Creating Silk Centres in the Country
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The Minister of State for Textiles, Shri E.V.K.S. Elangovan lighting the lamp to inaugurate the Indian Handicrafts & Gifts Fair, Spring 2009, being organized by Export Promotion Council for Handicrafts at Noida, U.P. on February 25, 2009. |
The Government of India through Central Silk Board in close co-ordination with the State Sericulture Departments is promoting development of sericulture in cluster mode approach throughout the country during XI Plan. Under this Cluster Promotion Programme, Central Silk Board (CSB) has proposed implementation of 50 cluster projects jointly with the State Governments, covering Mulberry, Tasar, Eri and Muga sectors. One tropical tasar cluster Center is being implemented in Mayurbhanj district of Orissa, covering two blocks at Saraskana and Kuliana. During the year 2009-10, it is proposed to implement 19 more cluster projects in different states including the State of Jharkhand. Under the Cluster Promotion Programme, the latest technological innovations could be disseminated in a systematic way to improve production, productivity and quality. The cluster development creates interest among other farmers to take-up sericulture mainly due to the fact that the farmers shall get constant support/guidance from the implementing agency from the stage of the commencement of host plant development till post-cocoon activities. The Cluster Programme brings in awareness among the sericulturists about the latest technologies developed and the kind of technical and financial assistance available to improve sericulture.
This information was given by the Minister of State for Textiles, Shri E.V.K.S. Elangovan in the Rajya Sabha .
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| Tata Nano to be launched on 23 March |
 Tata motors announced that they would be launching Nano, widely acclaimed as the world’s cheapest family car, on 23 March, in Mumbai. The company also informed that the bookings for the vehicle would commence in the second week of April 2009.
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Revision in FDI Regulations
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Government has put in place a liberal and investor-friendly policy on Foreign Direct Investment (FDI) under which FDI up to 100% is permitted on the automatic route in most sectors / activities. The UNCTAD’s World Investment Reports for 2007 and 2008 have rated India as the second most attractive investment destination.
The policy on FDI is reviewed on a continuing basis through inter-ministerial consultations. A statement giving the extant FDI policy on sensitive sectors viz., Defence, Aviation, Print Media and Telecom is as below:
1. Defence Production: FDI up to 26%, under the FIPB route, is allowed for Defence Production subject to licensing under Industries (Development & Regulation) Act, 1951 and guidelines on FDI in production of arms & ammunition.
2. FDI Policy for Air Transport Services Sector:
Government has allowed the following:
a. No foreign airlines would be allowed to participate directly or indirectly in the equity of an Air Service Undertaking;
b. FDI up to 49% and investment by Non-resident Indians (NRI) up to 100% will be allowed on the automatic route in Domestic Scheduled Passenger Airline Sector;
c. FDI up to 74% and investment by Non-resident Indians (NRI) up to 100% will be allowed on the automatic route in Non Scheduled airlines, Chartered airlines, and Cargo airlines;
d. FDI up to 74% and investment by NRI up to 100% will be allowed on the automatic route in Ground Handling Services; and
e. FDI up to 100% will be allowed on the automatic route in Maintenance and Repair organizations; flying training institutes; technical training institutions; and helicopter services/seaplane services.
3. Telecommunications:
a. Basic and cellular, Unified Access Services, National/ International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal
Communications Services (GMPCS) and other value added telecom services 74% (Including
FDI, FII, NRI,
FCCBs, ADRs,
GDRs, convertible
Preference
shares, and
proportionnate foreign
equity in Indian
promoters/ Investing Company) Automatic
up to 49%.
FIPB
beyond
49%. Subject to guidelines notified in the PN 3(2007)
b. ISP with gateways, radio-paging, end-to-end bandwidth. 74% Automatic
up to 49%.
FIPB
beyond
49%. Subject to licensing and security requirements notified by the Dept. of Telecommunications.
c. (a) ISP without gateway,
(b) infrastructure
provider providing dark fibre, right of way, duct space, tower (Category I);
(c) electronic mail and voice mail. 100% Automatic up to 49%.
FIPB
beyond
49%. Subject to the condition that such companies shall divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. Also subject to licensing and security requirements, where required.
d. Manufacture of
telecom
equipments 100% Automatic Subject to sectoral requirements.
4. Print Media:
a. Publishing of newspaper and periodicals dealing with news and current affairs 26% FIPB Subject to Guidelines notified by Ministry of Information & Broadcasting. www.mib.nic.in
b. Publishing of scientific magazines/specialty journals/periodicals 100% FIPB Subject to guidelines issued by Ministry of Information & Broadcasting.
www.mib.nic.in
c. Publishing of facsimile edition of foreign newspapers. 100% FIPB Subject to guidelines issued by Ministry of Information & Broadcasting.
Press Note 1 of 2009.
d. Publication of Indian editions of foreign magazines dealing with news & current affairs. 26% (FDI & Investment by NRIs/PIOs/FII) FIPB Subject to guidelines issued by Ministry of Information & Broadcasting. |
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Govt cuts fuel price
The government announced the second fuel price cut on 28 January, 2009. The price of petrol and diesel cut by Rs5 and Rs2 respectively. The price of cooking gas was cut by Rs25 per cylinder. Earlier the government cut fuel prices in the month of December last year. The lowering of prices is expected to help reduce inflation and increase the impact of the government’s economic and fiscal stimulus packages. |
Govt to keep tabs on FDI in restricted areas
NewDelhi,
Source: The Economic times
The new foreign investment norms, unveiled by the government through a flurry of Press Notes last month, will result in greater scrutiny of contractual relationships between foreign companies and their Indian partners, especially in restricted sectors, such as retail and telecom.
The government will watch out for attempts by foreign firms to gain entry into sectors they are not allowed to invest in through bogus partnerships, said a government official. The Foreign Investment Promotion Board (FIPB) will examine all domestic and international relationships between foreign companies and their Indian partners.
This is intended to ensure that Indian partners are not acting as proxies of the foreign firm, said the official who was involved in framing the new foreign direct investment (FDI) guidelines.
The nub of the new FDI norms, detailed in three Press Notes, is that the downstream investment of a cross-border JV is not foreign investment if more than 50% of its equity interest is ‘beneficially’ owned by resident Indians, making it a company owned and controlled by Indians.
To prove that Indian investors are really in control of the JV making downstream investments, they have to show that they do not have any relationship with the foreign partner anywhere else in the world that would compromise their independence in taking important decisions.
Problems, however, may crop up with the concept of ‘beneficial ownership’ of shares, as against ‘legal ownership’, defined by the company law.
Examples of beneficial ownership include trusts holding the shares of a promoter or the way elders benefit from owning shares of minors.
In the case of ‘legal ownership’, the owner of shares, according to the company’s shareholder register, is entitled to all the attendant rights and benefits, including voting rights.
However, as Sumant Batra, managing partner of law firm Kesar Dass B & Associates, explains, “The revised Press Note on FDI refers to ‘beneficial ownership’ as it is possible to vest real ownership of shares with someone other than the legal owner of shares by entering into innovative contractual relationships. This could mean that the legal owner may be acting on behalf of the real owner or passing on benefits from such shares to the real owner.”
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