Success in my Habit
Sunday, May 14, 2017
UK car exports to India grow 11-fold in 7 years, Jaguar Land Rover top list
India's longest highway tunnel to be inaugurated on April 2
The 10.89 km tunnel that has absorbed a sum of Rs 2519 crore in its construction, forms part of the proposed widening of National Highway 44 (old NH-1A) from Jammu to Srinagar will be inaugurated at 3 pm.
The tunnel is the longest highway tunnel in India boasting of features like Integrated Traffic Control System (ITCS), Video Surveillance System and FM Rebroadcast System, among others and will reduce travel time by approximately two hours, apart from promising fuel savings to the tune of 27 lakh per day.
"The tunnel has multiple economic gains as connectivity in the remote area can help transform the life of this neglected region in the hills. The credit goes to previous planners for having mooted this tunnel," S P Singh, senior fellow at the Indian Foundation of Transport Research and Training (IFTRT) told ET.
However, Singh added that the delay in the time for construction and the subsequent cost escalation could have been avoided.
The project has been dubbed as a "state of the art engineering marvel in the most difficult terrain pf Himalayas".
Lok Sabha clears Finance Bill 2017, mini reforms package
Accordingly, the government has made Aadhaar mandatory for filing of income-tax returns and for obtaining and retaining the permanent account number (PAN) from 1 July and capped legal cash transactions at Rs2 lakh, ensuring a paper trail for all high-value transactions.
To improve the ease of doing business and ensuring faster disposal of cases by various tribunals, the government will also reduce the number of tribunals and bring parity in pay and service conditions of the officials. The merger of eight tribunals with existing ones and pay parity for judges will ensure that these quasi-judicial bodies are adequately staffed, ensuring faster disposal of cases.
On Tuesday, when the amendments were introduced in Parliament, the opposition objected, saying the government was trying to legislate non-budgetary policies through the finance bill. Finance minister Arun Jaitley denied this and the introduction of the amendments was allowed by the speaker.
The finance bill is a money bill and needs only to be cleared by the Lok Sabha, where the Bharatiya Janata Party-led NDA has a clear majority.
Under the new amendments, the Competition Appellate Tribunal will be merged with the National Company Law Appellate Tribunal (NCLAT).
Lalit Kumar, corporate partner at law firm J. Sagar Associates, said, “Having one forum always helps. It’s definitely a positive move done to avoid multiplicity of tribunals. Tribunals like the NCLAT are already important with a judge and a technical member at the helm dealing with commercial matters.”
The amendments and measures announced earlier in the budget, including one to clean up political funding, mean the government has managed to push through significant reforms in this year’s budget. The changes will come into effect once the finance bill receives the President’s nod.
Replying to the debate in Parliament, Jaitley defended the government’s decision to make Aadhaar mandatory for filing of tax returns and for obtaining and holding on to the PAN, calling it an “anti-evasion” measure.
Explaining the rationale, Jaitley said that linking PAN with Aadhaar would help in weeding out multiple PANs held by one individual. “One person has made five PAN cards. These are then used for tax evasion. That is why we have made Aadhaar mandatory. This reduces the possibility of this kind of tax fraud and evasion,” he said.
Jaitley also defended the government’s decision to modify provisions related to search operations by the income-tax department in the finance bill, stating that no arbitrary powers have been given to the tax department.
Explaining the changes in Section 132A of the income-tax Act, Jaitley said it was important to protect the sources of information of the taxmen.
As per proposed changes to the section, taxmen will not have to disclose the reason for which the search was conducted to any person, authority or appellate tribunal.
“The current situation was such that if anyone challenged the search, then the sources of information had to be disclosed by the tax official. The sources of information started drying up. For instance, an employee will not disclose tax evasion by the head of the company for fear of disclosure. The change has been that now only the court can look into the source of the information but not anyone else,” Jaitley said.
“Before any search, if a tax officer gets information about undisclosed income with a particular taxpayer, the reasons for such a move have to be written in the search order. There is no change in this. This still has to be recorded,” he said.
The finance minister also reiterated that agricultural income is not taxed and would not be taxed in the future.
Earlier in the debate, the government was criticized for its decision to make Aadhaar mandatory for tax purposes.
“Supreme Court still hasn’t decided (on making Aadhaar mandatory). You are giving subsidy through Aadhaar. That is fine. But in this case, the tax is being paid to the government. Why should Aadhaar be made mandatory?” questioned Bhartruhari Mahtab, a Biju Janata Dal MP from Odisha.
Shreeja Sen contributed to this story.
Dream of 'Har Ghar Jal' will be realized by 2030: Tomar
New Delhi: Government today launched National Water Quality Sub Mission on Arsenic and Fluoride to provide safe drinking water to about 28,000 affected habitations in the country by March 2021 with an outlay of Rs 25,000 crore. Inaugurating the mission here in collaboration with the States, the Union Minister for Rural Development, Drinking Water and Sanitation and Panchayati Raj Shri Narendra Singh Tomar said that while West Bengal is badly affected by the problem of arsenic, Rajasthan suffers from presence of fluoride in drinking water with serious health hazards. He said, there are about 17 lakh 14 thousand rural habitations in India, of which about 77 percent have been provided with safe drinking water of more than 40 liters per person per day and about 4 percent of the habitations are suffering from problems of water quality. The Minister assured the participating delegates that there will be no discrimination of funds against any state to address the twin challenges of drinking water and sanitation. Ministers of Drinking Water and Sanitation from 12 States participated in the National Workshop on Water for All and Swachh Bharat.
Shri Tomar said that Government is committed to providing tap water on a sustained basis in every household by 2030 as per the United Nations Sustainable Development Goals for which Rs 23,000 crore of central fund will be required annually till the target is achieved. The Minister said that the dream of ‘Har Ghar Jal’ cannot be realized without the involvement of the citizens. He said that there are about 2,000 Blocks in the country with an acute shortage of surface and ground water sources and called for conservation of water on war footing through convergence of schemes like MGNREGA.
Dwelling on the issue of Swachhta, Shri Tomar said that sanitation coverage has increased from 42 percent to 62 percent since the launch of the Swachh Bharat Mission, SBM in October 2014. He said, apart from Sikkim, Himachal Pradesh and Kerala which are ODF (Open Defecation Free) States, 4 to 5 more States can become ODF in next six months. So far, 119 districts and 1.75 lakh villages have become ODF and the Centre has announced to incentivize the states for their timely progress. The Minister informed that since the launch of the SBM, more than 3.6 Crore toilets have been constructed in the rural areas and 16.41 lakh toilets were constructed under MGNREGA. He said, when we are seeking to transform India into a 21st century economic giant: open defecation and garbage cannot be part of this vision.
Shri Tomar along with the Minister of State for Drinking Water and Sanitation Shri Ramesh Jigajinagi launched Water APP on the occasion. The Minister also gave away prizes to various state governments for exemplary work done in the areas of sanitation and drinking water.
Cabinet approves of proposal to establish a Fund of Fund for Start-ups (FFS)
New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the following proposals with regard to the Fund of Funds of Start-ups (FFS) which was established in June, last year with a corpus of Rs. 1,000 crores.
i.Alternate Investment Funds (AIFs) supported by FFS shall invest at least twice the amount of contribution received from FFS in Start-ups qualifying as per the Gazette Notification G.S.R.180 (E) dt. 17/02/2016. Further, if the amount committed for a Start-up in whole has not been released before a Start-up ceases to be so, the balance funding can continue thereafter.
ii.It was also decided that operating expenses for carrying out due diligence, legal and technical appraisal, convening meeting of Venture Capital Investment Committee, etc. would be met out of the FFS to the extent of 0.50% of the commitments made to AIFs and outstanding. This will be debited to the fund at the beginning of each half year; i.e. April 1 and October 1.
Background
The Union Cabinet in its meeting held on 22/06/2016 had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs.10000 crore, with contribution spread over the 14th & 15th Finance Commission cycles based on progress of implementation and availability of funds. It was decided that the FFS shall contribute to the corpus of Alternative Investment Funds (AIFs) for investing in equity and equity linked instruments of various start-ups at early stage, seed stage and growth stages.
The FFS is being managed and operated by Small Industries Development Bank of India (SIDBI). FFS contributes to SEBI registered Alternative Investment Funds (AIFs) that may go up to a maximum of 35% of the corpus of the AIF concerned.
The Cabinet on 22.06.2016 had decided that the corpus of Fund of Funds along with counterpart funds raised by the AIFs in which FFS takes equity would be invested entirely in Start-ups. It has been pointed out to the Department during its interactions with various stakeholders that investors in the AIFs would prefer that the portfolio of AIFs is adequately diversified to manage the investment risks appropriately and if the entire pool of funds of the AIF is invested in Start-ups, it poses unacceptable risks to the investors of such AIFs.
The other issues raised by stakeholders were that the process of funding of Start-ups by AIFs is long drawn which starts from pitching by a Start-up, commitment by the AIF and then release of funds in tranches. Thus it is possible that before release of the final instalment the turnover of the Start-up crosses Rs. 25 crores but it still needs funds to meet its growth requirements. Besides, Start-ups need access to funds through various stages of their life cycle, viz. early stage, seed stage and growth stage.
It was also pointed out to the Department by SIDBI that the present provisions don’t provide for SIDBI to get compensated for activities done post sanction to AIFs.
These decisions have been taken to in the backdrop of the above concerns.
i.Alternate Investment Funds (AIFs) supported by FFS shall invest at least twice the amount of contribution received from FFS in Start-ups qualifying as per the Gazette Notification G.S.R.180 (E) dt. 17/02/2016. Further, if the amount committed for a Start-up in whole has not been released before a Start-up ceases to be so, the balance funding can continue thereafter.
ii.It was also decided that operating expenses for carrying out due diligence, legal and technical appraisal, convening meeting of Venture Capital Investment Committee, etc. would be met out of the FFS to the extent of 0.50% of the commitments made to AIFs and outstanding. This will be debited to the fund at the beginning of each half year; i.e. April 1 and October 1.
Background
The Union Cabinet in its meeting held on 22/06/2016 had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs.10000 crore, with contribution spread over the 14th & 15th Finance Commission cycles based on progress of implementation and availability of funds. It was decided that the FFS shall contribute to the corpus of Alternative Investment Funds (AIFs) for investing in equity and equity linked instruments of various start-ups at early stage, seed stage and growth stages.
The FFS is being managed and operated by Small Industries Development Bank of India (SIDBI). FFS contributes to SEBI registered Alternative Investment Funds (AIFs) that may go up to a maximum of 35% of the corpus of the AIF concerned.
The Cabinet on 22.06.2016 had decided that the corpus of Fund of Funds along with counterpart funds raised by the AIFs in which FFS takes equity would be invested entirely in Start-ups. It has been pointed out to the Department during its interactions with various stakeholders that investors in the AIFs would prefer that the portfolio of AIFs is adequately diversified to manage the investment risks appropriately and if the entire pool of funds of the AIF is invested in Start-ups, it poses unacceptable risks to the investors of such AIFs.
The other issues raised by stakeholders were that the process of funding of Start-ups by AIFs is long drawn which starts from pitching by a Start-up, commitment by the AIF and then release of funds in tranches. Thus it is possible that before release of the final instalment the turnover of the Start-up crosses Rs. 25 crores but it still needs funds to meet its growth requirements. Besides, Start-ups need access to funds through various stages of their life cycle, viz. early stage, seed stage and growth stage.
It was also pointed out to the Department by SIDBI that the present provisions don’t provide for SIDBI to get compensated for activities done post sanction to AIFs.
These decisions have been taken to in the backdrop of the above concerns.
Saturday, May 13, 2017
MakeMyTrip raises US$ 330 million from Ctrip.com, Naspers, others
MakeMyTrip said in a statement on Wednesday that it had entered into a definitive share purchase agreement with unnamed investors for ordinary shares worth $165 million (it plans to issue 4.58 million shares at $36 apiece).
The company added that it plans to issue 916,000 ordinary shares to Ctrip at $36 per share, and 3.66 million Class B convertible ordinary shares at the same price to MIH Internet SEA Pte, a subsidiary of Naspers.
The shares issued to Naspers will be convertible into ordinary shares of the company on a one-to-one basis, MakeMyTrip said.
The fresh capital infusion comes after MakeMyTrip, one of India’s first consumer Internet companies, which is also listed on NASDAQ, bought rival Ibibo Group’s travel business in India in an all-stock deal in October 2016 for about $720 million.
The move created the country’s largest online travel firm which, according to a note by Morgan Stanley, is worth $1.8 billion.
The money will come in handy for MakeMyTrip which is seeing increasing competition in its ticketing business from rivals including Yatra and Cleartrip, as well hospitality start-ups including the SoftBank-backed OYO Rooms (Oravel Stays Pvt. Ltd).
Over the years, MakeMyTrip has also started focusing on tours and hotel bookings that have higher profit margins than ticketing.
According to industry executives and experts, air ticket bookings offer a gross margin of 5-7% as against 10-20% hotel bookings offer.
According to an investor presentation by MakeMyTrip in April, the firm’s air ticketing transactions grew 28% in 2015-16 and tours and hotel bookings by 126% the same year. Net revenue in the air ticketing business grew 14% year-on-year; that in the tours and hotels business rose 45%.
A senior executive at MakeMyTrip said the company would invest in its hotels business and in redBus, the bus ticketing platform it acquired from Ibibo.
“As we penetrate deeper into tier II/III cities, budget hotels and homestays will be important,” said Rajesh Magow, co-founder and chief executive officer, India, at MakeMytrip, adding that this segment would drive growth. For MakeMyTrip, the premium hotel segment “is also important” because it helps the cause of consumer loyalty, Magow added.
MakeMyTrip’s revenues are currently split almost equally between ticketing and tours and hotel bookings, he said.
MakeMyTrip also plans to use the funds to expand overseas, especially in South-East and West Asia, and strengthen its business-to-business vertical to cater to small and medium enterprises, before rolling out the product for larger corporate entities.
“We are building a product which is a user-friendly tool to enable travel booking. This will be ready in 3-4 weeks. We will begin with SMEs as there are no massive structures and procurement processes (in them),” said Magow.
According to industry experts, the fresh capital will give the company ammunition to expand its lead over competitors.
“This capital is meant to grow the combined entity in an accelerated pace. The focus on hotels is understandable as this is an unsolved problem,” said Rutvik Doshi, director at Inventus (India) Advisors. “A large number of hotels do not have proper administrative or accounting processes and not even marketing capabilities. Getting the long tail of hotels online, especially the ones in smaller cities and towns, will require immense capital and effort.”
A ton of energy going into India: Tim Cook
At the analyst call after the second quarter earnings early Wednesday (India time), Chief Executive Tim Cook said, “We’re very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure.” Cook said in his opening address that revenue in India grew by strong double digits during the quarter ended April 1, setting a record.
Chief Financial Officer Luca Maestri quantified the “strong double-digit” growth for India — over 20 per cent. The company achieved double-digit growth in the US, Canada, Australia, Germany, the Netherlands, Turkey, Russia and Mexico, Maestri said. “Our growth rates were even higher, over 20 per cent in many other markets, including Brazil, Scandinavia, the Middle East, Central and Eastern Europe, India, Korea and Thailand.”
Globally, Apple sold 50.76 million iPhones in its second quarter financial year, down from 51.19 million a year earlier during the corresponding period. In India, around 2.5 million iPhones are estimated to have been sold between October 2015 and September 2016.
While the talk on India revolved around high growth (mainly of iPhones) and 4G network access, top executives remained tight-lipped on the regulatory hurdles Apple faces in the country as well as on the company plans in this geography.
For instance, when Simona K Jankowski of Goldman Sachs asked Cook if it was reasonable to assume that Apple would sell 10 million to 20 million iPhones in India next year, keeping in mind the growth and 4G roll-out, the chief executive officer spoke of having “a ton of energy going into the country on a number of fronts”. According to the transcript of the analyst call available at Seeking Alpha website, Cook said, “We’ve been investing quite a bit… it is the third-largest smartphone market in the world today behind China and the US… So, we believe, particularly now that the 4G infrastructure is going in the country and is continuing to be expanded, there’s a huge opportunity for Apple there. So that and the demographics of the country is why we’re putting so much energy there.”
To another question from Jim Suva of Citigroup Global Markets on Apple’s road map for India and whether it needed to work more with the government to set up stores and production units as well as to improve sales further, Cook agreed that the company was “underpenetrated there”. The company is “bringing all the things that we brought to bear in other markets that we’ve eventually done well in, and that’s from channel to stores to our ecosystem and so forth,” Cook added. He referred to India’s growth rates in relation to iPhone sales as “really good by most people’s expectations”, but said, “maybe not mine as much”. Cook’s meeting with Prime Minister Narendra Modi last year in New Delhi had centred on the promise that India market held, and the country has delivered in terms of consumer response.
The company is bringing all the things to the India market, Cook said. But when and how are among the questions that have kept industry watchers glued to the scene. Business Standard spoke to people close to the company and analysts to piece things together on Apple’s likely India road map for setting up fully-owned stores, starting manufacturing in the country, stepping up assembly lines, selling Apple-certified pre-owned phones and opting for the e-commerce route.
Store plan can wait
Even as Apple had proposed early in 2016 to set up fully-owned stores in India, 30 per cent local sourcing norm as part of the single brand retail foreign direct investment policy (FDI) policy has kept the plan on hold. A senior official at the Department of Industrial Policy and Promotion (DIPP) told this newspaper recently, “There’s been no retail proposal from Apple for a long time.”
Sources in the know said that the company was clear that compliance with the sourcing clause was not feasible. Case-to-case approval for niche cutting-edge companies was among the solutions devised by bureaucrats so that a company such as Apple could be spared from mandatory local sourcing. But definition of cutting-edge has been in the making for at least a year. Even as the government subsequently decided that a company manufacturing substantially in India would not have to comply with sourcing norms for owning retail outlets, the mathematics is still not working out for Apple, a source said.
There’s no show-stopper time frame for opening stores in India, a person familiar with the workings of the tech major said. Currently, there are franchisee stores in the country. “Apple could wait for long, till it has the right environment to set up stores as these are iconic destinations the world over. Typically, the company would not look at more than two to three stores in five to 10 years.” He cited global numbers to explain that Apple has no flagship store in many countries, including in Singapore. Dubai recently opened one. There are 495 stores in 18 countries, with maximum in the US, followed by Canada. China is high in the pecking order, too, with 40 stores, but Belgium, Mexico, Macau have only one each; the UAE, Netherlands and Sweden have three each; Turkey and Brazil have two each.
ADB sees India growing 7.4% in 2017-18, says GST, bankruptcy law big positives
World's highest railway bridge is coming up over the Chenab in J&K
Cabinet approves National Steel Policy 2017
The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
Key features of the NSP 2017:
1. Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs
2. Encourage adequate capacity additions,
3. Development of globally competitive steel manufacturing capabilities,
4. Cost-efficient production
5. Domestic availability of iron ore, coking coal & natural gas,
6. Facilitating foreign investment
7. Asset acquisitions of raw materials &
8. Enhancing the domestic steel demand.
The policy projects crude steel capacity of 300 million tonnes (MT), production of 255 MT and a robust finished steel per capita consumption of 158 Kgs by 2030 - 31, as against the current consumption of 61 Kgs. The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
Some highlights of New Steel Policy
The Indian steel sector has grown rapidly over the past few years and presently it is the third largest steel producer globally, contributing to about 2% of the country's GDP. India has also crossed 100 MT mark for production for sale in 2016-17.
The New Steel Policy, 2017 aspires to achieve 300MT of steel-making capacity by 2030. This would translate into additional investment of Rs. 10 lakh Crore by 2030-31.
The Policy seeks to increase consumption of steel and major segments are infrastructure, automobiles and housing. New Steel Policy seeks to increase per capita steel consumption to the level of 160 Kgs by 2030 from existing level of around 60 Kg.
Potential of MSME steel sector has been recognised. Policy stipulates that adoption of energy efficient technologies in the MSME steel sector will be encouraged to improve the overall productivity & reduce energy intensity.
Steel Ministry will facilitate R&D in the sector through the establishment of Steel Research and Technology Mission of India (SRTMI). The initiative is aimed to spearhead R&D of national importance in iron & steel sector utilizing tripartite synergy amongst industry, national R&D laboratories and academic institutes.
Ministry through policy measures will ensure availability of raw materials like Iron ore, Coking coal and non-coking coal, Natural gas etc. at competitive rates.
With the roll out of the National Steel Policy-2017, it is envisaged that the industry will be steered in creating an environment for promoting domestic steel and thereby ensuring a scenario where production meets the anticipated pace of growth in consumption, through a technologically advanced and globally competitive steel industry. This will be facilitated by Ministry of Steel, in coordination with relevant Ministries, as may be required.
Background:
Steel is one of the most important products in the modern world and forms the backbone to any industrial economy. India being one of the fastest growing economies in the world, and steel finding its extensive application right from construction, infrastructure, power, aerospace and industrial machinery to consumer products, the sector is of strategic importance to the country. The Indian steel sector has grown exponentially over the past few years to be the third largest producer of steel globally, contributing to about 2% of the country's GDP and employing about 5 lakh people directly and about 20 lakh people indirectly.
Untapped potential with a strong policy support becomes the ideal platform for growth. Owing to the strategic importance of the sector along with the need to have a robust and restructured policy in present scenario, the new NSP, 2017 became imminent. Though, National Steel Policy 2005 (NSP 2005) sought to indicate ways and means of consolidating the gains flowing out of the then economic order and charted out a road map for sustained and efficient growth of the Indian steel industry, it required adaptation in view of the recent developments unfolding in India and also worldwide, both on the demand and supply sides of the steel market.
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