Mohandas Pai, the former CFO of Infosys, has drawn the central government’s attention to a regulatory decision that disallows family offices to establish investment funds in Gujarat International Finance Tec-City (GIFT).

Pai, who recently slammed the ₹32,000-crore GST demand on Infosys, shared his concern in a post on X (earlier Twitter).

“PM @narendramodi Sir, some regulators think that all Indian citizens are tax evaders and need to be punished. look at what they are doing. You have said you respect tax payers, is this the way to respect honest tax payers? harass them, deny them? Pl intervene,’’ he said.

He went on to add, “pm @narendramodi Sir this goes against everything you are asking Indians to do to globalise, compete globally and build a developed India! That needs global investments, understanding of trends, creation of networks. Pl intervene’’.

Pai made these observations while sharing a post by another user — Rajeev Mantri, who had said that “Indian regulators have stopped allowing local family offices to set up investment funds in its new finance hub, as they are concerned these arrangements may be used to evade taxes and capital controls”.

Mantri had pointed out that the cost of the regulator’s move will be that Indian financial investors cannot buy and acquire critical technologies, leaving the field open to American, European, Japanese and even Chinese buyers.

“Then some years later, we will go begging as a country to the same foreign countries for FDI. The regulator will grin at winning another prize for its “macro prudential” approach’’.

The regulator in question is the Reserve Bank of India (RBI), which, according to reports, is worried that relaxing rules for such investment funds known as Family Investment Funds (FIFs) could result in loopholes that may be used for money laundering. A Bloomberg report said that the move could hit GIFT City’s plans to be a key centre used by the wealthy for overseas investments. FIFs are investment vehicles to manage the wealth of a family.

In January this year, GIFT City had given approval to Azim Premji’s family office to set up an investment fund. It had earlier received several applications from such wealthy families.