Nirmala Sitharaman clears 2 GIFT City proposals

• Union Finance Minister Nirmala Sitharaman announced the clearance of two proposals worth ₹469 crore of the International Financial Services Centres Authority (IFSCA) at GIFT City during her one-day visit in Gandhinagar.
• This will further upheld the Central government’s commitment to make GIFT City a world-class fintech hub as stated in the Union Budget 2021-22.

What is GIFT City?

• Gujarat International Finance TecCity (GIFT) is a central business district under construction between Ahmedabad and Gandhinagar in Gujarat, India.

Purpose:

• Its main purpose is to provide high quality physical infrastructure (electricity, water, gas, district cooling, roads, telecommunications, broadband) and the infrastructure is either Mumbai, Bangalore, Gurgaon.
• It is to enable financial and technology companies to operate from such. Insufficient or very expensive.
• Special Economic Zone (SEZ), International Education Zone, Integrated Township, Entertainment Zone, Hotel, Convention Center, International Techno Park, Software Technology Park (STPI) Unit, Shopping Center, Stock Exchange and Service Unit
• The idea for this city was developed during the vibrant Gujarat Global Investor Summit 2007.
• The Union Cabinet has approved the establishment of a unified body to regulate all financial services of the International Financial Services Center (IFSC) in India through the 2019 International Financial Services Center bill.

What Is IFSC

• An IFSC enables bringing back to India the financial services and transactions that are currently carried out in offshore financial centers by Indian corporate entities and overseas branches / subsidiaries of financial institutions (FIs) by offering business and regulatory environment that is comparable to other leading international financial centers in the world like London and Singapore.
• The International Financial Services Centres Authority (IFSCA) was established by the Government of India to develop and regulate international financial services centres in the country. Gift City is India`s first IFSC being developed.
• It would provide Indian corporates easier access to global financial markets.
• IFSC will also complement and encourage further development of India's financial markets.
• The first IFSC in India was founded in GIFT City, Gandhinagar, Gujarat.

IFSCA Members

• The IFSCA consists of nine members appointed by GOI. The members are:

• Chairperson

• 1 member from RBI

• 1 member from SEBI

• 1 member from PFRDA

• 1 member from IRDAI

• 2 members from the Finance Ministry

• 2 members appointed on recommendation of a Selection Committee

Services an IFSC can provide:

• Fundraising services for corporations, individuals and governments.
• Wealth management.
• Asset management and global portfolio diversification undertaken by pension/mutual funds and insurance firms.
• Global tax management and cross-border tax liability optimisation, providing a business opportunity for financial intermediaries, law firms and accountants.
• Risk management operations (insurance and reinsurance).
• Global and regional corporate treasury management operations.
• Mergers and acquisitions between trans-national corporations.