Govt approves 100% FDI in medical devices The health care sector in India is expected to reach $150 bn in 2017, from $80 bn in 2012, according to various reports

The central government on Wednesday approved 100 per cent foreign direct investment (FDI) in medical devices via the automatic route. The move came as a relief to the Indian health care sector, because at the moment, India imports about 70 per cent of its requirement for medical devices.

Under the automatic route, there will be no need for Foreign Investment Promotion Board’s permission to acquire an existing company or set up a new manufacturing unit in the medical devices sector.

According to Vrinda Mathur, director at Grant Thornton India, the move will give India’s medical devices sector the much-needed impetus and capital to focus on capacity building and product development. It will also “set the foundation for India to become a significant player in the global medical devices market just like pharmaceuticals”, he said.

“Easing of norms for medical devices industry by creating special carve out in the extant FDI policy on pharma sector will encourage FDI inflows in this area,” said the official statement issued after the Union Cabinet meeting in New Delhi.

“In this age of super specialisation, if medicines and pharma are one aspect, in which India has attained a certain amount of core competence, we still haven’t achieved that in medical devices, particularly which are to be installed in human body for the purpose of treatment,” Arun Jaitley said on Wednesday.

According to various reports, the health care sector in India is expected reach $150 billion in 2017, from $80 billion in 2012.

Govt may open up consumer e-commerce to foreign investors, limit in defence may increase

The Department of Industrial Policy & Promotion (DIPP) has suggested the government allow a minimum of 49 per cent foreign direct investment (FDI) in consumer e-commerce and up to 100 per cent in defence.

At present FDI is barred for e-commerce companies selling directly to consumers and the government in August increased the FDI limit in defence to 49 per cent from 26 per cent.

DIPP has given these suggestions to an inter-ministerial committee chaired by the DIPP secretary, which was set up to facilitate US investments in India. The committee, which consists of secretaries from 18 ministries, held its first meeting on December 18 to deliberate on pending issues and suggestions by ministries. DIPP's suggestions are based on submissions by different American companies currently operating in India.

The ministry of commerce and industry had on December 3 announced it would speed up approval for US investments, weeks after the two countries settled a global trade dispute and US President Barack Obama agreed to visit India. The inter-ministerial committee was set up to identify bottlenecks faced by US companies in India.

DIPP’s suggestion came after e-commerce giant Amazon, which has invested about $300 million in India, sought the government’s approval for further investments. At present, FDI is not permitted in consumer e-commerce companies and there are also restrictions on sourcing from local manufacturers.

Foreign e-commerce companies are allowed to operate as online marketplaces, but cannot sell directly to consumers. FDI of up to 100 per cent is permitted in business-to-business e-commerce.

The DIPP’s suggestion on increasing the FDI limit in defence was based on issues raised by Flextronics Technologies.

The inter-ministerial committee deliberated on issues faced by Amazon, Morgan Stanley, BAE Systems, Ford and eBay, among others. Representatives of these companies met the DIPP secretary earlier this month to apprise him on the bottlenecks they faced.

Ford pointed out issues of connectivity and logistics affecting its factories in Tamil Nadu and Gujarat.

BAE raised the need for a broader offset policy. Other issues included Amazon’s tax problems in Karnataka. It was argued that the Karnataka VAT laws were in conflict with central government regulations on FDI in business-to-consumer e-commerce.

According to government data, US companies invested $806 million in India in 2013-14, about six per cent of the total foreign investment in the country that year. Bilateral trade between the US and India stands at about $100 billion. The target has been set at $500 billion but no deadline has been set to achieve it.

FDI: THE NEXT STOP

Proposals To allow a minimum of 49 per cent FDI in consumer e-commerce   To increase FDI in defence to 100 per cent from the current 49 per cent Present scenario FDI is barred for e-commerce firms selling directly to consumers   FDI limit in defence stands at 49 per cent   100 per cent FDI is permitted in e-commerce marketplace model Investments from US US companies have invested $806 million in India in 2013-14   Bilateral trade between the US and India stands at about $100 billion *Proposals based on deliberations from representatives of US companies such as Amazon, Morgan Stanley, BAE Systems, Ford and eBay who met DIPP secretary earlier this month

E-auction not a sure cure for corruption

In May this year, the newly-appointed Narendra Modi government unveiled its priorities among which "promoting e-auction" for the procurement of goods and services ranked pretty high. The move was meant to calm the nerves of industry as well as government officials. While the former needed some assurance on transparency in government contracts after a slew of scams hit the headlines, the latter had become averse to taking decisions due to an array of charges against their colleagues in the recent past.

According to experts, the biggest benefit of e-tendering is that it leaves an "audit trail", much to the respite of the bureaucrats. However, its scope as a weapon to controlcorruption is limited. "It is no magic wand," says Neel Ratan, PricewaterhouseCoopers India executive director. "The usage of e-tendering is a mixed bag, with some states using it to a great extent. But, it is not a complete solution in itself."

But some feel it could contain corruption in government contracts and purchases. A month ago, the income tax authorities uncovered a massive corruption racket being allegedly run by a chief project engineer of Noida, Greater Noida and Yamuna Expressway. A special team has been formed to probe the Rs 954-crore tendering scam in which Yadav Singh was named. Also, following the raids, Noida Authority has now decided to go for e-tendering for projects above Rs 50 lakh.

Others insist the system is hardly foolproof. Even in the contracts which are bid through e-tendering, fake bids meant to inflate or deflate the quotes are rampant. Also, eligibility criteria are often tweaked to favour particular vendors. Leaking of information from the system by insiders also leads to foul play and manipulation of bids.

In order to ensure little scope for gaming the system, mature price discovery techniques have to be used for both products and services, says KPMG Partner (government advisory) Jaijit Bhattarcharya. "These software platforms can't be department specific, instead they should be centralised at the state government and central level to ensure minimum tampering."

Some of the avid users of e-tendering include Andhra Pradesh, Gujarat and Karnataka. In fact, Karnataka was the first to put up an e-procurement system, which was offered to other state governments and also to private companies for use by the government. Ratan adds that while e-tendering, the government should ensure wide participation, by publicising it adequately. Limited or closed tenders should be a rarity.

E-auction or e-tendering moves the process of bidding for government contracts completely online, removing most manual procedures and, therefore, creates an accountability trail. Though not mandatory, e-auctioning is quite widespread within the government machinery. The ministries of civil aviation, communications, coal and information technology have been early adopters of e-auction, using the method for their tenders over the last few years.

The Central Vigilance Commission had in 2012 asked the government and public sector undertakings to adopt and follow e-tendering process to reduce corruption in public service delivery systems. E-auctioning is also being used since 2011 for the distribution of iron ore, a key raw material for the steel industry. The ministry of road transport and highways had also directed the National Highway Authority of India and the states four years ago to strictly adopt e-tendering for better transparency in highways projects, though it says it is not being properly implemented.

However, a lot of ground still needs to be covered to move to a regime where all contracts are awarded through e-tendering.

Expert group to tackle cyber crimes The five-member expert group will prepare a road map for tackling cyber crimes effectively

The government has set up a committee to "comprehensively address" cyber crimes in the country.

This follows the arrest of Mehdi Masroor Biswas, the alleged pro-ISIS twitter handle operator from Bengaluru.

The five-member expert group will prepare a road map for tackling cyber crimes effectively, the government said in a statement on Wednesday.

"Recently, various issues relating to cyber crimes have been flagged at various fora including Parliament. India with a fast-growing economy is susceptible to international and domestic cyber attacks and there is a need to ensure cyber crime-free environment. There has been a 40 per cent annual increase in cyber crimes registered in the country during the past two-three years," it said.

The group includes Rajat Moona, director-general of Centre for Development of Advanced Computing; Gulshan Rai, director-general of Indian Computer Emergency Response Team; Manindra Agrawal, professor of computer science at Indian Institute of Technology - Kanpur; and D Dass, professor at International Institute of Information Technology; Bengaluru. Kumar Alok, joint secretary (centre state) in the home ministry, will be the convenor of the committee.

The expert group's terms of reference includes recommending possible partnerships with public and private sectors, NGOs, international bodies, etc. .

Amul to be first dairy firm to export to Russia At present, it exports milk and other dairy products to about 20 countries, including the US

Amul, the country’s largest dairy brand, is likely to benefit the most from Russia’s decision to lift restrictions on the import of milk, cheese and other dairy products from India.

Russia had to open its market to countries like India as it had imposed a one-year ban, in August, on a wide range of food products, including beef, pork, poultry, fish, fruit, vegetables, cheese, milk and other dairy products, from the US, Canada, the European Union, Norway and Australia. The move came in a response to penalties imposed on Russia over the crisis in Ukraine.

Amul, a dairy brand owned by Gujarat Cooperative Milk Marketing Federation (GCMMF), is in talks with Galactika Group of Russia for exporting milk, cheese and other dairy products.

“A team from Russia has also inspected our facilities earlier this month. We expect this to be sealed within the next couple of months,” R S Sodhi, managing director, GCMMF, told Business Standard. Beside milk, Amul might export cheese, dried milk and other dairy products to Russia.

However, Sodhi said the price of milk in the international market was a concern, and export at the moment might not be beneficial for Indian companies. “We are looking into certain things, including the prices, before taking a final call,” he added.

“The talks are still on. There has been no movement during the visit as commercial terms have not been finalised,” a senior government official told Business Standard.

At present, Amul exports milk and other dairy products to about 20 countries, including the US, West Asian countries, Philippines, Thailand, Malaysia, Hong Kong, Australia, New Zealand, Japan, Afghanistan, neighbouring Bangladesh, Sri Lanka and Nepal, among others. According to media reports, Galactika, part of FoodLine Holding, has about three per cent share in Russia’s milk market.

According to data with the Russian Federal Customs Service, import of milk and products made from Western countries to Russia rose 10.4 per cent in the first quarter of 2014 to 1,423 million tonnes on a year-on-year basis. Import of milk and dairy products rose in Russia because of shortage of raw milk and cheaper import prices.

India’s exports to Russia stood at about $2.15 billion in financial year ended March. This was a fraction of Russia’s total import of $318 billion. Of this, about $40 billion was spent to import food items from Western countries.

Experts have estimated India could export about $400 million worth of dairy products to Russia in the first year itself.

Madan Mohan Malaviya: Maker of Modern India Malaviya during the freedom movement was a bridge between the Extremists and the moderates

Madan Mohan Malaviya, a Congressman for half of his life and a member of the Hindu Mahasabha for the rest, was on Wednesday given the Bharat Ratna posthumously.

Malaviya (1861-1938) was the founder of the Banaras Hindu University (BHU), which happens to be a landmark in Prime Minister Narendra Modi’s parliamentary constituency, Varanasi. Malaviya, himself the son of a kathavachak and a teacher, was forced to leave teaching and embrace law when driven by poverty. He became a millionaire from his practice of law but gave it all up when he reached 50, to “serve” his country. Although he was a Congressman, he embraced propagation of Hinduism as an article of faith.

Malaviya’s mission was to set up a university for Indians, regardless of faith or caste, and BHU was born from donations big and small. “There is no greater saintly beggar than Malaviya ji” said Mahatma Gandhi, who was extremely fond of him. Recording his drive for funds to build the university, a contemporary wrote: The Maharajas of Darbhanga, Bikaner and many other states not only donated funds, but accompanied him during his fund collection tours. A sadhu gave him his chadar, a beggar a rupee, a poor 80-year-old widow a rupee, a mail runner two annas, a herdsman eight annas, poor chaprasis, patwaris and mudarrises their salaries. That made him also the beggar of the beggars!”

Malaviya was, during the freedom movement, a bridge between the extremists and the moderates — as the followers of Gokhale and Tilak were, respectively, called. In 1930, when Mahatma Gandhi launched the Salt Satyagraha and the Civil Disobedience Movement, he participated in it and courted arrest.

He plunged into the political arena immediately after his inspiring speech at the second Congresssession in Calcutta in 1886. He went on to serve the Congress for almost 50 years. He served as Congress President for four times — in 1909 (Lahore), in 1918 (Delhi), in 1930 (Delhi) and in 1932 (Calcutta).

The Bharat Ratna to him comes at a time when Nathuram Godse, a member of the Hindu Mahasabha at one time and who murdered Mahatma Gandhi, has become an unparliamentary word.

The Mahasabha is virtually extinct but the BHU stands out as a beacon to the liberalism of another era.

Atal Bihari Vajpayee: An appreciation, Vajpayee was fond of grand gestures, frequently leaving the fine print to be worked out by others

Is he a private person? Yes, but you would never know it, judging by the way he’s lived his life. Is he a public person? Not always: His political moves, especially against his adversaries, were so indirect and secret but so brutal that they rarely recovered.

The 10th prime minister of India, Atal Bihari Vajpayee, has been awarded a Bharat Ratna. Born on December 25, 1924, at Gwalior, Madhya Pradesh, to a Brahmin couple, Krishna Bihari Vajpayee and Krishna Devi, Vajpayee studied law at Kanpur’s DAV College. When he enrolled for the course, his father, a teacher in a school, said he wanted to study law as well. Father and son were admitted to the same class and shared a room in the same hostel. When students started talking about the father-son duo, the two were placed in different sections. But those who studied with him remember evenings spent cooking meals together. It was those days that made Vajpayee a gourmand (he was especially fond of Malpuas, a north Indian sweet) and became ‘head cook’’ when he was in Chandigarh jail during the Emergency.

Vajpayee was a political intern of Syama Prasad Mookerjee and became a member of Parliament for the first time in 1957. It was during this time that he actually came face to face with India and made lifetime friends. Vajpayee was at Mookerjee’s side when he latter went on a fast-unto-death in Kashmir in 1953, to protest against the system of carrying a permit for entering the state and the “inferior” treatment of Indian citizens visiting Kashmir, as also the special treatment accorded to Kashmir because it had a Muslim majority. Mookerjee died after weeks of weakness, illness and confinement in jail. Vajpayee wept bitterly at his funeral. It was a defining moment for his politics.

For several years, Vajpayee, along with the Jana Sangh and later the Bharatiya Janata Party, stayed on the fringes of politics. In those days, because resources were few and the party organisation not so robust, BJP leaders like Vajpayee and Bhairon Singh Shekhawat would contest from two and three constituencies. They would win some, lose some. No one thought of the BJS or BJP as India’s Hindu Right, not even when the party walked out of the Janata Party, (in whose government Vajpayee was foreign minister) on the issue of dual membership.

In the 1960s, during his tenure in Delhi as MP, Vajpayee came into contact with B N Kaul, who was a lecturer at Delhi's Ramjas College. When Kaul died, Vajpayee took Kaul’s family under his wing, including his wife Rajrani and daughters. Namita was adopted by Vajpayee as his daughter. His domestic arrangements caused a lot of tittle-tattle. Vajpayee paid no attention.

A matter of enduring mystery was his relationship with L K Advani, who was initially always a little in awe of Vajpayee – and the first to propose his name as prime minister, if the BJP ever came to power. Vajpayee was fond of grand gestures, frequently leaving the fine print to be worked out by others. There was a flash of something when Advani became as famous, if not, more than Vajpayee: during the rath yatra to build the Ram Temple at Ayodhya. It was Vajpayee who noted with some disapproval that Advani had consented to get himself weighed in blood during the rath yatra. At one stage, he commented, entirely without bitterness: “Dekho, Advaniji ki vaanar sena ja rahi hai”. He wasn’t to be seen anywhere when the Babri Masjid was brought down.

It was this dualism that was at work when the Godhra riots broke out. Much is made of Vajpayee’s ‘raj dharma’ comment when he met Narendra Modi. But they were not equals and Vajpayee never letModi forget this.

To many of his friends, it was disappointing that he should have appointed his (foster) son-in-law, Ranjan Bhattacharya as an Officer on Special Duty in the Prime Minister’s Office. Although cronyism was not a word in much currency in those days, there was some debate about the wisdom of this appointment. There was a child in Vajpayee always struggling to come out. Outlook magazine spoke to his aide, Shiv Kumar to recall his vacation in the US in 1993, when Vajpayee was only an MP. After the official engagements, the  two  visited first the Grand Canyon, and then Disneyland. Vajpayee, then 69 years  old,  was fascinated. He tried out ride after ride with child-like enthusiasm. "We stood in the queues for each and every ride," laughs Shiv Kumar. "I don't think I have ever seen him in such a jolly mood,” the magazine wrote.

But anyone who thought he was an amiable duffer was badly mistaken. Govindacharya, who tried to imply that it was others – notably the Sangh – who were actually behind Vajpayee’s public persona, found himself thrown out and crushed beyond recognition. Such was Vajpayee’s reach that the RSS found itself either unwilling or unable to come to Govindacharya’s aid. Vajapayee could criticise Modi’s handling of the riots. But when Himachal Pradesh strongman Shanta Kumar tried to publicly agree with Vajpayee, he was dismissed from the central government.

The Bharat Ratna should be interpreted as an award for his efforts to repair relations with Pakistan. There was no one who tried harder. But it was a time in Pakistan’s history and a time in India’s that simply did not let it happen. Vajpayee and Musharraf came the closest to actually resolving the Kashmir dispute – Khurshid Ahmad Kasuri, Gen Musharraf’s foreign minister and the principal back channel advisor on the four-point agreement that was started in 2002 and continued till 2007 (when it was finally dropped), has some interesting anecdotes about Vajpayee in his book that will come out next year.

Vajpayee has now retreated to a world that is entirely his own. He cannot talk, recognises no one and is bed-ridden. And yet, no one will disagree about the Bharat Ratna. It’s just frustrating that we will never get to know the real Atal Bihari Vajpayee.