BUSINESS

Budget 2013 Easier norms for equity investments, removal of cap for FIIs expected NEW DELHI: Finance Minister P Chidambaram may announce extensive changes in the regulatory regime governing capital markets in the upcoming budget, including scrapping the cap on the amount foreign institutional investors can invest in rupee corporate debt and putting in place a simpler regime for foreign investors in stocks and bonds. Further, the minister may also unveil a simpler version of the Rajiv Gandhi Equity Savings Scheme, which is meant for new investors, relax stringent know your customer (KYC) norms for individuals, and come up with tax sops for certain mutual fund products. "The budget will have a strong package for the capital markets," said a finance ministry official privy to the discussions. India needs to attract foreign capital to bridge its current account deficit that is projected to worsen to 4.4% of GDP due to rising import of gold and crude oil. In the current year, foreign institutional investors have invested $8.7 billion in buying up Indian stocks and debt, over and above the $31 billion they brought in last year. But stock market sentiment has soured in the past few weeks, as the impetus generated by reform measures announced since September 2012 begin to fade.