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Showing posts with label DIPP. Show all posts
Showing posts with label DIPP. Show all posts

Wednesday, 26 October 2016

16:38

India 130th in World Bank’s ease of doing business

India 130th in World Bank’s ease of doing business

In the 2017 rankings released on Tuesday, the only major improvement for India was seen in the area of ‘getting electricity’.

India has moved one rank up to the 130th position in the World Bank’s ‘ease of doing business’ ranking for 2017. This marginal improvement came on the back of slight improvement in four indicators — getting electricity, enforcing contracts, trading across borders and registering property.

“Over the past two years, the government has implemented a host of reforms to make it easier for businesses to start, operate and exit. It is therefore disappointing that these achievements are not covered by the report due to methodological issues. The government has engaged with the World Bank multiple times in the process, and is hopeful that they will take into account all the implemented reforms in future reports,” said a government statement. India was last year ranked on 130th among 190 economies that were assessed over ten parameters.
Ramesh Abhishek, secretary, Department of Industrial Policy and Promotion (DIPP), said on Tuesday that a dozen of important reforms like enactment of bankruptcy code, GST, introduction of single window system for building plan approvals and online ESIC (Employees’ State Insurance Corporation) and EPFO (Employees’ Provident Fund Organisation) registrations were not recognized by the World Bank this year.
The DIPP, he said, will appoint external agencies “to help departments carry forward reforms, hold stakeholders consultations, and monitor implementation of reforms”.
In the 2017 rankings released on Tuesday, the only major improvement for India was seen in the area of ‘getting electricity’. “On getting electricity, the report recognised the efforts of Tata Power in Delhi to make it faster and cheaper to obtain a connection. These efforts, combined with efforts in Mumbai last year, have allowed India to improve its rank on this indicator from 137 to 26…,” said a government statement. India was ranked 51st for ‘getting electricity’ in 2016. In the area of ‘enforcing contracts’, the country’s ranking improved from 178 in 2016 to 172 in 2017.
“Our objective is that in the next 3-4 years, India must come in the top 30 countries as far as ease of doing business is concerned,” Amitabh Kant, CEO, Niti Aayog, had said in May, 2016.




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Monday, 22 August 2016

21:11

India giving World Bank all evidence of improved ease of doing business

India giving World Bank all evidence of improved ease of doing business

NEW DELHI: India is providing detailed evidence to the World Bank on ease of doing business as it seeks to break into the top 100 countries on the bank's index from its current rank of 130.

Officials said logs of construction permits, containerised cargo movement at ports and setting up of a company are being provided to World Bank as part of the Narendra Modi government's efforts to ensure it does not miss any point to score to improve India's rank.

World Bank officials had a few queries for the Department of Industrial Policy & Promotion (DIPP) when they met on August 1 after completing field inspection and verification of claims over the 14 parameters on ease of doing business.

While the World Bank does not share its findings, one observation made by its team was that people were carrying paperwork to the offices of the Employees' Provident Fund Organisation even as registration was made free of all physical touchpoints. "We clarified that it is only for claims that one needs to file the papers," said a senior DIPP official, who did not wish to be identified.

Besides, DIPP is now gathering its own evidence for cases where it feels respondents have not have kept in mind the assumptions made by the World Bank study.

"In case of construction permits the study is limited to warehouses or buildings on the outskirts or setting up of a company parameter is only for domestic enterprises and not how long it takes for a foreign entity," the official said.

DIPP is taking a proactive approach to provide evidence on its part even after the field investigations have been wrapped by the World Bank team. Final rankings will be announced in October. The ranking considers business environment in DELHI and Mumbai. India compares unfavourably even with countries such as Mexico, which is ranked 38, and Russia, which is at 51. Prime Minister Modi has set a target for India to be in the top 50 in three years.

Specific areas DIPP has targeted are starting business, insolvency procedures, construction permits, ease of trade across borders and electricity connections. According to the department, total number of days required to start a business has been reduced to 12 from 29 in the past year. A team of researchers spent two weeks in Delhi and Mumbai talking to actual users and stakeholders to study and verify implementation of reforms, officials said.

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Monday, 26 October 2015

11:45

RBI rejects plan for 100% FDI in banks

RBI rejects plan for 100% FDI in banks

The Reserve Bank of India (RBI) has turned down a proposal from the government to allow up to 100% foreign direct investment (FDI) in banks, a move that may come as a damper for several private sector lenders such as ICICI Bank and HDFC Bank.

Sources said the RBI has not provided a clear reason to turn down the proposal from the department of industrial policy and promotion (DIPP) that deals with FDI policy. But in the past the regulator has seen banking as a sensitive sector and opposed allowing significant shareholding by foreign institutional investors, who are seen as short-term investors and can enter or exit a stock for short durations, largely to book profits.

Private banks are particularly keen on a higher ceiling and investors are also hoping for a relaxation. In fact, HDFC Bank recently got permission for 74% foreign investment and was also found to be in breach of the norms for a short period.

A few years ago, in the draft norms for new banks, the RBI had suggested limiting FDI to 49%, against the 74% cap. The finance ministry, however, saw it as a retrograde step and got the regulator to stick to the prescribed ceiling. In fact, a few years before that, during UPAI's tenure, there had been a major battle between the finance ministry and the RBI on how the FDI norms should be applied, with North Block finally saying that setting the foreign investment rules was in its domain.

Currently, the government permits 74% FDI in private banks, with up to 49% allowed under the automatic route. Foreign holdings beyond 49% need to be cleared by the Foreign Investment Promotion Board (FIPB). Portfolio investment in the sector is capped at 49% and banking is one of the segments where the composite caps, which allow fungibility between FDI and FII flows, have not been applied as the government argued that it is a "sensitive sector".

The DIPP has moved the proposal to allow 100% FDI in the sector at a time when several new players are entering the market with the RBI offering payments and small bank licences. Easier rules for overseas investment were seen to have helped some of the new players.

In any case, there are sublimits on ownership by a group in a bank and even promoters are expected to cut their stake over a period of time to encourage wider public participation and reduce concentration of risk.

Source:BankingUpdates.
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Friday, 18 September 2015

07:41

100 Percentage FDI in Private Banks on Cards

100 Percentage FDI in Private Banks on Cards

NEW DELHI: To increase foreign funds inflows into the country, the government is considering to relax investment norms by increasing foreign direct investment (FDI) limit to 100 per cent for private banks from existing 74 per cent.

According to a Commerce Ministry official, the Department of Industrial Policy and Promotion (DIPP) has sent a proposal to hike the FDI limit in the private banking industry to the Finance Ministry for its views.

At present, only 74 per cent FDI is permitted in the private sector banking, of which up to 49 per cent is allowed under the automatic route and beyond that through the approval of the Foreign Investment Promotion Board (FIPB).

The move will help the existing private sector banks, payments banks and small finance banks tap overseas markets to enhance their capital base.

Earlier, the Reserve Bank of India (RBI) granted in-principle approval to 11 entities to set up payments banks and 10 for small finance banks.

The government has also introduced the concept of composite caps where it removed separate caps for FDI and foreign portfolio investments (FPI) by replacing them with single upper limit in a bid to make foreign investments easier.  But given the sensitivities in the sector, the government has said foreign institutional investors (FIIs) cannot exceed the cap prescribed for portfolio investments in private sector banks. The limit of portfolio investment in banking is capped at 49 per cent

The government is taking several steps to boost FDI and has relaxed FDI norms for sectors such as medical devices, defence and construction activities. During April-June of this fiscal, FDI into the country grew 31 per cent to $9.50 billion.

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