Flush with the success of a millionaire visa programme to attract wealthy Chinese, Australia is now promising citizenship to rich Americans who are willing to bring their cash and entrepreneurial talent Down Under.But there's a rather large catch: participants in the invitation-only Premium Investment Visa scheme will need to invest A$15 million ($11.57 million) for the privilege of becoming an Aussie.Launched earlier this month but not widely publicised, the scheme's investment requirements easily top the existing two-year-old Significant Investor Visa (SIV) programme, which asks for a A$5 million commitment and has been especially popular with Chinese migrants.Investment advisors who have been briefed on the plan by government officials expressed doubts about the wisdom of targeting Americans, with several telling Reuters the more obvious place to start was Australia's Asian neighbours.AdvertisingAfter all, why would a successful U.S. entrepreneur want to invest a large chunk of cash in Australia - a country very similar to the United States, just further away from everything - in exchange for a passport that carries few additional benefits to their own?"The U.S. has some problems that Australia doesn't have. It's got a lot more racial crimes, it's got a lot more gun-related crimes, but I don't think that is going to drive a whole bunch of ultra-rich Americans out of their country," said Bill Fuggle, a partner at law firm Baker & McKenzie who advises wealthy Chinese migrating to Australia.The programme, which does not have any residency requirement, allows would-be migrants to invest pretty much anywhere except housing. In comparison, Significant Investor Visa holders must put at least 40 percent of their A$5 million investments in risky small-cap and venture capital funds, and be an Australian resident for 40 days a year for four years.Not About MoneyThe Australian Trade Commission (Austrade) revealed for the first time that the programme would begin in the United States, Australia's top two-way investment market, before expanding to other major investment markets such as the United Kingdom.Despite the hefty investment requirement, officials say it's not about the money. It's about attracting the best and brightest entrepreneurial talent from around the globe, and from America in particular."The United States ... is a natural place to target the kinds of entrepreneurial skills and talents we need to cultivate further in Australia," Austrade told Reuters in an email.U.S. "innovators" would help to build links between Australians and "entrepreneurial hubs" such as Silicon Valley, Los Angeles and Boston, it added."Australia has long been a place of innovative ideas, research and development, but has often lacked the capital, depth of entrepreneurial talent or scale to commercialise our ideas successfully," Austrade said.Australia's national science agency, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), boasts inventions such as WiFi, high-nutrient grains and a new way of making plastics that is already the basis of more than 200 patents. But it often struggles to bring its ideas to market due to a lack of venture capital.For the fourth consecutive year, Australia made the Top 10 global destinations for foreign direct investment in 2014, according to the UN Conference on Trade and Development. It ranked 8th, one ahead of the UK, and is one of only four developed countries in the Top 10.Tax experts said that while there were no major tax advantages for Americans in Australia, the depreciating Aussie dollar and the country's proximity to emerging markets like Indonesia and China could help to attract U.S. talent.Another recent area of heightened U.S. interest in Australia is the stock market, which is being eyed as a fundraising vehicle for venture capital-shy U.S. tech start-ups after the successful listing of San Francisco-based online recruiter 1-page 1PG.AX in October.Apple Inc AAPL.O co-founder Steve Wozniak is the most famous U.S. entrepreneurial talent to take up Australian residency, after his son married an Australian and migrated to Sydney."No country is perfect, but I like a lot of things about this place," he told the Australian Financial Review newspaper in December. Wozniak declined to be interviewed for this story.China RisingMore than 90 percent of the roughly 3,000 applicants for Significant Investor Visas are Chinese who wish to move to Australia for a better lifestyle or to avoid a sweeping corruption crackdown at home.Americans hardly figure among those being granted SIVs, fuelling doubts about how many will be interested in a "premium" visa."America and Australia are very similar countries. You could move from San Francisco to Sydney and it would be almost the same life," Baker & McKenzie's Fuggle said."So we are much more likely to get ultra-high net-worth Chinese entrepreneurs than Silicon Valley Americans."(Reuters)
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Higher food prices pushed India's retail inflation to an eight-month high in June, government data showed on Monday (13 July), dampening hopes of an interest rate cut by the central bank in the near future. Retail prices rose to 5.4 per cent year-on-year in June, higher than the 5.01 per cent print in May and the 5.1 per cent annual rise predicted by analysts in a Reuters poll. Food prices were up 5.48 per cent from 4.8 per cent in May. "The surprising factor for CPI to go up was that it was food driven ... we expect the RBI (central bank) to be on hold for now," said Sonal Varma, India economist at Nomura. A stronger-than-expected rise in prices is likely to fuel fresh inflation concerns for the Reserve Bank of India (RBI), which targets inflation of 6 per cent by January. Economists said the latest number will dampen enthusiasm for what would be the year's fourth rate cut, particularly given a patchy start to the rainy monsoon season. A Reuters poll released last month showed economists expected the RBI to keep the policy rate unchanged at a policy review next month, but cut it by 25 basis points in the final quarter. "Any hope of a rate cut in the near future is off the table now, given this kind of number, combined with the fact the monsoon has been weaker in the last couple of weeks," said Gaurav Kapur, senior economist at the Royal Bank of Scotland. India recorded above-average rains in June but forecasters have said the rains, critical for about half the nation's farmland that lacks irrigation facilities, would remain subdued in large parts of the country in the first half of July. India's consumer price inflation edged up to 5.40 per cent in June, government data showed on Monday (13 July). The data compared with a 5.10 per cent annual rise predicted by analysts in a Reuters poll and 5.01 per cent print in May. Retail food inflation rose to 5.48 per cent last month from 4.80 per cent in May.(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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Indirect tax revenues grew 37.5 per cent in the first quarter of current fiscal, which reflects a healthy growth in the economy, Chief Economic Advisor Arvind Subramanian said on Saturday (11 July). "In April-June over the comparable period last year, indirect tax revenue grew a robust 37.5 per cent," he said, without giving out the actual collection numbers. Subramanian said this indirect tax collections reflect in part the effect of the additional measures taken by the central government, including an excise duty increase on diesel and petrol and gold, besides a hike in service tax rate from June 1. He said that excluding these new measures, the indirect tax collections -- which include excise, Customs and service taxes -- grew 14.5 per cent in the first quarter from a year ago. "Given that GDP growth is the tax base, what it suggests is that the underlying nominal GDP growth is growing at a healthy pace," he said. However, the index of industrial production (IIP) data released yesterday showed that the growth in factory output in the first two months of the fiscal was 3 per cent as against 4.6 per cent in April-May of 2014-15.(PTI)
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Monsoon may have brought heavy rains elsewhere in the country, but cotton and soyabean farmers in Haldola face zero crop this season if there is no rain in the next ten days. Text by CH Unnikrishnan and photos by Umesh GoswamiEven as the state government of Maharashtra claimed in June that 70 per cent of sowing in the state's total 142 hectares of farm land marked for Kharif planting is complete after a promising start of monsoon, the key Marathwada region is already under the fear of an imminent drought.Hundreds of cotton and soyabean farmers at Haldola village in Jalna near Aurngabad have already seen the saplings shrunk to half the size as there weren’t enough rain after the first few in June. “If the rain doesn’t come in another ten days, all these plants will die,” says Girdhari Matre, a cotton farmer in Haldola village.As the state claimed, sawing of Kharif crops including cotton and soyabean is almost complete in Haldola, where most of the farmers are small and unorganised with a maximum farm land of 1.5 to 2 acres in possession.With no alternative source of irrigation, these farmers are fully dependent on rain in all the sowing seasons and have been under distress with repeated crop failures due to poor monsoon..Farmers in Haldola village told BW that most of them sowed in maximum area this time as there were signs of a good monsoon at the beginning. But, the situation is already worse with hardly any rain afterwards.Maharashtra agriculture minister Eknath Khadse had said in June that sowing of crops in Maharashtra has increased nearly 64 per cent in this season on the back of healthy rains across the state.“We took loans from private lenders at a rate which is as high as 48 per cent (upto 4 per cent monthly) to have maximum sowing,” says Kailash Narasahib Matre, whose family jointly owns some 18 acres of farm land for Kharif crops in Haldol.Haldola farmers, mostly grow BT cotton and hybrid soyabean as it is the case in most part of Jalna and Aurangabad districts, also said banks have almost stopped fresh lending as earlier loans are still unpaid due to bad crops in the last few seasons due to poor monsoon. . Most of the farmers, who have been now depending on their children's paltry income earned through unskilled jobs at the nearby industrial units in Aurangabad industrial zones and others, say their livelihood from the traditional farming is no more a dependable option and the mounting loan liabilities lead them to more distress.Though the state government have had "introduced" several farmer friendly schemes including farm subsidies, loan restructuring etc, the actual beneficiaries are often large scale farmers and the middlemen.Although the state government is now planning to device modern technologies such as cloud seeding etc., to overcome poor monsoon, many question the practicality and real outcome of such projects.
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Industrial production in May slowed to 2.7 per cent from 5.6 per cent a year ago, dragged down by manufacturing, strengthening the case for an RBI rate cut. The Index of Industrial Production (IIP) for April too has been revised downwards to 3.36 per cent from the earlier estimate of 4.1 per cent. The growth in the first two months of the fiscal was 3 per cent as against 4.6 per cent in April-May of 2014-15. According to the data released this evening, a sharp deceleration in output was witnessed in the manufacturing sector though there was some pick-up in mining activity. Growth in power generation too saw a marginal slowdown at 6 per cent from 6.7 per cent in May of the last fiscal. The growth in manufacturing was 2.2 per cent in May compared with 5.9 per cent in the corresponding month of the last year. The mining sector expanded 2.8 per cent compared with 2.5 per cent in May 2014. Manufacturing constitutes over 75 per cent of the index. The numbers further showed a slowdown in user-based industries, including capital goods and consumer durables. Output in the consumer goods, consumer durables and consumer non-durables segments shrank 1.6 per cent, 3.9 per cent and 0.1 per cent, respectively. The growth in capital goods group was meagre 1.8 per cent in the month under review as against 4.2 per cent year-on-year. The declaration in the industrial output may prompt RBI to consider industry demand of an interest rate cut in the next bi-monthly monetary policy meet on August 4. Besides data on industrial output and inflation, the central bank would also factor in spread of monsoon while deciding its monetary stance. (PTI)
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A recent study by a rating agency predicts that it will take some more years for the private final consumption expenditure to gather momentum and increase households demand for goods and services, writes Arshad Khan Rating agency India Ratings and Research expects the private final consumption expenditure to expand 8.1 per cent in FY16 from the estimated growth at 7.1 per cent in FY15. For the fiscal 2014 it stood at 6.2 per cent.The growth is still well below what was witnessed during FY06-FY12, when India’s consumption expenditure was at its peak. Consumption demand growth was down to 5.5 per cent in FY13.According to RBI, both near-term and longer-term inflationary expectations of households eased to 7-8 per cent in March 2015 from 15-17 per cent in September 2014. The rating agency believes this will help consumption demand to improve further. Though improvement in consumer sentiments is seen but still it will take a while for PFCE to gather momentum after a high and sustained inflation for four years.The root cause for the low demand was the high and continuous inflation which hampered the growth rate of the economy. This created uncertainty over the price of goods and services in the economy, adversely impacting both consumption and investment decisions.The rating agency expects the gross fixed capital formation (investment) to grow 6.9% in FY16 from the advance estimate of 4.1 per cent for fiscal 2015. The growth will be witnessed primarily by the budgetary aid and policy push to manufacturing/ infrastructure concerns by the government. By pushing pro-industrial policies like land acquisition, carrying out mining/spectrum auctions and increasing the foreign direct investment limit in insurance, the Modi Government is showing its resolution to improve the investment climate in the country. RBI’s recent cut in interest rates has further boosted the investment climate. As noted above, government expenditure is also likely to push up aggregate demand in the economy in FY16. The report also adds that the government final consumption expenditure in the economy could grow at 8.9 per cent in FY16 (FY15: 10.0 per cent).
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Indian firms battling towering debts are calling for more interest rate cuts as they worry the central bank is tying monetary policy too much to consumer inflation and ignoring the longest streak of wholesale price falls on record. Reserve Bank of India (RBI) Governor Raghuram Rajan in 2014 started using consumer prices as the bank's key inflation measure to focus policy on ordinary Indians. This year, the link between consumer prices and monetary policy became even stronger as the RBI formally adopted an inflation-targeting regime. But a growing divide between consumer and wholesale inflation has revived a long-standing debate on which inflation measure should be used to determine India's interest rates. The wholesale price index (WPI) has been falling since late 2014, dragged down by lower energy costs, while the consumer price index (CPI) is currently at 5 per cent. The RBI has cut interest rates three times this year as corporate profits shrank and companies small and large shied away from new investments. But India's hundreds of indebted companies are saying that's not enough. They argue the RBI has room to further ease policy, as the WPI has dropped for an unprecedented seven straight months. "It may not be suitable to be focussed on only one (inflation) index at a point in time," said R. Shankar Raman, chief financial officer of infrastructure conglomerate Larsen & Toubro. "Just as focus on WPI alone is not going to serve the purpose, focussing on CPI alone is also not going to serve the purpose," he added, referring to kick-starting economic growth. That echoes the argument made by India's chief economic adviser, Arvind Subramanian, who last month suggested that in "unusual times" of stress, a policy based on consumer prices alone may not reflect firms' realities. Rajan has not publicly spoken about the discrepancy, but some policymakers have attributed the widening gap between the two indices to commodity prices, and not to deflationary forces in the economy. The RBI could not immediately comment. The reality is lower interest rates reduce the cost of borrowing. In India, bank loans continue to form the lion's share of corporate financing, even though fund-raising in the equities market, for example, has increased this year. Indian companies, particularly small and mid-cap firms, carry Asia's biggest debt burden because of their aggressive borrowing in the boom years after the 2008 global crisis. Total debt for listed Indian companies excluding financials fell only 4 per cent to $368 billion in the year ended in March 2015. Adding to their woes, banks have yet to pass on most of the RBI rate cuts. The central bank has reduced its policy rate this year by a total of 75 basis points to 7.25 per cent. But banks have cut their rates by an average of 25 to 30 basis points, reducing incentive for companies to increase investment. MONSOONRajan ended the RBI's decades-long focus on wholesale inflation in January last year. At that time, CPI was 8.79 per cent, much closer to wholesale inflation of 5.11 per cent. But that decision is now coming under increasing scrutiny as firms struggle and Rajan has tied any additional easing to how food prices react to the current monsoon season. That is prompting concern he is turning cautious on rate cuts despite a struggling corporate sector and an unprecedented period of deflation as measured by the WPI, which is less affected by food and energy costs and does not reflect the services sector. Profits for the top 96 listed companies with at least $100 million in market capitalisation slumped 10.5 per cent in January-to-March, the most in at least three years, according to Thomson Reuters data. Estimates for the following quarter point to another lacklustre three months. "There is no clear proof that CPI is far superior to WPI," said Siddharth Sanyal, India economist for Barclays in Mumbai. "Monetary policy should not ignore the reality of persistent deflationary numbers on the wholesale index."(Reuters)
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India is seeing "stable growth momentum" even as economic activities are expected to slow down in China, the US and many other major economies, says Paris-based think tank OECD. The readings are based on Composite leading indicators (CLIs), that are designed to anticipate turning points in economic activity relative to trend. The Organisation for Economic Cooperation and Development (OECD) on Wednesday (08 July) said the indicators continue to point to firming growth in the euro area, including France and Italy, and to stable growth momentum in Germany, Japan and India. India's CLI stood at 99.5 in May and the grouping's latest report is based on readings for that month. Last month, OECD — a grouping of 34 countries — had pegged India's growth to remain "strong and stable" at 7.3 per cent in 2015 on the back of revival in investments. India has surpassed China to become the world's fastest growing economy by clocking 7.5 per cent growth for the three months ended March. In 2014-15, the economy had expanded 7.3 per cent. Earlier this month, Finance Minister Arun Jaitley said the country is no longer satisfied being in the 6 to 8 per cent growth. "It wants to transcend to another level and aim for 8 to 10 per cent growth... We wish to grow faster because we have a huge challenge of eradicating poverty ahead of us," he had said. Meanwhile, OECD in its statement today said that CLIs point to easing growth in the US, Canada, China as well as the UK, albeit from relatively high levels. Going by the indicators, Russia is showing tentative signs of a positive change in growth momentum whereas in Brazil a loss in momentum is expected.
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India has overtaken the US to become the world's third-largest steel producer and is working towards achieving 300 million tonnes (MT) target in the next 10 years, said Union Steel and Mines Minister Narendra Singh Tomar on Tuesday (07 July). "So far, India was the fourth-largest steel producer in the world only after China, Japan and the US. However, during the first five months of this calendar year, India has achieved the 3rd position in the global steel production," Tomar said. Addressing a meeting of the Parliamentary Consultative Committee, attached to his Ministries, in Bengaluru, Karnataka, the Minister said Indian steel industry is growing at a reasonably good pace and last year the growth in crude steel production in India was more than 8 per cent. "However, per capita steel consumption is quite low, 60 kg as against the world average of 216 kg. The low consumption no doubt indicates huge growth potential for Indian steel industry. India has fixed a target of 300 MT production capacity by 2025 and the steel ministry is working out action plan and strategies to achieve this target," he said as per an official statement issued in New Delhi. Indian steel industry is already in expansion mode. The older steel plants are being modernised and expanded. New greenfield plants are also coming with state-of-the-art technologies. He told the members that recently Prime Minister Narendra Modi had dedicated the country's largest Blast Furnace of 4160 cubic meter, installed at SAIL's IISCO Steel plant at Burnpur and several Blast Furnaces of around 4000 cubic meter with world class efficiency parameters are in the operation in the country. On Research and Development to sustain the long-term growth of the Indian steel industry, he said the problems in raw material area need to be addressed to utilise low-grade ore and high ash coal through R&D and technology interventions. The statement said Tomar stressed the need to pursue R&D for development of value added products for which we are dependent on import. "We have also issued an advisory to all the large steel companies to step up R&D and enhance R&D investment up to 1 per cent of their sales turnover. SAIL has corporate R&D centre at Ranchi. RINL is also expending R&D infrastructure. Large private sector companies have also set up good R&D facilities for addressing their problems," he added. The Ministry of Steel is facilitating for setting up of a new institution SRTMI and is contributing 50 per cent in the corpus of SRTMI to spear head R&D of national importance. In-principle approval for setting up of SRTMI has been given and CEOs of major Indian Steel Companies have signed a Memorandum of Agreement with the Ministry of Steel for participation and financial contribution in the initiative with an initial corpus of Rs 200 crore. Tomar said several plants have already been expanded and SAIL is in the process of modernising and expanding its capacity from the present level of 12.8 MT to 21.4 MT. Secretary Mines Balvender Kumar informed the members that the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 would address the emergent problems in the mining industry. The Amendment removes discretion in the grant of mineral concessions that would be granted by the respective state governments now through auctions, thereby bringing in a greater transparency and removing discretion. He said the Act makes it mandatory to establish a District Mineral Foundation (DMF) in all districts where mining takes place. "Contribution to the DMF of an amount not exceeding one-third of the royalty rate in so far as new concessions to be granted by auction are concerned and not exceeding the royalty in respect of existing concessions has been provided for," Kumar said as per the statement. Talking about exploration, Kumar said in order to bring the Indian mining industry at par with global standards, the Act has provided for a National Mineral Exploration Trust created out of contribution from the mining lease holders. "This would allow the government to have a dedicated fund for undertaking exploration. National Mineral Exploration Trust is being set up for providing impetus to exploration in mining sector. In addition, the transferability provision (in respect of Mining Leases to be granted through auction) would permit flow of greater investment to the sector and increasing efficiency in mining," he added. On provisions to check illegal mining, he said, all offences under the Act will now be subject to a maximum punishment of 5 years imprisonment or fine of Rs 5 lakh per hectare. Those present in the meeting included Minister of State for Steel and Mines Vishnu Deo Sai besides Members of Parliament both from the Lok Sabha and the Rajya Sabha. (PTI)
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