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New Delhi , Sept. 9

THE Government is working towards further relaxations in the eligibility as well as end-use criteria for foreign direct investments (FDI) in different sectors of the economy, Mr U.K. Sinha, Joint Secretary (Capital Markets and Pensions) in the Department of Economic Affairs of Ministry of Finance, has said.

In his address on `Raising capital overseas — Policy framework' at a meeting on `London global capital markets: Seizing the opportunity', Mr Sinha noted that more changes were in the offing in the area of FDI policies. "There is a case for further liberalisation in end-use criteria and the eligibility criteria. But we want to have an orderly change that is gradual in nature," he said.

The meeting was organised by the Associated Chambers of Commerce and Industry of India (Assocham).

On foreign institutional investors (FIIs), Mr Sinha said that more than $ 3 billion have come into the country in the current calendar year through this route. "We will continue to adopt policies that would encourage inflows through the ADR/GDR/FII route," Mr Sinha said.

Even while highlighting that the country was moving in the direction of full capital account convertibility, Mr Sinha, at the same time, stressed the need for having "reasonable control" on residents looking to convert their domestic assets into foreign assets. He, however, pointed out that a foreign investor is free to bring in the capital and take it out.

On the tendency of Indian issuers to naturally look in the direction of the US as against London or any other market for raising capital, Mr Sinha pointed out that the costs of raising capital is an important element that determines the market from which capital could be raised by an Indian issuer.

The Finance Ministry official also said that simultaneous listing in India and abroad could be a route that could be adopted by Indian companies planning an initial public offering (IPO). "The regulators are considering the modalities. There is an in-principle agreement that companies should be allowed to go in for simultaneous listing," he said.

On the new pension system, Mr Sinha said that the Government is thinking in terms of framing a separate legislation for pensions. The Union Cabinet had recently approved the blueprint for the new pension system, which includes the setting up of an interim Pension Fund Regulatory and Development Authority (PFRDA) through an executive order.

In his address, the Mayor of London, Mr Alderman Gavyn Arthur, sought to hard-sell the City of London as a pre-eminent international financial centre and urged Indian companies to look at London as a sourcing base for capital.

"Despite the UK not adopting the euro, the city of London is the largest centre of euro-denominated transactions in the Europe", he said.

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