The Government has put in place several safeguards to prevent misuse of Participatory Notes and there is no information with Sebi wherein Indian entities or investors are using the route of PNs and investing the black money through this route, Parliament was informed on Friday.
“Foreign Portfolio Investors (FPIs) are prohibited from issuing PNs to Resident Indians/Non-Resident Indians (NRIs) and they are also required to give an undertaking to this effect,” Minister of State for Finance Jayant Sinha said in a written reply to lok Sabha.
“There is no information with SEBI wherein Indian entities or investors are using the route of PNs and investing black money through this route,” he added. Sinha said PNs can be issued only by those entities which are regulated by the relevant regulatory authority in the countries of their incorporation, which comply with ‘Know Your Client (KYC) norms. PNs are subscribed by regulated entities with the objectives to take exposure in India securities even if they are not registered as FPI. Replying to a separate query, Sinha said India is the largest cumulative recipient of IDA and IBRD funds amounting to $103 billion of which IBRD is $53 billion and IDA $50 billion.
The minister also informed that kerosene subsidy in the current fiscal year's April-September period stood at Rs7,122 crore and domestic lPG including DBTl subsidy in the 2015-16 (April-September) period was Rs8814 crore.