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FDI reform measures a major macroeconomic reform: Fitch Ratings

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photo credit:peninsulla.blogspot.com

Chennai: Citing the liberalisation of foreign direct investment (FDI) rules by the central government on November 11, credit rating agency Fitch Ratings termed it a significant structural macroeconomic reform.

In a statement issued on Thursday, Fitch Ratings said: “This, together with an earlier announced plan to restore the financial viability of the country’s power distribution companies (discoms), indicates that India’s reform momentum remains intact.”

According to Fitch Ratings, the key changes in the FDI regime announced by the central government include upping the limit for FDI approvals from the Foreign Investment Promotion Board (FIPB) to Rs.50 billion from Rs.30 billion; increasing foreign-investor limits in several sectors including private banks, defence and non-news entertainment media; and allowing property developers to sell completed projects to foreign investors without lock-in periods.

As per the package for the power discoms, Fitch Ratings said the state owned power distribution utilities that opt for the package will see 76 percent of their debt transferred to states.

The balance 25 percent will be issued as state-guaranteed discom bonds.

This would happen after an agreement is singed between the power companies, the union ministry of power and the state governments.

“This could lead to higher general government debt of up to two percent of GDP (gross domestic product) but this is not sufficiently significant to have an effect on India’s ratings, especially with the potential positive longer-term effects of the reforms,” Fitch Ratings said.

“Importantly, the reforms create an incentive structure for state governments to reduce losses at discoms by requiring the state governments to assume a certain share of losses at these entities,” the agency said.

According to Fitch Ratings, these changes align with the government’s broad-based reform agenda and should support investment and real GDP growth over the long term.

“We forecast Indian real GDP growth to come in at 7.5 percent this year and accelerate to 8.0 percent in 2016 and 2017,” Fitch Ratings said.

However, other big reforms such as the implementation of a national value added tax, will require a two-thirds approval in the legislature and face stiffer political obstacles, Fitch Ratings said.

According to it, the passage of goods and service tax bill is important for the Indian economy as it would diminish the inter-state trade barriers.

(IANS)

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Rahul Gandhi Points at PM Modi to Vacate the Seat over Gas price Hike

Rahul Gandhi's twitter attack on PM Modi: Vacant your seat over the gas price hike.

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Rahul Gandhi's verbal attack on PM Modi
Rahul Gandhi's verbal attack on PM Modi wikimedia commons

NEW DELHI: Congress Vice President Rahul Gandhi on Sunday attacked the Narendra Modi-led central government after the prices of cooking gas was again hiked, asking him to “vacate the ‘Sinhasan’ (post of the Prime Minister)”.

“Mehangi gas, mehanga rashan. Band karo khokala bhashan. Dam bandho kam do. Warna khali karo sinhasan (Expensive gas, expensive ration. Stop making hollow promises. Fix the rates and give employment or else vacate the post),” Rahul Gandhi tweeted attaching a news report of the hike.

Gandhi was referring to the price hike announced by the state-run oil firms on Wednesday.

The prices of the LPG cylinder’s went up by Rs 4.50, while the non-subsidised rates were hiked by a steeper Rs 93 per cylinder.(IANS)

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With 100% FDI, Narendra Modi calls Food Sector a Priority in Make in India Programme

Modi said India with its rich legacy of spices could provide solutions and offer a win-win partnership as the world was becoming increasingly averse to the use of artificial colours, chemicals and preservatives.

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Modi
Prime Minister Narendra Modi. Wikimedia

New Delhi, November 3, 2017 : Prime Minister Narendra Modi on Friday said the food sector that allows 100 per cent foreign investment was the priority in the government’s ambitious Make In India programme.

Launching a three-day global conference on the food industry here, Modi said food processing was an age old practice in India and simple, home-based techniques like fermentation had resulted in the creation of our famous pickles, papads, chutneys and murabbas that now excite both the elite and the masses across the world.

He said the government had taken a range of transformational initiatives to make the country most preferred investment destination in this sector.

It is priority sector in our ‘Make in India’ programme. 100 per cent Foreign Direct Investment is now permitted for trading including through e-commerce of food products manufactured or produced in India, Modi told the World Food India conference that will see the participation of over 2,000 delegates from 200 companies from some 30 countries.

Apart from representatives of 28 states, it will also see participation of 18 ministerial and business delegations, nearly 50 global CEOs along with heads of all leading domestic food processing companies.

Modi said a single-window facilitation cell provided hand-holding for foreign investors and there were attractive fiscal incentives from the Union and state governments.

Loans to food and agro-based processing units and cold chains are classified under priority sector lending, making them easier and cheaper to obtain, the Prime Minister said.

Modi said the recently launched unique portal – Nivesh Bandhu (investor’s friend) – would bring together information on central and state government policies and incentives provided for the food processing sector.

He said private sector participation had increased in many segments of the value chain but sought more investment in contract farming, raw material sourcing and creating agri linkages.

There were opportunities in post-harvest management such as primary processing and storage, preservation infrastructure, cold chain and refrigerated transportation, the Prime Minister asserted.

There is immense potential for food processing and value addition, especially in niche areas such as organic and fortified foods.

Modi said India with its rich legacy of spices could provide solutions and offer a win-win partnership as the world was becoming increasingly averse to the use of artificial colours, chemicals and preservatives.

Modi said the Pradhan Mantri Kisan Sampada Yojana aimed at creating world class food processing infrastructure was expected to leverage investment of $5 billion, benefit two million farmers and generate more than half a million jobs over the next three years.

Narendra Modi said the government was planning to link agro-processing clusters with production centres through Mega Food Parks, which will offer immense value proposition in crops such as potato, pineapple, oranges and apples.

Minister of Food Processing Industries Harsimrat Kaur Badal in her address said agreements worth $10 billion were expected to be signed during the three-day global event.

Our demand of food is set to double over the next five years. Being six largest food and grocery market in the world, India is a destination that merits global attention in the food sector.

She said there was a need to wage war on food waste to ensure adequate food for all and to avoid a food crisis as the world’s population was set to increase by 25 per cent and the demand for food by 50 per cent by 2050. (IANS)

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Doing business in India easier now: Modi

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Doing business in India easier now: Modi

New Delhi, November 3, 2017: Prime Minister Narendra Modi on Friday invited global investors to do business in India, which he said was “easier now” after his government repealed archaic laws and launched attractive fiscal incentives.

Describing India as “one of the fastest growing economies” in the world, Modi said it was an opportune time for global businesses to invest in the country.

 “India has jumped 30 ranks this year in the World Bank’s (Ease of) Doing Business rankings. India was ranked number one in the world in 2016 in greenfield investment.

“India is also rapidly progressing on the Global Innovation Index, Global Logistics Index and Global Competitiveness Index,” Modi told the gathering of global businessmen at the inauguration of World Food India 2017 here.

Billed as the biggest congregation of global investors and business leaders of major food companies, the three-day event aims to transform the food economy and realise the government’s vision of doubling famers’ income by establishing India as a preferred investment destination and sourcing-hub for the global food processing industry.

“Private sector participation has been increasing in many segments of the value chain. However, more investment is required in contract farming, raw material sourcing and creating agri-linkages. This is a clear opportunity for global chains.”

Modi said India offered single window clearance for investors and had launched attractive fiscal incentives.

“There are opportunities in post-harvest management, like primary processing and storage, preservation infra, cold chain and refrigerated transportation.

“There is also immense potential for food processing and value addition in areas such as organic and fortified foods.”

He said food processing was a way of life in India that had been practiced for ages.

“Simple, home-based techniques, such as fermentation, have resulted in the creation of our famous pickles, papads, chutneys and murabbas that excite both the elite and the masses across the world.”

Modi said farmers were central to India’s efforts in food processing and as such the government launched the Pradhan Mantri Kisan Sampada Yojana to create world-class food processing infrastructure.

“This will leverage investment of $5 billion, benefit two million farmers and create more than half a million jobs.”

The food event will host over 2,000 participants and 200 companies from around 30 countries.

Apart from representatives of 28 states, it will also see participation of 18 ministerial and business delegations, nearly 50 global CEOs along with heads of all leading domestic food processing companies.(IANS)