with the need for managing the potential systemic risks - within the confines of the broad policy based on a calibrated approach to the management of capital account. while the fema notification on outward fdi regulates all acquisition of overseas securities denominated in foreign currency, the focus is primarily to regulate acquisition / incorporation of overseas entities by the indian corporates. the broad approach has been to facilitate outward foreign direct investment by domestic companies through joint ventures and wholly owned subsidiaries up to 400 % of their net worth ; restrictions apply only in respect of investments abroad in real estate and banking. investment which is also termed as financial commitment can be in form of equity, loan, guarantee and raising funds through pledge of shares, domestic and overseas assets. further, resident individuals are enabled to undertake outward fdi within lrs limit of us $ 250, 000. current issues during last one decade or so, cross - border businesses involving multi - layered structure of entities have been a common phenomenon. such layered structure of entities may be a plain vanilla two - tier structure or a complex multi - layered structure. further, some of the business models resulting in inward fdi through the overseas entities established under odi are posing major policy challenges including those pertaining to possible tax evasion, money laundering and round tripping. the world investment report of united nations conference on trade and development ( unctad ) has observed that tax avoidance practices by multinational enterprises ( mnes ) are a 5 / 6 bis central bankers'speeches global issue, relevant to all countries. such structures are created, typically, based on either for transfer pricing reasons or for financing their subsidiaries. while these could be established for tax avoidance purposes, such structures often involve investments in offshore investment hubs as holding entities, through which further investments are made in the step down subsidiaries. needless to say that even though the motivations range from genuine business / commercial considerations to taxation benefits which are available to any global investors, at times the underlying motive could be to create opacity through a labyrinth of structures for reasons unjustified which evokes concerns. treaty shopping and parking of capital and passive incomes in tax havens leads to erosion of the tax base of the countries. concerns have been raised about the minimization of tax burden by mnes using legal arbitrage opportunities that arise out of gaps and frictions in the interactions of various domestic laws and / or tax treaties. the international community has taken note of abusive tax practices employed by tax payers to create double

of the ecb and the european system of central banks, which we celebrated on 1 june. the creation of the euro has been an historic policy decision for europe. the ecb has been successful in delivering what it is expected to deliver under its mandate, namely price stability. importantly, longerterm inflation expectations have been at levels consistent with price stability. this is a great achievement against the backdrop of a series of substantial oil and food price shocks as well as increases in indirect taxes and administered prices over the past decade. price stability is essential not only because it protects the income of all our fellow citizens – and particularly the most vulnerable and poorest groups in society – but also because it is a necessary condition for sustainable economic growth and job creation. as regards fiscal consolidation and structural reforms, a number of euro area countries have made good progress over the past decade, while others are still lagging behind. notably, some countries have still to achieve and maintain sound fiscal positions and reduce government debt ratios to more sustainable levels. the ecb is concerned about recent signs of a slowdown or even back - tracking in terms of structural reforms and fiscal consolidation. ill - designed structural policies, economic rigidities and undisciplined fiscal policies may contribute to increased inflationary pressures or higher inflation persistence, which monetary policy would need to take into account. in this respect, the steady pursuit of prudent and efficient fiscal policies along with reforms that enhance competition and market flexibility is crucial to ensure the smooth functioning of monetary union. labour supply and employment in the euro area within this context, let me draw your attention to the latest eurosystem's structural issues report, which will be posted this morning on our website. the report this year focuses on the main developments in labour supply and employment in the euro area countries since the early 1980s. let me briefly mention some key developments. since the start of monetary union, the euro area has witnessed an increase of 15. 7 million in the number of people employed. this compares to around 5 million in the preceding period 1990 - 98. the total labour market participation rate rose to nearly 71 %, and the employment rate rose to over 65 %. the period since 1999 is also characterised by a change in labour supply composition. women have entered the labour market in increasing numbers. in addition, older workers have tended to remain in the labour market for longer, which is welcome in view of population ageing. immigrants have contributed positively to labour supply, helping to fill skills shortages