Union Finance minister Arun Jaitley has announced the establishment of a unified authority for regulating all services in IFSCs and tax incentives to promote trade in stock exchanges
Announcements in the union budget about tax incentives and an authority for regulating financial services in International Finance Service Centres (IFSC) will boost the prospect of proposed facility at the Bandra Kurla Complex (BKC) in Mumbai, claimed state government officials.
Union Finance minister Arun Jaitley has announced the establishment of a unified authority for regulating all services in IFSCs and tax incentives to promote trade in stock exchanges. Non-corporate tax-payers operating in an IFSC shall be charged Alternate Minimum Tax (AMT) at a concessional rate of 9% at par with Minimum Alternate Tax (MAT) applicable for corporates.
A senior state government official claimed the announcement would help the state government's plans for an IFSC in the Bandra Kurla Complex (BKC) by creating an enabling environment.
The IFSC is one of the ambitious projects of the Devendra Fadnavis-led state government which plans to develop it in a designated area in the BKC to help Mumbai's transition to a global financial hub. The state has also helped set up the Mumbai Centre for International Arbitration (MCIA) to establish a dispute redressal mechanism for the success of the IFSC and ensure ease of doing business.
Incidentally, in a reply in Parliament last year, Jaitley had said another IFSC could be considered after the first one at Gujarat International Financial Tech (GIFT) City in Gandhinagar was optimally used. After being at loggerheads with the Railways, the Maharashtra government had to part with a portion of land meant for the IFSC for the development of the Mumbai- Ahmedabad high speed railway terminus meant for the bullet train. Its plans for an iconic tower have also been affected by building height restrictions due to the airport's funnel zone.
However, the official claimed that despite this, the project was on track. "The bullet train station will be located underground and will not hamper work on the IFSC," he added.
"The idea is creating a zone which will be outside the country's laws to a large extent… it will be like a financial SEZ," explained another official, adding that Mumbai had more soft-capital, people with skill sets and presence of lawyers, banking and financial institutions and insurance companies than Gujarat.
However, former chief minister and senior Congress leader Prithviraj Chavan said the plan for the IFSC lacked clarity and the project was yet to get the Centre's approval. "(The Centre) wants to do the project in Gujarat and not in Mumbai as otherwise, investors will prefer Mumba. You have to kill Mumbai to get GIFT going up. That is the basic premise," he noted, stating that the budget speech made no mention of the proposed IFSC in India's financial capital.
"They are cheating the people and there will be no IFSC in Mumbai," charged Chavan.
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