SB I’s education loans now come with credit cards
State Bank of India is offering credit cards along with education loans to students to stay connected with them and to keep bad loans down. India’s largest bank is expecting the usage of the credit card and payment of dues by students to build up credit history, giving it a clue on the borrower’s credit behavior. The credit card has a credit limit of Rs 5,000 which is guaranteed by the parent. As at June-end 2014, SBI had an education loan portfolio of Rs 14,945 crore, up 7.21 per cent year-on-year.
State Bank of India is offering credit cards along with education loans to students to stay connected with them and to keep bad loans down. India’s largest bank is expecting the usage of the credit card and payment of dues by students to build up credit history, giving it a clue on the borrower’s credit behavior. The credit card has a credit limit of Rs 5,000 which is guaranteed by the parent. As at June-end 2014, SBI had an education loan portfolio of Rs 14,945 crore, up 7.21 per cent year-on-year.
PSBs need to raise Rs 2.2 lakh cr to meet Basel III norms:
Moody’s2
Major public sector banks in India will need to raise Rs. 1.5-2.2 lakh crore in the next four-five years to meet Basel III norms, rating agency Moody’s said in a report. The public sector banks that it rates could need external capital, assuming a moderate recovery in GDP growth and a gradual decline in non-performing loans from the current levels, the agency said.
Moody’s rates 11 public sector banks, representing 62 per cent of net loans in the Indian banking system.
Banks may tap the equity markets to raise capital, but with still-low bank valuations they could struggle to raise the required amount. That’s even with the recent rally in Indian stock prices, the report highlighted.
Moody’s noted that a significant part of the required capital — around Rs. 80,000-90,000 crore could be in the form of Additional Tier 1 capital.
Basel III raises the minimum required capital levels for both Total Tier 1 to 7 per cent and Common Equity Tier 1 capital to 5.5 per cent. Besides, banks will also need to meet a Capital Conservation Buffer in order to pay dividends. That will put pressure on public sector banks, as low capital levels remain a key credit weakness, Moody’s said.
About basel-iii norms
Basel III or Basel 3 released in December, 2010 is the third in the series of Basel Accords. These accords deal with risk management aspects for the banking sector. In a nut shell we can say that Basel iii is the global regulatory standard (agreed upon by the members of the Basel Committee on Banking Supervision) on bank capital adequacy, stress testing and market liquidity risk. (Basel I and Basel II are the earlier versions of the same, and were less stringent)
Major public sector banks in India will need to raise Rs. 1.5-2.2 lakh crore in the next four-five years to meet Basel III norms, rating agency Moody’s said in a report. The public sector banks that it rates could need external capital, assuming a moderate recovery in GDP growth and a gradual decline in non-performing loans from the current levels, the agency said.
Moody’s rates 11 public sector banks, representing 62 per cent of net loans in the Indian banking system.
Banks may tap the equity markets to raise capital, but with still-low bank valuations they could struggle to raise the required amount. That’s even with the recent rally in Indian stock prices, the report highlighted.
Moody’s noted that a significant part of the required capital — around Rs. 80,000-90,000 crore could be in the form of Additional Tier 1 capital.
Basel III raises the minimum required capital levels for both Total Tier 1 to 7 per cent and Common Equity Tier 1 capital to 5.5 per cent. Besides, banks will also need to meet a Capital Conservation Buffer in order to pay dividends. That will put pressure on public sector banks, as low capital levels remain a key credit weakness, Moody’s said.
About basel-iii norms
Basel III or Basel 3 released in December, 2010 is the third in the series of Basel Accords. These accords deal with risk management aspects for the banking sector. In a nut shell we can say that Basel iii is the global regulatory standard (agreed upon by the members of the Basel Committee on Banking Supervision) on bank capital adequacy, stress testing and market liquidity risk. (Basel I and Basel II are the earlier versions of the same, and were less stringent)
Philips to split into 2 companies
Dutch electronics group Philips NV said 23rd Septemeber it would split itself into two companies, spinning off its iconic lighting business 123 years after making its first incandescent light bulb.
It's the latest in a series of restructuring moves for the Dutch conglomerate, amid consecutive profit warnings and criticism its cumbersome corporate structure is slowing it down. Philips said it would merge its health-care and consumer-electronics divisions into a single company, which will remain the core of Philips's business. At the same time, it plans to hive off its lighting business, and possibly spin that division off in an initial public offering as early as 2016.
Philips was founded in 1891 by Frederik Philips and his son Gerard in the southern Dutch town of Eindhoven. Initially a producer of light bulbs, Philips grew to become one of Europe's largest industrial companies in the 20th century. It is credited with innovations like the compact disc and the electric shaver. In the 1970s, it employed more than 400,000 people globally.
Dutch electronics group Philips NV said 23rd Septemeber it would split itself into two companies, spinning off its iconic lighting business 123 years after making its first incandescent light bulb.
It's the latest in a series of restructuring moves for the Dutch conglomerate, amid consecutive profit warnings and criticism its cumbersome corporate structure is slowing it down. Philips said it would merge its health-care and consumer-electronics divisions into a single company, which will remain the core of Philips's business. At the same time, it plans to hive off its lighting business, and possibly spin that division off in an initial public offering as early as 2016.
Philips was founded in 1891 by Frederik Philips and his son Gerard in the southern Dutch town of Eindhoven. Initially a producer of light bulbs, Philips grew to become one of Europe's largest industrial companies in the 20th century. It is credited with innovations like the compact disc and the electric shaver. In the 1970s, it employed more than 400,000 people globally.
RBI Panel recommends 360-degree feed back
A report by a Reserve Bank of India (RBI) panel has said 360-degree feedback is important for a transparent and comprehensive performance assessment exercise, one that ensures adequate performance differentiation between employees.
In its report, the central bank’s committee on capacity building in banks and non-banking financial entities said posts of chief learning officer should be created in commercial banks, adding those appointed to such posts should develop a ‘learnability index’, a measure of an individual’s ability to learn. This would be applied as an input to judge “promotability”, disseminate knowledge across the organization and monitor and augment learning and sharing, it said.
Bankers will need to specialize in different business functions, while maintaining basic general competency. Banks need to identify five-six such tracks within which the staff can be groomed,” the report said.
The panel also suggested a stronger and more competitive human resource framework for the overall skill development of banks and non-banking financial entities regulated by RBI.
The committee was set up with the objective of implementing non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) related to capacity building in banks and non-banking financial companies (NBFCs), streamlining training intervention and suggesting changes to address the increasing challenges in these sectors. The committee is chaired by G Gopalakrishna, former executive director of RBI.
The panel was also tasked with evolving an appropriate certification mechanism for training by examining possible incentives for undertaking certification programmes and covering all levels — from the lowest rung to the board-level.
The committee added banks must avoid transfers for the sake of preset norms. “Job rotation in banks especially public sector banks should not be done in a mechanical manner, but through well laid-down criteria,” it said.
It also suggested ways to address replacement of talent within banks. The panel said the lack of replacement talent was one of the biggest challenges, adding to address this, banks should develop an internal expert pool and allow free movement of talent within the organisation.
Key Points:
A report by a Reserve Bank of India (RBI) panel has said 360-degree feedback is important for a transparent and comprehensive performance assessment exercise, one that ensures adequate performance differentiation between employees.
In its report, the central bank’s committee on capacity building in banks and non-banking financial entities said posts of chief learning officer should be created in commercial banks, adding those appointed to such posts should develop a ‘learnability index’, a measure of an individual’s ability to learn. This would be applied as an input to judge “promotability”, disseminate knowledge across the organization and monitor and augment learning and sharing, it said.
Bankers will need to specialize in different business functions, while maintaining basic general competency. Banks need to identify five-six such tracks within which the staff can be groomed,” the report said.
The panel also suggested a stronger and more competitive human resource framework for the overall skill development of banks and non-banking financial entities regulated by RBI.
The committee was set up with the objective of implementing non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) related to capacity building in banks and non-banking financial companies (NBFCs), streamlining training intervention and suggesting changes to address the increasing challenges in these sectors. The committee is chaired by G Gopalakrishna, former executive director of RBI.
The panel was also tasked with evolving an appropriate certification mechanism for training by examining possible incentives for undertaking certification programmes and covering all levels — from the lowest rung to the board-level.
The committee added banks must avoid transfers for the sake of preset norms. “Job rotation in banks especially public sector banks should not be done in a mechanical manner, but through well laid-down criteria,” it said.
It also suggested ways to address replacement of talent within banks. The panel said the lack of replacement talent was one of the biggest challenges, adding to address this, banks should develop an internal expert pool and allow free movement of talent within the organisation.
Key Points:
Create the position of “chief learning officer”, responsible
for leadership development and collaborative learning in commercial banks
Banks should Endeavour to expand enrolment of select internal
employees as part-time faculty to provide internal support for training
initiatives
To deal with talent replacement, there should be free
movement of talent within the organization for creation of a larger workforce
of trained personnel
Job rotation, especially in PSBs, should not be carried in a
mechanical manner but through a well laid down criterion
All banks may adopt e-learning methods and ensure that
function-specific lessons are made available to its staff
Conducting a common Banking Aptitude Test (BAT) at entry
levels.
Apex court scraps 214 of 218 coal blocks allotted since 1993
In a major blow to companies involved in coal mining, the Supreme Court on 24th September ordered the cancellation of 214 of the 218 coal blocks that were allocated between 1993 and 2011. It also imposed a penalty of Rs 295 per ton on the coal illegally extracted by 42 companies which had commenced production.
A three-judge Bench comprising Chief Justice RM Lodha and Justices Madan Lokur and Kurian Joseph rejected the argument made on behalf of the coal companies that the cancellation of the blocks would have a huge impact on the economy.
The order said though the allotment of 42 of 46 coal blocks were quashed, the cancellation would take effect only after six months, with effect from March 31, 2015.
According to the court, the estimated loss is Rs 295 per ton of coal and the compensatory payment on this basis should be made by the companies which had commenced extraction within three months and, in any case, on or before December 31, 2014. The coal extracted hereafter till March 31, 2015, will also attract the additional levy of Rs 295/tone.
The Government is expected to mop up Rs 8,000-10,000 crore through this compensatory payment. Acting on two public interest writ petitions, the court on August 25 held that the allotment of coal blocks made by the Screening Committee of the Government, as also those made through the Government dispensation route, were arbitrary and illegal.
Blocks allocated to Anil Ambani-run Reliance Power’s 3,950 MW Sasan Ultra Mega Power Project — Moher and Moher Amroli Extension — and one each belonging to Steel Authority of India (Tasra) and NTPC’s (Pakri Barwadih) were spared the de-allocation. The reason for exempting Reliance’s two coal blocks was that the Sasan project was awarded to Reliance Power through a tariff-based international competitive bidding process. The blocks awarded to NTPC and SAIL were not de-allocated because both are Central public sector undertakings eligible to mine under the Coal Mining Nationalization Act.
Chronology
In a major blow to companies involved in coal mining, the Supreme Court on 24th September ordered the cancellation of 214 of the 218 coal blocks that were allocated between 1993 and 2011. It also imposed a penalty of Rs 295 per ton on the coal illegally extracted by 42 companies which had commenced production.
A three-judge Bench comprising Chief Justice RM Lodha and Justices Madan Lokur and Kurian Joseph rejected the argument made on behalf of the coal companies that the cancellation of the blocks would have a huge impact on the economy.
The order said though the allotment of 42 of 46 coal blocks were quashed, the cancellation would take effect only after six months, with effect from March 31, 2015.
According to the court, the estimated loss is Rs 295 per ton of coal and the compensatory payment on this basis should be made by the companies which had commenced extraction within three months and, in any case, on or before December 31, 2014. The coal extracted hereafter till March 31, 2015, will also attract the additional levy of Rs 295/tone.
The Government is expected to mop up Rs 8,000-10,000 crore through this compensatory payment. Acting on two public interest writ petitions, the court on August 25 held that the allotment of coal blocks made by the Screening Committee of the Government, as also those made through the Government dispensation route, were arbitrary and illegal.
Blocks allocated to Anil Ambani-run Reliance Power’s 3,950 MW Sasan Ultra Mega Power Project — Moher and Moher Amroli Extension — and one each belonging to Steel Authority of India (Tasra) and NTPC’s (Pakri Barwadih) were spared the de-allocation. The reason for exempting Reliance’s two coal blocks was that the Sasan project was awarded to Reliance Power through a tariff-based international competitive bidding process. The blocks awarded to NTPC and SAIL were not de-allocated because both are Central public sector undertakings eligible to mine under the Coal Mining Nationalization Act.
Chronology
July, 1992: The Coal Ministry orders setting up of a
screening committee to consider proposals from private power companies for
captive coal mining on first-cum-first-serve basis. Screening committee
guidelines give preference to large projects of power and steel companies.
July 14, 1992: Many coal blocks, which were not in the
production plans of Coal India or the Singareni Collieries Company, were
identified and a list of 143 blocks were prepared.
1993-2010: A total of 70 coal mines or blocks were allocated
between 1993 and 2005, 53 in 2006, 52 in 2007, 24 in 2008, 16 in 2009 and 1 in
2010.
In all, 216 blocks were given between 1993 and 2010. Of
these, 24 were taken away at different points in time, effectively leaving the
total number of coal permits at 194.
March, 2012: A draft CAG report accuses the government of
'inefficient' allocation of blocks during 2004-2009; estimates windfall gains
to allotters at Rs 10.7 lakh crore.
May 29, 2012: Prime Minister Manmohan Singh offers to give up
his public life if found guilty in the scam.
May 31, 2012: The CVC, based on a complaint of two BJP MPs,
Prakash Javadekar and Hansraj Ahir, directs a CBI inquiry.
June, 2012: The Coal Ministry forms an inter-ministerial
panel to review the process of allocation of blocks and to decide either on
de-allocations or forfeiture of bank guarantees. Since then, the government has
taken back about 80 coal fields while bank guarantees in 42 cases have been
forfeited.
August 2012: CAG's final report, tabled in Parliament, tones
down loss to exchequer figure to Rs 1.86 lakh crore.
August 25, 2012: The government claims CAG's presumptive loss
theory flawed, no mining yet.
August 27, 2012: PM says CAG flawed; "The observations
of the CAG are clearly disputable."
September 6, 2012: A PIL in the Supreme Court seeks cancellation
of 194 coal block allotments. The apex court begins monitoring the CBI probe
into the coal field allocations
March 2013: The apex court asks CBI not to share probe
details with the government.
April 23, 2013: The Standing Committee on Coal and Steel in a
report tabled in Parliament says coal blocks distributed between 1993-2008 done
in unauthorised manner. Says allotment of mines where production not started
should be cancelled
April 26, 2013: CBI Director Ranjit Sinha submits affidavit
saying investigation report shared with Law Minister Ashwani Kumar.
May 10, 2013: Ashwani Kumar resigns.
June 11, 2013: CBI registers first information report (FIR)
against Naveen Jindal and Dasari Narayana Rao.
October 16, 2013: CBI files an FIR against industrialist
Kumar Mangalam Birla and former Cal Secretary P C Parakh.
July 2014: The Supreme Court sets up a special CBI court to
try all coal field allocation cases.
August, 2014: The CBI decides to close its case against Birla
and Parakh.
August 25, 2014: The Supreme Court rules that coal blocks
allocated by the government between 1993 and 2010 were illegal.
ADB ups growth forecast to 6.3%
A revival of investment and improved growth in advanced economies is set to benefit the Indian economy, says an Asian Development Bank report. The Asian Development Outlook 2014, an annual publication by the ADB has maintained its forecast for India’s growth for FY15 at 5.5 percent but has upgraded its forecast for fiscal year ending 31 March 2016 (FY16) to 6.3 percent from 6 percent.
The Asian Development Bank is a regional development bank established on 22 August 1966 which is headquartered in Metro, Philippines to facilitate economic development of countries in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly known as the United Nations Economic Commission for Asia and the Far East) and non-regional developed countries. From 31 members at its establishment, ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside
A revival of investment and improved growth in advanced economies is set to benefit the Indian economy, says an Asian Development Bank report. The Asian Development Outlook 2014, an annual publication by the ADB has maintained its forecast for India’s growth for FY15 at 5.5 percent but has upgraded its forecast for fiscal year ending 31 March 2016 (FY16) to 6.3 percent from 6 percent.
The Asian Development Bank is a regional development bank established on 22 August 1966 which is headquartered in Metro, Philippines to facilitate economic development of countries in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly known as the United Nations Economic Commission for Asia and the Far East) and non-regional developed countries. From 31 members at its establishment, ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside
Industry lines up behind Modi’s pitch
Prime Minister Narendra Modi launched the ‘Make in India’ campaign at a high-profile event on 25th September, which captains of industry from India and abroad immediately joined by committing multi-crore investments and projects in the presence of Mr. Modi.
Unveiling the campaign logo earlier, Mr. Modi said “FDI should be understood as ‘First Develop India’ along with ‘Foreign Direct Investment’” while encouraging investors not to just look at India as merely a market but also as an opportunity.
The Prime Minister pointed out that it was crucial to increase the purchasing power of the common man to boost demand and thus spur development.
All about programme
The launch of Prime Minister Narendra Modi’s flagship ‘Make in India’ campaign was simultaneous at the national, State and global level in Indian missions abroad. The ‘Make in India’ initiative has its origin in the Prime Minister’s Independence Day speech where he called for the initiative coupled with a ‘Zero Defect Zero Effect’ policy.
Given the government’s intention to boost domestic manufacturing and create new jobs, its proposal to introduce a new policy for Micro, Small and Medium Enterprises (MSMEs)
India’s MSME sector has recorded more than 10 per cent growth in recent years despite the economic slowdown.
MSMEs contribute nearly eight per cent to the national GDP, employing over eight crore people in nearly four crore enterprises and accounting for 45 per cent of manufactured output and 40 per cent of exports from India. Thus, the focus of the government on MSMEs at this juncture is justified given their potential for providing growth and employment.
In view of the significance of the sector, the government had announced a number of measures in its first budget. Some of the significant initiatives were setting up of Rs.10,000 crore of venture capital fund and establishing a nationwide, district-level incubation and accelerator programme for encouraging entrepreneurship.
Other important budgetary announcements included establishing a network of Technology Centres; revising the definition of MSMEs for providing higher capital ceiling, friendly legal bankruptcy framework to enable easy exit, a programme to facilitate forward and backward linkages with multiple value chain of manufacturing and service delivery to be put in place, and launching the Skill India movement for youth with an emphasis on employability and entrepreneurship.
A committee was also proposed to examine the financial architecture with a view to removing bottlenecks and creating new rules and structures for the sector.
The government recently inaugurated a holistic, innovative and low-cost National Small Industries Corporation’s online e-commerce shopping portal for buying and selling of products produced by MSMEs.
MSMEs are mainly classified as manufacturing and service enterprises.
There is a specific stipulated limit on investment in plant and machinery for each of the respective micro, small and medium segments in manufacturing with a maximum limit of Rs.10 crore, and for equipment in service enterprises with a maximum limit of Rs.5 crore.
MSMEs with 94 per cent of units unregistered are highly diverse in terms of their size and the level of technology employed. The production in the sector ranges from output of grass-root village industries and auto components, to microprocessors, electronic components and electro-medical devices.
Since 1948, successive governments have been making intense efforts to encourage MSMEs but the sector continues to be under stress.
The office of Development Commissioner for MSMEs was set up in 1954 and a dedicated Ministry for MSMEs in 1999. The Small Industries Development Bank of India (SIDBI), established in 1990, is the principal financial institution for promotion, financing and development of the MSMEs in addition to commercial banks, State financial corporations, and State industrial development corporations.
Despite such efforts, some of the key problems faced by MSMEs continue to be related to availability of technology, infrastructure and managerial competence, and limitations posed by labour laws, taxation policy, market uncertainty, imperfect competition and the skill level of the workforce.
Prime Minister Narendra Modi launched the ‘Make in India’ campaign at a high-profile event on 25th September, which captains of industry from India and abroad immediately joined by committing multi-crore investments and projects in the presence of Mr. Modi.
Unveiling the campaign logo earlier, Mr. Modi said “FDI should be understood as ‘First Develop India’ along with ‘Foreign Direct Investment’” while encouraging investors not to just look at India as merely a market but also as an opportunity.
The Prime Minister pointed out that it was crucial to increase the purchasing power of the common man to boost demand and thus spur development.
All about programme
The launch of Prime Minister Narendra Modi’s flagship ‘Make in India’ campaign was simultaneous at the national, State and global level in Indian missions abroad. The ‘Make in India’ initiative has its origin in the Prime Minister’s Independence Day speech where he called for the initiative coupled with a ‘Zero Defect Zero Effect’ policy.
Given the government’s intention to boost domestic manufacturing and create new jobs, its proposal to introduce a new policy for Micro, Small and Medium Enterprises (MSMEs)
India’s MSME sector has recorded more than 10 per cent growth in recent years despite the economic slowdown.
MSMEs contribute nearly eight per cent to the national GDP, employing over eight crore people in nearly four crore enterprises and accounting for 45 per cent of manufactured output and 40 per cent of exports from India. Thus, the focus of the government on MSMEs at this juncture is justified given their potential for providing growth and employment.
In view of the significance of the sector, the government had announced a number of measures in its first budget. Some of the significant initiatives were setting up of Rs.10,000 crore of venture capital fund and establishing a nationwide, district-level incubation and accelerator programme for encouraging entrepreneurship.
Other important budgetary announcements included establishing a network of Technology Centres; revising the definition of MSMEs for providing higher capital ceiling, friendly legal bankruptcy framework to enable easy exit, a programme to facilitate forward and backward linkages with multiple value chain of manufacturing and service delivery to be put in place, and launching the Skill India movement for youth with an emphasis on employability and entrepreneurship.
A committee was also proposed to examine the financial architecture with a view to removing bottlenecks and creating new rules and structures for the sector.
The government recently inaugurated a holistic, innovative and low-cost National Small Industries Corporation’s online e-commerce shopping portal for buying and selling of products produced by MSMEs.
MSMEs are mainly classified as manufacturing and service enterprises.
There is a specific stipulated limit on investment in plant and machinery for each of the respective micro, small and medium segments in manufacturing with a maximum limit of Rs.10 crore, and for equipment in service enterprises with a maximum limit of Rs.5 crore.
MSMEs with 94 per cent of units unregistered are highly diverse in terms of their size and the level of technology employed. The production in the sector ranges from output of grass-root village industries and auto components, to microprocessors, electronic components and electro-medical devices.
Since 1948, successive governments have been making intense efforts to encourage MSMEs but the sector continues to be under stress.
The office of Development Commissioner for MSMEs was set up in 1954 and a dedicated Ministry for MSMEs in 1999. The Small Industries Development Bank of India (SIDBI), established in 1990, is the principal financial institution for promotion, financing and development of the MSMEs in addition to commercial banks, State financial corporations, and State industrial development corporations.
Despite such efforts, some of the key problems faced by MSMEs continue to be related to availability of technology, infrastructure and managerial competence, and limitations posed by labour laws, taxation policy, market uncertainty, imperfect competition and the skill level of the workforce.
‘Made in China’ launched…..
The Chinese government launched a ‘Made in China’ campaign, with a host of tax concessions. China would encourage high-tech imports, research and development (R&D) to upgrade ‘Made in China’, a decision by the Chinese government said.
Under the new campaign, China will use tax breaks to encourage enterprises to upgrade their equipment and increase R&D efforts to improve the manufacturing industry. Companies that bought new R&D equipment and facilities after January 1 or possess minor fixed assets will have taxes reduced on the basis of value, the Cabinet, presided over by Premier Li Keqiang, has decided.
Imported high-tech equipment will also enjoy tax deductions in aviation, bio-medicine production, manufacturing of railway and ships, electronics production, including computer and telecommunications, instrument production and those used in making IT products and software, state-run Xinhua news agency reported on 25th September.
China’s new move aims to prompt technical improvement of companies, especially innovation of small and medium-sized enterprises, which in the past three decades propelled it to become the world’s second-largest economy and made it a powerhouse of the manufacturing industry.
China's manufacturing sector, a key driver of its economic growth, is regarded highly competitive in the global market.
The Chinese government launched a ‘Made in China’ campaign, with a host of tax concessions. China would encourage high-tech imports, research and development (R&D) to upgrade ‘Made in China’, a decision by the Chinese government said.
Under the new campaign, China will use tax breaks to encourage enterprises to upgrade their equipment and increase R&D efforts to improve the manufacturing industry. Companies that bought new R&D equipment and facilities after January 1 or possess minor fixed assets will have taxes reduced on the basis of value, the Cabinet, presided over by Premier Li Keqiang, has decided.
Imported high-tech equipment will also enjoy tax deductions in aviation, bio-medicine production, manufacturing of railway and ships, electronics production, including computer and telecommunications, instrument production and those used in making IT products and software, state-run Xinhua news agency reported on 25th September.
China’s new move aims to prompt technical improvement of companies, especially innovation of small and medium-sized enterprises, which in the past three decades propelled it to become the world’s second-largest economy and made it a powerhouse of the manufacturing industry.
China's manufacturing sector, a key driver of its economic growth, is regarded highly competitive in the global market.
Govt. to shut six ailing PSUs
The government on 25th September said it has begun the process of reviving five ailing PSUs and is working on one-time settlement involving voluntary retirement scheme entailing a cost of Rs 1,000 crore for employees of six state-run units not capable of revival.
The government on 25th September said it has begun the process of reviving five ailing PSUs and is working on one-time settlement involving voluntary retirement scheme entailing a cost of Rs 1,000 crore for employees of six state-run units not capable of revival.
Govt. trims borrowing target by Rs 8,000 crore
The Central Government on 26th September said it would borrow Rs.2.40 lakh crore from markets in the second half of the current fiscal, Rs.8,000 crore less than the annual estimate. With this, the borrowing by way of dated securities (G-secs) for the entire fiscal will total Rs.5.92 lakh crore as against the Budget Estimate (BE) of Rs.6 lakh crore. Borrowing calendar was finalized by the government in consultation with the Reserve Bank of India.
The Central Government on 26th September said it would borrow Rs.2.40 lakh crore from markets in the second half of the current fiscal, Rs.8,000 crore less than the annual estimate. With this, the borrowing by way of dated securities (G-secs) for the entire fiscal will total Rs.5.92 lakh crore as against the Budget Estimate (BE) of Rs.6 lakh crore. Borrowing calendar was finalized by the government in consultation with the Reserve Bank of India.
S & P’s rating upgrade to boost foreign investments
The global ratings agency Standard & Poor’s raised India’s sovereign outlook from “negative” to “stable.” The upgrade signals a greater margin of safety on creditworthiness and thus improves India’s attractiveness as an investment destination to foreign investors. The benefits further extend to Indian companies as overseas borrowing rates come down. The stable outlook augurs well for the rupee that has weakened in the past week. The S&P cited two reasons for the change in outlook. First, a stronger political mandate improves the government’s ability to implement reforms, spur growth and improve its fiscal performance. Then, India’s external account has improved.
With the S&P upgrade, all three major global credit agencies have now placed India’s sovereign rating at the lowest investment grade but with a stable outlook. S&P cut India’s rating to “BBB-minus” in April 2012.
Analysis
The global ratings agency Standard & Poor’s raised India’s sovereign outlook from “negative” to “stable.” The upgrade signals a greater margin of safety on creditworthiness and thus improves India’s attractiveness as an investment destination to foreign investors. The benefits further extend to Indian companies as overseas borrowing rates come down. The stable outlook augurs well for the rupee that has weakened in the past week. The S&P cited two reasons for the change in outlook. First, a stronger political mandate improves the government’s ability to implement reforms, spur growth and improve its fiscal performance. Then, India’s external account has improved.
With the S&P upgrade, all three major global credit agencies have now placed India’s sovereign rating at the lowest investment grade but with a stable outlook. S&P cut India’s rating to “BBB-minus” in April 2012.
Analysis
One of the significant reasons for the upward revision
according to S&P was that “the new government has both the willingness and
capacity to implement reforms necessary to restore some of India’s lost growth
potential. This is exactly what Mr. Modi appears eager to convey through his
Make in India campaign, launched in New Delhi’s
Prime Minister Modi struck pointed out how Indian companies
were forced to consider investing outside the country due to policy flip-flops
and delays in clearances. In that sense, his FDI — First Develop India — was a
signal to companies that his government would create an enabling environment
for investment, which he expected they would reciprocate by committing their
energies and investments to the country.
It is also significant that he thought it fit to point out
India’s low ranking as regards the ease of doing business, assuring investors
thereby that he was sensitising the bureaucracy to get its act together on this
critical point.
The jury will be out on this issue, going by the experience
of the collapse of similar efforts to untangle red tape.
Indeed, S&P has referred to the fiscal constraints in
terms of the high subsidy burden on the government, observing that successive
governments have been unable to either increase the revenue base or curb
expenditure.
The remarkable turnaround in the external finances of the
country with the current account deficit at a low of 1.8 per cent has obviously
been an important factor, along with political stability, for S&P’s outlook
revision.
Standard and Poor:
Standard & Poor's Financial Services LLC (S&P) is an American financial services company. It is a division of McGraw Hill Financial that publishes financial research and analysis on stocks and bonds. S&P is considered one of the Big Three credit-rating agencies, which also include Moody's Investor Service and Fitch Ratings. Its head office is located in New York City
Standard & Poor's Financial Services LLC (S&P) is an American financial services company. It is a division of McGraw Hill Financial that publishes financial research and analysis on stocks and bonds. S&P is considered one of the Big Three credit-rating agencies, which also include Moody's Investor Service and Fitch Ratings. Its head office is located in New York City
ADB sells its 5.2% stake in Petronet
Asian Development Bank (ADB) sold its entire 5.2 per cent shareholding in Petronet LNG in a bulk deal on 26th September. ADB sold its 39 million shares for Rs 183.2 apiece. The total transaction size was Rs 714.48 crore. Some of the shares were bought by foreign institutional investor Citigroup Global Markets (Mauritius) Pvt Ltd, HDFC Top 200 Fund and HDFC Equity Fund.The promoter shareholders of PLL are Indian Oil Corporation, GAIL, ONGC and Bharat Petroleum Corporation, which hold 12.5 per cent each.
Asian Development Bank (ADB) sold its entire 5.2 per cent shareholding in Petronet LNG in a bulk deal on 26th September. ADB sold its 39 million shares for Rs 183.2 apiece. The total transaction size was Rs 714.48 crore. Some of the shares were bought by foreign institutional investor Citigroup Global Markets (Mauritius) Pvt Ltd, HDFC Top 200 Fund and HDFC Equity Fund.The promoter shareholders of PLL are Indian Oil Corporation, GAIL, ONGC and Bharat Petroleum Corporation, which hold 12.5 per cent each.
SEBI notified final rules for REITs and InvITs
Security Exchange Board of India on 26th September 2014 notified the final rules for setting up of Real Estate Investment Trusts (REITs) Regulations 2014 and Infrastructure Investment Trusts (InvITs) Regulations 2014. The notifications would help in attracting more funds in a transparent manner into the realty and infrastructure sectors.
The notification on REITs has been issued after SEBI in August 2014 said that the REITs should operate with an asset pool of at least 5 billion rupees (81.8 million dollars). It also said that the REITs should have an initial issue size of at least 2.5 billion rupees for shareholders.
About REITs and InvITs
The REITs and InvITs are listed entities that mainly invest in income-producing assets, the earnings of which are mostly distributed to their shareholders. They generally get special tax treatment.
Security Exchange Board of India on 26th September 2014 notified the final rules for setting up of Real Estate Investment Trusts (REITs) Regulations 2014 and Infrastructure Investment Trusts (InvITs) Regulations 2014. The notifications would help in attracting more funds in a transparent manner into the realty and infrastructure sectors.
The notification on REITs has been issued after SEBI in August 2014 said that the REITs should operate with an asset pool of at least 5 billion rupees (81.8 million dollars). It also said that the REITs should have an initial issue size of at least 2.5 billion rupees for shareholders.
About REITs and InvITs
The REITs and InvITs are listed entities that mainly invest in income-producing assets, the earnings of which are mostly distributed to their shareholders. They generally get special tax treatment.
SBI and Korea bank agreement
State Bank of India (SBI), on 26th September 2014 announced that it has signed a Line of Credit (LoC) of 500 million dollar with Export-Import Bank of Korea (Korea Eximbank). The LoC will be utilised to provide finance to SBI’s clients in India and neighbouring countries that have business relationships either by way of equity participation or regular trade with Korean companies globally, as well as joint ventures or subsidiaries of Korean companies.
State Bank of India (SBI), on 26th September 2014 announced that it has signed a Line of Credit (LoC) of 500 million dollar with Export-Import Bank of Korea (Korea Eximbank). The LoC will be utilised to provide finance to SBI’s clients in India and neighbouring countries that have business relationships either by way of equity participation or regular trade with Korean companies globally, as well as joint ventures or subsidiaries of Korean companies.
SBI, ICICI allowed kids to operate bank accounts
independently
State Bank of India (SBI) and Industrial Credit and Investment Corporation of India (ICICI) on 24 September 2014 allowed kids to operate bank accounts independently.
The bank account is available for all kids above 10 who can sign uniformly. A uniform signature is a prerequisite since the banks are not making any allowance in signature variation for children and cheques can be returned where signatures do not match. On 5 September 2014, SBI had launched new accounts Pehla Kadam and Pehli Udaan for kids.
Now, ICICI Bank has launched Smart Stars account and Federal Bank Limited has Young Champ Account for minors. Further, ICICI Bank has imposed a debit transaction limit of 50000 rupees annually for minor-operated accounts. If the account is operated with a guardian's consent, the annual limit is enhanced to 2 lakh rupees.
The banks are offering full-fledged services to minors, including photo debit cards and access to mobile and net banking.
These minor-operated accounts were allowed by the Reserve Bank of India in May 2014 to inculcate savings behavior among the young. The only condition was that minors should not be given any overdraft or credit facility.
State Bank of India (SBI) and Industrial Credit and Investment Corporation of India (ICICI) on 24 September 2014 allowed kids to operate bank accounts independently.
The bank account is available for all kids above 10 who can sign uniformly. A uniform signature is a prerequisite since the banks are not making any allowance in signature variation for children and cheques can be returned where signatures do not match. On 5 September 2014, SBI had launched new accounts Pehla Kadam and Pehli Udaan for kids.
Now, ICICI Bank has launched Smart Stars account and Federal Bank Limited has Young Champ Account for minors. Further, ICICI Bank has imposed a debit transaction limit of 50000 rupees annually for minor-operated accounts. If the account is operated with a guardian's consent, the annual limit is enhanced to 2 lakh rupees.
The banks are offering full-fledged services to minors, including photo debit cards and access to mobile and net banking.
These minor-operated accounts were allowed by the Reserve Bank of India in May 2014 to inculcate savings behavior among the young. The only condition was that minors should not be given any overdraft or credit facility.
Use technology to detect fraud, tax panel tells customs
The Tax Administration Reform Commission (TARC), headed by Parthasarathi Shome, has recommended that the Customs department shift its focus from traditional methods of processing trade documents to a risk-management system with greater reliance on technology.
While the Customs department has initiated a risk-based management system, it has not developed an enterprise risk management framework. The framework should facilitate legitimate trade while subjecting riskier transactions to closer scrutiny, the report said.
The report is the second in a series by the commission. The first report, filed in June, had recommended abolition of the post of revenue secretary and merging CBEC and the Central Board of Direct Taxes (CBDT). Such far-reaching recommendations were not part of the second report.
The commission said risk-based management included principles of self-assessment that the Customs department had already incorporated. However, the philosophy behind self-assessment had not been internalized in the department, particularly at the operational level.
The Tax Administration Reform Commission (TARC), headed by Parthasarathi Shome, has recommended that the Customs department shift its focus from traditional methods of processing trade documents to a risk-management system with greater reliance on technology.
While the Customs department has initiated a risk-based management system, it has not developed an enterprise risk management framework. The framework should facilitate legitimate trade while subjecting riskier transactions to closer scrutiny, the report said.
The report is the second in a series by the commission. The first report, filed in June, had recommended abolition of the post of revenue secretary and merging CBEC and the Central Board of Direct Taxes (CBDT). Such far-reaching recommendations were not part of the second report.
The commission said risk-based management included principles of self-assessment that the Customs department had already incorporated. However, the philosophy behind self-assessment had not been internalized in the department, particularly at the operational level.
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.
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