สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 15 ตุลาคม 2556

To unlock FDI, govt to ease lock-in period for realty

Much to the cheer of foreign real estate developers, those investing in India’s construction sector might be allowed to exit before the mandatory three years stipulated at present. However, for that, they would have to complete the project and procure completion occupancy certificates from local authorities. Currently, they can exit before three years of putting in money only with permission from the Foreign Promotion and Investment Board (FIPB). That’s not all. According to a Cabinet note, being prepared by the Department of Industrial Policy and Promotion (DIPP), foreign developers will be allowed to take back the entire invested amount before three years, after obtaining the government’s approval. A senior official involved in the process confirmed this to Business Standard. According to the current FDI policy, the lock-in period of three years applies to every tranche of investment brought in by a foreign player from the date of receipt of investment or from the date of ‘completion’ of minimum capitalisation, whichever is later. Developers had long been complaining that restrictions, such as the lock-in norms, deterred them from investing in the Indian market. India allows 100 per cent FDI through the automatic route in townships, housing, built-up infrastructure and construction-development projects, subject to certain conditions.

(Source: Business Standard)

Cabinet note on FDI in housing in a day

The department of industrial policy and promotion (DIPP) will finalise the Cabinet note on relaxing foreign direct investment (FDI) norms in the housing sector in a day or two. The main provisions likely to be relaxed include easing the three-year lock-in period for FDI in housing and townships. “We will take one more day to finalise the note before sending it to the Cabinet for approval,” said a DIPP official. At present, 100% FDI is allowed in townships, housing and built-up infrastructure and construction developments. Besides, the note is also likely to reduce the minimum capitalisation to $5 million instead of the present $10 million for wholly-owned subsidiaries. As per the current FDI policy, the lock-in period of three years applies to every tranche of investment brought in by a foreign player from the date of receipt or from the date of ‘completion’ of minimum capitalisation, whichever is later. Moreover, the investment cannot be repatriated before a period of three years from completion of minimum capitalisation.

(Source: Financial Express)

Finance Ministry detects about Rs 1,000 cr customs, excise duty evasion.

As many as 229 cases of customs duty evasion and 255 cases of excise duty evasion were detected by economic intelligence officials during the period. The amount of excise duty evasion was about Rs 982 crore and that of customs was at least Rs 100 crore, a Finance Ministry official said.  A scrutiny of customs duty evasion cases revealed that mis-declaration and undervaluation of imported goods were the common modus operandi followed by fraudsters in order to cheat the exchequer, the official said.  The misuse of Indo-Thailand Free Trade Agreement for importing gold bars, evasions of duty in import of liquor, external or portable data storage drives and excess quantity of Chinese cigarettes and mis-declaration of Chinese batteries and Ammonium Chloride were detected in these cases.The officials also detected undervaluation in import of fingerprint identification and card based security systems by undervaluation and evasion of import duty by incorrect classification of tablet PCs.  Whereas, production of iron and steel, vehicles parts and accessories and malted foods and chocolates were prone to excise duty evasion, the official said.  As many as 569 cases of service tax evasion were also detected by various central excise and service tax formations across the country during the period. The amount of evasion involved in these cases was Rs 589.40 crore. The Finance Ministry officials have given stern warning to tax evaders to pay their dues or face necessary action.

(Source: Economic Times)

Economy moving towards stagflation: CII survey of CEOs

The Confederation of Indian Industry (CII) said on Monday that its survey of CEOs indicated the economy was moving towards stagflation. “Indicating that the economy is moving towards a situation of stagflation, majority of the respondents (42 per cent) expected inflation to increase moderately in the second half of the year,” CII said in a statement. Stagflation refers to a situation where economic growth is too low and inflation is too high, leading to high unemployment levels. The situation indicates a dilemma for policymakers, since actions designed to cut inflation may aggravate unemployment. CII, however, did not elaborate why it dropped the word stagflation, as the respondents only talked about a moderate rise in inflation. According to data released on Monday, inflation in both wholesale and retail counters rose for the month of September, driven by vegetable prices, particularly onions. Inflation stood at 6.46 points in Wholesale Price Index (WPI) terms, and 9.84 per cent on Consumer Price Index basis.

(Source: Business Standard)

Economic Section

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