NEW DELHI: India will aggressively woo sovereign wealth funds and pension funds with tax exemptions to entice them into investing in sectors including telecom, transport, logistics, energy, and education. “We are talking to some of the top pension funds including from the US, Norway and Denmark, as well as with sovereign wealth funds from Saudi Arabia, Kuwait, Qatar and Singapore. We want to get them to invest top dollars in long term projects in energy, including renewables, telecom, water, and sewage treatment plants, food logistics, industrial parks, and even in education,” said a senior finance ministry official.
The Prime Minister has already held talks with 20 top funds and officials say they were building up on the talks. “There is a provision in the income tax act from this year’s budget to give such funds a tax exemption for specified infrastructure investments. We have given one such exemption earlier this week, more will follow,” an officials said. Abu Dhabi’s Sovereign Wealth Fund-MIC Redwood 1 RSC Limited-became the first foreign SWF to be granted 100 per cent income-tax exemption for long-term infrastructure investments.
The Government could expand the list of infrastructure projects eligible for tax exemptions “depending on demand for specific sectors.” SWFs and Pensions funds are being wooed since they hold trillions of dollars in assets, of which a large slice is usually invested in long term debt or equity. The top five global pension funds alone hold nearly $4 trillion worth of assets.
Assets under mana g ement at the world’s 300 largest pension and sovereign funds had increased in value by 8 per cent to a total of $19.5 trillion in 2019, according to statistics compiled by Thinking Ahead Institute. “We are targeting the big 20 as they account for 40 per cent of this money. But others are also welcome,” a finance ministry official said. “They like predictability of returns and safety. We think we can promise them that.”