Source Business standard
| Now, Rajasthan set to amend Apprentices Act |
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New Delhi, 1 July After announcing a series of labour reforms to attract investment in Rajasthan, the state government has now decided to amend another central law, the Apprentices Act, 1961. It is expected the move will help industry get skilled workers and generate more opportunities for the state's youth. The Act was last amended in 1973, when the training of graduates and diploma holders in engineering and technology was brought under its purview. Since the Vasundhara Rajeled government came to power in Rajasthan in December 2013, 18 companies have either invested or are in the process of investing ₹ 34,380 crore in the state. Raje's government has already announced it will amend the Industrial Disputes Act, 1947, the Factories Act, 1948, and the Contract Labour Act, 1970. These Acts, along with the Apprentices Act, fall under the Concurrent List; amendments to these require the state Assembly's and, subsequently, the President's assent. These amendments will be taken up by the Rajasthan Assembly in two weeks. "Amendments will be made in the Apprentices Act, 1961, to create larger opportunities of employment for the youth," Raje announced on micro- blogging site Twitter late on Monday. State parliamentary affairs minister Rajendra Rathore said, " The state will be able to fix the number of apprenticetraining related seats in industry and establishments. And, the stipend for apprentices will be no less than the minimum wage. The state government will bear half the cost to train apprentices, if their number exceeds 250," he said. The Apprentices Act controls and regulates training of apprentices. Currently, the Act covers 254 categories of industries. According to the Act, it is obligatory for these establishments to appoint apprentices and impart theoretical and practical training to them. Sources in the state government say after the amendments, the appointment of apprentices will be voluntary and industry will be allowed to design courses according to their needs. " We are not changing the provisions of the Act regarding the punishment. What we are doing is making it more flexible. There will be less prosecution in such cases. The intention is to generate more employment the way we are doing through amendments to other three Acts," Rajiv Mehrishi, chief secretary of Rajasthan, told Business Standard. "The Apprentices Act, 1961, was written for a very different India. It has scared away employers because it requires an employer to seek a licence for every apprentice. It has imprisonment provisions for not engaging with the Act. Also, it micro- specifies location, duration and trades," said Manish Sabharwal, who headed the Planning Commission's sub- committee on remodelling India's apprenticeship regime. "Apprentices are vital to building skills," he adds. India has only 300,000 apprentices, compared with three million in Germany, 10 million in Japan and 10 million in China. Why employers not keen on appointing apprentices under the current Act: RAJASTHAN REFORMS |Separate permissions from both state and central governments |Only a few trades from the services sector are covered |Complex and cumbersome record- keeping process |Stipend is governed by the Act |Act decides ratio of apprentices- to- workers |Training period is decided by the government |Apprentices cannot be terminated during training |Training cost is high |Employer faces imprisonment of six years or fine or both for violating the rules under the Act |Training curriculum are outdated |
| Small banks may need at least ₹ 200 cr of capital: RBI |
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Mumbai, 1 July It is expected while announcing the norms for setting up smaller banks in India, the Reserve Bank of India ( RBI) will mandate minimum capital requirement of ₹ 200 crore, against ₹ 5 crore mandated in 1996, when guidelines to set up local area banks were announced. According to the central bank's new guidelines on new bank licences, the minimum capital requirement to set up a full- fledged bank is ₹ 500 crore. In the fresh guidelines for small banks, the emphasis will be on providing basic banking facilities to customers. Smaller banks will help improve penetration in un- banked areas and mobilise resources. Also, as these won't need substantial infrastructure and staff, their operating expenses will be low. While these entities will have to maintain a particular statutory liquidity ratio and cash reserve ratio, these might face restrictions on wholesale lending and foreign exchange business. To start with, restrictions could be put on the number of branches and the asset size; relaxation could be provided after a review of their performance. Also, the exposure limits for small banks could be lower than those offering fullfledged banking services. While the previous guidelines on local area banks brought under their jurisdiction two- three contiguous districts, small banks are likely to have restrictions in this regard. For instance, a small bank might not be allowed to expand beyond a large state, though it could be allowed to operate in multiple states in case these states are relatively small, such as those in the Northeast. Following an announcement in the Budget in 1996, RBI had licensed six local area banks, of which two were shut, primarily due to mismanagement. The overall performance of existing local area banks hasn't been satisfactory, as these have become high- cost structures. As of March– end, 2012, the cost- income ratios of the four local area banks ranged from 58.24 per cent to 87.2 per cent, according to RBI. In a discussion paper on banking structures in India released last year, RBI said it was open to allowing cooperative banks to function as local banks. Two urban cooperative banks — Saraswat Bank and Shamrao Vithal Co- operative Bank — have already started groundwork in this regard. As of Marchend, 2013, there were 1,606 urban cooperative banks in India. However, entities applying for such licences will be subject to stringent fit- and- proper criteria. Under the new bank licence norms, RBI has said banking aspirants should have asuccessful track record of at least 10 years. In the recent round of bank licences, the central bank had ignored entities facing investigations by various agencies. It had granted in- principle licences to only two entities — infrastructure finance company IDFC and mircolender Bandhan. A look at the number ofsmall banks |64 regional rural banks (consolidated from 196 RRBs originally set up) |1, 606 urban cooperative banks |31 state cooperative banks |371 district central cooperative banks |20 state cooperative agriculture and rural development banks |697 primary cooperative agriculture and rural development banks Source: RBI ( as on March 31, 2013) SPREADING THE BANKING NET |
| On tight purse strings |
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The few interest groups for which no one has to speak up for consists of the judiciary, the legal profession and litigants in general. Since the judges, from their position, cannot form a pressure group to clamour for more funds, it was expected of the rest of the legal profession to take up this public cause. There was an opportunity a few days ago when all state bar councils met at the call of the Bar Council of India. The only thing they did was to run down the proposal of the new Chief Justice, R M Lodha, of scrapping long court vacations as impractical and unworkable. There was not a word about the government starving the judiciary of funds; no plea for more Budget allocations, no wish list before the new government. It would seem that the lawyers' body wants to perpetuate the current ignominious status quo, getting paid for interminable adjournments and tying up briefs for years in forensic minutiae. The chief justices and jurists have consistently pointed out that the share the judicial system gets from the budgets, the Union or the states, is meagre. Two months ago, Chief Justice Lodha said that it is getting only between 0.4 and 0.11 per cent of budgetary allocations. The percentage has remained static for years. The other Cinderellas such as health and education have started getting a better share and attention due to social concerns and public awareness. However, courts are still neglected, as vouched for by the current chief justice. In contrast, the allocation for the justice system is 1.2 per cent in Singapore, 1.4 per cent in the US and 4.3 per cent in the UK. The miserly allotment the Indian judiciary gets includes what it generates from court fees, stamp duty and other miscellaneous heads, which also go to the general pool. This creates a grim picture in terms of human suffering. More than 30 million cases are pending before the courts. Some judges have said that it would take decades to clear the matters already pending before them. Against the Law Commission recommendation of 50 judges for one million people, the current ratio is 10.5 for one million. Nearly half the judges' posts are vacant. Tribunals, nearly 40 at last count, are in a worse condition. The consequences are dismal to millions of people awaiting justice. Jails are overflowing with persons awaiting trial. Substantial numbers have already undergone imprisonment for periods they would have been sentenced if they were convicted. Unappealing service conditions and hidden pressures keep away the best talents at the bar from accepting judicial posts. Good lawyers have to sacrifice sizeable income if they are elevated to the bench. Judges must also be made of " sterner stuff" to resist political and corporate arm- twisting, as seen in recent episodes of mysterious recusals. As a result, the legal eagles have invited a situation in which they have to argue intricate points of law before a less- endowed brethren. It could be called poetic justice, but for the fact that the clients are the sufferers. It is well- known that the government is the largest single litigant and 60 per cent of the cases involve central laws. Therefore, the Union should contribute adequately to the expenditure on better administration of the courts. New laws are manufactured at every turn without estimating the expenditure involved. In the US, bills are said to annex a financial allocation after a "judicial impact assessment". Successive chief justices have called for financial and administrative autonomy for the judiciary. This third arm of the state ideally deserves a Budget of its own, much more than the railways. Currently, funds come piecemeal from different sources and each can blame the other for delays and inadequacy. Chief justices don't know from where the next cache would come. Currently, they have to send court registrars to panhandle before government secretaries and others who hold the purse strings. Ideas are not wanting. For example, a 2001 consultation paper on financial autonomy for the judiciary suggested a judicial council that would prepare a Budget in consultation with the executive. Advisors from the Comptroller and Auditor General ( CAG) would be involved in drafting it. The CAG will monitor the disbursement and expenditure. However, such ideas have not registered in the mind of the decision- makers. In the recent election manifestos, the Congress has been characteristically dismissive of the plight of the judiciary, with only a few sentences devoted to it. The Bharatiya Janata Party manifesto was elaborate on this subject. Looking at the past record, it is difficult not to be sceptic. But we are told to wait for the good days to come. No one should carry a stopwatch during the honeymoon. The judiciary has always been neglected in Budgets OUT OF COURT MJ ANTONY |
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Source Business line
CLB rejects Electrosteel Steels plea for pref issue at a discount OUR BUREAU
KOLKATA, JULY 1: The Company Law Board (CLB) declined to accept Electrosteel Steels' proposal for preferential issue of shares to promoters at a discounted price. The company, promoted by Electrosteel Castings, will have to issue the shares to promoters at the face value of ₹10 instead of the proposed ₹5 a share. Electrosteel Steel is issuing the shares in relation to a corporate debt restructuring agreement with its lenders. The agreement called the promoters to bring in ₹222.50 crore to the fund-starved company. Following the CLB order turning down Electrosteel Steels' petition, the company's board decided on Tuesday to issue the shares at ₹10. This move would comply with SEBI's ICDR Regulation. Shareholders' nod The Companies Act, 2013, which is yet to take effect fully, prohibits issuance of shares at a discount. In a postal ballot earlier, the shareholders, however, had passed the board's proposal for a discounted issue. Since the quantum of equity capital will remain unchanged at ₹222.50 crore, the number of share would be half of what was estimated earlier. According to company estimates, in the earlier price plan, Electrosteel Steels would have issued 44.50 crore shares. Now it would issue only 22.25 crore shares. Post-issue, the promoter holding would go up to around 45 per cent from the pre-issue holding of 40 per cent. The CDR was triggered by the delay in payment of interest and instalments to lenders, led by SBI. The stock of Electrosteel Steels on Tuesday closed flat at ₹7.18 on the BSE. The total traded quantity on the exchange was 25.2 lakh shares, five times the past fortnight's average. (This article was published on July 1, 2014) |
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93810 11200
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