Economy News-Daily Digest: 6 Key Updates
1. Indian Govt Signs Loan Agreement With JICA For Bullet Train Funds
The Indian Government signed an agreement with the Japan International Cooperation Agency (JICA) which has agreed to provide an Official Development Assistance (ODA) loan of around Rs 5,500 crore (89,547 million Japanese Yen) as Tranche 1 for the the Mumbai-Ahmedabad High-Speed Rail project.
JICA had agreed to provide nearly 80,000 crore for the High Speed Rail Project, the cost of which was estimated at 1 lakh crore, but so far, only 125 crore has been released.
2. Indian Ports Association appoints Managed Service Provider for Port Enterprise Business System for Five Major Ports
As part of its efforts to promote Ease of doing Business through digital transformation and build a world class port infrastructure in the country, the Indian Ports Association (IPA) has appointed M/s Tech Mahindra as the Managed Service Provider for the five major ports at Mumbai ,Kolkata, Chennai, Deendayal Port and Paradip Port Trust. This initiative is a major step towards integrating the maritime sector and fostering growth and development of major public sector ports in the country.
The proposed Enterprise Business System will comprise of three core solution components – Port Operations Solution, standard ERP solutions, and auxiliary solutions, and would tightly integrate with Port Community System (PCS) and other retained applications of ports, Enterprise Business standard processes and shared infrastructure on cloud, making it next generation modern system which will serve ports purpose in coming years. The system would be driven by transparent, simple and error-free business processes, easily measured by clearly defined key performance indicators, use latest technology to achieve strategic business objectives and integrate seamlessly with prevalent systems and devices. The solution proposes a cafeteria approach for ports, which allows them to select the systems that they want to be implemented as per their needs. This model enables a minimal efforts in a seamless manner if new ports opt to join the system in near future.
The Project Implementation and Stabilisation period is 20 months and Operations & Maintenance support is for 5 years.
The five major port trusts, viz, Mumbai Port Trust, Kolkata Port Trust, Chennai Port Trust, Deendayal Port Trust and Paradip Port Trust have come together in this collaborative effort towards building a common shared platform for modernization and automation of port processes. The key benefits from the system in Port and Shipping sector include:
- Improve India’s ranking in Ease of doing business
- Enable faster request processing in delivery of services with better turnaround time
- Reduction in manual intervention/documentation required
- Reduction in overall Transaction time and costs
- Improve the efficiency of port operations, quick turn round of vessel and subsequent less dwell time
- Dashboard to ports/MOS for Real Time MIS on cargo/ship movements & Exim transactions
- Simplified and accelerated procedures for cargo entry, exit or transit
- Enhanced transparency across systems
3. Habibganj to be Indian Railways’ 1st world-class station
The redevelopment work of Indian Railways stations across the country is going on and the first railway station that will be ready soon is the Habibganj railway station in Madhya Pradesh. The Habibganj railway station is India’s first to be reconstructed on the lines of Germany’s Heidelberg railway station.
The station is being redeveloped by Indian Railway Stations Development Corporation (IRSDC) along with a private firm, the Bansal Group.
It will become the first railway station in the country to be redeveloped under the PPP (Public-Private Partnership) model.
4. Government forms high-level panel to look into global trade challenges
The Commerce Ministry has constituted a High Level Advisory Group (HLAG) to look into the challenges emanating from the current global trade scenario and suggest ways to boost the country’s goods and services exports. The formation of the panel was approved by commerce and industry minister Suresh Prabhu.
The panel will examine the prevailing international trade dynamics, the rising protectionist tendencies, non-engagement by some countries on outstanding trade negotiation issues and their insistence on pursuing negotiating mandates.
It would also suggest a pragmatic framework for India’s future engagement in international trade, and the manner in which it can play a proactive and constructive role in exploring and building consensus on resolving trade related issues.
Surjit S Bhalla, Director of Oxus Research and Investments, will chair HLAG. Other members of the group include former foreign secretary S Jaishankar, Principal Economic Advisor Sanjeev Sanyal, among others.
HLAG will meet regularly over the next two months and make specific recommendations to facilitate the formulation of future trade policies.
5. GST council meeting: 7-member panel set up on ‘calamity tax’
The Goods and Services Tax (GST) Council in its 30th meeting decided to form a seven-member ministerial group to examine the modalities for revenue mobilisation in case of natural calamities and disasters such as the recent floods in the state of Kerala. The committee headed by Bihar’s Deputy Chief Minister Sushil Kumar Modi has to submit its report by October 31.
The Council broadly agreed to discuss the legality of such a levy at national level and not restrict it to one state. Kerala had demanded levy of a special cess on State GST (SGST) to raise revenues in the aftermath of floods in the state.
The committee will look into five issues flagged by the Council, including whether the new tax should be levied only in the state concerned or should it be an all-India levy, and that should it be on specified luxury or sin goods only.
The GoM will also look into whether National Disaster Response Fund (NDRF)/State Disaster Response Fund (SRF) mechanism is sufficient to deal with calamities and also define circumstances where the ‘calamity tax’ can be imposed as also the legal aspect of imposition of such a tax within the GST.
Assam Finance Minister Himanta Biswa Sarma, Kerala Finance Minister Thomas Isaac and Punjab Finance Minister Manpreet Singh Badal are part of the ministerial committee. Other members of the GoM are Odisha Finance & Excise Minister Sashi Bhusan Behera, Maharashtra Finance & Excise Minister Sudhir Murgantiwar and Uttarakhand Finance Minister Prakash Pant.
6. Government sets up 11-member panel to review framework for CSR policy
The government has set up an 11-member high-level panel to review the existing framework, guide and formulate the roadmap for a coherent policy on corporate social responsibility (CSR) activities under the companies law.
The panel will be chaired by corporate affairs secretary Injeti Srinivas.
The Companies Act mandates that firms with a net worth of at least Rs 500 crore or revenue of Rs 1,000 crore or net profit of Rs 5 crore should spend at least 2% of their net profit on CSR. It also mandates that any failure in this regard should be explained in the annual financial statement. The disclosure requirement was meant to ensure firms do their best in CSR initiatives and hence no penalty for default of this requirement is prescribed in the law.
The committee is expected to review the existing CSR framework as per act, rules and circulars issued from time to time and recommend guidelines for better enforcement of CSR provisions. It will analyze outcomes of CSR activities/programmes/projects and suggest measures for effective monitoring and evaluation of CSR by companies. Suggestions are also expected on innovative solutions, use of technology, platform to connect stakeholders, and social audit.
According to the ministry of corporate affairs, the four years of implementation of CSR have enabled compilation of data on the number of companies complying with CSR provisions, funds allocated and spent across various sectors, and geographical spread of CSR spending, among others.