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Govt to announce multi-brand retail policy soon
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IT sector to grow by 25-26% annually: Narayana Murthy
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| 02. POLICY |
| Govt to announce multi-brand retail policy soon |
| Business Standard: January 17, 2011 |
New Delhi: The government is likely to announce significant policy measures relating to allowance of foreign direct investment (FDI) in the multi-brand retail segment, even as the Department of Industrial Policy and Promotion (Dipp) under the Ministry of Commerce and Industry is giving final touches to the draft report prepared by an inter-ministerial committee.
The committee, constituted under the Ministry of Consumer Affairs and Public Distribution, has prepared a draft report by taking the concerns and viewpoints of all stakeholders concerned.According to the present rule on retail, 100 per cent FDI is allowed in wholesale cash-and-carry trading and 51 per cent in the single-brand category, but completely prohibited in multi-brand retail.The report has been given to Dipp, which is giving its final touches. After this, it would be sent to the Cabinet Committee on Economic Affairs to be translated into a policy, senior officials told Business Standard.
Officials also said the government would make the announcement at an opportune time to avoid any uproar as any move in this would have far-reaching political implications, besides resistance from the general public, as it concerns employment and livelihood for millions.It is also likely that the government might announce the policy measures relaxing FDI norms in multi-brand retail during the coming Budget for 2011-2012. This committee was formed after Dipp floated a discussion paper on liberalising FDI norms in multi-brand retail in July last year.
Justifying the government’s stance on the issue, Commerce and Industry Minister Anand Sharma had earlier said the idea was to create a broad-based consensus in policy formulation for further development of the sector. The ministry itself wants to open up the sector for 51 per cent FDI, as is allowed in single-brand retail.While the Ministry of Consumer Affairs and Public Distribution has suggested a threshold of 49 per cent FDI in multi-brand retail, the micro, small and medium enterprises ministry has cautiously recommended 18 per cent. However, the Ministry of Communications and IT said liberalising the sector would have dire consequences for electronics manufacturers.
With FDI inflows dwindling, the government is under severe pressure to boost the country’s investment figures. The total FDI equity inflows during April-October stood at $17,365 million compared to $23,781 million during the corresponding period in 2009-10, say official statistics.Global multi-brand retail chains have also been pushing India to open up the sector for FDI in order to tap the billion-plus consumers market. International retail juggernauts such as Wal-Mart, Carrefour and METRO have opened up their cash-and-carry stores in order to osak up the market.
Wholesale cash-and-carry was thrown open for 100 per cent FDI in 1997, subject to prior approval from the government. It was brought under the automatic route in 2006. During April 2000-March 2010, $1.779 billion worth of FDI were received in the sector. In 2006, the government permitted 51 per cent FDI in single-brand retailing. Since then, total FDI received till March 2010 was to the tune of $194.69 million in this category.
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| New norms for firms on safety labels soon |
| Economic Times 28 JAN, 2011 |
The ministry of corporate affairs is preparing a set of guidelines that will require companies to disclose whether their products carried adequate health safety labels and if they observed product safety standards during the manufacturing process.
Companies will have to make the disclosure in their annual financial statements. Although the guidelines on business responsibility will be voluntary, companies will have to explain the reasons for not complying, thus making them an indirect obligation. "Business should disclose all information truthfully and factually through labeling and other means, including risks involved on their use, so that consumers can exercise their freedom to consume them," said an official in the ministry.
The guidelines will also ask companies to provide details of the customer complaints they received on the safety, labeling and safe disposal of their products during the reporting year. The norms will require the firms to establish a grievance handling mechanism to address customer concerns and their feedback. However, some experts said if followed in the true spirit, the norms could prove detrimental to the interests of companies in sectors such as the fast-moving consumer goods and telecom. "Making a statement on the number of complaints received during a year may be counter-productive for companies in terms of strengthening its customer brand loyalty," a representative of a business chamber said, requesting anonymity. The guidelines, if implemented, will for first time bring consumer safety norms within the ambit of business laws. The fact that customers are not satisfied with the service delivery of companies is widely known, given the growing number of consumer complaints pending before the consumer commissions.
The guidelines will also ask companies to promote and advertise their products in a manner that is not misleading or confusing. The corporate affairs ministry has invited suggestions from stakeholders on the guidelines, which are expected to improve the corporate social responsibility standards announced by the ministry in December 2009.
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| Govt releases first defence production policy |
| livemint.com: January 14, 2011 |
It’s an attempt to promote reliance in the defence sector and the government will give preference to indigenous design development and manufacture of defence equipment
The government released the defence production policy for the first time on 13 Jan 2011. intended to create an eco-system, which is conducive for private defence industry in the country particularly for the small and marginal enterprises.It’s an attempt to promote reliance in the defence sector and the government will give preference to indigenous design development and manufacture of defence equipmentThe Policy will design and integrate platform systems within the country in line with the sector’s long-term integrate perspective plan.Also, all viable approaches such as formation of consortium, joint ventures and public-private partnerships will be suitably explored
The ‘make’ category of the defence procurement procedure (DPP) 2011 will be simplified in such a manner that it enables both public and private industry to meet defence requirement as fast as possible.The government will also set up a separate fund to provide for necessary resources to publice and private sector entities including the SMEs to support innovation and research and development activities to enhance the country’s cutting edge technologies in defence.
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| RBI cuts fee on outstation cheques |
| The Times of India: January 20, 2011 |
The RBI has decided to lower the service charge for outstation cheques up to Rs 5,000 but allowed banks to levy a higher fee for cheques above Rs 1 lakh. In a notification, the regulator said the new charges would be applicable from April.
According to the revised schedule, in case of outstation cheques up to Rs 5,000, the service charge has been halved to Rs 25. For amounts between Rs 5,001 and Rs 10,000, the levy has been retained at Rs 50. For cheques between Rs 10,001 and Rs 1 lakh, the charge remains unchanged at Rs 100. The service charges have to include all charges such as those for postal, courier and handling, though service tax is outside the ambit. For cheques above Rs 1 lakh, banks would be free to levy any fee as part of RBI's move towards providing greater freedom.
At present, banks can charge up to Rs 150 per cheque. The same dispensation has been put in place in case of cheques covered under speed clearing. In case of local clearing, processing charges have been raised by 50 paise per cheque.RBI said the measures are expected to hasten the migration of transactions to electronic mode. At the same time, it noted that the levies should be "reasonable and computed on a cost-plus-basis and not as an arbitrary percentage of the value of the instrument. The service charges-structure should not be open ended and should clearly specify the maximum charges that would be levied on customers including charges if any, payable to other banks.
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| SEBI approves NSE tie-ups with regional bourses |
| IBEF: January 03, 2011 |
| New Delhi: Securities and Exchange Board of India (SEBI) has approved the National Stock Exchange’s (NSE) tie-ups with a number of regional exchanges.
The regional trading platform approved for the tie-ups include Calcutta, Vadodara, Jaipur and Madhya Pradesh (MP). The approval would enable the members from the respective exchanges to operate on a country-wide trading platform, according to a NSE release.
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