Resurgent Rajasthan sees proposals worth Rs 3.3 lakh cr

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The first day of the much-hyped Rajasthan Resurgent Summit concluded with 295 proposals worth Rs 3.3 lakh crore. These proposals, however, were received over the past year and barely left much scope for industry heavyweights and the Union government to announce any new big-ticket projects.

“These proposals are just the tip of the iceberg. A lot of work has to be done,” Chief Minister Vasundhara Raje said in her inaugural speech. “This investment will create 2.5 lakh jobs,” she added.

In the past year, Rajasthan has undertaken a raft of economic and industry reforms to create an investment-friendly image. Her government was left with a huge debt, including Rs 70,000 crore of debt from the power sector, by the previous Congress government.

THE PROPOSALS
• Rs 11,000 cr investments announced by Kumar Mangalam Birla
• Rs 10,000 cr pledged by Gautam Adani
• Rs 6,500 cr worth investments by Anil Ambani
• Rs 10,000 cr worth projects to be undertaken by chemical & fertiliser ministry
• 24 model railway stations to be developed in the state

Lauding Raje’s role, Union Finance Minister Arun Jaitley said, after leading the state in reforms, the chief minister should now lead the state in ease of doing business. The government should provide land for business. “The India of 2015 is not the India of 1971. For that matter, it is also not the India of 1991. The aspirational constituency, which supports growth wants India to reform at a much faster speed,” he said. “Everything should be corruption free. Taxation should be reasonable and the policy should not be so aggressive that it deters investors, ” he added.

Among the investments made public on Thursday, the biggest perhaps came from Kumar Mangalam Birla, chairman of the Aditya Birla Group. Birla promised investment of nearly Rs 11,000 crore, including Rs 7,000 crore for setting up two new cement plants and Rs 3,000 crore for establishing a 500 MW solar power plant in the state. Gautam Adani, head of the Adani Group, also promised to invest an additional sum of Rs 10,000 crore over four years for the expansion of thermal power plants and generation of solar power in the state.

However, then there was a word of caution by Hero Motocorp chairman Pawan Munjal. Though he lauded the government’s role in making the state investor friendly, he requested the chief minister to ensure speedy clearance of projects.

“We need speedy clearances for setting up our industries,” Munjal said, disclosing that his company is setting up a state-of-the-art Research and Development Centre on the outskirts of Jaipur.

Uday Kotak, chief executive officer of Kotak Mahindra Bank, found special mention from Raje for the bank’s financial services. Kotak said his bank’s lending ratio is more than the deposit in the state.

For instance, against a deposit of Rs 100, his bank lends Rs 250. “We plan to double our lending from Rs 5,000 crore to Rs 10,000 crore in the next three years… this will help small, medium-scale industries and farmers in the state,” Kotak said.

From the central government, the biggest announcements came from chemicals and fertiliser minister Ananth Kumar, who promised Rs 10,000-crore of projects. This includes setting up a National Institute of Pharmaceutical Education and Research in Jhalawar district in two years, upgrade of the Central Institute of Plastic Engineering and Technology in Jaipur, and setting up a plastics park and a medical devices park, a first in the country. Railways minister Suresh Prabhu said they were going to set up 24 modern railway stations in the state.

Tourism was another key sector, which received special attention from the Central government, as well as the summit’s international partners including Singapore, Japan, Italy and Australia. Singapore Home Affairs Minister K Shanmugam said Singapore Airlines has decided to operate a direct flight from Singapore. “The airlines knew that it might not be earning profit in one or two years, but it is a long-term partnership,” he said.

Religare set to exit MF business

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In the midst of foreign entities exiting the Indian mutual fund segment, Invesco, a large global player in asset management, has decided to show a long-term commitment here.

Religare on Wednesday informed the stock exchanges that Invesco Ltd had agreed to raise its stake in Religare Invesco Asset Management Company to 100 per cent, from the existing 49 per cent. It could, say company sources, be a Rs 500-550 crore deal, to be finalised after regulatory clearances.

“Invesco had a call option to increase their stake to 100 per cent by March 2016. Invesco decided to announce it ahead of the deadline, so that the regulatory clearance could be in place (by then),” said a company official.

MANAGING ASSETS
Foreign players exiting MF

  • Goldman Sachs sold to Reliance MF
  • Pinebridge sold to Kotak AMC
  • ING sold to Birla Sunlife MF
  • Morgan Stanley to HDFC MF
  • Daiwa sold to SBI MF
  • Fidelity sold to L&T Finance

Foreign players increasing MF India presence

  • Invesco agrees to increase stake to 100% in Religare Invesco fund house
  • Nippon agreed to increase stake to 49% in Reliance Mutual Fund
  • Schroders acquired 25% stake in Axis Mutual Fund

The reason for the sale by Religare was not disclosed to the stock exchanges. Sources indicated it could be due to the promoters wanting to monetise some assets to meet other financial obligations. Religare’s shares reacted negatively to the announcement, with a fall of nearly two per cent on Thursday morning.

This deal marks the bucking of a trend, with seven foreign entities quitting the fund management space in the past seven years. The latest was the buyout of Goldman Sachs’ Indian asset management business by Reliance MF. Reportedly, Nomura is also planning to end its joint venture with Life Insurance Corporation, in LIC Nomura MF. “We are excited about the long-term prospects of the important Indian market. By taking full ownership of this business, we will further deepen our presence in India and enhance our ability to meet client needs across the globe,” said Andrew Lo, head of Asia-Pacific for Invesco.

Globally, Invesco manages Rs 52.8 lakh crore. Outside of America, it is the largest fund manager in Britain and also has operations in other parts of Europe, Canada and Asia.

Religare Invesco MF managed Rs 21,593 crore of assets as of end-September. Invesco first invested in Religare in 2013 when the assets under management stood at Rs 14,000 crore. The global firm had bought stake from the promoters, Delhi-based brothers Malvinder and Shivinder Singh, for Rs 450 crore.

Invesco says it has decided to continue with the same management team, headed by Saurabh Nanavati as chief executive.

“We will look at introducing more products from Invesco’s global portfolio which will be suitable to the sensibilities of Indian customers,” said another company official.

Source: http://www.business-standard.com/article/markets/religare-set-to-exit-mf-business-115111900827_1.html

Finance ministry raises duty drawback rates for exports for engineering, marine, leather and textiles

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As exports fell for the 11th month in a row in October 2015, the government on Monday increased the refunds to exporters on duties on imports, particularly those relating to engineering products. This would also neutralise the impact of import duty hike in steel, used in engineering products.

Besides engineering goods, the government raised the duty drawback rates on composite products such as leather handbags, ready-made garments made of cotton wool and those made of cotton with lycra.

The Central Board of Excise and Customs raised the duty drawback rate by two percentage points for the engineering sector, which would allow higher tax refund to exporters of machinery and appliances, electrical machinery, tools and implements, among others.

“These revised rates are based on average incidence of customs and central excise duties and service tax related with the manufacture of export goods and involve substantial total drawback for exporters,” the government said in a release.

After the additional hike in the duty drawback, the rate for certain engineering products could go up to close to eight per cent, sources said.

However, the government did not take into the account the 20 per cent safeguard duty imposed on hot-rolled steel. “It is a positive that the government has made up for the hike in duty on steel. But the smaller firms will have to bear the impact of safeguard duty, as it is not factored in new duty drawback announced ” said Ajay Sahai, director-general and CEO, Federation of Indian Export Organisations.

CRUX OF THE MATTER

  • Move expected to neutralise impact of import duty hike in steel
  • Duty drawback rates raised on engineering goods, leather handbags, readymade garments made of cotton wool and cotton with lycra, shrimps
  • Two percentage points rise in duty drawback for engineering sector to allow higher tax refund to exporters of machinery and appliances, electrical machinery, tools among others
  • Former CMD N Ramanujan had worked out a JV with Titan Watches when Xerxes Desai was heading it. But the government turned it down
  • The only operational plant at Tumkur, Karnataka, has 2 million-unit capacity of quartz watches
  • The watch model, Kanchan, used to sell at a premium in the grey market at Rs 1,000, when its legal price was Rs 700

Duty drawback is a refund of certain types of customs and Central excise duties as well as service tax on imports of inputs or raw materials that are used to manufacture goods for exports.

The revised rates of duty drawback notified by the finance ministry will be effective from November 23.

In a first, the government extended the brand rate of duty drawback to wheat. It also provided a mechanism to pay provisional drawback to exporters soon after export, for certain exports made under the claim for brand rate of duty drawback.

“This was pending for a long time. In a positive development, the government also allowed exporters claiming brand rate of drawback rate to avail provisional drawback rate until the brand rate is decided,” said Sahai.

The government added the expert committee would look into exporters’ concerns arising from new schedule of rates and make further recommendations to the government in January 2016. The government will also take into account feedback from export promotion councils to this effect.

Source:

http://www.business-standard.com/article/economy-policy/finmin-raises-duty-drawback-rates-to-arrest-export-slump-115111700035_1.html

Want to partner India in smart cities: Huawei

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Chinese technology major Huawei wants to partner India in helping it build Information and Communications Technology (ICT) infrastructure for the development of smart cities, a senior company executive said at the Huawei Innovation Day Asia, co-hosted with National University of Singapore, here last week.

 

The Centre has already announced the list of 100 cities which it plans to make ‘smart’ by providing efficient physical, social, institutional and economic infrastructure. The government has defined a smart city in the Indian context as a city that provides a decent quality of life to its citizens, a clean and sustainable environment, and supports the application of smart solutions.

 

“We will be able to help India build ICT infrastructure including wireless systems and the computing platforms for the smart cities,” said Joe So, Huawei’s chief technology officer for Industry Solutions at the company’s Shenzhen head office.

 

“We can help build the inter-dependency of the Indian system,” So said, stressing on Huawei’s strength in building ICT infrastructure.

 

Noting the similarities between India and China, especially in view of the huge population in their major cities, So said India’s smart cities should also adopt ICT. So pointed out the use of ICT in Chinese cities has helped reduce crime rates significantly. The Indian smart cities could also use ICT for similar use, said So at the Huawei Innovation Day Asia.

Elaborating, So said India would not be able to have one plan for building 100 smart cities as the country’s major regions are different from one another. Each city must be planned based on its structure and people’s needs such as New Delhi being a government and agencies centre and Mumbai being a commercial hub.

Addressing the Innovation Day Asia, Singapore’s minister for trade and industry S Iswaran said, “The ICT innovation will have a profound impact on the nature of jobs, the viability of business models, and the structure of economies.” Citing the Asian Development Bank’s figures, Iswaran said the continent’s urban population grew by 44 million every year and the Asian nations had to concern themselves with their citizen’s growing expectations for more efficient government services, as well as ensure environmental sustainability.

So said he’ll be highlighting Huawei’s technologies for India, its second largest market outside China, at the Smart-Safe City conference in Bangalore on December 19.

The company also announced its vision for the next generation of the smartphone: The “superphone”, and said it will be developed by 2020.
Source:http://economictimes.indiatimes.com/articleshow/49798484.cms

 

India, Japan sign action plan to double investments in 5-years

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The governments of India and Japan signed an agreement on Thursday for doubling of Japanese investment into Indian firms in the next five years, and  boosting two-way trade. The signatories were Commerce and Industry Minister Nirmala Sitharaman and Japan’s minister for economy, trade and industry, Yoichi Miyazawa.

The plan was categorised into five broad areas: development of selected townships in India, promotion of investment and infrastructure development, further development and cooperation in information technology, enhancing cooperation in strategic sectors and Asia-Pacific economic integration.

Signing of the action plan is seen “as a step further in improving the trade relationship between India and Japan as a follow-up of Prime Minister Narendra Modi’s visit to Japan last year,” stated a release quoting Miyazawa.

According to Sitharaman, the agenda was in line with PM’s Make in India plan that will further investments from Japan into the country’s manufacturing sector.

Last year, the Department of Industrial Policy and Promotion under the ministry of commerce and industry had set up a mechanism to fast-track Japanese investments named ‘Japan Plus.’

During Modi’s visit, Japanese Prime Minister Shinzo Abe had set a target of 3.5 trillion yen ($33.5 billion) of public and private investment and financing from Japan including official development assistance to India to be made over five years. There are already 1,209 Japanese firms operating in India out of which 137 have started their operations after October 2013.

Japan is the fourth largest foreign direct investment (FDI) contributor to India, with major interests in pharmaceuticals, automobiles, and services sectors accounting for 7.46 per cent of total FDI equity inflows into India. During April 2000-November 2014, FDI from Japan into India stood at $17.55 billion.

Under the Tokyo Declaration for Japan-India Special Strategic and Global Partnership, Modi and Abe have set a target of doubling Japanese FDI and the number of Japanese firms in India by 2019.

Source: http://www.business-standard.com/article/economy-policy/india-japan-sign-action-plan-to-double-investments-in-5-years-115043000401_1.html

Strengthening Iran-India trade ties a great opportunity for both

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Iran’s Ambassador to India Gholamreza Ansari at the inaugural session of the United Economic Forum’s Trade Summit 2015 in Chennai on Saturday.

Iran’s Ambassador to India Gholamreza Ansari at the inaugural session of the United Economic Forum’s Trade Summit 2015 in Chennai on Saturday.

India is on top of Iran’s list of partners with which it plans to strengthen economic ties in the region, according to Ghulam Raza Ansari, Ambassador of Iran to India.

Ansari, who just returned from Iran after participating in a seminar on its economic direction post-sanctions, said that the countries in the region had been Iran’s biggest asset in tiding over a three-decade long sanction imposed by the West.

Iran had managed the sanctions and achieved its rights through diplomacy and cooperation. It will first focus on growing trade relations in the region and India is a top priority. There is a great opportunity for both countries to increase economic relations across a wide range of sectors such as oil and gas including transmission, metal, food and agriculture.

Tamil Nadu particularly was first destination of Iran’s investments when it invested in 1960s in petrochemicals and refinery, he said, addressing the inaugural function of a two-day trade summit organised by the United Economic Forum, a platform for the socio-economic development of muslims.

Mufti Mohammad Sayeed, Chief Minister, Jammu and Kashmir, said education is the key to the development of the community.

The Sachar Committee, which had been appointed by the previous Central Government to go into socio economic status of Muslims and make recommendations for their development, had pointed out that educational backwardness was the reason for economic backwardness.

The Committee’s recommendations such as starting quality government schools in areas where there are Muslims, schools for girls and skill development facilities need to be implemented. Degrees awarded by traditional institutions such as the Madarasas must be recognised in mainstream education and competitive exams, he said.

Ahmed AR Buhari, President, UEF, said India is a bright spot in the globe in terms of economic development. The forum is actively participating in the ‘Make in India’ campaign launched by the Prime Minister, Narendra Modi.

UEF has set a target of garnering ₹ 10,000 crore in investments during the two-day summit and has tied up investments of over ₹ 2,000 crore on the first day across a range of sectors including tourism, hospitality, real estate and logistics.

Source: http://www.thehindubusinessline.com/economy/strengthening-iranindia-trade-ties-a-great-opportunity-for-both/article7877117.ece

 

 

Optimistic About India Growth Prospects: IMF

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IMF

Confident that the Indian economy is increasingly on a stable footing, the International Monetary Fund (IMF) on Sunday said further progress is required on the long-standing supply bottlenecks and for achieving faster and more inclusive growth.

“We are optimistic about India’s prospects and view the economy being on an increasingly stable footing,” said Kalpana Kochhar, deputy director of the IMF’s Asia and Pacific department.

“Inflation has declined, the current account deficit is in check, international reserves are ample and economic growth is picking up,” she added.

Listing out various positive developments, Ms Kochhar said a number of important economic and structural reforms have also been initiated.

These include diesel price deregulation, steps to create more flexible labour markets (particularly at the state level), coal sector reforms, adoption of the flexible inflation targeting framework by the Reserve Bank of India (RBI), increasing infrastructure spending, and enhancing financial inclusion, Ms Kochhar told PTI in an interview.

“But further progress is needed to relax long-standing supply bottlenecks (especially in the energy, mining and power sectors) and achieve faster and more inclusive growth,” she said.

The IMF has often said that India is among the few bright spots in an otherwise gloomier world economy.

In a recent report published ahead of the G20 Summit, which began in Turkey on Sunday, the Washington-based multilateral institution said India’s growth will benefit from recent policy reforms, a consequent pickup in investment and lower commodity prices.

It also projected a 7.5 per cent growth rate for India in 2016, as against China’s 6.3 per cent.

However, for the current 2015 year, the IMF has projected 7.3 per cent growth rate, which is 0.2 per cent less than its projection made for the year in July.

“Growth in China is expected to decline as excesses in real estate, credit, and investment continue to unwind. India’s growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices,” the report said.

Source: http://profit.ndtv.com/news/economy/article-optimistic-about-india-growth-prospects-imf-1243581