GOVERNMENT OF INDIA
Ministry of Finance
DEPARTMENT OF ECONOMIC AFFAIRS
UNSTARRED QUESTION NO 2407
TO BE ANSWERED ON TUESDAY, APRIL 15, 2008 CHAITRA 26, 1929 (SAKA)
Guidelines for Operations of foreign Funds
SHRI RAJEEV CHANDRASEKHAR
Will the Minister of FINANCE be pleased to state:-
(a) whether Government has any policy or guidelines with respect to operations of foreign funds in the country;
(b) if so, the details thereof; and
(c) if not, whether Government has any proposal to frame a policy or guidelines on the issue?
Minister of State in the Ministry of Finance
(SHRI PAWAN KUMAR BANSAL)
(a) and (b) Foreign funds may come to the country either to Government or to non-government entities. Funds received in the Government of India are in the form of Development related funds, grants and credit etc. The Development related funds are received from multilateral agencies viz. World Bank, IMF and ADB etc. and bilateral donors viz. EU, Japan, UK, France and Germany etc. Funds received from these agencies are project specific and utilized as per agreements signed. Foreign funds may come to non-government entities for investment or non-investment purposes. The foreign funds for investment purposes are governed by FDI policy, amended by GOI from time to time. Foreign Investment in India is also received through Foreign Portfolio Investments (FPI) and Foreign Venture Capital Investors (FVCIs) routes. The latter two investments are governed by SEBI (FII) regulations, 1995 and SEBI (FVCI) regulations 2000. Foreign funds inflows other than investment purposes are governed by Foreign Contribution Regulation Act (FCRA).
(c) Does not arise.