Why is it in the news ?

LS passed International Financial Services Centres Authority Bill, 2019 in Lok Sabha.

Constitutional provisions

  • The IFSC Bill,2019 comes under the ambit of the special provision of article 117 of the Constitution.
  • Article 117(1): Any bill under Article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States.
  • Article 274(1) :No Bill or amendment which imposes or varies any tax shall be introduced or moved in either House or Parliament except on the recommendation of the President.

Multiple regulation in financial sector

The banking, capital markets and insurance sectors in IFSC are regulated by multiple regulators -- the RBI, SEBI, PFRDA and the IRDA.

Provisions of the bill

  • Regulatory authority: The unified authority which will be independent would be subject to audit by the CVC and the CAG.
  • There will be a tax holiday only for 10 years in the IFSC and not become a tax haven.