As per the notification, FDI, up to 100% would be permitted for brownfield investment in the pharmaceutical sector, under the government approval route while FDI up to 100%, under the automatic route, would continue to be permitted for greenfield investments
Mumbai: The Reserve Bank of India (RBI) today notified new rules doing away with automatic approval for foreign direct investment (FDI) in existing pharmaceutical companies, reports PTI.
Tightening the norms, the government had last month done away with automatic approval of FDI in the existing pharmaceutical companies.
“FDI, up to 100%, would be permitted for brownfield investment (i.e. investments in existing companies), in the pharmaceutical sector, under the government approval route,” RBI said in a notification.
Under the new rules, for any merger or acquisition, the overseas investor will have to seek permission from the Foreign Investment Promotion Board (FIPB).
After six months, it will be the monopoly watchdog Competition Commission of India (CCI) which will vet such deals.
The decision follows directions from prime minister Manmohan Singh, who along with his senior Cabinet colleagues had deliberated on 10th October over concerns arising out of several acquisitions of domestic pharmaceutical companies by overseas firms.
For the new investment, 100% FDI will be allowed under the automatic route, under which investors only inform the RBI about the inflows and no specific government nod is required.
“FDI, up to 100 per cent, under the automatic route, would continue to be permitted for greenfield investments in the pharmaceuticals sector,” RBI said.
The filter was suggested by a high-level committee, headed by Planning Commission member Arun Maira.
Concerns have been raised over the impact of a spate of acquisitions of home-grown firms by multi-national companies.
The recent acquisitions include Ranbaxy Laboratories buy out by Daiichi Sankyo of Japan, Shanta Biotech by Sanofi Aventis of France and Piramal Health Care by Abbott Laboratories of the US.
The affordability factor has so far been the hallmark of the Indian generic drugs all over the world, thanks to robust growth of the home-grown players.
Given the volatility in the capital market, in the backdrop of the global and domestic economic situation, the government has not come out with any public offer to sell its stake in PSUs, except PFC, this fiscal
New Delhi: The government on Friday said that mopping up Rs40,000 crore through disinvestment is a “stiff task” amid volatility in the capital markets even as it is looking at other options, like buyback of shares by PSUs, to meet the target, reports PTI.
“With the present trend and prevailing scenario in the capital market, achieving the disinvestment target of Rs40,000 crore during the remaining period of 2011-12 would be a stiff task,” said the Mid-Year Analysis, 2011-12, tabled in Parliament.
The government is envisaging mobilising Rs40,000 crore by selling its stake in public sector undertakings (PSUs) through public offers, but has so far managed to collect only Rs1,145 crore from Power Finance Corporation’s follow-on public offer (FPO).
Given the volatility in the capital market, in the backdrop of the global and domestic economic situation, the government has not come out with any public offer to sell its stake in PSUs, except PFC, this fiscal.
So far this fiscal, receipts from disinvestment and miscellaneous heads are Rs2,731 crore, as against Rs2,235 crore in the comparable period last year.
Meanwhile, finance secretary RS Gujral said, “We still feel that there is a possibility of it (achieving the target),” and the government is looking at other options, including buyback of shares by PSUs, besides public offerings.
Asked if share buyback by PSUs is also among the options, Mr Gujral said: “There are options, including buyback. That is one of the options.”
The secretary, however, said the decision on the process of disinvestment would be taken by finance minister Pranab Mukherjee in consultation with Department of Disinvestment (DoD).
“It is between the disinvestment secretary and the finance minister. If any of those options require Cabinet approval, the ministry will take it. We are working on it,” he said.
According to sources, the DoD has circulated a Cabinet note to seek views of different ministries to sell government equity through buy-back mode in PSUs.
About a dozen cash-rich units, like Coal India, SAIL, NMDC, ONGC and NTPC, have been identified for the purpose, they added.
The Cabinet Committee on Economic Affairs has also approved disinvestments in SAIL, ONGC, HCL, BHEL and NBCC.
According to IRDA, the total (public and private) number of insurance policies that lapsed during FY 2010-11 stood at 1.40 crore, with an assured sum of Rs1.58 lakh crore compared to 1.23 crore policies with an assured sum of Rs2.14 crore in FY09-10
New Delhi: The total number of insurance policies that lapsed in the public and the private sector rose to 1.40 crore during 2010-11 from 1.23 crore in the previous fiscal, reports PTI.
According to the Insurance Regulatory Development Authority (IRDA), the total (public and private) number of insurance policies that lapsed during FY 2010-11 stood at 1.40 crore, with an assured sum of Rs1.58 lakh crore.
This was against 1.23 crore policies with an assured sum of Rs2.14 crore in FY09-10, finance minister Pranab Mukherjee said in a written reply to the Lok Sabha.
He added that the total number of policies sold in FY10-11 stood at 1.10 crore and there were 2,189 complaints of mis-selling registered with IRDA during the period.
On measures taken by the insurance sector watchdog to ensure a healthy insurance market in the country, he said: “IRDA has mandated insurance companies to put in place an efficient system of grievance redressal and establishment of IRDA Grievance Call Centre (IGCC) and Integrated Grievance Management System (IGMS)...”
“The Authority on 20 September 2011 notified guidelines on persistency of policies i.e. percentage of policies in continuity to the total number of policies.
“As per these guidelines, agents are required to maintain an average persistency rate of 50%. The licence of the agent is renewed only if this condition is met,” Mr Mukherjee added.