Government Accepts the Report of the Committee for Rationalising the Definition of FDI and FII

The Government of India had constituted a Committee for rationalising the definition of FDI and FII as per the announcement of the then Union Finance Minister during the Budget Speech 2013-14 (Para No. 95) which reads as follows: 

“In order to remove the ambiguity that prevails on what is Foreign Direct Investment (FDI) and what is Foreign Institutional Investment (FII), I propose to follow the international practice and lay down a broad principle that, where an investor has a stake of 10 percent or less in a company, it will be treated as FII and, where an investor has a stake of more than 10 percent, it will be treated as FDI. A committee will be constituted to examine the application of the principle and to work out the details expeditiously.”

The Committee has now submitted its report which has been accepted by the Government .Report of the Committee is available on the web-site of Ministry of Finance- www.finmin.nic.in. Major features of the report are as follows:

The core recommendation of the committee is that it should be the endeavour to simplify the classification of foreign investment and enable basically two classes of foreign investors in the long run viz. Portfolio Investors and FDI Investors, and at best carve outs therein for NRIs, in view of their special status.

The committee adopted the conceptual framework that Foreign Direct investment (FDI) is characterised by a lasting interest i.e. existence of a long term relationship, significant degree of influence. Normally, ownership of 10 percent or more of the ordinary shares OR voting power signifies this relationship and it involves both initial and subsequent transactions. On the other hand Portfolio Investment is characterised by the largely anonymous relationship between the issuers and holders, and the degree of trading liquidity in the instruments. Further it covers, but is not limited to securities traded on organized or other financial markets.

The Committee has recommended the merger of the FII and Qualified Foreign Investors (QFI) regimes under the new “Foreign Portfolio Investors” (FPI) regime, and this has been notified by SEBI and RBI in their respective regulations.

The FPI regime will be subject to the prevailing SEBI (SAST) Regulations to prevent persons acting in concert. There is no change proposed in the monitoring mechanism. However, it has been proposed in addition, that the onus of adherence to the aggregate FPI limit will also be cast on the Investee Company, which can be asked to get the compliance to the foreign investment limit verified by the Statutory Auditor on a half-yearly basis.

Foreign investment of 10 percent or more through eligible instruments made in an Indian listed company would be treated as FDI. All existing foreign investments below the threshold limit made under the FDI Route shall however, continue to be treated as FDI. Foreign Investment in an unlisted company irrespective of threshold limit may be treated as FDI. An investor may be allowed to invest below the 10 percent threshold and this can be treated as FDI subject to the condition that the FDI stake is raised to 10 percent or beyond within one year from the date of the first purchase. The obligation to do so will fall on the company. If the stake is not raised to 10% or above, then the investment shall be treated as portfolio investment. In case an existing FDI falls to a level below 10 percent, it can continue to be treated as FDI, without an obligation to restore it to 10% or more. In a particular company, an investor can hold the investments either under the FPI route or under the FDI route, but not both.

A relook at the Foreign Venture Capital Investors (FVCI) scheme is called for since these investors are basically in the nature of FDI.

Regarding NRI investors, they have a special place in the foreign investment regime since NRI funds flow even through deposits and remittances. Special privileges are also available to NRIs in terms of the Overseas Citizenship Act and the provision to make ‘non-repatriable’ investments. This position would remain and to reinforce the same, it may be further examined if non-repatriable investment by an NRI can be treated as “domestic” as also an enabling mechanism to enable such investment to come through via a corporate form.

PSLV-C23 Launch Scheduled on June 30

The launch of ISRO’s Polar Satellite Launch Vehicle, PSLV-C23, is scheduled on June 30, 2014 (Monday) from Satish Dhawan Space Centre SHAR, Sriharikota. The vehicle lift-off time is scheduled at 09:49 hrs IST. 

PSLV-C23 will carry a 714 kg French Earth Observation Satellite SPOT-7 as the main payload. Also, the 14 kg AISAT of Germany, NLS7.1 (CAN-X4) & NLS7.2 (CAN-X5) of Canada each weighing 15 kg, and the 7 kg VELOX-1 of Singapore are being carried as co-passengers. These five satellites are being launched under commercial arrangements that ANTRIX has entered with the respective foreign agencies.

All the five satellites have been integrated with PSLV-C23 and the final phase of checks is progressing. The Mission Readiness Review (MRR) Committee and the Launch Authorisation Board (LAB) are meeting on June 27, 2014 to review the progress of prelaunch activities. After the clearance from LAB, the 49 hour count down for the mission will commence at 08:49 hrs IST on June 28, 2014.

Project ‘Mausam’ Launched by Secretary, Ministry of Culture

Secretary, Ministry of Culture Shri Ravindra Singh on 20th June, 2014 presented ‘Mausam’, a Ministry of Culture project to an international audience at the 38th session of the World Heritage Committee at Doha, Qatar. One of the main deliverables of this project is nomination of maritime cultural landscapes across the Indian Ocean as a trans-national property on the World Heritage List of UNESCO.

Director General UNESCO, who was present at the launch function, expressed a great interest in this project. Ambassadors of several countries including China, UAE, Qatar, Iran, Myanmar, and Vietnam also expressed keen interest in the multifaceted cultural project.

The endeavour of Project ‘Mausam’- Mausam: Maritime Routes and Cultural Landscapes is to position itself at two levels: at the macro level, it aims to re-connect and re-establish communications between countries of the Indian Ocean world, which would lead to an enhanced understanding of cultural values and concerns; while at the micro level, the focus is on understanding national cultures in their regional maritime milieu.

The central themes that hold Project ‘Mausam’ together are those of cultural routes and maritime landscapes that not only linked different parts of the Indian Ocean littoral, but also connected the coastal centres to their hinterlands. More importantly, shared knowledge systems and ideas spread along these routes and impacted both coastal centres, and also large parts of the environs.

Preliminary works on this new project has already been initiated. A monthly lecture series has been organized at India International Centre (IIC), New Delhi in collaboration with IGNCA, National Monuments Authority (NMA), New Delhi and IIC. The first international conference, scheduled in February 2015, would be organized with national and international research partners and collaborators. The central theme of this conference is Great Centres of Learning: Knowledge Societies and the Making of the Indian Ocean region. This workshop proposes to focus on great centres of learning in the Afro-Asian world and their function in creating syncretic forms of religious and secular knowledge in the Indian Ocean region (IOR).

Project ‘Mausam’ is an exciting, multi-disciplinary project that rekindles long-lost ties across nations of the Indian Ocean ‘world’ and forges new avenues of cooperation and exchange. The project, launched by India in partnership with member states, will enable a significant step in recording and celebrating this important phase of world history from the African, Arab and Asian-world perspectives.

Healthy Food Habbits: Ways and means of limiting the Trans Fat intake

Presently, India is facing the dual burden of disease – while large majority of the people are suffering from chronic energy deficiency (due to poor quantity and quality of food intake); a sizeable population on the other hand is also suffering from the diet-related chronic degenerative/lifestyle related diseases. The risk factors associated with these diseases include unhealthy dietary practices, physical inactivity, overweight/obesity, smoking/drinking, drug abuse and psychological stress. Among the diet related factors, apart from the total energy intake, quantity and quality of the dietary fat play an important role.

The dietary fats may contain saturated, monounsaturated and polyunsaturated fatty acids. Further, the unsaturated fatty acids can exist either in the cis or the trans configuration depending on position of the hydrogen atoms at the double bonds. In the case of cis configuration, both the hydrogen atoms are on same side of the carbon chain, resulting in a kinked geometry which imparts greater fluidity to the oils. However, in trans configuration, the hydrogen atoms are on the opposite side, as a result the chain gets straighter with greater rigidity (Figure 1). Conversion of cis isomers to the corresponding trans isomers result in an increase in the melting point. From the health view point, lower the melting point, better is the oil or the fat.

H H H

CH3-(CH2)7- C=C-(CH2)7-COOH CH3-(CH2)7- C=C-(CH2)7-COOH

H

Oleic acid (9 cis C18:1) Elaidic acid (9 trans C18:1)

Figure 1: Structural differences in the cis and trans isomers of fatty acids

Elaidic acid (9 trans C18:1) is the geometric isomer of oleic acid (9 cis C18:1). While, oleic acid has a melting point of 16.3ºC, the melting point of elaidic acid (9 trans C18:1) is 43.7ºC and that of vaccenic acid (11 trans C18:1) 44ºC. The trans fats are even more harmful than their saturated counterparts.

Trans fats or Trans fatty acids (TFAs) are the most harmful type of fats which can pose many adverse effects on our body. Major TFAs include elaidic acid (9 trans C18:1) primarily found in partially hydrogenated vegetable oils, and vaccenic acid (11 trans C18:1), found in meat/ dairy products. TFAs are also present as conjugated linoleic acid (CLA, C18:2). However, in case of polyunsaturated fatty acids (containing >2 double bonds), either one or more of the double bonds can be in trans configuration. Thus, it is possible that in the polyunsaturated fatty acids, there is coexistence of the cis and the trans double bonds.

The commonly consumed vegetable oils like soybean, sunflower, safflower, mustard, olive, rice bran, sesame are the sources of cis mono and polyunsaturated fatty acids and their saturated fatty acid content is also low. However, to obtain textural similarity to pure ghee and to improve their oxidative stability, these vegetable oils are subjected to hydrogenation. Since, complete hydrogenation would result in a waxy and excessively hard product; these oils are subjected to partial hydrogenation. Partially hydrogenated oils have a longer shelf life and are less liable to rancidity. However, this process converts some of the cis-isomers into their trans counterparts and thus leads to the production of trans fatty acid. Deodorization of fats/oils (usually carried out at high temperatures; 180ºC to 270ºC) also results in the formation of trans fatty acids.

Partially hydrogenated vegetable oils (PHVOs) have been a significant part of the human diet since ages. Many studies have reported the deleterious effects of trans fats derived from PHVO; and this hard fact has been of great relevance in formulating the health guidelines.
Indian consumer today is incognizant of the amount of TFA present in the commercially prepared fried food items and lacks understanding regarding the actual amount of TFA they are consuming during the day through these fried foods. The population in general is ignorant of the adverse effects of TFAs on health.

Food Safety and Standards Authority of India (2010) has recommended that the TFA level in PHVOs should be below 10% which needs to be brought down to 5% in 3 years. Further, it has been proposed to mandate trans fat labelling so as to reduce its intake.

Partially hydrogenated vegetable oils are the major source of trans fats in our diets. A small amount of TFA though present in dairy fat and meat products is not that harmful.

Frying process is another which leads to the production of trans fatty acids; and their formation has been closely associated with the temperature of frying the food, duration of frying, number of times the fats/oils are heated/reheated.

In 2003, World Health Organization had recommended the trans-fat intake (from industrially produced hydrogenated oils and fats) should be less than 1% of the total energy. However, the Indian dietary guidelines propose that the trans fat intake should be less than 2% of the total energy.

Suitable strategies to limit the Trans Fat intake include:

Ø Avoid using “Vanaspati/ Partially hydrogenated vegetable oils” or margarine in your kitchen. Most of our people consider vanaspati to be an economical substitute for pure ghee.
Ø Avoid consuming food items prepared in “Vanaspati/PHVOs” or margarine; ensure to check the food labels.
Ø Limit the intake of fried/baked foods, particularly the marketed fried foods.
Ø Even while frying Poori/ bhatura etc. occasionally, use oils (and not the hydrogenated fat) and do not heat the oil for very long time.
Ø Do not repeatedly heat the oil or re-use the same oil for frying. Generally, masses are not aware of the adverse health effects of TFA and that reheating of fats/ oils results in the formation of TFA.
Further, after the frying process, cool the left-over fats/oils, strain out the suspended food particles and store the fat/oil in refrigerator/cool place and use it in the preparation of dry vegetables/curries and pulav etc.
Ø Avoid using ready to use/instant mixes for preparing foods as they have a greater chance of containing the Trans fats.
Ø Check the Nutrition Facts label on packaged food items for their TFA content, if indicated.
Ø Always check the ingredient list on packaged foods for the words like “shortening”, “partially hydrogenated vegetable oil” or “hydrogenated vegetable oil”, since, these contain trans fats.
Ø Avoid processed foods like cookies, chips, cakes and patties. Also, avoid consuming commercial fried foods and mithais esp if prepared in Vanaspati/PHVOs; and limit their quantity as well as frequency of intake.
Ø While eating out/ ordering food from outside, try to find out the oil being used in food preparation. If possible, request for reducing the amount of oil in the food preparation. A better option is to skip the deep-fried foods while eating out.
Ø For bakery items like biscuits and cake, red palm oil having a semi-solid texture can be blended with other edible oils, in 1:1/ 1:2 blends and used. It will also enhance the Beta-carotene/vitamin A content of the food item. Due to the semi-solid texture, RPO will help in bringing about the shortening effect in baked items without adding to their TFA content.
Implications for policy, practice and education: The authorities need to check the use of vanaspati and margarine as well as control an excessive use of the reheated fats/ oils. The halwais should be advised not to use oils over and over again for frying but to consume the used oils in the preparation of vegetables, curries, dough making, pulav etc. Nutrition education needs to be imparted to the halwais regarding TFA and their adverse health effects as well as they should be trained on correct frying practices.
The government should consider specifying achievable lower limits for TFA and SFA content of vegetable oils and the processed/fried foods. Nutrition labels on processed foods should indicate the TFA and SFA contents separately along with the optimal recommended ranges. The restaurants should avoid the use of ‘partially hydrogenated oils’ and if otherwise, its use should be disclosed.
Further, the consumers should be made aware of the health hazards associated with TFA intake. In oil processing, the food industry should implement newer technologies so as to produce zero trans fat containing products with desired functional properties. A multi-sectoral and proactive approach is required to successfully remove/reduce industrially produced TFAs from the food supply chain. Targeted message campaigns discouraging the intake of trans-fats containing foods can be of great help.

While some developing countries have laid down norms for TFA content of food, India needs strict regulations regarding the TFA content of fats/ oils as well as that of the commercially prepared food items. Therefore, at present the responsibility lies with the consumers to safeguard their interest. Therefore, steps need to be taken for curbing the trans fat intake through foods prepared both at industrial as well as household level.

“Beware of the trans fats in your diet, their high intake increases the risk of degenerative/lifestyle diseases. Say no to the hydrogenated fats/oils and the products prepared in hydrogenated fats/oils. Further, reduce the intake/frequency of fried foods, particularly the commercially prepared ones

India 143rd on Global Peace Index

Ranking India among 20 most violent places in the world, a global study today said the country's economy took a hit of over Rs 1 lakh crore in containing and dealing with cases of violence last year.

In the latest annual ranking of Global Peace Index, India has been ranked at 143rd position out of 162 countries surveyed.

While India has slipped two positions, Iceland continues to top the list as the world's most peaceful place. However, Syria has replaced Afghanistan as the most violent place.

"The economic impact of containing and dealing with the consequences of India's levels of violence was estimated to cost the national economy USD 177 billion (about Rs 1.07 lakh crore) in 2013," the Sydney-based international think tank Institute for Economics and Peace said in its report adding that is equivalent to 3.6 per cent of India's GDP, or USD 145 per person.

It estimated the impact of violence on global economy at USD 9.8 trillion or 11.3 per cent of world GDP in 2013, an increase of USD 179 billion from the previous year. The increase has been largely attributed to upward revisions of China's military expenditure and the number and intensity of internal conflicts.

Within South Asia, Bhutan has been ranked as the most peaceful country, followed by Nepal, Bangladesh and Sri Lanka. India is ranked fifth in the region -- better than Pakistan at sixth and Afghanistan at seventh.

Globally, Pakistan is ranked 154th, while Afghanistan is at 161st position in this year's list.

As per the report, India suffers chronically from international tensions and widespread internal conflict.

"While Maoist movements are one of the biggest threats to India's internal security, sporadic conflict with its neighbours also threatens the country's external security," it said.

In concurrence, India is ranked number 4 out of 159 countries in the Global Terrorism Index.

"If India could improve its overall levels of peace, the dividend that would flow from this would substantially improve the country's economic growth rates. This can be achieved by a renewed government focus on building the underlying qualities that create and sustain peaceful societies such as low levels of corruption, well-functioning government and equitable distribution of resources," IEP founder and Executive Chairman Steve Killelea said.

The GPI is the world's leading measure of global peacefulness produced by the IEP. It gauges on-going domestic and international conflict, safety and security in society, and militarisation in 162 countries by taking into account 22 indicators.

Sanjaya Rajaram chosen for World Food Prize

In recognition of his outstanding work in the improvement of wheat crop

Sanjaya Rajaram, veteran plant scientist, has been chosen for this year’s World Food Prize for his “scientific research that led to a prodigious increase in world wheat production.”

Announcing this here, M.S. Swaminathan, founder of the M. S. Swaminathan Research Foundation (MSSRF) and chairman, global jury for selection of the Food Prize Laureate, told reporters on Wednesday that Dr Rajaram, now settled in Mexico, was selected for his “outstanding work in the improvement of wheat crop and wheat production in the world.”

Describing Dr. Rajaram as a “worthy successor” to the legacy of Norman Borlaug who was instrumental in instituting the Prize, Dr. Swaminathan said the plant scientist, hailing from rural background in the Varanasi district of Uttar Pradesh, was known for his “genuine concern for farming and farmers,” especially small and marginal farmers. He was still keeping contact with his roots.

Dr. Swaminathan, the first recipient of the Prize in 1987, said the selection of Dr. Rajaram was significant as this year marked the centenary year of Dr. Borlaug as well as the international year of family farming.

Regarded as the most prestigious award in the area of food and agriculture, the Prize, carrying a cash prize of $ 250,000, would be presented during the U.N. World Food Day on October 16.

S. Nagarajan, MSSRF advisor and former Director of the Indian Agricultural Research Institute (IARI), hailed Dr. Rajaram for being responsible in reorganising Wheat Revolution. P.C. Kesavan, Distinguished Fellow of the MSSRF, recalled the days when he and Dr Rajaram spent together at the Institute. G. Venkataramani, biographer of the awardee, said wheat varieties developed by Dr. Rajaram had been grown on 60 million hectares worldwide