Improving climate for foreign investments

 

The silver lining for those who have been waiting for some quick progress on the economic reforms front arrived on Tuesday. The department of industrial policy and promotion (DIPP) announced a review of foreign direct investment (FDI) policy in as many as 15 sectors. These reforms were long overdue and their final realization should considerably bolster India’s attractiveness to foreign capital and technology.

With an aim “to further ease, rationalize and simplify the process of foreign investments in the country”, the announced measures involve sectors as diverse as defence, mining, construction and plantation. A whole range of FDI proposals have been, in one stroke, shifted from the route of government approval, where, as the DIPP notes, time and energy of investors is wasted, to the automatic route. For instance, in the defence sector, the proposals for FDI up to 49% will now come under the automatic route instead of the government route as under extant rules. For investments above 49%, the proposal will be considered by the Foreign Investment Promotion Board (FIPB) instead of the current scrutiny by the Cabinet Committee on Security.

The liberalization of the FDI regime in the construction sector has the potential for yielding a considerable windfall as this sector has been the second highest beneficiary of foreign investment—accounting for 9.34% of the total FDI inflows from April 2000 to June 2015. In other measures, sectoral caps have been increased and new avenues have been opened up for foreign investments. The wholesale, retail and e-commerce spaces have been opened up for manufacturing industries. To cap it all, the threshold up to which FIPB can consider foreign equity proposals has been raised from Rs.3,000 crore to Rs.5,000 crore. Beyond this limit is the realm of the Cabinet Committee on Economic Affairs.

In order to make it easier for foreign investors, DIPP has also been advised to consolidate all FDI-related instructions from countless government notifications and press notes into a single booklet. The recovery of the Indian economy, fragile and slow though it may be, has definitely been helped by an increase in foreign investment. The foreign equity inflows for the first six months of the calendar year 2015 saw a 34% increase from the corresponding figure last year. According to a Financial Times report in September, India has emerged as the world’s most favourite destination for FDI in 2015.

It is true that India has traditionally been far more reliant on domestic investments than on foreign inflows for economic growth. According to World Bank data, at its peak in 2008, FDI in India stood at 3.5% of GDP. The level of gross capital formation as a percentage of GDP, however, has consistently hovered above 30% since 2004, achieving a peak of 39% in 2011. There are, however, three reasons why the government’s push for greater FDI inflows is not at all misplaced.

One, the FDI inflows tapered off from a peak of 3.5% of GDP in 2008 to 1.3% in 2012 before marginally reviving to 1.7% in 2014. It is clear that India has adequate capacity and need to further absorb foreign capital. Two, domestic investment has not picked up because the Indian corporate sector has been battling over-leveraged balance sheets. With large numbers of stressed and non-performing assets on their books, banks, too, have been unwilling to lend further. World Bank data reflect the same, as gross capital formation plummeted from 39% of GDP in 2011 to 31% of GDP in 2014—the lowest in over a decade. In the light of such a decline, the 2014-15 Economic Survey was unequivocal on the imperative of augmenting public investment “to recreate an environment to crowd-in private sector investment”. A spurt in FDI will undoubtedly support the increasing public investment in spurring consumer demand and create positive conditions for private domestic investments.

Three, an increase in the level of FDI is not just a transient indicator of the health of the economy or a measure of success for initiatives such as “Make in India”. FDI brings with itself world’s best practices and access to technology. It induces greater competition in the markets of the recipient country and helps the latter integrate with global supply chain. In short, more and more FDI is welcome and so are the measures to facilitate the same.

Workshop on discontinuation of Interview for recruitment to the Junior-level posts in the Government

Dr. Jitendra Singh to inaugurate Workshop on discontinuation of Interview for recruitment to the Junior-level posts in the Government

Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances & Pensions, Atomic Energy and Space, Dr. Jitendra Singh will inaugurate a one-day Workshop of the Principal Secretaries of the General Administration Department (GAD) of various States/Union Territories looking after the work of recruitment of employees, in New Delhi on Monday, November 16, 2015.

The daylong Workshop will focus upon the Central Government’s directions calling for discontinuation of Interview for recruitment to the Junior-level posts in the Government. Presentations will be made by the Staff Selection Commission (SSC), Railway Recruitment Boards (RRBs), representatives of State Government from Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Punjab, Rajasthan, Sikkim and Uttarakhand besides the Department of Personnel & Training (DoPT).

Dr. Jitendra Singh had last month appealed to the Chief Ministers of all the States to take steps to abolish interview for recruitment to lower posts wherever possible. As a prompt follow up to the suggestion made by the Prime Minister Shri Narendra Modi during his Independence Day address to abolish interview for recruitment to such posts where it is not required, the DoPT took up the matter with the State Governments of all States on September 4, 2015 following which the matter was discussed with the Secretaries of General Administration Department (GAD)/Personnel from States during the two-day workshop held in New Delhi on September 8-9, 2015.

The government’s view is that the interviews should be discontinued for recruitment to junior-level posts where personality or skill assessment is not absolutely required. The objective behind abolition of interviews for such posts is that it will curb corruption, ensure more objective selection in a transparent manner and substantially ease the problems of the poor and resourceless aspirants. This will not only enable giving more weightage to the merit but also supplement the government’s resolve for “Maximum Governance, Minimum Government”.

In a letter addressed to the Chief Ministers last month, Dr. Jitendra Singh had informed that several Group 'B' (Non-Gazetted) and Group 'C' (Non-Technical) posts in various Ministries/Departments and other organisations under Central Government have already been identified where the selections can be made through a competitive examination without conducting the interview. The Chief Ministers of different States have been requested to involve the Public Service Commission and other recruiting agencies in their respective States where interview can be discontinued and selection can be done only through examination. This would be a major step towards achieving the goal of citizen-centric transparent governance.

The DoPT and the Department of Administrative Reforms & Public Grievances (DAR&PG) and the Department of Pensions and Pensioners Welfare have recently undertaken several path breaking decisions including abolition of attestation of certificates and instead introduced self-attestation of certificates, introduction of pension portal to abolish the requirement for a written life-certificate and decision to revisit and revise the pattern and syllabus of Civil Services Examination.

Smart City Plans to be evaluated based on credibility, do-ability and citizen engagement

Smart City Plans to be evaluated based on credibility, do-ability and citizen engagement

Implementation framework given 30% weightage, Result orientation-20%, Citizen participation-16%, smartness of solutions-10%, SWOT analysis based strategic plan-10%

Weightage for Pan-city solutions increased based on suggestions from States and ULBs

UD Ministry firms up evaluation criteria for second stage of City Challenge competition

Smart City Plans to be submitted to the Ministry of Urban Development by the 98 identified mission cities for evaluation in the second stage of ‘City Challenge Competition’ will be assessed for their credibility and do-ability. The Ministry has firmed up the evaluation criteria seeking to enable formulation of workable city level Smart City Plans as suggested by the Minister of Urban Development Shri M.Venakaiah Naidu. States and Urban Local Bodies have been adequately consulted in this regard.

The Mission cities are currently engaged in preparation of Smart City Plans to be submitted to the Ministry of Urban Development by the 15th of next month for evaluation so as to pick up the first batch of mission cities for financing this year. 98 cities were earlier selected based on intra-state competition in the first stage of City Challenge Competition based on a set of criteria.

The evaluation criteria for second stage of competition accords a weightage of 30 out of a total 100 marks for Implementation framework including feasibility and cost effectiveness, 20 for Result orientation, 16 for Citizen consultation for identifying goals and objectives, 10 for Smartness of solutions, 10 for adoption of SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis for preparation of strategic plan and 5 each for City vision and goals and Quality of city profiling including identification of Key Performance Indicators (KPIs), Potential for improvement of city and 4% for Processes followed.

Smart City Plans will be assessed based on City-level criteria (30% weightage), Area Based Development features(50%) and Pan-city Solutions(15%) encompassing above mentioned parameters. Based on the suggestions from States and Urban Local Bodies(ULBs), weightage for Pan-City Solutions has been increased from 10% to 15%.

Citizen engagement has been made mandatory for identifying smart city objectives and evolving strategic plan under city-level criteria, deciding on area development features and identification of Pan-city Solutions with a total weightage of 16%.

City-level criteria includes measures taken during the last three years to enhance livability and administrative efficiency of cities, quality of city vision and strategic plan, identification of gaps and KPIs and potential for improvement.

Implementation framework including feasibility and cost effectiveness of Area Based Development and Pan-city Solutions of Smart City Proposals is given the highest weightage of 30% as it encompasses credibility of proposals. Under this, Mission cities should indicate realistic timelines and targets and sequencing of efforts and actions through PERT and CPM charts, a clear financing plan with details of resource requirements and their mobilization, development of bankable projects, innovative ways of financing including tapping of financial markets and land monetisation, life time costs, O&M costs and financial sustainability, details of Special Purpose Vehicle to be set up, convergence with other schemes, role of various institutions involved in implementation of plan etc.

Result orientation of Area Development and Pan-city Proposals includes extent of adoption of 24 Smart City features, do-ability of proposals, outcomes, convergence of different schemes for resource mobilization, identification of risks and their management, impact of smart city proposals on governance, Spatial impact (enhanced density of living and mixed land use), Economic impact (new commercial spaces for economic activity), Social impact (improved public spaces enhancing social cohesion) and Environmental impact.

Pan-city Solutions are mandatory component of Smart City Proposals aiming at benefitting entire city through application of Information & Communication Technologies resulting in improvement in governance and public service delivery. Mission city are required to clearly bring out the measurable impact of these solutions on governance and service delivery besides the time frame by when the benefits would be felt by the citizens.

Smart City Mission focusses on area development through retrofitting, redevelopment and green field development or a combination of these with Pan-city Solutions as a mandatory component.

Under retrofitting, an already built up area of a minimum of 500 acres identified will be taken up for addressing existing infrastructure deficits and promotion of smart city features. Under redevelopment, built up area of minimum 50 acres would be re-built with smart city features. Minimum area for green field development is 250 acres.

Navy’s Long Range Maritime Patrol Aircraft- Boeing P-8I- Dedicated to the Nation

Navy’s Long Range Maritime Patrol Aircraft- Boeing P-8I- Dedicated to the Nation

Giving a boost to the firepower and arsenal of the Indian Armed Forces, the Defence Minister Shri Manohar Parrikar dedicated the Boeing P 8 I (Poseidon Eight India) Long Range Maritime Patrol aircraft to the nation this morning, at an impressive ceremony held at INS Rajali, Arakkonam, India’s premiere Naval Air Station in southern India, about 70 Km off Chennai.

The ceremony was attended by a host of dignitaries including the Chief of Naval Staff Admiral RK Dhowan, and Flag Officer Commanding-in-Chief Eastern Naval Command Vice Admiral Satish Soni.

Shri Parrikar, who flew in to INS Rajali on board a Boeing P-8I from Port Blair this morning, described the aircraft as one of the best for surveillance in the world today. During the flight, Shri Parrikar was given an exposure to various sensors and other sophisticated state-of-the-art equipment and their capabilities. He said the aircraft will provide the Indian Navy the necessary reach and flexibility to undertake extensive surveillance as also to respond swiftly and effectively to contingencies in our areas of interest.

Shri Parrikar, in particular complimented the Navy and its air arm for expeditiously inducting and operationalising this force multiplier, which would enable the nation’s Armed Forces to dominate the future battle space. Taking note of the spectacular efforts put in by INS Rajali and its personnel, Shri Parrikar praised the fact that, even in the short phase of trials and testing, the P-8I aircraft had achieved a number of operational milestones which includes participation in the search effort for Malaysian Airlines Flight MH 370, the first successful firing of air launched Harpoon Block II missile in the world, torpedo firing and active participation in major naval exercises.

The P-8I aircraft is a variant of the P-8A Poseidon aircraft that Boeing developed as a replacement for the US Navy’s ageing P-3 fleet. Indian Navy became the first international customer for the P-8 aircraft with the conclusion of the nearly US $ 2.1 billion contract on 01 Jan 2009 for a total of eight aircraft. The first aircraft arrived in India on the 15 May 2013 and as of date; all eight aircraft have been inducted into the Indian Navy and are fully integrated into its operations.

The P-8I aircraft is equipped for long range anti submarine warfare, anti -surface warfare, intelligence, surveillance and reconnaissance in support of broad area, maritime and littoral operations. Its communication and sensor suite includes indigenous equipment developed by defence PSUs and private manufacturers. With its high speed and high endurance of about 10 hours, the aircraft is capable of thrusting a punitive response and maintaining a watch over India’s immediate and extended areas of interest.

The aircraft are based at INS Rajali, and are operated by Indian Naval Air Squadron 312A under the command of Commander Venkateshwaran Ranganathan.

Centre relaxes FDI norms in 15 sectors

Centre relaxes FDI norms in 15 sectors
The Centre on Tuesday announced 'big bang' foreign direct investment (FDI) reforms, easing conditions across 15 sectors, including defence, banking, construction, retail, broadcasting and civil aviation.
For facilitating faster approvals on most of the proposals, the government has decided that the inter-ministerial Foreign Investment Promotion Board (FIPB) can from now onwards give approvals to proposals above Rs 5000 crore, up from the earlier threshold of Rs 3,000 crore.
A senior Industry Ministry official said "by far, these (set of reforms) are the biggest path-breaking and the most radical changes in the FDI regime ever undertaken by the Centre. With the Prime Minister's approval and after several rounds of inter-ministerial consultations, we have brought out about 35 changes in the FDI policy cutting across 15 sectors. We have expedited these changes over the last couple of weeks. This exercise could have other wise taken over a year and would have needed over 16 cabinet notes."
Crux of the reforms
According to an official release, the crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted.
Significantly, undeterred by the debacle in Bihar polls, the BJP-led NDA government stated that: "With this round of reforms, the government has demonstrated that India is unstoppable on the path of economic development... It is also clear that India is a country, which is more than ready to integrate with the global economy."
For the sake of ease of doing business, the Industry Ministry will soon consolidate all FDI-related instructions contained in various notifications and press notes and prepare a booklet so that the investors do not have to refer to several documents of different time-frames.
The release said refining of foreign investment norms in construction is to facilitate the construction of 50 million houses for poor. It added that opening up of the manufacturing sector for wholesale, retail and e-commerce is aimed at motivating industries to ‘Make in India’ and sell it to the customers here instead of importing from other countries.
Higher FDI
According to Industry Ministry data, India received FDI of $19.39 billion during January-June 2015, an increase of 30% over the same period last year. The Modi government in the last few months has introduced many FDI policy reforms in sectors such as defence, rail infrastructure, construction development, insurance, pension, medical devices, white label ATM operations, investments by NRIs on non-repatriation basis and has introduced composite cap for foreign investment.
Main sectoral changes in the FDI regime
Construction sector: Conditions of area restriction of floor area of 20,000 sq. metres in construction development projects and minimum capitalisation of US$ 5 million to be brought in within the period of six months of the commencement of business have been removed.
Defence: Foreign investment up to 49% will be under automatic route. Proposals for foreign investment in excess of 49% will be considered by FIPB. Earlier, foreign investment up to 49% is permitted under government approval route. Foreign investment above 49% was also permitted, subject to approval of Cabinet Committee on Security on case-to-case basis, wherever the investment is likely to result in access to ‘state-of-art’ technology in the country.
Also, portfolio investment and investment by foreign venture capital investors (FVCIs) will be allowed up to permitted automatic route level of 49%. (So far, portfolio investment and investment by FVCIs was restricted to 24% only).
However, government approval will be required in case of infusion of fresh foreign investment within the permitted automatic route level, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor.
Broadcasting: In terrestrial broadcasting FM (FM Radio), and in up-linking of ‘news & government route current affairs TV channels FDI upto 49% is allowed through the FIPB route, while 100% FDI is allowed through the automatic route in up-linking of non-‘news & current affairs TV channels.
Banking: In private sector banking, the government has allowed full fungibility of foreign investment in private sector banking. Accordingly, FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74%, provided that there is no change of control and management of the investee company.
Plantation: The government also decided to plantation activities namely; coffee, rubber, cardamom, palm oil tree and olive oil tree plantations also for 100% foreign investment under automatic route. As of now, only tea plantation was open to foreign investment.
NRIs: Investment by companies/trusts/partnerships owned and controlled by NRIs on non-repatriation basis will now be treated as domestic investment.
E-Commerce: Manufacturers have been allowed to sell their product through wholesale and/or retail, including through e-commerce without government approval.
Retail: The government has eased FDI policy conditionalities for single-brand retail trading, besides permitting 100% FDI in duty-free shops.
Also, a single entity will be permitted to undertake both the activities of single-brand retail trading (SBRT) and wholesale with the condition that conditions of FDI policy on wholesale/ cash and carry and SBRT have to be complied by both the business arms separately. Currently, wholesale/cash and carry trader cannot open retail shops to sell to the consumer directly.
LLP: 100% FDI in limited liability partnerships (LLPs) has been permitted under automatic route.
Aviation: Regional air transport service will be eligible for foreign investment up to 49% under automatic route. Under the present FDI policy, foreign investment up to 49% is allowed only in scheduled air transport service/ domestic scheduled passenger airline.
Foreign equity caps of certain sectors - non-scheduled air transport service, ground handling services, satellites establishment and operation and credit information companies have now been increased from 74% to 100%. Further, sectors other than satellites establishment and operation have been placed under the automatic route.

Highlights of the Chief Minister’s Sub-group report on rationalization of Centrally sponsored Schemes

Highlights of the Chief Minister’s Sub-group report on rationalization of Centrally sponsored Schemes
Following are the highlights of the Chief Minister’s sub group report on rationalization of centrally sponsored scheme under the aegis of NITI Aayog which was constituted on March 9,2015 by the Prime Minister in pursuance of the decision taken in the first meeting of the Governing Council of the NITI Aayog held on 8th February, 2015:
Formation of the Sub-Group
· The Sub-Group of Chief Ministers on the rationalization of Centrally Sponsored Schemes (CSS) was constituted on March 9, 2015 by the Prime Minister in pursuance of the decision taken in the first meeting of the Governing Council of the NITI Aayog held on February 8, 2015.
· Chief Ministers of Arunachal Pradesh, Jammu & Kashmir, Jharkhand, Kerala, Manipur, Nagaland, Rajasthan, Telangana, Uttar Pradesh and Lt. Governor of A & N Islands are Members of the Sub-Group. The Chief Minister Madhya Pradesh is Convener and CEO, NITI Aayog is Coordinator of the Group. The Sub-Group undertook extensive consultations with the Central Ministries, including the Ministry of Finance, NITI Aayog and States and UTs including those which were not represented by their Chief Ministers/ LGs in the Sub-Group. In addition, at the instance of the Sub-Group, CEO/NITI Aayog undertook regional consultations at official level at Kolkata, Chandigarh, New Delhi and Hyderabad with States/UTs. The Sub-Group itself met four times and has finalized its recommendations on the basis of such extensive consultations. In this endeavor, the Sub Group has been assisted by a Working Group of senior officers drawn from NITI Aayog, Central Ministries and States/UTs.
· It is matter of great satisfaction that despite such wide ranging consultation, this report has the broad agreement of not only the member chief ministers but also of the non-member states

Guiding Principles

· The formation of the Sub-Group is testimony to the resolve of the Union and the States /UTs to work as Team India in the spirit of Cooperative Federalism towards realisation of the goals of VISION 2022 when we will celebrate the 75th year of Independence. The objectives of the VISION are broadly: (a) providing basic amenities to all citizens in an equitable and just manner for ensuring a life with self-respect and dignity, and (b) providing appropriate opportunities to every citizen to realize her potential.

· For realising VISION 2022, the Governing Council of NITI Aayog is engaged in developing the contours of the National Development Agenda. CSS are key instruments for meeting the objectives outlined in the National Development Agenda.
· The sectors covered under the National Development Agenda are critical to the transformation of India and the outcomes will transcend State boundaries. Since a significant amount of Plan Transfers to States/UTs are routed through CSS, and since many CSS interventions are in the social sectors, it is imperative that they are designed to be effective and outcome-oriented. Moreover, they should be adequately funded and their implementation should be sufficiently flexible to enable the States to efficiently implement them according to local requirements and conditions.

Provision for CSS in Union Budget of 2015-16.

· In the Union Budget for 2015-16, CSS are classified as Central Assistance to State Plan (CASP). In 2014-15, budgetary provisions were made for 66 CSS of which 17 large schemes were designated as ‘flagship’ programmes.
· With effect from BE 2015-16, following the acceptance of the recommendations of the 14th Finance Commission (FFC) by Government of India, the devolution to States has increased from 32% to 42% of the net Union Tax Receipts. In absolute terms, it is estimated that this entails additional devolution of Rs. 1.78 lakh cr to the States. As a result, the fiscal space available with the Union Government to fund CSS has shrunk.

· The 14th FC has recommended that sector-specific transfers from the Union to the States/UTs should be confined to sectors like education, health, drinking water and sanitation. However, in view of the preponderance of CSS being interventions in key sectors of national importance, the Government of India has retained 50 of the 66 ongoing CSS in Budget 2015-16. The balance are being either taken into the Central sector, or reformulated as new Umbrella Schemes or have been transferred to the States.
· Hence, post-14thFC devolution, the BE for Central Assistance to State Plan (CASP) has been reduced from Rs. 3.38 lakh cr in 2014-15, to Rs. 2.05 lakh cr in 2015-16. The BE for CSS has reduced from Rs. 2.52 lakh cr to about Rs. 1.69 lakh cr (excluding provision for CSS for UTs).
Rationalisation of CSS: Perspectives of Centre, State and UTs:
· Henceforth only Schemes/Programmes in CSS in key identified sectors will comprise the National Development Agenda.
· The number of Schemes/Programmes should be reduced for improving their visibility and impact.
· Investment in Core Schemes/Programmes should be maintained at least at their current level.
· While deciding the funding pattern, special dispensation needs to be given for North Eastern and Himalayan States and UTs.
· States should be given flexibility in the implementation of the Schemes.
· Given their critical role in successful implementation of Schemes, the support from the Centre for remuneration of grass-root workers like ASHA, Aanganwadis, Contract Teachers etc. should be maintained at present levels for at least two years.
· The processes and procedures for release of Central Assistance (CA) to the States under these Schemes should be simplified.
· There should be a degree of certainty regarding the availability of funds and Central Assistance likely to be available under these Schemes in the medium term.
· Projects/activities that are already sanctioned earlier under these schemes should be completed for which adequate provisions should be made.
· NITI Aayog should emerge as a platform for addressing problems in implementation of Schemes/Programmes under the National Development Agenda.
Major Recommendations at a glance:
· Focus of CSS should be on the Schemes that comprise the National Development Agenda where the Centre and the States will work together in the spirit of Team India.
· Sectors/ tasks/objectives like Poverty Elimination including MGNREGA and Schemes for social inclusion; Drinking water and Swachh Bharat Mission; Rural Connectivity including Electrification; Access Roads and Communications; Agriculture including Animal Husbandry, Fisheries and Irrigation; Education including Mid Day Meal; Health, Nutrition, Women and Children; Housing for All: Urban Transformation and Law and Order and Justice Delivery System would be Core Sectors as they constitute important elements of the National Development Agenda. MGNREGA and Schemes for Social inclusion would be accorded highest priority.
· Accordingly, existing CSS should be divided into: Core and Optional schemes.
· Amongst the Core Schemes, those for social protection and social inclusion should form the Core of the Core and be the first charge on available funds for the National Development Agenda.
· Ordinarily, in any sector there should be one Umbrella scheme having the same funding pattern for all its sub-components.
· Investment levels in Core Schemes should be maintained so as to ensure that the optimum size of the programme does not shrink.
· Funds for Optional Schemes would be allocated to States by the Ministry of Finance as a lump sum and States would be free to choose which Optional Schemes they wish to implement. Additionally, the States have been given the flexibility of portability of funds from optional schemes ( should it choose not to utilize to utilize its entire allocation under that head) to any other CSS component within the overall allocation for the state under CASP.
· From now onwards, the sharing pattern should be:
For Core Schemes
a) For 8 NE and 3 Himalayan States: Centre: State: 90:10
b) For other States: Centre: State: 60:40
c) For Union Territories: Centre: 100%

For Optional Schemes
a) For 8 NE and 3 Himalayan States: Centre: State: 80:20
b) For other States: Centre: State: 50:50
c) For Union Territories: Centre: 100%
· Existing funding pattern for schemes classified as Core of the Core should continue.
· Remuneration for ASHAs, Aanganwadi and Contract Teachers to be protected. However, Central Assistance (CA) may be capped at existing level for the next 2 years in this regard.

(Provision for incomplete projects: all works begun in projects in existence in 2014-15 in which work has been awarded till 31 March 2015 should be funded on the existing pattern for the next 2 years.
· Flexibility in Schemes and Institutional mechanism: 25% allocation in a Scheme should be flexi-fund, to be spent in accordance with Ministry of Finance guidelines.
· Design of CSS should be broadly like Rashtriya Krishi Vikas Yojana (RKVY) with a large number of admissible components in a scheme, and the States being free to choose components to suit their local needs.
· Cost norms in construction component of schemes should be decided by States subject to capping of allocation by the Centre.
· Releases of funds should be simplified, based on yearly authorization. Actual release of cash would be on quarterly basis. .
· Releases should be based on Utilization Certificates of the installment prior to the last installment to a State/UT.
· The Ministry of Finance would make Scheme-wise allocations for Core Schemes. In each Core Schemes, there would be transparent criteria for State allocation of funds. There would also be transparent criteria for the lump sum allocation to States for Optional Schemes. These criteria to be evolved by NITI Aayog in consultation with State Governments and central Ministries.
· NITI Aayog to have concurrent jurisdiction in monitoring of Centrally Sponsored Schemes in the States and Central Ministries.
· Third-party evaluation by NITI Aayog

BIS elects Raghuram Rajan as its vice-chairman

BIS elects Raghuram Rajan as its vice-chairman
Raghuram Rajan, Reserve Bank of India (RBI) Governor who has been a vocal votary for increased co-ordination among central banks, has been elected vice-chairman of the Bank of International Settlement (BIS). Mr. Rajan will have a three-year term as vice-chairman of the BIS.
“Rajan joined the BIS Board of Directors in December 2013. Jens Weidmann, Chairman of the BIS Board, welcomed Dr. Rajan in his new role and thanked him for his continued service to the Bank,” the RBI said in a press release.

First such RBI Governor
Mr. Rajan is the first Indian central bank Governor to become the vice-chairman of BIS.
BIS is headquartered in Basel, Switzerland, and acts as a coordinating body among central banks to ensure global monetary and financial stability. The BIS board meets at least six times a year.
The BIS board comprise all central bankers. The board includes U.S. Federal Reserve Chair Janet Yellen, Bank of England Governor Mark Carney and Bank of Japan Governor Haruhiko Kuroda.
Mr. Rajan was appointed Governor of the RBI in September 2013, and was given a three-year term. This new role of Mr. Rajan will surely boost his chances for an extension next year, according to central bank watchers.
Tiding the currency crisis
The former International Monetary Fund chief economist, who is widely credited for predicting the global financial crisis of 2008, was appointed RBI Governor amid a currency crisis in 2013 which he was able to tackle soon after he assumed charge. He was also able to bring down inflation from double digit levels in the last two years and had proposed radical changes in the areas of monetary policy and banking reforms in India.
Mr. Rajan has been a strong critic of unconventional monetary policies such as quantitative easing and keeping interest rates at near-zero level for long, and he also believes that the sooner central banks recognised the importance of coordination, the more sustainable global growth would be.
“The current non-system in international monetary policy is, in my view, a source of substantial risk, both to sustainable growth and to the financial sector,” Mr. Rajan said in a speech at an event organised by the Institute of Monetary and Economic Studies, Bank of Japan, Tokyo, last year.
Problem of collective action
“It is not an industrial country problem, nor an emerging market problem; it is a problem of collective action,” he added