Incentives to develop ease of doing Business



Incentives to develop ease of doing Business
            The Central Government is committed to give a helping hand to states, so that India’s business regulatory environment can be further improved. 


            Department of Industrial Policy & Promotion organized a  Brain Storming Session  on 16th November 2016 to discuss “Assessment of State Implementation of Business Reforms, 2017” on the following issues:


i)        Suggestions on next set of reforms - Addition, Deletion and Modification
ii)       Evaluation methodology for the ranking
iii)      Incorporation of private sector feedback on the implemented reforms


            Further, states with more than 90% implementation of reforms have been requested to handhold and guide the reform process in States/UTs with less than 40% implementation of reforms as detailed below:-

S.NO.
Partner States (with more than 90% implementation score)
States (with less than 40% implementation score)
1.
Telangana
Tripura
2.
Andhra Pradesh
Kerala and Puducherry
3.
Gujarat
Dadar and Nagar Haveli and Andaman and Nicobar Island
4.
Chhattisgarh
Mizoram
5.
Madhya Pradesh
Daman and Diu
6.
Haryana
Meghalaya
7.
Jharkhand
Sikkim
8.
Rajasthan
Lakshadweep
9.
Uttarakhand
Assam
10.
West Bengal
Nagaland
11.
Odisha
Manipur
12.
Bihar
Arunachal Pradesh
13.
Punjab
Jammu and Kashmir and Chandigarh
14.
Maharashtra
Goa

            These states have been requested to provide technical guidance and arrange workshops to ensure the implementation of reforms.  This handholding will not only hasten business reform implementation across the country, it will also help states to learn from each other.

            Central Government has been assisting all States/UTs through many ways, which include organizing workshops and video conferences for better understanding of reform measures, facilitate learning from each other as well as sharing of good practices.  Jharkhand has been participating in such interactions and necessary assistance and way forward has been provided by the Central Government for implementation of reforms and improving the regulatory environment of the State.
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India’s Foreign Trade: February, 2017
I. MERCHANDISE TRADE
EXPORTS (including re-exports)
In continuation with the revival exhibited by exports since September 2016, exports during February 2017 for the first time exhibited a double digit positive growth of 17.48 per cent in dollar terms valued at US$ 24490.27 million as compared to US$ 20845.73 million during February,2016. In Rupee terms, during February 2017 exports were valued at Rs. 164269.71 crore as compared to Rs. 142246.46 crore during February,2016, registering a positive growth of 15.48 per cent.
Cumulative value of exports for the period April-February 2016-17 was US$ 245413.05 million (Rs. 1648743.26 crore) as against US$ 239378.37 million (Rs. 1562819.14 crore) registering a positive growth of 2.52 per cent in Dollar terms and positive growth of 5.50 per cent in Rupee terms over the same period last year.
Non-petroleum and Non Gems & Jewellery exports in February 2017 were valued at US$ 18011.73 million against US$ 14990.68 million in February 2016, an increase of 20.15 %. Non-petroleum and Non Gems and Jewellery exports during April - February 2016-17 were valued at US$ 179136.99 million as compared to US$ 175352.94 million for the corresponding period in 2016, an increase of 2.16%. In this connection it is mentioned that the global Brent prices ($/bbl) and Gold ($/troy oz) have increased by 67.14% and 2.89% respectively in February 2017 vis-à-vis February 2016 as per World Bank commodity price data (The pink sheet).
The growth in exports is positive for USA (5.61%), EU(1.68%) and Japan(10.87%) but China has exhibited negative growth of (-6.20%) for December 2016 over the corresponding period of previous year as per latest WTO statistics.
IMPORTS
Imports during February 2017 were valued at US$ 33386.57 million (Rs. 223942.06 crore) which was 21.76 per cent higher in Dollar terms and 19.69 per cent higher in Rupee terms over the level of imports valued at US$ 27418.98 million (Rs. 187100.79 crore) in February, 2016. Cumulative value of imports for the period April-February 2016-17 was US$ 340698.43 million (Rs. 2289598.48 crore) as against US$ 353696.36 million (Rs. 2307259.36 crore) registering a negative growth of 3.67 per cent in Dollar terms and 0.77 per cent in Rupee terms over the same period last year.
CRUDE OIL AND NON-OIL IMPORTS:
Oil imports during February, 2017 were valued at US$ 7681.20 million which was 60.02 percent higher than oil imports valued at US$ 4800.20 million in February 2016. Oil imports during April-February, 2016-17 were valued at US$ 76743.86 million which was 1.76 per cent lower than the oil imports of US$ 78121.86 million in the corresponding period last year.
Non-oil imports during February, 2017 were estimated at US$ 25705.37 million which was 13.65 per cent higher than non-oil imports of US$ 22618.78 million in February, 2016. Non-oil imports during April-February 2016-17 were valued at US$ 263954.57 million which was 4.22 per cent lower than the level of such imports valued at US$ 275574.50 million in April-February, 2015-16.

II. TRADE IN SERVICES (for January, 2017, as per the RBI Press Release dated 15th March, 2017)
EXPORTS (Receipts)
Exports during January 2017 were valued at US$ 13570 Million (Rs. 92385.10 Crore) registering a negative growth of 1.70 per cent in dollar terms as compared to positive growth of 3.49 per cent during December 2016 (as per RBI’s Press Release for the respective months).
IMPORTS (Payments)
Imports during January 2017 were valued at US$ 8409 Million (Rs. 57248.81 Crore) registering a positive growth of 1.39 per cent in dollar terms as compared to negative growth of 0.35 per cent during December 2016 (as per RBI’s Press Release for the respective months).
III.TRADE BALANCE
MERCHANDISE: The trade deficit for April-February, 2016-17 was estimated at US$ 95285.38 million which was 16.65% lower than the deficit of US$ 114317.99 million during April-February, 2015-16.
SERVICES: As per RBI’s Press Release dated 15th March 2017, the trade balance in Services (i.e. net export of Services) for January, 2017 was estimated at US$ 5161 million. The net export of services for April- January, 2016-17 was estimated at US$ 53477 million which is lower than net export of services of US$ 59289 million during April- January, 2015-16. (The data for April-January 2015-16 and 2016-17 has been derived by adding April-January month wise QE data of RBI Press Release).
OVERALL TRADE BALANCE: Overall the trade balance has improved. Taking merchandise and services together, overall trade deficit for April- February 2016-17 is estimated at US$ 41808.38 million which is 24.0 percent lower in Dollar terms than the level of US$ 55028.99 million during April-February 2015-16. (Services data pertains to April-January 2016-17 as January 2017 is the latest data available as per RBI’s Press Release dated 15th March 2017)


MERCHANDISE TRADE


EXPORTS & IMPORTS  : (US $ Million)                                                                                                (Provisional)
EXPORTS (including re-exports)
FEBRUARY
APRIL-FEBRUARY
2015-16
20845.73
239378.37
2016-17
24490.27
245413.05
% Growth 2016-17/ 2015-16
17.48
2.52
IMPORTS


2015-16
27418.98
353696.36
2016-17
33386.57
340698.43
% Growth 2016-17/ 2015-16
21.76
-3.67
TRADE BALANCE


2015-16
-6573.25
-114317.99
2016-17
-8896.30
-95285.38
EXPORTS & IMPORTS: (Rs. Crore)                                                                                                                            (Provisional)
EXPORTS (including re-exports)
FEBRUARY
APRIL-FEBRUARY
2015-16
142246.46
1562819.14
2016-17
164269.71
1648743.26
% Growth 2016-17/ 2015-16
15.48
5.50
IMPORTS


2015-16
187100.79
2307259.36
2016-17
223942.06
2289598.48
% Growth 2016-17/ 2015-16
19.69
-0.77
TRADE BALANCE


2015-16
-44854.33
-744440.22
2016-17
-59672.35
-640855.22

SERVICES TRADE

EXPORTS & IMPORTS (SERVICES) : (US $ Million)
(Provisional)
January 2016-17
EXPORTS (Receipts)
13570.00
IMPORTS (Payments)
8409.00
TRADE BALANCE
5161.00
EXPORTS & IMPORTS (SERVICES): (Rs. Crore)
(Provisional)
January 2016-17
EXPORTS (Receipts)
92385.10
IMPORTS (Payments)
57248.81
TRADE BALANCE
35136.29
Source: RBI Press Release dated 15th March,2017

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Meeting of Trade Development and Promotion Council

The 2nd meeting of Council of Trade Development and Promotion was convened in New Delhi on 05.01.2017 under the Chairpersonship of Hon'ble Commerce & Industry Minister (I/C).   Ministers from 08 States and senior officials from other states and Heads of Trade Bodies like FIEO/FICCI/CII participated in the meeting.

              The Members of the Council resolved to jointly address impediments in trade and the infrastructure gaps which adversely affect India’s exports. The major issues discussed were diversifying India’s exports basket by enabling more sectors and breaching new markets; creation/upgradation of infrastructure including connectivity, establishment of dry ports, creation of facilities for testing, certification, storage and packaging; expanding quantum and coverage in provision of incentives for exports, the preparation of the export strategies by the States in line with the Foreign Trade Policy; appointment of Export Commissioners in the State and the need to diversify the export basket in services beyond IT and ITeS.

The States appreciated the GoI’s initiative in constituting the Council to facilitate a platform to the States to articulate their views on issues related to exports.  Most of the States highlighted the importance of support by the Centre for creation of export infrastructure and articulated their views on the various aspects of trade, particularly from their stand point.

            The Government has taken following measures to boost export of services and merchandise goods:

(i)        It has announced launch of a new scheme for creation of export infrastructure in the budget of 2017-18.

(ii)     The Merchandise Exports from India Scheme (MEIS) was introduced in the Foreign Trade Policy (FTP) 2015‐20 on April 1, 2015 and is a major export promotion scheme implemented by the Ministry of Commerce and Industry. MEIS aims to incentivize export of merchandise which is produced/manufactured in India. Rewards @ 2‐5% under MEIS are payble as a percentage of realized FOB value of covered exports, by way of the MEIS duty credit scrip, which are transferable and can also be used for payment of a number of duties including the basic customs duty. At present, 7914 tariff lines at 8 digit HS Codes are covered under MEIS scheme.

(iii)    The Government has also launched Services Exports from India Scheme (SEIS) in the FTP 2015‐2020. The Scheme provided rewards to service providers of notified services who are providing service from India. The rate of reward under the scheme would be based on net foreign exchange earned. The present rates of reward are 3% and 5%.

(iv)    The Government continues to provide the facility of access to duty free raw materials and capital goods for exports through schemes like Advance Authorization, Duty Free Import Authorization (DFIA), Export Promotion Capital Goods (EPCG) Scheme and drawback /refund of duties.

(v)       The Government is implementing the Niryat Bandhu Scheme with an objective to reach out to the new and potential exporters and mentor them through orientation programmes, counselling sessions, individual facilitation, etc., on various aspects of foreign trade for being able to get into international trade and boost exports from India.

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Concept Note on Trade Facilitation Agreement

 India tabled the “Concept Note for an initiative on Trade Facilitation in Services” dated 27 September 2016(S/WPDR/W/55) at the WTO. The objective behind India’s proposal for an Agreement on Trade Facilitation in Services (TFS) is to initiate discussions at the WTO on how to comprehensively address the numerous border and behind-the-border barriers, across all modes of supply, which are impediments to the realization of the full potential of services trade. Like the Trade Facilitation Agreement ("TFA"), adopted by WTO Members in 2014 to facilitate trade in goods, a well-structured TFS will significantly enhance the potential for trade in services for all WTO Members. India has proposed that the TFS Agreement could be based on the TFA in goods, with suitable modification and adaptation to the services context, as required.
            India’s proposal was initially discussed at the WTO on 6th October 2016. Many WTO Members expressed interest in India’s proposal as a positive move to revive Services negotiations at the WTO. Some of the key issues raised by members related to scope and coverage of India’s proposal, mandate for a TFS and provisions related to Special and Differential Treatment. Some members sought greater detail about India’s proposal.
             The response of the Government was that India’s proposal for an Agreement on TFS is to comprehensively address the numerous border and behind-the-border barriers impeding trade in services across all modes of supply. India has taken the position that the mandate for a TFS arises from the various provisions of the General Agreement on Trade in Services (GATS).
             Subsequently, India tabled a follow-up proposal dated 14th November 2016 on “Possible Elements of a Trade Facilitation in Services Agreement” (S/WPDR/W/57) at the WTO, which outlines the possible elements of the TFS Agreement, as conceived by India, in a more detailed manner.
             Recently, India has tabled a draft legal text on Trade Facilitation in Services at the WTO to facilitate discussions among WTO members and to take forward this agenda.

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Concept Note on Trade Facilitation Agreement

 India tabled the “Concept Note for an initiative on Trade Facilitation in Services” dated 27 September 2016(S/WPDR/W/55) at the WTO. The objective behind India’s proposal for an Agreement on Trade Facilitation in Services (TFS) is to initiate discussions at the WTO on how to comprehensively address the numerous border and behind-the-border barriers, across all modes of supply, which are impediments to the realization of the full potential of services trade. Like the Trade Facilitation Agreement ("TFA"), adopted by WTO Members in 2014 to facilitate trade in goods, a well-structured TFS will significantly enhance the potential for trade in services for all WTO Members. India has proposed that the TFS Agreement could be based on the TFA in goods, with suitable modification and adaptation to the services context, as required.
            India’s proposal was initially discussed at the WTO on 6th October 2016. Many WTO Members expressed interest in India’s proposal as a positive move to revive Services negotiations at the WTO. Some of the key issues raised by members related to scope and coverage of India’s proposal, mandate for a TFS and provisions related to Special and Differential Treatment. Some members sought greater detail about India’s proposal.
             The response of the Government was that India’s proposal for an Agreement on TFS is to comprehensively address the numerous border and behind-the-border barriers impeding trade in services across all modes of supply. India has taken the position that the mandate for a TFS arises from the various provisions of the General Agreement on Trade in Services (GATS).
             Subsequently, India tabled a follow-up proposal dated 14th November 2016 on “Possible Elements of a Trade Facilitation in Services Agreement” (S/WPDR/W/57) at the WTO, which outlines the possible elements of the TFS Agreement, as conceived by India, in a more detailed manner.
             Recently, India has tabled a draft legal text on Trade Facilitation in Services at the WTO to facilitate discussions among WTO members and to take forward this agenda.

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Generation of Employment in Manufacturing Sector

The Government is implementing Integrated Development of Leather Sector (IDLS) sub-scheme as part of the Indian Leather Development Plan (ILDP). This has significantly contributed to capacity development in the labour intensive leather sector which has a larger scope for providing employment to socially and economically weaker sections of the society and women. Further, Stand-up India Scheme is implemented with an objective to facilitate bank loans between Rs. 10 lakh and Rs. 1 crore to at least one Scheduled Caste/Scheduled Tribe and at least one women borrower per bank branch for setting up Greenfield enterprises.


Tax incentives are provided under section 80JJAA of the Income Tax Act on additional employment in manufacturing sector. In addition, the Government has taken a number of measures to promote domestic manufacturing in the country in order to generate more employment opportunities in this sector. This, inter alia, include simplification and rationalization of the Foreign Direct Investment (FDI) Policy, building  of industrial corridors, taking proactive steps to ease doing business environment in the country,  launch of ‘Make in India’ initiative in 2014.  One of the objectives of ‘Make in India’ is to increase the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022 and to create 100 million additional jobs by 2022 in this sector. The focus sectors under ‘Make in India’ initiative inter-alia include employment-intensive industries like textiles and garments, leather and footwear, gems and jewellery and food processing industries. Further, the Government also proactively identifies and addresses instances of inverted duty structure, in consultation with industry, in such cases where the import duty on finished products are lower than that of the inputs for the finished products. Such correction of duty inversion provides level playing field to the domestic industries by encouraging domestic value addition and discouraging imports of such final products.

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Approval of Loan to VCIC by ADB

Asian Development Bank (ADB) has approved $631 million (Rs.4165 crore) in loans and grants for infrastructure development along the Vizag-Chennai Industrial Corridor (VCIC) on 20th September, 2016. This amount comprises (i) $ 500 million two-tranche facility to build key infrastructure (ii) $ 125 million two-tranche loan to help with industrial policies and business promotion (iii) $ 5 million grant from the multi-donor Urban Climate Change Resilience Trust Fund that is managed by ADB to build climate resilient infrastructure, and (iv) $1 million technical assistance to help the Andhra Pradesh local Government to manage the corridor. India and ADB have signed first tranche of loan USD 375 million pact for loans and grants to develop Visakhapatnam-Chennai Industrial Corridor. Detailed Project Reports (DPR) for the first tranche has been prepared.  First tranche loan will have a 25 year term, including a grace period of 5 years, a 20 year straight line repayment method at an annual interest rate determined in accordance with ADB’s LIBOR-based lending facility. 

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Setting up of NICDIT for Industrial Corridors

            The Government has approved the expansion of the mandate of Delhi Mumbai Industrial Corridor Project Implementation Trust Fund (DMIC-PITF) and re-designated it as National Industrial Corridor Development and Implementation Trust (NICDIT).
            NICDIT is an apex body under the administrative control of Department of Industrial Policy and Promotion (DIPP) for coordinated and unified development of the following industrial corridors:
i)            Delhi Mumbai Industrial Corridor (DMIC)
ii)          Chennai Bengaluru Industrial Corridor (CBIC)
iii)         Amritsar Kolkata Industrial Corridor (AKIC)
iv)         Bengaluru Mumbai Industrial Corridor (BMIC)
v)          Vizag Chennai Industrial Corridor (VCIC).
            NICDIT will support project development activities and appraisal, approval and sanction of projects as per extant delegation. It will also coordinate and monitor all central efforts for the development of Industrial Corridor projects.
            Government of India (GoI)’s contribution to NICDIT will be used as a revolving corpus. Investments into the SPVs by Government of India will be routed through NICDIT so that all debt service payments by SPVs and proceeds from equity disinvestment from SPVs including SPVs developed by Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) by utilizing grants given by GoI can be ploughed back into the corpus enabling NICDIT to support the development of more industrial cities in future.
            The details of amount sanctioned and released towards various industrial corridors during the current financial year 2016-17 and for the BE of next financial year 2017-18 are as under:
(Rs. In crore)

S.No.Name of the Industrial Corridor 2016-17 2017-18
1. DMIC         495.49     1031.79*
2. Other Corridors         4.50     13.00
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Launch of Trade Infrastructure for Export Scheme (TIES)

Commerce and Industry Minister Smt. Nirmala Sitharaman launched the Trade Infrastructure for Export Scheme (TIES) today . Speaking at the event she said the Scheme is focussed on addressing the needs of the exporters. Smt. Sitharaman said the focus is not just to create infrastructure but to make sure it is professionally run and sustained. The Minister added that there will be an Empowered Committee to periodically review the progress of the approved projects in the Scheme and will take necessary steps to ensure achievement of the objectives of the Scheme. She said the proposals of the implementing agencies for funding will be considered by an inter ministerial Empowered Committee specially constituted for this Scheme to be chaired by the Commerce Secretary. While appraising the project the justification, including the intended benefit in terms of addressing the specific export bottlenecks, would be evaluated.

Commerce Secretary Smt. Rita Teaotia said the scheme would provide assistance for setting up and up-gradation of infrastructure projects with overwhelming export linkages like the Border Haats, Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, dry ports, export warehousing and packaging, SEZs and ports/airports cargo terminuses. She said last and first mile connectivity projects related to export logistics will also be considered.

About TIES- After delinking of the ASIDE Scheme in 2015, the State Governments have been consistently requesting the support of the Centre in creation of export infrastructure. This support is imperative to act as an inducement to the States to channelize funds from their increased devolution towards creation of export infrastructure. The objective of the proposed scheme is to enhance export competitiveness by bridging gaps in export infrastructure, creating focused export infrastructure, first mile and last mile connectivity for export-oriented projects and addressing quality and certification measures.

The Central and State Agencies, including Export Promotion Councils, Commodities Boards, SEZ Authorities and Apex Trade Bodies recognised under the EXIM policy of Government of India; are eligible for financial support under this scheme.

The Central Government funding will be in the form of grant-in-aid, normally not more than the equity being put in by the implementing agency or 50% of the total equity in the project. (In case of projects located in North Eastern States and Himalayan States including J&K, this grant can be upto 80% of the total equity).The grant in aid shall, normally, be subject to a ceiling of Rs 20 Cr for each infrastructure project.

The implementing agencies shall provide details of the financing tie-ups for the projects which will be considered before approval of the project. Disbursement of funds shall be done after financial closure is achieved.

 

 



 

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