Senior Congress leader Jairam Ramesh recently came out with his book To the brink and back: India’s 1991 story that gives an insider’s account of the reforms process when he functioned as an aide to then PM P. V. Narasimha Rao. In an interview with BW Businessworld’s Suman K. Jha, Ramesh says the BJP is now trying to appropriate Rao’s legacy. He, however, feels the GST Bill would be passed in the winter session.Excerpts:Q: Your book says that there was a per-fect jugalbandi between Narasimha Rao and Manmohan Singh for the 1991 reforms. Why did the Congress then disown Rao?A: The Congress has been ambivalent about Rao for two reasons. One, the economic reforms of 1991 led to an electoral disaster, first in 1994 in Andhra Pradesh and Karnataka and then in the 1996 general elections. Two, his handling of Ayodhya.Q: Isn’t it ironical that the BJP has decided to build a memorial for Rao?A: Having no icons, the BJP is appropriating icons: Sardar Patel, Subhash Chandra Bose, Bhimrao Ambedkar… and now Rao.Q: You have described the way Rao and Singh reached out to the Opposition and opposition within the Congress on the reforms. What can the present NDA leadership learn from them?A: Political dialogue is completely absent with this government. The initiative for this has to come from those in power. The initiative in 1991 came from Rao and Singh. Neither Modi nor Jaitley has the patience and attention span that Rao and Singh demonstrated in June, July and August of 1991.Q: The Congress will sooner or later be led by Rahul Gandhi. Would Rao have approved of the left-turn that the Congress is taking?A: It’s a bogus argument because Congress is, has been, and will continue to be a left of centre party. The economic reforms may have given it a right-wing image, but neither Rao nor Singh can be called a market fundamentalist; both of them were aware of the social realities of India.Q: You came out with the land Act of 2013. The NDA tried to change it, by arguing that even Congress chief ministers felt it was not workable at all. Assam’s Tarun Gogoi, for instance…A: That’s the fig leaf that the NDA took. Late Gopinath Munde, who was the rural development minister, didn’t want it. It was only when Nitin Gadkari became the minister that the demand came. We know the interests that Gadkari represents. Of course, Congress CMs had reservations about it. Prithviraj Chavan, for instance. Congress CMs are CMs because of the party, right?Q: The Modi government has been trying to reach out to you on GST…A: That’s a myth. There’s been no structured dialogue between the Congress and the government leadership. The GST dialogue of Arun Jaitley is: “Take it or leave it”. We have suggested 4-5 amendments. Has Jaitley reached out to P. Chidambaram? Chidambaram is giving his ideas in a column, and Jaitley is giving his ideas in a press conference and Facebook posts.Q: Now, the BJP is saying they willadvance the winter session…A: We introduced the GST Bill in March 2011. We have waited for four years; we might as well wait for five years.Q: Do you think GST will become a reality in the coming winter session?A: That should not be a problem. Congress is the original author of GST. We know the GST is going to benefit the country. But GST has been badly handled by this government. For three years, Modi opposed GST, and now they have become its biggest champions.Q: What are you busy with these days?A: I have in mind three books. One on the development challenges of the Maoist affected states. Another on rights-based legislations like RTI. And a third one on the reorganisation of Andhra Pradesh. (This story was published in BW | Businessworld Issue Dated 05-10-2015)
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The costliest FM radio licence was bagged by HT Media which picked up the lone Delhi station for Rs 169.16 crore while the cheapest bid for a FM station, at its reserve price, went to RBNL’s Big FM in Aizwal for Rs 12.07 lakh, writes Ashish SinhaCentral government will get to pocket around Rs 3,000 crore revenue from the third phase of FM radio auctions – Rs 1,187 crore from auctions, rest from Migration Fees. That is the upside. The downside is only 97 stations across 58 towns were bought leaving 38 stations (out of 135 station) in 11 cities remained unsold. Big Players will gain with a much wider reach while smaller centres will experience the power of private FM radio. For 21 eligible bidders, it took 125 rounds of clock auctions, Rs 1,187 crore and over one month of agonising wait to bid and win 97 FM stations across 58 towns. For those interested in numbers, the average cost per station worked out to be Rs 12.23 crore, the highest compared to the previous two phases of private FM radio auctions (FM-I in 2002 & FM-II in 2006). The costliest FM radio licence has been bagged by HT Media which picked up the lone Delhi station for Rs 169.16 crore. It again bid aggressively at Rs 122.81 crore to own one of the two FM stations available in Mumbai. HT Media also picked up a station in Hyderabad. In total, HT Media Ltd has spent Rs 340 crore to bag 10 FM station licences – average cost per station of Rs 34 crore. To its credit, HT Media picked up seven stations at their reserve price. These stations are located in the Hindi heartland of Uttar Pradesh – Lucknow, Kanpur, Agra, Aligarh and Gorakhpur were purchased at reserve price along with Bareilly and Allahabad. The cheapest bid for a FM station, at its reserve price, went to RBNL’s Big FM in Aizwal for Rs 12.07 lakh. Entertainment Network India Ltd (ENIL), the radio broadcasting unit of Bennett, Coleman and Co. Ltd, also spent Rs 339 crore to bag 17 stations to extend its tally of Radio Mirchi brand to 49 stations (up from 32 stations earlier). Radio Mirchi’s 49 station network includes the licences it bought for Amritsar, Patiala, Shimla and Jodhpur from Oye FM of the India Today Group. In terms of newer cities, Radio Mirchi has acquired stations in Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati, Shillong and second frequencies in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur and Lucknow, among others. ENIL CEO Prashant Panday said that the company will roll out the Mirchi brand in all the new towns. Big FM’s chief Tarun Katial said he was hoping to launch the new stations within the current fiscal. Panday of Radio Mirchi said too few frequencies in the metros after almost a decade of the second phase was not desirable. In his opinion, the FM auctions were not a success for the government. Panday said some of the new stations will take half a decade to break even. Smita Jha, media practice head at consulting firm PriceWaterHouseCoopers, said the auctions were successful because it was transparent and earned the government 110 per cent on its reserve price. Experts pointed to the scarcity of spectrum in the metros did not help the bidders as it pushed the prices very high. Music Broadcast Pvt. Ltd, which is now a part of the Dainik Jagran Group, Reliance Broadcast Network Ltd (RBNL), DB Corp. and Rajasthan Patrika Pvt. Ltd were the other major media groups who won FM stations. RBNL, which operates under the FM radio brand name of Big FM, bagged 14 stations and spent Rs 117 crore in the auctions. It acquired stations in Pune, Nagpur, Lucknow, Patna, Varanasi, Kolhapur among others taking its overall tally from 45 stations to 59 stations. The Dainik Jagran group, that owns the Radio City brand (Music Broadcast Private Limited) won 11 stations with its overall tally of FM stations touching 39 stations. This includes stations under the brand name of Radio Mantra and Radio City. Apurva Purohit, CEO, Radio City 91.1 FM, said it won frequencies in the markets that it was keen on. According to the 2015 media and entertainment industry report by the Federation of Indian Chambers of Commerce and Industry and KPMG, the radio sector is witnessing a CAGR of 18 per cent and is expected to touch revenue of around Rs 4,000 crore in 2019 compared with Rs.1,960 crore in 2015. As per the frequency allocation plan, HT Media will now have a new frequency of 107.2 MHz in Delhi for its latest acquisition apart from Fever 104 that it already operates. In Mumbai, it will operate its new acquisition on 91.9 MHz. ENIL, which operates its Radio Mirchi brand on 98.3 Mhz will operate its Hyderabad stations on 95 and 104 MHz. In Kanpur, HT Media will operate on 104 MHz but ENIL will operate on 91.9 MHz. In Aligarh, HT Media has been allocated 94.9 MHz but in Bareilly it will operate its station on 94.3 MHz. In Shillong, RBNL, Big FM will operate on 98.3 MHz while ENIL’s Radio Mirchi will operate on 91.1 MHz. ashish.sinha@businessworld.in
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India plans to address some pending tax disputes in the next few days, Finance Minister Arun Jaitley said on Thursday, but did not give details or say whether the cases in question included disputes with foreign companies that have spooked investors. Jaitley said while a number of tax disputes have been "put to rest" since the BJP government took office in May last year, others are being resolved now. "Now, a number of them have been put to rest and we are trying over the next few days itself so that many others can be put to sleep either by a judicial resolution or an executive resolution," he said while addressing the India Economic Convention in New Delhi. Earlier this month, the finance ministry decided not to press claims for a Minimum Alternate Tax (MAT) against foreign portfolio investors. India remains locked in major back-tax battles with telecoms group Vodafone and Cairn Energy. Jaitley said last week that the government was trying to resolve pending tax cases, many of them outside the courts. Stating that the system of allocation of natural resources has been rationalised and the controversies put to rest, Jaitley said there are many other economic reforms in the pipeline. While the GST Bill is stuck because of political reasons, the government is trying to put on track a bankruptcy code, dispute resolution in major contracts, expeditious arbitration procedures and a public procurement law, he said. "In a situation where there is turmoil almost by the day as far as global markets are concerned, we are trying to make the fundamentals of our own economy strong so our ability to resist these changes can substantially improve," he said. The Finance Minister impressed upon the need to attract more investments for the manufacturing sector. "Without investment, there is going to be no additional economic activity," he said, terming improving ease of doing business and resolution of tax disputes as "work in progress". (Agencies)
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Fear of CBI, apprehension about political masters and uncertainty about PMO continue to plague bureaucrats. Suchetana Ray reports Policy paralysis is a word that virtually came to define the UPA II regime, especially from 2012 till their last days in office in 2014. Experts attributed the paralysis to the fear among bureaucrats over action by anti-corruption agencies as well as aimless political bosses in ministries getting caught in a slew of scams. Many thought a change in regime will magically change the situation. But senior bureaucrats say the situation on the ground shows that there has been little or no change; the fear of the CBI still looms large. The bureaucrats continue to be apprehensive about their ministerial masters and of course there is uncertainty about what the Prime Minister’s Office (PMO) wants! To illustrate the state of bureaucracy in the finance ministry, a top official in North Block points towards the pending files on the residual stake sale in Hindustan Zinc Ltd (HZL) and Balco. Finance Ministry is keen to sell its remaining 29.5 per cent stake in Hindustan Zinc and 49 per cent stake in Balco. The stake in these erstwhile state-owned companies was sold to Vedanta in 2002-03. North Block expects to rake in about Rs 20,000 crore from offloading its stake in both these companies, money that finance ministry wants as its disinvestment programme hasn’t really got the cash registers jingling. But top officials in the ministry say that bureaucrats in the Disinvesment Department under the Finance Ministry is in no mood to touch the file. “In fact, the former Disinvestment Secretary even refused to sign the minutes of meeting, held to discuss the way forward for Hindustan Zinc and Balco.” Even the nodal ministry of Mines is reluctant to take a decision on the matter. The fear is of a CBI action, years after the matter was decided upon. The HZL case is stuck in the Supreme Court after a body called the National Confederation of Officers’ Associations of Central Public Sector Undertakings filed a PIL last year challenging the proposed disinvestment, saying the decision was “irrational, illogical, illegal, unreasonable, malafide and arbitrary”. Meanwhile, the Central Bureau of Investigation (CBI) is also looking into suspected irregularities in the original 2002 stake sale of HZL to Vedanta. Balco, meanwhile has been stuck as there have been some difficulties in valuing the Centre’s stake in the unlisted company. “Unless the Government decides to amend the Prevention of Corruption Act (PoCA), officials will not take a definitive role in the HZL matter,” explains a top official in the know of the entire matter. Finance Minister Arun Jaitley has time and again spoken on the need to amend PoCA, but so far the Government has not been able to table the amendments in the Parliament. One of the amendments seeks to differentiate between an act of corruption committed knowingly for “intentional enrichment”, and any irregularity committed unknowingly or without mala fide intent. The budgeted disinvestment target for the year is Rs 69,500 crore, out of which Rs 41,000 crore is expected to come from minority stake sales in listed PSUs, and Rs 28,500 crore is expected from strategic sale in unviable government assets. Although not part of this year's plans, the HZL-Balco residual stake sale could fetch more than Rs 20,000 crore and go a long way in meeting the ambitious target. But HZL and Balco are not the only examples of pending and piling files on desks of top bureaucrats. The overarching fear of the PMO has also had its share in inaction of officials, however, contradictory it might sound. Recently, the PMO directed the NHAI to complete the Delhi-Jaipur Highway by the end of October, on a priority basis with special attention to deadline. Sources point out that the PMO was oblivious to the fact that land acquisition is pending at 3 locations but no one had the courage to bring this to the attention of PM Modi or his men. So the file say sources is lying idle and will continue to do so. Examples of lack of direction from political bosses are also plenty. Senior officials point out how despite the third coal block auction auction successfully ending in mid-August no deed transfer for any block has taken place so far. The reason: the Government is yet to notify an adjudicator for the purpose.
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The housing and urban development ministry is striving to put in place a single window clearance for layouts and building permission which has been a long pending industry demand Come 2016 and the Ministry of Housing and Urban Development is aiming to put in place a single window, time-bound clearance system for layout approvals and building permissions. A group of ministers on the subject is already deliberating. This GoM has representations from the ministries of environment, defence, civil supplies, civil aviation and others, said housing and urban development minister M Venkaiah Naidu at an industry event organised by ASSOCHAM on Wednesday (September 16). “It is a long pending demand of the industry. I am working with six ministers and I have a group of ministers’ meeting. I have held four rounds of meetings with secretaries, ministers and others,” said Naidu inaugurating a national summit on ‘Housing for All-Catalyst for development & inclusive growth,’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). “The last meeting is on October 14 after that we will submit the report to Cabinet and then we will go ahead because we are getting permissions from these departments and by the beginning of the next year, I am sure you will have this in place,” Naidu said. Naidu asked the real estate sector to focus on green building technologies and adopt appropriate, cost-effective building materials, reduce dependence on conventional energy intensive construction practices. Conceding that employment generation is a major challenge, the union minister said, “If you can push the real estate sector, if you really give credit to the infrastructure sector and also to the (IT) information technology sector then Indian youth will get better employment opportunities.” The union minister also emphasised on the need for labour reforms, reforms for land and real estate sector. Besides, he also stressed upon the need for politics of speedy and inclusive development.
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Finance Minister Arun Jaitley has announced a 20 per cent safeguard duty on imported steel. The move is expected to provide relief for the steel sector which is struggling due to cheap imports from China and the countries with which India has free trade agreements, says India Ratings and Research (Ind-Ra). The duty of 20 per cent is applicable on import of hot-rolled flat products of non-alloy and other alloy steel with a width of 600 mm or above. The safeguard duty on hot-rolled coils (HRC) would benefit the integrated steel producers (ISPs) only in the short-term as it is it is applicable for only 200 days. Ind-Ra estimates that the landed price of HRC imported from China will be higher than the domestic steel prices by Rs 2,000 per tonne. This will be in stark contrast to the present situation where imported HRC is cheaper by Rs 2,000 per tonne than domestic HRC. This will also provide headroom to domestic steel producers to increase their prices and volumes, provided Chinese players do not reduce their prices further. The safeguard duty is superior to the import duty as it is applicable to all nations unlike the import duty which excludes countries falling under free trade agreements. The higher safeguard duty would benefit the ISPs, but negatively impact the companies involved in cold rolling and annealing of HR coils. However, the players could circumvent this by importing HRC with some value addition, Ind-Ra said. HRC has been one of the major products produced domestically and its import has hurt the domestic steel industry. Out of the total steel imports of 9.3 MT in 2014-15, HRC accounted for nearly 25 per cent. The country's import of iron and steel rose 58 per cent during April-June 2015. The sector's contribution to stressed advances stood at 10.2 per cent of the total advances at end-December 2014 and is among the top five sectors with stressed loans in the system. Steel imports have increased primarily from China, Korea and Japan. While the imposition of import duty of 12.5 per cent applies to China, it does not apply to Korea and Japan, with which India has bilateral free trade pacts. Flat steel is used in various industries such as automobiles and consumer durables and the safeguard duty would mean higher costs for the end-users of these products. Also the 200-day duty will not solve all the problems the industry is facing, but will provide temporary relief, Ind-Ra added.
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Finance Minister Arun Jaitley on Monday (14 September) assured global investors of the "fairest and predictable taxation regime" as he invited them to invest in various sectors, including infrastructure, manufacturing and defence. He was optimistic that Indo-US bilateral trade will surge five times to $500 billion in the next few years on the back of growing cooperation between both the nations. Jaitley was speaking at the 11th Indo-US Economic Summit, which was organised ahead of the Prime Minister Narendra Modi's second visit to the US later this month. US Ambassador to India Richard Verma was also present. India's fundamentals are sound even amid the global turmoil, Jaitley said, adding that the government has been working on strengthening real economy by focusing on quick decision making, stable policy regime, predictable taxation system and improving on ease of doing business. "The last two are work in progress," the minister said. Elaborating on taxation, he said, the government has tried to resolve the legacy issue by governmental decisions, legislation or even by accepting judicial mandate. The government has tried to "put each one of these (taxation) issues to rest so that from the regime, which had earned an adverse reputation... we can evolve into fairest and predictable taxation regime in India". He was confident that these initiative will make India an attractive investment destination for global investors. "I am quite certain the more India moves in that direction ... (we) will have an economy which is growing much faster than world... It will provide the kind of growth rate which will help eliminate poverty in India," he said. On the growing Indo-US ties, he said, "Our ambitions are extremely high. Both US President and the Prime Minister have now set an ambitious goal of bilateral trade to increase it by 5 times from $100 billion to $500 billion over the next few years. And this is defying a situation where the world itself is passing through a turmoil." (PTI)
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Of the two gold schemes cleared by the government, the Sovereign Gold Bond (SGB) scheme may have a higher chance of succeeding and would potentially cut India’s gold import bill, says a Nomura report. According to the Japanese brokerage firm, “the SGB scheme may have a higher chance of succeeding, as it is sovereign- backed and provides an attractive investment option for households that would like to hold gold as part of their investment portfolio and earn a coupon along the way”. Annual investment demand for gold is estimated at 300 MT per annum, which is around 35 per cent of India’s gold import bill ($34 billion in fiscal year 2014-15).“If some of this can be substituted by the SGB, then it could potentially cut India’s gold import bill,” Nomura said in a research note. In the second half of this fiscal year (October-March), the government plans to issue Rs 15,000 crore worth of SGBs. “If successful, this should lower the government’s market borrowing (since SGBs will be within the fiscal deficit) and the gold import bill by a similar amount ($2.2 billion),” Nomura added. On gold monetisation scheme, Nomura said, participation by households and temple trusts will be a challenge. Moreover, “temple trusts have historically stayed away from similar gold schemes. Also, since household jewellery will be converted into gold bars and coins, this may not be as attractive a proposition. Moreover, households with large gold deposits may be wary of tax scrutiny,” it said. “Overall, we think the sovereign gold bond scheme is more likely to succeed, and the gold monetisation scheme less so,” the report said.Sovereign gold bonds, are aimed at people buying the precious metal as an investment. Such bonds will be issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of five years to seven years with a rate of interest to be calculated on the value of the metal at the time of investment. However, there will be a cap of 500 grams that a person can purchase in a year. Such bonds will be offered to only Indian citizens and institution while the securities will be traded on exchanges to allow early exit for investors. Through the Gold Monetisation Scheme, approved by the Union Cabinet, gold in any form can be deposited with banks for a period of 1-15 years that will earn interest while redemption will be at the prevailing value at the end of the tenure.(PTI)
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Haider Ali KhanDelhi Health Minister Satyendra Jain has said that AAP government is working to strengthen Delhi’s network of ‘Mohalla’ or neighbourhood polyclinics along with Accredited Social Health Activist (ASHA) network to enable city residents in availing medical facilities closer home at affordable costs. He was discussing issues of concerns facing Delhi’s healthcare at the second India Health and Wellness Summit and Awards 2015. “We are working to put all our resources in healthcare to the right use. We are establishing a network of mohalla clinics along with ASHAs to take first line of healthcare delivery closer to the homes of people. If we have good middle level clinics at the neighborhood level, people will be able to access basic medical facilities more conveniently at more affordable costs and will not need to visit hospitals for every ailment,” said Jain. Union Minister of State (Independent Charge) for Culture, Tourism, Dr Mahesh Sharma said, “With a tradition of ancient medicine India has much to give to the world and our government will try to help the medical tourism sector to leverage its economic benefits to the best of our potential.” He also emphasized on the need of preventive medicine and said the wellness sector including wellness spas have a lot of potential for medical tourism. AAP government has set a target to 1000 mohalla clinics in a year. The idea behind this scheme was to ease the burden on hospitals like AIIMS, Safdarjung Hospital, LNJP and GTB Hospital and also to provide affordable healthcare near the home of the patient.
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The move to come out with a “brand new” Gold Monetisation Scheme – or a new deposit-like offering – may prove to be a non-starter. While operational guidelines on the revised scheme is yet to be announced by the Reserve Bank of India, if the past is anything to go by, it will be a damp squib. Even under the existing gold deposit scheme, you and I can monetise physical gold, jewels or gold coins – deposit it in a bank and earn return in grammage on them. But its success has been limited due to high melting costs (and low caratage) and very high ticket sizes. The Report of the Working Group to Study `Issues Related to Gold and Gold Loans NBFCs in India (January 2013; chairman: K U B Rao) also noted that as the schemes are based on the gold content of the jewelleries, the customer will not get back the jewelleries in its original form but only the gold. “… this type of scheme was met with limited acceptability in the Indian context, as people have emotional and sentimental attachments with their gold jewels which are lying with them for generations”, it said. A case has been made for tax incentives on such schemes, including on gold bonds – which was also announced by Union Finance minister, Arun Jaitley, on Wedneday along with the gold deposit scheme. But the percentage of the population above the minimum limit chargeable to tax under Income Tax Act is in single digits. With a majority of gold buyers hail from the rural, some or many of them may not be subject to income tax; fiscal incentive route will not attract them. Of course, a case exists to offer such incentives to high net-worth individuals who may hold idle gold to diversify their portfolios.
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