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Prime Minister Attends G-20 Summit in Toronto
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A Buddhist Bounty, Jharkhand, Bihar
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AP Govt unveils new industrial policy
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President, ICCR, Dr. Karan Singh’s eventful Moscow visit
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| 04. POLICY WATCH |
| AP Govt unveils new industrial policy |
| Source : The Hindu Business Line |
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Hyderabad: The new Industrial and Investment Promotion Policy (IIPP) for 2010-2015 will help unlock investment potential in the State attracting about Rs 75,000 crore over the next five years, according to the Andhra Pradesh Chief Minister, Mr K. Rosaiah.
He unveiled the AP IIPP 2010-2015 at the Secretariat, in the presence of members of the Confederation of Indian Industry and Federation of Andhra Pradesh Chamber of Commerce and Industries. The Chief Minister said that there is untapped potential in the State which could be channelised to deliver better results in terms of attracting more investments and in helping create additional employment.
“While the policy document for 2005-2010 has done well extending incentives and attracting investments in to the State, we believe that the current framework will help in accelerating investments into the State. Through the policy and incentives in the firm of power and VAT subsidy, and special incentives to SC/ST and women entrepreneurs, the State expects to attract about Rs 15,000 crore investment a year,” he said.
The policy provides for investment of up to Rs 100 crore a year through budget support to create and strengthen infrastructure for industries, apart from providing stamp duty rebates. The policy aims at a growth of about 12-15 per cent an annum in the industrial sector.
“The power subsidy of up to 75 paise a unit makes Andhra Pradesh power tariff to the industrial consumers amongst the lowest in the country. We are extending this facility to encourage industries even at the cost of financial loss to the State exchequer,” he said.
He called upon industrial and trade bodies to play the role of ambassadors of the State in attracting investments and convening entrepreneurs to set up base in the State.
Citing the Centre's decision to set up a NTPC-BHEL power equipment manufacturing base at Mannavaram in Chittoor district of Andhra Pradesh, with an outlay of Rs 6,000 crore and potential to employ around 6,000 people, the Chief Minister said that this would not have been possible if the State did not have potential to support such a major project. In fact, this is amongst the single largest investments announced in the State, he said. He added that Bharat Dynamics Ltd has come up with a plan to set up two missile manufacturing units in the State. |
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Insurance regulator extends protection
to premature withdrawals of ULIPs Source : The Hindu Business Line
“All insurers will now need to go to the drawing rooms and redesign their products,” Mr G. Muralidhar, COO, Kotak Life Insurance.
Hyderabad: The Insurance Regulatory and Development Authority has come up with fresh guidelines that are expected to bring some protection and cheer to policyholders of unit-linked insurance plans (ULIPs). Those who wish to prematurely withdraw now have a reason to be happy as their investments will soon have some protection.
Announcing the norms for ULIPs in a circular on Monday, the Insurance Regulatory and Development Authority (IRDA) has capped charges (reduction in yield) from the sixth year. These changes, which will be applicable from September 1, 2010, come close on the heels of the IRDA winning the battle on the jurisdiction of ULIPs with the market regulator, SEBI.
“With a view to smoothening the cap on charges, the capping has been rationalised to ensure that the difference in yield is capped from the fifth year onwards. This will not only reduce the overall charges on these products, but also smoothen the charge structure for the policyholder,” Mr J. Hari Narayan, Chairman, IRDA, said in the circular.
So far, the cap was applicable only at the time of maturity.
If anybody pre-surrenders the policy, the return on the investment is dependent on the discretion of the insurer.
The maximum reduction in yield could be between 4 per cent and 2.25 per cent from the annualised premiums paid from the fifth to 15 year of a policy.
Guaranteed Returns
The ULIP policyholders of pension and annuity products will have a minimum guaranteed return of 4.5 per cent per annum on their fund value on the date of maturity.
The mortality or health cover could be offered along with the pension and annuity products as riders, giving enough flexibility for the policyholders to select covers of their choices.
The three-year lock-in period is increased to five years, including top-up premiums. The insurers would have to to distribute the charges in an even fashion during the lock-in period.
Mortality cover has been increased to 10 times, from five times, of the annualised premiums.
Death benefit should not be less than 105 per cent of the premiums paid, according to the guidelines. For those customers who enter into an insurance contract after 45 years of age, the cover should be at seven times of the annualised premiums.
Last month, the IRDA had said that partial withdrawals were only possible after fifth policy anniversary for all unit-linked products except pension, annuity products, among other changes. The life insurance industry appears to be a little worried over the new regulations. Mr G. Muralidhar, Chief Operating Officer, Kotak Life Insurance, told Business Line that the new guidelines would put strain on the capital of the insurance companies while making things “better for the policyholders”.
“All insurers will now need to go to the drawing rooms and redesign their products,” he added. |
Railway Ministry finalises policy on pvt freight terminal
Source : The Hindu Business Line
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New Delhi: The Ministry of Railways has finalised a policy on private freight terminal (PFT) the main aim of which is to enable rapid development of network of freight terminals with private sector participation.
The policy is also likely to lead to integration of rail transport with supply chain to provide efficient and cost-effective logistic to end-users and a new business opportunity to investors to get railway access to handle third-party cargo, an official statement issued here on Wednesday states.
The scheme, which was announced by the Railway Minister, Ms Mamta Banerjee, in the Railway Budget presented last year, became effective from the end of May this year, the statement adds.
The main features of the PFT, which will be allowed to handle all cargo except for outward coal, coke and iron ore, include terminals being allowed to come up on a Greenfield or Brownfield basis but only on private land. |
| E-filing of Central excise, service tax |
| Source : The Hindu Business Line |
| New Delhi: The Institute of Company Secretaries of India (ICSI) has entered into a memorandum of understanding with the Central Board of Excise and Customs (CBEC). This would enable company secretaries to set up Certified Facilitation Centres (CFCs) under the Automation of Central Excise and Service Tax (ACES) project, which will facilitate e-filing of returns and other documents by assessees of Central Excise and Service Tax. CFC is a facility, other than the physical front offices or facilitation centres of CBEC, which may be set up and operated by a practising company secretary to whom a certificate is issued under the ACES project, where the assessees of Central Excise and Service Tax can avail themselves of the facility to file their returns and other documents electronically along with associated facilitation on payment of specified fees. |
Clean energy cess on coal, lignite, peat
from July 1
Source : The Hindu Business Line
New Delhi: The clean energy cess imposed on coal, lignite and peat will come into effect from July 1, the Finance Ministry has said. The Finance Minister, Mr Pranab Mukherjee, had proposed the levy of a clean energy cess in Budget 2010-11 to build the corpus of the National Clean Energy Fund. The amount of cess will be Rs 50/tonne.
Cess Collection
The Finance Ministry has through the Clean Energy Cess Rules 2010 spelt out the manner in which the cess would be collected and assessed by the Revenue Department.Every producer of raw coal, raw lignite and raw peat will have to get registered with the jurisdictional central excise officer.
Payment schedule
Also, the cess on these goods removed from a mine during a month will be payable by the 5 {+t} {+h} of the second month, following the month of removal, according to the Finance Ministry. Simply put, cess on all coal, lignite and peat removed from a factory for the month of July 2010 should be paid to the exchequer by September 5, 2010.
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Service tax waived on power supply,
services within ports
Source : Business Standard
New Delhi: The government has decided to exempt distribution of electricity, services provided within ports and airports, international passengers in transit and those travelling to and from the North-East from the ambit of service tax while bringing in more services in the tax net from July 1.
In addition, construction services under specified government schemes and tournaments and championships organised by specified bodies would be exempted from the tax, the finance ministry said in separate notifications.
On Tuesday, the ministry issued notifications for exemption of these services from tax and enforcing the provisions of the Finance Act 2010 from July 1. It, however, further postponed the exemption of service tax in relation to transport of specified goods by rail. The levy, which had to come into effect from April 1, will now come into force on July 1.
The realty sector, which had protested against a 10 per cent service tax on the sale of property in the Budget, got higher abatement of 75 per cent from 67 per cent. The service tax would now be levied only on 25 per cent of the gross value.
Besides, low-cost housing schemes for the urban poor under the Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awas Yojana would be waived from any service tax.
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RBI permits zero-coupon NCDs
Source : Business Standard
Mumbai: The Reserve Bank of India (RBI) has allowed companies to issue zero-coupon non-convertible debentures (NCD) at a discount to the face value, according to the final guidelines for issuance of the debt instruments.
It released final guidelines for the issuance of the debt instruments with original maturity of up to one year. These directions will become effective from August 1.
In addition, no corporate with a tangible net worth of less than Rs 4 crore will be permitted to issue an NCD. The company will also have to ensure that it has sanctioned working capital limit or term loan by banks or financial institutions and that its borrowal account is classified as a standard asset.
The central bank had released draft guidelines in November 2009 for public comment. As proposed in the draft guidelines, RBI has barred companies from issuing NCDs with a maturity period of less than 90 days.
An eligible corporate intending to issue NCDs will have to obtain a credit rating for issuance of the NCDs from a rating agency and the minimum credit rating shall be P-2 of CRISIL or the equivalent rating by other agencies.
The total amount of NCDs proposed to be issued will have to be completed within a period of two weeks from the date on which the corporate opens the issue for subscription.
An additional clause that was not present in the draft guidelines is the auditors of the corporate will have to certify to the investors that all the eligibility conditions are met by the corporate.
RBI permitted any entity that is registered as a trustee with the Securities and Exchange Board of India (Sebi) to act as a DT for the NCD issue. |
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