India government to rollback higher surcharge on foreign portfolio investors

[August 23, 2019]  NEW DELHI (Reuters) - The Indian government announced measures on Friday to revive economic growth and markets including the withdrawal of higher taxes for foreign portfolio investors (FPIs) and said it would release funds for bank recapitalization upfront.

Finance Minister Nirmala Sitharaman told reporters the government had decided to withdraw the surcharge on FPIs which she had unveiled in her budget for the fiscal year ending March 2020.

The higher tax applied to individuals and FPIs earning more than 20 million rupees annually which led to a sharp fall of Indian equity markets.

FPIs have pulled out over $1 billion in August from the Indian markets.

The government hopes the new measures will improve the sentiment leading to higher private investment and assuage concerns of portfolio investors, to revive economic growth of Asia's third largest economy from a five year low.

(Reporting by Aftab Ahmed; Writing by Swati Bhat; Editing by Sanjeev Miglani)

[© 2019 Thomson Reuters. All rights reserved.]

Copyright 2019 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.