| Modi unveils new governance model |
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New Delhi, 27 February The Bharatiya Janata Party's (BJP's) prime ministerial candidate, Narendra Modi, on Thursday said his idea of a better governance model would stand on the feet of greater economic federalism, more harmony in decision making and fewer laws. He said he favoured a goods and services tax ( GST) — but not before suitable information- technology ( IT) infrastructure was put in place — and told traders they could combat the challenge of big brands by increased use of e- commerce. Foreign investment wasn't a sin but an opportunity, Modi said, though without revealing his stand on foreign direct investment ( FDI) in multi- brand retail. Besides calling for a stop to migration to big cities, he said public- sector undertakings shouldn't be disinvested but experts in the In an address to a gathering of industry captains, top corporate executives and economic experts — from India and abroad — he invoked Mahatma Gandhi's name several times. In what appeared a response to the traction the Aam Aadmi Party's participatory democracy call had gathered, he said development could not merely be a government agenda but a jan andolan ( a people's movement). He said his inspiration was Gandhi, who succeeded in making the fight for independence a battle every Indian could participate in. Even an effort to ensure India's energy security should become a popular movement, where each person should think of saving electricity and use of fuel, he said. The Gujarat chief minister borrowed from Gandhi's concept of trusteeship to elaborate on his idea of leadership. He said the prime minister should be the trustee of the people, able to call on the populace, in addressing problems. Pitching for strengthening India's federal structure, he said the real team in the country wasn't the PM and his Cabinet but the PM and states' chief ministers. Modi's speech reflected much homework and an effort to explain his understanding of economic liberalism in common man's language. Unfortunately, in the absence of live translation, the speech delivered in Hindi was lost on the economic experts and executives the India Foundation, the organisers of the event, had invited from abroad. Turn to Page 12 > STRAIGHT TALK ON GOVERNANCE "The fashion to run the country from Delhi must end. States should be more empowered... states must be trusted to govern" ON E- COMMERCE "Trading community shouldn't run away from global challenges. Don't be scared of online growth. Face the challenges and modernise your supply chain and delivery system... demand from govt to help build your capacity" ON SYSTEM & LAWS "System does not run on laws but on trust. The law enters when the system is broken. This is the basic principle from which will begin the total overhaul of the governance I am talking about" ON GOODS & SERVICES TAX "We are in favour of goods &services tax. But till online operations are put in place, GST is impossible. IT infrastructure is the first requirement for GST. But the Centre is not prepared for it" |
| Deloitte objects to PWC's special audit report on MCX |
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Mumbai, 27 February Deloitte Haskins & Sells, the auditor of Multi Commodity Exchange ( MCX), is understood to have objected to a special audit report on the exchange by PricewaterhouseCoopers (PwC). Earlier, the Forward Markets Commission ( FMC) had asked PwC to carry out a special audit of MCX, since the exchange's inception in 2003. A source privy to the development said Deloitte, MCX's auditor for most of the past decade, had reportedly objected to PwC pointing out several irregularities in the exchange's expenditure, donations, etc, in its audit report. Attempts to contact Deloitte failed. Sources said Deloitte might challenge PwC's findings. On Thursday, the MCX's audit committee met. This was followed by a meeting of the exchange's board, at which the issue of Deloitte objecting to the PwC report was taken up. FMC had provided the exchange an interim report by PwC, which was placed before the meeting of the MCX board of directors on February 13. The board had said before coming out with suggestions, if any, for the board of directors, the audit committee should discuss the findings with PwC. FMC had asked the exchange to take action based on the findings of the report and submit an action- taken report to the regulator. According to MCX's filing on BSE, the audit committee has interacted with PwC team. " This is an interim report submitted by PwC on which certain additional inputs are sought by the audit committee; the final report from them is still awaited," MCX said. Meanwhile, at the MCX board meeting on Thursday, it was decided two cases of likely default would be transferred to the exchange's defaults committee. |
| CSR to exclude political funding |
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New Delhi, 27 February Political funding by India Inc will not qualify as spending on corporate social responsibility (CSR), according to the CSR rules notified by the ministry of corporate affairs on Thursday, about five months after draft rules in this regard were put in the public domain for consultation. The norms will also be applicable to foreign companies with branches or project offices in India. For these companies, all CSR activities have to be carried out in India. The notification, effective from April 1 this year, clearly states any contribution from companies made " directly or indirectly" to any political party won't be considered CSR activity. The notification comes merely months before general elections in the country. Last year, the government had provided a new structure for political funding by companies, under which these entities could set up 'electoral trusts' for providing funds to registered political parties. The ' electoral trust' structure also provides for a few tax benefits to these entities for funds provided to political parties. About a dozen entities, including those related to the Ambanis, Tatas, Mittals, Birlas and Vedanta, have already set up such trusts. Companies' CSR activities will cover a wide range of activities, added after consultations with stakeholders. These include projects promoting preventive health care and sanitation, livelihood enhancement projects, protection of national- heritage art & culture and steps for the benefit of armed forces veterans. Activities aimed at reducing the inequality faced by socially and economically backward groups have been included under CSR. However, activities that help only company employees and their families won't be part of CSR activities. Before finalising and notifying the rules, the ministry of corporate affairs consulted various stakeholders, including stalwarts of India Inc. The draft CSR rules were issued on September 10, 2013. The new Companies Act, 2013, mandates companies with a net worth of at least ₹ 500 crore or a turnover of at least ₹ 1,000 crore or a net profit of at least ₹ 5 crore to spend at least two per cent of their average net profits of the past three years on CSR activities. While deciding if a company has to spend on CSR, profit from foreign branches and dividend received from other companies in India will be excluded from the net profit criteria. The board reports for companies spending on CSR have to include an annual report on CSR activities. In the case of a foreign company, its balance sheet will have to have an annexure on CSR spend. "The CSR rules released today ( Tuesday) have answered many questions companies had. The time taken for release of the rules is justified by the clarity the rules have brought out," said Santhosh Jayaram, technical director ( sustainability), KPMG in India. Norm will also be applicable to foreign companies with branches or project offices in India |
| Modi questions Centre's preparedness on GST |
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The Bharatiya Janata Party (BJP)' s prime ministerial candidate, Narendra Modi, on Thursday questioned the UPA government's preparedness for introducing the much- awaited goods and services tax ( GST). The Gujarat chief minister said the BJP was not opposed to GST but the indirect tax reform cannot be rolled out before putting in place an information technology (IT) infrastructure and addressing states' concerns. "We are in favour of GST. But till online operations are not there, GST is impossible. IT infrastructure is the first requirement for GST. But the Centre is not prepared for it," Modi said while addressing agathering of chartered accounts and finance professionals organised by the Bhartiya Vitta Salahkar Samiti. Modi said he had also told Finance Minister P Chidambaram the Centre had not prepared the groundwork for setting up the IT infrastructure for GST. As the Centre was trying to get states on board for introducing GST, which will help plug leakages and widen the tax base, Gujarat and Madhya Pradesh, both ruled by the BJP, were the two key opponents of it. "Secondly, in a federal structure, the Centre should emphatically look at the concerns of states," said Modi. GST, which would replace excise duty and service tax at the Centre's end and value added tax ( VAT) on the states' front, was originally scheduled to come into effect from April 1, 2010. However, it is not slated to come into operation even in the current financial year. In a different context, Modi said: " Our states are our strength; they are not our weakness. States are important. Federal structure is important in letter and spirit; it is our strength." He also stressed the need to maintain the sanctity of bodies such as the Central Bureau of Investigation and Central Vigilance Commission. Answering queries from the chartered accountants, Modi said urbanisation was not a problem, but people should be able to make a living in small towns and villages, too. He said there are a lot of opportunities in the agriculture sector but no one was focusing on technology in agriculture. He highlighted skill development, faster disposal of cases by setting up Lok Adalats, professionalism of public sector units and prevention of corruption as other factors that can contribute to growth. "It is said PSUs ( public sector undertakings) are born to die — either get closed or get sold. We thought differently and professionalised our institutions," he said. Attacking Prime Minister Manmohan Singh, Modi said the UPA government cannot blame coalition politics for its failures as former prime minister Atal Bihari Vajpayee successfully led a coalition government during the NDA regime. THE TAX CONUNDRUM 100 DAYS AGENDA* |Privatisation and disinvestment: Privatise Coal India Limited |Recapitalise banks whose non- performing assets have increased to unsustainable levels |Introduce the goods and services tax and the direct taxes code |Reform the labour laws to make both hiring and exits easy |Revamp the agriculture sector to usher in a second Green Revolution. Scrap the Agriculture Produce Marketing Committee laws |Abolish the system of minimum support prices for farm goods, allow free trade of agricultural goods across the country and facilitate the adoption of genetically modified crops |Allow foreign direct investment in major areas, including in retail, to create more jobs *Action plan recommended for the new government in its first 100 days after its formation sometime in May 2014. The recommendations were made at the first panel discussion at the India Economic Convention 2014 on Thursday, February 27 DEEPAK PAREKH'S 10- POINT AGENDA* |Create energy security by boosting domestic production of coal by unshackling the sector, allowing private producers in coal and privatising Coal India Limited |Deepen the financial markets; let insurance and pension funds come in freely to meet the huge demand for funds for the infrastructure sector |Ensure better and more smooth interministerial coordination so that one arm of the government knows what the other arm is planning. A strong Prime Ministers Office is a must |Revive focus on boosting urban infrastructure |Corporatise Indian Railways to make it more modern and efficient |Allow foreign direct investment in different sectors |Strengthen and expand the scheme for direct transfer of benefits |Work towards improving the ease of doing business in India. |Make policies transparently and without any flip- flops |Instil confidence in the bureaucracy, which is demoralised; politicians must back the bureaucracy for taking tough and complex decisions *Suggestions made by Deepak Parekh, chairman of HDFC, at the India Economic Convention 2014 BATTLEGROUND ELECTIONS 2014 |
| CBI says 50 million duped of ₹ 45,000 cr |
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New Delhi, 27 February Nirmal Singh Bhangoo, promoter of Jaipur- based Pearls Agrotech Corporation Ltd ( PACL) and Pearls Golden Forest ( PGF), and Sukhdev Singh, director, PACL, had allegedly managed to pull off a scam a fourth the size of the 2G telecom spectrum scam or coal block allocation scam. Five days after registering aFirst Information Report ( FIR) against Bhangoo, Singh and the companies, the Central Bureau of Investigation (CBI) said it had found the alleged scam of agricultural land allotment was of ₹ 45,000 crore. It said the two had raised money from "over 50- million gullible investors through a collective investment scheme under the garb of sale and development of agricultural land." The CBI had registered a case of cheating and criminal conspiracy in this matter on the directions of the Supreme Court. Bhangoo and Singh were allegedly running a pyramid scheme through a vast network of commission agents across the country. The agents were being paid hefty commissions for luring investors, according to the agency. The CBI inquiry indicated the company was raising money by issuing bogus land allotment letters. The probe revealed the PACL, after being directed by the high court of Punjab and Haryana to wind up the scheme and refund investors, had started a similar fraudulent scheme under another company. Funds from the new company were used to pay old investors "to stave off criminal prosecution." Two missing on Navy vessel found dead AGRICULTURAL LAND SCHEME |
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