Jayant Sinha: No plans to ban Participatory Notes

The Centre is not looking to ban ‘Participatory Notes’, which have been creating a storm in the stock markets.

There is no proposal at present to remove participatory notes in order to check the generation and laundering of black money, Jayant Sinha, Minister of State for Finance, told the Lok Sabha, in a written reply here on Friday.

Significant stance The Narendra Modi government’s stance on Participatory Notes is significant, as before being swept to power in May this year, its key promise was to tackle the menace of black money. It is also facing Opposition’s ire in the ongoing Winter session of Parliament for doing little on this front.

P-Notes are generally frowned upon by critics as these are issued to companies/funds outside India whose identities are not known to Indian authorities.

Critics argue that P-Notes — an offshore derivative instrument — is a “mystery wrapped in a puzzle” and “discriminatory” besides favouring “ghost investors.”

As the true identity of the investors in P-Notes is not usually known, there is apprehension that funds flowing into the country could be from dubious sources.

Meanwhile, in a separate reply, Sinha said total net investments in equity and debt made by FIIs and foreign portfolio investors (FPIs) in the country between April-November stood at ₹1.84 lakh crore. The total investment by FIIs and FPIs in 2013-14 was ₹ 51,649 crore.