Government Is Now Injected With Much Needed Instinct To Kill Without Mercy !
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Labour laws to be reformed!The corporate government is now injected with much needed instinct to kill without mercy after the Lok Sabha, the UPA government on Friday secured an easy 14-vote victory in the Rajya Sabha as well on the issue of FDI in multi-brand retail.Now!EGoM decides to cut base reserve price by 30% in 4 circles.Post FDI in retail, the government will look at more reforms and the government will talk to the opposition party, BJP to get clearances on insurance and pension reforms.

Troubled galaxy destroyed Dreams, Chapter 827

Palash Biswas

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The corporate government is now injected with much needed instinct to kill without mercy after the Lok Sabha, the UPA government on Friday secured an easy 14-vote victory in the Rajya Sabha as well on the issue of FDI in multi-brand retail.Now,India plans to amend its antiquated labour laws to  revolutionise the retail sector!On the other hand, the provident fund (PF) department has voluntarily given up its powers to take action against employers who fail to deposit workers' dues unless it can name workers whose savings are in danger, evoking protest from union leaders and labour experts who said this could protect companies that fail to make PF contributions.Developers including Supertech and Ansal API, today announced investments of nearly Rs 8,000 crore on projects over the next four years.EGoM decides to cut base reserve price by 30% in 4 circles.Several important bills are likely to be taken up by Parliament for clearance during the ongoing session including the Companies Bill, Competition Bill and FDI in insurance and pension sectors.

Post FDI in retail, the government will look at more reforms and the government will talk to the opposition party, BJP to get clearances on banking,insurance and pension reforms.The government is gearing up to implement India's largest indirect tax reform - the proposed goods and services tax GST.

The United Progressive Alliance (UPA) government on Friday won its second battle on the issue of foreign direct investment (FDI) in retail as it defeated the Opposition's motion in Rajya Sabha as well.The win in the Rajya Sabha, which was expected to be tough for the government, came after MPs of the Samajwadi Party walked out of the Upper House of Parliament, in effect abstaining, and with the Bahujan Samaj Party (BSP) in favour of the UPA.Also, as seen in the Lok Sabha, there were MPs who broke ranks with their party during the vote. Upendra Kushwaha of the JD(U) voted for the government even though his party was against FDI in retail. Reacting to the victory of the government, Union Parliamentary Affairs Minister Kamal Nath said reforms were on track. He further Refuted BJP's charge that the UPA used the Central Bureau of Investigation (CBI) to get Mayawati's support, saying, "Mayawati voted with the BJP on nuclear deal earlier, then it did not raise the CBI issue. Now when they vote against BJP, BJP accuses of misuse of CBI. This shows the mindset of BJP, it is about the politics of BJP."

The win in the Upper House came two days after the UPA government on Wednesday defeated the motions by the opposition parties in the Lok Sabha. Defeating the motions comfortably in the Lok Sabha, the UPA had got 253 votes in its favour, as there were 218 votes against the government. Renowned tax expert Parthasarathi Shome has been appointed adviser to Finance Minister P Chidambaram. The appointment comes at a time when the ministry is struggling to rein in the fiscal deficit at the targeted level of 5.3 per cent of gross domestic product for the current financial year.Shome had held the same post from October 2004 to January 2008. Even then, he was adviser to Chidambaram. In that stint, he played a crucial role in facilitating state-level value-added tax and initial discussions on goods and services tax. Known for tax reforms, Shome was the brain behind then fringe benefit tax and banking cash transaction tax.

The agenda:

banking,insurance and pension reforms

largest indirect tax reform - the proposed goods and services tax GST.

Companies Bill and Competition Bill

Amend labour lawas to suit retail requirements

Nationwide uniform licensing of organised retail

Regulatory framework to ensure arge retailers don`t displace small ones

Safeguards in land use policy to prevent diversion of agricultural land

Improve city planning for adequate commercial space

Implement GST:Accord industry status to retail

Buoyed by the victory on the foreign direct investment (FDI) issue in Parliament, the government on Friday said it would bring more bills in coming weeks for ushering in economic reforms. "Certainly, we are going to bring in more legislation in coming weeks in Parliament (financial bills) and we will be engaging all political parties on it," Parliamentary Affairs Minister Kamal Nath told reporters. The Minister was asked if approval of FDI in retail by Parliament was a signal for more reforms in the near future.

Asked if the government had sought the support of the Bharatiya Janata Party (BJP) on the financial bills, he said, "I have discussed with them. I am sure that the BJP will also support us. They want one or two amendments in the bills and that discussion is going on. Convergence on this issue would be necessary."

On the government's victory on the FDI issue in Rajya Sabha, Finance Minister P Chidambaram said, "After the Lok Sabha vote, it was perhaps not necessary to demand vote in Rajya Sabha. It is the right of the Rajya Sabha and they asked for it. "We showed that we have a clear majority. The government has demonstrated that in both the Houses...we have the majority."

The government plans to revolutionise the retail sector to make India a global shopping hub, with new labour laws to support 24-hour business, limiting reckless multiplication of malls to prevent urban chaos, and strong measures to ensure small shopkeepers also thrive in the transformation.
The consumer affairs ministry also wants to allow farmers to directly sell their produce to retailers, and adopt a uniform countrywide licensing regime to accelerate retail growth. The issue of modernising retail to ensure that benefits reach every section of society was debated in the cabinet when it approved FDI in multi-brand retail.Economic Times reports.

To facilitate such far-reaching changes, the government plans to set up a committee of central ministers of agriculture, commerce, corporate affairs, environment, finance, food, labour, railways, urban development and infrastructure ministries, official sources said.

Another panel of secretaries, representatives from IIMs, industry bodies, consumer activists and trader associations will also study the retailing sector. The move is expected to bring on board small traders and shopkeepers, who are apprehensive about loss of business if large international companies set up shop in India.

Traders welcomed the move. "This is a fantastic method to take things forward... It will smoothen out trade at pan-India level," said Kumar Rajagopalan, head of Retailers Association of India, which has 400 modern retailers as members.

The government panel will discuss ways to modernise labour laws and amend them to be more supportive of retail requirements pushing for 24x7x365 work environment. It will also look at means to reduce multiple licensing requirements and offer a single-window facility for retail operations throughout the country.


"It will also consider establishing a national commission to study the problems of retail sector," said a consumer affairs ministry official.


Madan Sabnavis, chief economist at CARE Ratings, said the government has safeguarded interests of small kirana shopowners and manufacturers in its notification on FDI in retail by ensuring 30% outsourcing from local small and medium industries. "Walmart, if it comes, can't open 30-40 stores at one location even in cities like Delhi and Mumbai.

It gives enough space for small stores to operate, which can thrive on their doorstep services. The government should modernise APMC Act to create direct linkage of farmers with retailers," he said.

However, Dharmendra Kumar, director, India FDI Watch, an NGO that has opposed the entry of foreign retailers, said the government should have sufficient regulatory framework to control the rampage of foreign retailers entering the Indian space. "There is no cap on the number of stores a big retailer can open in a city. Nor there is any specification on size of the store. In absence of such regulations, these supermarts can open in any location interfering with the operations of small stores," he said.

The panel, however, is looking at putting some safeguards in place to help small stores. "It will work out a legal and regulatory mechanism to ensure that large retailers don't displace small ones and even misuse their higher buying power to create a one-sided price war besides setting up in-built policy to relocate or reemploy people who are affected due to opening up of big malls in the vicinity of their shops," another official of consumer affairs ministry said. The committee will also consider recommendations of the parliamentary standing committee on retail sector, and suggestions of the study on organised retail by the Indian Council for Research on International Economic Relations (ICRIER).

ICRIER had endorsed the entry of branded chains in retail sector, saying the sector is likely to grow at 13% till 2011-12 with organised retail growing at 45-50% in this period and unorganised retail at about 10%.

A recent study by ICRIER on facilitating trade has argued that pan-India supply chains cannot be established unless GST is implemented. Arpita Mukherjee, professor, ICRIER, said retailers face multiple regulations that vary across states and this creates hurdles for smooth functioning.

"For example, the central government can have a model Shops and Establishment Act that states can implement. This Act should have provisions for modern retail to operate such as possibilities to employ on a rotational basis and flexibilities in shop opening timings. If these reforms are implemented within two years, it will lead to investment in backend and help to reduce wastage," she said.

Enforcement officers of the department cannot act against companies defaulting on workers' PF dues

An order issued by former central PF commissioner RC Mishra on November 30, his last day in office, said enforcement officers of the department cannot act against companies defaulting on workers' PF dues unless they can identify the workers whose savings are at stake."There shall be no assessment without identifying individual members in whose account the fund is to be credited," the order states, adding employers cannot be penalised if they are 'unable' or 'unwilling' to submit requisite details.

he directive also sets a seven-year limit for probing cases of PF default by companies that are required to remit 24% of a workers' salary into their provident fund accounts till they retire.

"This is a questionable directive and will severely restrict the hands of PF commissioners. It will be virtually impossible for them to establish default if they don't get employee records from companies," said A Viswanathan, a former PF commissioner. Until now, department officials could initiate investigations against a company if they noticed discrepancies between the wage bill and its PF contributions.

But under the new rule, unless they can identify the names of the employees who have been denied benefits, it can't begin proceedings. Some construction companies that are currently under investigations for PF fraud have furnished incomplete or incorrect records, claim officials. Mishra said he had not issued the order in his personal capacity.

"So many orders are signed, somebody has to sign them. This was not issued in my personal capacity," he said, adding that ET should ask those in charge today to explain the logic of the directive, before disconnecting the call.

Since Mishra's exit, the government is yet to appoint a PF commissioner to oversee the corpus of Rs 5,00,000 crore that the workforce has entrusted with the department. At present, there are 6 crore PF account holders in the country.

Justifying the seven-year limitation for investigations, the official circular states that open-ended assessments and investigations serve no real purpose.

"Moreover, such enquiries often do not result in identification of beneficiaries and only tend to harass employers and establishments. It is accordingly directed that no inquiry or investigation shall ordinarily go beyond the preceding seven financial years," it said.

But Viswanathan said a limitation period, as imposed in the order, is not envisaged under the Employees' Provident Fund (EPF) Act of 1952. "A limitation period is enshrined in the incometax laws, but cannot be applied in social security systems as the implication is that a person will be dispossessed of his rightful benefits," he said, stressing that seven years is too short a limit to impose on savings that are accumulated over 35-40 years of a person's working life.

EGoM decides to cut base reserve price by 30% in 4 circles

After the 2G auction turned out to be a failure, the government has decided to cut spectrum reserve price by 30% in four circles. The Empowered group of Ministers (EGoM) met today as Telecom Minister Kapil Sibal laid out the auction roadmap, reports CNBC-TV18's Siddarth Zarabi.

He said that the ministry will conduct fresh auctions in four circles for 1800 mhz band. These include Mumbai, Delhi, Karnataka and Rajasthan. Sibal also informed that three circles (Mumbai, Kolkata and Delhi) will see auction for 900 mhz band.

From nearly Rs 700 crore, reserve price in Delhi circle will now cost around Rs 483 crore. The Mumbai circle will now cost around Rs 475 crore rupees for the 1800 mhz spectrum.

Here are the key takeaways of the EGoM.

The EGoM has decided to cut  reserve price by 30 percent, in four important circles Bombay, Delhi, Karnataka, Rajasthan for the 1800 mhz band. However, the final call will be taken by the cabinet.

The next point is that the reserve price for the 900 mhz band with respect to refarming, the EGoM has upheld the TRAI's recommendation for that to be twice that of the 1800 Mhz band. The cellular operators wanted that to be same as the 1800 Mhz band. Refarming will start in December 14 in three crucial circles Delhi, Mumbai and Kolkata. It would essentially mean a clear impact for companies like Bharti , Idea and Vodafone because they are the three dominant players in these three circles.

The EGoM has decided to conduct an auction once again in March 2013 which would mean after the budget, but within the current financial year. This is for both the 1800mhz and the 900 mhz band frequencies.

As far as the 800 Mhz band (popularly referred to as CDMA) is concerned, GSM operators had demanded this spectrum should be taken away from the CDMA operators. This demand did not see any favourable reflection within the EGoM. The CDMA spectrum that was on offer in the recent auction did not find any takers. The final decision will be taken once formal reference is made by the DoT to the TRAI to decide the new reserve price for the CDMA frequency.

What will be pricing of 800 Mhz band?

The TRAI will now hopefully give a final recommendation on the new reserve price for 800 mhz band. The in principle view of the EGoM is that it has to be below the 1800 mhz price. There are two levels of 1800 mhz pricing. The circles where already auction was concluded and a new price being discovered have been sold at a reserve price which was now being brought down for only four circles. So, therefore if we were to apply the same logic we could safely say that the CDMA price will be at two levels just like we now have two different reserve prices in the 1800 mhz band.

This matter will now be deliberated upon by the TRAI and its expectations will be out in January  for the EGoM to consider this. According to sources, auction for the CDMA frequencies is likely to happen sometime in the next fiscal.

Ration shop dealers demand withdrawal of cash transfer scheme

Ration shop dealers today threatened to go on strike demanding that direct cash transfer scheme should be withdrawn, and accused the government of being lethargic in strengthening the food distribution system.

The All India Fair Price Shop Dealers' Federation said it would close down various rations shops across the country for one day on December 11, which would have an adverse impact on farmers.

The Federation has written to Union Minister K V Thomas intimating him about their intention to go on strike.

"We demand immediate withdrawal of Cash Transfer scheme. This scheme will not only ruin ration shops across the country but will completely destroy the public distribution system of the country.

"They (government) should strengthen the existing public distribution system across the country so that each and every member of BPL and APL families gets food to eat," general secretary of the Federation, Biswambhar Basu, said.

The government proposes to roll-out the Aadhaar-enabled cash transfer for 29 schemes from January 1 in 51 districts, spread over 16 states. It also plans to cover the entire nation by the end of December 2013. Later, cash transfer would cover 42 welfare schemes.

Realty majors including Supertech and Ansal API announce Rs 8,000 cr investments on projects

Signalling bounce back of the real estate sector after a prolonged slowdown, developers including Supertech and Ansal API, today announced investments of nearly Rs 8,000 crore on projects over the next four years.

Moreover, companies such as DLFBSE -2.52 % are looking to cut debt significantly in coming years, besides expecting better sales amid rising housing prices.

Realty firm Supertech said it will invest around Rs 5,500 crore in the next 3-4 years to develop residential projects and acquire land in North India. It is also targeting annual revenue of Rs 10,000 crore by 2015, from Rs 2, 500 crore at present.

"We have an ambitious plan to become a major developer in the country. We are going to invest around Rs 5,500 crore in the next 3-4 years to consolidate our position in the market," Supertech Chairman and MD R K Arora said.

He said this amount will be invested to develop housing projects and acquire land bank in NCR and Uttarakhand. The NCR-based Supertech at present has about 1,000 acres in the Northern states.

"We are continuously acquiring land. In the next 3-4 years, we will acquire a further 400-500 acres. It'll need a minimum investment of Rs 2,500 crore," Arora said.

Another National Capital Region-based realty firm Ansal Properties and InfrastructureBSE -4.52 % announced an investment of about Rs 1,500 crore in 2013-14 as capex on construction of various projects across the country.

Ansal API Vice Chairman and MD Pranav Ansal also said the company, which currently has a borrowing of Rs 1,350 crore, will become debt-free in the next three years with the help of internal cash flows.

"We are increasing the capex to complete the existing projects to Rs 1,400-1,500 crore next fiscal from Rs 1,000 crore in this year," he said.

He also said the company will reduce its current debt of Rs 1,350 crore to Rs 1,100 crore by the end of this fiscal.

"The debt will come down to about Rs 800 crore during the next financial year... We are aiming to become a debt-free company within next three years. We are not raising any debt at this moment and are repaying our existing borrowings from internal cash flows," Ansal said.

Mantri Realty said it will invest up to Rs 750 crore to develop three new housing projects in Maharashtra and Karnataka over the next 2-3 years. The company's Chairman Sunil Mantri said these projects will be launched next year.

The company is developing 10 projects at various locations, mainly in Western India.

The country's largest realty firm DLF said it will launch 3-4 projects in Gurgaon by March 2013 and will also reduce debt significantly from sale of non-core assets and improved cash flows.

7 Dec, 2012, 08.50PM IST, Rakhi Mazumdar,ET Bureau
UIDAI targets 400 million enrolments by mid 2013, Aadhar hopes to give unique identity to some 1.2 bn residents

The Unique Identification Authority of India (UIDAI) hopes to enroll 400 million people by mid 2013 as part the government's ambitious Aadhar programme that hopes to give a unique identity to some 1.2 billion residents of the country.
"Our target to is get 600 million enrolled into the sytem by 2014. While we have capbility to add a million people into the database per day, we are currently doing about 6 lakh,"" Nandan Nilekani, chairman of UIDAI said. The government's plan of direct cash transfer hinges crucially on the Aadhar database. It is the first application that we are building on the database, Mr Nilekani said. Currently 270 million people are enrolled into the system, while unique ID numbers have been issued to 220 million. It is already the world's largest database based on biometrics like iris scan, finger printing technology,"" he added.

The direct cash transfer plan will be the first in a series of citizen-centric services that is expected to use the UIDAI -based system to identify an individual and target the right beneficiary so as to minimise wastage in the government's Rs 300,000 crore subsidy regime, he said. Mr Nilekani was speaking at a special plenary during the 4th National Conference on Leadership at the CII-Suresh Neotia Centre of Excellence on Friday.

Earlier in the day, speakers deliberated on how strategic business leadership can spur economic growth which holds the key to taking on challenges of recession hit economies. Adressing a session on 'Markets Global & Local in a Recessed Economy', Shekar Viswanathan, deputy MD Toyota Kirloskar Motors spoke on issues of critical market sustainability in the automtive sector.

'A pollicy on hybrid cars, eco friendly vehicles, simpler tax laws are the need of the hour to sustain the next round of the auto industry's growth which has been a key driver of the Indian economy,' he said.

Speaking on behalf of the organised retail industry, tipped as another major growth driver, Mohit Kampani CEO of Spencer's Retail said retail FDI can realise its potential for generating huge employment if the challenges of trained manpower and a proper regulatory framework is met and complex tax rules are simplified.

I P Tantia, CMD Tantia Construction pointed out the need for sustained public investment in infrastructure to boost connectivity and drive economic growth to fight recessionary trends. Lord S K Bhattacharyya chairman of Warwick Manufacturing Group emphasised the need for a strong political will to get the reforms agenda running.

Speaking of initiatives required to ensure India's leadership in the 21st century he said it is essential to invest in education, especially innovation, with the aim to create an ecology of R&D. Lord Bhattacharyya who advised the Margaret Thatcher govt in the UK in privatising Rolls Royce and British Aerospace in the '80s said private capital and strong political leadership can work towards a common goal.

He warned against India's reliance on outsourcing-led IT services industry saying that backlash against it was already evident in the US, the UK and Germany. Instead, a deeper academic industry partnership and an ecosystem that fosters innovation, similar to Korea and Eastern Europe, holds the key to a solid foundation for long term economic growth, he said.

6 Dec, 2012, 12.49PM IST, ET Now
FDI in retail will not transform the pace of economy: Bibek Debroy, Centre for Policy Research

In an interview with ET Now, Bibek Debroy, Professor, Centre for Policy Research, shares his views on the government's win on FDI vote and the need for further reforms. Excerpts:


ET Now: What did you make of all that happened in the Parliament yesterday?

Bibek Debroy: I do not think such a big deal should have been made out of the FDI issue. Technically, voting is still to be done in the Rajya Sabha. But on this FDI issue, too much is being made out of it, both on the positives as well as on the negatives. It is not going to transform the pace of the Indian economy. There are many more important reforms that one ought to be talking about.

ET Now: How shaky the way ahead could be for more reforms coming in? Do you think that is not really the case?

Bibek Debroy: Have the state governments changed the APMC act? There are orders under their Essential Commodities Act. Have the state governments changed them? There is the cold storage order. There is the Article 14 of the Constitution. It is all very easy to say that it is up to the states to decide. The reason I am mentioning all this is that a lot of people seem to be going gaga over what has happened yesterday. Going gaga over the fact that now all of Indian retail is going to get organised, employment will happen on the disaster side, the corner shops will close down; none of that is going to happen. If it is important, why did we draw artificial distinctions between multibrand and single brand? What does it mean to say that we have got this 30% sourcing? We had it for single brand. We had subsequently diluted it. So nothing substantial has happened yesterday. It is just a framework enabling piece of policy and it will take very long for any organised retail activity to happen. What will temporarily happen is that the existing Indian partners will be able to sell their equity to the foreign joint venture partners. So that was the point I was trying to make on FDI in retail.

ET Now: What more do you think needs to be done and could the Opposition play spoils sport, essentially in more reform measures ahead?

Bibek Debroy: Yes, of course. But under the presumption that the reforms we are talking about are legislative and about pensions/insurance. But if the focus of reforms is executive, then the opposition is a boggy. The reforms are executive in the form of environmental clearances, forest clearances, the national investment board bringing down the deficit. Now those things have got nothing to do with the collation and with what is happening in Parliament. But if we are looking for pensions and insurance, which are attractive to the external credit rating agencies, then that is going to be more difficult.

http://economictimes.indiatimes.com/opinion/interviews/FDI-in-retail-will-not-transform-the-pace-of-economy-Bibek-Debroy-Centre-for-Policy-Research/articleshow/17503909.cms

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