THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA INDIA AGAINST ITS OWN INDIGENOUS PEOPLES

PalahBiswas On Unique Identity No1.mpg

Thursday, August 23, 2012

Decks clear for FDI in key sectors despite Mamata`s stiff resistance! Chidambaram cleared 10 foreign direct investment proposals worth 12.6 billion rupees!India to consider 10 pharma FDI proposals on Aug 24.

Decks clear for FDI in key sectors despite Mamata`s stiff resistance! Chidambaram cleared 10 foreign direct investment proposals worth 12.6 billion rupees!India to consider 10 pharma FDI proposals on Aug 24.

Troubled Galaxy Destroyed dreams, Chapter 794

Palash Biswas
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Finance minister P Chidambaram has cleared a proposal to raise foreign direct investment limit in insurance and pension sectors to 49%, making it clear that he intends to push sentiment changing reforms even though politically things look difficult for the United Progressive Alliance government.As UPA ledership failed to convince Mamata Banerjee once again!West Bengal CM Mamata Banerjee on Wednesday stalled a discussion on the long-pending decisions to allow FDI in multi-brand retail.The finance ministry will move a detailed proposal for the consideration of the cabinet.FDI in multi brand retail is in pipeline already.Stung by criticism over lack of policy decisions, the UPA government is eyeing several measures to lift investment sentiment, and boost growth that slipped to a nine year low of 6.5% in 2012-12 and is in the danger of going down further.Meanwhile, inflicted with scams ansd scandals and politically siezed,a combative Sonia Gandhi on Thursday asked Congress MPs not to be defensive on the CAG report on coal blocks allocation and to aggressively counter the offensive launched by the BJP which is demanding the resignation of Prime Minister Manmohan Singh.The ministry of telecommunications has asked Internet Service Providers to block 16 Twitter accounts, including those of right-wing entities and leaders such as Sangh Parivar, Panchjanya magazine and Pravin Togadia.

The United Progressive Alliance (UPA) allies on Wednesday backed the government on its offer to discuss the report of the Comptroller and Auditor General (CAG) on coal blocks allocation in Parliament to break the logjam.Rejecting the Opposition's demand for the resignation of Prime Minister Manmohan Singh in the wake of the CAG's report that puts the presumptive losses in the coal block allocation at Rs 1.86 lakh crore, the allies said the demand was "unreasonable."

However, the UPA's difficult ally, Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee opposed the government's proposal to bring in economic reforms by allowing Foreign Direct Investment (FDI) in retail and aviation sector.

But it made no difference as Chidambaram cleared 10 foreign direct investment proposals worth 12.6 billion rupees!India to consider 10 pharma FDI proposals on Aug 24.It should be understood that the government is keen to push the FDI proposals to signal to overseas investors that the Manmohan Singh government is back with a reforms mindset after unleashing a series of tax law changes that hurt investment sentiment.

The Comptroller and Auditor-General's report on coal blocks allocation continued to haunt the government on Wednesday.For the second day, both the Lok Sabha and the Rajya Sabha were adjourned without conducting any business, except the tabling of papers, as Opposition members stalled the proceedings pressing their demand for the resignation of Prime Minister Manmohan Singh.Both Houses were frequently adjourned in the pre-lunch session as Opposition members raised slogans against Dr. Singh and the government.

Foreign direct investment

From Wikipedia, the free encyclopedia

Foreign direct investment (FDI) is investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. [1] [2]
As a part of the national accounts of a country FDI refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.[3] It is the sum of equity capital, other long-term capital, and short-term capital as shown the balance of payments. It usually involves participation in management, joint-venture, transfer of technology and expertise. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative) and "stock of foreign direct investment", which is the cumulative number for a given period. Direct investment excludes investment through purchase of shares.[4] FDI is one example of international factor movements.(http://en.wikipedia.org/wiki/Foreign_direct_investment).


India approved a $180 million foreign direct investment plan by U.S. media group Walt Disney , part of a new push to clear a backlog of investment proposals as the finance ministry seeks to inject new life into the slowing economy.In total, Finance Minister P. Chidambaram cleared 10 foreign direct investment proposals worth 12.6 billion rupees, on the recommendation of the Foreign Investment Promotion Board (FIPB), the government said on Thursday.


However, UPA key ally Trinamool Congress today strongly opposed allowing FDI in key sectors like retail, insurance and aviation arguing that it would be harmful for the people of the country. In a setback to the government's plan to ease foreign investment rules for multi-brand retail and civil aviation, Trinamool Congress chief Mamata Banerjee on Wednesday refused to discuss the issue at the UPA coordination committee meeting, citing protocol. Times of India reports that The West Bengal chief minister, who returned to the meeting of the coalition partners, told the gathering that according to the rules of engagement, allies should be alerted in advance about any issue that is put on the agenda. She is learnt to have said that she could not discuss the issue without consulting her party colleagues. The committee, however, approved amendments to the Unlawful Activities Prevention Act to effectively combat money laundering and terror financing and declare such crimes as terrorist acts. Through the proposed amendment, the government intends to make UAPA more effective in preventing unlawful financial activities, money laundering, terror financing and circulation of fake Indian currency notes. But Banerjee retained her status as the chief opponent of the government's reforms plan, forcing it to put on hold decisions regarding allowing foreign stores to set up multi-brand outlets in India and permitting foreign airlines to acquire up to 49% stake in Indian carriers. But her decision to join the UPA coordination meeting had raised expectations that Congress leaders would convince her to soften her stance, if not drop her protests altogether. Defence minister A K Anthony was even flown to Kolkata to get her on board but Banerjee is still to agree to the proposal. Commerce & industry minister Anand Sharma has told industry captains that the government is planning to announce an FDI package around mid-September.


Amid reports that the government is mulling over allowing FDI in retail, BJP on Thursday announced it will organise a protest demonstration by traders from across the country in the national capital on August 23 to oppose any such move.National Convenor of Traders Cell, BJP, Shyam Bihari Mishra, told reporters that the day-long protest will be held at Jantar Mantar and around 10,000 traders from different parts of the country are expected to participate in it.

"Traders from the whole country are living in fear of FDI in retail. The Centre is making new laws under foreign pressure, especially of the US. An example of this is the Food Security Bill and the Goods and Services Tax," Mishra said.

After the protest demonstration, the traders and BJP leaders will march towards Parliament and lay siege of the complex.Senior BJP leaders, including party president Nitin Gadkari, LK Advani, Leader of the Opposition in Lok Sabha Sushma Swaraj, Rajnath Singh, Murli Manohar Joshi, Kiran Maheshwari and Vijay Goel among others, will participate in the protests.

"The trader is not safe in the country. There are frequent loots and murders," Mishra said.

Traders from Assam, West Bengal, Kerala, Uttar Pradesh, Orissa, Tamil Nadu, Bihar and several others states are expected to attend.

On the other hand, expressing the political compulsion very well,Commerce and Industry Minister Anand Sharma today said no state will be forced to implement FDI in multi-brand retail, even as the key ruling front ally Mamata Banerjee opposed opening of the sector.

"No state will be forced to implement FDI in multi-brand retail," Sharma told reporters after inaugurating the India International Jewellery Expo in Mumabi. Though some states are not in its favour, they too will gradually see the benefit of it, he said adding opening up of the sector would help farmers, consumers as well as small entrepreneurs as integrated infrastructure will benefit the rural economy. He said as many as 10 states have endorsed the Centre's decision to allow foreign investment in the sector.

"The chief ministers of top 10 states have already extended their support to Centre's decision to allow FDI in multi-brand retail, stating the move will improve availability of quality goods and enhance competitiveness," Sharma said.

The union cabinet had deferred a decision on these bills when Pranab Mukherjee was the finance minister because of opposition from allies such as Trinamool Congress even though the FDI limit was only 26%.Chidambaram will need all his persuasion skills to get all allies on board, though it is not yet clear when the cabinet will take up the proposal. Even if approved, the two bills are unlikely to make it to Parliament in the Monsoon session that concludes on August 27.

The government had introduced the Insurance Laws (amendment) bill, 2008 in Parliament December 2008 to update the sector law and increase the foreign participation in the sector.

FDI limit in the pension sector will be linked to cap in insurance sector that the government proposes to raise to 49% from present 26%.

Earlier in the day, the key UPA ally Trinamool Congress chief Mamata Banerjee strongly opposed FDI in key sectors like retail, insurance and aviation arguing it would be harmful for the people of the country.

"We are not in favour of FDI in retail and all this (insurance)... and pension sectors. We are not in favour of FDI in aviation also. Always we are in favour of common people," Trinamool Congress chief Mamata Banerjee said. She was speaking to reporters after meeting Finance Minister P Chidambaram here.

"In our election manifesto what we raised, we will stick to it ... Other countries all over world are also saying if they allow FDI in retail market, then workers will die... So we are not (in favour)," Banerjee said.

The government has been unsuccessful in going ahead with the key reform bills in Parliament mainly because of opposition from its key ally TMC. It has not been able to go ahead with the implementation of foreign direct investment (FDI) in multi brand retail even after securing Cabinet approval.

Besides, government proposes to increase foreign investment cap in insurance sector to 49 per cent, from 26 per cent.

Further, it is also looking at passing the Pension Fund Regulatory and Development Authority Bill, 2011, which provides for private sector and foreign investment in pension sector. In the aviation sector, the government is toying with the idea of allowing foreign airlines to pick up stake in domestic carriers.

On SEZs, Sharma said the government would shortly come out with the fresh special economic zones guidelines.

"The department of Commerce, Commerce Secretary, the DGFT and other senior officials are presently engaged in dialogue with the Finance Ministry over some revenue and taxation related issues. The new SEZ guidelines will be notified shortly," Sharma said.

Disney had in February acquired a controlling stake in UTV, one of India's premier media and entertainment companies, then delisted it after spending about $375 million to buy out other investors.
Disney has plans to restructure its digital assets in India to drive growth in segments like mobile, online and interactive TV, the company says on its India website.

A Disney India spokeswoman declined to comment when asked about the investment ruling. One industry analyst said the planned investment was related to the UTV acquisition.

The company had asked the government permission to invest 10 billion rupees to expand its business in India and invest in subsidiaries including broadcasting companies, the government said.

Since taking charge of the ministry last month, Chidambaram has directed officials to put FDI approvals on fast track as part of a drive to revive investor confidence after growth slowed to its slowest pace in nearly a decade.

"We have been directed by the minister to meet more frequently and clear FDI proposals as early as possible," said a senior official in the finance ministry, who declined to be named.

The FIPB is due to next meet on Friday to consider 10 FDI proposals from pharmaceutical companies, including eight that had been deferred in earlier meetings, he said.

"Most of the proposals are expected to be approved," the official said.

Economic times reports:Jet Airways, SpiceJet and Kingfisher slipped over 2 per cent in early trade on Thursday after West Bengal chief minister and Trinamool Congress chief Mamata Banerjee on Wednesday stalled a discussion on the long-pending decision to allow FDI in aviation.
"There were expectations that Banerjee would back the proposal to allow foreign airlines to buy up to 49% equity in Indian carriers," ET reported.

Currently, foreign investors can own up to 49% stake in Indian carriers, but only if they are not in the airline business. "There are not many in the ruling side who feel that Banerjee would give up her opposition to financial sector legislations such as the pension reform bill," the report added.

Earlier today Kotak said yields are still intact in the aviation sector in a seasonally weak second quarter. The brokerage firm maintains 'buy' on SpiceJet and 'sell' on Jet Airways as Jet was not able to gain out of Kingfisher's capacity cuts. However, yields are intact in a seasonally weak second quarter.

At 10:00 am, Jet Airways was trading 2 per cent lower at Rs 389.10. It has hit a low of Rs 385.60 and a high of Rs 397 today.

SpiceJet Ltd was trading 2.6 per cent lower at Rs 35.70. It has hit a low of Rs 35.25 and a high of Rs 36 today.

Kingfisher Airlines Ltd was trading 1 per cent lower at Rs 9.90. It has hit a low of Rs 9.71 and a high of Rs 10 today.

The Hindu reports,speaking at the second meeting of the UPA Coordination Committee, Ms. Banerjee said she wanted more consultations on the FDI in aviation sector but said there was no way the UPA could entertain Opposition demand on Prime Minister's resignation.

"The stand taken by BJP and its partners that they will not allow discussion of the subject nor will they allow Parliament to function is unreasonable. On that, all the UPA partners are agreed," Finance Minister P Chidambaram told journalists after a meeting of UPA Coordination Committee.

The Committee discussed, among other things, the controversial issues of the Foreign Direct Investment (FDI) in retail and Teesta but Mr. Chidambaram said the parties only exchanged their views. Further discussions would be held in the coming days. "The third meeting of the Coordination Committee will be held next month after the ongoing monsoon session of Parliament ends," he added.

According to Mr. Chidambaram, all issues engaging the country were discussed at the meeting, including economic, political and foreign relations.

"We discussed the impasse in Parliament and unanimously agreed that the offer made by the Prime Minister that we are willing to discuss any subject in Parliament, including the CAG reports, must be reaffirmed and restated. Tomorrow, the Leader of the House will restate the position again that we are willing to discuss any subject on the floor of the House," Mr. Chidambaram said.

The meeting, the second since the UPA Coordination Committee was set up last month, was also attended by Ms. Mamata Banerjee who had skipped it the last time. Ms. Banerjee is expected to meet some Union Ministers and Congress leaders on Thursday.

The government will reassess its fiscal position for 2011-12 in its mid-year economic review, taking into consideration rising expenditure and resource mobilisation efforts.

"The fiscal deficit target for the current financial year will be reassessed after mid-year review depending on the pace of expenditure and resource position of the government," Finance Minister P Chidambaram said in a written reply to the Rajya Sabha.

The government aims to bring down the fiscal deficit- the gap between expenditure and revenue collection - to Rs 5.13 lakh crore or 5.1 per cent of GDP in the current fiscal. In 2011-12 fiscal, the deficit had ballooned to 5.76 per cent of GDP on account of high fuel subsidy outgo.

"Government is keeping a strict vigil on the Indian economy in the current financial year. Government has reverted to the path of fiscal consolidation with gradual exit from the expansionary measures in a calibrated manner," Chidambaram said.

The Indian economy is facing slowdown with the economic growth touching a nine-year low of 6.5 per cent in 2011-12.

Industrial production in June declined by 1.8 per cent from a growth of 9.5 per cent in same month last year due to poor show by manufacturing and capital goods sectors.

The factory output in the April-June quarter too contracted by 0.1 per cent against an expansion of 6.9 per cent in the similar period last fiscal.

Chidambaram said the reduction in the fiscal deficit is targeted with a mix of reduction in total expenditure as percentage of GDP and improvement in gross tax revenue.

The government, Chidambaram said, has already taken steps to control fiscal deficit, by mobilising revenue and restricting expenditure.

Also a committee comprising Vijay Kelkar, Indira Rajaraman and Sanjiv Misra has been constituted to assist in formulation of a fiscal consolidation roadmap.

For the April-June period, the fiscal deficit in monetary terms stood at Rs 1.9 lakh crore, or 37.1 per cent of the 2012-13 target.

Achieving the 5.1 per cent target for the current fiscal seems challenging in view of rising oil, food and fertiliser subsidy bills.

The Reserve Bank has called upon the government to cut expenditure on subsidies and "use resources so released to step up public capital expenditures".

"With limited fiscal and monetary space available to provide a direct stimulus, an expenditure-switching policy is needed that reduces revenue spending by cutting subsidies and using the resources so released to step up public capital expenditures," RBI said today in its annual report for 2011-12 fiscal ended on June 30.

Flagging the twin deficits on the fiscal and current account fronts as the main fiscal concern, the report said this switching can help the government improve on both these fronts, while the RBI can accelerate its nearly three-old inflation, which it termed as still "sticky" more aggressively in the meanwhile.

Admitting that its long-drawn battle against inflation through a tight monetary policy has contributed to the growth deceleration that has fallen below potential, it, however, defended the move saying price stability is needed to sustain long-term higher growth.

Attributing slowdown to a combination of domestic and global factors, the report said, "Global macroeconomic and financial uncertainty, weak external demand, elevated prices, widening twin deficits and falling investments combined to adversely impact domestic growth."

On the slowing investments, it said, "the investment climate worsened due to structural impediments, policy uncertainties inflation persistence and rising interest rates."

Greater public and private participation is required in sectors such as railways, ports and power as India looks at investing USD 1 trillion in infrastructure over the next five years, Minister of State for Urban Development Saugata Ray said today.

Besides, he said, urban development projects have not been able to get a strong response based on Public-Private- Partnership.

Although PPP is happening in sectors like telecom, ports and roads, lot of other segments need greater attention, the minister added.

"India's basic infrastructure was ranked at 86th in the global competitive report 2010 by the World Economic Forum. So, we have a long way to go. There is a potential for PPP to contribute more and help bridge the infrastructure gap in sectors like ports, roads, railways and power," Ray said.

He was speaking at the "2nd Regional Conference on Infrastructure Management" organised by CII and CBRE.

"We are envisaging PPP in urban development but the response has not been encouraging except in solid waste management," he said.

The minister also cited the example of development of Delhi Metro and other big airport projects through PPP mode.

Ray said presence of large scale skilled manpower makes India an important player in infrastructure management.

Delhi Mumbai Industrial Corridor (DMIC) CEO Amitabh Kant said that to accommodate the increasing population in the urban areas, comprehensive planning of cities are required with the help of private players.

Citing example of the government's ambitious USD 100 billion DMIC project, which aims to create world class infrastructure, Kant said they have involved best experts from the world for the proposed smart cities in the DMIC.

These world-class cities would have self-sustainable habitats with minimal pollution levels, maximum recycling, optimised energy supplies and efficient public transportation. Government has planned seven such cities in the DMIC.

He said to develop infrastructure in the DMIC, both public and private participation is needed. But added that the government have to provide the basic infrastructure to attract private players.

"We are working with best master planners for the cities. CISCO and IBM are working with us," he said.

CBRE South Asia Chairman and Managing Director Anshuman Magazine said that although the country's infrastructure is gradually improving, managing and maintaining it is a big question.

Recently, for instance, services of Delhi Airport Metro Express, implemented under the PPP mode, were suspended on technical grounds.

Besides, CAG has raised concerns over the Delhi Airport project, implemented by GMR-led DIAL, for alleged deviations from the signed contract.

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