Nation
Jaitley discusses sovereign wealth fund roadmap
Finance Minister Arun Jaitley on Wednesday discussed the operationalisation of India's first Rs 40,000 crore sovereign wealth fund, the National Investment and Infrastructure Fund (NIIF).
 
"Second meeting of the governing council of the NIIF was held under the chairmanship of Arun Jaitley to review the status of actions taken for the operationalisation of the NIIF and to provide the road map for further activities," the Finance Ministry said in a statement.
 
Jaitley also launched NIIF website here on Wednesday during the second governing council meet of the sovereign wealth fund.
 
The council discussed the long term investors, sovereign wealth funds and pension funds, which are seeking to invest in the NIIF, the statement said.
 
The progress on the MoUs (memorandum of understanding) for investment in NIIF with several investors such as Abu Dhabi Investment Authority from UAE, open joint-stock company Rusnano from Russia and Qatar Investment Authority, Qatar were also discussed, it said.
 
Financial Times, London has adjudged NIIF as the most innovative structure in Asia Pacific under finance category.
 
The guidelines for investment of the corpus of NIIF were also discussed at the meeting.
 
"The NIIF would have various sector-specific or investor-specific close ended funds and each fund may issue various classes of units. The government along with other investors would subscribe to the units of various funds," it said.
 
The units, investment strategy and accounts of each fund shall be distinct from and independent of the other funds, it added.
 
The shortlisting of projects for initial investment by the NIIF and the selection of its chief executive officer was also discussed at the meeting.
 
"A core team has been put in place to carry-out the activities of the NIIF," the statement said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Rajya Sabha elections raise hope of GST Bill passage: Report
Recent elections of the Rajya Sabha increase probability of Goods and Services Tax (GST) Bill being cleared by the upper house of the Parliament. If the Bill gets cleared in the Rajya Sabha, the roll out of GST could be by 1 April 2017, says Kotak Institutional Equities Research in a note. West Bengal Chief Minister Mamata Banerjee on Tuesday assuring support instructed state Finance Minister Amit Mishra and Chairman of the Empowered Committee of Finance Ministers on GST, to ensure passage of the Bill in the ensuing monsoon session of Parliament.
 
"A constitutional amendment bill requires the support of two-thirds of the members present and voting, which means the GST bill would need the support of 161 out of 241 members. If the opposition is able to garner 81 members, it can stall the legislation. The known opponents of the bill, Congress -58, Communist Party of India (Marxist) (CPI-M) -8, Dravida Munnetra Kazhagam (DMK) -4 and Communist Party of India (CPI) with single member are expected to have, between them, 71 members of Parliament (MPs). All India Anna Dravida Munnetra Kazhagam (AIADMK)’s 13 MPs will play a critical role. We do not count MPs that were nominated by the previous United Progressive Alliance (UPA) government in this list. Parties such as Janata Dal -United (JD-U) with 10 MPs and Rashtriya Janata Dal (RJD) with four are in alliance with the Congress in Bihar, although the government there is not dependent on continued support of INC. If all the regional parties were to side with the government, the (GST) Bill can pass in the Rajya Sabha. Even abstentions will work in favour of the opposition," says the research report.
 
 
In December 2015, a government panel headed by the chief economic adviser had recommended three broad rates for GST—17-18% as the standard rate for most goods and services, 12% for essential items and 40% for luxury items, and tobacco. Precious metals will be taxed at 2-6%. More importantly, the ‘reclassification’ of the current huge number of indirect taxes into one tax and rates into three rates broadly for most goods and services will result in simplification of India’s complex indirect tax system.
 
Kotak says, "A standard rate of 17%-18% (or lower) is possible only if various exemptions and low tax rates removed or reduced from the onset of GST and the tax base expands with time. Some of the bigger consumption items such as alcohol, electricity and petroleum products are being kept out of GST; precious metals will be taxed at 2-6% as per the panel. The panel’s computed revenue-neutral rate (RNR) of 15-15.5% highlights the large number of items that have nil or low indirect tax currently since the current indirect tax rate on most goods is over 20% (cumulative impact of central excise duty of 12.5% and state value added tax (VAT) of 12.5%; the bases for computation of excise duty and VAT are different though) and on services 15%."
 

"We note that the current tax rates (total indirect taxes) on most goods and services are quite different from the proposed standard rate of 17%-18%. This may create volatility in stocks and speculation about the actual rates until the rates are finalized. The final decision on the rates and the classification of items (by rates) will be taken later by the GST Council once the GST Constitutional Amendment Bill is cleared in the parliament and ratified by at least 50% of the states. The GST bill with specific details on rates and items will be enacted later by the parliament and all the state legislatures once there is consensus on the structure and specifics of GST. We expect GST to be implemented from 1 April 2017," the research note concluded.

 

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Are Indian cities ready for the coming migration wave?
According to the World Urbanization Prospects of the UN Population Division, the percentage of people residing in urban areas is slated to rise to 60 percent by 2030 and to 66.4 percent by 2050, up from 54 percent in 2015. In 1950 the corresponding figure was just under 30 percent. This shows the magnitude of change happening across the world with an ever-increasing percentage of people residing in urban areas.
 
India, as a country, has been slow to urbanise. At present, according to census 2011, roughly 31 percent of Indians reside in urban areas. Over the next few years, India is expected to urbanise rapidly -- and this percentage is slated to rise sharply.
 
A pertinent question that arises is: Do Indian cities have the wherewithal to be resilient in the face of such unprecedented migration?
 
At the core of finding an answer is a multi-stakeholder group comprising citizens, governments and businesses that can solve many of the urban issues that are being faced.
 
In the case of India, governments before the present dispensation and the present dispensation have been trying to find solutions to these questions. The earlier JNNURM and the Smart Cities Mission now are both part of the resolve to improve India's urban ecosystem.
 
It is in this context that a recent book by the World Bank becomes pertinent. "Regenerating Urban Land - A Practitioners Guide to Leveraging Private Investment" has laid focus on a hitherto less-focussed area in urban affairs that can be leveraged for better livability and competitiveness, namely, regenerating urban land. The book details a conceptual framework for understanding the urban regeneration process as well as mentions eight case studies of such projects from across the world.
 
According to this important work, urban regeneration is done in areas where there are pockets of under-used and under-utilized land or distressed and decaying areas.
 
A successful urban renewal process has four phases. These include an initial 'scoping phase', which primarily provides decision makers with analytical tools to confront issues facing the city. It is both forward looking and backward looking. It looks backwards for the city's history and DNA and looks ahead to what is required.
 
The book goes on to cite Ahmedabad's Sabarmati Riverfront Development project (SRDP), one of the eight case studies, as an example of a scoping exercise that took a long time for completion.
 
The second step is the 'planning phase'. This involves 'designing a web of actions and institutions'. The book explicitly mentions that a successful planning framework brings together an inspiring vision with a clear regulatory process. A planning process with the help of scoping process must detail all the vital assets and elements including land, community and environmental issues.
 
In the case of SRDP, the planning phase was initiated once the special purpose vehicle (SPV) for riverfront development was established.
 
Post this, the third stage is financing. Here, there are generally two types of tools available. Financial tools involve direct financial assistance such as value capture methods (impact fees, special assessments, extractions). Regulatory tools utilize regulatory powers of a city to incentivise private sector participation in the form of tax-based/non-tax based incentives, zoning, land use planning and the like.
 
In the case of Ahmedabad, an innovative financial scheme was utilised for financing. Fourteen percent of the reclaimed land was used to finance complete regeneration of the riverfront. The city used its serviced public land to raise a loan from the Housing and Urban Development Corporation (HUDCO), a central government public sector undertaking.
 
The final step is the implementation stage that translates the vision for sustainable change into financial, contractual and institutional relationships between the public and private sectors. This involves creating an organisational structure, which is sustainable and can exist through multiple political administrations.
 
In the case of SRDP, post the establishment of SPV, a diverse board was enabled with members from the private sector, the bureaucracy and the political parties (both ruling and opposition) which enabled the project to be viewed as a civic work rather than one aligned with any party's agenda.
 
The other case studies in the book are equally insightful. The book is a welcome addition to the body of work for policymakers and development practitioners in India and elsewhere. It will aid development professionals and policymakers understand how urban regeneration projects can be conceived and can contribute to revitalising the economy and build its competitiveness and resilience for the future.
 
Over the next few years, more such thinking is required for countries like India to face some of the challenges that may arise due to their massive and haphazard urbanisation that is underway.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

PRAVIN PATEL

1 year ago

Smart cities is a step forward to urbanise our population by breaking our villages and in turn finishing Gram Panchayats. Govt. talks a lot about taking inspiration from Mahatma Gandhi who always talked about strengthening villages, village economy and Panchayati raj governance. When we are not able to make our cities free from the stray animals taking control of narrow roads compared to always increasing traffic, with more urban areas, we are only going to multiply the problems, as such under the circumstances that prevails in our country, I am not in favour of smart cities.

Jyoti Dua

1 year ago

This is the way to go about for Smart City Projects.

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