The Finance Minister, Nirmala Sitharaman, announced the clearance of the International Financial Services Centres Authority (IFSCA) proposals at the Gujarat International Finance Tec-City (GIFT City) Gandhinagar. The Finance Minister cleared two proposals of the IFSCA worth Rs.469 crore.
IFSCA Proposals
The Finance Minister announced the clearance of Rs.200 crore for headquarter building and Rs.269.05 crore for the supervisory technology fund for the IT infrastructure proposed by the IFSCA. She stated that out of the Rs.200 crore clearance for the headquarters building, Rs.100 crore is a loan and the other Rs.100 crore is a grant. The headquarters of IFSCA is at GIFT City.
The Budget’s IFSC-related measures include tax exemption for aircraft lease rentals paid to foreign lessors, tax holiday for capital gains for aircraft leasing companies, an exemption to investment divisions of foreign banks, and tax incentive for relocating foreign funds in IFSC.
GIFT City in Gujarat
GIFT City is an integrated city built in Gujarat on 886 acres of land that includes office spaces, schools, residential apartments, hotels, hospitals, clubs, retail and various recreational facilities. It is an emerging global IT and financial hub and is a state-of-the-art integrated financial centre.
The finance minister briefed the bullion vaulting facility at GIFT City and underlined the central government’s commitment to make it a world-class fintech hub, as stated in the Union Budget 2021-22 during the clearance announcement of two proposals of the IFSCA.
The India International Exchange Limited, located at the IFSC, GIFT City, commenced operation on 16 January 2017. Its daily turnover has crossed USD 6 billion as of 18 November 2021, with the exchange having 38 members.
As of October 2021, there are 21 banking licenses at GIFT City, including five foreign banks, 15 domestic banks and one multilateral institution. The banking asset size of GIFT City has increased to USD 22 billion, its banking transaction crossed USD 125 billion, and derivatives trade by IFSC banking units crossed USD 135 billion between May 2020 and October 2021.
The clearance of the two IFSCA proposals will help in the growth of GIFT City. The India International Exchange Limited at GIFT City aims to list more companies and improve bond market activities. It seeks to keep India on the global map as the centre of excellence in the financial and IT/ITeS services domain.
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