Rs 20,000 cr boost for small units in capital
goods sector
The Government on 15th September announced a Rs 20,000-crore scheme for enhancing competitiveness of small and medium enterprises in the capital goods sector. Under the scheme approved by the Cabinet, the first phase, with an outlay of Rs 930 crore, will focus on development of specified technologies.
Under phase-I, special centres for textile, machine tools and auto will be set up in Surat, Bangalore, and a city in Punjab respectively.
The outlay approved for phase-I was for two-and-a-half years. The Government will provide Rs 581.22 crore (80 per cent), while the remaining will be provided by the industry. The same mechanism will be applied for the entire scheme to be implemented over a period of time
The Government on 15th September announced a Rs 20,000-crore scheme for enhancing competitiveness of small and medium enterprises in the capital goods sector. Under the scheme approved by the Cabinet, the first phase, with an outlay of Rs 930 crore, will focus on development of specified technologies.
Under phase-I, special centres for textile, machine tools and auto will be set up in Surat, Bangalore, and a city in Punjab respectively.
The outlay approved for phase-I was for two-and-a-half years. The Government will provide Rs 581.22 crore (80 per cent), while the remaining will be provided by the industry. The same mechanism will be applied for the entire scheme to be implemented over a period of time
Rs 4, 754-cr power transmission scheme for
North-East approved
The government on 15th September approved a scheme for strengthening power transmission in Arunachal Pradesh and Sikkim at an estimated cost of Rs 4,754.42 crore. The Cabinet Committee on Economic Affairs approved this scheme. It is necessary to strengthen the power transmission for proper voltage management and lower distribution losses in both the states.
The project would be implemented by Power Grid Corporation with its consultancy fee of 12 per cent of the execution cost. After commissioning, the projects would be owned and maintained by state governments. The project is to be implemented within 48 months from the first fund release to Power Grid Corporation.
The government on 15th September approved a scheme for strengthening power transmission in Arunachal Pradesh and Sikkim at an estimated cost of Rs 4,754.42 crore. The Cabinet Committee on Economic Affairs approved this scheme. It is necessary to strengthen the power transmission for proper voltage management and lower distribution losses in both the states.
The project would be implemented by Power Grid Corporation with its consultancy fee of 12 per cent of the execution cost. After commissioning, the projects would be owned and maintained by state governments. The project is to be implemented within 48 months from the first fund release to Power Grid Corporation.
Economy poised to grow 5.7%: OECD
Sharply revising upwards its forecast, Paris-based think tank Organisation for Economic Cooperation and Development on Monday projected 5.7 per cent growth for the economy this year, even as global recovery continues at a moderate pace. Its latest estimate is way higher than the 4.9 per cent growth projection in May this year.
In its latest interim Economic Assessment report released, OECD said a moderate expansion is under way in most major advanced and emerging economies. However, growth remains weak in the euro area, which runs the risk of prolonged stagnation if further steps are not taken to boost demand, it added.
Sharply revising upwards its forecast, Paris-based think tank Organisation for Economic Cooperation and Development on Monday projected 5.7 per cent growth for the economy this year, even as global recovery continues at a moderate pace. Its latest estimate is way higher than the 4.9 per cent growth projection in May this year.
In its latest interim Economic Assessment report released, OECD said a moderate expansion is under way in most major advanced and emerging economies. However, growth remains weak in the euro area, which runs the risk of prolonged stagnation if further steps are not taken to boost demand, it added.
Capital goods sector scheme gets cabinet nod
Aiming to make the Indian capital goods sector globally competitive, the Cabinet Committee on Economic Affairs (CCEA) 15th September approved the "Scheme for Enhancement of Competitiveness of the Capital Goods Sector" to boost the Indian economy
The scheme will be implemented in the 12th Plan period and spill over to the 13th Plan period with an estimated outlay of Rs.930.96 crore. The gross budgetary support (GBS) from the government for the scheme would be Rs.581.22 crore and the balance Rs.349.74 crore would be contributed by the stakeholder industries
The capital goods value added contributes a fairly constant proportion of 9-12 percent of the total manufacturing value added. The apparent consumption of capital goods constitutes a constant share of 17-21 percent of the total gross domestic investment in the country.
The scheme has five components to achieve the desired result in pilot mode.
Aiming to make the Indian capital goods sector globally competitive, the Cabinet Committee on Economic Affairs (CCEA) 15th September approved the "Scheme for Enhancement of Competitiveness of the Capital Goods Sector" to boost the Indian economy
The scheme will be implemented in the 12th Plan period and spill over to the 13th Plan period with an estimated outlay of Rs.930.96 crore. The gross budgetary support (GBS) from the government for the scheme would be Rs.581.22 crore and the balance Rs.349.74 crore would be contributed by the stakeholder industries
The capital goods value added contributes a fairly constant proportion of 9-12 percent of the total manufacturing value added. The apparent consumption of capital goods constitutes a constant share of 17-21 percent of the total gross domestic investment in the country.
The scheme has five components to achieve the desired result in pilot mode.
Firstly, creation of "Advanced Centres of
Excellence" for research and develop
ment and technology development with national
centres of excellence in education and technology.
Secondly, establishment of "Integrated
Industrial Infrastructure Facilities" popularly known as Machine Tool
Parks with a basic objective of making the machine tool sector more competitive
by providing an ecosystem for production.
Thirdly, "Common Engineering Facility
Centre" for textile machinery will be be set up with active participation
of the local industry and the industry association, which in turn would improve
facilitation to the users along with visibility.
Fourthly, "Testing and Certification
Centre" for earth moving machineries in view of the fact that it is soon
going to be made a mandatory requirement and at present there is no test
facility to test earthmoving machinery like that in the automobile industry.
And finally, the creation of a "Technology
Acquisition Fund" under the Technology Acquisition Fund Programme in order
to help the capital goods Industry to acquire and assimilate specific technologies,
for achieving global standards and competitiveness within a short period of
time
SEBI accepts India Incorporations requests on
corporate governance
Acceding to representations from market participants, companies and industry associations on practical difficulties in implementing the corporate governance norms, SEBI has amended them (requests or suggestions) even before they are scheduled to come into force from October 1.
Acceding to representations from market participants, companies and industry associations on practical difficulties in implementing the corporate governance norms, SEBI has amended them (requests or suggestions) even before they are scheduled to come into force from October 1.
Companies with share capital of less than Rs 10
crore and net worth of less than Rs 25 crore, besides those listed on the SME
and SME’s institutional trading platforms (ITP), have been given the option of
implementing SEBI’s corporate governance norms.
The date of appointing a woman director on
board has been postponed to the next fiscal (April 1, 2015).
Independent directors should not have or have
had any material pecuniary relationship with a company, its parent/ subsidiary/
associate/ promoters/ or directors during the last two financial years or
during the current fiscal. The maximum tenure for independent would be
according to the Companies Act 2013 as against the 10 years stipulated earlier.
The Chairman of a company has been allowed to
be a member of the nomination and remuneration committee (earlier he was not a
part), but cannot chair these committees — the chairmanship would remain with
an independent director, said SEBI.
SEBI added the risk management committee of a
company should have majority representation from the board, and has to be
chaired by a board member, though senior executives may be inducted as members.
Earlier, this was not specified.
For related party transactions (RPT), SEBI has
explained that a “transaction” with a related party shall be construed to
include single transaction or a group of transactions in a contract. SEBI has
substituted its definition of a related party by the one defined by the
Companies Act 2013 and the applicable accounting standards.
A material RPT is one that if a transaction
exceeds 10 per cent of a company’s annual turnover. Earlier, it was the higher
of 5 per cent of turnover or 20 per cent of net worth.
The audit committee of the company has been
allowed to grant omnibus approvals for proposed RPTs, provided the committee
lays down a criteria for such approval.
Cognizant to acquire us firm TriZetto for $2.7b
Cognizant announced on 15th September that it has entered into a definitive agreement to acquire TriZetto Corporation for $2.7 billion in cash, its largest acquisition ever, subject to customary adjustments. The deal is among the biggest technology buys in the world, which will catapult Cognizant into the league of the top five leading IT services providers for the healthcare segment across the globe.
Based in Englewood, Colorado in the US, privately held TriZetto is a provider of healthcare IT software and solutions with revenue of $676 million. TriZetto and its 3,700 employees will be a part of Cognizant’s existing heal-thcare business, which cu-rrently serves more than 200 clients, including 16 of the top 20 US health plans and four of the top five pharmacy benefit management companies. Healthcare represents ab-out 26 per cent of Cognizant’s revenue of $8.84 billion (2013). The company envisages over $1.5 billion of potential revenue synergies cumulatively over the next five years.
Cognizant announced on 15th September that it has entered into a definitive agreement to acquire TriZetto Corporation for $2.7 billion in cash, its largest acquisition ever, subject to customary adjustments. The deal is among the biggest technology buys in the world, which will catapult Cognizant into the league of the top five leading IT services providers for the healthcare segment across the globe.
Based in Englewood, Colorado in the US, privately held TriZetto is a provider of healthcare IT software and solutions with revenue of $676 million. TriZetto and its 3,700 employees will be a part of Cognizant’s existing heal-thcare business, which cu-rrently serves more than 200 clients, including 16 of the top 20 US health plans and four of the top five pharmacy benefit management companies. Healthcare represents ab-out 26 per cent of Cognizant’s revenue of $8.84 billion (2013). The company envisages over $1.5 billion of potential revenue synergies cumulatively over the next five years.
RBI suggests norms for reforming PSBs
In the wake of rising frauds and corporate governance issues in public sector banks, the central bank has recommended to the government certain norms for reforming public sector banks (PSBs). On recent reports about the government looking to pare its stake in public sector banks below 51 per cent following recommendations of the P. J. Nayak Committee (to review governance of boards of banks in India), Gandhi, Deputy Governor of RBI said the government had to take a view on how much they wanted to invest in these banks.
He also said that final guidelines for giving universal banking licences on-tap would be issued in the current financial year. On the liquidity coverage ratio norms, he said banks as of now were in compliance with the norms and would be able to achieve the target.
In the wake of rising frauds and corporate governance issues in public sector banks, the central bank has recommended to the government certain norms for reforming public sector banks (PSBs). On recent reports about the government looking to pare its stake in public sector banks below 51 per cent following recommendations of the P. J. Nayak Committee (to review governance of boards of banks in India), Gandhi, Deputy Governor of RBI said the government had to take a view on how much they wanted to invest in these banks.
He also said that final guidelines for giving universal banking licences on-tap would be issued in the current financial year. On the liquidity coverage ratio norms, he said banks as of now were in compliance with the norms and would be able to achieve the target.
First set of defense sector FDI proposals gets
FIPB nod
The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defense proposals. The Government had notified new norms allowing higher FDI in the defense sector on August 26. On 16th September FIPB cleared 21 of the 35 proposals brought for its consideration. The approved proposals are worth Rs 988 crore.
The 21 approved projects include those of Bharti Shipyard, Solar Industries and Kineco Kaman Composites India relating to the defense sector. Though another proposal, of Hats off Helicopter Training, came through the Civil Aviation Ministry, it involves the Defense Ministry. The board also gave its nod to two proposals, of IndusInd Bank and ANZ Capital, related to the financial sector.
The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defense proposals. The Government had notified new norms allowing higher FDI in the defense sector on August 26. On 16th September FIPB cleared 21 of the 35 proposals brought for its consideration. The approved proposals are worth Rs 988 crore.
The 21 approved projects include those of Bharti Shipyard, Solar Industries and Kineco Kaman Composites India relating to the defense sector. Though another proposal, of Hats off Helicopter Training, came through the Civil Aviation Ministry, it involves the Defense Ministry. The board also gave its nod to two proposals, of IndusInd Bank and ANZ Capital, related to the financial sector.
Jan Dhan benefit to be extended
The RuPay debit card facility, with in-built accident insurance cover of Rs 1 lakh currently available only to Jan Dhan accountholders, will be extended to all existing bank account holders. The facility of overdraft of Rs 5,000 — after satisfactory operations in the account for some time — will also be extended to existing accountholders. Account holders can avail themselves of these benefits by submitting an application to the bank branch concerned
The RuPay debit card facility, with in-built accident insurance cover of Rs 1 lakh currently available only to Jan Dhan accountholders, will be extended to all existing bank account holders. The facility of overdraft of Rs 5,000 — after satisfactory operations in the account for some time — will also be extended to existing accountholders. Account holders can avail themselves of these benefits by submitting an application to the bank branch concerned
ADB to lend $63.3 million for urban services
The government has signed an agreement with the Asian Development Bank (ADB) for $63.3 million loan to improve urban municipal services in 14 towns in north Karnataka.
This is the fourth and the last tranche of loan under the North Karnataka Urban Sector Investment Programme to help upgrade infrastructure. The programme includes expansion of the potable water systems to provide continuous water supply with private sector participation in 12 towns, completion of sewerage networks in three towns and improvements to the road network in two towns.
The $270 million overall investment programme aims to improve basic urban services for at least 4.3 million people living in 25 North Karnataka towns by providing them with improved water supply, faster urban transportation, and other public facilities.
The government has signed an agreement with the Asian Development Bank (ADB) for $63.3 million loan to improve urban municipal services in 14 towns in north Karnataka.
This is the fourth and the last tranche of loan under the North Karnataka Urban Sector Investment Programme to help upgrade infrastructure. The programme includes expansion of the potable water systems to provide continuous water supply with private sector participation in 12 towns, completion of sewerage networks in three towns and improvements to the road network in two towns.
The $270 million overall investment programme aims to improve basic urban services for at least 4.3 million people living in 25 North Karnataka towns by providing them with improved water supply, faster urban transportation, and other public facilities.
Nod for 21 FDI’s
The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defence proposals. The Government had notified new norms allowing higher FDI in the defence sector on August 26. On 14th 16th September FIPB cleared 21 proposals, including that of Bharti Shipyard, but turned down Sistema Shyam’s request to raise foreign holding.
The proposal of Bharti Shipyard — the shipbuilder has foreign direct investments through institutional investors and non-resident Indians — to undertake defence activities was cleared, sources said. Verizon Communications India’s proposal to increase foreign equity participation by its foreign parent from 74 per cent to 100 per cent was also approved.
Other cleared proposals included those of Kineco Kaman Composites India Ltd in the defence sector and ANZ Capital Ltd in the financial services sector.
FDI doubles to $3.5 billion in July
Foreign direct investment (FDI) flows into India more than doubled to $3.5 billion in July, the department of industrial policy and promotion said on 16th September. In July 2013, the country had received FDI of $1.65 billion. During April-July this financial year, foreign inflows grew 52 per cent to $10.7 billion, compared with $7.05 billion in the corresponding period last year.
Easy norms for equity shares under FDI
The Reserve Bank of India (RBI) has eased the guidelines for issue of shares or convertible debentures under the automatic route. According to the changed norms, companies can issue equity shares to a resident outside India against any type of fund, subject to certain riders. The central bank has permitted the issuance of equity shares against any fund payable by the investee company, the remittance of which does not require prior permission of the government or RBI.
The banking regulator said the equity shares should be issued in accordance with the extant foreign direct investment guidelines on sectoral caps, pricing guidelines etc.
Earlier, under the automatic route, an Indian company could issue shares or convertible debentures to a resident outside India against lump-sum technical know-how fee, royalty external commercial borrowings and import payables of capital goods by units in special economic zones.
The norms allow issuance of shares subject to conditions such as entry route, sectoral cap, pricing guidelines, and compliance with the applicable tax laws.
The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defence proposals. The Government had notified new norms allowing higher FDI in the defence sector on August 26. On 14th 16th September FIPB cleared 21 proposals, including that of Bharti Shipyard, but turned down Sistema Shyam’s request to raise foreign holding.
The proposal of Bharti Shipyard — the shipbuilder has foreign direct investments through institutional investors and non-resident Indians — to undertake defence activities was cleared, sources said. Verizon Communications India’s proposal to increase foreign equity participation by its foreign parent from 74 per cent to 100 per cent was also approved.
Other cleared proposals included those of Kineco Kaman Composites India Ltd in the defence sector and ANZ Capital Ltd in the financial services sector.
FDI doubles to $3.5 billion in July
Foreign direct investment (FDI) flows into India more than doubled to $3.5 billion in July, the department of industrial policy and promotion said on 16th September. In July 2013, the country had received FDI of $1.65 billion. During April-July this financial year, foreign inflows grew 52 per cent to $10.7 billion, compared with $7.05 billion in the corresponding period last year.
Easy norms for equity shares under FDI
The Reserve Bank of India (RBI) has eased the guidelines for issue of shares or convertible debentures under the automatic route. According to the changed norms, companies can issue equity shares to a resident outside India against any type of fund, subject to certain riders. The central bank has permitted the issuance of equity shares against any fund payable by the investee company, the remittance of which does not require prior permission of the government or RBI.
The banking regulator said the equity shares should be issued in accordance with the extant foreign direct investment guidelines on sectoral caps, pricing guidelines etc.
Earlier, under the automatic route, an Indian company could issue shares or convertible debentures to a resident outside India against lump-sum technical know-how fee, royalty external commercial borrowings and import payables of capital goods by units in special economic zones.
The norms allow issuance of shares subject to conditions such as entry route, sectoral cap, pricing guidelines, and compliance with the applicable tax laws.
Bank credit growth falls below 10% after 5
years
For the fortnight ended September 5, annual credit growth in the banking system fell to 9.68 per cent, data released by the Reserve Bank of India (RBI) showed. This was the first time since October 2009 (9.01 per cent) that growth in bank credit fell below 10 per cent.
For the fortnight ended September 5, annual credit growth in the banking system fell to 9.68 per cent, data released by the Reserve Bank of India (RBI) showed. This was the first time since October 2009 (9.01 per cent) that growth in bank credit fell below 10 per cent.
Gas panel submits report, recommends less than
disputed price
A Committee of Secretaries (CoS) looking at the new gas pricing guidelines has submitted its report to the petroleum ministry. The exact recommendations of the panel on pricing have been kept under wraps. However, official sources said it has suggested a price less than what the Rangarajan panel had recommended — $8.4 per unit. The panel was constituted last month to review gas pricing guidelines of January 2014.
As per the guidelines, based on the recommendations of an earlier panel, headed by former chairman of Prime Minister’s Economic Advisory Council C Rangarajan, new doubled gas prices were to come into effect beginning April. But the implementation was postponed owing to the general elections in May. The government later deferred the announcement of the new price till September-end. However, a final decision on pricing might be delayed further due to Assembly polls in Maharashtra and Haryana in mid-October
Every dollar increase in gas price would raise urea production cost by Rs 1,370 per tonne, electricity tariff by 45 paise per unit, compressed natural gas prices by Rs 2.8 per kg and piped natural gas rates by Rs 1.8 per standard cubic meter.
A Committee of Secretaries (CoS) looking at the new gas pricing guidelines has submitted its report to the petroleum ministry. The exact recommendations of the panel on pricing have been kept under wraps. However, official sources said it has suggested a price less than what the Rangarajan panel had recommended — $8.4 per unit. The panel was constituted last month to review gas pricing guidelines of January 2014.
As per the guidelines, based on the recommendations of an earlier panel, headed by former chairman of Prime Minister’s Economic Advisory Council C Rangarajan, new doubled gas prices were to come into effect beginning April. But the implementation was postponed owing to the general elections in May. The government later deferred the announcement of the new price till September-end. However, a final decision on pricing might be delayed further due to Assembly polls in Maharashtra and Haryana in mid-October
Every dollar increase in gas price would raise urea production cost by Rs 1,370 per tonne, electricity tariff by 45 paise per unit, compressed natural gas prices by Rs 2.8 per kg and piped natural gas rates by Rs 1.8 per standard cubic meter.
Panel on accounting norms set up
The Corporate Affairs Ministry has constituted a National Advisory Committee on Accounting Standards under the chairmanship of Amarjit Chopra to advise the Central Government on the formulation and laying down of accounting policies and accounting standards. Besides Chopra, who is a former CA Institute President, the committee will have 12-other members including nominees of industry bodies — CII, FICCI and Assocham — and regulatory bodies such as RBI and SEBI. The panel Chairman and members will have a term of one year from September 18 or till the constitution of the National Financial Reporting Authority, whichever is earlier.
The Corporate Affairs Ministry has constituted a National Advisory Committee on Accounting Standards under the chairmanship of Amarjit Chopra to advise the Central Government on the formulation and laying down of accounting policies and accounting standards. Besides Chopra, who is a former CA Institute President, the committee will have 12-other members including nominees of industry bodies — CII, FICCI and Assocham — and regulatory bodies such as RBI and SEBI. The panel Chairman and members will have a term of one year from September 18 or till the constitution of the National Financial Reporting Authority, whichever is earlier.
Tourism Ministry eyes 1% share in world tourist
arrivals
The Ministry of Tourism aims to get 1 per cent share of world tourist arrivals, as against the current 0.64 per cent. In 2013, India received 69.7 lakh tourists and this year expectation is it to cross 73 lakh. The country witnessed 16.9 per cent growth in foreign tourist arrivals in August 2014 compared to the same month last year.
The Ministry has launched ‘Culinary Survey of India’ for identification, documentation and archiving of recipes across the country. It recently laid the foundation stone for the Indian Culinary Institute in Tirupati. The Ministry will soon launch a Cleanliness Index which will rank all tourist destinations in the country.
The Ministry of Tourism aims to get 1 per cent share of world tourist arrivals, as against the current 0.64 per cent. In 2013, India received 69.7 lakh tourists and this year expectation is it to cross 73 lakh. The country witnessed 16.9 per cent growth in foreign tourist arrivals in August 2014 compared to the same month last year.
The Ministry has launched ‘Culinary Survey of India’ for identification, documentation and archiving of recipes across the country. It recently laid the foundation stone for the Indian Culinary Institute in Tirupati. The Ministry will soon launch a Cleanliness Index which will rank all tourist destinations in the country.
PFRDA panel to assess investment norms
Pension fund regulator PFRDA has set up an expert committee under the chairmanship of former Sebi chairman G N Bajpai to review investment guidelines for pension system, other than for government employees, and suggest changes to make the scheme more attractive.
The panel will, among other things, "review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes," PFRDA said in a notification.
The six-member panel would also make recommendations on any other related issue which has a bearing on the investment pattern of New Pension System and will affect the interest of subscribers to the NPS such as active and passive management.
The penal which is expected to submit its report in six weeks would also look into the monitoring and supervision mechanism over pension fund manager investment portfolio.
Members of the panel are Deepak Satwalekar, former CEO and Managing Director at HDFC Standard Life Insurance Company; S B Mathur, former LIC Chairman; C R Murlidharan, former IRDA Member and Madhavi Das, Executive Director, PFRDA.
In 2010, the PFRDA had set up a committee headed by G N Bajpai and entrusted it with the task of analysing the fee structure and suggesting changes to the National Pension System (NPS).
The central government had introduced the New Pension System (NPS) in January 2004.
Initially, the New Pension System covered new entrants to central government services (excluding Armed Forces) and some state government services. From May 1, 2009, PFRDA has extended NPS to all citizens of India, including workers of the unorganised sector. NPS has garnered a total of 71 lakh subscribers by July 31, 2014 and is managing above Rs 58,000 crore of funds.
Pension fund regulator PFRDA has set up an expert committee under the chairmanship of former Sebi chairman G N Bajpai to review investment guidelines for pension system, other than for government employees, and suggest changes to make the scheme more attractive.
The panel will, among other things, "review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes," PFRDA said in a notification.
The six-member panel would also make recommendations on any other related issue which has a bearing on the investment pattern of New Pension System and will affect the interest of subscribers to the NPS such as active and passive management.
The penal which is expected to submit its report in six weeks would also look into the monitoring and supervision mechanism over pension fund manager investment portfolio.
Members of the panel are Deepak Satwalekar, former CEO and Managing Director at HDFC Standard Life Insurance Company; S B Mathur, former LIC Chairman; C R Murlidharan, former IRDA Member and Madhavi Das, Executive Director, PFRDA.
In 2010, the PFRDA had set up a committee headed by G N Bajpai and entrusted it with the task of analysing the fee structure and suggesting changes to the National Pension System (NPS).
The central government had introduced the New Pension System (NPS) in January 2004.
Initially, the New Pension System covered new entrants to central government services (excluding Armed Forces) and some state government services. From May 1, 2009, PFRDA has extended NPS to all citizens of India, including workers of the unorganised sector. NPS has garnered a total of 71 lakh subscribers by July 31, 2014 and is managing above Rs 58,000 crore of funds.
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