Indian government officials look set bring in regulations which lay down rules for venture capitalists and foreign property investors.
Dr K P Krishnan of the Indian Ministry of Finance has told business leaders the government plans to better control companies looking for short-term profits.
According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), officials will try to tighten controls “without disturbing fund flows”.
ASSOCHAM said:
“Dr Krishnan further indicated the government would ensure equitable growth of all sectors and restrict specific sectors like realty from absorbing their investments to make quick money.”
The joint secretary of the Ministry made the comments while addressing the launch of the Venture Capital Association of India, organised by ASSOCHAM.
Indian capital market regulator SEBI is working with the government on the rule-making process, and plans to make registration of certain venture firms mandatory.
SEBI is first gathering data about investments in sectors such as real estate, IT and education before making further regulations, which are likely to include new taxes.
No timeframe has been set by either the government or SEBI, with officials maintaining they are in the “dialogue process “.
In an effort to keep prices stable local laws have already been passed in parts of India which ban foreigners from owning property.
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