|Thursday, February 3, 2000,
Zero sales tax on IT products
Day-long strike by PSU staff
Modernise stone industry:
Committee for steel industry
Subsidy scheme for cold storages
learning in Britain
Envoy visits Manesar
Liberalised FDI norms to woo
NEW DELHI, Feb 2 The Governments decision to liberalise the foreign direct investment norms whereby, barring a small negative list, all items have been placed under the automatic route is the first milestone in the countrys second phase of economic reforms.
The decision of the Union Cabinet last night to announce a small negative list is in keeping with the Governments commitment to early implementation of the second phase of economic reforms, and represents a major step towards dispensing with the present mechanism of consideration of proposals on a case to case basis. It would lend greater transparency to the process of foreign direct investment and inspire more confidence in the foreign investors.
According to the Union Minister for Commerce and Industry, Mr Murasoli Maran, the placing of all items under the automatic route for foreign direct investment, non-resident Indians and overseas corporate bodies would give a jump start to foreign investments in the country.
Foreign direct investment, which has been hovering at around $ 4 billion per annum during the last three years is expected to touch $ 10 billion in the coming years.
We had the Chinese fever till now. We now want to generate Indian fever amongst the investors, Mr Maran said on the Government plans to make India a strong magnet for attracting foreign investments.
The present decision provides for a small negative list consisting of the following: All proposals which require an industrial licence on account of (1) the item requiring an industrial licence under the Industries (Development and Regulation) Act, 1951; (11) foreign investment being more than 24 per cent in the equity capital of units manufacturing items reserved for small scale industries; and (111) all items which require an industrial licence in terms of the locational policy notified by government under the New Industrial Policy of 1991. All proposals in which the foreign collaborator has a previous venture or tie-up in India. - All proposals relating to acquisition of shares in an existing Indian company in favour of a foreign/NRI/OCB investor. All proposals falling outside notified sectoral policy/ caps or under sectors in which FDI is not permitted and/ or whenever any investor chooses to make an application to the Foreign Investment Promotion Board and not to avail of the automatic route.
The Government has also decided to constitute a group of Ministers to review existing sectoral policies and sectoral equity caps. Similarly, the Government aims to harmonise sectoral policy with the overall FDI policy.
The group of Ministers will be drawn from the Ministries of Finance, External Affairs, Commerce and Industry, Telecom, Chemical and Fertilisers and Small Scale Industries.
Under the automatic route, foreign investors would be required to make an upfront statement to the RBI and carry on with their project. However, for those companies who still care for an official letter from the Government regarding clearance of their project, they would be entitled to go through the FIPB route.
Mr Maran said the
Government would finally like to have a single empowered
window system under which it should take foreign
investors only one day to get all clearances. This
is already happening in Georgia. And, we will follow the
Georgia example, he said.
NEW DELHI, Feb 2 (PTI) Industry chambers today welcomed the Governments decision to make FDI approval automatic for a majority of sectors and said it would enable India to achieve the target of attracting $ 10 billion FDI on an annual basis.CII said the decision to undertake a review exercise by a group of ministers to prune the negative list was also a positive one.
FICCI said the governments decision to deny automatic approval to proposals where the foreign collaborator has an existing tie-up or joint venture in the country and proposals where a foreign investor seeks to acquire shares in existing Indian companies is being viewed as one which has been made keeping in mind the small Indian investors as well.
Assocham said steady improvement in GDP, lower levels of inflation, stable exchange rate and a well-regulated capital market would help to reduce the risk perception of investing in India.
MUMBAI, Feb 2 (PTI) The Central Government is trying to convince State Governments to keep the sales tax levels at zero per cent on IT products to give boost to the sector, Union Information Technology Minister Pramod Mahajan said today.
To promote India as a superpower in knowledge-based technologies, the Government was considering more incentives, and some of them would find place in forthcoming Budget, the Minister said while inaugurating the Nasscom 2000 India, an international conference and expo, here.
However, he did not give any details of the budgetary proposals under consideration.
Referring to the present trend of distinguished infotech experts going to developed countries for making it big there, he said the main objective of his Ministry was to arrest the present trend of braindrain, and facilitate and provide an enabling environment for the brainpower to grow and prosper within the country.
Speed in policy decisions and providing necessary infrastructure were the essential ingredients for accomplishing the nations dream of becoming a knowledge superpower in a decade, he said adding the sectors development should be more broadbased.
At present, about 60 per cent of software exports were by the top 10 companies, and about 25 per cent of exports were by three IT companies in the country, he said.
He said in this context of infrastructure building, I ask the political parties not to pose any problems for such projects.
India should adopt a three-pronged approach efforts at individual, organisational and national levels to harness the opportunities provided by the emerging digital economy in the world effectively, Sycamore Networks Chairman Gururaj Deshpande said.
Developing venture capital funds and reliance on free market economy was also important as industrial growth was not possible without liberal entry and exit norms for corporates, he said.
Large valuations for Silicon Valley success stories such as Yahoo, Amazon, Ebay and Priceline.com are due to the anticipated future business potential of their ideas as perceived by investors, and one should develop such ideas, he added.
An individual with entrepreneural skills should develop the ability to dream big and think globally and above all should have the courage of conviction to overcome all odds, Deshpande said, adding it should have team members with global vision with clear objectives.
strike by PSU staff
NEW DELHI, Feb 2 More than 15 lakh workers of public sector companies today struck work to press their demand for a five-year wage settlement period and payment of salaries and dearness allowance to employees of sick units.
The Government claimed that the strike did not disrupt work most PSUs as majority of workers reported for work, while the striking unions said that the agitation was a complete success.
The strike was a complete success as 75 per cent of workers in PSUs across the country struck work, Mr M.K. Pandhe, General Secretary of CITU, which had called the strike, said while addressing a press conference here today.
The government stated that the strike did not have much impact as INTUC, HMS and NFITC, which control 58 per cent of the work force did not join the strike.
The regional offices of IOC, LPG plants in Chandigarh and Powergrid Corporation in Faridabad and Ballabgarh were affected by the strike, the government said.
The strike was mainly in the Left stronghold areas and had little impact in the rest of the country, the Ministry of Labour said.
CITU, however, claimed that the strike affected working in BHEL, BEL, IBP, HAL, Hindustan Teleprinters, ONGC, Coal India and several other PSUs in the country.
stone industry: Gehlot
CHANDIGARH, Feb 2 The 1st international stone industry exhibition, conference and buyer seller meet,India Stonemart 2000, organised by the Centre for Development of Stones and CII was inaugurated at Jaipur today by the Rajasthan Chief Minister, Mr Ashok Gehlot.
Mr Gehlot said unless the Indian stone industry modernises and inducts new technologies, especially for making the sector environment friendly, it would be crowded out of international markets.
Ms Vasundhara Raje, Union Minister of State for Small Scale Industries and Mr Jesaya N. Nyamu, Minister of Mines and Energy Republic of Namibia addressed the gathering.
The two-day international conference will attract 400 national and international delegates and will offer a platform for deliberations on technological changes, world stone scenario and changing market challenges for Indian players, said a CII statement here.
North v West & South
On most major economic and social parameters, the northern States are fast losing out to western and southern states, said Mr Sunil Kant Munjal, Chairman, CII (Northern Region), at a press conference in Jaipur this afternoon.
Elaborating, Mr Munjal said there had not been any significant improvement in the quality of life of the common man across areas such as transport, employment, environment, basic goods and services, education, health and law and order.
The State leadership
must address the new realities of shift in economic
decision making from the Centre to States. Populist
policies must get replaced by economically viable schemes
and the northern States must move towards a common
NEW DELHI, Feb 2 (PTI) The Government has constituted a project co-ordination committee under the chairmanship of Minister of State for Steel Dilip Ray to address the problems of the steel industry.
The committee comprising steel, finance, commerce, power and coal secretaries and heads of financial institutions like IDBI, ICCI, IFCI, and SBI would function till March 31, 2000, an official release said here today.
Apart from suggesting measures for early completion of the on-going iron and steel projects, the group would also address problems like demand generation, customs and excise duties, rationalisation, exports faced by the existing and newly commissioned plants.
scheme for cold storages
CHANDIGARH, Feb 2 A capital subsidy schemes for the construction or expansion of cold storages for horticultural produce has been introduced by the Union Government to be implemented through NABARD and the National Horticulture Board.
Capital subsidy to the extent of 25 per cent of the project cost, subject to a maximum of Rs 50 lakh, will be released by NABARD on the completion of the project.
Cooperatives, companies, corporatoins,, agro-industries corporations, growers associations, partnership and proprietary firms will be eligible to take up cold storage projects, said a NABARD statement.
The bank will provide 50 per cent of the project cost as loan and 25 per cent will have to be contributed by the promoters.
NABARD will provide 90
per cent refinance at 8.5 per cent rate of interest to
the financing bank. The ultimate borrower will get loan
from the financing bank at 1 per cent above the prime
lending rate of the bank concerned.
LONDON, Feb 2 (AP) Microsoft chief Bill Gates outlined a plan yesterday to equip all students in Britain with their own portable computers within the next five years.
Microsoft hopes its anytime, anywhere learning programme will be funded by parents and sponsorship from local communities as well as schools and the Government.
The company itself is donating about £ 1 million ($ 1.62 million) over the next few years, to be raised from sales revenues from the programme.
The programme, which also calls for giving laptops to teachers, has been tested in 28 British schools over the past two years.
It means students dont have to queue up to use computers but can instantly access a wealth of information on the subjects they need to learn about, said Aileen White, a teacher at Cornwal Lis School in the southeast England town of Maidstone.
GURGAON, Feb 2 Mr Lee Chong-Moo, Ambassador of the Republic of Korea, today visited the Industrial Model Township (IMT) at Manesar, near here. Dr Harbakhsh Singh, MD, HSIDC, briefed Mr Moo on infrastructure development works in progress.
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