The Hindu Business Line : Can Mumbai become an IFC

Making Mumbai an international financial centre (IFC) should not be a vain talk. The High- Powered Expert Committee (HPEC) has made some good recommendations, such as bringing all aspects of financial services under one umbrella based on the US and UK models. The Government must implement the suggestions made by the HPEC. Also, relaxing the RBI rules to bring rupee trade to Mumbai needs to be initiated quickly. This will benefit the corporate sector and banks.

A. Jacob Sahayam, Thiruvananthapuram

The financial sector needs a thorough overhauling to meet the needs of globalisation. Tinkering with the I-T, Customs and Excise legislation and SEBI tightening its control time and again to protect the interests of investors will not create a healthy atmosphere for the growth of international financial centres. Reforms are moving at snail's pace. The Government is mulling over the Tarapore Committee's report on CAC (Capital Account Convertibility). No doubt, financial inclusions add to the revenues of the banks but it cannot happen overnight. Vision of GST by 2010 is yet to be clarified and pursued vigorously. The Government appears to repose its faith in the proliferation of service tax regime, though it calls direct tax as the "future tax".

CAC plays a major role in raising the standard of financial centres to international levels. CFC (Controlled Foreign Corporation) Regulations look at the nexus between the taxpayer and the foreign income, taxing the worldwide income of the resident taxpayers. The key to internationalising the market lies in CFC, which is also one of the recommendation of the Kelkar Committee

Though Mumbai boasts of a stock exchange of international standards, it lags behind financial centres such as London, New York, Paris, Singapore, Hong Kong, etc. Stock exchanges should be complimented by commodity and metal exchanges. As for infrastructure, Mumbai lacks modern aerodromes and ports (with advanced gadgets such as floating harbour). If CAC is implemented , it will help Mumbai operate as a standard financial centre.

T.S. Sundareswaran, New Delhi

Notwithstanding the overhauling of financial sector laws or not, the financial growth of Mumbai is an unstoppable process. The city has all the ingredients for rapid financial growth. It is of great importance for a growing economy that the financial sector laws are continuously reviewed in a comprehensive manner and overhauled periodically so as to prevent tax evasion, and remove road blocks to growth. The review should be holistic and based on credible feedback. This applies not only to Mumbai but also other major cities that are growing rapidly into economic hubs.

T. R. Anandan, Coimbatore

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