With an aim to develop Indian capital markets, the Securities and Exchange Board of India (SEBI) has asked the government to provide clarity on tax benefits for new products like Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts and debt securities.
The capital market regulator is of the view that REITs and infrastructure bonds would allow investors to invest in specific products linked to real estate projects and infrastructure projects besides providing necessary safeguards. Further, these products would also help the corporates raise significant amounts of capital for their projects. Therefore, there is a need to remove certain anomalies in tax structure for these products.
Regarding the REITs, SEBI Chairman U K Sinha has asserted that REITs have been a significant vehicle for global investors and Indian capital markets will soon tap this opportunity as SEBI is ready with guidelines that would be announced immediately after tax clarity from the government. Sinha further added that to expand corporate bond markets, new draft for debt was already in place compromising simplified regulations.
SEBI’s chairman also expressed the need to encourage Small and Medium Enterprises (SMEs) to get listed and get benefited from the capital markets. SEBI has also identified certain SME clusters to encourage listing. At present, the listed SME market capitalisation in India stands at over Rs 7,500 crore, while only 65 companies have got listed on SME Platform of exchanges. Furthermore, SEBI would soon put in place norms for crowd funding, which would allow start- ups to tap new platforms to raise funds.