Over a decade ago, Swraj Paul, the prominent London-based NRI businessman, tried to take over an Indian company. Naturally, the owners resisted and were successful in initiating a huge uproar against his bid. Several economists claimed that the government averted the takeover, more to obtain political mileage than the welfare of the industry. To prevent the re-emergence of such crises, it brought prudential norms such as the 1per cent and 5 per cent limits on investment by individual NRIs. I strongly feel that this was a wrong decision. India always needed foreign exchange. All takeovers, acquisitions, mergers, joint ventures are associated with infusion of better productivity and efficiency.

Perhaps, having realised the futility of these decisions, the authorities, during their bid of liberalisation, permitted FIIs/ NRIs/ OCBs to invest up to 24 per cent (raised to 30 per cent by the Finance Act 97) of a company's equity capital, provided such company takes the approval of its shareholders in a general body meeting.

Then again, they introduced 40 per cent (raised to 51 per cent) for new issues and 100 per cent schemes for high priority industries. The introduction of GDRs was a bold step worth appreciation. When all this was taking place, the 1 per cent and 5 per cent limit stayed put, even after having lost its significance. Raising it to 5 per cent and now 10 per cent is superfluous.

The finance minister has proclaimed that all the procedures are being thoroughly reviewed with a view to modify them to facilitate investment by NRIs. All the governments in the past have promised to smoothen and streamline procedures. This assurance has become stale.

A number of NRIs write to me for investment advice. Upon receiving my need-based suggestions, many of them desire to go ahead but they find it difficult to get the desired application form. q Even the routine NRE and FCNR deposits are riddled with problems. It takes on exorbitant and indefinite time for an inward draft, leave alone a cheque to get cleared. Worse is the situation at repatriation. NRIs are just not used to such delays.

The finance minister has to address himself to this aspect much more than offering the FIIs/NRIs any further concessions. If they have a difficulty in laying their hand on an application form, will any temptations ny way of the sops offered by the finance minister help?

In case of an RNOR, the income which accrued or arose outside India was not taxed. Thus a returning NRI, who has been enjoying the NRI status for at least two consecutive financial years, hitherto enjoyed a large privilege. His global income had protection from Indian taxes for the next nine years. Losing his NRI status did not hurt much as the prerogative of the RNOR status eased him eventually into becoming a full-fledged resident. Now, he finds that he has to pay tax not only on his income from FNCR but also on `Resident Foreign Currency (RFC) Account'! Returning NRIs could safely park their foreign exchange in RFC accountwithout paying tax till such time they made up their minds about staying in India permanently. Discarding of this status, interest on RFC accounts has become taxable.

Why should anyone any longer bring with his foreign exchange with him? Since he is allowed to keep to keep any of his assests abroad without RBI permission, would it not be advisable to look at Swiss Banks? Better still, invest in India through Mauritius, a tax haven, and enjoy real freedom from tax, thanks to the `Double Tax Avoidance Treaty' of India with that country?