Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TDS :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: form 3cd :: due date for vat payment :: cpt :: VAT RATES :: ACCOUNTING STANDARD
News Headlines »
 CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 FinMin looks at cut in corporation tax
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest

RBI may raise cap on overseas investment
April, 24th 2007
The move will partly offset the impact of foreign currency inflows on money supply.
The Reserve Bank of India (RBI) is considering raising the cap on overseas investments by companies to partly offset the impact of large foreign currency inflows on money supply and in turn inflation.
Companies are currently allowed to invest overseas to the extent of 200 per cent of their net worth every year.
The RBI, in consultation with the government, is exploring the option of allowing companies to invest up to 250 per cent of their net worth overseas.
                            (In $ billion)
Year Inward Outward
2006-07 16 11.8
2005-06 5.5 3.2
2004-05 5.6 2.4
2003-04 4.3 1.9
The discussions follow large inflows on account of investments in equities and projects, exports and remittances by non-resident Indians. In an attempt to prevent the rupee from gaining too much, the RBI was an aggressive buyer of foreign currency in the first two months of calendar 2007.
However, the rupee gained over 2 per cent in March as the RBI stayed away from the foreign exchange market, since buying dollars would have released more rupees into the system and impacted the central banks efforts to keep a tight check on liquidity.
In fact, the central banks forex purchases in January and February contributed to a 22.1 per cent rise in money supply in early March, from 19.4 per cent in late December 2006.
This, in turn, forced it to raise both the cash reserve ratio (CRR) the proportion of cash deposits banks must keep with the RBI and the rate at which it lends short-term money to banks against government securities.
The attempt at allowing higher level of foreign exchange outflows is meant to lower the net foreign exchange inflows. It comes at a time when a growing number of Indian companies are planning overseas acquisitions.
According to the Ministry of Finance, the total outward FDI in 2005-06 was $3.2 billion and the inward FDI flow was to the tune of $5.5 billion.
India can consider allowing outflows on account of investments overseas as the foreign exchange reserves position is extremely comfortable. Foreign exchange reserves have increased by $25.84 billion to $203.09 billion since January 2007.
The S S Tarapore committee report on fuller capital account convertibility had also recommended gradual liberalisation of outward FDI. The committee had proposed raising the ceiling for outward investments by companies to 400 per cent of their net worth in three phases.
Bankers said the proposed increase in the investment limit will be a morale booster and indicates the slow but steady transformation towards fuller account convertibility.
An investment banker, however, said any foreign acquisition depends on the economic benefit the acquirer hopes to derive from the target company. Once that is in place, the cap on investment does not really matter, he adds.
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions