by admin | May 25, 2021 | Business, Business Summit, Corporate, Corporate finance, Corporate Governance, Economy, Emerging Businesses, Events, Investing, News, Politics, SMEs
Gandhinagar : Prime Minister Narendra Modi on Friday said that his government had made doing business in India easier, cheaper, faster and smarter with his term accounting for almost 45 per cent of the Foreign Direct Investment (FDI) that the country received in the last 18 years.
Speaking at the inaugural function of the Vibrant Gujarat Global Summit 2019 here, he said India was now one of the most open countries for FDI with over 90 per cent approvals put on the automatic route.
“In the last four years, we have received FDI worth $263 billion. This is 45 per cent of the FDI received in last 18 years,” Modi told the gathering.
He said India was among the top 10 FDI destinations.
Modi, who is on a three-day visit to his home state to throw open his pet biennial Vibrant Gujarat Global Summit, said the India of today was a land of “immense opportunities” being the only place that offered democracy, demography and demand.
“Fifty cities in India are ready to build metro rail systems. We have to build 50 million houses. The requirement of road, rail and waterways is enormous. We want world class technologies to achieve our goal in a faster and cleaner way. India is thus, a land of immense opportunities.” he said.
The Prime Minister said the challenge for India, as in most emerging economies, was to grow horizontally as well as vertically to ensure that the benefits of development spread to regions and communities that have lagged behind while also meeting enhanced expectations in terms of quality of life, quality of services and quality of infrastructure.
“We are well aware that our achievements, here in India, will directly impact one sixth of humanity.”
Modi said his government had removed the barriers which were preventing India from achieving its full potential and now it was ready for business like never before.
The government has made doing business easier. cheaper, faster and smarter, he said.
“In the last four years, we have jumped 65 places in the global ranking of World Bank’s Doing Business Report. From 142 in 2014 to 77 now, but we are still not satisfied. I have asked my team to work harder so that India is in the top 50 next year.
“We have also made doing business cheaper. The historic implementation of Goods and Services Tax and other measures of simplification and consolidation of taxes have reduced transaction costs and made processes efficient.
“We have also made doing business faster through digital processes, online transactions and single point inter-faces,” he said.
He said his government had made doing business smarter by insisting on IT based transactions and digital payments including direct transfer of government benefits.
Modi added that he understood that being a young nation, India needs to create job opportunities and better infrastructure, which are both linked with investments.
“Therefore, in recent years, there has been unprecedented focus on manufacturing and infrastructure,” he said.
Listing the achievements of his government, he said for the first time, India had become a net exporter of electricity, had installed transmission lines at an unprecedented pace and had doubled the speed of road construction with rural road connectivity now at 90 per cent.
“At 7.3 per cent, the average GDP growth, over the entire term of our government, has been the highest of any Indian government since 1991. At the same time,the rate of inflation at 4.6 per cent is the lowest for any Indian government since 1991, when India began its process of liberalisation,” he said.
Modi had conceptualised the summit as Gujarat Chief Minister in 2003 to position the state as an ideal investment destination after the 2002 riots.
—IANS
by admin | May 25, 2021 | Banking, Corporate, Corporate finance, Corporate Governance, Economy, News
Mumbai : HDFC Bank on Thursday welcomed the government’s approval of Rs 24,000 crore foreign direct investment (FDI) into the bank.
In an official statement, the bank said: “This decision comes against the backdrop of an expected pick-up in credit growth driven by consumption-led demand and a recovery in the investment cycle.”
“We are delighted to hear that the government has approved our capital raising proposal. The additional capital will go a long way in supporting our growth plans over the next few years, especially in semi-urban and rural India,” said Paresh Sukthankar, Deputy Managing Director, HDFC Bank.
“We do believe this decision bodes well for the overall investment climate and foreign inflows as well,” Sukthankar added.
As of March 31, 2018 the bank had a network of 4,787 branches and 12,635 ATMs and had 4.3 crore customers across 2,691 Indian towns and cities. The bank’s balance sheet for the year stood at Rs 10.63 lakh crore.
Finance Minister Piyush Goyal on Wednesday said that with this additional FDI foreign equity in HDFC Bank would continue to remain within the mandatory cap of 74 per cent.
“The current 72.62 percent foreign equity holding is being raised to 74 per cent with this Rs 24,000 crore FDI,” he said.
Goyal also said the bank’s capital adequacy ratio would be strengthened in this way, and it had also indicated its intent to expand both its physical branches network as well as its digital banking reach.
—IANS
by admin | May 25, 2021 | Business, Corporate, Corporate Governance, Economy, Finance, Investing, Large Enterprise, News, Politics
Suresh Prabhu
By Arun Kumar Das,
New Delhi : A government cannot run industry and regulation on businesses should be kept to a minimum to attract more foreign direct investment (FDI) and spur domestic financing, according to a minister.
Commerce and Industry Minister Suresh Prabhu said that a committee had been set up under the chairmanship of the Secretary, Department of Industrial Policy and Promotion, to look at regulatory issues.
“The ultimate idea is that regulation should not stifle the possibilities of investment. I get a sense now that people have again started looking at investments,” Prabhu told this correspondent in a freewheeling interview here ahead of his visit to Davos for the World Economic Forum’s (WEF) annual conference.
Prabhu also maintained that the government cannot run industry and a new industrial policy was in the works aimed at reducing regulations and promoting modernisation of existing industry. It will also seek to encourage new and emerging industries, even those which are not seen today.
The minister is slated to hold a series of bilateral meetings with his counterparts from many countries, including Australia and the UK, participating at the WEF in Davos, besides holding meetings with leading business leaders from around the globe in an attempt to attract more FDI into the country.
Taking note of India’s jump in the global “ease of doing business” rankings from 130th place to 100th, Prabhu said the government was in the process of initiating a number of measures, which might not have been captured in this particular ranking study. “In the next few years’ time, we will see it (the ranking) improving again and again,” he said.
Prabhu said the change in rankings was largely because of the introduction of the goods and services tax (GST) regime which was the single-largest and most significant reform post-Independence. It was also “a great positive” step in the direction of bringing transparency and greater reliability.
On the core focus areas for India to boost exports, he said the government was in the process of drawing up strategies across five main components — promotion of services, value-addition in goods, focus on agriculture, improving standards, and logistics.
“We have identified champion sectors with untapped potential for value-addition, employment generation and technology upgradation to promote services. Focus will be on improving the ease of doing business across these sectors,” he said.
India, he said, was poised to become the third-largest economy in the world and the onward journey of becoming a $5 trillion economy was “inevitable and unstoppable”.
“Today, global output is higher than the global trade. We need to re-strategise our global trade. India’s journey towards achieving $5 trillion economy sooner is not possible without expansion of our basket of global trade,” Prabhu said.
Envisaging a new high in India’s economic scenario, he said: “If we grow by more than eight per cent we will reach there in the next 6-7 years; if we grow by today’s pace of around 7 per cent we will reach there in 1-2 years more.”
Asked about the steps being taken to reduce India’s logistics costs, Prabhu said earlier there was no dedicated team dealing with logistics, but Prime Minister Narendra Modi had taken the decision to create a separate logistics division within the Ministry of Commerce and Industry.
He said steps were being undertaken to create a digital logistics platform for the industry to increase the speed of movement of goods and reduce costs.
“If a consignment is to be transported from, say, Mumbai to Kolkata, why not part-use rail and part-use road? But the right decision can be made only when we know the exact cost and time taken. A digital platform can make that happen,” he said.
Dwelling on the strategy to boost the “Make In India” initiative, he said it will be successful only if it happens at the state and district levels.
As Railway Minister Prabhu had undertaken a programme of developing a joint tourism circuit on the western coast of India, including the Konkan and Goa regions.
Now as the Minister for Commerce and Industry, he wants to take the Make-in-India concept to the Konkan.
(Arun Kumar Das is a senior freelance journalist. He can be contacted at akdas2005@gmail.com)
—IANS
by admin | May 25, 2021 | Business, Economy, Emerging Businesses, Investing, Markets, News
New Delhi : The governments recent move to allow 100 per cent foreign direct investment (FDI) in single-brand retail under the automatic route is expected to increase the market share of organised retail in India to 10 per cent by fiscal 2020, rating agency Crisil said on Monday.
Crisil said the decision will increase the market share by almost 100 basis points from its earlier expected share growth of nine per cent by fiscal 2020, based on healthy revenue growth of 18 per cent of organised brick and mortar (B&M) retailers.
“Better operating environment for single-brand retail would also mean the pace of store additions by organised retailers will be faster than the annual 10-12 per cent Crisil had presaged earlier,” it said in a statement.
According to Crisil, the impact of relaxation in rules would be more pronounced in the apparel, luxury goods, home decor, footwear, and electronics segments, which make up around 45 per cent of the country’s organised retail revenues.
“Global single-brand retailers facing growth headwinds in their key geographies will now be more than keen to peg tent in India,” said Anuj Sethi, Senior Director, Crisil Ratings.
“And those already present could step up investments. The previous sourcing norms were a bottleneck to scaling-up of operations,” he added.
Crisil said while FDI approval under the automatic route will lower the time to commence business, the relaxation of 30 per cent local sourcing norms for the first five years by allowing inclusion of incremental sourcing for global operations will provide sufficient time for new entrants to set up and stabilise their sourcing base.
“All this will mean increase in competition for domestic organised B&M retailers,” said Amit Bhave, Director, Crisil Ratings.
“However, more foreign retailers vending their ware would also lead to sharper focus on, and improvements in, supply chain efficiencies which will benefit the sector over the medium term,” he added.
The rating agency believes that healthy growth prospects for the sector and benefits of scale and focus on profitability, will help offset the impact of higher capital spending and increasing competition on credit profiles over the medium term.
—IANS
by admin | May 25, 2021 | Business, Corporate, Corporate Buzz, Corporate Governance, Investing, Large Enterprise
New Delhi : Ahead of the World Economic Forum in Davos which Prime Minister Narendra Modi will attend this month, the Union Cabinet on Wednesday opened up Air India for foreign investors and brought in changes in key sectors by allowing 100 per cent foreign investment in single brand retail and construction development through the automatic route.
The decisions, taken at a meeting of the Union Cabinet chaired by Modi and intended to liberalize and simplify the FDI policy to provide ease of doing business, drew sharp criticism from both the opposition and trade bodies.
However, the government contended that the move would “lead to larger FDI inflows contributing to growth of investment, income and employment”.
Wednesday’s decision marked a key change in the aviation industry where the government had already allowed up to 49 per cent FDI in private carriers. There was a restriction that foreign airlines could not invest in the loss-making Air India.
“It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49 per cent under approval route in Air India subject to the conditions that foreign investments in Air India including that of foreign airlines shall not exceed 49 per cent either directly or indirectly,” an official statement said.
It added that substantial ownership and effective control of the national carrier shall continue to be with “vested in Indian national”.
The Cabinet also approved 100 per cent FDI in single brand retail trading, tweaking its present policy of allowing only 49 per cent foreign investment in the sector through automatic route and the rest through government approval.
It also gave five-year holiday for foreign investors from the mandatory 30 per cent of local purchases. But after that, they will be required to meet 30 per cent of sourcing norms directly towards its India operations on an annual basis.
The Cabinet also decided to allow 100 per cent FDI in construction development relating to building townships, housing, infrastructure and real estate broking services.
“It has been decided to clarify that real estate broking service does not amount to real estate business and is therefore eligible for 100 per cent FDI under automatic route.”
Making changes in the sector relating to power exchanges, the government removed the restrictions on investment by foreign institute investors and portfolio investors to invest in power exchanges through primary market as well. Under the present policy, FII and FPI purchases were restricted to secondary market only.
The Congress and the CPI-M slammed the government move on Air India, saying it would only lead to the national carrier going into the hands of a foreign airline.
Former union minister Anand Sharma said the government should come clear on the Air India deal as to whether its assets “worth lakh of crores of rupees” and its route rights would also go to the investor.
He said the UPA government had consciously kept Air India out of the purview of FDI though it had allowed 49 per cent FDI in the civil aviation sector.
The Communist Party of India-Marxist (CPI-M) said the Modi government was now moving towards handing over Air India to a foreign airline.
“The government should heed the recommendation of the Parliamentary Standing Committee on Transport, Tourism and Culture which has asked the government to review its decision on privatisation of Air India and provide five years to revive the airline with its debt written off.”
There was support to the Air India move. Pervez Damania, a former Director of the now defunct Kingfisher Airlines, welcomed it saying the “government has no business to be in flying”.
P.N. Vijay, a market analyst, said the decision was “not good enough”. “It should be 100 per cent FDI in Air India.”
On allowing 100 per cent FDI through the automatic route in single brand retail, the CPI-M said the move portends the Modi government’s intentions of “moving towards allowing FDI in multi-brand retail trade”. It warned of grave consequences for the domestical retail trade.
However, Ananda Sharma termed the FDI in retail “a cosmetic change” and “minor tweak”.
“I don’t think its going to make much change because almost all the major brands of the world are already here as 100 per cent FDI was already allowed. This is done perhaps for the Prime Minister to make a statement at Davos.”
Both Congress and the CPI-M reminded the BJP that it had opposed the entry of foreign companies into retail trade earlier and it has now “hypocritically reversed its position”.
Calling it a “serious matter” for small businesses, the Confederation of All India Traders (CAIT) strongly opposed the FDI in single brand retail.
Condemning the Modi government’s “love for MNCs”, CAIT Secretary General Praveen Khandelwal said the move would facilitate easy entry of multi-national companies in retail trade and leave a large number of people jobless.
“It’s a serious matter for small businesses. It is a pity that instead of formulating policies for the welfare, upgradation and modernisation of existing retail trade, the government is more interested in paving the way for the MNCs to control and dominate the retail trade of India.”
Modi will be the first Prime Minister after 20 years to participate in the annual World Economic Forum show in Davos where world leaders and top industrialists and businessmen meet. The four-day event begins on January 23.
—IANS
