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Centre to convert Jal Marg Vikas Project into an economic corridor

May 25, 2017

After the initial bid to make the 1,380-km stretch of the Ganga river from Varanasi to Kolkata navigable round the year, the Centre is now focussing on converting the ?5,369-crore, World Bank-aided Jal Marg Vikash Project into an economic corridor.

On May 26, the implementing agency, Inland Waterways Authority of India (IWAI) will meet World Bank experts to explore the possibility of setting up a freight village – loosely described as a logistics and trading hub – in Varanasi.

Logistics hub

With inland waterway and its allied terminal facilities under construction, Varanasi is emerging as a multi-modal logistics hub, located in close proximity to NH-2 and NH-7 and the upcoming Dedicated (rail) Freight Corridor.

The benefits can be optimised if Varanasi is converted into the mother trading hub, from where goods can move across the region. That would attract huge investments in trading logistics such as warehousing and others.

The project will require 80 to 100 acres of land. We are confident that the project will get the support of the UP government, IWAI vice-chairman Pravir Pandey told BusinessLine on the sidelines of a inland waterway and coastal shipping seminar organised by the Indian Chamber of Commerce on Tuesday.

The idea has already caught the fancy of Jharkhand, which is planning an economic zone at Sahebgunj terminal where Petronet LNG will build and operate LNG bunker for vessels.

Jharkhand Chief Minister Raghubar Das offered 5,000 acres of land in Sahebgunj, Pandey said.

Jal Marg Vikash aims to create a 35-metre-wide channel in the Ganga to run vessels of 1,500-2,000 tonne dry weight capacity, which is close to the carrying capacity of a goods train.

Barge designs

To encourage domestic barge manufacturing, the project authorities have already designed 14 types of vessels suited for navigation on the Ganga through DST, Germany. The designs will be freely available to barge makers.

The designs also include “dumb barge” flotillas of 1,000 tonne dry weight each, which can be joined in a chain (like railway wagons) to carry more cargo than a railway rake.

We are creating intellectual property which will be available to everyone through our website latest by August, Pandey said. The designs are now in approval phase.

The estimated cargo movement by the river is 22 million tonne in 2022 and 45 mt by 2030 – up from the existing 4.5 mt. The cargo will primarily come from road transport.

Pilot projects

The cement industry has already evinced interest in the project. IWAI is now conducting pilots with Dalmia Cement and Ultratech.

A total of six terminals will be built across the stretch. This will include three multi-modal and two intermodal terminals. One of them at Gazipur (UP) would help tranship LNG to Nepal.

On the cards are two ship-repairing facilities at Haldia and Farakka in West Bengal. A new lock-gate at Farakka barrage is under construction that will ensure fast movement.

In three years from the conception in July 2014, Rs. 1800 crore worth of projects are already awarded and under construction. Nearly 500 crore worth of dredging contracts are underway. “Unlike in the past, we are focussing on dredging only the shoals (natural ridges) that too to create the 35 metre wide channel with assured draft.

The motto is to do limited disturbance to the river,” he said.

New Act

To create the legal framework to enable modern inland waterway transport; the Centre has drafted a Bill to amend the century-old Inland Vessels Act.

The new Act will outline issues concerning disaster, safety and role of the States, who are the implementing authority.

Pandey says the amendment is already cleared by the Standing Committee and would be placed before the Parliament in the “next session”(monsoon session).

A draft guideline and standing operating procedures are also under preparation through the National Disaster Management Authority.

Source: The Hindu Business Line

Conclave on GST and impact on SMEs in Chennai tomorrow

May 25, 2017

With the Centre all set to implement its biggest reform measure yet come July with the rollout of the Goods and Services Tax (GST) regime, businesses are scrambling to understand the implications of the changeover.

While GST is touted to be the most significant tax reform since independence as it will integrate and simplify the indirect tax system, the state of preparedness to tackle the new regime is not too good.

Smaller companies that have limited resources at their disposal face a tougher challenge in adopting the new tax. There is a cost involved in the changeover as manpower has to be trained, accounting systems changed to build in the new taxes and remove the old and logistics will have to be re-worked to ensure that the tax incidence is optimum. However, over the long-term, there will be higher transparency and lower tax evasion.

Opportunities are also likely to multiply as the unorganised sector will also come within the tax net, thus weeding out the weaker players. In this connection, The Hindu BusinessLine has organised a special conclave where SMEs can understand the new reform and figure out the best way to manage the changeover.

The Business Line SME conclave, presented by Zoho Books will examine the financial, technological, legal and procedural challenges in the GST implementation and provide solutions. The event Banking Partner is Lakshmi Vilas Bank & the event is Powered by Market of India in Chennai and Coimbatore markets.

The conclave will kick off in Chennai on Friday, May 26, at Hotel Accord Metropolitan, Chennai, from 6 pm onwards. A similar programme will also be held in Coimbatore on June 9, at Hotel Aloft, Uppilipalayam.

The event is supported by Madras Chamber of Commerce & Industry and Tamil Nadu Small & Tiny Industries Association. For registrations, contact roopa.shinde@ thehindu.co.in. Entry is by invite only.

Source: The Hindu Business Line

RCEP Hanoi talks: India not willing to go beyond 80% tariff elimination in goods

May 25, 2017

India ignored calls for zero tariffs on 92 per cent of traded goods as part of the ambitious Regional Comprehensive Economic Partnership (RCEP) being negotiated between 16 countries, including China, and instead stuck to its offer of 80 per cent.

New Delhi’s current position, too, would result in substantial opening up of the Indian market to Chinese goods, as even with a deviation of 6 per cent that India is demanding in special cases, tariffs have to be removed on 74 per cent of items.

India held its ground at the Trade Ministers meeting in Hanoi on Monday by refusing to give in to demands for tariff elimination of 92 per cent of goods.

It has stuck to its offer of 80 per cent elimination with a 6 per cent deviation and also a longer implementation period for certain countries like China, a government official told BusinessLine.

The RCEP countries, which include the 10-member Asean, India, China, South Korea, Japan, Australia and New Zealand, seek to create the largest free trading bloc in the world accounting for 45 per cent of the world population and over $21 trillion of gross domestic product.

While India put up a valiant fight to protect its industry in the area of goods, in services, things remain tight. RCEP members are not just hesitating to give offers that would result in improved facilitation of movement of workers within the bloc, many are not eager to even give commitments on freezing the current levels of market access that they offer to all countries (MFN levels).

This is worrying for India as countries like Australia are already tightening their visa norms at MFN levels and if commitments are not given soon, the gains in the area of services may not amount to much. “We have told RCEP members that committing to their current MFN levels in Mode 4 (movement of professionals) is the starting point for the negotiations and they need to do more,” the official said.

While the RCEP countries are talking in terms of implementing the offers over a period of 15 years, India has asked for 20 years to deal with certain countries (such as China).

This means that it could wait for eliminating tariffs on the most sensitive goods for up to 20 years, but for other goods the tariffs have to be phased out much earlier and some even immediately on implementation.

India is in a better position to offer ambitious market openings to the Asean, Japan and South Korea, with which it already has free trade pacts, than China, New Zealand and Australia, with which it has none.

Although the RCEP countries are hoping to conclude the negotiations by the year-end, there are indications that talks may roll over to next year as a lot of loose ends still remain in all the three major areas of negotiations.

Source: The Hindu Business Line

FSSAI to widen fortification programme’s ambit to include bread, pasta

May 25, 2017

The Food Safety and Standards Authority of India (FSSAI) has decided to cover such packaged foods as bread, breakfast cereals and pastas under the ambit of the fortification programme.

The apex food regulator is actively working on the standards for packaged food products, which people eat on a regular basis.

It is expected to come up with the standards for such packaged foods shortly, first for the stakeholders and businesses and then for general comments.

In a couple of months’ time, the standards will be out, said Pawan Kumar Agarwal, chief executive officer, FSSAI.

He added, “The apex regulator is working on the fortification standards of some of the packaged foods that people eat commonly. The matter is being considered by a working group on fortification, which would examine and bring out the details of the food products and the respective standards.”

We’re working on the fortification standards for packaged food, and the standards for such food like bread, pasta and breakfast cereals would be out for comments shortly, Agarwal said.

The working group on the fortification will meet soon. Following that, the recommendations and standards would be placed before the stakeholders or businesses for their comments, he added.

He expected thatthe clarity on the packaged food fortification was expected to come soon, after which the road for packaged food fortification would be clear.

Operationalise stds for fortification

Meanwhile, the apex food regulator has issued a notification for the operationalisation of the fortification standards and regulations for foods,such as milk, edible oil, rice, wheat, and salt. The notification specifies the nutrients and maximum limit of the micronutrients.

Agarwal said, We have finalised the fortification standards. We received over 100 inputs, which were examined by the working group.

Two major suggestions were incorporated. Firstly, we stipulated the maximum limits of the standards, and now we have given the range of the nutrients. Secondly,the specification of vitamin and micronutrients clause was also added with the standards. These were the main changes incorporated in the new draft, he added.

Meanwhile, according to the operationalised regulations, there would be general obligation for quality assurance on the manufacturers and packers of fortified foods, and they have to submit evidence of the steps taken in this regard.

The food business operators (FBOs) also have to ensure compliance with the Food Safety Standards Regulations, 2011, and the packaging and labelling requirements.

Source: FNB News

Cabinet decides to abolish Foreign Investment Promotion Board

May 25, 2017

In a major decision aimed at further easing doing business in India, the Union Cabinet on Wednesday abolished the 25-year-old Foreign Investment Promotion Board (FIPB), obviating the need for prior clearance for Foreign Direct Investment in more than 90 percent cases. Industry lauded the move as a "bold" step that would add to the healthy inflow of foreign investment.

Announcing the decision, Finance Minister Arun Jaitley told reporters here that after Wednesday's move, only 11 sectors would require prior approval for Foreign Direct Investments (FDI).

The cabinet today (Wednesday) took the important decision of abolishing the FIPB, Jaitley told reporters after the cabinet meeting. He said this was done to further ease doing of business in the country.

Explaining the rationale behind the decision, the Minister said that after the liberalisation of FDI rules, 91-95 per cent of FDI was coming in anyway through the "automatic" route, without needing FIPB clearance.

The Union Budget 2017-18 presented in February had announced the proposal for abolition of FIPB.

He also said that in the case of the 11 sectors that need prior approval for FDI, these would now be given by the ministries concerned. Wherever there are security considerations, the Home Minister's approval would also be taken, he added.

Asked about how long the process of abolition would take, Jaitley said this would be done expeditiously. Cases pending for approval with the FIPB would now be taken up by the respective ministries, the Finance Minister clarified.

The FIPB was set up in the early 1990s as an inter-ministerial single-window for allowing FDIs that need government approval.

The government relaxed FDI norms in June 2016 in single brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products, whereby investors in these sectors do not need to seek approval from the FIPB.

The Confederation of Indian Industry (CII) welcomed the decision as a bold step that would streamline the process of FDI approvals and thereby boost FDI flows into the country, adding to growth and employment.

Already, the government has among the most liberal FDI regimes in the world, which has greatly improved the investment climate. As a result, for the last three years, FDI has been on the ascendant and is setting new records, CII Director General Chandrajit Banerjee said in a statement in New Delhi.

Source: SME Time

Govt approves public procurement policy for local suppliers

May 25, 2017

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a policy for providing preference to local suppliers in government procurement.

The new policy is expected to encourage 'Make in India' and promote manufacturing and production of goods and services in India with a view to enhancing income and employment, said a cabinet communique.

Under the policy, preference in government procurement will be given to local suppliers. Local suppliers are those whose goods or services meet prescribed minimum thresholds for local content, it said.

In procurement of goods for Rs. 50 lakhs and less and where the nodal Ministry determines that there is sufficient local capacity and local competition, only local suppliers will be eligible.

For procurements valued at more than Rs 50 lakh or where there is insufficient local capacity/ competition) if the lowest bid is not from a non-local supplier, the lowest-cost local supplier who is within a margin of 20 per cent of the lowest bid, will be given the opportunity to match the lowest bid, the statement said.

In fact, procurement by the government is substantial in amount and can contribute towards this policy objective.

Local content can be increased through partnerships, cooperation with local companies, establishing production units in India or Joint Ventures (JV) with Indian suppliers, increasing the participation of local employees in services and by training them.

Source: SME Time

Govt hikes sugarcane FRP by Rs. 25/quintal for 2017-18

May 25, 2017

The government today decided to increase fair and remunerative price (FRP) of sugarcane by Rs. 25 per quintal to Rs. 255 for 2017-18 season beginning October.

A decision in this regard was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA) here.

The FRP is the minimum price that sugarcane farmers are legally guaranteed. However, state governments are free to fix their own state advised price (SAP) and millers can offer any price above the FRP.

Sugar mills situation has improved. For 2017-18, sugarcane FRP of Rs. 255 per quintal has been approved, which is 10.6 per cent higher than the current level, Finance Minister Arun Jaitley told reporters after the meeting.

The cane price is linked to a basic recovery rate of 9.5 per cent, subject to a premium of Rs. 2.68 per quintal for every 0.1 per cent point increase in recovery above that level.

This is in line with the recommendations of the Commission for Agricultural Costs and Prices (CACP), a statutory body that advises the government on the pricing policy for major farm produce.

It may be noted that sugarcane FRP was kept unchanged at Rs. 230 per quintal this year.

Higher rate has been fixed for 2017-18 taking into account the rise in cost of production and millers’ capacity to pay the rate in view of better sugar prices.

Asked whether some states fix higher price than FRP, Jaitley said that the situation continues as the matter is pending in the Supreme Court.

Sugarcane output in the current year declined by over 12 per cent to 306.03 million tonnes due to drought in key growing states Maharasthra and Karnataka. However, the prospects in 2017-18 seem to be bright as the Met Deparment has forecast normal monsoon.

Source: The Hindu Business Line

Centre plans to upgrade ship repairing at 7 ports

May 25, 2017

The central government has identified ship repairing facilities of seven ports for upgradation into modern units in collaboration with Cochin Shipyard, a top official said in Kolkata.

It has been decided at last week's meeting in Goa that seven ports, which have ship repair facilities that need to be upgraded, should enter into an understanding with Cochin Shipyard Ltd for developing them into a good ship repairing facility, Union Ministry of Shipping's Joint Secretary (Sagarmala Wing) Rabindra Kumar Agarwal said in Kolkata.

He said the respective ports and Cochin Shipyard would decide the modalities of development.

Pandu in Assam, Mumbai, Goa, and Kandla are among the identified ports where redevelopment of repairing facilities would be done, Agarwal said on the sidelines of an event organised by Indian Chamber of Commerce.

The aim is to have enough such repairing facilities across states, he explained, adding that if ships are taken to longer distances for repairing works, it entails additional costs.

These are existing facilities with the ports but their utilisation came down over the years. Since there is space available, it will be easier for us to develop them, he added.

Source: SME Time

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