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India Economic & Investment Updates(2)
Herewith major economic & Investment updates. Those who are interested in having a detailed report, position paper, or policy framework have to contact us in the e-mails or telephone number listed above. Please also note that this service will be free of cost till 31st December 2014 and after that we propose to make it available only to members. For membership details, please contact us through the e-mails or telephone.
1. More states join the Uber Ban
The San Francisco based taxi aggregator, Uber, which is at the center of controversy on account of the rape committed by one of its drivers, is facing retaliatory steps from more states. Karnataka and Andhra Pradesh state governments have joined the Delhi government in banning the taxi service from plying. Maharahtra government seems to be still undecided on this issue. It may be noted that these states have maximum number of women workers in the IT industry, who have to work at night. Though there are company vehicles to ply them, some on week ends or off days, travel in hired transport.
2. GST May be a Reality Soon.
The much awaited Goods and Services Tax (GST), which is designed to eliminate the cascading effect of the indirect taxes may become a reality soon. The Center and sate governments are meeting regularly to thrash out the differences. A possible breakthrough is expected very soon since the Modi administration is very keen to implement the tax regime at the earliest. But policy watchers are of the opinion that the policy implementation my become a political issue since ruling BJP objected to the implementation of the composite tax, when they were in opposition.
3. Modi Administration Downplays CII's select leak of Industry's concern
Long back, the then Finance Minister Mr. R Venkataraman, who later became the President of India called Indian industry as Oliver Twist: More You Give More They Want. Many in the government feel that the CII's ploy (recently they held a close door meeting to gauge the industry response to Modi Administration's economic policy and diligently leaked the highlights to the press) is nothing short of a black mail by industrialists, who want everything in a platter. For countering the blackmail, the government machinery is working overboard in collating the information about the non-perming assets created by individuals industrialists and tax evasions they commit. While CII is making a veiled attack on the government, the other apex industrial bodies like FICCI and Assocham seem to be distancing themselves from the opinion. It is also heard that a section of the CII remembers are dissociating themselves from the view expressed by CII.
4, Putin Offers Helping Hand to Modi
Vladmir Putin, the Russian strongman, who is currently on a visit to India, seems to be wooing the Narendra Modi administration to join hands with his country for strengthening India's defense sector. The economic sanctions hit Russian economy to keep India on the right side has tempted the latter with direct trade in diamonds and offered technical and financial support for the ICT and energy sectors. Modi seems to have pitched for Russian assistance, both technical and financial -for his flag ship event-Make in India.
5. Major Shakeout in Indian Insurance Sector Expected.
In the event of passage of the Insurance Bill by both Houses of Parliament, a major shakeout is widely expected in the cash strapped insurance sector. Barring the state-run insurance companies and a very few private companies, almost all the players are running in loss. They may seek assistance from foreign players to make their working more operational. Newer products complying with IRDA guidelines are needed to stay in the competition.
6. PSU Banks to raise Resources from Capital Market
According to government sources, the public sector banks in the country needs Rs 2.4 lakh crore to infuse its capital to comply with the Basel 111 capital adequacy norms. The cabinet has already approved 10 PSU banks to go for stock sales. The overriding condition is that these banks should retain 52 percent of the government's share after the stock sales. The largest of the PSU bank -State bank of India-is expected to mobilize Rs 25,000 crore of the total approved limit of Rs 33,000 crore to meet the capital requirement.
7. Electronics Development Fund Formed
To give a boost to the electronics production in the country, the government has given approval to form the Electronics Development Fund. The fund to be operated by SIDBI or similar organizations will fund electronics and information technology entrepreneurship ventures. The fund will be available to both the government and private sector run companies.
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