45. Whenever I have travelled outside India, Non-Resident Indians (NRIs) have expressed a sincere desire to contribute meaningfully to the development of India. I believe NRIs constitute a huge, untapped potential for India’s development. I propose the following steps to encourage NRIs to participate in the development of their country of origin:

At present NRIs are allowed to purchase shares in Indian companies in the secondary market subject to a limit of 1 per cent of the company’s total equity for individual NRIs and NRI overseas corporate bodies, with a 5 per cent limit for aggregate NRI/OCB investments in the company. These limits were imposed many years ago when our capital market regulations were much weaker and there were no rules governing acquisition and takeovers. The situation has changed materially in both these respects. I, therefore, propose to raise the individual investment limit of 1 per cent for NRIs to 5 per cent and the aggregate limit for all NRI investments in a company from 5 per cent to 10 per cent.

NRIs have also complained to me that the procedures governing their participation in our share markets are extremely cumbersome and onerous. I am having these procedures thoroughly reviewed with a view to modifying them to facilitate investment by NRIs in our capital markets.

The Unit Trust of India will launch a new India Millennium Scheme which will be open for subscription in dollars only by NRIs. The money collected under this scheme would be invested in shares of Indian companies with high potential for growth and in high quality Indian debt. The details of the scheme will be announced shortly.

The State Bank of India is launching a new Resurgent India Bond denominated in foreign currencies for subscription by NRIs. This will enable NRIs to contribute to the flow of resources for our country’s development, especially for building up infrastructure. The bond will be fully repatriable and the government will extend tax concessions similar to those currently available to NRI deposits to this new bond. The details of the scheme will be notified separately. I am confident that NRIs will welcome this initiative and will contribute liberally to these Bonds.

46. I have one more significant announcement to make for NRI’s. Government have decided to draw up a scheme for issuance of a Persons of Indian Origin (PIO) Card for those living abroad and having foreign passports. The PIO Card, which would be extended to persons of Indian Origin settled in countries to be specified by government would besides introducing a visa-free regime, also confer some special economic, educational, financial and cultural benefits. The details are being worked out.