Mid Night News update 27th December 2016

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India Inc report foreign borrowings to the tune of $488 million in the month of November 2016. These foreign borrowings include money raised through ECBs, FCCBs and rupee denominated bonds under the Masala bond scheme. This figure is sharply lower than the $3.16 billion raised by Indian companies in November 2015. While 60% of these funds raise were denominated in foreign currency, the balance 40% was raised through rupee denominated bonds. The RDBs are a much better choice as the currency risk is obviated and hence does not put pressure on the value of the INR versus the dollar.

After attacking black money held in cash, the next target of the Modi government is to attack black held in the form of benami property. Benami properties are purchased by buyers who do not want to disclose the audit trail and hence purchased in other names. Modi has announced a start by undertaking a detailed scrutiny of real estate assets that have dubious titles. The government will use bank audit trails, data on cash deposited during the demonetization, PAN tracking of transactions and use all these pieces of information to track down benami properties. The problems could arise from the fact that India’s land records are patchy and arcane. In most cases, land records have not been digitized. While there is no hard data, existing estimates put the benami transactions at around 10% of the total volume of real estate transactions.

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