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Chidambaram, Sharma set the ball rolling on FDI cap review

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Crucial meeting: Anand Sharma, Minister for Commerce and Industry, with Saurabh Chandra, Secretary DIPP, coming out after meeting with the Finance Minister in the Capital on Monday. – Kamal Narang
Crucial meeting: Anand Sharma, Minister for Commerce and Industry, with Saurabh Chandra, Secretary DIPP, coming out after meeting with the Finance Minister in the Capital on Monday. – Kamal Narang

Formal talks begin; Commerce Ministry’s final report likely by July 6-7

The Government has kicked-off the process of reviewing foreign direct investment (FDI) caps in various sectors.

The process began on Monday with formal consultations between Finance Minister P. Chidambaram, and Commerce and Industries Minister Anand Sharma.

“Whatever steps are required, whether it is further reforms or opening up (FDI in different sectors), we will take an early view on it,” Sharma told reporters after the over 90-minute meeting with Chidambaram. He refused to divulge the details of Monday’s discussions.

The exercise of reviewing FDI caps is based on the suggestion given by a Government-appointed panel headed by Arvind Mayaram (Secretary in the Department of Economic Affairs). The committee has recommended three caps – 49 per cent, 74 per cent and 100 per cent – against the present system 26, 49, 74 and 100 per cent.

It also suggested raising limits in sectors such as defence, multi-brand retail, print media, news channels, stock exchanges among others.

On June 25, Chidambaram had said that revised FDI caps for various sectors would be in place by the second or third week of July.

Later in the day, the Secretary in the Department of Industrial Policy and Promotions (DIPP), Saurabh Chandra, initiated discussions on one-to-one basis with Secretaries of 15 Ministries, such as Defence, Telecom, Information and Broadcasting, Petroleum, Power and Space.

The meeting with other Ministries will take place on Tuesday.

“After these meetings, each Minister will send their views in writing to the Commerce and Industries Minister. A final report is expected to be ready by July 6 or 7,” Chandra said. He said the Ministries’ views will keep in mind the Home Ministry’s apprehension on revising FDI caps in various sectors.

Based on the deliberations of these meetings, Chidambaram and Sharma will discuss the issue with the Prime Minister. However, the final decision will be taken by the Cabinet.

The Mayaram committee has said that considering the adoption of the principle of ownership and control, the revised definition of which is being proposed by DIPP, there should be only three categories of activities.

First, where foreign ownership and control cannot be allowed, 49 per cent FDI will be permitted with the definition of control.

Second, in sectors or activities where ownership and control (Indian or foreign) is not material, FDI will be 100 per cent on automated routes.

The third category will be one where though foreign ownership and control is permitted, a degree of Indian participation or oversight is also considered necessary.

In these 74 per cent FDI with FIPB (Foreign Investment Promotion Board) oversight has been recommended.

shishir.sinha@thehindu.co.in

(This article was published on July 1, 2013)
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Union Budget 2014-15 Highlights

  • Following are the highlights of the Union Budget 2014-15 presented by Finance Minister Arun Jaitley in Parliament on July 10, 2014
  • Income-tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3 lakh
  • Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs 1 lakh.
  • Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh
  • Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5 lakh.
  • Committee to look into all fresh tax demands for indirect transfer of assets in wake of retrospective tax amendments of 2012
  • Fiscal deficit target retained at 4.1% of GDP for current fiscal and 3.6% in FY 16
  • Rs 150 crore allocated for increasing safety of women in large cities
  • LCD, LED TV become cheaper
  • Cigarettes, pan masala, tobacco, aerated drinks become costlier
  • 5 IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
  • 5 more IITs in Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
  • 4 more AIIMS like institutions to come up in AP, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP
  • Govt proposes to launch Digital India’ programme to ensure broad band connectivity at village level
  • National Rural Internet and Technology Mission for services in villages and schools, training in IT skills proposed
  • Rs 100 cr scheme to support about 600 new and existing Community Radio Stations
  • Rs 100 cr for metro projects in Lucknow and Ahmedabad
  • Govt expects Rs 9.77 lakh crore revenue crore from taxes
  • Govt’s plan expenditure pegged at Rs 5.75 lakh crore and non-Plan at Rs 12.19 lakh crore.
  • Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called ‘Namami Gange’
  • Kisan Vikas Patra to be reintroduced, National Savings Certificate with insurance cover to be launched
  • FDI limit to be hiked to 49% pc in defence, insurance
  • Disinvestment target fixed at Rs 58,425 crore
  • Gross borrowings pegged at Rs 6 lakh crore
  • Contours of GST to be finalised this fiscal; Govt to look into DTC proposal.
  • ‘Pandit Madan Mohan Malviya New Teachers Training Programme’ launched with initial sum of Rs 500 crore
  • Govt provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants
  • Set aside Rs 11,200 crore for PSU banks capitalisation
  • Govt in favour of consolidation of PSU banks
  • Govt considering giving greater autonomy to PSU banks while making them accountable
  • Rs 7,060 crore for setting up 100 Smart Cities
  • A project on the river Ganga called ‘Jal Marg Vikas’ for inland waterways between Allahabad and Haldia; Rs 4,200 crore set aside for the purpose.
  • Govt proposes Ultra Modern Super Critical Coal Based Thermal Power Technology
  • Expenditure management commission to be setup; will look into food and fertilizer subsides
  • Impasse in coal sector will be resolved; coal will be provided to power plants already commissioned or to be commissioned by March 2015
  • Long term capial gains tax for mutual funds doubled to 20%; lock-in period increased to 3 years
  • Rs 4,000 cr set aside to increase flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.
  • EPFO to launch the ‘Uniform Account Number’ service to facilitate portability of Provident Fund accounts
  • Mandatory wage ceiling of subscription to EPS (Employee Pension Scheme) raised from Rs 6,500 to Rs 15,000
  • Minimum pension increased to Rs 1,000 per month
  • Union Budget 2014: List of products getting cheaper/ costlier

  • Finance Minister Arun Jaitley today spared the common man from price hikes by keeping duties on commonly used day-to-day items unchanged but made it costlier for smokers and tobacco consumers with a steep increase in excise rate in tax proposals in Budget 2014—15.
  • Following is a list of what will be cheaper and costlier:
  • YOU WILL PAY LESS FOR
  • CRT television
  • LED/LCD TVs especially below 19 inch
  • Footwear priced between Rs 500 to Rs 1,000 per pair
  • Soaps
  • E—book readers
  • Desktop, laptops and tablets
  • RO based water purifiers
  • LED Lights, fixtures and lamps
  • Pre forms of precious and semi—precious stones
  • Sports Gloves
  • Branded petrol
  • Matchbox
  • Life micro insurance policies
  • HIV/AIDS drugs and diagnostic kits
  • DDT insecticides
  • YOU WILL PAY MORE FOR
  • Cigarettes
  • Aerated drinks with sugar
  • Pan masala
  • Gutka and chewing tobacco
  • Jarda scented tobacco
  • Radio Taxi
  • Imported electronic products
  • Portable X—ray machines
  • Half cut/broken diamonds.

  • DATA BANK

    Exchange Rate

    Dollar Spot Forward Rate

    Open-Ended Mutual Funds

    MCX-SX Currency Futures

    NSE Currency Futures


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