Economic Survey : India Economy to Grow 8.5%

India’s economy will grow at a rate of more than 8 per cent in the 2015-16 fiscal year, while consumer inflation will drop to between 5 and 5.5 per cent, according to the Economic Survey report, tabled at Parliament by Finance Minister Arun Jaitley, a day before Prime Minister Narendra Modi government’s first full Union Budget.

The survey, a report on the state of Indian economy, forecast the economy would grow by 8.1-8.5 per cent under a new calculation method that makes India the world’s top-growing big economy. The report also indicated that India can increase public investments and still hit its borrowing targets, while saying the country needed to adhere to its medium-term fiscal deficit target of 3 percent of gross domestic product.

Noting India had hit an economic sweet spot, the report added the country had room for big bang reforms. This gives an indication that Finance Minister Arun Jaitley will stick to debt targets in his maiden full-year budget .

The Economic Survey prepared by the Finance Ministry’s chief economic adviser Arvind Subramanian on the state of Asia’s third-largest economy was released ahead of Union Budget announcement for 2015/16 that begins on April 1.

* India must meet its medium-term fiscal deficit target of 3 percent of GDP

* Government will adhere to fiscal deficit target of 4.1 percent of GDP in 2014/15

* Govt should ensure expenditure control to reduce fiscal deficit

* Expenditure control and expenditure switching to investment key

* 2015/16 GDP growth seen at over 8 pct y/y

* Double digit economic growth trajectory now a possibility

* Economic growth at market prices seen between 8.1 - 8.5 percent in 2015/16 on new    GDP calculation formula

* Total stalled projects seen at about 7 percent of GDP, mostly in private sector

* There is scope for big bang reforms now

* India can increase public investments and still hit its borrowing targets

* Inflation shows declining trend in 2014/15

* Inflation likely to be below central bank target by 0.5 - 1 percentage point

* Lower inflation opens up space for more monetary policy easing

* Govt and central bank need to conclude monetary framework pact to consolidate      gains in inflation control

* Consumer inflation in 2015/16 likely to range between 5-5.5 percent

* Govt remains committed to fiscal consolidation

* India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline

* Outlook for external financing is correspondingly favourable

* Estimated at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP    in 2015/16

* Overhauling of subsidy regime would pave the way for expenditure rationalisation

* Liquidity conditions expected to remain comfortable in 2015/16

S&P Revises India’s GDP Forecast to 7.9 Per Cent

Global rating agency Standard & Poor's Ratings Services revised India’s GDP forecast upwards at 7.9 per cent for the fiscal year ending March 2016 driven by rising investment and low oil prices.

However, the forecast of real GDP growth in the Asia Pacific region has been lowered.

“India should be the Asia-Pacific region's bright spot. We revised our growth forecasts for the country upward, reflecting new official data based on methodological improvements. Standard & Poor's now forecasts GDP growth at 7.9% in the fiscal year ending March 2016, versus 6.2 per cent earlier, and 8.2 per cent in fiscal 2017, from 6.6 per cent previously. Rising investment and low oil prices have been boosting India's growth,” said Paul Gruenwald, Asia-Pacific Chief Economist at S&P.

S&P has lowered its GDP growth forecasts for China, Japan, and the Asian Tiger economies, as per its report titled ‘Stronger US economy and lower oil prices aren't boosting Asia-Pacific growth’.

The twin factors of strengthening US economy and lower oil prices have yet to lift economic data in much of Asia-Pacific. Central banks have shifted their stance in recent months, with a critical group of monetary policy makers cutting rates or easing financial conditions and the remainder moving to a more neutral stance.

This is contrary to what we observed until the latter part of 2014. Weaker growth in China and Japan may be weighing on overall sentiment, although India's star is rising.

S&P trimmed GDP growth forecasts for China to 6.9 per cent this year and 6.6 per cent in 2016, from 7.1 per cent and 6.7 per cent, respectively. It believes the official growth target will be about 7 per cent.

For Japan, the agency has lowered our growth forecast to 0.7% this year (from 1.3%) and 1.3% in 2016 (2.1% previously).

Railway Budget : No Hike in Fares, No New Trains

India’s Railway Budget for 2015-16 holds no surprises as Railway Minister Suresh Prabhu sparing the passengers of a fare hike. He however announced a record investment plan of over Rs. 1 lakh crore for the sector.

Highlights of Railway budget 2015-16

• ·        No increase in passenger fares
• ·        No new trains announced
• ·        Tickets can be booked 120 days in advance instead of 60 days to tackle tout menace
• ·        Outlay for passenger amenities increased by 67%
• ·        Plan expenditure to go up to a record Rs. 1.1 lakh crore in 2015-16 from an estimated Rs. 61,500 crore in 2014-15.
• ·        Central government to outlay likely to at 41 per cent (Rs.45,100 crore) in 2015-16
• ·        Will introduce train sets saving 20% of journey time, similar to bullet trains in design, and that can run on existing tracks
• ·        The speed passenger trains across nine corridors will be increased to 160-200 km from 110 km
• ·        SMS alert to be introduced for train timings
• ·        To introduce air-conditioned coaches for suburban trains
• ·        Wi-fi to be available at 400 railway stations
• ·        To revamp station redevelopment policy completely
• ·        To have bidding system for redevelopment of stations
• ·        To develop 10 satellite railway stations this year
• ·        800 km of gauge conversion will be commissioned
• ·        E-catering introduced in 108 trains, can order on IRCTC website
• ·        To expand water vending machines on more stations
• ·        On-board entertainment facility could be extended on Shatabdi trains
• ·        Mobile charging stations will be introduced in general class coaches
• ·        More general class coaches will be added to select trains for benefit of the common man
• ·        Railways plans to spend over Rs. 8 lakh crore over five years
• ·        Pension funds, multi-lateral banks have evinced interest in Railways
• ·        Proposed the best operating ratio in nine years, of 88.5 per cent for 2015-16
• ·        Railways to go through transformation in five years; to increase track capacity by 10 per cent to 1.38 lakh km
• ·        Feasibility report of high speed train between Mumbai and Ahmedabad expected by mid-2015
• ·        Wagon-making scheme to be reviewed to make it easier for private investment
• ·        To improve cleanliness & design of bed linen
• ·        All India 24x7 grievances helpline 138 to start soon
• ·        7,000 more toilets to be replaced by Bio-Toilets, New toilets at 650 stations, more  vaccum toilets
• ·        Passenger travelling unreserved can procure a ticket within 5 minutes
• ·        Mobile application to address complaints of people is also being developed
• ·        Introduction of integrated ticketing will be done
• ·        Hand-held devices for ticket checkers for moving towards paperless ticketing
• ·        Centrally managed railway display network in over 2000 stations in next 2 years
• ·        Railways will play a big role in socio-economic development of the country
• ·        Railways carry a big burden of expectations
• ·        Investments in railways will have multiplier effect
• ·        Railways facilities have not improved significantly over last few years
• ·        The cycle of under-investment should end
• ·        Railways has to regain in share in freight traffic
• ·        Railways aims to deliver a sustainable improvement in customer experience and make rail a safer means of travel
• ·        Objective is to make Railways self-sustainable
• ·        Rail-cum-road ticket to be extended to many stations
• ·        We are committed to provide rail connectivity to North Eastern states
• ·        Transport Logistic Corporation of India to be set up to aid expanding freight handling capacity and provide end-to-end logistic solutions
• ·        PPP model will help to augment resources and generate more employment
• ·        6608 kms of track to be electrified
• ·        Projects worth Rs. 96,182 crore to expand capacity of 9,420 km rail lines
• ·        CCTVs to be introduced in select trains and suburban trains for women safety
• ·        Train Protection Warning System, Train Collision Avoidance System
• ·        Projects for rail connectivity to many ports and mines
• ·        To monetize assets rather than sell them
• ·        To set up full-fledged Railway University in FY16
• ·        Rs.2000 crore for Coastal Connectivity Program; Rs.2500 crore through BOT/Annuity route
• ·        Drawing up comprehensive policy to tap latent advertising potential
• ·        Online application for all recruitment process
• ·        To impart soft skills to our staff we intend to impart regular training
• ·        917 safety work projects to eliminate over 3,000 unmanned crossings in all states
• ·        PPP cell to be revamped to make it result oriented
• ·        Railways can't function as business as usual mode
• ·        To set up infra fund, JV with IRFC for long-term funding

ITC acquires Park Hyatt Goa for Rs 515.44 crore

ITC group has won the bid to acquire Park Hyatt Hotel property in Goa for Rs.515.44 crore.

The diversified group has remitted 25 per cent of the bid amount of Rs 128.86 crore for the hotel owned by Blue Coast Hotels and put up for public auction by IFCI.

In a filing to the BSE, IFCI said the Kolkata-based ITC has remitted the advance as per the terms of the tender document.

The bid value is equivalent to the reserve price set by the lender, IFCI Ltd. The auction was initiated under the SARFAESI Act, 2002.

The PL Suri-controlled Blue Coast Hotels Ltd, which owns the Park Hyatt Hotel, had a debt of Rs 228.11 crore as of March 31, 2014. The company has been in the red since March 2011 and had defaulted on loan repayments to IFCI.

As of March 2014, the Suri family had a 43.46 per cent controlling stake in Blue Coast. Of the promoters’ stake, nearly 97 per cent was pledged with the lenders. Apart from Park Hyatt Goa Resort & Spa, it also owns MGM Grand New Delhi, Sheraton Chandigarh and Sheraton Amritsar.

The sale of the hotel in Cansaulim saw Blue Coast’s shares rise 4.93 per cent to Rs 63.90 on the BSE, on Monday. ITC’s shares were down 1.45 per cent at Rs 390.15.

ITC operates hotels under four brands: ITC Hotels (luxury), Welcom Hotel (5-star segment), Fortune (mid-market to upscale) and Welcom Heritage (heritage leisure).

Vistara Airlines in Trademark Battle

Hardly a month after it began services, Vistara, the Tata-Singapore Airlines joint venture has moved the Karnataka High Court in a legal battle with a travel agent over trademark.

Vistara Voyages, a Bengaluru-based travel agency, filed a suit in a civil court in that city seeking to restrain Tata-Singapore Airlines from using the Vistara trademark.

The airline filed a petition in the court in December challenging a lower court's jurisdiction to hear a suit that sought to restrain it from using the Vistara trademark.

Last August, Tata-Singapore Airlines settled on Vistara as the brand name for their airline.

Vistara Voyages, set up in 2008, offers leisure and corporate travel services and filed the suit claiming distinctiveness in service with the brand name.

The airline filed an application in the civil court challenging its jurisdiction to hear the suit but its plea was rejected. In December, the airline filed a writ petition in the high court challenging the civil court order.

Both Tata-Singapore Airlines and Vistara Voyages applied last year to the Controller General of Patents Design & Trademarks to register their trademarks.

The airline is also facing an objection in the registration of its trademark. After examining the airline's application, the registrar of trademarks, Delhi, said it was "liable to be refused".

"All trademarks are processed by the trademark office according to its prescribed procedures. Guidelines and information about all applications are publicly available.

S&P says India need to cut fiscal deficit

Rating agency Standard & Poor's said India must boost growth, cut its fiscal deficit and fulfill promises of financial and fiscal reforms in order to justify an upgrade in a credit rating, currently lodged one rung above junk bond territory.

The agency, in a news release issued listed what it needed to see to upgrade India's sovereign debt credit rating from 'BBB-minus'.

"Crucial factors include higher growth in real per capita GDP, stronger fiscal and debt metrics, and a stronger external position or improved monetary policy setting, and the government's ability to fulfil its promises on key reforms will be critical to the country's success," S&P said.

S&P said it did not expect swift progress on fiscal consolidation, and if this was the sole consideration India would have to wait several years before an upgrade.

"Improvements in India's weak fiscal balance sheet are likely to be gradual and are thus unlikely to lead to a rating upgrade in the next three to five years," S&P said, adding that the country's fiscal and debt indicators are the weakest among peers like Brazil and Indonesia.

First Budget of the Modi government will be closely watched for pro-growth measures, reforms for the power sector and other areas of infrastructure, as well as fiscal consolidation.

S&P raised India's credit rating outlook to 'stable' from 'negative' in September, citing the prospect of reforms.

China to Roll Out Large Passenger Aircraft Soon

China’s answer to Boeing and Airbus, the C919 large passenger aircraft will roll off assembly lines this year, the manufacturer announced.

The Commercial Aircraft Corporation of China has completed basic assembly of the aircraft. The company has secured orders for 450 C919 planes from 18 customers.

With 168-seat and 156-seat layouts, the C919 will compete with Boeing and Airbus in the medium-range aircraft sector. The C919's first test flight is planned for this year.

Earlier, an Airbus forecast said China will become the world's largest domestic aviation market in the next decade.

According to the forecast, the country will need more than 5,300 new passenger aircraft and freighters between 2014 and 2033, with a total market value of US$820 billion or 17 percent of total global demand, in the next 20 years.

Air India, IndiGo Most Hit By Flight Delays in Jan

Directorate General of Civil Aviation (DGCA) said passengers of Air India and no-frill carrier IndiGo were most affected due to delays of flights by over two hours in January.

The number of Air India passengers affected due to flight delays beyond two hours stood at 96,232 in January and that  of IndiGo, which has best on-time performance record among the domestic airliners, stood at 75,034, according to  DGCA monthly domestic air traffic report.

Also, as many as 11,666 passengers of private carriers Jet Airways and its subsidiary JetLite were also affected after their flights were reported late by more than two hours.

The DGCA norms make it mandatory for the airlines to submit data on number of cases of denied boarding, cancellations and delays along with the status on a monthly basis.

As per the report, while Air India provided facilities such as refreshments, refunds (where passenger desired), rescheduling of flights besides giving a compensation of Rs 1.04 crore to the aggrieved flyers, IndiGo provided only refreshments to the passengers of the delayed flights.

It may be noted here that the domestic passenger traffic grew by 21.33 per cent in January this year as compared to figures in the same month a year ago. In January 2015, all Indian carriers ferried a total of 62.45 lakh passengers as compared to 57.47 lakh in January 2014.

In all, a total number of 2,11,326 passengers of various airlines suffered at the airports in the country on account of denied boarding, cancellations and delays, the report said.

Of these, as many as 1,89,497 passengers were affected due to the delays of more than two hours, while those affected due to the flight cancellations by various airlines stood at 19,869 in January 2015.

Also, Jet Airways combined with JetLite, and state-run Air India were the only two carriers whose passengers were denied boarding in January 2015, with 1,082 and 878 passengers respectively.

SEBI to Crackdown on Unlawful Traders

India’s stock market regulator, Securities and Exchange Board of India (SEBI) said it will look into recent crackdown on the alleged leak of classified official documents at the behest of corporate groups to ensure that such leaks were not used to push up or pull down the share prices of listed companies.

A senior SEBI official said depending on the progress of the inspection, which involves analyzing trading and share price trends in a host of energy companies including some large firms from private as well as public sector, further action would be initiated by the regulator.

Those found to have traded on the basis of stolen information from government offices could be probed under insider trading and prevention of fraudulent and unfair trade regulations. They would be subjected to stern penal action by SEBI, he added.

Delhi Metro Opens ‘Exact Change’ Counters

In order to ease rush at ticket counters, the Delhi Metro opened 'exact change counters' at 20 stations for passengers who bring the exact ticket amount.It has also installed point of sale (POS) machines to facilitate cashless transactions at 73 stations.

"At the exact change counters, only those passengers who bring exact change for purchasing token for their destination station will be entertained. This will avoid any queuing or waiting time for these passengers," a Delhi Metro statement said.

These 20 stations are: New Delhi, Chandni Chowk, Rajiv Chowk, Anand Vihar, Shahdara, HUDA City Centre, Jahangirpuri, Uttam Nagar East, Saket, Dilshad Garden, Kashmere Gate, Badarpur, AIIMS, Vaishali, Karol Bagh, Seelampur, MG Road, NOIDA City Centre, RK Ashram and Dwarka Mor.

The statement said Delhi Metro on an average faces a demand of coins worth approximately Rs 7 lakh per day, and to supply this to passengers, it tries to ensure that enough change is available at the stations.

"However, despite all efforts, only about Rs 4-4.5 lakh coins can be made available to the stations on a daily basis. These exact change counters, therefore, are a step towards encouraging passengers to bring exact change for buying tokens," the statement added.

Additionally, the POS machines at 73 stations, including all stations of the Airport Express Line, aim to facilitate cashless transaction for passengers, who wish to recharge their smart cards by using credit or debit cards.

These stations also include Rithala, Rajiv Chowk, Huda City Centre, Saket, Pragati Maidan, Nawada, Akshardham, NOIDA City Centre, Vaishali, Rajouri Garden and Nehru Place.

"These machines are available at the customer care centre of these metro stations and passengers can easily get their smart cards recharged by using their credit/debit cards," the statement said.

At present, about 70 per cent of Metro passengers are smart card users.

India to Build Smart Cities in 12 Major Ports

In an ambitious plan, the Indian government plans to build one smart city each at the country's 12 major ports, at an estimated total investment of Rs. 50,000 crore.

According to Nitin Gadkari, Minister for Road Transport, Highways, each port will construct one smart city and each city will be built with an expenditure of about Rs. 3,000-4,000 crore.

"These will be green smart cities. We are starting work on these in four to six months. You will see all these complete in five years," he said.

The 12 major ports under central government's control have between them an estimated 2.64 lakh acres of land which is being mapped through satellites and are major resources with Shipping Ministry.

Mumbai Port Trust alone has about 753 hectares of land with it, valued at about Rs. 46,000 crore.

"We are identifying our property through GPS system. We do not want to sell land to builders and developers. We will develop these," Gadkari said, adding that companies will be invited to construct houses there and private investment will be roped in.

Detailing the concept, he said these cities will be built as per international standards and have wide roads, green energy, advanced townships and greenery.

In addition, these smart cities and ports will have e-governance links, international standard facilities, special economic zones, ship breaking and ship building centres besides allied things, he said.

“Port water will be recycled. Port wastes will be turned into bio gas. Vehicles will run on bio fuel. Solar energy and wind power will be generated at ports. These cities will be pollution-free and very green smart cities. We are starting these," Gadkari said.

Besides, electric vehicles will run here and these smart cities would house schools, commercial complexes and other amenities, he added.

The 12 major ports in the country -- Kandla, Mumbai, KEPT, Marmugao, New Managlore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) -- handle approximately 61 per cent of cargo traffic.

Gadkari said his ministry has plans to encourage setting up of some bio diesel plants at these ports, including Haldia, where bio diesel will be made from palm oil residue.

"India imports edible oil worth Rs. 1 lakh crore annually and maximum oil is imported from Malaysia," he added.

As part of its plan to revamp the country's top 12 ports, the Centre has already asked the ports to prepare land data base and development plans to achieve international operating standards.

The ports have also been asked to come up with a shelf of projects to augment their capacity to 1,600 million tonnes from the present about 800 million tonnes.

India Toughens Measures on Ponzi Schemes

India has constituted a high-powered committee to recommend steps to strengthen the existing legislative and administrative framework for curbing the menace of Ponzi schemes.

Inter-ministerial Group comprising senior officials of finance, home and law ministries as well as the investigative agencies will study the existing statutory framework for dealing with unauthorized deposit taking activities and suggest ways to plug the loopholes and beef up the system.

Besides identifying legislative and administrative changes needed to plug loopholes in the system, the group has also been mandated to lay down a standard operating procedure (SOP) for processes to be followed by the lead agency and authorities which are investigating such cases.

The SOP, sources said, will ensure that prosecutors are able to nail culprits in courts without delay.

The detailed, written instructions will also help agencies achieve uniformity in their performance while investigating such cases across various jurisdictions.

Many entities are exploiting legal loopholes to cheat the public with Ponzi schemes and recommendations of the group would help government arm state and Central regulators and agencies to check such activities.

With regulatory loopholes and multiple agencies, it has been difficult to curb the menace of Ponzi, or illegal money pooling schemes.

While chit funds are regulated by state governments, collective investment schemes come under the ambit of the Securities and Exchange Board of India.

Non-banking financial companies are under Reserve Bank of India (RBI) regulations whereas companies in general fall in the regulatory framework of the corporate affairs ministry.

RBI figures show that there are more than 700 companies spread across different states against which complaints of non-payment of investors' money have been received.

India FDI Doubles to $2.16 Billion in December

In a positive development, Foreign Direct Investment (FDI) in India almost doubled to $ 2.16 billion in December 2014, compared to $ 1.10 billion in the same month of 2013.

During the April-December period of current fiscal, FDI rose by 27 per cent to $ 21.04 billion as against $ 16.56 billion in the same period last fiscal, the data by Department of Industrial Policy and Promotion showed.

Amongst the top 10 sectors, telecom received the maximum FDI of $ 2.67 billion in the nine-month period, followed by services ($ 2.29 billion), automobile ($ 1.58 billion), pharmaceuticals ($ 1.21 billion) and computer software and hardware ($ 971 million).

During the period, India received maximum FDI from Mauritius at $ 5.89 billion, followed by Singapore ($ 4.31 billion), the Netherlands ($ 2.57 billion), the US ($ 1.48 billion) and Japan ($ 1.42 billion).

In 2013-14, FDI stood at $ 24.29 billion as against $ 22.42 billion in 2012-13.

Healthy inflow of foreign investments into the country helps in balancing the country’s balance of payments and stabilize the value of rupee.

India is estimated to require around $ 1 trillion over five years to overhaul its infrastructure sector, including ports, airports and highways to boost growth.

The government is taking steps to boost FDI in the country. It has relaxed FDI norms in sectors including insurance, railways and medical devices.

Airbus Seeks Local Partners to Make Military Helicopters

European airline giant Airbus Group seek local partners to make military helicopters to comply with rules aimed at helping the India’s defence industry.

Airbus Helicopters, part of Airbus Group said it is in talks with Indian companies including Mahindra & Mahindra, Reliance Industries and the Tata Group to jointly make military helicopters in India.

The company is offering to build its light utility AS550 Fennec and the medium lift EC725 for the armed forces, which are heavily dependent on an ageing fleet of Cheetah and Chetak helicopters.

Under Prime Minister Narendra Modi’s “Make in India” initiative, foreign contractors used to selling directly to New Delhi must form partnerships with local companies and transfer more of the work to help to develop the country’s defence industry.

The government last year scrapped the planned acquisition of 197 light utility helicopters so that it could launch a new competition reserved for domestic companies that form joint ventures with foreign suppliers.

In addition to Airbus, other firms including US-based Sikorsky Aircraft and Russian Helicopters are also expected to bid for the order.

“We are willing to partner with Indian companies to supply light utility helicopters to the Indian military,” Goldie Srivastava, spokesman for Sikorsky’s parent company United Technologies, said.

Srivastava also said the company would be interested in participating in the bidding process for supplying 123 multi-role S-70B Seahawk helicopters to the navy once the tender opens.

State-run Hindustan Aeronautics is the only Indian company producing helicopters, meaning that global defence firms are likely to have to partner with a private company building a product for the first time and from scratch.

Airbus executive Farid said that was a concern. “It is a tough task because you need to establish your vendors here which are not as existent as in other countries,” he added. 

Foreign ownership in joint ventures in the defence industry is limited to 49%, but foreign companies say majority ownership would speed up India’s drive for its own manufacturing base and ensure quality.

India Notified Insurance FDI Rules

Two months after issuing the ordinance, Indian government has notified rules for higher foreign direct investment (FDI) in the insurance sector.

The rules, expected to help foreign companies raise or make fresh investments in Indian companies, will ensure that even if the ordinance lapses now, it will continue to be in place and accordingly all actions will have legal validity.

The ordinance was issued as the Insurance Laws (Amendment) Bill has been pending in Rajya Sabha since 2008.

Now, it is mandatory for the Government to get the Bill passed, otherwise the ordinance will lapse. The Centre, on its part, expects the Bill to sail smoothly in the Budget session of Parliament.

According to these rules, foreign equity investment cap of 49 per cent is applicable to all Indian insurance companies. This will comprise both FDI and foreign portfolio investment (FPI). FDI means buying equity directly from the company and proceeds going to the company, while FPI refers to buying equity from the stock market, but money not going to the company. Instead, the shareholder, in its personal capacity, gets the money.

The 49 per cent limit is the composite cap, which means FDI or FPI alone can have 49 per cent. However, SEBI norms prescribe that FPI investment cannot be more than 24 per cent in a company.

Only if shareholders approve, FPI investment can go up to 49 per cent. The rules also say that Indian insurance companies should ensure that ownership and control remains in the hands of resident Indian entities.

FDI proposals up to 26 per cent of the total paid-up equity of an Indian insurance company will be allowed on the automatic route, and FDI proposals which take total foreign investment above 26 per cent and up to the cap of 49 per cent, will require Foreign Investment Promotion Board approval.

PM Wants ‘Make in India’ In Defence Sector

Prime Minister Narendra Modi called upon Indian industry and armed forces to develop own capabilities in defence manufacturing and stop reliance on imports.

Speaking at the Aero India 2015 Exhibition, he said the public sector defence undertakings should do much better and exploit their huge asset base and manpower to develop defence equipment and technologies.

"We must develop a financing system suited to the special needs of aerospace industry. It is a market where buyers are mainly governments, the capital investments are large and the risks are high. We must ensure that our tax system does not discriminate against domestic manufacture in comparison to imports, Modi said.

More broadly, he said the country's defence industry will succeed more if the manufacturing sector is transformed in India. The country needs great infrastructure, sound business climate, clear investment policies, ease of doing business, stable and predictable tax regime, and easy access to inputs, he stated.

Above all, there is a need for vast pool of highly skilled and qualified human resources for the defence industry, he said and added that the aerospace industry alone would need about 200,000 people in another ten years.

"We will set up special universities and skill development centres to cater to our defence industry, just as we have done in atomic energy and space. I have especially invited the State Governments to come here with package of facilities to attract investments in defence manufacturing" Modi added.

Kerala Launches Global Video Contest to Boost Tourism

Kerala Tourism has launched a month-long video sequencing contest to promote the destination, said Minister for Tourism A.P. Anil Kumar.

Thirty videos, each of two-minute duration, will be created for the contest, highlighting diverse aspects of the State. Each video will be divided into six portions of 20 seconds each and uploaded to the site. The divided portions will be in jumbled order.

Contestants have to log in to the contest page, www.keralatourism.org, where they can rearrange the jumbled portions into a single continuous sequence that accurately matches the original video.

The competition will encourage people to spend more time on the tourism website.

Three bumper prizes will be given away. The first is a seven-day and six-night Kerala package for two, with economy class one way flight tickets from anywhere in the world. The second bumper prize is six-day and five-night Kerala package for two. The third bumper prize is five days and four nights Kerala package for two.

EPFO Revives Plan to Start Commercial Bank

The Employees’ Provident Fund Organization (EPFO) has revived a proposal to start a commercial bank despite concerns whether the retirement fund manager has the ability to do so.

EPFO hopes the proposed Workers’ Bank will help it expand investments, increase earnings and improve subscribers’ engagement with the organization, which manages a corpus of over Rs.6 trillion and has an active subscriber base of more than 42 million.

EPFO, which functions under the labour ministry, may soon send the proposal to the finance ministry for consideration although the Reserve Bank of India (RBI) suggested when the proposal first came up in 2011 that such an option may not be feasible.

The Workers’ Bank is proposed to be modelled on Members’ Equity Bank, Australia, which is supported by the Australian Council of Trade Unions.

The commissions and service charges that are now paid to banks by EPFO can be used as working capital once the proposed bank is up and running. It can also manage its growing corpus instead of going to third-party portfolio managers.

Instead of withdrawals, the bank can provide repayable loans to EPF subscribers. It can also provide personal loans to members based on their EPF balance, according to an EPFO document.

According to the document dated 19 July 2011 and placed before EPFO’s central board meeting on 19 December 2014, starting a bank with EPF money may be ideal in meeting the requirements of workers, besides providing an avenue for deploying EPF funds profitably.

Munjal Sells 4% Stakes of Hero MotoCorp

In a significant development, Hero MotoCorp Ltd promoter Brijmohan Lall Munjal pared four per cent stake in the company by selling seven million equity shares to ‘fund new growth avenues’.

The company in a statement said the BML Munjal-led Hero Group has divested seven million equity shares in its flagship company Hero MotoCorp Ltd in a major initiative towards diversification into fast growth areas.

According to information available with BSE, the promoter stake in Hero MotoCorp stood at 39.92 per cent at the end of December 2014.

Following the sale, the over $5-billion Hero Group still holds a significant stake of over 36 per cent in the company, the statement added.

Elaborating on the funds’ use, the company said: “The group will use the sale proceeds to fund new growth avenues available through the Government’s ‘Make in India’ initiative.”

The Prime Minister’s ‘Make in India’ platform has opened up new vistas, some in very high growth areas, and the Hero Group — with its experience, scale of operations and brand equity — is uniquely placed to leverage these emerging opportunities, it said.

On the focus on its core business, the company said: “The Hero Group remains strongly committed to its core two-wheeler business, where it sees enormous potential, both in India and overseas.”

Hero MotoCorp sold 6.64 million two-wheelers in 2014, including over 200,000 units in global markets.

India May Get Swiss Bank Account Details By 2018

After India and Switzerland agreed to become 'early adopters' of an 'automatic exchange of information' mechanism prepared by global body OECD to help each other in fighting the tax evasion and frauds, India may get bank account details of Indians in Switzerland by 2018.

Under a global framework, more than 40 jurisdictions including India had agreed to become 'early adopters' of an 'automatic exchange of information' mechanism prepared by global body OECD to help each other in fighting the tax evasion and frauds.

"This so-called early adopters group plans to collect data from 2016 and exchange information for the first time in September 2017," according to a new report by the Swiss government.

However, Switzerland would see its 'first exchange' under this framework taking place in the year 2018. As per the report, as many as 58 countries would see their 'first exchange' taking place in 2017, followed by another 35 in the year 2018.

While India is part of the 'First Exchange 2017' group, it will have to wait till 2018 for 'automatic exchange of information' with Switzerland because of the Alpine nation being in the second grouping.

The details that would be shared include account number, name, address and date of birth, tax identification number, interest and dividends, receipts from certain insurance policies, credit balances on accounts, as also proceeds from the sale of financial assets.

Explaining the exchange process, the report said: If a taxpayer in a Country A has a bank account in Country B, the bank would disclose financial account data to authorities in the Country B, which would automatically forward the details to authorities in Country A to help them examine the data.

Once in place, the mechanism would help the Indian authorities to have a strong ground while seeking to bring back and tax the funds stashed overseas by its citizens.

To curb illicit fund flows and to tax unaccounted wealth stashed abroad, India has stepped up its efforts, including re-negotiating tax treaties with various countries. India expects automatic exchange to help curb this menace.

Many countries worldwide are taking steps to address the menace of illicit funds being stashed away in tax havens.