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India’s External Engagement a
Whopping 500 Billion
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03. INVESTMENT UPDATE |
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FDIs
to be doubled by 2010-11 |
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Deputy
Chairman Planning Commission, Dr. Montek Ahluwahlia announced that
Foreign Direct Investments (FDI‚s ) which currently are estimated
at $10billion would be doubled by mid of 11th plan period to ensure
that the current flip of infrastructural development attains vigorous
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Inaugurating the ASSOCHAM, MIT India, ICICI & IFMR sponsored
Consortium Summit, Dr. Ahluwahlia said that the 11th Plan approach
document paper aims at accelerating the GDP Growth rate of 9.5%
by mid of 11th plan period to make sure that the GDP growth
rate of 8.5% on an average is achieved by the end of next plan
period. The government
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expects the 10th
plan GDP growth rate on an average rate of 7.5%, he added.
"So far the direct investments from overseas institutions
in the stock market through listed companies are estimated at
$10billion and with the increased focus of UPA government for
the development of Indian infrastructure like roads, ports,
airports, communications and the like would be doubled with
more reform oriented policies to increase the inflow of investors."
said Dr. Ahluwahlia.
He, however, admitted that power sector which is suppose to
have attracted a large amount of private investment has failed
to so and its aggregate technical losses increased to 38% which
ideally should have been at 6%. The government, therefore, would
do its best to accelerate public private investment in the power
sector during the 11th plan period so that it becomes a driving
engine to fuel higher growth rate for Indian economy, pointed
out Dr. Ahluwahlia.
The government, according to Deputy Chairman of Planning
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Commission would make the regulatory mechanism
more effective and user friendly so that public private investment
that flow towards the infrastructure developments in the years
to come are properly and gainfully utilized without developing
leakage‚s in the value chain processes of the system.
On labour Laws, Dr. Ahluwahlia said that flexibility was essential
and called for but given the current political realities,
higher and fire system cannot be put into place even in areas
where a particular section of society is wanting it to happen.
The Union Labour Ministry, however, is working on a direction
to evolve flexible labour laws with consensus with all constituents
of the UPA government without creating any political disharmony,
hinted Dr. Ahluwahlia.
Among the leading luminaries that participated in the summit
include president ASSOCHAM, Mr. Anil K Agarwal, Industrialist
Adi Godrej, Power Secretary Mr.R V Shahi, Mr. Arun Firodia,
Mr. Kamal Meattle, Chief Minister of Delhi Mrs. Sheila Dixit,
Dr. Kirt Parikh and the like.
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Industry says yes to 49 per cent
FDI in retail
According to the latest findings of
industry chamber Assocham, an overwhelming majority of domestic firms
are keen in allowing 49% FDI in a calibrated manner in retailing,
instead of 100 per cent foreign equity. In a note submitted to the
commerce and industry ministry, Assocham suggested the government
to first consult the domestic industry before finalising and announcing
entry of overseas mega malls in the country.
In response to an Assocham questionnaire
circulated to domestic players, one of the leading retailing firms,
which runs value-buying chains through out the country and is expanding
very fast, wanted a period of two to three years for the domestic
industry to consolidate.
Many of the retail firms in the domestic sector favoured export commitments
on the FDI investments by as much as 20 times. According to Assocham,
the domestic players suffer from the lack of infrastructure,the biggest
bottleneck being the prohibitive prices of large retail spaces in
central locations in large Indian cities. This is primarily because
the private holdings are fragmented and the impact of the Urban Land
Ceiling Act.
The pro-tenancy Rent Control Acts have distorted the property markets
in cities leading to exceptionally high prices. A plethora of bureaucratic
hurdles and high capital cost also place domestic retailing firms
at a disadvantage against the international players, which have over
the years , placed efficient chains in order at a low capital cost.
It is estimated that for opening a single store in the country as
many as 13 licences are required.
"Absence of single-window clearance, coupled with other issues
like lack of property infrastructure, works as a major impediment
to growth of retailing", Assocham said.
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India to sign
pacts with patent offices abroad
The Union Cabinet has approved a proposal to sign an agreement
with patent offices across the world to allow patent examiners
to access the Traditional Knowledge Digital Library (TKDL)
created by the National Institute of Science Communication
and Information Resources (NISCAIR) on India's traditional
medicine systems.
The signing of the pact is expected to benefit the country
immensely as it could help prevent scientists abroad from
getting patents on various medical remedies that are already
known to Ayurveda and other traditional medicine systems of
India.
This is because once the pact is signed, the patent offices
across the world will be obliged to refer to the TKDL to assess
whether the remedy is new or is based on knowledge already
available in the Indian systems of medicines, as and when
scientists apply for such patents.
The data relating to only 7,000 formulations each in Unani
and Siddha, and 1,500 postures in yoga remained to be included
and the entire process was expected to be completed by December
next year.
The data are being made available in five international languages
ò English, German, French, Spanish and Japanese.
A salient feature of the pact will be that the patent offices
will be able to use the digital library only for patent search
and examination.
The patent examiners will not be able to disclose the information
to any third party unless it is essential for the purpose
of patent search and examination.
New Mining Policy
to Attract large Investment: Minister
Minister for Mining Mr. Sis Ram Ola, has announced that his
Ministry is formulating a new Mining Policy which aims at
attracting domestic and foreign investments to the tune of
1,00,000 cr. and generate direct and indirect employment for
about 5 lakh skilled and unskilled labour force by 2011. Up
to March 2006, the
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government has approved
a good deal of proposals for exploration of mining potential
which cover the area of 2,78,773 sq. km. In addition, various
state governments between 1995-96 also leased out licences for
mining exploration which cover the additional area of 2,88,135
hectare. Mr. Ola also announced that his Ministry had signed
Memoranda of Understanding to attract investments in the domestic
mining sector from countries like Australia, Canada, China,
Iran, South Afriac, Mozambique and Kazakstan. These countries
have in principal agreed to transfer their technological know-how
to India to adequately exploit the potential of domestic mining
sector.
The Minister also said that Ministry of Mines in collaboration
with Geological Survey of India have been undertaking effective
mapping exercise of potential areas in which mineral wealth
is supposed to be preserved. The findings of the mapping exercise
would also be made public so that potential investors know of
it and come forward for exploration of such areas in near future.
Dr. Ghosh announced that the new guidelines formulated by the
Ministry in consultation with Ministry of Mines have been sent
to the Prime Minister’s Office for necessary approval.
The PMO which is currently examining the new guidelines would
send them back to the Ministry of Environment & Forests
with its approval in next 3 weeks time after which the government
would come out with the relevant notifications, he added.
The new guidelines for according environmental and forests clearances
have been amply reformed and rationalised to suit the current
spirit of liberalisation so that mining sector contribution
significantly goes up to national GDP.
EMC to double India investment to
$500m
Storage and information management giant EMC Corporation will
invest $250 million in India until 2010 as part of a recent
revision of its India strategy, the company announced.The hiked
investments signal India‚s growing importance as a research
and development location as well as core market to consume
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EMC products, he said. EMC has invested
$850 million worldwide in 2004, which was raised to $1 billion
in 2005. The company estimates global investments worth $1.2
billion in 2006, of which the $250 million investment in India
is part. The company is present in more than 80 countries.
All the investments in India are being done in the technology
development work such as Information management, storage and
infrastructure development that EMC does from around the world
and to set up a centre for excellence for e-governance.
The Indian operations have yielded 350 major customers in
India, which had a key role to play in the decision to double
planned investments here. Some of this money will be used
to expand the sales and marketing as well. The US firm will
also double its 1,600-strong India workforce by 2008 as it
boosts its operations in Asia’s third-largest economy.
UBS to invest
$40m in Hyderabad service centre
The Union Bank of Switzerland (UBS) is investing Swiss francs
50 million ($40 million)in the UBS India Service Centre in
Hyderabad. The financial major's 11.5 acre centre will focus
on knowledge services such as research and analytics, business
process offshoring such as transaction and data processing
and IT infrastructure support.
UBS has already recruited 180 people in the city and by the
end of the second phase of development will have a seat capacity
of 1,500.
Twenty FDI proposals cleared
Based on the recommendations of the Foreign Investment Promotion
Board (FIPB) in its meeting held on 13th June, 2006, Finance
Minister, Shri P. Chidambaram has approved 20 proposals of
Foreign Direct Investment amounting to Rs.762.12 crore. These
proposals relate to Ministries/Departments; namely Commerce,
Heavy Industries, Information & Broadcasting, Industrial
Policy & Promotion, Telecommunications, Urban Development
and Economic Affairs. The major investment proposals pertain
to the sectors like Wholesale Trading, Industry, Information
& Broadcasting, Urban Development, Infrastructure and
NBFC activities.
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