Former Finance Minister Thomas Isaac has said that the state government can raise investments for its infrastructure projects through the Shariah-compliant Non-Banking Finance Company (NBFC) route.
“If the regulatory hurdles were removed with the influence of the state government over the Centre, the ongoing Emerging Kerala event would have attracted major investments from the Gulf Cooperative Council (GCC) countries,” Isaac said.
The West Asian investors are not able to avail of the External Commercial Borrowing (ECB) route, as laid down by the RBI because of complete lack of Shariah-compliant bonds known as ‘Sukuk.’ The definition of ‘Bond’ as given in the Companies Act 1956, is wide enough to include ‘Sukuk.’
“The only step required is to treat the Sukuk issued by Indian companies as bonds for the purpose of SEBI regulations and to treat the profit earned on it as ‘interest’ for tax purposes.
“If the issue is solved, investments worth crores are awaiting the state,”
said O P Raman Kutty, group financial controller, Turki Corporation, Jeddah.