Govt to make changes in FDI norms
New Delhi: After Hutchison Essar shareholding tangle, the finance ministry is planning to come out with a fresh set of guidelines for foreign direct investment (FDI) that will clearly define what constitutes indirect holding, beneficial interest and other forms of economic control. The exercise is aimed at plugging loopholes and ensuring that companies follow both the letter and spirit of foreign investment rules.

The new guidelines are being prepared by the Foreign Investment Promotion Board (FIPB) under the department of economic affairs (DEA).

The department of economic affairs, commerce and industry all support the need for an overhaul.

The overhaul in guidelines has been triggered by the Vodafone International Holdings B V proposal, cleared with conditions on May 7, asking the government to take note of its acquisition of 51.96 per cent in Hutchison Essar Ltd, India's fourth-largest mobile service provider. The key issue raised here was whether Hutchison Essar had violated the 74 per cent FDI limit for telecom services due to the financing and holding arrangements for 15 per cent equity of the company by its managing director Asim Ghosh, Max group chairman Analjit Singh and financial institutions IDFC and SSKI.

The issue that came under scrutiny was whether the beneficial interest of this 15 per cent holding had been transferred to Hutchison Essar's former owners, Hong-Kong-based Hutchison Telecom International Ltd (HTIL), which had extended credit support to the Indian shareholders to acquire their shares.

The FIPB says the issue of indirect holdings needs to be clarified since it impacts all sectors that have FDI limits.

The FDI allowed in telecom services is 74 per cent. Another five, including broadcasting services, allow 49 per cent. Another five sectors including print and defence permit only 26 per cent. Four sectors are barred from FDI — atomic energy, the lottery business, gambling and betting and retail (except single-brand retailing where 51 per cent FDI is allowed).
Back to News Review index page  

Karnataka withdraws ban on night shift for women
Bangalore: The Karnataka government has decided to withdraw the rule banning night shifts for women in various industries due to tremendous opposition from women and industries.

The government will now issue an ordinance to withdraw the Karnataka Shops and Commercial Establishment Act 2007 rule that barred women from working after 8 pm. Women working in the IT/ITES/BT sectors, hospitality industry and emergency services were excluded from the rule earlier.
Back to News Review index page  

Customs, excise collections grow by 19.1 pc
New Delhi: Customs and excise revenue collections posted a healthy growth of 19.1 per cent in April.

Finance Minister Palaniappan Chidambaram had earlier said he expected a fall in demand for goods and services after the five-time increase in the interest rates by banks and financial institutions.

Revenue Department in Finance Ministry reported customs and excise collection at Rs13,862 crore during April 2007 as against Rs11,634 crore achieved in the corresponding month in the previous financial year. Customs revenue has gone up to Rs7221 crore a growth of 27.4 per cent over Rs5667 crore reported for April 2006. Similarly, the excise duties collection has moved up by a modest 11.3 percent at Rs6640 crore over Rs5967 crore in April 2006.
Back to News Review index page  

Govt to provide incentives to states to raise farm output
New Delhi: The Centre plans to offer incentives to states that implement strategies to raise agricultural output, Prime Minister Manmohan Singh said on Monday.

The Prime Minister said whatever strategies were chosen by the states, they must deliver tangible benefits to farmers, consumers and the rural economy as a whole. He said this was a must if the country had to avert any crisis in the agrarian sector and fulfil the needs of a growing economy.

The Department of Agriculture has said that a draft National Policy for farmers was being considered by a committee of secretaries and a broad consensus among states has emerged.

The draft policy involves setting up of Rainfed Area Authority with a budget of Rs300 crore, bringing additional area under irrigation, launching of special wheat production programme with investment of Rs841 crore and an action plan for increasing pulses' production.
Under the Horticulture Mission, a public-privatisation model has been suggested by the Ministry of Agriculture.
Back to News Review index page