RBI raises FII cap on bonds, debentures by infra cos by $20 billion

The additional limit has been raised to $25 billion, taking the maximum limit of FII investment in bonds and non-convertible debentures issued by infrastructure companies to $40 billion, the RBI said in a notification

Mumbai: In a bid to boost investment in the infrastructure sector, the Reserve Bank of India on Friday hiked the limit on foreign institutional investor (FII) investment in listed non-convertible debentures and bonds issued by core segment companies by $20 billion, reports PTI.

Till now, the limit for such investment was $15 billion in corporate debt, with an additional limit of $5 billion in bonds with a residual maturity of over five years.

This additional limit has been raised to $25 billion, taking the maximum limit of FII investment in bonds and non-convertible debentures issued by infrastructure companies to $40 billion, the RBI said in a notification.

The apex bank added that such investments by FIIs would have a minimum lock-in period of three years. However, the FIIs can trade among themselves during the lock-in period.

The relaxation in the limit comes at a time when the government has announced plans to double investments in the infrastructure sector to $1 trillion during the 12th Plan (2012-17).

It wants the private sector to contribute at least half of the intended investment. The raising of the limit is likely to boost efforts in that direction.

Meanwhile in a separate notification, the RBI said that custodian banks could issue irrevocable payment commitments (IPC) on behalf of FIIs to stock exchanges and clearing houses for purchase of shares under portfolio investment scheme.

IPC is a kind of instrument used to provide financial guarantee.


RTI inquiries reveal civic body’s wasteful garden beautification plans

Activists, residents protest against exorbitant cost of unnecessary replacement of existing facilities at Five Gardens in central Mumbai

After the facelift for Shivaji Park in central Mumbai, the popular Five Gardens park, in Wadala, is being renovated. The exercise has been done in one of the gardens which has a police post, and another that has a water tank, and the rest of the work is to follow soon.

According to information gathered by activists Nitin Desai and Ashok Ravat through RTI applications, the civic authorities have spent a modest Rs30 lakh on the Five Gardens project so far. This includes short lampposts that cost Rs50,000 each and benches that each cost Rs30,000. But, the residents are unconvinced about the need for such renovation work as the gardens were not in any poor condition to deserve such expenditure.

Nitin Desai said, "The Bombay Municipal Corporation (BMC) wants to similarly renovate other popular gardens across the city through this one single contractor. If this is so, one can only imagine the wasteful expenditure they will incur."

Work orders for renovation in gardens 'A' and 'B' describe the replacement of old lampposts at a cost of Rs50,000, inclusive of fittings and wiring. In garden 'A' 31 new lampposts, which the BMC says are 'antiques'. In Garden 'B', where there were originally just four lampposts in the centre, 33 new lampposts have been installed on the sidewalks.

The total cost is said to be Rs7.4 lakh. The wiring costs totals Rs7.67 lakh. The activists said that when they inquired at some shops about similar wrought-iron lampposts models they were given an estimate of about Rs2,000 each.

The old concrete benches that were donated by Ghanshyam Saraf Trust were perfectly functional, and still pulled out and replaced with new benches that cost Rs 30,000 each. Twenty-nine benches have been placed in garden 'A' at a cost of about Rs9 lakh.

Even the placement of the benches is not proper. "They have made bench clusters, which are now hangouts for antisocial elements after dark," Mr Desai said.

The civic authorities proposed to pave the footpath around garden 'B' with granite, which would cost about Rs20 lakh. But after the activists protested that the existing pavement was in good condition and did not require to be changed, the original concrete structure was allowed to be retained, and the touching-up cost only Rs5 lakh.

This work was undertaken this year itself, with the first order given in January. Work in garden 'B' was taken up first and then garden 'A' was completed in March. However, since the queries raised by the activists and residents, the remaining work has been put on hold.

The authorities propose to beautify the footpaths around gardens 'A', 'B' and 'C' at a cost of Rs20 lakh and this was initially planned to be completed in 40 days. No amount has been specified for the protection and maintenance of the renovated gardens. Besides, all this work is being handled by just one local contractor.

"Parsi Colony is a sleepy area, and after sunset, it is very quiet," said Mr Ravat. "The only people hanging around in the area at night are vagabonds and goons. The luxurious benches and lights provide the perfect setting for them to sleep and bid their time."




5 years ago

The scams just don't seem to be stopping. India has become a country of thugs and crooks who just want to rip off the poor and needy of the must needed amenities such as public toilets, water supply, etc. to fill the pockets of rich, vain "local contractors" who run away with extravagant projects with almost zero competition.

nagesh kini

5 years ago

As one who has been in the know of Mumbai's open spaces and recreation gardens more particularly in the Mahim-Shivaji Park and all about costing of garden facilities and services, I'm greatly disturbed at the numbers thrown up by the RTI on lamp posts and benches.

The prices paid are way out. Those responsible for approving the quotations and placing the orders need to be pulled up after a detailed fast probe.

The entire cost of the renovation of the Baji Prabhu Udyan on the Shivaji Park sea front needs to be investigated as it also is inflated beyond reasonable limits.

Share prices may fall further, subject to bounces: Friday Closing Report

While a bounce-back is on the cards, expect a further decline unless Nifty holds above 5,800

Yesterday we had said that the market is now in a downward trend and that immediate support for Nifty was at 5,750 and further down, at 5,700. The market broke its first support in early afternoon and then quickly fell to the second support of 5,700. The low for the day was 5,706. While Nifty bounced back to 5,750 in the late stages, the downward trend looks like a strong one. If the bears are able to maintain the downward trend, we may see the market fall to the level of 5,600. The bulls would regain the initiative only above 5,800. Today's decline meant a fifth negative closing in a row.

The market opened flat as investors remained nervous ahead of the RBI's monetary policy announcement, due on Tuesday. The Sensex opened at 19,293, almost unchanged from its previous close of 19,292 while the Nifty resumed trade two points lower at 5,783. Global as well as Indian analysts opine that the central bank will hike key rates by 25 basis points in a bid to cap rising prices.

The market touched the day's high in initial trade with the Sensex touching 19,357, a gain of 65 points and the Nifty rising 19 points to 5,804 at its intra-day high. Trade was range-bound with small spells of buying, pushing the indices in the green, but profit-taking ensured that they stayed in the negative terrain. A lower opening of the European bourses also added to the indecisiveness in noon trade.

The sell-off increased sharply, pushing the indices further southwards in the post-noon session with the key benchmarks falling to the day's low at around 2.45pm. The US futures trading weak added to the late session woes in the domestic market. At the intra-day low, the Sensex tumbled 277 points at 19,015 and the Nifty retraced 79 points to 5,706. The market bounced back from the lows of the day in the last half an hour, but closed in the negative for the fifth straight day. The Sensex settled at 19,136, down 156 points and the Nifty was 36 points lower at 5,750. The advance-decline ratio on the National Stock Exchange was 378:1015.

The broader indices suffered greater damage than the Sensex today. The BSE Mid-cap index tanked 1.03% and the BSE Small-cap index tumbled 1.57%.

Among the sectoral caps, the BSE Fast Moving Consumer Goods (up 0.88%), BSE Healthcare (up 0.61%) and BSE Oil & Gas (up 0.02%) were the gainers. The losers were led by BSE Capital Goods (down 2.72%), BSE Realty (down 2.66%) and BSE Bankex (down 1.76%).

Hindustan Unilever (up 2.24%), Maruti Suzuki (up 1.27%), Reliance Industries (up 0.83%), Hero Honda (up 0.80%) and Wipro (up 0.79%) were the top gainers on the Sensex. Larsen & Toubro (down 3.87%), Jindal Steel (down 3.57%), ONGC (down 2.79%), Jaiprakash Associates (down 2.57%) and DLF (down 2.37%) were the major losers on the index.

Side-stepping security concerns, India on Thursday finalised most of the terms on which it plans to buy natural gas from Turkmenistan through a pipeline passing through Afghanistan and Pakistan.

Terms of the Gas Sale and Purchase Agreement (GSPA) were finalised at a meeting of the oil ministers of the four to Turkmenistan-Afghanistan-Pakistan-India gas pipeline here yesterday but crucial aspects of price of gas and transit fee were left to be decided by July.

Markets in Asia ended mostly lower on the last trading day of the week on worries of another rate hike by the Chinese central bank and on reports that South Korea's industrial production expanded at a slower pace in March. South Korea's factory output climbed 8.7% in March from a year earlier after gaining a revised 9.2% in February.

Besides, the HSBC's China Purchasing Managers' Index (PMI) stood at 51.8 in April, unchanged from March even as the government hiked interest rates, pointing to a steady growth in the country's manufacturing sector.

The Hang Seng was down 0.36%, the KLSE Composite shed 0.02%, the Straits Times fell 0.16%, the Seoul Composite declined 0.72% and the Taiwan Weighted was down by 0.36%. On the other hand, the Shanghai Composite gained 0.87% and the Jakarta Composite advanced 0.28%. The Japanese market was closed for a local holiday.

Back home, foreign institutional investors were net sellers of equities worth Rs832.59 crore on Thursday. On the other side, domestic institutional investors were net buyers of shares worth Rs532.60 crore.


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