• Govt okays major easing of FDI norms
• STPIs, 100% EOUs may enjoy tax holiday for 3 more years
• Govt revives idea of higher education commission
• SEBI to consider uniform face value of shares
• Insurance Bill: House nod unlikely
• Decision soon on foreign stake in local airlines
• Govt approves facsimile edition of ‘WSJ’
• Nod for recapitalisation of 3 PSBs
• Nod to JV for airlines hub in Nagpur
• The Cabinet Committee on Economic Affairs (CCEA) has issued guidelines for computation of foreign holding in Indian companies, linking approvals to the concept of control for the first time. The new measures are likely to be implemented with prospective effect and two Press Notes of the 2009 series will be released in the next 10 days. Under the new guidelines, downstream investments by an Indian company that has foreign investment but is “owned and controlled” by Indians will not be considered FDI. However, if the investing Indian company is foreign-owned and controlled, then its entire downstream investments will be considered indirect FDI. (BS)
• According to sources, govt plans to extend the tax concessions enjoyed by technology parks and 100% export-oriented units (EOUs) beyond March 2010. The commerce department and the IT ministry are learnt to be jointly lobbying for a three-year extension of the tax concessions offered to the software & technology parks of India (STPI) to ensure a steady flow of investments into the sector. A case is also being made for the continuation of sops to 100% EOUs to make the country’s exports more competitive in the global market. (ET)
• According to sources, govt is considering creation of a permanent higher education commission as an apex authority to anchor the increasingly large private role in the sector as well as the government colleges. The proposal is being pushed by the ministry of human resource development, which is known to be in favour of retaining education in state control. A committee under educationist Professor Yashpal is already preparing a report on regulating higher education and its recommendations are to guide the future of the proposed commission. The idea of a commission is to provide the means to regulate the large private sector share in education as well as to prevent the entry of an independent body like the one proposed by the Knowledge Commission. (BS)
• SEBI is learnt to be considering its Primary Market Advisory Committee’s recommendation to introduce a uniform face value system for all listed companies. According to the recommendations put on the SEBI’s website, the multiple face value system creates confusion among investors and investors tend to look at the market price of a particular stock without knowing its face value. The confusion is compounded when companies declare dividend as a percentage of the face value as the practice of declaring a percentage dividend based on a low face value is misleading, especially when the company has raised money at a hefty premium or when its stock was trading at a high price in the secondary market. Abolition of the multiple face value concept would lead to the merger of the capital of a company with its share premium account and the declaration of dividend per share would then provide a much clearer picture of corporate performance. (BS)
• According to sources, the Insurance Laws (Amendment) Bill is unlikely to be enacted during the current tenure of the govt. The Bill was introduced in the Rajya Sabha in December 2008 to raise the FDI threshold in the insurance sector from 26% to 49%. But neither has the parliamentary standing committee on finance cleared it, nor is the panel scheduled to meet during the upcoming session. (FE)
• According to sources, govt will decide very soon on a plan to allow overseas airlines to purchase a stake in local carriers opening the doors for foreign carriers to invest in the country. Govt may permit overseas airlines to own stakes of up to 25%. (Mint)
• Ministry of information and broadcasting has approved publication of facsimile edition of ‘The Wall Street Journal’ and ‘The Wall Street Journal Asia’, in India. The two newspapers will be published by Wall Street Journal India Publishing Pvt. Ltd, a fully owned subsidiary of the US-based Dow Jones and Co. Inc. The co recently got the FIPB approval for a FDI of Rs2.16 crore to launch the facsimile editions. This is the first time a foreign news and current affairs publisher has been allowed to launch a facsimile edition on its own. (Mint)
• Govt has approved the recapitalisation of three public sector banks (PSBs), Uco Bank, Vijaya Bank and Central Bank of India, by infusing Rs 3,800 crore. Under the approved recapitalisation plan, govt would infuse Rs 1,400 crore into the Central Bank of India while Vijaya Bank and Uco Bank would get Rs 1,200 crore each. The fund infusion would increase the banks’ capital adequacy ratio (CAR) to more than the desired level of 12%.
• Union Cabinet has approved the handing over of Dr Babasaheb Ambedkar International Airport in Nagpur to a JV company for upgrading it to a multi-modal international passenger and cargo hub. The JV partners are the Airports Authority of India (AAI) and Maharashtra Airport Development Company (MADC) Ltd, set up by the Maharashtra government. The venture would now invite a partner for a second JV that would undertake the modernisation programme. The partner would be selected on a competitive basis and would have a 76 per cent stake. The remaining stake would be with the approved JV. The JV will develop a world-class passenger and cargo hub in Nagpur through the PPP model. The second JV will also have to be approved by the Union Cabinet. The project is planned to be developed in three phases with capital cost estimated at Rs 3,327.5 crore over the period up to 2035. (BS)
