Rahul Gala loves technology. And he loves it so much that he has transformed the methods of agriculture in the arid region of Kutch. Today, he logs on to his computer in the morning, feeds in the data and that's it. The rest is taken care by the system-right from the irrigation to fertigation in his farm. He grows export-quality dates and mangoes by installing a first-of-its-kind computer aided technology in India. “I can feed data for a week's schedule and my system does it for the farm right from the irrigation to fertigation,” says the 30-year-old Gala, who's director of Jalbindu Agri Tech.

After returning from Australia to his native village Ratual (near Bhuj), Gala aimed to become an agri-entrepreneur. What helped in installing this technology was his degree in horticulture from Queensland University in Australia. He exploited an untapped opportunity and transformed the dynamics of methods of production. Currently, he grows 'barhi' (a fresh variety of dates) over 12 acres of land and has sown more than 600 date plants. Each plant is expected to produce 50-70 kg of dates, which is set for despatch to Europe and Dubai under his brand Golden Dates. What's more surprising is that fellow farmers near his village are getting accustomed to his technology and are increasingly becoming e-producers.

“Agriculture is going to create huge opportunities in India. The need is dynamism and professionalism,” says Gala. Many including Reliance, Essar and Atul Group have shown interest in his technology. “But I like to work on my own methods and a create sense of ownership among farmers,” he adds. He has already tied-up with seven super-specialty stores in Mumbai to supply dates and mangoes and is set to invest close to Rs 6 crore in cold-storage facilities to keep his produce fresh for exports.

Agriculture in India is transforming its practices. As young and charged-up entrepreneurs are joining the fray, commodities are being turned into value-added products and premium prices can be demanded from various retail outlets. With the same available resources, young entrepreneurs are modifying their business-models and exploiting market opportunities to improve their lifestyles. This is not only helping the entrepreneur but also encouraging farmers to shift to a better world. With a hope to make south Gujarat (an NRI-belt) the rose hub of the country, Kumar Patel returned to his village Kutched (25 kms from Valsad) after working with a few consulting firms in the US. Now Patel, at 34, has just roped in 15 rose producing villagers and entered into a buy-back arrangement with them to market their products under his popular brand-'Best Roses'.

His Rs 15 crore rose company has already started exporting to Japan, Holland, Europe, Dubai and the US with many more negotiations going on. Patel, who is also an MBA from San Francisco, recently established a hydroponics plant (the first in India) in his rose garden. “Most of the farmers are illiterate and belong to our community which has been, for some time, baffled with conventional sugarcane and paddy production. Now, they are earning more than 40% profits by growing quality roses,” says Patel.

He adds that the strength of his business lies in having more units from the region to compete in the global market since labour is cheaper and his village is geographically well-placed to for timely cargo movement. Best Roses produces nearly 10 million roses per annum at an average market price of Rs 3.50 per stem, mostly imported from Kenya. It offers a range of roses-bugatti, aloha, aqua, avalance, Bordeaux, among others. A few hundred miles away, Makrand and Anjali Churi are busy providing exotic value to their unique plan. Nisarg Nirman Agro Products, a Mumbai-based firm headed by the Churis grows and sells exotic fruits and vegetables to five-star hotels in India.

Source: The Economic Times

The Securities and Exchange Board of India (Sebi) is working on a policy to allow certain categories of foreign investors to invest in Indian securities markets through the automatic route, without having to register themselves with the regulator, as is the current norm. The proposed automatic approval will be subject to KYC (know-your customer) requirements being complied by brokers and custodians, through whom foreign investors carry out their transactions. FIIs such as pension funds, endowment funds, university funds, insurance companies, banks and mutual funds are likely to be among the foreign institutional investors that may be allowed to invest directly in the Indian market, officials familiar with the development told ET.

They said the capital market regulator was deliberating whether to do away with the registration process for any entity. However, the view taken by RBI on this will be crucial in formulating the policy. In the past, the central bank had expressed reservations relating to KYC norms given the threat of money laundering and terror financing. Currently, even though Sebi does the FII registration, it is the custodians of these investors who ensure that KYC norms are being complied with, and also maintain their own records of transactions.

Sebi has already started discussions with market intermediaries to understand how the FII registration process works in other emerging markets such as South Korea, Taiwan and Singapore. In some of the markets such as South Korea and Taiwan, foreign investors have to just fill an application form and can start trading within two days. Financial sector regulators are also looking at the issue of distinction between foreign direct investment (FDI) and foreign institutional investment. Their view is that portfolio investment should not be considered for FDI limit since portfolio investors just have trading interests.

Another important move considered by policy makers is to allow any overseas entities, including NRIs (non-resident Indians) and OCBs to invest in the local stock markets, provided they identify themselves under the KYC norms. “There should be no discrimination between non-resident Indians and other investors...since NRIS are already bringing in so much of foreign exchange remittances into the country,” an official associated with the exercise said.

Currently, NRIs are allowed to invest through different category or schemes such as the Portfolio Investment Schemes — they can pick up to 5% in one company. They can also invest through a broad-based fund, which has at least 20 investors with no investor holding more than 10%. “Once the restrictions on NRIs are removed, it will enhance the inflow of investments in India substantially,” said a senior official with a law firm involved in the FII registration process. Following the stock market scam of 2001, investment by NRIs has become more difficult, since overseas corporate bodies or OCBs were banned. The regulator is likely to put out the consultative policy paper for public comments shortly. Meanwhile, the Sebi board, which will be meeting this week, is likely to discuss the future of regional stock exchanges. In the recent past, Sebi had appointed a committee to study the future of regional stock exchanges — post-demutualisation under the leadership of G Anantharaman, former Sebi whole-time member.

Source: The Economic Times

Persisting with its efforts to boost foreign investment flows through policy liberalisation, the government is likely to allow foreign direct investment (FDI) in 'investment companies'. The finance ministry and the Reserve Bank of India (RBI) feel that foreign investment should be allowed in investment companies, since they are similar to holding companies.

Investment companies do not figure in the list of 18 NBFC activities wherein foreign investment is allowed. Non-banking financial companies or NBFCs, also known as residuary non-banking companies, are firms engaged in the business of loans, purchase of securities, leasing, hire-purchase, insurance business and chit business. Unlike banks, they cannot accept demand deposits - funds deposited at a depository institution that are payable on demand, immediately, or within a very short period, like a savings bank account.

Since FDI is allowed in holding companies with permission from the Foreign Investment Promotion Board (FIPB), it is felt that the same facility should be provided to investment firms which may invest foreign funds in downstream businesses. In other words, the foreign investment would be used by the company concerned for investment in businesses other than its own.

The issue came up for discussion in the context of a proposal by Tata Group to bring FDI into an investment company owned by it. The FIPB first deferred it, and then recommended that it should be rejected, since investment companies do not figure in the list of 18 NBFC activities in which foreign investment is allowed. The rejection was recommended on technical grounds, though deliberations between the department of industrial policy & promotion (DIPP), the finance ministry and RBI highlighted the intention to allow foreign investment in such firms.

It is understood that finance minister P Chidambaram has asked the FIPB to reconsider the proposal from Tata Investment Corporation in view of the changed situation. Government sources, on condition of anonymity, said the board is likely to discuss the proposal once again in the backdrop of the government's intention to boost foreign investment flows. Approval from FIPB and minimum capital norms would be made mandatory for FDI in investment companies, as similar norms are applicable for other NBFC activities, the sources added.

Sources said FIPB can recommend approval of the proposal with the perspective that investment companies would be added to the list of 18 NBFC activities in which foreign investment is allowed. Waiting for the list to be modified would be time-consuming, since it requires approval from the Union Cabinet.

Tata Investment Corporation, which operates as an investment company and invests in other companies, mutual funds and venture capital funds, is registered with RBI as an investment company.

The firm plans to raise Rs 723 crore through a rights issue in the form of zero-coupon convertible bonds (ZCCBs), including warrants that give shareholders the right to invest in future at specified prices. Since 3.51% stake in the company is held by foreign institutional investors (FIIs), the firm approached FIPB for approval. Tata Sons has 54.98% stake in the company, while non-resident Indians hold 0.46%. The funds are supposed to be raised over a period of time, with some flowing in now, followed by subsequent instalments in 2009 and 2011. Though FIPB clearance is not crucial for the issue, since foreign holding is less than 4%, the Tata Investment Corporation has generated significant interest since it is leading to rationalisation of the FDI policy for financial services, opening up yet another avenue for FDI.

Source: The Economic Times