New Mines Bill to be tabled in winter session in Parliament

Mines secretary S Vijay Kumar said, “There is no delay. We have sent the Cabinet note on the draft bill to Cabinet secretariat and other concerned ministries. It will soon come up before the Cabinet for approval”

New Delhi: The new Mines Bill, which provides for sharing of profits and royalty with project-affected people, is likely to be introduced in the winter session of Parliament, reports PTI.

The Bill, earlier supposed to be tabled during the just-concluded monsoon session, has not yet been placed before the Cabinet despite the fact that it was approved by a ministerial panel in July.

When asked, mines secretary S Vijay Kumar told PTI, “There is no delay. We have sent the Cabinet note on the draft bill to Cabinet secretariat and other concerned ministries. It will soon come up before the Cabinet for approval.”

He added that “the draft bill is now likely to be introduced in Parliament in its next session after the Cabinet approval”.

In July, the ministerial panel, headed by finance minister Pranab Mukherjee, had approved the draft bill, which provides 26% profit-sharing with displaced people by coal mining companies.

For the non-coal miners, the new law will provide for payment to the displaced an amount equivalent to royalty paid to the state government.

The draft Mines and Mineral Development and Regulation (MMDR) Bill, 2011, seeks to replace more than half-a-century old law under the same name.

The draft bill also proposes to set up a district development fund, where the money accumulated from the 26% profit sharing by coal miners and an amount equivalent to 100% of royalty for non-coal miners, will be deposited and will get spent on local population and area development, the draft bill has proposed.

Apart from compensating the displaced people through profit-sharing and royalty, the draft bill also says that the mining firms will have to bear a combined cess up to 12.5% on the royalty paid to states and the Centre, as per the new mining bill.
This includes 10% cess to state governments on the royalty payment, while 2.5% levy will be charged by the Centre as cess.

However, industry chambers like Ficci and Assocham are opposed to the draft bill, saying that it would make India most-taxable country for the miners.

Seeking a revision of the draft proposals, Ficci in its representation to the prime minister had said that new proposals would lead to such a situation, where total payable tax on coal would be at over 61 per cent, making the industry unattractive.

It has also projected that taxes on iron ore mining would be around 55%, while for bauxite, it would zoom to 110%.

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August inflation to remain close to 10%; another rate hike likely

“Headline inflation is expected to rise to around 9.7% for August... which is likely to prompt the RBI to raise the repo rate by 25 bps in the upcoming mid-quarter review. However, inflation is expected to ease in the subsequent months which suggests that policy rates may be close to a peak,” ICRA economist Aditi Nayar said

New Delhi: With headline inflation hovering around the 10% mark, the Reserve Bank of India (RBI) is likely to raise its key policy rates again in its mid-quarterly review of the credit policy later this week, reports PTI.

The inflation numbers for August will be released on 14th September, while the RBI’s mid-quarterly policy review is slated for 16th September.

Experts said the headline inflation in August is expected to be close to the double-digit mark which will keep RBI on the path of tight monetary policy.

“We expect inflation numbers to be in the range of 9.5%-10% for August... RBI is likely to hike rates by 25 basis points in its mid-quarterly review,” Crisil chief economist DK Joshi said.

He said pressure would be on all fronts, including food, non-food primary articles and manufactured items.

“Inflation is mostly borad-based. So, there will be pressure on each segment of the basket starting from food to manufacturing,” Mr Joshi said.

Inflation, as measured by the Wholesale Price Index (WPI), stood at 9.22% in July. It has been above the 9% mark since December last year.

RBI has hiked its key policy rates 11 times since March 2010 to tame inflation.

India Inc has said that repeated rate hikes have affected investments by raising borrowing cost.

The economy grew by 7.7% in April-June, the slowest in six quarters.

“Inflation for August is expected to be around 9.7% due to higher price of primary articles. Mostly, inflation is broad-based and not limited to any particular segment,” Standard Chartered Global Research senior economist Anubhuti Sahay said.

The sustained price pressure, she added, could prompt the RBI to continue with its tight monetary policy.

“RBI is likely to hike policy rates by 25 basis points in the upcoming policy review,” Ms Sahay said.

While food inflation is close to double-digit mark, the rate of price rise of non-food primary items is over 11%.

Meanwhile, manufactured inflation, which constitutes over 65% of the WPI basket, is over 7%.

Experts also said that after a final rate hike on 16th September, The RBI may go for a halt in its monetary tightening policy.

“Headline inflation is expected to rise to around 9.7% for August... which is likely to prompt the RBI to raise the repo rate by 25 bps in the upcoming mid-quarter review.

However, inflation is expected to ease in the subsequent months which suggests that policy rates may be close to a peak,” ICRA economist Aditi Nayar said.

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Final norms on new bank licences after amending Banking Bill

The amendment to the Banking Bill seeks to allow the RBI to supersede the board of a banking company for a total period not exceeding 12 months. It also exempts mergers and acquisitions in the banking sector from the scrutiny of the Competition Commission of India

New Delhi: The Reserve Bank of India (RBI) is likely to issue the final guidelines for granting bank licences to corporates only after Parliament approves the Banking Laws (Amendment) Bill, 2011, reports PTI.

The final guidelines on new banking licences would be released only after the necessary amendments to the Banking Laws (Amendment) Bill, which seeks to give more power to the regulatory powers of the RBI, sources said.

The central bank had last month issued the draft guidelines which pegged the minimum capital needed to set up a commercial bank by a corporate house having successful track record of 10 years at Rs500 crore.

It is to be noted that the Banking Laws (Amendment) Bill was introduced in Parliament in March this year.

Sources added that empowering the RBI is essential for obtaining information about the other businesses of the corporate houses seeking banking licences in order to protect depositors’ interests.

Banking companies are engaged in multifarious activities through the medium of associate enterprises. It has, therefore, become necessary for the RBI, as the regulator of the banking companies, to be aware of the financial impact of the business of such enterprises on the financial position of the banking companies, sources said.

It is, therefore, proposed to confer power upon the RBI to call for information and returns from the associate enterprises of banking companies also and to inspect the same, sources added.

The amendment seeks to allow the RBI to supersede the board of a banking company for a total period not exceeding 12 months.

The proposed amendment moved by the government also exempts mergers and acquisitions in the banking sector from the scrutiny of the Competition Commission of India.

According to the draft guidelines, companies which are primarily engaged in the real estate or stock broking will not be eligible for promoting bank.

“Entities or groups having significant (10% or more) income or assets or both from real estate, construction and broking activities individually or taken together in the last three years will not be eligible to set up new banks,” the draft said.

On foreign holding, it said the aggregate non-resident shareholding in the new bank should not exceed 49% for the first five years.

At present, the foreign shareholding in private sector banks is allowed up to 74% of the paid-up capital.

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