Category — Politics

India Jumps 30 Spots in WB’s Ease of Doing Business Ranking

Driven by banking reforms, power supplies, and protection of minority investors, India’s ranking in the World Bank Doing Business 2018 report climbed 30 notches to 100. Regulatory and policy reforms put in place by the federal and state governments over the past four years start to deliver results on the ease of doing business front. “…the country is continuing its steady shift towards best practice in business regulation,” noted the report.

Live Mint says: The Doing Business 2018 report, which bases the rankings on field surveys and interviews with corporate lawyers and company executives in Delhi and Mumbai, also recognized India as one of the top five reformers in this year’s assessment. The country improved its ranking on six out of the 10 parameters used to judge ease of doing business, becoming the only large economy to do so this year.

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“Today’s result is a very clear signal from India to the rest of the world that not only has the country been ready and open for business, as it has been for many decades, it is now competing as the preferred place to do business globally,” said Annette Dixon, the World Bank’s vice president for  South Asia.

October 31, 2017   No Comments

Indian Government to Bail Out State-Owned Banks

Over the next two years, New Delhi plans to pump about $32 billion into state-owned banks in a bid to increase money flow, significantly spur economic activity, loosen credit conditions, and boost investment and growth.

The Economist explains that according to the plan unveiled on October 24th, the ailing banks will lend the government $21 billion, about a third of their combined market value. The government will reinvest this money in bank shares, thus ensuring they no longer need a bail-out. Bankers are being encouraged to use a new bankruptcy code to deal with bust borrowers; raise 580 billion rupees themselves, perhaps by selling non-core assets, and receive a further 180 billion rupees from government coffers left over from a previous scheme.

Indian Rupee Symbol

The total funds for the initiative equal roughly 1.3 percent of the country’s GDP. Within one year of implementation, the drag on bank credit growth is expected to decrease by up to 10 percentage points, while GDP growth could rise by up to 5 percentage points, Goldman Sachs said.

CNBC reports that according to analysts at both Goldman Sachs and ING Bank, the Indian rupee is expected to gain in strength over the next year as a result of recapitalization.

This move is associated with risks:

Interest payment on the bond will come at a budgetary cost, which may increase government expenditure and the fiscal deficit, according to Radhika Rao, economist at Singapore headquartered DBS Bank.

The move could “sustain the risk of more public sector bank loans turning sour, swelling the country’s [bad loan] ratio,” according to a note by ING Bank.

October 28, 2017   No Comments

India and USA Are Natural Allies says Tillerson

U.S. Secretary of State Rex Tillerson arrived in India as part of a multi-stop tour across the Middle East and South Asia. He had discussions with Prime Minister Narendra Modi, and  India’s minister for Foreign Affairs Ms. Sushma Swaraj. Tillerson and Swaraj stressed the close relationship and shared values between the two countries and pledged to work closely on matters of security, and also to enhance defense and economic cooperation.

The US Secretary of State, Mr. Rex Tillerson calls on the Prime Minister, Shri Narendra Modi, in New Delhi on October 25, 2017.

The US Secretary of State, Rex Tillerson calls on Prime Minister Narendra Modi, in New Delhi on October 25, 2017

Tillerson mooted a larger role for India in stabilizing the economy of Afghanistan, and pledged American support to fight terrorists. “In the fight against terrorism, the United States will continue to stand shoulder to shoulder with India. Terrorist safe havens will not be tolerated,” he said.

Tillerson expressed concern that extremist groups could threaten the security of Pakistan. “We also are concerned about the stability and security of Pakistan’s government, as well as that these terrorist organizations have enlarged their numbers, enlarged their strength and their capability,” he told reporters.

While recognizing India as a key partner in the face of what he considers as China‘s negative influence in Asia, Tillerson reiterated that India could play a wider role in the region, reports Voice of America.

“The United States supports India’s emergence as a leading power and will continue to contribute to Indian capabilities to provide security throughout the region.” He said Washington was willing to provide New Delhi with advanced technologies for its military modernization.

“We also look forward to further cooperation in the broader Indo-Pacific region as we both promote a rules-based approach to commerce, and a transparent and sustainable approach to economic development,” he said.

October 27, 2017   No Comments

India’s Army to Upgrade 2,000 Military Stations

The Indian Army will modernize 2,000 military stations and develop them in line with the government’s smart city initiative. 58 military stations have already been identified as part of the pilot project.

“We are looking at developing the military stations as smart cities where all modern amenities will be made available. Developing a state-of-the-art IT network will be a key feature,” said a senior Army official.

Indian Army

The Army will also implement 65 reform measures recommended by the Lieutenant General (retired) D.B. Shekatkar Committee which include the redeployment of nearly 57,000 officers and other ranks to enhance the combat capability of the force, optimization of signals establishments, and closure of military farms and army postal establishments in peace locations, among others. Firstpost reports that these reforms will be implemented by 31 December, 2019.

October 23, 2017   No Comments

India’s Food Safety Regulator Eases Business Policies

To facilitate ease of doing business, state-owned Food Safety and Standards Authority of India (FSSAI) put in place procedures to simplify licensing and registration processes:

  • It developed an online Food Licensing and Registration System in all states, (except in Nagaland) as also at airports, seaports and in India’s railway systems.
  • Working in collaboration with the national Center for Good Governance, FSSAI developed forms  that are now much simpler than before.
  • Inspection of premises before issuing licenses has been waived by the authority.
  • FSSAI will strengthen its customer care cell and make it available throughout the day for consumer complaints, food import clearance issues, food registration and licensing issues, and any other related queries.
  • FSSAI approved a policy to accept Codex standards where there are no government guidelines in place, while concurrently initiating the exercise of aligning its standards with Codex.
  • FSSAI simplified food import clearances: It integrated its Food Import Clearance System with the Indian Customs and Central Excise gateway, enabling a food importer to file an application on the Single Window Interface to Facilitate Trade or SWIFT System.

Food Import Clearance Process:

File Application on SWIFT ->Document Scrutiny->Inspection & Sampling->Samples to Lab->Lab Test Report-> No Objection or Non Conformance Certificate ->Transmit NOC/NCC online to SWIFT->Authorities decide on release of consignment

  • For importing food into India the importer must have a valid FSSAI License and the Import-Export Code from the Directorate General of Foreign Trade.
  • Currently FSSAI is present at 6 places in India: Chennai, Kolkata, Mumbai, Delhi, Cochin and Tuticorn.
  • In the case of food items with a very short shelf life, (such as fresh fruit and processed cheese) FSSAI will issue a Provisional No Objection Certificate immediately.
  • To eliminate the current practice of multiple sampling and testing from the same cargo, and to facilitate import clearance, FSSAI now allows one homogeneous sample to be drawn from commingled cargo of pulses, cereals and oils for multiple importers at the first port of discharge. The analysis report of the sample at the first port of discharge will remain valid at other ports of discharge.

FSSAI Logo

October 23, 2017   No Comments