“ Maharashtra to set up infra SPV to raise Rs 1 lakh crore “
Envisaging an investment of Rs 1 lakh crore in the next five years in the infrastructure sector, the Maharashtra government today proposed to set up a special purpose vehicle (SPV) to raise the fund.
The SPV, 'Mahainfra', was announced by Finance Minister Sudhir Mungantiwar while presenting the budget in the assembly today.
Mungantiwar said infrastructure development is one of the top priorities of the BJP-led government.
"However, infrastructure requires a large sum of capital. In the next five years, we envisage that about Rs 1 lakh crore will be required to finance key projects," he said.
Given the constraints in raising such a huge amount, there is a need to look at alternative methods to generate funds for infrastructure development, he added.
It is only a matter of time when all the States come out with their own Infra SPVs – something which I have been urging the State Chief Ministers through my following blogs / emails :
· Creating Wealth to Create Jobs ( 26 Feb 2014 )
· Don’t Ask How ? ( 14 April 2014 )
· A Case for Zero Personal Income Tax ( 11 Nov 2014 )
· A Virtuous Circle ( 04 Jan 2015 )
· A Dream House by 2020 ? ( 01 Sept 2015 )
· Making Molehill out of a Mountain ? ( 19 Nov 2015 )
· Structural Reforms ? ( 30 Jan 2016 )
· Make Opposition Irrelevant ( 18 Feb 2016 )
· Making India a Tax Haven ? ( 04 April 2016 )
· “ Not So Smart “ Cities ? ( 05 Sept 2016 )
And there will be a virtual race among the States if Shri Mungantiwar succeeds in persuading Shri Arun Jaitleyji to declare a INFRASTRUCTURE INVESTMENT AMNESTY SCHEME , under which :
· Holders of BLACK MONEY ( domestically or abroad ) can invest into such State Infra SPVS ( Bonds / Equity / Fix Deposits etc )
· There will be no restriction on the amount of the BLACK MONEY that they may invest
· No questions will be asked as to the source of the investments
· All investments will need to be made from a bank account
· There will be no inquiry / litigation / prosecution / punishment , in respect of such BLACK MONEY investments , under any law
· A person can invest in any number of SPVs floated by any number of States
· All such investments shall remain locked-in for a period of 10 years
· Investment Instruments can be gifted to close relatives
· Amounts maturing after the lock-in period ( with accumulated interest or capital gain ) will be exempted from Personal Income Tax
If such a SPV-specific AMNESTY SCHEME is introduced , within 6 months , we will see BILLIONS of DOLLARS worth of BLACK MONEY flowing into INFRA SPVs – obviating the need for FDI . There will be an unprecedented push to Infrastructure , with consequent generation of millions of jobs !
Remember , how , a few months back , Indonesia succeeded in converting $ 300 BILLION worth of BLACK MONEY into productive WHITE MONEY , by taxing at 4 % !
The Scheme suggested by me will set up a fierce – but healthy – competition among the States to woo the BLACK MONEY holders !
21 March 2017
www.hemenparekh.in / blogs