Citizens' Issues
Over 4,000 km of road construction in northeast to improve connectivity
Over 4,000 km of roads and highways are to be constructed over the next few years in the northeastern states to improve connectivity and change the fortunes of the region, a top official has said.
 
This constitutes the bulk of the 6,841 km of roads and highways to be built in India's hilly states, which include Jammu and Kashmir, Himachal Pradesh and Uttarakhand, at an estimated cost of Rs.45,164 crore (nearly $7 billion), said Anand Kumar, the first managing director of the National Highways and Infrastructure Development Corporation Ltd. (NHIDCL), which was created in 2014.
 
"We are the first to start 18 projects in Tripura, Meghalaya and Arunachal Pradesh with a total length of 600 km at a cost of Rs.6,500 crore. This year we have started five projects in Arunachal Pradesh," Anand Kumar told IANS.
 
The NHIDCL took over the projects of the Border Road Organisation (BRO) and the Public Works Department (PWD) of the states concerned and has started showing results in no time in terms of improving the shoddy condition of the roads and highways in the region, he added.
 
Terming infrastructure the prime factor that can change the fortunes of the region, Anand Kumar said the corporation has taken all measures to maintain transparency and ensure that road and highway construction is all done with perfection.
 
"For transparency, we have handed over the work to regional contractors in small packages at a pre-estimated cost. These ensure that there is no misuse of funds by handing over a large stretch to a single contractor," Anand Kumar said.
 
The company has decided on 11 projects in Manipur, nine in Meghalaya, three in Mizoram, four in Nagaland, 23 in Arunachal Pradesh and seven in Tripura. In several projects, Japanese infrastructure major JICA has also chipped in. The Imphal-Moreh project is being funded by the Asian Development Bank (ADB), considering it is the link between India and Myanmar.
 
Emphasising that projects in the remaining northeastern states will be started within months, Anand Kumar, a 1984 Kerala batch IAS officer, said that there are several projects for four-lane roads, including the NH-39 that connects Dimapur and Kohima - considered Nagaland's main business route which is in a pathetic state during the monsoon.
 
"It is not an easy geographical area to work in, with undulating terrain and geological surprises. We try our best and, most importantly, after each road and highway is constructed by the local contractors, to whom we give out the work, our engineers do the quality check and if found below standards, we take the necessary action against them," he said.
 
Anand Kumar admitted that land acquisition and forest clearance are emerging as one of the prime factors in road construction in Assam and Meghalaya. "We are taking it up with the forest ministry and are soon likely to see an end to the problem."
 
He also emphasised on seven key strategies that NHIDCL follows, including use of e-tools through which bidding for tenders is done online. Existing procedures and processes are also being revisited to effectively monitor road construction and prevent graft.
 
Other strategies include continuous capacity building, use of new and appropriate technologies, creation of a scientific and innovative temper, speedy dispute resolution mechanism and regular consultation with stakeholders.
 
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.

User

DIPP permits LLPs to make downstream investments
This should make LLPs happy and we can expect a notification from RBI amending Regulation 14 (6) of the Foreign Exchange Management Regulations for transfer or issue of security by a person resident outside India
 
With the aim of improving the ease of doing business in the country and to fast-tack the projects that are stuck, the Department of Industrial Policy & Promotion (DIPP) has issued press note no. 12 (http://dipp.nic.in/English/acts_rules/Press_Notes/pn12_2015.pdf) dated 24 November 2015 (shall come into effect immediately) thereby liberalising FDI in favour of 15 major sectors.
 
Prior to the press note, only an Indian company having foreign direct investment (FDI) was permitted to make downstream investment in limited liability partnerships (LLPs), subject to conditions that both (i.e. the company and LLP) shall be operating in a sector where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions. The conditions remain the same post issuance of press note, however, permissibility has changed as explained hereunder:
 
Internal accrual was not explained formerly. As evident from the meaning provided, accumulated profits will not be regarded as internal accrual unless transferred to reserves. Downstream investments using internal accruals will be subject to relevant sectoral caps and conditionalities. Further, such investment cannot be made in an investment company unless Government approval has been obtained. This is to be complied irrespective of the amount or extent of foreign investment.
 
The change has definitely rendered a reason to cheer to the LLPs. In this regard, we can expect a notification from RBI amending Regulation 14 (6) of the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000.
 
In this article, we have discussed the liberalisation with respect to downstream investments in/by LLPs.
 
Downstream investment: Meaning
 
Para 3.10.2 of the FDI Policy defines the term downstream investment as follows-
 
‘Downstream investment’ means indirect foreign investment, by one Indian company, into another Indian company, by way of subscription or acquisition in terms of Paragraph 4.1. Paragraph 4.1.3 provides the guidelines for calculation of indirect foreign investment, with conditions specified in paragraph 4.1.3 (v).
 
Relevant provisions for downstream investments formerly:
 
“3.2.5 FDI in Limited Liability Partnerships (LLPs)
 
FDI in LLPs is permitted, subject to the following conditions: 
(c) An Indian company, having FDI, will be permitted to make downstream investment in an LLP only if both-the company, as well as the LLP- are operating in sectors where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions.
(d) LLPs with FDI will not be eligible to make any downstream investments.”
 
“3.10.3 Foreign investment into an Indian company engaged only in the activity of investing in the capital of other Indian company/ies (regardless of its ownership or control): 
 
3.10.3.3 For infusion of foreign investment into an Indian company which does not have any operations and also does not have any downstream investments, Government/FIPB approval would be required, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps.”
 
“3.10.4.2 Downstream investments by Indian companies will be subject to the following conditions: 
 
(i) Such a company is to notify SIA, DIPP and FIPB of its downstream investment in the form available at http://www.fipbindia.com within 30 days of such investment, even if capital instruments have not been allotted along with the modality of investment in new/existing ventures (with/without expansion programme); 
(ii) Downstream investment by way of induction of foreign equity in an existing Indian Company to be duly supported by a resolution of the Board of Directors as also a shareholders‟ agreement, if any; 
(iii) Issue/transfer/pricing/valuation of shares shall be in accordance with applicable SEBI/RBI guidelines; 
(iv) For the purpose of downstream investment, the Indian companies making the downstream investments would have to bring in requisite funds from abroad and not leverage funds from the domestic market. This would, however, not preclude downstream companies, with operations, from raising debt in the domestic market. Downstream investments through internal accruals are permissible, subject to the provisions of paragraphs 3.10.3 and 3.10.4.1. “
 
Scenario post amendment
 
“3.2.5 FDI in Limited Liability Partnerships (LLPs)
 
FDI in LLPs is permitted, subject to the following conditions: 
(a) FDI is permitted under the automatic route in LLPs operating in sectors/ activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions.
(b) An Indian company or an LLP, having foreign investment, will be permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions.”
 
“ 3.10.3 Foreign investment into an Indian company engaged only in the activity of investing in the capital of other Indian company/ies (regardless of its ownership or control): 
3.10.3.3 For undertaking activities which are under automatic route and without FI linked performance conditions, Indian company which does not have any operations and also does not have any downstream investments, will be permitted to have infusion of foreign investment under automatic route. However, approval of the Government will be required for such companies for infusion of foreign investment for undertaking activities, which are under Government route, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps.”
 
“3.10.4.2: Downstream investments by Indian companies/LLPs will be subject to the following conditions:
 
 (i) Such a company/LLP is to notify SIA, DIPP and FIPB of its downstream investment in the form available at http://www.fipbindia.com within 30days of such investment, even if capital instruments have not been allotted along with the modality of investment in new/existing ventures(with/without expansion programme);
(ii) Downstream investment by way of induction of foreign equity in an existing Indian Company to be duly supported by a resolution of the Board of Directors as also a shareholders agreement, if any;
(iii) Issue/transfer/pricing/valuation of shares shall be in accordance with applicable SEBI/RBI guidelines;
(iv) For the purpose of downstream investment, the Indian companies/LLPs making the downstream investments would have to bring in requisite funds from abroad and not leverage funds from the domestic market. This would, however, not preclude downstream companies/LLPs, with operations, from raising debt in the domestic market. Downstream investments through internal accruals are permissible, subject to the provisions of paragraphs 3.10.3 and 3.10.4.1.For the purpose of FDI policy, internal accruals will mean as profits transferred to reserve account after payment of taxes.
 
(Niddhi Parmar works in Corporate Law Services Group at Vinod Kothari & Co)

User

AirAsia plane crash caused by faulty component, crew action
A faulty component and the way the pilots responded to a technical malfunction caused AirAsia Flight QZ8501 to plunge into the Java Sea in December 2014, killing all 162 people on board, Indonesian officials said on Tuesday.
 
The ill-fated plane was en route to Singapore from the Indonesian city of Surabaya on December 28, 2014, when it crashed into the Java Sea, CNN reported.
 
The plane's flight control computer had a cracked solder joint that kept malfunctioning, Indonesia's National Transport Safety Committee (NTSC) said in a report. 
 
Aircraft maintenance records found it had malfunctioned 23 times in the year before the crash, and the interval of those became shorter in the three months prior to the crash.
 
"Subsequent flight crew action resulted in inability to control the aircraft causing the aircraft to depart from the normal flight envelope and enter a prolonged stall condition that was beyond the capability of the flight crew to recover," the report said.
 
The investigation, a joint effort involving Australian, French, Singaporean and Malaysian authorities, points to weaknesses in pilot training, which heavily emphasises on take off and landing, an aviation expert said.
 
Preliminary findings from the NTSC earlier this year said roughly 35 minutes into the two hour flight, the pilot asked air traffic control for permission to climb to avoid stormy weather.
 
The plane went from cruising at 32,000 feet, ascending steeply to 37,400 in about 30 seconds -- something commercial planes are not designed to do. It may have been climbing at a rate twice as fast as it could and should.
 
Minutes later, the plane disappeared from radar.
 
Although the area was experiencing turbulent weather patterns, seven other planes flying nearby landed safely.
 
Malaysia-based AirAsia did not have the clearance to fly the route on that particular day.
 
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.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)