• MoF no to FDI in local cos via bourses
• Interest sops for exporters may run till Dec
• Mutual fund loads may go down
• Impact of economic meltdown less severe in India, says ILO
• GST may not cover alcohol
• Manufacturing sector growth slips into negative zone: CII
• Govt mulls sops for setting up pvt units in SC/ST areas
• According to sources, ministry of finance (MoF) has turned down a proposal from Department of Industrial Policy And Promotion (DIPP) to let foreign companies buy shares of Indian companies directly from stock markets, as FIIs do. MoF has apprehensions about allowing strategic investments and says it has turned down DIPP s proposal as there are no guidelines in place to demarcate a portfolio investment and a strategic investment. SEBI and RBI are known to have not raised any objection to the proposal though. (ET)
• Govt is likely to extend the 2% interest rate subvention/ subsidy available to exporters from select sectors on their borrowings beyond March 31, 2009 for another nine months up to December 31, 2009. The facility allows exporters of textiles, handicrafts, leather, marine products, gems & jewellery, carpets and small & medium enterprises to borrow money from banks at 2% lower interest than what is charged of other export sectors. The banks are reimbursed the subsidised interest amount by the government. The step is part of the series of incentives which the UPA government is likely to announce as part of the vote-of-account this month in its last attempt to prop up the economy. (ET)
• According to sources, SEBI is considering a proposal for a variable load structure for mutual fund according to which investors in India may no longer have to pay entry or exit charges (loads). Distributors, however, may be allowed to charge a load on some schemes — such as money market and some liquid funds — that mostly do not attract entry loads at present. (BS)
• International Labour Organization (ILO) has stated that the impact of the global economic meltdown would be less severe in India and other south Asian countries since they are less exposed to the US economy and the financial market. ILO’s Department of Economics and Labour market analysis has also said that progress could be halted if suitable education is not imparted now. In fact, in India only education can ensure equal distribution, access to economic opportunities and brisk growth path for everyone. (BS)
• According to the recommendations proposed by the sub-panel of the Empowered Committee of State Finances Ministers, which is giving final touches to the dual GST structure for the country in consultation with the Center, in order to protect revenues of the states, demerit good alcohol may be kept outside the ambit of the Goods and Services Tax (GST) regime. A demerit good is a good whose consumption is considered unhealthy. Tobacco, another demerit good, may be brought under GST with input tax credit. Also, the Center may be allowed to levy excise duty without the input tax credit, over and above the GST rate, to protect its revenues. GST Regime is scheduled to be implemented from April next year. (BS)
• According to Confederation of Indian Industry - Ascon survey, the manufacturing sector, reeling under the impact of global financial crisis has reported slowdown in production during the first three quarters of the current fiscal. The survey shows one-third of the manufacturing sub-sectors out of 96 monitored by CII have reported negative growth in production during April-December 2008 compared with April-December 2007. The worst hit sectors in terms of declining growth are castings, synthetic fiber, textile machinery, commercial vehicles, utility vehicles, edible oil like groundnut oil, and compressors. CII has further suggested that with inflation declining, conditions are favourable for further cut in interest rates to stimulate demand and help arrest further slowdown in the manufacturing sector. (FE)
• According to sources, Govt is convening a meeting with the three apex chambers—Confederation of Industry (CII), Associated Chambers of Commerce and Industry of India (Assocham) and Federation of Indian Chambers of Commerce and Industry (Ficci) regarding the affirmative action (AA) to be taken for the SC/ST in the private sector. The meeting is likely to be held on February 9 by the department of industrial policy and promotion (DIPP) with the representatives of Indian Inc. According to sources, the meeting has been convened to ensure that the private sector sets up manufacturing units with specific emphasis for creation of employment for the SC/ STs in districts that are SC/ST dominated. Some of these areas are Chhattisgarh, Jharkhand, Orrisa, West Bengal, Madhya-Pradesh, Bihar, Rajasthan, and the North-East. It would also discuss the incentive scheme for the SC/ST and the impact on industrialisation of backward districts. (FE)
