7) 100% FDI allowed in e-commerce marketplace model.
- Government has given the green light to 100% FDI in the marketplace format of e-commerce retailing with a view to attract more foreign investments.
- As per the guidelines issued by the Department of Industrial Policy and Promotion (DIPP) on FDI in e-commerce, foreign direct investment (FDI) has not been allowed in inventory-based model of e-commerce.
- At present, global e-tail giants like Amazon and eBay are operating online marketplaces in India, while homegrown players like Flipkart and Snapdeal have foreign investments even as there were no clear FDI guidelines on various online retail models.
- To bring clarity, the DIPP has also come out with the definition of `e-commerce`, `inventory-based model` and `marketplace model`.
- Marketplace model of e-commerce means providing of an IT platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.
- The inventory-based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to consumers directly.
- A marketplace entity will be permitted to enter into transactions with sellers registered on its platform on business-to-business basis.
- An e-commerce firm, however, will not be permitted to sell more than 25% of the sales affected through its marketplace from one vendor or their group companies.
- In order to provide clarity to the extant policy, guidelines for FDI on e-commerce sector have been formulated.
- The government has already allowed 100% FDI in business-to-business (B2B) e-commerce.
8) LIC increases stake in IDBI Bank to 14.37%.
- State-owned lender IDBI Bank informed stock exchanges that Life Insurance Corp. (LIC) of India now owns 14.37% stake in the bank, after a preferential issue of shares.
- The life insurance behemoth previously owned 7.21% in the bank, which transferred 7.16% equity stake or 15.87 crore shares to LIC.
- With this transaction, IDBI Bank is now the second largest bank holding for LIC. The insurance provider owned 21.22% stake in Corporation Bank, the highest equity it holds in any lender.
- Apart from these two, LIC owns 14.36% stake in UCO Bank and 13.75% stake in Canara Bank, at the end of the third quarter. The government directly owned an 80.16% stake in IDBI Bank.
- IDBI Bank’s board had approved the bank’s plan for a preferential issue of capital to LIC, aggregating up to Rs. 1,500 crores.
- Earlier this month, the state-owned lender had stated that it plans to raise Rs. 19,000-20,000 crore worth of equity capital, through all available options such as qualified institutional placements (QIPs) and preferential allotment to large strategic investors.
- Apart from this, the bank will also try to raise debt capital worth Rs. 4,000 crores by issuing Tier-I bonds and Rs. 8,000-9,000 crore through tier-II bonds during the next three years.
- Mint had reported that the International Finance Corp. (IFC), US-based private equity firm TPG Capital and UK’s development finance institution CDC Group are all in talks with the government to buy stake in IDBI Bank.
- Banks have to maintain a minimum CAR of 9.625%, according to the guidelines on the implementation of Basel III norms issued by the Reserve Bank of India (RBI).
- An asset quality review of RBI had recently asked banks to recognize weaker assets as bad loans and make provision for it. This took a toll on the profitability of public sector banks in the quarter ended.
9) CBDT signed 11 unilateral Advance Pricing Agreements.
- The Tax Department has signed 11 more Advance Pricing Agreements (APAs) with taxpayers covering overseas transactions within group entities so as to reduce litigations.
- Central Board of Direct Taxes (CBDT) has signed 11 unilateral APAs. With this signing, India has entered into 59 bilateral and/or unilateral APAs. 50 of these agreements have been signed in the current financial year.
- Unilateral APAs refer to the signing of agreement with the Indian tax authorities and an MNC, while bilateral APAs also involve the government of the country where an overseas company is located.
- APA, introduced in the Income Tax Act in 2012, provides for pact between taxpayers and the IT department on an appropriate transfer pricing methodology for determining the value of assets and ensuing taxes on intra-group overseas transactions.
- The agreements cover a range of international transactions including corporate guarantees, royalty, software development services, IT enabled services and trading. The agreements pertain to different industrial sectors like telecom, media, automobiles, IT services, etc.
- Some of the agreements have rollback provisions and provide certainty to the taxpayers for nine years with regard to the covered international transactions.
- Rollback provisions in APAs were introduced in 2014 Budget to provide certainty on the pricing of international transactions for four years (rollback years) preceding the first year from which APA becomes applicable.
- The number of applications is indicative of the wide international and national appreciation of the India`s APA programme`s ability to address complex transfer pricing issues in a fair and transparent manner.
10) Jaitley launches `Make in India` conference in Sydney.
Finance Minister Arun Jaitley launched ‘Make in India’ conference in Sydney and asked Australian businesses to be the part of India’s growth story.
India becomes the key focus of the world and ‘Make in India’ is one of the key focuses of the government.
India could manage to become a very low cost service provider but failed to transform into a low cost manufacturing.
The Minister pinpointed that with People in agri sector moving out, there was a need to achieve the target of manufacturing sector to occupy the 25 per cent of India’s GDP. Now is the time when ‘Make in India’ campaign can translate into actual activities.
India has to invest in its infrastructure in a bid to prepare a base for an economy of this huge size. Manufacturing must occupy a space.
The conference was launched in the presence of Australia’s Special Envoy for trade Andrew Robb, Indian High Commissioner Navdeep Suri, CII Director-General Chandrajit Banerjee, CII President Sumit Mazumder and NEW Parliament Secretary for Major Events and Tourism Jonathan O’Dea.
Mr. Jaitley indicated that India has been given a second chance to transform itself into manufacturing hub with ‘Make in India’ campaign launch.
Indian economy was doing well despite global downturns and if the global tailwinds become more supportive, India could perform even better.
Global investors must seriously look at in terms of investing in India.
The constituency that supports economic reforms in India are far more bigger than the one which obstructs it. India becoming an aspirational society has significantly increased.
Mr. Jaitley also cited the size of the market that India offered.
Any market that occupies 1/6 of the global population, 35-40 per cent of them in middle class. Its purchasing power increasing by the day.
The Minister further assured the investors that tax system in India was also being gradually brought to global standards.
11) Piramal Enterprises to invest Rs. 900 crore in Essel Green Energy.
- After real estate, Ajay Piramal has turned his focus on to renewable energy. Piramal Enterprises Ltd (PEL) will, in collaboration with Netherlands-based APG Asset Management, invest Rs. 900 crore ($132 million) in Subhash Chandra’s Essel Green Energy Private Ltd.
- Essel Green Energy currently owns 160 MW of independent solar power projects in four States, of which 110 MW is operational and 50 MW is currently under execution. The company plans to ramp up its solar power capacity to 1,000 MW in the next 2-3 years.
- Essel Green had recently installed a 50-MW solar project in Uttar Pradesh. The Centre has set a target of installing 100 gigawatts (GW) of solar power capacity and 60 GW of wind power capacity by 2022.
- APG represents over 30 per cent of all collective pension schemes in the Netherlands and managed pension assets of more than €400 billion.
- Over the last one year a number of national and international firms have announced investments in the renewable energy sector, including, SunEdison, SoftBank and Enel.
12) Japan to lend Rs. 14,000 crore for Indian projects.
- The Government of Japan has committed a loan of JPY 242.2 billion (around Rs. 14, 251 crore) for various projects across India, including Jharkhand, Odisha, Madhya Pradesh and the North East. The Official Development Assistance is to be deployed for a transmission system strengthening project in Madhya Pradesh, an integrated sanitation improvement project in Odisha, a dedicated freight corridor project, a road network connectivity improvement project in the North East, and a micro drip irrigation project in Jharkhand, according to a government release.
- The Government of Japan has committed a total of JPY 390 billion in the current financial year which is the highest amount committed in a year. India and Japan have had mutually beneficial economic development cooperation since 1958.
- In the last few years, economic cooperation between India and Japan has strengthened and grown into a strategic partnership.
13) Mallya offers to repay Rs. 4,000 crore to banks.
- After being pursued for years by a consortium of banks, former liquor baron Vijay Mallya has offered to pay Rs. 4,000 crore of the Rs. 9,091 crore he and his now-defunct Kingfisher Airlines owe the lenders.
- According to a proposal submitted to the Supreme Court, Mallya has agreed to pay Rs. 2,000 crore up front and an additional Rs. 2,000 crore. The proposal was put forward after Mallya had two rounds of discussions with the lenders through video conferences.
- The proposal was submitted to the court by Mallya’s counsel CS Vaidyanathan. The Supreme Court asked the consortium of banks to respond to the proposal within a week, and posted the matter for hearing on April 7.
- Asked by the SBI counsel where Mallya is residing right now, Vaidyanathan said he is still abroad. Mallya has been summoned to appear before the Enforcement Directorate under the provisions of the Prevention of Money Laundering Act, but it is not clear if he will do so now.
- The lenders are examining the proposal, but disclosed no details. Apart from Rs. 4,000 crore, Mallya has agreed to pay an additional Rs. 2,000 crore if he wins a case against GE Corp.
- SBI is keen to ensure that the interests of all the banks are sufficiently protected before it takes a decision. If the proposal is accepted, Mallya will be forced to disclose the source of the Rs. 4,000 crore he has agreed to pay.