#ForeignTradePolicy 2015-2020 Unveiled

#ForeignTrade Policy 2015-2020 Unveiled

Two New Schemes – “Merchandise Exports From India Scheme” And “Services Exports From India Scheme” Introduced

  

The much awaited #ForeignTradePolicy 2015-20 was unveiled today by Minister of Commerce & Industry Mrs. Nirmala Sitharaman, at Vigyan Bhawan. The new five year Foreign Trade Policy, 2015-20 provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister.  The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.

   During her address Mrs. Sitharaman stated that there were various forces shaping India and its equation with the rest of the world.  She urged the Government and industry to work in tandem to deal with the challenges posed.

   The release of Foreign Trade Policy was also accompanied by a FTP Statement explaining the vision, goals and objectives underpinning India's Foreign Trade Policy, laying down a road map for India’s global trade engagement in the coming years.  The FTP Statement describes the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade eco system. It seeks to enable India to respond to the challenges of the external environment, keeping in step with a rapidly evolving international trading architecture and make trade a major contributor to the country’s economic growth and development.  She promised to have regular interactions with all stakeholders, including State Governments to achieve the national objectives.FTP2015-20. introduces two new schemes, namely “Merchandise Exports from India Scheme (MEIS)” for export of specified goods to specified markets and “Services Exports from India Scheme (SEIS)” for increasing exports of notified services, in place of a plethora of schemes earlier, with different conditions for eligibility and usage.  There would be no conditionality attached to any scrips issued under these schemes.  Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable. For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%. Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.

Measures have been adopted to nudge procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75% of the normal export obligation. This will promote the domestic capital goods manufacturing industry.  Such flexibilities will help exporters to develop their productive capacities for both local and global consumption.  Measures have been taken to give a boost to exports of defense and hi-tech items.  At the same time e-Commerce exports of handloom products, books/periodicals, leather footwear, toys and customized fashion garments through courier or foreign post office would also be able to get benefit of MEIS (for values upto 25,000 INR).  These measures would not only capitalize on India's strength in these areas and increase exports but also provide employment.

   Commerce Minister stated that although exports from SEZs had seen phenomenal growth, significantly higher than the overall export growth of the country, in recent times they had been facing several challenges.  In order to give a boost to exports from SEZs, government has now decided to extend benefits of both the reward schemes (MEIS and SEIS) to units located in SEZs.  It is hoped that this measure will give a new impetus to development and growth of SEZs in the country. 

   Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objective of new FTP  is  to move towards paperless working in 24x7 environment.  Recently, the government has reduced the number of mandatory documents required for exports and imports to three, which is comparable with international benchmarks.  Now, a facility has been created to upload documents in exporter/importer profile and the exporters will not be required to submit documents repeatedly.  Attention has also been paid to simplify various ‘Aayat Niryat’ Forms, Manufacturers, who are also status holders, will now be enabled to self certify their manufactured goods in phases, as originating from India with a view to qualifying for preferential treatment under various forms of bilateral and regional trade agreements.  This “Approved Exporter System” will help these manufacturer exporters considerably in getting fast access to international markets.

   A number of steps have been taken for encouraging manufacturing and exports under 100% EOU/EHTP/STPI/BTP Schemes.  The steps include a fast track clearance facility for these units, permitting them to share infrastructure facilities, permitting inter unit transfer of goods and services, permitting them to set up warehouses near the port of export and to use duty free equipment for training purposes.

   Considering the strategic significance of small and medium scale enterprise in the manufacturing sector and in employment generation, ‘MSME clusters’ 108 have been identified for focused interventions to boost exports. Accordingly, ‘Niryat Bandhu Scheme’ has been galvanized and repositioned to achieve the objectives of ‘Skill India’.  Outreach activities will be organized in a structured way at these clusters with the help of EPCs and other willing “Industry Partners” and “Knowledge Partners”. 

#Nano drone in your palm

The robust Skeye nano drone not only fits comfortably in one’s palm but is also easy to charge

Drones are a remarkable technological advancement. They are not only dead useful and are handy, and are built using the best approaches mankind has ever known. After Google launched its project drone, a chain reaction started and many other companies came up with their own designs of drones that provide a wide array of functionalities. Ranging from delivery services in hard to reach regions to spraying fields with pesticides to collect data aerially to formulate dynamically updated maps, these drones have proved that they are capable of doing almost any task.

One of the main objectives of building drones was to use the machines to spy and collect information that cannot be accessed easily. This is why it is essential that they have insignificant size so they become difficult to spot. Skeye nano drone fits this description perfectly.

When weather conditions are drastic and unfavourable, it is very difficult for these drones to stay up in the sky. Skeye nano drone is very robust. It can fly even in biting winter and in rain. But its small size makes it difficult to control it in windy situations. It is an easily pocketable drone as it measures only 1.57 square inches. Skeye nano drone is a quadcopter style drone. It has 4 perfectly balanced miniature rotators that keep it up. It looks like a child’s toy but this little hero is self sufficient. There is absolutely no quantifiable reason to underestimate its functionality.

This little flying box has a self stabilizing mechanism that helps maintain its balance and not get swayed by strong winds. Its gyros and accelerometer functionalities keep it steady. The implementation posed quite a difficulty to the developers. It provides sensitivity controls in three layers which in turn provide it with different piloting abilities to suit its flying under different conditions. It provides a basic mode for beginners who want to adjust their hands on this flying machine. The second mode is for advanced pilots and the last mode is for professionally trained drone veterans.

It is very simple to charge the drone. It has a slot which connects a USB charger to charge it. Customized charger is available with the packet itself. A charging round of about 30 minutes provides it enough power to stay in the air for an approximate of 7-8 minutes. Now, that is not too much, but because of its size, a constraint on the size of the battery was a major parameter.

It is available for an affordable price of $59. Now you will have to be very careful about your privacy for anyone can keep an eye on your house. It implements Ready To Fly technology (RTF) with 6 axis flight control system which makes it handy. It also has the ability of pulling off stunts smoothly with its aerobatic flip capability and LED light for flying in the night.

The new multilateral financial architecture

The announcement by Britain, France, Germany, Australia and Brazil to join the China-promoted Asian Infrastructure Investment Bank (#AIIB) has taken the world by surprise. AIIB, dismissed just months ago by western countries as another flamboyant plan by China, is now clearly accepted as a tangible game changer in the multilateral financial architecture.

What really reveals the scope and potential of AIIB, however, is Beijing's brilliant and calibrated March 29 vision for transnational economic corridors for Asia, inviting the world to participate in this ambitious web of cross-border physical, financial and business connectivity.

India, along with 45 other countries including Indonesia and Singapore, is a founder member of AIIB. AIIB's voting structure may be based on purchasing power parity and gross domestic product (GDP). If that happens, India will become the second-largest shareholder, and must aim to influence these institutions.

China's intended role for AIIB is not so different from the existing Western lenders like the World Bank (WB) and the International Monetary Fund (IMF), which have configured the system to suit their needs. In AIIB, China has replicated the formation and functioning of these institutions.

In formation,

• The IMF and WB were post-war efforts by the US to capitalise on a fiscally-weak Britain and extend control over the Sterling Area by internationalising trade rules (for example, reduction of tariffs) and foreign exchange rules (for example, no devaluation) while financing post-war economic growth. AIIB is a post-recession effort by China to capitalise on a fiscally-weak US and European Union, to limit US economic influence in Asia by internationalising infrastructure development.
   
• The AIIB focus on infrastructure is a masterstroke. Infrastructure is China's competency. The China Development Bank (CDB) already has 16 per cent committed abroad. By some estimates, CDB and China's Exim Bank, together provide more aid to Asia than the WB and Asian Development Bank, combined. In 2014, G20 leaders pledged to advance global GDP by 2 per cent, using infrastructure as a key instrument.
   
• As the US did, China wants to keep majority shareholding, so it can influence AIIB's course - an opportunity it did not get with the WB and IMF (both under 5 per cent) or the BRICS bank (equal 20 per cent). China is rumoured to be seeking a 50 per cent voting share of AIIB's initial capital of $50 billion.

China is leveraging legitimate concerns. Developing countries are frustrated with the Western institutions' unfair standards, ineffective aid policies and interference in local policy-making. The pressure on South Korea and Indonesia to open their domestic economies to foreign investment, in return for financial assistance during the 1997 Asian crisis, has not been forgotten.

There's also China's strategic interest looking for multilateral legitimacy and funding. Global participation in China-led projects, it hopes, will dilute its reputation in parts of Africa and Asia of an abrasive and transactional foreign aid policy.

In functioning,

• The vision for AIIB and China's infrastructure projects like the Maritime Silk Road, Silk Road Economic Belt, and Pakistan-China Economic Corridor, coincide. This is how the US uses IMF multilateral funding for projects in Ukraine, Iraq and Afghanistan.
   
• The World Bank and IMF co-opted countries. China will go beyond, to co-opt long-term investors such as pension funds, sovereign wealth funds and insurance companies, which have $50 trillion in capital. China will invest its own $3-trillion reserves in projects promising higher returns than US Treasury Bills. The US has done that successfully for decades by recycling petro dollars into developing countries.
   
• AIIB will be a platform for renminbi internationalisation, just as the IMF and WB were for dollar internationalisation. It can then raise and extend loans in renminbi on a large scale, an experiment that CDB has already undertaken.

The formidable intentions of AIIB and the new transnational corridors project are both a challenge and an opportunity for India.

If AIIB takes equity stakes in transnational infrastructure projects, it has geopolitical implications. Islamabad awarding management control of its Gwadar Port to China in 2013, created a stir in India and the West. Imagine China's clout within India if AIIB owns or manages India-located projects such as the Bangladesh-China-Myanmar-India corridor, and the many internal industrial corridors that Prime Minister Narendra Modi has planned with foreign funding.

The opportunity for India then, is to influence and partner both AIIB and the nascent BRICS bank on favourable terms. Infrastructure is the focus of BRICS bank too, but so is sustainable development. Developing countries, including India, can seek financing for climate change technologies, environment protection, affordable drugs and other technology-based public service delivery solutions. This will leverage India's IT prowess and Brazil's sustainable development experience. The first president of the BRICS bank from India should set this course.

India is at a critical juncture. It is one of the largest recipients of WB aid, loans that can be cannibalised as these new institutions emerge, so it must capitalise on its early placement in the new multilateral financial architecture. Else, as the experience with the United Nations Security Council, Association of Southeast Asian Nations, Asia-Pacific Economic Cooperation and Shanghai Cooperation Organisation shows, a missed opportunity in the beginning will take years to make up - if ever.

saina nehwal no1

For a country starved of successes at the individual level in world sport, Saina Nehwal’s feat of becoming the first Indian woman shuttler to reach the No.1 position in the world is a stupendous achievement. The 25-year-old Nehwal — a resident of Hyderabad — achieved this mark during the course of the 2015 India Open Super Series badminton tournament, after defeating the reigning world champion, the Spaniard Carolina Marin, in the semi-finals. Nehwal eventually won, defeating former world champion Ratchanok Intanon of Indonesia. Amidst the collective disappointment in the cricket-mad country following India’s loss to Australia in the World Cup, Nehwal’s mark has offered a moment of immense pride and delight for Indian sports-lovers. Very few Indians have reached the pinnacle of individual sports. In badminton, only Prakash Padukone had reached the No.1 mark, more than three decades ago. Nehwal now occupies a distinguished position in Indian sport along with achievers such as chess grandmaster Viswanathan Anand and boxer Mary Kom, both of whom reached the top positions in the respective individual sports.

Nehwal’s ascent was aided by the fact that the reigning Olympic badminton champion, Li Xuerui from China, sustained an injury and has played sparingly in the past few months. It is Nehwal’s persistent competitiveness that has allowed her to remain in the top echelons of her sport, and helped her reach the summit at an opportune time. She had won five major tournaments since 2014 — the Indian Open Grand Prix twice, the Australian Super Series and the China Open in 2014, and the India Super Series in 2015. Credit must also go to Nehwal’s coaches over the years, who include Dronacharya award winner Syed Arif, badminton legend Pullela Gopichand and the present coach Vimal Kumar, who is also a former Indian champion. As with other Indian sportspersons — Viswanathan Anand in particular — Nehwal’s success could spur other Indians to take a liking to that sport and inspire them to seek competitive pursuits. The lack of adequate sporting infrastructure, the general absence of a sporting culture, and the domination of cricket in media coverage of sports in the country have meant that Indian achievements in individual sports are few and far between. Here is hoping that such triumphs as Nehwal’s are not flashes in the pan but the start of a trend of strong competitiveness among individual sportspersons, at least in badminton. The victory of male shuttler K. Srikanth in the same tournament — which lifted his world ranking to No.4 — suggests there is indeed something strong brewing in Indian badminton.

Health and Family Welfare Ministry to Implement #RSBY Scheme from Tomorrow

Health and Family Welfare Ministry to Implement RSBY Scheme from Tomorrow

Labour and Employment Ministry Transfers RSBY Scheme

The Rashtriya Swasthya Bima Yojna (RSBY ) of the Labour and Employment Ministry will now be implemented by the Ministry of Health and Family Welfare. In pursuance of a recent policy decision of the Government, the Labour and Employment Ministry is handing over the RSBY scheme to the Ministry of Health and Family Welfare with effect from tomorrow( 1st April 2015).The decision will come in to force on as is, where is basis.

The RSBY, the health insurance scheme for BPL(below poverty line) families was launched for the workers in the unorganized sector in the FY 2007-08 and it became fully operational from 1st April 2008. It provides for IT-enabled and smart –card-based cashless healthy insurance, including maternity benefit cover up to Rs. 30,000/- per annum on a family floater basis to BPL families (a unit of five) and 11 occupational groups in the unorganized sector. The ‘’Unorganized workers social Security Act, 2008” came into operation w.e.f 31st December 2008 and it encompassed ten social security schemes benefitting the unorganized workers including the RSBY.

The scheme has benefitted 3,85,15,411 families up to 31st March 2014. As many as 10311 hospitals are rendering services to the insured persons which include 6093 private hospitals and 4218 Government hospitals. Insurance Companies both of public and private sector (Govt-4, Private-12) are participating in this flagship scheme. Central share to the tune of Rs. 3738.05 crores was released by GOI during the last six years and the release during current FY is Rs 548.20 up to 23rd March 2015.

Out of 29 States and 7 Union Territories, the scheme was never operational in 3 States and 4 UTs and was operational for some time and then stopped in 5 States and one UT. In 21 States and one UT, the scheme is under continuous implementation starting from FY 2008-09. Altogether, 548 districts [out of the country total of 676 districts] have been covered under RSBY so far and 128 districts have never implemented RSBY.

In India, out of the estimated workforce of 47 crores, only eight crore are organized workers and thirty nine crore are workers in the unorganized sector. 

Nine organic and exotic agricultural products from Northeast India were accorded geographical indication (GI)

Nine organic and exotic agricultural products from Northeast India were accorded geographical indication (GI) registration tag. GI tag will help to protect these exclusive special local crops and pave way for better branding and marketing of these products both in domestic and international Market. 

Geographical Indication (GI) accorded products are 
Assam Karbi Anglong Ginger. Assam Tezpur Litchi. Meghalaya Khasi Mandarin. Sikkim Large Cardamom. Mizoram Bird Eye Chilly. Manipur Kachai Lemon. Tripura Queen Pineapple. Arunachal Orange. Nagaland Tree Tomato. 

Union Government owned North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC) had played important role in getting GI registry. North Eastern Council (NEC) provided the financial support to this initiative.    About Geographical Indication (GI) Geographical Indication is an insignia on products having a unique geographical origin and evolution over centuries. It is a mark of authenticity and ensures that registered authorised users (or at least those residing inside the geographic territory) are allowed to use the popular product name. In India GI registration is governed by the Geographical Indications of goods (Registration and Protection) Act, 1999. Darjeeling tea was the first product in India accorded with GI tag.

Decoding the #National #Pension System

Budget 2015 brought the National Pension System (NPS) back into the limelight by announcing an additional deduction of Rs. 50,000 for the same. But before going into those details, let us first understand what NPS is all about.

For starters, the NPS is a defined contribution pension scheme. Originally, only Central Government Employees joining service on or after 1.1.04 were eligible to avail of this scheme. Later, it was extended to employees of any other employer and also to any citizen of India (including an NRI but not a PIO having bank account in India) between the age of 18 and 55. They have to contribute annually 10% of their salary to NPS. A matching contribution would be made by the employer.

In order to give a fillip to this scheme, the FM has proposed a separate deduction of Rs. 50,000 over and above the current deduction of Rs. 1,50,000 available u/s 80CCE for contributions to NPS. Consequently, now it is possible for a taxpayer in the 30% tax bracket to save up to Rs. 15,450 in tax every year over and above what he could do so far.

Salient Features
There are two types of accounts –– Tier-I and Tier-II. Tier-I is geared towards retirement and has restricted liquidity. Withdrawal is possible only between the age of 60 and 70 years except for critical illnesses and for buying or constructing a house. On attaining 60 years of age and up to 70 years, the investor has an option of withdrawing a minimum of 40% of the pension wealth in order to purchase a life annuity. If withdrawal is sought earlier than age 60, say, when the person opts for early VRS or retires at the designated age, 80% of the accumulated capital is to be used to buy a life annuity. At the age of 70, the entire amount may be withdrawn.
Tier-II accounts are add-ons having all the parameters identical with the Tier-I, but there is no restriction on any amount of withdrawals any number of times, provided a minimum balance of Rs. 2,000 is maintained at the end of the FY.

Any individual can opt for such add-on only after he has contributed at least the minimum contribution to Tier-I. This Tier-II is comparable with say a tax saving mutual fund or even a savings bank account.

Low Cost — The investment management fee is as low as 0.0009% p.a., irrespective of the type of portfolio the account holder desires. Yes, there are some small fees charged for various purposes, but it is claimed that all these put together makes NPS having a very low cost for its management.
The corpus will be invested in three asset classes –– Equity (E), Government Securities (G) and Corporate Bonds and Fixed Deposits (C).
The account holder can opt for an active choice (change any time) of the asset mix he desires to have or a default option called Life Stage Fund where the asset mix gets changed automatically depending upon the age of the subscriber. At the age of 18 years, the asset allocation would be 50% in E, 30% in C and 20% in G till the investor turns 35 when the ratio of investment in E and C will then decrease annually, while the proportion of G will rise. At 55 years, G will account for 80% while the share of E and C will fall to 10% each.

Because of the link of NPS with equities, you may stagger your investments in some installments like the SIP of a mutual fund. However, take account of the fact that there is a transaction charge of 0.25% or Rs. 20 (whichever is higher) on every contribution.

Minimum annual contribution is Rs. 6,000 per FY payable in one or more installments of minimum Rs. 500 to Tier-I. For Tier-II the minimum amount is Rs. 250 per contribution and also per FY.
Transparency could be improved. Whereas Mutual Funds have to announce their NAVs on a daily basis NPS would announce NAV on yearly basis.
Tax Treatment
The Finance Act 2011 has clarified that the contribution of the employer to the extent it does not exceed 10% of the employee’s salary is not a part of the limit on contribution of Rs. 1,50,000.

Contributions made by an individual to his NPS account are deductible u/s 80CCD. The ceiling on contribution in the case of an employee is 10% of his salary and in any other case, 10% of his gross total income. Salary includes dearness allowance if the terms of employment so provide, but excludes all other allowances and perquisites.

Unfortunately, NPS withdrawals (including employer’s contributions) are governed by Sec. 80CCD (3) which taxes any amount received by the assessee, including the annuity. It is also taxable in the hands of the nominee who has the option to own the scheme and continue the contributions, if he is eligible to do so.

Consequently, the entire income stream from NPS (the lump sum and the pension) is fully taxable. This essentially makes NPS the first among the EET (Exempt-Exempt-Taxed) kind of instruments. This is the greatest drawback. The other drawback is the compulsion of buying an annuity with 40% of the corpus if withdrawals are effected when the assessee’s age is between 60 and 70 years.

On the plus side, NPS is slated to provide higher returns because a part of its corpus can be parked in equities and moreover, the cost of managing the NPS is very low.

For clarity, assume that you have invested Rs. 50,000 in NPS for 20 years and the returns are 12% p.a., resulting in the corpus rising to Rs. 36.03 lakh. If it is taxed @30.9%, the value will be fall to Rs. 24.89 lakh. The same amount invested in EPF @8.5% will grow to Rs. 25.58 lakh and it is tax-free. Realise that NPS invests maximum 50% of your contributions in equities and that too in Nifty Index whereas the MFs have no such restrictions.

Fortunately, this extra contribution up to Rs. 50,000 under Tier-II is not taxable at its withdrawal. But you need to possess a Tier-I account and contribute minimum of Rs. 6,000 before you go for Tier-II.

To Sum
At the end of the day, NPS has both positives as well as some negatives. On the one hand is the taxability factor at withdrawals (even in the hands of a nominee) and also of annuity receipts but on the other hand is the extremely low cost as compared to any other saving product. Only time will tell which factor would prove to be more decisive.