New Delhi, Aug 29: In major decisions to liberalise Foreign Domestic Investment (FDI) norms to boost investment, the Union Cabinet on Wednesday approved 100 per cent FDI in coal mining and contract manufacturing through automatic route.
The Cabinet also liberalised sourcing norms concerning single-brand retail and allowed 26 per cent FDI in the digital media. It also decided that single-brand retail trading entities can do retail online trade prior to the opening of brick and mortar stores.
Briefing the media on the decisions of the Cabinet, Commerce and Industry Minister Piyush Goyal said the decisions have been taken to make the country an attractive destination for FDI. Information and Broadcasting Minister Prakash Javadekar was also present at the briefing.
Goyal said that changes in the FDI Policy were meant to liberalise and simplify the FDI policy to provide ease of doing business in the country, bring larger FDI inflows and contribute to the growth of investment, income, and employment.
He said that presently 100 per cent FDI under automatic route is allowed for coal and lignite mining for captive consumption by power projects, iron and steel, and cement units and other eligible activities.
Hundred per cent FDI under automatic route is also permitted for setting up coal processing plants like washeries subject to some conditions.
“Now 100 per cent FDI through automatic route will be allowed in coal mining and associated infrastructure including processing, washing, and thrashing,” he said.
The changes in FDI norms in coal mining activities are expected to attract international players to create an efficient and competitive coal market, he said.
The minister said the Central government was keen to make India a manufacturing hub and many people were wanting to manufacture goods in India due to change in the global environment, but there were some difficulties.
He said companies get their goods manufactured on the contract due to the reduction in costs due to scales of operation.
“It has been decided to allow 100 per cent contract manufacturing through the automatic route. It will be a big boost to the manufacturing sector in India,” added Goyal.
He said manufacturing through contract contributes equally to the objective of Make in India.
The existing policy provides 100 per cent FDI under the automatic route in the manufacturing sector. There is no specific provision for contract manufacturing in the policy.
Manufacturing activities may be conducted either by the investee or through contract manufacturing in India under a legally tenable contract, “whether on principal to principal or principal to agent basis.”
Referring to the decision to ease local sourcing norms for FDI in Single Brand Retail Trading (SBRT), he said that it had been announced in the Union Budget.
“This will lead to greater flexibility and ease of operations for SBRT entities besides creating a level-playing field for companies with higher exports in a base year,” he said.
The minister said that extant FDI Policy provides that 30 per cent of the value of goods has to be procured from India if SBRT entity has FDI more than 51 per cent. As regards local sourcing requirement, the same can be met as an average during the first five years and thereafter annually towards its India operations.
“It has been decided that all procurements made from India by the SBRT entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. The current cap of considering exports for 5 years only is proposed to be removed, to give an impetus to exports.”
He said the existing policy provides that as regards local sourcing requirement, incremental sourcing for global operations by the non-resident entities undertaking single-brand retail trading, either directly or through their group companies, will also be counted towards local sourcing requirement for the first five years.
However, prevalent business models involve not only sourcing from India for global operations by the entity or its group companies, but also through an unrelated third party, done at the behest of the entity undertaking single-brand retail trading or its group companies.
“In order to cover such business practices, it has been decided that ‘sourcing of goods from India for global operations’ can be done directly by the entity undertaking SBRT or its group companies (resident or non-resident}, or indirectly by them through a third party under a legally tenable agreement,” he said.
An official release said that the existing policy provides that only that part of the global sourcing shall be counted towards local sourcing requirement which is over and above the previous year’s value.
“Such requirement of a year-on-year incremental increase in exports induces aberrations in the system as companies with lower exports in a base year or any of ‘ the subsequent years can meet the current requirements, while a company with consistently high exports gets unduly discriminated against. It has been now decided that entire sourcing from India for global operations shall be considered towards local sourcing requirement,” it said.
Goyal said that the present policy requires that SBRT entities have to operate through brick and mortar stores before starting retail trading through e-commerce.
He said this is out of sync with current market practices.
“It has been decided that retail trading through online trade can also be undertaken prior to the opening of brick and mortar stores, subject to the condition that the entity opens brick and mortar stores within 2 years from the date of start of online retail,” he said.
Online sales are also expected to lead to the creation of jobs in logistics, digital payments, customer care, training, and product skilling.
Referring to the digital media, the release said that the existing policy provides for 49 per cent FDI under approval route in uplinking of ‘News and Current Affairs’ TV Channels and 26 per cent FDI in print media.
“It has been decided to permit 26 per cent FDI under government route for uploading and streaming of News & Current Affairs through Digital Media, on the lines of print media,” it said.
The minister said that FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country.
He said FDI up to 100 per cent is permitted on the automatic route in most sectors and activities.
FDI policy provisions have been progressively liberalized in sectors such as defence, construction, trading, pharmaceuticals, power exchanges, insurance, pension, broadcasting, and civil aviation to make India an attractive investment destination.
“These reforms have contributed to India attracting record FDI inflows in the last five years. Total FDI into India from 2014-15 to 2018-19 has been US dollar 286 billion as compared to US do1lar 89 billion in the 5-year period prior to that. The FDI in 2018-19 at US dollar 64.37 billion (provisional figure) is the highest ever FDI received for any financial year,” he said.
Goyal said global FDI inflows have been facing headwinds for the last few years but India continues to remain a preferred and attractive destination for global FDI flows and has potential to attract far more foreign investment by liberalising norms.
New Delhi, Aug 21: The High Level Committee (HLC) of the Union Home Ministry has approved Rs 4432.10 crore of additional ‘Central Assistance’ to Odisha, Karnataka and Himachal Pradesh from National Disaster Response Fund (NDRF).
The assistance was sought in the wake of drought (Rabi) of 2018-19, avalanches, hailstorms, landslides and cyclone ‘Fani’ (2019) affecting the states.
Chaired by the Union Minister for Home Affairs Amit Shah, the HLC met in New Delhi on August 19 to deliberate and take a decision on the issue.
Of the Rs 4432.10 crore of additional central assistance to three states, Rs 3338.22 crore has been given to Odisha for Cyclone Fani, while Rs 1029.39 crore to Karnataka for drought and Rs 64.49 crore to Himachal Pradesh for avalanches and hailstorm.
This additional assistance is over and above the funds released by Centre to the states in the State Disaster Response Fund (SDRF) already at the state’s disposal. During 2018-19, the Centre had released Rs 9,658 crore to all states and during 2019-20, till date the Centre has released Rs 6,104 crore to 24 states from SDRF.
In the case of Odisha at the onset of Cyclone ‘Fani’, Rs 340.87 crore was released in advance on April 29 from SDRF. Prime Minister Narendra Modi visited Odisha on May 6 and as announced by him, immediate assistance of Rs 1,000 crore was released in advance. An ex-gratia sum of Rs 2 lakh were also provided to next of the kin of the deceased and Rs 50,000 to seriously injured in the Cyclone from Prime Minister’s Relief Fund.
HLC also reviewed the existing practice of deputing an Inter-Ministerial Central Team (IMCT) after the receipt of Memorandum from the state in the wake of any severe calamity. In a significant decision taken by the Union Home Minister, IMCT will henceforth be constituted immediately in the aftermath of any natural calamity of severe nature, which will visit the affected areas in the state so as to have first hand assessment of damage caused and relief work carried out by the state administration.
IMCT will again visit the state after submission of the Memorandum for detailed assessment of the damage and relief operations conducted for making final recommendations for allocation of additional funds. At present IMCT visits the affected state only once after the receipt of Memorandum from the state, a Home Ministry official said.
Following the revised practice, the MHA will immediately constitute and depute IMCTs to States of Assam, Meghalaya, Tripura, Bihar, Uttrakhand, Himachal Pradesh, Gujarat, Rajasthan, Maharashtra, Karnataka and Kerala affected by recent floods, he added.
Mr Shah directed the senior officers to continue to take every possible measure to deal with the situation arising out of South-West Monsoon in the concerned states and to extend all necessary assistance to the flood affected states.
During Cyclone ‘Fani’, apart from the rescue operations by the central and Defence forces, the Centre had provided all necessary assistance in restoration of power supply and communication in affected districts, including that of providing necessary stores, generator sets, steel poles and skilled manpower. As other states were also likely to be affected, an amount of Rs 688 crore was released in advance from State Disaster Response Fund to State Governments of Andhra Pradesh, Tamil Nadu and West Bengal.
The HLC was held on August 19 and was attended by the Union Finance Minister Nirmala Sitharaman, Union Agriculture Narendra Singh Tomar were present in the meeting, along with senior officers of the Ministries of Home Affairs, Finance, Agriculture and NITI Aayog.
New Delhi, Aug 17: The Jammu and Kashmir Chief Secretary BVR Subrahmanyam on Friday said that the restrictions imposed in Jammu and Kashmir on August 5 , before the revocation of article 370, will be eased out in a phased manner.
Addressing a press conference at Srinagar, Mr Subrahmanyam said that the schools will reopen from next Monday while the landline phones would be restored by the weekend.
Telecom connectivity, a major point of concern, will gradually be restored in a phased manner keeping in mind the constant threat posed by terrorist organisations in using mobile connectivity to organise terror actions, he said.
Speaking on land line connectivity in the state he said that there would be gradual restoration from Friday night and Saturday morning onwards. “You will find a lot of Srinagar functioning tomorrow morning. BSNL takes a couple of hours to get back to action. Exchange by exchange they will be switching it on. Over the weekend, you will have most of these lines functional.” Mr Subrahmanyam said.
Explaining about the security situation in the state the J&K Chief Secretary said that out of 22 district in Jammu and Kashmir, situation in 12 districts is normal while there was limited night-time restrictions only in five districts.
“After today’s Friday prayers, immediate reports suggest that things have gone off quite peacefully right throughout the state,” he said. “We have prevented any loss of human life despite concerted efforts by terrorist organisations, radical groups and continuing efforts by Pakistan to destabilise the situation,” he said.
“The measures put in place have ensured that there had been not a single loss of life or serious injuries to anyone during the course of maintaining peace and order. We have prevented any loss of human life despite concerted efforts by the terrorist organizations, radical groups and continuing efforts by Pakistan to destabilize the situation” he added.
The J&K Chief Secretary also said that the steps were taken to ensure that there was no shortage of essential supplies, medical facilities and hospitals continued to function normally whereas electricity, water supply and sanitation services were maintained.
“The pilgrims going on Haj and returning from Haj were specifically facilitated and people associated with all these support services have free movement” he said.