If we go by the Foreign institutional investors (FIIs) investment this month we find that they have pumped more than 876 Crore into the financial system whereas they had withdrew over Rs 1,100 crore from equity markets last month due to fears that proposed GAAR provisions
This optimism for investment by FIIs in India stems from the fact that they are hopeful that GAAR will be revisited by Indian agencies else they may see en mass FIIs running away from the nation. They perceive that GAAR can cause heavy tax burden for investors putting money through tax-friendly places like Mauritius. Now only time will tell as India has put GAAR in place after thorough deliberations and it is good for our nation. Though in short term we may suffer but in longer term we are going to gain.