Jaitley meets Aus PM Turnbull, talks trade

Finance Minister Arun Jaitley today met Australian Prime Minister Malcolm Turnbull as he highlighted the potential of the Indian economy to grow beyond the current rate of 7.6 per cent and the large scope for higher economic exchanges between the two nations.

During the meeting in Canberra, Turnbull expressed interest in cooperating with India in renewable energy sector where Australia has expertise.

Jaitley also extended an invitation to Turnbull to visit India. The Finance Minister also met his Australian counterpart Mathias Cormann at a luncheon meet.

Jaitley reached the Australian capital this morning after a two-day stay in Sydney where he inaugurated the ‘Make in India’ conference.

The Finance Minister is scheduled to address the K R Narayanan Oration series for this year at the Australian National University (ANU) later today.

Jaitley’s speech would review the potential of the government’s policy initiatives to stimulate financial inclusion and reduce poverty and create job opportunities through people’s enhanced participation.

In the evening, Jaitley would also be attending a special reception organised by the Canberra-based Indian High Commission to be attended by Indian community leaders from several Australian cities.

RBI relaxes norms for firms to raise foreign funds for infra

The Reserve Bank has relaxed overseas borrowings norms to help companies raise funds for infrastructure projects in the country.

The central bank said it has reviewed the extant External Commercial Borrowing (ECB) guidelines in consultation with the government after “taking into account prevailing external funding sources, particularly for long-term lending and the critical needs of infrastructure sector of the country”.

Now firms in infrastructure sector, Non-Banking Financial Companies -Infrastructure Finance Companies (NBFC-IFCs), NBFCs-Asset Finance Companies (NBFC-AFCs), Holding Companies and Core Investment Companies (CICs) will also be eligible to raise ECB with minimum average maturity period of five years, subject to 100 per cent hedging.

Further, ‘Exploration, Mining and Refinery’ sectors which are not included in the list of infrastructure sector but were eligible to take ECB will be deemed as in the infrastructure sector, and can access ECB as applicable to infrastructure sector, RBI said.

“Companies in infrastructure sector shall utilise the ECB proceeds raised under Track I for the end uses permitted for this Track. NBFCs-IFCs and NBFCs-AFCs will, however, be allowed to raise ECB only for financing infrastructure,” it added.

Holding Companies and CICs shall use ECB proceeds only for on-lending to infrastructure Special Purpose Vehicles (SPVs).

Track I refers to Medium term foreign currency denominated ECB with Minimum Average Maturity of 3/5 years.

The individual limit of borrowing under the automatic route for these companies is USD 750 million.

Only those NBFCs which are coming under the regulatory purview of the Reserve Bank are permitted to raise ECB.

Nippon Life Insurance raises stake in Reliance Life to 49%

Japan’s Nippon Life Insurance today increased stake in Reliance Life Insurance by another 23 percent, taking its total holding to 49 percent.

Reliance Capital, the holding company of Reliance Life, received Rs 2,265 crore for the deal.

Nippon Life’s total investment has reached Rs 8,630 crore for acquiring 49 percent stake each in Reliance Life Insurance and Reliance Capital Asset Management.

Reliance Life has managed a strong valuation of about Rs 10,000 crore and highest embedded value multiple across life insurance companies.

In line with the new shareholding structure, the name of the company will also be changed to Reliance Nippon Life Insurance Company Limited.

“We would like to welcome Nippon Life Insurance as our equal partners in life insurance and asset management businesses. We have immensely benefited from our relationship with Nippon Life over the last five years and look forward to further consolidate this partnership in India and abroad with their experience,” Reliance Capital ED and Group CEO Sam Ghosh said in a statement.

In March 2011, Nippon Life had picked up 26 percent stake in the life insurance venture under Reliance Capital for Rs 3,062 crore.

Jaitley asks Australia’s Super, Future funds to invest in India

Promising better returns, Finance Minister Arun Jaitley today invited Australia’s sovereign wealth funds and pension funds to invest in India.

During a bilateral meeting with Australian Treasurer Scott Morrison here today, Jaitley sought investments in India by the Future Fund, Australia’s sovereign wealth fund, as also by the Super Fund, the country’s multi-industry superannuation fund.

Jaitley also called for higher investments by Australian businesses in India, saying they can get better returns on their investments.

He also said that India wants to benefit from the Australian experience in implementing GST, saying India is ready for GST rollout as hoped the new indirect taxation regime will soon become a reality.

During the meeting, Morrison said Australia is keen to further increase its investment in India.

Talking about recent developments in bilateral and strategic cooperation in multiple areas, he emphasised on the common interest of the two countries in promoting policies to sustain economic growth and create jobs for the youth.

The two leaders discussed various global and bilateral economic issues and agreed to continue and enhance the economic engagement and collaboration of the two countries.

The meeting was also attended by the Finance Ministry and RBI officials from the Indian side, as also by the senior officials from Australia Treasury and the Reserve Bank of Australia.

Modi reels out credit growth, FDI inflows to slam doubters

In a strong rebuttal to those doubting India being the fastest growing major economy, Prime Minister Narendra Modi reeled out statistics on credit growth and record FDI inflows to underscore that the economic success was the hard-won result of prudence, sound policy and effective management.

He said the government programmes are aimed at creating more employment as well as to carry out administrative and policy reforms for sustained growth.

“For India to be at the top of global growth tables is an unusual situation. Obviously, there are some who find that difficult to digest and come up with imaginative and fanciful ideas to belittle that achievement.

“The fact is that India’s economic success is the hard-won result of prudence, sound policy and effective management,” he said at the Bloomberg India Economic Forum.

Stating that India’s growth rate is acknowledged as the highest among major economies, he said, “There are some who remain confused and have said the growth rate does not ‘feel’ right. Perhaps I can be of some assistance to them in reducing the confusion, by stating facts in place of feelings.”

Reeling out statistics, he said there has been a smart pickup in credit growth after September. While credit off-take in the year to February increased by 11.5 percent, overall fund flow to the corporate sector through equity and borrowings rose by over 30 percent in the first three quarters of 2015-16.

Also, the trend of firms facing credit rating downgrade in 2013 and 2014 has been reversed and in the first half of fiscal year 2015-16, for every company getting a downgrade, there were more than two companies which received upgrades, the best level in recent years, he said.

“Net foreign direct investment in the third quarter of the current financial year was an all-time record,” he said highlighting increased overseas funds in fertiliser, sugar and agricultural machinery, sectors closely connected with rural economy.

Also, FDI in construction saw 316 percent growth, while the same in software and hardware almost quadrupled.

“In a difficult global environment for exports, manufacturing output has fluctuated. However, several key sub-sectors of manufacturing are growing rapidly,” he said.

Modi said his government’s focus was on agriculture and doubling farm income by 2022. Also, his strategy is to optimise use of resources through efficient implementation.

Ease of doing business a must to boost investment: Jaitley

Finance Minister Arun Jaitley today said India needs to further ease its business processes to boost foreign and domestic investments, even as he admitted that the country has been impacted by global trade shrinkages.

Terming ‘ease of doing business’ in India as an “important work which is still in progress”, Jaitley also said that the Modi government has been able to straighten several laws and was trying to make taxation systems compatible with the global standards.

Addressing the Sydney campus of the S P Jain School of Global Management after arriving this morning on a four-day visit to Australia, Jaitley said the NDA government also been able to make headway in terms of eliminating corruption and it was working on removing discretions of all forms.

Jaitley, who was welcomed by Indian high commissioner Navdeep Suri and S P Jain School President Nitish Jain at the jam-packed event where he spoke on ‘Reimagining the Indian Economy’, said the global trade shrinkages has impacted India too in terms of uncertainties in stock and currency markets, which Australia itself has also witnessed.

“Opening of the Indian economy and sectors like insurance, railways, defence and several others which were earlier unavailable for FDI has helped us,” Jaitley said.

Listing various measures taken since the NDA government came to power in May 2014, Jaitley said, “We have also removed the unnecessary conditionalities which was slowing down foreign direct investments and this, probably in greenfield projects, has made India the most sought after destination as far as FDI is concerned”.

“The second important challenge was not only to improve India’s image but…. image gets improved by the fact that in actual operation those who domestically do business and those who intend to invest in India go back with an impression that it is easy to do business in India,” he said.

“In term of ease of doing business, you are measured by the stability of policies, by predictability, by cutting short the time between the decision to make investment and actual implementation… you need few approvals and easy approvals,” he said.

He said that for India, the system was to get approval from multiple authorities which could frustrate the investors.

“I can claim that we have achieved everything but I think there is a greater realisation in India that in the competitive world today not only to attract foreign investors but also persuading domestic investors, we will have to ease our business processes,” he said adding “that’s an important work which is still in progress as far as India is concerned”.

He also said that the government has been able to make a headway in terms of eliminating corruption.

Detailed norms on FDI in food processing soon: Nirmala

Government will soon come out with detailed norms to operationalise the decision to permit 100 percent foreign direct investment (FDI) in the food processing sector.

The FDI in food processing sector, Commerce and Industry Minister Nirmala Sitharaman said, will help farmers in getting good prices of their produce besides eliminating wastage of food produce.

“There is a lot of food being wasted in the country because there are no storage capacities. Wastage is there because timely procurement does not happen,” she told PTI in an interview.

The minister said “there are a lot of people who are interested in putting funds for creating value addition in agricultural produce. Therefore if FDI is permitted, they can come, procure from the farmer, give him a fair price, do value addition and avoid wastage of produce”.

On when the government will come out with detailed guidelines on FDI in food processing, the minister said: “It has to come out sooner”.

The Department of Industrial Policy and Promotion (DIPP) is in the process of finalising the cabinet note in this regard along with Ministry of Food Processing.

Recently, Finance Minister Arun Jaitley held a meeting with top officials of food processing, commerce and industry ministries to work out the modalities for allowing 100 percent FDI in marketing and processing of foods products.

With a view to benefit farmers and reducing wastage of fruits and vegetables, the government in the Budget proposed allowing 100 percent foreign direct investment in marketing and processing of food products.

In his Budget speech, Jaitley had said the move would benefit farmers, give an impetus to the food processing industry and create vast employment opportunities.

During April-December, FDI into the country grew by 40 percent to USD 29.44 billion.

World Bank to extend USD1.5 bn support to Swachh Bharat Mission

The Cabinet today approved USD 1.5 billion (about Rs 9,000 crore) World Bank support for the Swachh Bharat Mission (SBM) in rural areas.

“The project basically provides for incentivising states on the basis of their performance in the existing SBM-Gramin. Incentivisation of states was approved by the Cabinet while approving the SBM-Gramin on September 24, 2014,” Minister of Communications and Information Technology Ravi Shankar Prasad said after the Cabinet meeting here.

The current approval provides for the mechanism of such incentivisation through World Bank credit, he said, adding that under the approved project, the performance of the states will be gauged through certain performance indicators, called the Disbursement-Linked Indicators (DLIs).

The states will pass on a substantial portion of more than 95 per cent of the Performance Incentive Grant Funds received from the MOWS, to the appropriate implementing levels of districts, Blocks, GPs etc, he said.

The end-use of the incentive grants will be limited to activities pertaining to the sanitation sector, he added.

“The project will accelerate efforts to achieve sustained outcomes in sanitation by 2019. The incentive framework introduced through the project will reorient efforts of states towards the SBM(G) ‘outcomes’ such as reduction in open defecation, sustainable achievement of open defecation-free (ODF) villages and improvement in solid and liquid waste management (SLWM),” Prasad said.

DHFL to raise Rs 500 cr from debentures

Mortgage firm Dewan Housing   Finance Corporation Ltd (DHFL) today said it proposes to raise Rs 500 crore from issuing debentures to fund business growth.

The company proposes to issue 5,000 Secured Non- Convertible Redeemable Debentures with a face value of Rs 10 lakh each aggregating to Rs 500 crore on Private Placement basis, DHFL said in a statement.

The debenture will carry a coupon rate of 9.40 per cent payable annually and at maturity.

The debentures will be listed on National Stock Exchange.

The issue opens on March 30 and closes on the same day.

WMA limit for government Rs 50,000 cr for H1 of FY17: RBI

To help Centre tide over temporary mismatches in the cash flow of receipts and payments, the RBI said the limit for Ways and Means Advances (WMA) for the first half of 2016-17 will be Rs 50,000 crore.

“The Reserve Bank may trigger fresh flotation of market loans when the Government of India utilises 75 percent of the WMA limit,” the central bank said in a statement.

RBI retains the flexibility to revise the limit at any time, in consultation with the Government of India, taking into consideration the prevailing circumstances.

The interest rate on WMA is equal to the repo rate while for overdraft it is two percent above the repo rate.

The minimum balance required to be maintained by the Government with the RBI will not be less than Rs 100 crore on Fridays, on the date of closure of Government’s financial year and on June 30, the closure of the annual accounts of the RBI.

It should not less than Rs 10 crore on other days.

As per the provisions of the agreement dated March 26, 1997 between the Government of India and the Reserve Bank of India, overdrafts beyond ten consecutive working days will not be allowed.

The WMA limit for the second half of the financial year 2016-17 will be fixed in September 2016, the RBI said.

RBI provides WMA to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments.