TRACKPAD

FDI Equity Inflow Ascends 44% During Last 21 Months

It seems that government’s effort to boost foreign investment is bearing fruit as FDI has seen sharp spurt during last two years. In fact due to the continuous reforms and initiatives being undertaken by government, the FDI equity inflow has  recorded a growth of 44%  in its 21 months tenure from June 2014 to February 2016. It has climbed from $ 43.87 billion to $ 63.16 billion over the preceding period of 21 months i.e. September, 2012 to May, 2014. 

As per the written reply of Minister of State (Independent Charge) of Commerce & Industry, Nirmala Sitharaman in Lok Sabha, to boost the entire investment environment and to bring in foreign investments in the country, government has brought in FDI related reforms and liberalization touching upon 15 major sectors of the economy by putting more and more FDI proposals on automatic route.

Limit of Ethanol Blending Increased to 10%

Government has permitted Oil Marketing Companies (OMCs) to sell Ethanol blended petrol with percentage of ethanol up to 10%   to achieve 5% ethanol blending across the country as a whole. As far as on ground achievement is concerned, during the sugar year 2014-15, OMCs have achieved a blending percentage of 2.3 per cent. This was informed by Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan in Lok Sabha.

As petrol has been decontrolled with effect from June, 2010, OMCs take appropriate decision on pricing of petrol as per international prices and market conditions. Important to note that ethanol blending in petrol results in saving of petrol to the extent of its blending and consequent foreign exchange. The potential foreign exchange earnings for the Sugar Year 2014-15 amounts to around USD 285 Million. 
In order to improve the availability of ethanol and encourage ethanol blending, the Government has fixed the delivered price of ethanol in the range of Rs.48.50 per litre to 49.50 per litre. Also the ethanol produced from other non-food feedstocks besides molasses, like cellulosic and ligno cellulosic materials including petrochemical route, have been allowed to be procured. 

Concessions to startups regarding Labour Laws 

Government seems to be quite serious about unleashing the startup movement in the country and supporting entrepreneurship. In order to promote the start-Up ecosystem in the country, Ministry of Labour & Employment has issued an advisory to the states and central labour enforcement agencies for a compliance regime based on self-certification and regulating the inspections under various Labour Laws. 

Importantly it has been suggested that if such start-ups furnish self-declaration for compliance of nine labour laws for the first year from the date of starting the start-up, no inspection under these labour laws will take place. The nine labour laws, included in this advisory are: Industrial Disputes Act, 1947; Trade Unions Act, 1926;  Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996; Industrial Employment (Standing Orders) Act, 1946; Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979;  Payment of Gratuity Act, 1972; Contract Labour (Regulation and Abolition) Act, 1970; Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Employees’ State Insurance Act, 1948. 

In a written reply in Parliament, Bandaru Dattatreya, the Minister of State (IC) for Labour and Employment, said that from the second year onwards, up to 3 years from the setting up of the units such start-ups are required to furnish self-certified returns and would be inspected only when credible and verifiable complaint of violation is filed and approval has been obtained from the higher authorities. Government is of the view that these measures intend to avoid harassment of the entrepreneurs by restricting the discretion and arbitrariness.