A panel headed by former RBI deputy governor KJ Udeshi mooted that banks should not insist on to insist on the submission of form 15 CA/15 CB for any remittances under the Liberalised Remittance Scheme
Mumbai: The Reserve Bank of India (RBI) appointed panel on Wednesday suggested significant liberalisation of forex regulation to allow hassle free remittances and overseas investments, reports PTI.
“To enable hassle-free remittances by resident individuals, banks may be advised by the RBI not to insist on the submission of form 15 CA/15 CB for any remittances under the Liberalised Remittance Scheme (LRS),” the report of the panel headed by former RBI deputy governor KJ Udeshi said.
The report of the committee to review the facilities for individuals under Foreign Exchange Management Act (FEMA), 1999 said over a period of time, the FEMA rules now contain contradictory provisions and there is also a need to make definitions uniform and consistent across FEMA.
The committee is of the considered view that the procedural ‘knots’ in the system need to be untied to enable the present forex liberalisation to be effective and in the absence of untying of these knots, any further forex liberalisation will not be meaningful.
The report also noted that instead of an erstwhile single regulator (the RBI), we now have a multitude of regulators, each interpreting FEMA in his own way.
General permission, it said, may be granted to resident individuals to acquire shares of a foreign company in part or full consideration of professional services rendered to the foreign company or in lieu of director’s remuneration.
Besides, it suggested, general permission may be granted to resident individuals to acquire qualification shares of an overseas company for holding the post of a director without the existing limitations.
It is to be noted that the committee was set up, following the announcement in Annual Monetary Policy for 2011-12 in May.
“Recognising the need for facilitating genuine foreign exchange transactions by individuals—Residents/Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs)—under the current regulatory framework of FEMA, RBI has constituted a committee under the chairmanship of KJ Udeshi,” RBI governor D Subbarao had said in the Annual Monetary Policy for 2011-12.
The objective of the review was to identify areas for streamlining and simplifying the procedure so as to remove the operational impediments and assess the level of efficiency in the functioning of authorised persons, including the infrastructure created by them.
Among other recommendations, Indian resident employees or directors may be permitted to accept shares offered through an ESOP Scheme globally.
It also suggested that the Portfolio Investment Scheme needs to be reviewed in its entirety and there is no need for continuation of the existing scheme.
While the agriculture ministry is in favour of allowing more exports, the food ministry wants to defer the decision till September by when it would know the actual closing stock of sugar in this season and will get a clear picture of likely production in the next season
New Delhi: An Empowered Group of Ministers (EGoM) on food, headed by finance minister Pranab Mukherjee, is scheduled to meet on Friday to decide on allowing more sugar exports and lifting ban on wheat exports, reports PTI.
The government has so far this year allowed exports of one million tonnes of sugar in two equal tranches under Open General Licence (OGL).
"The EGoM meeting is scheduled for 12th August. Sugar and wheat exports are on the agenda," a highly placed source said.
Indian Sugar Mills Association (ISMA), the apex industry body for sugar sector, has been demanding that the government should allow another one million tonnes of sugar exports considering the huge surplus stock and higher global prices.
Not only industry, almost all political parties from Maharashtra are demanding more exports so that mills could make payments to sugarcane farmers.
On Tuesday, food minister KV Thomas had said in the Lok Sabha that mills owe Rs2,591 crore to sugarcane farmers till 15th May of the current 2010-11 season (October-September). Another Rs211 crore sugarcane arrear is pending from previous seasons.
Mills have not been able to make timely payment to cane farmers this season due to liquidity crunch following a decline in ex-mill prices.
While the agriculture ministry is in favour of allowing more exports, the food ministry wants to defer the decision till September by when it would come to know the actual closing stock of sugar in this season and will get a clear picture of likely production in the next season.
Sugar production of India, the world's second largest producer and biggest consumer, is estimated at 24.2 million tonnes in the 2010-11 season as compared to around 19 million tonnes last year. The annual demand is pegged at 21-21.5 million tonnes.
On wheat export, which has been banned since early 2007, sources said the issue may be discussed again but export is unlikely to take place given low global prices.
In its last meeting, which was held early July, the EGoM had deferred the decision to allow wheat exports.
Nifty may see an upmove till 5,270
As we mentioned in our yesterday's closing report, the Nifty witnessed a bounce-back today. Apart from the indicators which pointed towards such gains, faith shown by the people in power helped the gains to continue. The loss of the past six days during which the Nifty broke the 14 months' low was 444 points. We expect the Nifty to continue the gains till the level of 5,270.
As expected, the market rebounded today-ending its six-day losing streak-on assertions from the US Federal Reserve overnight. The optimism boosted markets around the world. Back here, the Nifty opened 124 points higher at 5,197 and the Sensex resumed trade at 17,245, up 387 points and crossing its psychological level of 17,000. Buying in IT, realty, consumer durables and auto stocks also supported the upmove.
The Federal Reserve on Tuesday pledged to keep rates unchanged at near zero levels through mid-2013 and added that it would take appropriate steps to prop up the sagging economy.
Rising steadily in subsequent trade, the market touched the day's high in mid-morning trade where the Nifty rose to 5,197 and the Sensex to 17,256. However, profit booking at higher levels led to the indices paring some of the gains. The indices fell to the day's lows in the post-noon session with the Nifty falling to 5,123 and the Sensex going back to 17,022.
Buying activity resumed after the indices hit the lows, propping them higher and ensuring a positive close after six days of continuous losses. At the day's close, the Nifty gained 88 points to 5,161 and the Sensex finished the session at 17,131, higher by 273 points.
The advance-decline ratio on the National Stock Exchange was a positive 1388:398.
The broader indices outperformed the Sensex today with the BSE Mid-cap index climbing 2.31% and the BSE Small-cap index advancing 2.46%.
The top gainers in the sectoral space were BSE Auto (up 4.17%), BSE Realty (up 2.98%), BSE Consumer Durables (up 2.61%), BSE IT (up 2.41%) and BSE Bankex (up 2.39%). BSE Fast Moving Consumer Goods (down 0.47%) and BSE Oil & Gas (down 0.19%) were the only laggards.
Tata Motors (up 6.08%), Maruti Suzuki (up 5.95%), Hindalco Industries (up 5.24%), Mahindra & Mahindra (up 5.03%) and DLF (up 4.31%) were the major gainers on the Sensex. ONGC (down 2.22%), ITC (down 1.15%), Hindustan Unilever (down 0.95%), Sun Pharma (down 0.68%) and Tata Power (down 0.54%) ended as the top losers on the index.
The star performers on the Nifty were Tata Motors (up 6.04%), Maruti Suzuki (up 5.78%), DLF (up 5.54%), Hindalco (up 5.10%) and M&M (up 4.82%). The main losers were Grasim (down 2.53%), ONGC (down 2.14%), ITC (down 1.68%), Cairn India (down 1.46%) and Ranbaxy (down 1.30%).
Markets in Asia, with the exception of the Straits Times, closed higher following assurances from the US Fed last night. Regional indices bounced back from a two-week decline on speculations that the US central bank might implement some new measures to boost the economy.
In economic news, China's July exports rose 20.4% from a year ago, the biggest gain since April while imports rose 22.9% year-on-year. However, analysts cautioned debt issues and lower consumer spending in the US and Europe could pose a problem in the coming months.
The Shanghai Composite gained 0.91%, the Hang Seng climbed 2.34%, the Jakarta Composite jumped 3.44%, the KLSE Composite rose 0.57%, the Nikkei 225 surged 1.05%, the Seoul Composite advanced 0.27% and the Taiwan Weighted surged 3.25%. Bucking the trend, the Straits Times declined 2.18%.
Back home, foreign institutional investors were net sellers of stocks worth Rs2,104.56 crore on Tuesday. On the other hand, domestic institutional investors were net buyers of stocks worth Rs1,412.96 crore.
Fortis Healthcare International today said it has entered into an agreement to acquire a 65% stake in Vietnam-based Hoan My Medical Corporation for $64 million (nearly Rs289 crore). This is the company's sixth investment in eight months and is seen as an important step in consolidating its presence in the growing healthcare delivery market in Asia. Fortis Healthcare gained 0.93% to close at Rs156.65 on the NSE.
Glenmark Pharmaceuticals today said it has started Phase-IIb human trials of its 'Revamilast' molecule, which is being developed for treatment of inflammatory disorders like asthma and rheumatoid arthritis. The molecule has successfully completed pre-clinical trials and Phase-I studies in the UK. The stock jumped settled 7.02% higher at Rs327.75 on the NSE.
GVK Power and Infrastructure is expected to commence work on its 690MW hydro-electric power project at Kishtwar in Jammu & Kashmir by December 2011. The power plant is likely to be commissioned in 2017. Situated on the river Chenab, it will provide 16% of its output to the state of Jammu & Kashmir free of charge. The stock rose 4.36% to Rs19.15 on the NSE today.