📰 Centre amends rules for minorities from three nations
Citizenship form will have a separate column for them
•The contentious Citizenship (Amendment) Bill, 2016, is pending in Parliament, but the Union Home Ministry has notified amendments to the Citizenship Rules, 2009, to include a separate column in the citizenship form for applicants belonging to six minority communities from Pakistan, Afghanistan and Bangladesh.
•Under the amendments, a separate entry in the form will ask the applicant: “Do you belong to one of the minority communities from Afghanistan, Bangladesh and Pakistan — Hindus, Sikhs, Buddhists, Parsis, Sikhs and Christians?” The Centre has made the changes under Section 18 of the Citizenship Act, 1955. New rules were notified on December 3.
•A parliamentary committee has been examining the Citizenship (Amendment) Bill, 2016, that proposes citizenship to six persecuted minorities — Hindus, Jains, Sikhs, Parsis, Christians and Buddhists — from Pakistan, Afghanistan and Bangladesh, who came to India before 2014. It has run into strong resistance in the BJP-ruled Assam because it will pave the way for giving citizenship mostly to illegal Hindu migrants from Bangladesh in Assam, who came after March 1971, in violation of the 1985 Assam Accord.
Excluded from NRC
•Around 40 lakh people in Assam have been excluded from the final draft of the National Register of Citizens (NRC) published on July 30. Last month, the Home Ministry re-notified rules empowering 44 Collectors in seven States, except Assam, to accept online applications from those belonging to the six communities from Pakistan, Afghanistan and Bangladesh.
These rules were first notified in 2015.
•Rajendra Agarwal, BJP MP and chairman of the Joint Parliamentary Committee on the Citizenship (Amendment) Bill, told The Hindu that the Home Ministry had to carry out day-to-day works and the amended rules would benefit those who escaped persecution. “The amended rules are not in violation of the work of the parliamentary committee. It is done to provide relief to the people. The decision to grant them citizenship will be cleared by Parliament,” he said.
•Since 2011, nearly 30,000 Pakistanis, mostly Hindus, have been granted long-term visas.
📰 JICA team finds norms ‘flouted’ in Mumbai-Ahmedabad bullet train project
Japanese officials met farmers over land acquisition
•Officials of the Japan International Cooperation Agency (JICA), which is funding the Mumbai-Ahmedabad bullet train project, have apparently found violations of the agency’s guidelines in the process of land acquisition.
•The officials held a series of meetings with farmers and their representatives and also activists, who are opposing land acquisition for bullet train project.
•According to sources, a team of JICA officials is now likely to convey its concerns to the authorities in Gujarat involved in the land acquisition process.
•“They have agreed with our view that compensation has been reduced by the Gujarat government,” said a farmer’s representative, who met the JICA officials.
•The JICA team met farmers and their representatives , their lawyer Anand Yagnik and activists in Surat, Bharuch, Valsad and other places to understand their concerns and reluctance to part with land after more than 1,000 farmers filed affidavits in the Gujarat High Court challenging the State’s land acquisition process, saying it violates JICA’s guidelines.
Unilateral approach
•“During our meeting with JICA officials, we apprised them about our concerns and the unilateral approach taken by the State authorities with regard to land acquisition. We want fresh environment impact assessment and also social impact assessment,” said a farmer from Bharuch whose land is under acquisition process.
•“After the meeting, the JICA team assured us that our concerns will be addressed and JICA guidelines will be followed,” said Rohit Prajapati, a leading activist with Pariavaran Suraksha Samiti (PSS).
•Jayesh Patel of the Gujarat Khedut Samaj (Gujarat Farmers Society), also met the Japanese team and put forward demands of farmers in South Gujarat.
•“As per JICA guidelines, there must be fair compensation for those whose lands are acquired for any project where funding is provided by it but in case of bullet train project, that’s not the case because the Gujarat government has diluted the provisions so that compensation amount comes down,” Mr Patel said.
•Through their lawyer Anand Yagnik, farmers alleged that the Gujarat government has diluted the Land Acquisition Act, 2013, after Japan entered into a contract with the Indian government in September 2015 to build the country’s first high speed bullet train project between Mumbai and Ahmedabad.
•A total of 1,400 hectares land is being acquired in Maharashtra and Gujarat. Of this, 1,120 hectare land is owned by farmers, who have been demanding higher compensations.
📰 Navy on a major capability upgrade
Undertaken 113 port calls this year, says officer
•In the backdrop of increasing responsibilities in the Indian Ocean Region (IOR) and increased Chinese presence increasing the tempo of overseas deployments and exercises to an all-time high, Indian Navy has embarked on a major capability upgrade. Highlighting this, a Navy officer said that this year on an average 35 Navy ships were deployed every day.
•The Navy has undertaken 113 port calls including operational turnarounds this year and has participated in 21 exercises including the Indra series with Russia which began on Sunday,” the officer said.
•With Navy ensuring the presence of atleast one major ship at all critical choke points in the IOR under its Mission Based Deployments, the operational requirements have significantly gone up. On the other hand, India has significantly increased its military to military engagement with friendly nations as part of its defence diplomacy and the Navy is at the forefront.
•“As on today, 32 ships and submarines are presently under construction in Indian shipyards. These include the Indigenous Aircraft Carrier (IAC) Vikrant, Project-15B destroyers, Project-17A stealth frigates, P-28 Anti-Submarine Warfare (ASW) Corvettes, Offshore Patrol Vessels (OPV) and Scorpene class submarines… In addition, Government approval has also been accorded for 56 Ships and six submarines,” Navy Chief Adm Sunil Lanba said last week.
•The 56 ships are in various stages of procurement and include replacements for existing platforms as well as new additions. “Construction activity will be spread over a decade,” Adm Sunil Lanba stated.
•These include next generation frigates and destroyers, four stealth frigates from Russia, four Landing Platform Decks (LPD), 16 shallow water craft, 12 mine sweepers, five Fleet Support Ships (FSS), four survey vessels, 2 Diving Support Vessels (DSV) among others.
•The six submarines under Project-75I are being procured through the Strategic Partnership (SP) route for which the submarine specific guidelines are expected to be issued shortly taking the much delayed project forward.
•Process is also on for procurement of 57 carrier based fighter aircraft, 111 Naval Utility Helicopters (NUH), 24 Multi-Role Helicopters (MRH). There is a larger requirement of 123 MRHs which will fly from ship decks.
•The Navy currently has 117 ships, 15 submarines and over 200 aircraft and has set an ambitious target of 200-ship force by 2027.
•All this comes in the backdrop of China increasing its presence and establishing permanent facilities in the IOR. Adm Lanba stated that China deploys six to eight warships in the IOR at any given time and the eighth Chinese submarine since 2013 to enter the region returned to its base in October.
•India has of late signed a series of logistics agreements -- US, France, Singapore and more in the offing -- which the navy expects will increase its reach and also offset the deficiencies in numbers in the near term. Navy has also signed white shipping agreements with 19 countries of which 12 have been operationalized for increased Maritime Domain Awareness (MDA).
•Outlining an aircraft carrier based force structure for the Navy, Adm Lanba said, “In my opinion a three Carrier Battle Group (CBG) will suffice the Indian Navy’s role to provide maritime security in the IOR.”
•While Navy is looking for more submarines, Adm Lanba said the high cost of a carrier is justified by the capability a CBG can bring to bear. “A submarine can’t do the same role as a CBG or a carrier can do. Submarine is an ideal platform for sea denial, while a CBG is the most potent platform for sea control,” he added.
•However, the force enhancements are contingent on increased budgetary allocation which has not seen a major increase over the years. Also all three services are on a major modernisation drive putting further pressure on the limited resources.
📰 Bahrain criticises Qatar Emir for not attending GCC summit
Doha sends its State Minister to the one-day regional meet
•Bahrain’s Foreign Minister criticised Qatar’s Emir Sheikh Tamim bin Hamad al-Thani on Sunday for not attending a Gulf Arab summit in Saudi Arabia, an absence that suggests a rift between Doha and three Gulf Arab states is unlikely to be resolved soon.
•Qatar sent its State Minister for Foreign Affairs to the annual one-day summit that is overshadowed by the economic and diplomatic boycott of Doha since mid-2017 by Riyadh, the UAE, Bahrainand Egypt over allegations that Doha supports terrorism. Qatar denies the charges. “Qatar’s Emir should have accepted the fair demands (of the boycotting states) and attended the summit,” Foreign Minister Sheikh Khalid bin Ahmed Al Khalifa said in a tweet.
•In response, Ahmed bin Saeed AlRumaihi, director of the Information Office at Qatar’s Foreign Ministry, said: “Qatar can make its own decisions and had attended (last year’s) Kuwait summit while the leaders of the boycotting countries did not.”
•The Gulf Cooperation Council’s (GCC) summit of six member states opened in Riyadh on Sunday at a time when the country is under pressure over the murder of journalist Jamal Khashoggi in October at the kingdom’s Istanbul consulate.
•Saudi TV showed King Salman greeting officials from the United Arab Emirates, Oman, Bahrain and Kuwait on their arrival.
Exit from OPEC
•Doha last week abruptly announced that it was exiting the oil exporters’ group OPEC after 57 years to focus on gas in an apparent swipe at the bloc’s de facto leader Saudi Arabia. Kuwait’s ties with Riyadh are also strained over control of shared oilfields, further weakening unity of the GCC which was set up in 1980 as a bulwark against larger neighbours Iran and Iraq.
•Saudi Arabia has resisted U.S. pressure to restore ties with Doha following Khashoggi’s murder, an act that drew condemnation and scrutiny of Riyadh’s regional foreign policy.
📰 Next, GSAT-11 awaits ₹200 crore ground system
Gateways in four cities to deliver high-speed broadband via giant satellite
•Now that GSAT-11, the third and latest Internet-boosting communication satellite, is up in space, the Indian Space Research Organisation (ISRO) says it is in the process of readying a ₹150-200-crore ground infrastructure across cities to use it.
•A Ka-band hub or gateway each is being set up in Delhi, Bengaluru, Ahmedabad and Ranchi to deliver high-speed broadband services via the giant satellite.
•K.Sivan, Chairman, ISRO, said, “The activity of establishing the ground system is on and it may happen over some more months.”
•The nearly six-tonne heavyweight satellite was launched in December 5 on a European launcher. Along with its older HTS mates — GSAT-19 and GSAT-29 — it forms an Indian quartet of high-throughput satellites (HTSs). Each of them has a different space location over India and must have its own ground systems.
•The ground systems are being put up by external agencies chosen through competitive bidding. They will also be operated and maintained by them for five to seven years. Dr. Sivan admitted that there were “procedural delays” in completing the system with outside support.
•The use of the Ka band will be new in the country. In 2017, ISRO’s payload developing unit, the Space Applications Centre (SAC) in Ahmedabad, had put out a search or RFP (request for proposal) for companies that could set up GSAT-11’s Ka-band ground systems.
•About the HTSs, Dr. Sivan said, “Our target is to deliver close to [a Net data speed at the rate of] 100 Gbps through them. We have planned a fourth one, too — the GSAT-20. It will be a four-tonne-class HTS and will be launched towards the second half of 2019 on our GSLV MarkIII vehicle. With that, our current national requirement should be met.”
Remote areas
•The fleet is designed to mainly serve the remote and hilly northeastern States, and Jammu & Kashmir, which are starved of reliable Net services. “Our concentration is on those areas, where it is not possible to establish terrestrial cables as in cities,” Dr. Sivan said.
•Referring to the consecutive launches of GSAT-29 in November and GSAT-11 in December, Dr. Sivan said, “Within a matter of about 20 days, we have already beefed up the requirements of VSATs (very small aperture terminals) by putting up two satellites suited to them.”
📰 Death in the air: on tackling air pollution
It is time clean air is made a front-line political issue
•As an environmental scourge that killed an estimated 1.24 million people in India in 2017, air pollution should be among the highest policy priorities. But the Centre and State governments have tended to treat it as a chronic malaise that defies a solution. The deadly results of official apathy are outlined in the Global Burden of Disease 2017 report on the impact of air pollution on deaths, disease burden, and life expectancy across the states of India, published by The Lancet. Millions of people are forced to lead morbid lives or face premature death due to bad air quality. India’s national standard for ambient fine particulate matter, or PM2.5, is notoriously lax at 40 micrograms per cubic metre, but even so, 77% of the population was exposed to higher levels on average. No State met the annual average exposure norm for PM2.5 of 10 micrograms per cubic metre set by the World Health Organisation. If the country paid greater attention to ambient air quality and household air pollution, the researchers say, people living in the worst-affected States of Uttar Pradesh, Bihar, Rajasthan and Jharkhand could add more than 1.7 years to their life expectancy. Similar gains would accrue nationwide, but it is regions with low social development, reflected partly in reliance on solid fuels for cooking, and those with ambient air pollution caused by stubble-burning, construction dust and unbridled motorisation such as Delhi that would benefit the most.
•Sustainable solutions must be found for stubble-burning and the use of solid fuels in households, the two major sources of pollution, and State governments must be made accountable for this. The Centre should work with Punjab and Haryana to ensure that the machinery already distributed to farmers and cooperatives to handle agricultural waste is in place and working. A mechanism for rapid collection of farm residues has to be instituted. In fact, new approaches to recovering value from biomass could be the way forward. The proposal from a furniture-maker to convert straw into useful products will be keenly watched for its outcomes. A shift away from solid fuels to LPG in millions of low-income homes has provided health benefits, The Lancet study says, underscoring the value of clean alternatives. The potential of domestic biogas units, solar cookers and improved biomass cookstoves has to be explored, since they impose no additional expenditure on rural and less affluent households. Such measures should, of course, be complemented by strong control over urban sources of pollution. India’s commitments under the Paris Agreement on climate change require a sharp reduction in particulates from fossil fuel. Fuels may be relatively cleaner today and vehicles better engineered to cut emissions, but traffic densities in cities have led to a rise in pollution. Real-time measurement of pollution is also lacking. There are not enough ground-level monitoring stations for PM2.5, and studies primarily use satellite imagery and modelling to project health impacts. Rapid progress on clean air now depends on citizens making it a front-line political issue.
📰 Current account woes
Proper structural reforms are needed to boost exports, reduce dependence on imported oil
•The latest trade figures published by the Reserve Bank of India confirm the damage caused by high global oil prices in the last few months. India’s current account deficit (CAD) widened to 2.9% of gross domestic product (GDP) in the July-September quarter, a four-year high, under increasing pressure from the oil bill. This is in contrast to the same quarter a year ago when the CAD was only 1.1% of GDP. The widening of the CAD was due to an increase in the trade deficit, which jumped to $50 billion in the September quarter as compared to $32.5 billion a year ago, due to a higher import bill. The government, however, may not be too worried about the widening CAD figures as the major factor that was behind the phenomenon has abated; global oil prices have dropped sharply since early October. Brent crude is down almost 30% from the high it reached in early October. So the size of the deficit is likely to come down in the quarter ending December. This is not to suggest that all is fine. As usual, medium to long-term risks to the external sector remain. For one, there is the threat of price volatility faced by heavy importers of oil. Unless India manages to diversify its energy base by tapping into local sources of energy, this will remain a perennial threat to economic stability.
•A widening current account deficit per se should not be a cause for worry as long as foreign capital inflows into the economy are brisk enough to fund its huge import needs. The trouble arises when foreign inflows dry up and restrict the ability to purchase essential imports. So as liquidity conditions continue to tighten across the world, India’s heavy import dependence is a cause for concern. Meanwhile, when Western central banks tighten their monetary policy, the RBI will be forced to tighten its own policy stance in order to retain investment capital and defend the rupee. This will impact domestic economic growth negatively. Each time the external account has come under pressure, the government has simply tried to bring in piecemeal emergency measures, such as a little opening up of the capital account or ill-advised restrictions on imports. Such a policy obviously manages to only kick the can down the road rather than bring a permanent solution to the problem. In order to bring about any meaningful change, the government should also try implementing proper structural reforms that can boost exports, thus helping fund imports through means other than capital inflows, and end the over-reliance on imported oil.
📰 Urjit Patel makes a statement with his CRR remark
‘CRR decision not in MPC’s ambit’
•At the press conference post the fifth monetary policy review on December 5, Reserve Bank of India Governor Urjit Patel brushed aside a question on reduction in cash reserve ratio (CRR) saying that it is not in the ambit of the Monetary Policy Committee (MPC).
•On the face of it, it might look like he has only stated the obvious. But it is not so black and white. The unasked question on CRR was: why cannot it be voted upon in the MPC? It is after all a liquidity management tool that can impact interest rate. And again, it is not as if the MPC votes only on the repo rate. Though the law mandates voting only on repo rate, there is voting on the policy stance as well. So, why not on CRR as well? Mr. Patel’s answer at the press conference has to be seen in this context.
•Observers see this as an emphatic statement on who is the decision-making authority on CRR. There are two other statements in the press conference which are seen as Mr Patel attempting to regain ground lost in the last board meeting of the RBI.
•By unambiguously stating that liquidity is no longer an issue for non-banking finance companies, the RBI has virtually ruled out any discussion on the subject during the next board meeting. The issues of providing liquidity for NBFCs and RBI governance are expected to be on the agenda of the next board meeting scheduled for December 14.
•The other decision was to form an expert committee for micro, small and medium enterprises.
•The central bank noted that without understanding the economic forces and transaction costs affecting the performance of the MSMEs, the often adoptedrehabilitation approach to the MSMEs stress has ‘focused on deploying favourable credit terms and regulatory forbearances.’
•With this committee, RBI has ensured that the issue will not be taken up by the board in the near term. The composition of the committee and its terms of reference will be finalised by the end of December 2018 and the report will be submitted by the end of June 2019.
📰 ‘Challenge for the panel is we don’t know what the resources are’
GST collections are yet to show a stable trend which means projections for 2020-25 are difficult, says the Chairman of the Fifteenth Finance Commission
•The Chairman of the Fifteenth Finance Commission, N.K. Singh, says that though the Commission will have to take the 2011 census as the base year for population, it could use a combination of variables to ensure that performance and efficiency on part of the States are not penalised, while at the same time ensuring that considerations of equity are suitably addressed. Excerpts from an interview:
Some States have argued for the use of the 1971 census to consider population. Your view?
•The Presidential notification on the Terms of Reference (ToR) of the Commission says that wherever we have to use population we have to use 2011 as the base year. Nonetheless, there are several things open to us.
•Naturally, those States where there has been improved demographic management have argued that the 2011 census is not rational or fair to them. And those States where population base is large have argued that population must be [taken] as it is today.
•And their needs for roads, education, health … the fact is whatever the legacy issues, these are people as is where is now, and therefore have argued that it’s quite fair to use the later population base.
•The wording of the ToR of the 14th Finance Commission gave it some latitude and it therefore chose to give 27% weightage to population – 17% and 10%, ie 10% for the later 2011 population and 17% for the earlier one.
•This time, perhaps the wording does not allow that degree of latitude; but there is a reference in the ToR of suitably incentivising States which have achieved better demographics management. One can use a combination of variables to try and see that performance and efficiency is not penalised while at the same time ensuring that considerations of equity are suitably addressed.
How important is it that political parties are aligned?
•It came as a pleasant reminder, whenever we visited the States. Apart from meeting governments, we have met representatives of all political parties across the spectrum.
•And all political parties, invariably, have signed a common memorandum that invariably articulates the viewpoint contained in the State government’s memorandum.
•Political parties have come to the conclusion that this is in the interests of the State, that they must sink their political differences and put their strength behind the point of view articulated by the State in the memorandum submitted to the Commission.
What is the biggest challenge for the Commission?
•Right now, the most important challenge for the Commission is that we don’t know what the resources are because of several factors. First and foremost, the GST itself.
•GST does mean a case of pooled sovereignty. So a State government’s flexibility in calibrating their excise rates to meet their targets has now been submerged in the GST.
•So the manoeuvrability of States to address their revenue deficit issues through additional revenue measures have to that extent got circumscribed, so they have to look at non-tax revenues in being able to garner this. Second, as GST rates have been changed several times and their structure has been changed several times, we need to wait for figures at the end of the current fiscal year, to make projections – and don’t forget, we have to make projections for the years 2020 to 2025 – and therefore what revenue buoyancy numbers would be reasonable and consistent with actual performance is the key variable of how much resources we have.
•The second challenge is that we are awaiting eagerly the memorandum of the central government, which we hope will be available by this month and which would tell us what the expectations of the central government are in terms of the obligations and responsibilities they have for the vertical distribution formula – which is the first thing we have to decide, the split between the Centre and the State.
•Last year, in the notification issued by the Ministry of Finance, they have made Centrally Sponsored (CS) schemes have a sunset clause that is co-terminus with the cycle of the Finance Commission.
•This is a very important change, that the open ended Schemes in a major rationalisation taken up last year, all now have a sunset clause, unless specifically so indicated — like the Pradhan Mantri Gram Sadak Yojana has just been extended to 2022-23. This clause means that for the continuation of the schemes in the next Commission cycle, they must be reviewed and some conclusion on their continuation must be reached. We hope that when we receive the memorandum of the central government, not only the issue of Central outlay but also on the issue of CS schemes, there is some thought to be given which will be of some value to us.
•CS schemes are a jungle, in the sense that all attempts at trying to rationalise them have only met with partial success.
•I think the PM did, in the initial stages, recognise the problem.
•He set up a committee under Shivraj Singh Chauhan which suggested the rationalisation of the CS schemes which was accepted by the council, classifying them as ‘core of the core’ and ‘the core and the optional’. But they have umbrella schemes and under the umbrella, most of the schemes that existed before have resurfaced.
•This is a case in which small sums of money [are allocated] with huge establishment costs.
•Many of them are there, and there is a great need to rationalise them. The 14th Finance Commission had hoped that when they made 32% into 42% one of the assumptions was that there would be a significant a rationalisation of these myriad CS schemes, many of which may have lost contemporary relevance; unfortunately that did not happen and that is part of the problem.
•You had talked of incentivising States for acting on pollution...
•We are getting some research done by The Energy Research Institute of India(TERI) and other international organisations for developing a composite environmental index. In such an index, the ease of not merely business, not merely life, but let’s say, ease of breathing is an interesting thought and we are trying to see whether we can develop criteria of measuring that. Data on pollution levels, particularly in urban areas, is quite available and [we have to see] whether that can be made a variable in a composite environmental index which somewhat broadens the forest cover without penalising States that have forest cover. In the case of the forest cover, here’s an interesting point. In the last Commission, weightage of 7.5 was given to the forest cover.
•Now, we found out that the bulk of money did not go to the forest department of the States that receive benefits from this. It went into the consolidated funds. That is the catch. They say this is not illogical, because many of these States, particularly the northeast and hill states, say they maintain these forests, do not get too much revenue because they are eco-sensitive zones; these are the lungs of the country, entailing costs but the States do not get any revenue. Partly, with these funds going into the consolidated funds, they are being compensated for their fiscal disability in this regard; that has to be viewed somewhat differently; fiscal disability compensation versus what might go directly into the forest part of it in terms of preservation and development.
📰 The world may turn flat for Indian companies, thanks to SEBI panel
Amendments to key laws needed before the suggestion can become reality
•The world is flat is an international best-seller by three-time Pulitzer Prize winner Thomas Friedman. The title of the 2005 book was a smart take on the concept that the world should be a level-playing field, with all companies getting equal opportunity.
•Taking a cue from this, perhaps, a panel of experts appointed by the Securities and Exchange Board of India (SEBI), in their own little way, tried to ‘make the world flat’ for Indian and overseas companies, last week.
•The panel recommended that unlisted Indian companies should be allowed to do direct equity listing in select overseas markets and that companies from such jurisdictions should also be allowed to list their shares on Indian bourses. To be sure, this is just a recommendation.
•The board of the capital markets regulator, which has representations from the Reserve Bank of India (RBI) and the government, could deliberate on this before giving the proposals a final shape.
•The importance of the recommendations, however, cannot be disputed. Current regulations bar unlisted Indian companies to list their shares overseas, though such entities could list their depository receipts, which many companies have done.
•Also, overseas companies can currently list here only by way of issuing Indian Depository Receipts (IDRs), a framework that has proved to be a non-starter with just one issuance in 2010 of Standard Chartered Plc.
•Interestingly, the panel has been quite pragmatic in their approach and has tried to create a framework keeping the current regulatory system in sight.
•“One good thing about the report is that it is in a plug-and-play format,” said a person familiar with the committee’s deliberations.
•“The regulatory framework has been designed keeping in mind the current framework. More importantly, the changes that are required can be done by way of a notification or circular by other regulators or policymakers. There is no amendment required to any of the laws, which would have made this whole exercise a very time-consuming one,” the person, who wished not to be named, said.
Amendments needed
•While the committee has put forth its set of recommendations, the listing framework would only be possible after amendments to two key laws — Foreign Exchange Management Act (FEMA) and Companies Act. “Such a step of allowing unlisted Indian firms qualifying the criteria for listing their equity overseas is a welcome move,” said Daizy Chawla, senior partner, Singh & Associates, a law firm.
•“With respect to the amendment to FEMA, the same can be done through issuing a circular by RBI. As far as the amendment in Companies Act is concerned, the same will also not be a problem considering that in 2016 with respect to Masala Bonds, the same was done by issuing a circular,” Mr. Chawla added.
•The SEBI panel has been quite choosy in terms of the countries and the exchanges that have been included as ‘Permissible Jurisdictions,’ where unlisted Indian companies can do a direct equity listing.
•While the starting point was IOSCO - International Organization of Securities Commissions – signatories, the SEBI panel only chose those jurisdictions that are part of the IOSCO board and not just ordinary members of the global body.
•The permissible jurisdictions have been identified as U.S., China, Japan, United Kingdom, Hong Kong, South Korea, France, Germany, Canada and Switzerland. Thereafter, the exchanges were zeroed in on the basis of liquidity by referring to the data from the World Federation of Exchanges (WFE).
•Mona Bhide, managing partner, Dave & Girish & Co., believes that while the recommendation is an essential step to take India ahead as a player in the global securities market, the path does have certain legal issues that need to be addressed carefully.
•“Changes to existing statutes can be done only by passing a law that amends the existing law at Parliament level and that would require time.
•“However, relaxation to existing FEMA guidelines can be made by RBI. We also need to bear in mind that FEMA has already prescribed sectoral limits to foreign investments.
•“So, the new guidelines will need to provide that the total foreign investments in an Indian company should not exceed the existing prescribed limits,” explained Ms. Bhide.
•In 2014, the almost $22-billion public issue of Chinese major Alibaba on the New York Stock Exchange (NYSE) was the largest such offering in U.S. history. Further, MakeMyTrip formed a company overseas to make it easier to list on NASDAQ.
•Incidentally, the SEBI panel is of the view that such listing, if allowed, would benefit companies in the form of alternative source of capital, broader investor base and better valuation along with other strategic benefits.
•While recommending to allow allowing overseas companies to list in India, the committee felt that Indian investors could benefit from enhanced diversification of portfolios and participation in the wealth Bioplastic seen as a viable alternativereated by global companies.
📰 Bioplastic seen as a viable alternative
Made using plant-based raw materials
•With the ban on single-use plastics looming, various alternatives and innovations are being mooted. One of the substitutes that has been researched over the past many years is biodegradable and compostable plastic materials, also known as bioplastic.
•Bioplastics are made using a range of materials such as sugarcane, corn and other plant-based sources but are stable enough to be used under controlled heat conditions.
•These products can be turned into compost with little damage to the environment as compared to single-use plastics.
The PLA option
•Among the many bioplastics, poly lactic acid, known as PLA, is seen as a viable option to single-use plastics.
•PLA products are made using raw materials like sugarcane and corn, which are converted into lactic acid and then used to make products.
•“PLA products are generally made from plant resources. These products are degradable both under aerobic and anerobic conditions. They do not pollute the environment and can be used for a variety of things such as spoons, plastic containers and tumblers,” Arthi Rathinasabapathy, Phd Biotechnology from CINVESTAV-IPN, Mexico, told The Hindu
•A joint venture company, Total Corbion PLA, which has set up a plant in Thailand to manufacture PLA products, is now conducting trials of PLA-based paper cups in Namakkal and Sivakasi.
Cost conundrum
•“Using PLA, we can make cups, cutlery, can coat them onto paper…PLA degrades much faster. It leaves no harmful substances (as residue),” Stefan Barot, Senior Business Director, Total Corbion, said.
•According to him, it takes just about 1.6 kg of sugar to make 1kg of PLA, compared to other types of bioplastics that require significantly more natural resources. Mr. Barot said the company set up a plant in Thailand since it is one of the top sugar-producing countries in the world. India too offers the same advantage.
•Dr. Arthi said one of the issues with such alternative sources of plastic is the high cost of manufacturing.
•“The cost is almost 50 times higher. Only if demand for such products increases will costs come down,” she said.
