|Speech of Shri
Finance Minister, Government of India
27th February, 1999
35. A vibrant capital market is essential for providing the much-needed funds for our infrastructure sector. Infrastructure projects need long term funds, which, in turn, require a deep and well-functioning debt market. With a view to modernising the debt market and introducing paperless trading in this segment also, Government proposes to abolish stamp duty on transfer of debt instruments within the depository mode.
36. Lately, there has been considerable debate on the importance of good governance of Indian corporates. It is increasingly being realised that if investors have to be drawn back to the capital market, companies have to put their houses in order by following internationally accepted practices of corporate governance. This is necessary to enhance investor confidence. To help promote this trend, I propose to institute a National Award for Excellence in Corporate Governance.
37. The Deepak Parekh Committee appointed by the UTI has made wide-ranging recommendations, including for restructuring of the US-64 scheme and for granting tax incentives. We are taking necessary action. I will come to the tax incentives shortly. The details of the restructuring are being announced separately in a press release. This should lift the cloud of uncertainty from the capital market and restore confidence.
38. My tax proposals will also greatly strengthen mutual funds and thereby help bring small retail investors back into the capital market. It has also been decided to set up a joint mechanism between SEBI and the Department of Company Affairs for taking stringent action against unscrupulous promoters who raise money from investors and misutilise them.