Mumbai: Tata Chemicals has acquired 25.1 per cent stake in the ammonia-urea fertiliser complex at Gabon in Africa for $290 million (Rs 1,300 crore).
The company acquired stake as a strategic investor in stream 1 of a greenfield port-based ammonia-urea fertilizer manufacturing complex in the Republic of Gabon.
The project comprises setting up of 1.3 million tonnes per annum (MTPA) of urea plant in the first phase (stream 1). There is an option to expand into another stream (stream 2) of 1.3 MTPA.
Other shareholders in the project are Olam with 63 per cent stake and the Republic of Gabon with 12 per cent stake.
The plant is strategically located near Gabon’s main port and it enables efficient and cost-effective material handling and proximity to large markets such as Africa, North America, Latin America and India, the statement said.
Success in my Habit
Wednesday, April 20, 2011
Dr Reddy's expands R&D centre in Cambridge
Chennai/Hyderabad: Dr Reddy's Laboratories has opened its newly expanded Chirotech Technology Centre, a purpose-built facility to house its laboratories and offices, at the Cambridge Science Park, UK.
“Being located in this historic university city and in one of the leading European centres for science and innovation makes it the ideal location to expand and develop our research, development and technology capabilities. The facility will be a centre of excellence for chemistry and reinforces our commitment to building a leading edge research organisation to meet the innovation needs of our customers,” GV Prasad, vice chairman and CEO of the company, said in a release.
Dr Reddy’s had acquired the Chirotech R&D facility from Dow Pharma along with its manufacturing facility in Mirfield, UK, in 2008 at $32 million. The additional capacity of 33,000 ft built at the centre helps to house more number of scientists and laboratory facilities. The company has already increased the number of scientists to 40 from the previous 30, according to a company spokesman.
The additional capacity will help facilitate an initial doubling of scientific staff in Chirotech while providing for further capacity additions in future, the company said. It is expected to strengthen core capabilities in biocatalysis and chemocatalysis, build capacities in fast growing segments and allow development of other areas of expertise in chemistry and processing for use in the pharmaceutical industry. The new facility is part of the custom pharmaceutical services business unit of Dr Reddy's and will offer these expanded services to its customers worldwide.
“Being located in this historic university city and in one of the leading European centres for science and innovation makes it the ideal location to expand and develop our research, development and technology capabilities. The facility will be a centre of excellence for chemistry and reinforces our commitment to building a leading edge research organisation to meet the innovation needs of our customers,” GV Prasad, vice chairman and CEO of the company, said in a release.
Dr Reddy’s had acquired the Chirotech R&D facility from Dow Pharma along with its manufacturing facility in Mirfield, UK, in 2008 at $32 million. The additional capacity of 33,000 ft built at the centre helps to house more number of scientists and laboratory facilities. The company has already increased the number of scientists to 40 from the previous 30, according to a company spokesman.
The additional capacity will help facilitate an initial doubling of scientific staff in Chirotech while providing for further capacity additions in future, the company said. It is expected to strengthen core capabilities in biocatalysis and chemocatalysis, build capacities in fast growing segments and allow development of other areas of expertise in chemistry and processing for use in the pharmaceutical industry. The new facility is part of the custom pharmaceutical services business unit of Dr Reddy's and will offer these expanded services to its customers worldwide.
ONGC Videsh buys into Kazakh oilfield
New Delhi: ONGC Videsh, the foreign arm of India's largest energy explorer ONGC, has signed 'definitive' agreements with Kazakhstan's state-run KazMunaiGas to acquire a 25% stake in the Satpayev exploration block, which has estimated 1.85 billion barrel oil reserves.
The agreements were signed on Saturday during Prime Minister Manmohan Singh's Kazakhstan visit, the company said. The cabinet had approved the deal in July 2009. ONGC Videsh already has stakes in oilfields in several countries including Russia, Sudan and Vietnam, apart from exploration blocks. In a separate development, Kazakhstan announced that it will supply 2100 tonnes of uranium to India's nuclear plants by 2014.
The agreements were signed on Saturday during Prime Minister Manmohan Singh's Kazakhstan visit, the company said. The cabinet had approved the deal in July 2009. ONGC Videsh already has stakes in oilfields in several countries including Russia, Sudan and Vietnam, apart from exploration blocks. In a separate development, Kazakhstan announced that it will supply 2100 tonnes of uranium to India's nuclear plants by 2014.
Retail investors bet big on ETFs, especially those in gold
Mumbai: Underperforming equities drive push, trend seems likely to continue
Indian retail investors are betting big on Exchange Traded Funds (ETFs). The category emerged as an outperformer during financial year 2010-11, even as the mutual fund sector witnessed erosion of assets in other categories.
ETFs were the only category which registered a four-fold increase in influx of funds. Net inflows here were Rs 3,638 crore, compared with a meagre Rs 784 crore in the previous financial year. The number of folios jumped from a little over 200,000 to 420,000. The funds thus mobilised were Rs 7,709 crore against Rs 3,535 crore earlier, up 118 per cent.
On the other hand, overall industry folios dropped two per cent, while the average of assets under management slipped 5.6 per cent to Rs 7.05 lakh crore during the year, against Rs 7.47 lakh crore in the previous year.
Rajan Mehta, executive director, Benchmark Asset Management, says, “Investors’ base in ETFs have gone up as the visibility of these products increased. More, investors' mindset is aligning to the fact that it's a simple, suitable product for them and an investor-centric instrument, with a low cost attached to it.”
The industry added seven more ETF schemes in 2010-11, taking the total to 28. Ten of these are Gold ETFs. Says Nitin Rakesh, managing director and CEO of Motilal Oswal Mutual Fund: “The number of retail investors putting money in ETFs is probably the highest at this point of time.”
Interestingly, it is the gold ETFs which have attracted much of the investor attention. Net inflow in gold ETFs has gone up close to three-fold last year, to Rs 2,250 crore.
“With the kind of rally seen in gold prices over the last three years, investors have understood that gold investment could give better returns at a time when equities are underperforming,” explains Mehta. He says lesser returns from equities last year also contributed to the rising number of retail investors in gold ETFs.
“Investors are now willing to put in 10-20 per cent of their overall investments in ETFs,” adds Mehta. The gold ETFs saw investor folios reach 320,000 in 2010-11, compared with 160,000 in 2009-10.
Fund houses are optimistic about continuation of the high trajectory of growth in the ETF category, which has also attracted global MF players to India. The recent deal of Goldman Sachs taking over Benchmark AMC is one signal in this regard.
Indian retail investors are betting big on Exchange Traded Funds (ETFs). The category emerged as an outperformer during financial year 2010-11, even as the mutual fund sector witnessed erosion of assets in other categories.
ETFs were the only category which registered a four-fold increase in influx of funds. Net inflows here were Rs 3,638 crore, compared with a meagre Rs 784 crore in the previous financial year. The number of folios jumped from a little over 200,000 to 420,000. The funds thus mobilised were Rs 7,709 crore against Rs 3,535 crore earlier, up 118 per cent.
On the other hand, overall industry folios dropped two per cent, while the average of assets under management slipped 5.6 per cent to Rs 7.05 lakh crore during the year, against Rs 7.47 lakh crore in the previous year.
Rajan Mehta, executive director, Benchmark Asset Management, says, “Investors’ base in ETFs have gone up as the visibility of these products increased. More, investors' mindset is aligning to the fact that it's a simple, suitable product for them and an investor-centric instrument, with a low cost attached to it.”
The industry added seven more ETF schemes in 2010-11, taking the total to 28. Ten of these are Gold ETFs. Says Nitin Rakesh, managing director and CEO of Motilal Oswal Mutual Fund: “The number of retail investors putting money in ETFs is probably the highest at this point of time.”
Interestingly, it is the gold ETFs which have attracted much of the investor attention. Net inflow in gold ETFs has gone up close to three-fold last year, to Rs 2,250 crore.
“With the kind of rally seen in gold prices over the last three years, investors have understood that gold investment could give better returns at a time when equities are underperforming,” explains Mehta. He says lesser returns from equities last year also contributed to the rising number of retail investors in gold ETFs.
“Investors are now willing to put in 10-20 per cent of their overall investments in ETFs,” adds Mehta. The gold ETFs saw investor folios reach 320,000 in 2010-11, compared with 160,000 in 2009-10.
Fund houses are optimistic about continuation of the high trajectory of growth in the ETF category, which has also attracted global MF players to India. The recent deal of Goldman Sachs taking over Benchmark AMC is one signal in this regard.
Bank loans grow 21.4% in 2010-11, deposits rise 15.8%
Mumbai: Bank loans registered a growth of 21.38 per cent in 2010-11, while deposit growth stood at 15.84 per cent, according to data released by the Reserve Bank of India (RBI).
While credit growth was higher than RBI’s projection of 20 per cent in 2010-11, deposit growth fell short of the 18 per cent projection. Deposit growth for 2009-10 was 17 per cent, while the growth in credit was 16 per cent.
The growth in loans came off sharply in the last fortnight of the financial year ended March 25, compared to the previous fortnight, in which credit growth was 23.20 per cent. In the fortnight ended March 25, banks disbursed Rs 82,593 crore worth of loans. Deposits grew by Rs 64,333 crore in the fortnight.
Analysts and bankers said a growth rate of 18 per cent in deposits and 20 per cent in credit should be sustainable for banks in 2011-12. With policy rates expected to rise further, banks may not be willing to raise loan rates, owing to liquidity coming back into the system. Typically in the beginning of a financial year, the demand for loans is slack.
“We feel interest rates have peaked. But since inflation is still high, there is a chance of RBI raising policy rates further in May. However, a rise in policy rates will not necessarily mean an immediate hike in deposit and lending rates,” said RK Bansal, executive director and group head (retail banking), IDBI Bank. He said IDBI Bank had no plans to cut retail term deposit rates, nor to raise lending rates. “For the current financial year, because of a low-base, I expect around 20 per cent growth in deposits. I also expect 18-20 per cent growth in credit,” Bansal said.
Liquidity concerns have also ebbed since the beginning of the financial year, as banks become net lenders to the central bank’s liquidity adjustment facility. Liquidity was in deficit mode during the second half of the current financial year, which saw rates heading north.
“Currently, there are no liquidity pressures. Hence, banks may want to withdraw their special rates on deposits. But banks may not reduce rates, as deposits from retail segment are yet to pick up. So they may want to wait and watch before slashing interest rates on deposits,” said a official from a public sector bank.
While credit growth was higher than RBI’s projection of 20 per cent in 2010-11, deposit growth fell short of the 18 per cent projection. Deposit growth for 2009-10 was 17 per cent, while the growth in credit was 16 per cent.
The growth in loans came off sharply in the last fortnight of the financial year ended March 25, compared to the previous fortnight, in which credit growth was 23.20 per cent. In the fortnight ended March 25, banks disbursed Rs 82,593 crore worth of loans. Deposits grew by Rs 64,333 crore in the fortnight.
Analysts and bankers said a growth rate of 18 per cent in deposits and 20 per cent in credit should be sustainable for banks in 2011-12. With policy rates expected to rise further, banks may not be willing to raise loan rates, owing to liquidity coming back into the system. Typically in the beginning of a financial year, the demand for loans is slack.
“We feel interest rates have peaked. But since inflation is still high, there is a chance of RBI raising policy rates further in May. However, a rise in policy rates will not necessarily mean an immediate hike in deposit and lending rates,” said RK Bansal, executive director and group head (retail banking), IDBI Bank. He said IDBI Bank had no plans to cut retail term deposit rates, nor to raise lending rates. “For the current financial year, because of a low-base, I expect around 20 per cent growth in deposits. I also expect 18-20 per cent growth in credit,” Bansal said.
Liquidity concerns have also ebbed since the beginning of the financial year, as banks become net lenders to the central bank’s liquidity adjustment facility. Liquidity was in deficit mode during the second half of the current financial year, which saw rates heading north.
“Currently, there are no liquidity pressures. Hence, banks may want to withdraw their special rates on deposits. But banks may not reduce rates, as deposits from retail segment are yet to pick up. So they may want to wait and watch before slashing interest rates on deposits,” said a official from a public sector bank.
India, US pursue sustainable alliance in coal sector
Mumbai: After the civil nuclear agreement, India and the US are pursuing an alliance in the coal sector. Both the countries, which met recently in New Delhi, are considering encouraging equity partnerships with offtake in expansion projects, long term offtake arrangement and equity in new projects.
India’s premier coal producer, Coal India (CIL), has identified 142 new projects, comprising 35 under ground (UG) and 107 opencast (OC) for ultimate capacity of 380.22 million tonnes with an estimated capex of $7.7 billion.
Besides, CIL is setting up 20 washeries with a capacity of 111.1 million tonnes, with estimated capex of $510 million. India is expected to have a coal production of 447 million tonnes by the end of the 11th plan and 633 million tons by end of the 12th plan. According to Centre’s estimates, the coal shortage is expected to be 85 million tonnes by end of 2011-12.
The alliance is crucial to tackle constraints in exploration of coal. Of 277 billion tonnes geological reserves, only 110 billion tonnes reserves are in “proved category”. Besides, there are problems and constraints in underground mining, mainly because of use of old technology, and labour-intensive processes and safety issues.
A coal ministry official told Business Standard, “In equity model, it is proposed to acquire stakes in operating mines or greenfield coal blocks and import produce from such acquisitions to India. In the off-take model, it is proposed to enter into long-term offtake contract (10 years) with coal companies for procurement of imported coal. USA has been identified as a preferred country for both the equity and off-take models.”
At present, Coal India (CIL) is in an advanced stage of creating strategic alliance with a large US company through the “equity model”. In “off-take model”, several US coal companies have qualified to participate in the final stage of the process and price bids shall be shortly invited from those coal companies.
The official argued: “Thermal coal exports from USA at a competitive price can potentially bridge India’s demand-supply gap. Competitive model for maritime freight needs to be explored for making the landed cost of US coal in India attractive. Indo-US bilateral platform can be leveraged to sensitise stake holders at the government level to create an enabling situation for CIL to strike deals with US coal companies. Several responses were received from US-based coal companies. Discussions are in progress with Peabody, and Massey Energy Corporation.”
US side may come up with new technologies and expertise to take part in mechanisation of UG mines, keeping in view the production, productivity, safety and economics.
India and US are also looking at financing of capacity building and skill development in the area of geospatial technology application in mine land reclamation for sustainable coal mining in India.
Besides, funds can be available to develop core competence of technical experts through training and site visits to make them capable of taking inferred decisions for addressing land reclamation challenges.
India’s premier coal producer, Coal India (CIL), has identified 142 new projects, comprising 35 under ground (UG) and 107 opencast (OC) for ultimate capacity of 380.22 million tonnes with an estimated capex of $7.7 billion.
Besides, CIL is setting up 20 washeries with a capacity of 111.1 million tonnes, with estimated capex of $510 million. India is expected to have a coal production of 447 million tonnes by the end of the 11th plan and 633 million tons by end of the 12th plan. According to Centre’s estimates, the coal shortage is expected to be 85 million tonnes by end of 2011-12.
The alliance is crucial to tackle constraints in exploration of coal. Of 277 billion tonnes geological reserves, only 110 billion tonnes reserves are in “proved category”. Besides, there are problems and constraints in underground mining, mainly because of use of old technology, and labour-intensive processes and safety issues.
A coal ministry official told Business Standard, “In equity model, it is proposed to acquire stakes in operating mines or greenfield coal blocks and import produce from such acquisitions to India. In the off-take model, it is proposed to enter into long-term offtake contract (10 years) with coal companies for procurement of imported coal. USA has been identified as a preferred country for both the equity and off-take models.”
At present, Coal India (CIL) is in an advanced stage of creating strategic alliance with a large US company through the “equity model”. In “off-take model”, several US coal companies have qualified to participate in the final stage of the process and price bids shall be shortly invited from those coal companies.
The official argued: “Thermal coal exports from USA at a competitive price can potentially bridge India’s demand-supply gap. Competitive model for maritime freight needs to be explored for making the landed cost of US coal in India attractive. Indo-US bilateral platform can be leveraged to sensitise stake holders at the government level to create an enabling situation for CIL to strike deals with US coal companies. Several responses were received from US-based coal companies. Discussions are in progress with Peabody, and Massey Energy Corporation.”
US side may come up with new technologies and expertise to take part in mechanisation of UG mines, keeping in view the production, productivity, safety and economics.
India and US are also looking at financing of capacity building and skill development in the area of geospatial technology application in mine land reclamation for sustainable coal mining in India.
Besides, funds can be available to develop core competence of technical experts through training and site visits to make them capable of taking inferred decisions for addressing land reclamation challenges.
BRICS to trade in own currencies
China: The settlement in local currencies will be subject to national laws.
India on Thursday agreed to an arrangement to facilitate and expand the system of settling in local currencies all trade transactions among members of the BRICS group of countries. The agreement followed consultations among development banks representing Brazil, Russia, India, China and South Africa, held here with a view to strengthening the BRICS inter-bank cooperation.
At $4.6 trillion, the five BRICS countries account for almost 15 per cent of global trade volume, but trade among them is only about $230 billion a year. The expanded system of settling trade in local currencies would boost intra-BRICS trade, a senior Chinese government official said.
While the China Development Bank led the discussion at the meeting, held concurrently with the BRICS Summit, the Exim Bank represented the Indian side. A key element in the new arrangement, a senior Indian government official explained, was that the settlement in local currencies would be subject to national laws.
The annual BRICS development banks’ meeting, that began here yesterday, also formalised three other cooperation arrangements among the member countries. To start with, the participating banks agreed to enhance co-operation in cross-border investments and financing of companies and projects.
The development banks also agreed to take pro-active steps in expediting capital market reforms in the BRICS countries, particularly with regard to issuance of bonds and listing of stocks. India, the officials said, would play a major role in this area as it has one of the most developed and active capital markets within the BRICS region.
The fourth element in the inter-bank co-operation mechanism pertains to the development banks’ commitment to promote exchange of information on financing and investments.
The absence of an established system of flow of financial information among the BRICS countries has hindered faster growth of intra-BRICS trade and investments.
The BRICS countries are the most representative countries among emerging markets. The combined population of the five countries is close to three billion, accounting for 43 per cent of the world total. Their combined gross domestic product, or GDP, is $11 trillion, or 16 per cent of the world’s total GDP. Their GDP share in the global pie, however, goes up to almost 25 per cent when compared against their GDP on a purchasing-power-parity basis.
India on Thursday agreed to an arrangement to facilitate and expand the system of settling in local currencies all trade transactions among members of the BRICS group of countries. The agreement followed consultations among development banks representing Brazil, Russia, India, China and South Africa, held here with a view to strengthening the BRICS inter-bank cooperation.
At $4.6 trillion, the five BRICS countries account for almost 15 per cent of global trade volume, but trade among them is only about $230 billion a year. The expanded system of settling trade in local currencies would boost intra-BRICS trade, a senior Chinese government official said.
While the China Development Bank led the discussion at the meeting, held concurrently with the BRICS Summit, the Exim Bank represented the Indian side. A key element in the new arrangement, a senior Indian government official explained, was that the settlement in local currencies would be subject to national laws.
The annual BRICS development banks’ meeting, that began here yesterday, also formalised three other cooperation arrangements among the member countries. To start with, the participating banks agreed to enhance co-operation in cross-border investments and financing of companies and projects.
The development banks also agreed to take pro-active steps in expediting capital market reforms in the BRICS countries, particularly with regard to issuance of bonds and listing of stocks. India, the officials said, would play a major role in this area as it has one of the most developed and active capital markets within the BRICS region.
The fourth element in the inter-bank co-operation mechanism pertains to the development banks’ commitment to promote exchange of information on financing and investments.
The absence of an established system of flow of financial information among the BRICS countries has hindered faster growth of intra-BRICS trade and investments.
The BRICS countries are the most representative countries among emerging markets. The combined population of the five countries is close to three billion, accounting for 43 per cent of the world total. Their combined gross domestic product, or GDP, is $11 trillion, or 16 per cent of the world’s total GDP. Their GDP share in the global pie, however, goes up to almost 25 per cent when compared against their GDP on a purchasing-power-parity basis.
Direct tax mop-up at record Rs 4.5L cr
New Delhi: The government has collected an all-time high income tax of Rs 4.5 lakh crore in 2010-11, at least Rs 4,000 crore more than the revised budget estimate of Rs 4.46 lakh crore.
This is in addition to all-time high refund of Rs 72,000 crore that the Central Board of Direct Taxes (CBDT) has made till March 31, 2011 by clearing backlogs.
In previous years, the tax collection figures were bloated by delayed refunds, giving a wrong picture to net direct tax collection. The early refunds have also saved the government nearly Rs 4,500 crore towards interest payments.
In Nagpur, while addressing the passing out of 63rd batch of Indian Revenue Service officers, CBDT chairman Sudhir Chandra said, "Direct taxes collection by the end of financial year 2010-11 stood at Rs 4.50 lakh crore against a revised target of Rs 4.46 lakh crore."
Chandra has issued instructions to all I-T formations to immediately clear all pending refunds and has given them an extended ten days till April 20 to make refunds to taxpayers.
Delhi has cleared 82,000 refunds between April 1 and 10; Jaipur 35,343; Ahmedabad 33,610; Chennai 30,158 and Pune 19,522, clearing all the backlog. But, taxpayers in Mumbai are not as fortunate with more than two lakh refunds pending till April 10.
Officials in the Mumbai commissionerate have refused to abide by the finance ministry's diktat and have gone slow on refunds. It has cleared nearly 7,000 refunds between April 1-10. In contrast, relatively smaller formations such as Baroda and Hyderabad cleared more than 15,667 and 18,174 refunds respectively during this period.
This is in addition to all-time high refund of Rs 72,000 crore that the Central Board of Direct Taxes (CBDT) has made till March 31, 2011 by clearing backlogs.
In previous years, the tax collection figures were bloated by delayed refunds, giving a wrong picture to net direct tax collection. The early refunds have also saved the government nearly Rs 4,500 crore towards interest payments.
In Nagpur, while addressing the passing out of 63rd batch of Indian Revenue Service officers, CBDT chairman Sudhir Chandra said, "Direct taxes collection by the end of financial year 2010-11 stood at Rs 4.50 lakh crore against a revised target of Rs 4.46 lakh crore."
Chandra has issued instructions to all I-T formations to immediately clear all pending refunds and has given them an extended ten days till April 20 to make refunds to taxpayers.
Delhi has cleared 82,000 refunds between April 1 and 10; Jaipur 35,343; Ahmedabad 33,610; Chennai 30,158 and Pune 19,522, clearing all the backlog. But, taxpayers in Mumbai are not as fortunate with more than two lakh refunds pending till April 10.
Officials in the Mumbai commissionerate have refused to abide by the finance ministry's diktat and have gone slow on refunds. It has cleared nearly 7,000 refunds between April 1-10. In contrast, relatively smaller formations such as Baroda and Hyderabad cleared more than 15,667 and 18,174 refunds respectively during this period.
Obama picks another Indian-American for key Government post
New Delhi: The US President Barack Obama has named Geeta Pasi, an Indian-American, as US Ambassador to the Republic of Djibouti in the Horn of Africa.
A graduate from Duke University and masters in French Studies from New York University, Pasi currently works as the Director of East African Affairs in the Africa Bureau at the Department of State. Before this, Pasi held the post of the Deputy Chief of Mission at the US embassy Dhaka from 2006-2009.
Pasi has also served as Deputy Principal Officer at the US Consulate General in Frankfurt; Political Chief at Embassy Accra; Human Rights & Consular Officer at Embassy Bucharest; and Political and Economic Officer at US Consulate Douala. One of her postings was as Political Military Officer at the US embassy in New Delhi.
Pasi has also worked in Washington as Desk Officer for Afghanistan and for Mali, Niger, and Burkina Faso. She was also a Line Officer in the Executive Secretariat.
President Obama, while announcing his intention of nominating Pasi and three more people for important administration posts said, “I am pleased to announce that these experienced and committed individuals have agreed to join this Administration, and I look forward to working with them in the months and years ahead”.
A graduate from Duke University and masters in French Studies from New York University, Pasi currently works as the Director of East African Affairs in the Africa Bureau at the Department of State. Before this, Pasi held the post of the Deputy Chief of Mission at the US embassy Dhaka from 2006-2009.
Pasi has also served as Deputy Principal Officer at the US Consulate General in Frankfurt; Political Chief at Embassy Accra; Human Rights & Consular Officer at Embassy Bucharest; and Political and Economic Officer at US Consulate Douala. One of her postings was as Political Military Officer at the US embassy in New Delhi.
Pasi has also worked in Washington as Desk Officer for Afghanistan and for Mali, Niger, and Burkina Faso. She was also a Line Officer in the Executive Secretariat.
President Obama, while announcing his intention of nominating Pasi and three more people for important administration posts said, “I am pleased to announce that these experienced and committed individuals have agreed to join this Administration, and I look forward to working with them in the months and years ahead”.
Time-bound clearance for new projects
New Delhi: India could soon be an easier place to do business. The government is set to launch a project that will not just provide entrepreneurs the opportunity to seek all clearances for starting business at the click of a mouse but is also going to guarantee approvals in a specified number of days.
In all, around 35 approvals from authorities ranging from municipalities, state government agencies and the Centre are required to start a business. These could include registration under the Companies Act and the Shops & Establishment Act to registration for VAT and with the Income Tax authorities.
Infosys, which was selected two years ago to execute the project, is expected to help the government roll out the project in Andhra Pradesh by the end of the year, minister of state for commerce & industry Jyotiraditya Scindia told TOI. "This will be an additional window, especially for smaller companies and start-ups. All we are trying to do is put everything together without affecting the functioning of any of the agencies," Scindia said.
Though the e-biz portal, which is being tested, would also deal with export and import related registrations, a separate platform for trade is being developed. While states such as Delhi had shown interest, Andhra seems to have stolen a march for the moment.
For long, India, despite its attractiveness due to a large market and cheap labour, has ranked poorly in terms of ease of doing business. In International Financial Corporation's Doing Business Report 2011, India was placed 134 among 183 countries. When it came to starting a business, it was ranked even poorly at 165, as it took 29 days to complete 12 procedures. In terms of dealing with construction permits, it was at the 177th position since it took 195 days to get 37 permits.
Though the government has been trying to improve India's ranking for the last few years, it is only now that things seem to be falling in place. The commerce and industry ministry is also piloting the National Manufacturing Policy (NMP) to help businesses speed up the closure process, where India ranked 134th as it takes seven years to complete the formalities.
To begin with, in the proposed National Manufacturing & Investment Zones, the government has proposed a faster mechanism for settling the assets of a sick company. For instance, to settle labour dues independent of those of creditors, companies might be asked to purchase job loss policy from insurance companies to provide compensation for a specified number of days for every year of service rendered. Alternatively, a sinking fund could be maintained at the zonal level.
The NMP is in the final stages with Prime Minister Manmohan Singh scheduled to meet ministries over the next few weeks, officials said. But that would still leave the government with the task of enforcing contracts where India has a poor track record. The IFC report ranked India at 182 among 183 countries. But that's expected to be taken up only in the next phase.
In all, around 35 approvals from authorities ranging from municipalities, state government agencies and the Centre are required to start a business. These could include registration under the Companies Act and the Shops & Establishment Act to registration for VAT and with the Income Tax authorities.
Infosys, which was selected two years ago to execute the project, is expected to help the government roll out the project in Andhra Pradesh by the end of the year, minister of state for commerce & industry Jyotiraditya Scindia told TOI. "This will be an additional window, especially for smaller companies and start-ups. All we are trying to do is put everything together without affecting the functioning of any of the agencies," Scindia said.
Though the e-biz portal, which is being tested, would also deal with export and import related registrations, a separate platform for trade is being developed. While states such as Delhi had shown interest, Andhra seems to have stolen a march for the moment.
For long, India, despite its attractiveness due to a large market and cheap labour, has ranked poorly in terms of ease of doing business. In International Financial Corporation's Doing Business Report 2011, India was placed 134 among 183 countries. When it came to starting a business, it was ranked even poorly at 165, as it took 29 days to complete 12 procedures. In terms of dealing with construction permits, it was at the 177th position since it took 195 days to get 37 permits.
Though the government has been trying to improve India's ranking for the last few years, it is only now that things seem to be falling in place. The commerce and industry ministry is also piloting the National Manufacturing Policy (NMP) to help businesses speed up the closure process, where India ranked 134th as it takes seven years to complete the formalities.
To begin with, in the proposed National Manufacturing & Investment Zones, the government has proposed a faster mechanism for settling the assets of a sick company. For instance, to settle labour dues independent of those of creditors, companies might be asked to purchase job loss policy from insurance companies to provide compensation for a specified number of days for every year of service rendered. Alternatively, a sinking fund could be maintained at the zonal level.
The NMP is in the final stages with Prime Minister Manmohan Singh scheduled to meet ministries over the next few weeks, officials said. But that would still leave the government with the task of enforcing contracts where India has a poor track record. The IFC report ranked India at 182 among 183 countries. But that's expected to be taken up only in the next phase.
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