Regulations
'Way forward is to get things done without legislation'
The recent change to the FDI policy regime by the Indian government is a welcome move. In spite of the huge setback to the political strategy of the NDA-led government at the center after the Bihar debacle, the government seems keen on reviving the investment cycle. That is the sure shot way to regain the growth momentum.
 
The most recent reforms are seen to impact as high as 15 distinct sectors of the economy. This will will certainly take India forward in its quest to achieve economic development for its citizens and global competitiveness among its peers. 
 
The slew of reforms pertain to different aspects of the Foreign Direct Investment regime. The core issue of these reforms is to further "ease, rationalise and simplify the process of foreign investments" in the country and to put a greater number of FDI proposals on the automatic instead of the government route that investors are never keen on taking. 
 
Thus, the impetus is clearly on easing the hassles investors and businesses face in investing in India's growth story. These changes can be seen in light of the government's push for bettering India's performance on the Ease of Doing Business Ranking of the World Bank where this country is placed a dismal 130 in spite of improving 12 places (4 places on the new methodology) in comparison to the previous year. 
 
Some of the reform measures include increasing the monetary limit for Foreign Investment Promotion Board (FIPB) from Rs.3000 ($455 million) to Rs.5000 crore. Proposals above Rs.5000 crore would go to the Cabinet Committee on Economic Affairs. The proposals also contain measures to correct the long-pending issues like limited liability partnerships as well as NRI-owned companies who seem keen to invest in India. Some proposals also seek to enhance the sectoral investment caps so that foreign investors don't have to face fragmented ownership issues and get motivated to deploy their resources and technology with full force.
 
Other sectors where the reforms have been initiated include establishment and transfer of ownership and control of Indian companies, agriculture and agricultural husbandry, plantation, mining and mineral separation of titanium bearing minerals and ores. Also, changes have been made in sectors like defense, broadcasting, civil aviation, construction development sectors, cash and carry wholesale trading/wholesale trading (including changes to time of sourcing from medium and small sector) enterprises. A boost has also been provided to single brand retail trading and duty-free shops that might see a proliferation of better equipment manufacturing in India. Also, some changes have been proposed in the banking in private sector and India's ailing manufacturing sector.
 
These changes are seen to be harbingers of the reform promise that had seen the coming to power of the Narendra Modi government in May 2014. The government's recent push in FDI is seen to a be a positive development both in the policy circles as well as in the business and investor community - both of which have expressed their satisfaction with the move. 
 
FDI constitutes the highest inflows to developing countries - even higher than the official development assistance (ODA) and the much talked about remittance flows to developing countries. The government's push to reform the FDI policy regime is likely to be seen in the light of the liberalization and calibration of the economy further to bring in capital and technology necessary for economic growth and development. 
 
Over the next year or so, the reform agenda, if pursued properly, can have a multiplier effect on the economy with investors, businessmen and most importantly consumers benefiting from better goods and services. The recent changes to the FDI regime only showcase that much can be achieved even without legislation. The way forward is to get things done without legislation that can benefit the people of the country.
 
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.

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COMMENTS

Narendra Doshi

2 years ago

YES,this road has been forced upon & MUST be used extensively.

DLF gets Competition Commission's nod for Rs.1,990 crore deal with GIC
 Indian realty major DLF Ltd on Monday said it has received approval from the Competition Commission of India for a joint-venture with Singapore's sovereign wealth fund GIC, which is investing close to Rs.1,990 crore in two projects in Delhi.
 
"DLF Home Developers Ltd (DHDL), a wholly-owned subsidiary of DLF Ltd and GIC, Singapore's sovereign wealth fund, have signed an agreement to enter into a joint venture to invest in two upcoming projects located in central Delhi," the company said in a regulatory filing with the Bombay Stock Exchange.
 
The statement said GIC would invest a sum of approximately Rs.1,990 crore in the two projects, subject to meeting all statutory requirements and conditions precedents which are customary, prior to the closing.
 
"In continuation of the above... (the) Competition Commission of India... considered and approved the proposed combination in terms of sub-section (1) of the Section 31 of the Competition Act, 2002, "the company said, adding that it was now awaiting the detailed order from the commission.
 
"Pursuant to receipt of this approval, both parties are initiating the necessary steps to successful closing of this transaction," the company added.
 
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.
 

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Nifty, Sensex headed higher – Monday closing report
Nifty seems to be headed towards 8,000 subject to dips
 
We had mentioned in Saturday’s closing report that Nifty, Sensex are weak and that Nifty is likely to meet selling on rallies. The major indices in the Indian stock markets opened lower on account of the terrorist attack in France and closed with marginal gains as the day’s trading progressed. The day’s trends in the indices are given in the table below:
 
 
India Vix closed at 17.88, up 1.27%. NSE turnover was at 82.42 crore.
The index for industrial production (IIP) growth was sharply lower than expected in September at 3.6% from 6.3% in August, while retail inflation inched up for the third successive month in October to 5%.
India's annual rate of inflation, based on wholesale prices, inched up to (-)3.81% for October from (-) 4.54% for the month before, mainly on account of a whopping  86% spike in the prices of onions and 53% in pulses over the past year. According to the data on official wholesale prices index released by the commerce and industry ministry, the indices for both the major groups of primary articles and manufactured products registered a decline of 0.36% and 1.67%, respectively, during the month under review. The index for the sub-category of food articles, though, was up 2.44% during the year. In the past month alone, prices for urad dal rose 17%, arhar 12%, gram 7% and moong 6%.
There was favourable news from China for Indian and global investors. President Xi Jinping said that the Chinese economy is predicted to grow by about 7% this year, which will continue to contribute as high as about a third to the global growth, the media reported on Monday. "China has the confidence and capability to maintain medium-high growth," Xi said on Sunday while addressing the ongoing two-day G20 Summit in Antalya in southwest Turkey. China shouldered the responsibility of driving economic growth in times of the world economic hardship, he said, noting that China had contributed up to 50 percent of world economic growth from 2009 to 2011, the Global Times reported. Despite a recent slowdown, China still contributes 30% to world economic growth, which means that China still acts as a major world economic powerhouse, said Xi.
In the domestic economy in India, fuel prices rose as oil companies on Sunday hiked the prices of petrol and diesel by 36 paise and 90 paise respectively. "The current level of international product prices of petrol and diesel and INR-USD exchange rate warrant an increase in prices, the impact of which is being passed on to the consumers with this price revision," Indian Oil said in a statement on Sunday. The oil marketer said the price of petrol per litre from Monday will be Rs.61.06 in Delhi, Rs.66.39 in Kolkata, Rs.68.13 in Mumbai and Rs.61.38 in Chennai. Diesel will cost Rs.46.80 a litre in Delhi, Rs.50.29 in Kolkata, Rs.54.04 in Mumbai and Rs.48.00 in Chennai.
The levy of 0.5% Swachh Bharat cess on taxable services came into effect from Sunday. With the imposition of the cess, the service tax rate will go up from 14% to 14.5% on all taxable services. It is expected to fetch the exchequer about Rs3,800 crore in the remaining months of the fiscal. It will translate into a tax of 50 paise on every Rs100 worth of taxable services. Service tax on restaurant bills will go up from 5.6% to 5.8% following the levy of 0.5% Swachh Bharat, or Clean India, cess. The finance ministry has clarified that for restaurants or eating joints having air-conditioning facility, the cess would be 0.5% of 40% of the billed amount that is 0.2%. The Swachh Bharat cess, the statement said, will be levied only on the portion of taxable services (after abatement) and will go towards funding of the government's cleanliness drive.
Healthcare major Apollo Hospitals Enterprise Ltd. on Saturday said it closed its books for the second quarter with a net profit of Rs93.67 crore. In a regulatory filing with BSE the company said it posted a net profit of Rs93.67 crore for the quarter ended September 30, 2015 as compared to Rs91.50 crore for the quarter ended September 30, 2014. The company's total income has increased from Rs1,161.05 crore for the quarter ended September 30, 2014 to Rs1,371.80 crore for the quarter ended September 30, 2015. Apollo shares closed at Rs1,277.30, up 2.25% on the BSE.
The top gainers and top losers of the indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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