The government is set to announce a new aviation policy shortly to boost growth and ease business in the sector minister for Civil Aviation Ashok Gajapathi Raju said at a conference on “Aviation Day” on Tuesday (14 July). Speaking at the event organised by CII in partnership with the Ministry of Civil Aviation and IATA, Raju said that while all measures will be taken to ease the investment climate, there is an equal need for rules and regulations as well. “There is a need for rules but rules and regulations but they will not be kept just for the sake of rules,” the minister said. Elaborating on the new aviation policy that is expected to be taken up by the cabinet shortly, Secretary Civil Aviation R N Choubey said that the aviation policy would look at three major pillors- reducing cost of acquisition of aircrafts and airports and working with states to moderating taxes on ATF at the state level. “We are working to see that all states can bring down the VAT rates to 4 per cent on ATF; This is crucial as India has to import crude oil and moderate fuel prices are a key component to making the industry competitive,” he said. Earlier, Raju, asserted that regulations are here to stay, but rules will have to be amended for the growth of the sector. Different countries have experimented with different regulations as each country is unique in its market structure and design. India, which is known to be complex market, will have to borrow ideas from different markets and will have to modify these Ideas as per requirement to ensure growth of the aviation industry. The minister emphasized that Industry, Government of India and the States Government will have to work together to drive India’s emergence as the 3rd largest Global Aviation Market. The Government, he said, is committed in its resolve to ensure ease of doing business and is moving in that direction.Sanjay Reddy, Chairman, CII National Committee on Infrastructure & Vice Chairman, GVK Power and Infrastructure in his introductory remarks emphasized on the need for a healthy aviation industry. The aviation sector in the country needs to be made a profitable business venture, as huge amount of capital is required to support future growth of the sector. Currently, Indian aviation industry is growing at an average growth rate of 13 – 15%, while at the same time certain parts of the country is witnessing a growth rate of as high as 30%. Success, he said, lies in collaborative approach and suggested that Ministry of Civil Aviation could form a Committee having all stakeholders including Airlines and Airports to work together and make India the 3rd largest aviation market in the world.ashish.sinha@businessworld.in
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Euro zone leaders made Greece surrender much of its sovereignty to outside supervision on Monday (13 July) in return for agreeing to talks on an 86 billion euros bailout to keep the near-bankrupt country in the single currency.The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged leftist Prime Minister Alexis Tsipras to abandon promises of ending austerity and could fracture his government and cause an outcry in Greece."Clearly the Europe of austerity has won," Greece's Reform Minister George Katrougalos said."Either we are going to accept these draconian measures or it is the sudden death of our economy through the continuation of the closure of the banks. So it is an agreement that is practically forced upon us," he told BBC radio.If the summit had failed, Greece would have been staring into an economic abyss with its shuttered banks on the brink of collapse and the prospect of having to print a parallel currency and exit the European monetary union."The agreement was laborious, but it has been concluded. There is no Grexit," European Commission President Jean-Claude Juncker told a news conference after 17 hours of bargaining.He dismissed suggestions that Tsipras had been humiliated even though the summit statement insisted repeatedly that Greece must now subject much of its public policy to prior agreement by bailout monitors."In this compromise, there are no winners and no losers," Juncker said. "I don't think the Greek people have been humiliated, nor that the other Europeans have lost face. It is a typical European arrangement."Tsipras himself, elected five months ago to end five years of suffocating austerity, said he had "fought a tough battle" and "averted the plan for financial strangulation".Greece won conditional agreement to receive a possible 86 billion euros ($95 billion) over three years, along with an assurance that euro zone finance ministers would start within hours discussing ways to bridge a funding gap until a bailout - subject to parliamentary approvals - is finally ready.That will only happen if he can meet a tight timetable for enacting unpopular reforms of value added tax, pensions, budget cuts if Greece misses fiscal targets, new bankruptcy rules and an EU banking law that could be used to make big depositors take losses.German Chancellor Angela Merkel said she could recommend "with full confidence" that the Bundestag authorise the opening of loan negotiations with Athens once the Greek parliament has approved the entire programme and passed the first laws.The secretary-general of Merkel's conservatives said the Bundestag was likely to vote on Greece on Friday.Versailles In Brussels?Asked whether the tough conditions imposed on a desperate Greece were not similar to the 1919 Versailles treaty that forced crushing reparations on a defeated Germany after World War One, Merkel said: "I won't take part in historical comparisons, especially when I didn't make them myself."The deterioration of the Greek economy since Tsipras won office in January, and particularly in the last two weeks, had led to a much higher financing need, she said.One senior EU official calculated the cost to the Greek state of the last two weeks of political and economic turmoil at 25 to 30 billion euros. A euro zone diplomat said the full damage might be closer to 50 billion euros.Tsipras accepted a compromise on German-led demands for the sequestration of Greek state assets worth 50 billion euros - including recapitalised banks - in a trust fund beyond government reach, to be sold off primarily to pay down debt. In a gesture to Greece, some 12.5 billion euros of the proceeds would go to investment in Greece, Merkel said.The Greek leader had to drop his opposition to a full role for the International Monetary Fund in the next bailout, which Merkel had insisted on to win parliamentary backing in Berlin.In a sign of how hard it may be for Tsipras to convince his own Syriza party to accept the deal, Labour Minister Panos Skourletis said the terms were unviable and would lead to new elections this year.Six sweeping measures including spending cuts, tax hikes and pension reforms must be enacted by Wednesday night and the entire package endorsed by parliament before talks can start, the leaders decided.In almost the only concession after imposing its tough terms on Tsipras, Germany dropped a proposal to make Greece take a "time-out" from the euro zone that many said resembled a forced ejection if it failed to meet the conditions.Tsipras was subjected to a 17-hour browbeating by leaders furious that he had spurned their previous bailout offer on more favourable terms in June and held a referendum last week to reject it. Only France and Italy worked to try to soften the terms being imposed on Greece.Hard BargainSome diplomats questioned whether it was feasible to rush the package through the Greek parliament in three days. Tsipras is set to sack ministers who did not support him and make dissident Syriza lawmakers resign their seats, people close to the government said.Even if this week's rescue succeeds, many EU diplomats question whether an unstable Greece will stay the course on a three-year programme.Merkel, whose country is the biggest contributor to euro zone bailouts, said from the start that she would drive a hard bargain against a backdrop of mounting opposition at home to more aid for Greece.The final sticking point was Germany's insistence on an independent external trust fund to control state assets for privatisation. Berlin initially wanted to use a structure in Luxembourg managed by its own national development bank, KfW, but eventually relented.One diplomat said that was tantamount to turning Greece into a "German protectorate". But Merkel declared the matter a "red line" for Germany.Euro zone finance ministers were tasked with finding sources of immediate bridge funding for Greece if it passed the laws, to prevent it defaulting on a key payment to the ECB next Monday.Finance ministers said Greece needed 7 billion euros of funding by July 20, when it must make a crucial bond redemption to the ECB, and a total of 12 billion euros by mid-August when another ECB payment falls due.The ECB maintained emergency funding for Greek banks to keep them just afloat this week, a banking source said. But the finance ministry in Athens said the banks would remain shut for now.(Reuters)
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The government has capped the subsidy it will pay on kerosene at Rs 12 per litre while deciding to foot the entire bill on domestic cooking gas, a senior official said.The Finance Ministry will pay Rs 12 per litre in cash to state-owned fuel retailers and any unbridged gap between the retail selling price and the cost of production will be borne by upstream companies like ONGC, he said.Currently, oil companies sell kerosene at a loss of about Rs 18 per litre. Of this, the government will foot Rs 12 and the rest will come from upstream firms."At current oil prices, the upstream share for the full fiscal may be Rs 5,000-6,000 crore," he said.For LPG, the government has decided to fully bear the difference between the cost and the retail selling price.The Budget for 2015-16 has provided for Rs 22,000 crore towards LPG subsidy and another Rs 8,000 crore on kerosene."While provisioning for kerosene is sufficient, additional funds may have to be provided in supplementary demands for LPG," he added.(PTI)
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One of the Federal Reserve's most dovish officials said on Friday that September may turn out to be the right time to raise interest rates if the U.S. economy continues to improve, and he set a relatively high hurdle for delaying the move until next year. Boston Fed President Eric Rosengren said in an interview that while wild cards remain - including the recent drop in oil prices, China's economic slowdown, and the ongoing Greek debt crisis - the U.S. central bank could move to tighten policy at any upcoming meeting, including one in mid-September. "I don't rule out any of the meetings from here on out," Rosengren told Reuters by phone. "If we do continue to get improvement in labor markets, if we do become reasonably confident that we're moving back to 2-percent inflation, it may be appropriate as early as September," he said of raising rates from near zero. "I don't think we have seen that evidence yet but we still have a couple months of data to see whether it's more strongly confirmed." Rosengren has long advocated for more monetary accommodation than most of his colleagues at the central bank, which has kept interest rates at rock bottom to boost the recovery. With wages showing early signs of a pick-up and U.S. unemployment down to 5.3 percent, he set a high bar for delaying a hike. Only if labor markets unexpectedly weaken, if core inflation starts to drop off, or if the wage gains dissipated, "those would be the things that would make me want to pause and wait and see whether there is further evidence," he said. Rosengren, who does not have a vote on policy this year, predicted core personal consumption expenditure (PCE) inflation to rise to 1.3 percent by year end, from 1.2 percent now, and for it to hit about 1.6 percent by the end of 2016. He expects gross domestic product (GDP) to rebound to about 2.75 percent in the second half of this year. "But that could certainly go off track if we get an international shock that changes people's confidence," he said. The predictions, he said, show "only modest" improvement in inflation and they assume some tightening in labor markets. "That might make me start tightening, but exactly what the timing of that occurs depends" on incoming data, he added. If "international shocks turn out to not to be negative at all that would be very good news," Rosengren said. (Reuters)
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Retirement fund body Employees’ Provident Fund Organisation (EPFO) is considering a scheme for its subscribers so that they are able to own a house by retirement, Labour Minister Bandaru Dattatreya said in New Delhi on Friday. “We have to see that by retirement every EPFO subscriber has his own house. We are considering this,” he said while unveiling ‘Nidhi Aapke Nikat’ or ‘PF Near You’, a public outreach initiative for its 6 crore members. While he did not provide details of the scheme, sources said the ministry intends to collaborate with public sector undertaken (PSU) banks, housing finance companies, state-owned construction firms like NBCC and authorities like DDA, PUDA, HUDA to build houses at prices to be fixed by the government. EPFO’s Central Provident Fund Commissioner K K Jalan later told PTI that a committee comprising of EPFO trustees and senior Labour Ministry officials is working the proposal. The panel is expected to submit its report soon. He also said EPFO has proposed to increase the maximum sum assured under the Employees’ Deposit Linked Insurance Scheme 1976 to Rs.4.5 lakh, from Rs.3.6 lakh. At present, there are over 70% EPFO subscribers whose basic wages are less than Rs.15,000 per month who could benefit from the scheme. EPFO’s plan comes against the backdrop of the Centre’s recently launched mission - ‘Housing for All by 2022’. Dattatreya also said the EPFO would soon launch a service to provide details of subscribers account on their mobile phones. Jalan said the EPFO is in the process of launching a mobile application for availing services like passbook details. The app will be launched by year-end, he added. The ‘Nidhi Aapke Nikat’ initiative is aimed at increasing the interaction between the various stakeholders of EPFO. The ‘PF Near You’ would replace Bhavishyanidhi Adalat and would be held on 10th of every month starting from July, 2015. The programme was observed at all the 122 offices of the EPFO in the country. (PTI)
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Sutanu Guru wonders what exactly India can do with troubled and troublesome PakistanThe acronym PPP means many things to many people. For those talking about large industrial and infrastructure projects, PPP means public private partnerships (though some would prefer to call it private plunder of public!). For new age economists, PPP actually means purchasing power parity. For idealistic Indians unwilling to let the stark reality of hostility and terror stop them standing on candle lit vigils on the Wagah border, PPP stands for the fervently desired Pakistan peace problem. But for Prime Minister Narendra Modi and his team of geopolitical, foreign policy and security advisors, the best full form for the acronym PPP would Pakistan, a Permanent Problem. Chest thumping nationalists are already doing what they excel at after Modi held a one hour bilateral meeting with Pakistan Prime Minister Nawaj Sharif in Russia: they were thumping their chests. The joint statement issued after the “dialogue” had no mention of Kashmir. That, for our nationalists was yet another grand victory for Modi.People who still dream of restoring the “Akhand Bharat” can afford to nurse and nurture such delusions. Not ordinary Indians; and definitely not policy makers. There mere fact that no public mention was made of Kashmir is neither here, nor there. In a day or two, Pakistan is capable of doing mischief that would bring Kashmir squarely back in focus. Let’s face it: if the core issue that India has with Pakistan is terrorism, Kashmir has been a core issue for Pakistan since 1947. After all, it has fought three wars with India over Kashmir. Calling Pakistan irrational for wanting to gobble up Kashmir is not going to help. In the long run, for any kind of peace and trust to prevail, and for the two nations to behave like ordinary neighbors, both the Kashmir and the terror issue have to be resolved.This is where the Permanent Problem called Pakistan crops up. Nawaj Sharif might have shaken hands with Modi and nice words were aired subsequently. But the fact is that Sharif cannot take “any” decision related to India without the tacit, or explicit approval of the Pakistani military establishment. There are absolutely no signs yet that the Pakistani military establishment has come to the conclusion that its policy of inflicting a thousand bleeding cuts on India is not working and in fact becoming counterproductive. When close to 150 school children were massacred last December in Peshawar, many optimists felt the Pakistani military would finally accept the reality that it can no longer afford to distinguish between good terrorists (who target India) and bad terrorists (who target Pakistan). There is ample evidence to suggest that the good and bad terrorists are now allies and that Pakistani citizens are facing brunt of this Islamist fantasy that has spiraled out of control. But are the generals convinced yet? Not by a long shot. They still seem to think that the likes of Hafeez Saeed and LeT are useful weapons to keep India in a state of apprehension, if not terror.This will become even more glaring as the gap between India and Pakistan widens. Unless things go very wrong in the future, the Pakistani economy would be puny in comparison with the Indian economy by 2025. There is simply no way Pakistan would be able to match Indian expenditure and investment on defense, even f it continues to receive generous aid from “allies” like China and the United States. Quite simply, India would be way out of the league of Pakistan in the next decade. The only “military” threat that Pakistan can pose is nuclear weapons. But would a future leadership of Pakistan be so mad as to invite complete self annihilation by launching nukes on India? That leaves terrorism as the only strategic weapon that Pakistan can continue to use: in Kashmir, and elsewhere in India. Short of fighting a war that could potentially cripple the Indian economy, what else can India do? Waiting for powers like America to help is stupid; as long as their “homelands” are not directly threatened by Pakistani terrorism and terrorists, America, China, Germany et al will only “urge peaceful dialogue” and maybe diplomatically spank Pakistan once in a while. Quite simply, there still is no incentive for the Pakistani military to stop using terrorism as an instrument of foreign policy with India.There really are no easy options for India. That’s why this author thinks India could face a Permanent Pakistan Problem.
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Green Business Certification Inc. (GBCI), in conjunction with the International Finance Corporation (IFC), on Thursday (9 July) launched the EDGE green building certification system in India to jumpstart the mainstreaming of resource-efficient buildings across the country in a fast, simple and affordable way.An innovation of IFC, EDGE is a certification system for new residential and commercial buildings that enables design teams and project owners to assess the most cost-effective ways to incorporate energy and water saving options in their buildings.“By helping project teams implement financially attractive measures, EDGE will help push the new construction market in India forward,” said Mahesh Ramanujam, president of GBCI and chief operating officer of the U.S. Green Building Council (USGBC). “What’s more, strategies applied in EDGE can later be leveraged and upgraded to more comprehensive green building practices. . The market transformation of the global built environment will require widespread participation and cooperation. Certification programs such as EDGE are critical in order to achieve this success.” GBCI, the world’s premiere green building credentialing body, also certifies project and accredits professionals under USGBC’s fifteen year-old Leadership in Energy and Environmental Design (LEED) green building program, along with several other standards all within the sustainability and built environment arena including the WELL Building Standard, the PEER standard for power systems and SITES for sustainable landscapes. GBCI was selected by IFC to administer and certify EDGE projects in India because of the traction GBCI has gained globally in the certification and credentialing for sustainability standards. Daily, GBCI certifies 1.8 million square feet of construction space.“As the leader in the green building certification space, GBCI has the greatest potential to convince the Indian market to build resource-efficient buildings at scale through EDGE,” said Prashant Kapoor, IFC’s Principal Green Building Specialist. “GBCI’s willingness to take on this enormous challenge is a breakthrough in IFC’s ambition to promote green building growth in emerging markets in order to help tackle climate change.”“GBCI’s overarching mission is to transform the built environment,” added Ramanujam. “EDGE allows us to broaden our scope and affect market transformation on an even greater scale. By also certifying EDGE buildings at the entry level spectrum, we are furthering the education of the market when it comes to sustainable and efficient construction practices.”EDGE empowers builders to choose technical solutions while capturing costs and projected operational savings. The drivers behind EDGE are financial but the results are environmental – EDGE helps mitigate climate change by encouraging resource-efficient development.To reach the EDGE minimum standard, a building must achieve a 20 per cent reduction in energy and water consumption, as well as the energy used to make the construction materials. Green Business Certification Inc.Green Business Certification Inc. (GBCI) is the premier organization independently recognising excellence in green business industry performance and practice globally and ensuring global competitiveness and reduced environmental impact through its certification and credentialing standards.GBCI certifies green business industry performance and practice globally. Established in 2008, GBCI exclusively administers project certifications and professional credentials and certificates within the framework of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) green building rating systems as well as the PEER standard for power systems, the WELL building standard, the SITES standard for sustainable landscapes and the GRESB benchmark, which is used by institutional investors to improve the sustainability performance of the global property sector.
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Retailers fear that if e-commerce companies are allowed better access to foreign capital, the level playing field between two types of consumer services will be disturbed, Gurbir Singh and Vishal Krishna report As many as 12 big retailers, including Future Group, Landmark, Shoppers Stop and Globus, met Commerce Minister Nirmala Sitharaman in New Delhi on Wednesday and pitched strongly against the Union government's proposal to grant 100 per cent foreign direct investment (FDI) status to e-commerce and e-tailing companies. Led by Future Group CEO Kishore Biyani and Shoppers Stop vice chairman B.S. Nagesh, organised retailers demanded a level playing field between the brick-and-mortar retail industry and e-commerce. They also presented a memorandum highlighting the violations and what they call "malpractices" of e-tailing giants like Flipkart and Amazon, who they claim have made a mockery of the current 49 per cent cap on FDI in organised retail. "It was a good meeting. The minister gave us a long and patient hearing. We asked her: On what grounds was the government discriminating between physical retail and technology-based ecommerce?" Kishore Biyani told BW Businessworld. The Commerce Ministry has lined up a series of consultations with other stakeholders too. Sitharaman will meet e-tailing chains, including Flipkart, eBay and Snapdeal, on 10 July and the chief ministers of various states on 15 July before the issue is decided by the Union Cabinet. E-tailers have raised Rs 24,000 or more and the digital purchase of consumer goods has been galloping over the last 2-3 years. Impressed by the growth figures, the government is sympathetically looking at a proposal to grant this sector "100 percent FDI" status. "Investments will help e-tailers scale up to many more cities. Smartphone usage has been high and there is a clear trend that people will also shop from homes," says Vipul Parekh, co-founder of Big Basket. Retailers' ConcernsHowever, the details of the Commerce Ministry's intent are not yet out in the open. Retailers fear that if e-tailers are allowed better access to foreign capital, the level playing field between two types of consumer services will be disturbed and e-tailers will steal a march over access to supply chain logistics. The foreign monies raised by the e-tailers will enable them to create a strong warehouse-to-home connect, and they can even dominate in segments such as delivering fresh fruits and vegetables. Perhaps the only thing keeping e-tailers from making a clean sweep would be the fact that 70 per cent of Indians live in rural areas where access to smart phones and computers is limited. Management consultant Gartner predicts that there will be more than 240 million smart phones bought per year by the Indian public. The total broadband penetration can double to 200 million by the same period. But consultants have mixed reactions. "Policy in India cannot look at retailing in a western homogenous growth model. It surely cannot open up FDI without looking at the impact on socio-economic and cultural conditions," said Devangshu Dutta, CEO of Third Eyesight, a retail consultancy. He adds that the government needs to open up FDI in a phased manner. This is true because over the last three years there has been a policy paralysis that has stalled the retail industry. The e-tailers Flipkart, Snapdeal and Amazon follow a market place model and yet end up losing more than Rs 9,700 crore on discounting and reverse logistics alone. Hundred per cent FDI is allowed in market places. "The e-commerce industry needs a fillip and the government has already shown interest in making India an investor-friendly country," says Rajiv Khaitan, founder of Khaitan and Company, a law firm. "Rentals have always eroded the business profits of brick and mortar retailers," says Sanchit Vir Gogia, CEO of Greyhound Research. He adds that with FDI only in e-tailing they, the brick and mortar retailers, can use their stores more effectively in delivering goods through their own e-tail channels across cities and towns. "It saves so much real estate cost that can directly go in to shareholders income in the long run," says Gogia. Biyani, on the other hand, says the government's definition of e-commerce as technology-based trading as basically flawed. "Don't retailers like us use electronic technology to sell goods as well? Or, don't e-tailing chains have a huge brick-and-mortar backend? So on what basis is the government favouring e-commerce as a special category?" Biyani asks. The case of the retailers is that if the government wants to open 100 per cent FDI, it must do so for all retail trade, irrespective whether is sold through physical stores or through digital channels. This is something the Union government can do only if it willing to take on the wrath of several lakhs of mom and pop kirana stores in the country.
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