India: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has recommended to Reserve Bank of India (RBI) to issue new banking licences only to Indian owned and Nationally incorporated banks so as to ensure that Financial Inclusion (FI) of aam aadmi with banking system is achieved as desired by government for inclusive growth and employment.

According to ASSOCHAM, the proposal for issuance of new bank licences as mooted in the Finance Act, 2010-11 is timely and can well serve development objectives of government provided RBI considers the recommended suggestions since Indian owned and Indian incorporated banks would have potential to broadbase its banking network and also become a force to reckon with.

The chamber has advocated the need for giving new licences based on realistic approach and processes so that efficiency and stability of banking system is sustained by inducting more competition.

In a statement, the ASSOCHAM spokesman emphasized that experience has shown that promises made by licensee at the time of issuance of licence and subsequent compliance are often at variance and RBI has little authority to take corrective action, especially in a de-regulated environment.

It is in view of this that ASSOCHAM feels that the apex bank should observe extra precautions before it considers and rewards licences for new banking entities because cancellation of bank licence that commences business is often an impractical proposition under current legal framework. “A study of compliance with conditions imposed on bank licences issued, including promises of priority to, say, agriculture would be helpful in devising correctives, and in the way forward”, argued ASSOCHAM.

The chamber has further stressed that it would be critical to ensure that such licences will necessarily serve developmental objectives because major banks in private sector that are now operating in India are incorporated in India but are predominantly owned by foreigners.

Further, the ASSOCHAM has pointed out that there have been instances where full and reliable information on the fit and proper ownership of promoters was not brought to the notice of RBI before issuance of licence. Therefore, putting in public domain every application and its accompanying information at every stage would avoid such misleading representations.

The guidance of ownership and governance issued in 2004 have helped in improving consolidation and strengthening of private sector banking. Hence, issue of new licences could ideally be considered broadly as per guidelines already in position.

The ASSOCHAM has further cautioned that legal aspects, both in letter and spirit should not be ignored. As per current legislation governing banks, voting rights are restricted to 10 per cent, whatever be the extent of actual ownership. When the RBI stipulates a higher percentage for a promoter’s ownership, an artificial slicing of ownership often becomes an operational necessity, and RBI becomes a willing party tot artificial slicing, this in a way undermining intent of law.

The amendments to existing Act also envisage strengthening the regulatory authority of RBI consistent with global best practices. In view of recent global experience with banking industry and India’s own experience, ideally, the proposed amendments to law could be carried out first and the new bank licences issued thereafter to reduce uncertainties to all concerned.

Source: http://www.assocham.org/prels/shownews.php?id=2528

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India: Sustained economic growth at 9 percent and more is possible only when stable and sustainable macroeconomic environment is maintained and stalled reform agenda is revived, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Reforms have to restructure policies and strengthen institutions to create enabling environment for markets to function. Immediate measures needed include maintaining fiscal discipline to contain fiscal deficit, reforming tax systems to improve revenue productivity and minimise distortions and reforming fiscal management systems to improve productivity of public spending.

In addition, it is necessary to replace government’s pricing and output decisions with market decisions, continue with internal and external liberalisation, deepen markets and strengthen regulatory system to increase competition in economy.

Inclusive growth also calls for policy focus to improving agricultural productivity and creation of sustainable off farm employment opportunities for rural population and emphasis on skill development in both urban and rural areas to enhance their productivity and incomes. Decontrolling industries controlled at present, allowing foreign direct investment into retail and insurance sectors, enactment of bankruptcy laws, allowing entry of private sector into some of sectors that are hitherto considered a public sector preserve and doing away with labour laws are some of the other policy reforms that are needed. Many of the State government laws relating are obsolete and need to be reviewed.

The Chamber has pointed out that Fiscal Responsibility and Budget Management Act has not helped to bring down overall fiscal liabilities of government. Although considerable progress was made in compressing deficits until 2007-08, large expenditure outgo on subsidies, pay revision and loan waiver and excise and service tax cuts to combat economic slowdown resulted in the deficit burgeoning to 10.4 per cent in 2008-09 and 10.3 per cent in 2009-10.

There has been attempt to return to fiscal consolidation path and consolidated deficit of Centre and states is estimated at 8.4 per cent in 2010-11. The large deficits tend to put pressure on the credit market and tend to financially crowd out the private investment, with adverse impact on economic growth.

On issue of maintaining fiscal discipline, ASSOCHAM feels that persistence of large fiscal liabilities has delayed much needed capital account convertibility. Large fiscal liabilities lead to financial repression and weakens banking and financial system. Besides, public ownership makes system even more vulnerable to political influence in decisions. Besides hindering development of credit market, lack of contestable competition in financial system has not helped to develop robust and mature credit market.

Equally worrisome concern, according to ASSOCHAM that has impeded investment flow and constrained economic growth performance in the country is infrastructure deficit. For improving industrial performance, it is imperative that infrastructure constraints are removed particularly in energy, roads, ports, airports and urban infrastructure. While in some areas such as roads and airports it has been possible to make private sector to participate in infrastructure investment, in many others the progress has been slow. The fiscal pressure has limited government’s ability to provide viability gap funding. Further, in many other areas, government will have to continue to make investment. Total capital expenditure at Central and state levels in 2008-09, is estimated at 4.8 per cent of GDP and this is clearly not adequate.

There is considerable reform that is needed to create an appropriate institutional environment as well. Vestiges of autarchic economic regime have continued and there is still a lot of faith in the protectionism and role of public sector, which can be seen in many spheres. The prevailing institutions do not provide structure of incentives necessary for faster growth and much more remains to be done in strengthening and deepening the market.

Source: http://www.assocham.org/prels/shownews.php?id= 2527

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India: Planning Commission pledged to substantially narrow down prevailing gender biases against women in its 12th plan period approach paper and recommend higher allocation to fulfill intended objective when it was brought to it’s notice that female participation in jobs of services have just touched 20 per cent of total workforce and their numbers in boardrooms of India Inc. are less than 2 per cent.

Disclosing this at a seminar jointly organized by ASSOCHAM and Centre for Public Policy which was presided over by Member of Parliament, Ms. Supriya Sule, Member, Planning Commission, Dr. Syeda Hameed said that the commission has begun exercise to make 12th Five Year Plan approach paper for 2012-2017.

“It would do it’s best to substantially bridge prevailing gender biases against women, not only from employment perspective but also address concerns and issues of discrimination against them and recommend higher allocations at policy levels so that visible improvements are seen in their plight in years to come”, said Dr. Hameed.

During the occasion joint findings of ASSOCHAM and Centre for Public Policy were released on women participation in boardrooms of corporate India and their employment in it in which it was highlighted that females’ participation number in corporate assignments remains much below. It was pointed out that women representation in decision and policy making within large companies is less than 2 per cent.

However, in Macro, Small and Medium Enterprises (MSMEs) it is close to negligible against the widespread perception that females occupy over 5 per cent jobs in it, said ASSOCHAM Education Committee Chairman, Mr. Vinay Rai who also heads Rai Foundation.Mr. Rai added that women participation is lowest in automobile, mining, agriculture, engineering and construction.

The findings further reveal that approximately 20 per cent females are engaged in services sector which predominantly falls within jurisdiction and administrative control of private sector in which there is no statutory obligation to hire females. On this estimated 20 per cent, of women services close to 8 per cent is hired for financial services, majority of which is in insurance, banking and professional services in areas of legal profession. In this segment females are doing extraordinary jobs in rendering actuary related services.

Interestingly, media & entertainment especially the electronic media engages over 10 per cent of females’ services of a total of 20 per cent participation of theirs in the services sector of the Indian economy. Although, young females are taking up professional careers in engineering, its impact in terms of their engagements in automobile sector as well as construction is negligible, but findings of ASSOCHAM state that this sector will emerge as one of the most promising areas for women’s employment 5 years hence.

Speaking on the occasion Member of Parliament, Ms. Supriya Sule aired her apprehensions that Women Reservation Bill, pending in Parliament to enlist 33 per cent reservation for them in Indian legislature is unlikely to see light of the day. This is because an intense pressure is being built against it due to male chauvinism but women MPs will continue to resist the male dominance in Parliament until the bill sails through, added Sule.

Amongst others who participated in the occasion comprised Ms. Seema Jajodia, Chairperson, ASSOCHAM Womens Foundation, Mr. Vinay Rai, President, Rai Foundation, Mr. Babu Lal Jain, Chairman, Entrepreneurship Development Council and Head of a 40 member Pakistani Women delegation, Ms. Mossarat Qadeem who is currently on visit to India who asserted that women should be given a say in political and peace process between India & Pakistan.

Source: http://www.assocham.org/prels/shownews.php?id= 2526

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India: Environmental clearances, infrastructure shortfalls and land acquisition problems continue to be key concerns for corporates, intending to realize their investment dreams both for expansion as well as fresh investments due to which most of investment projects remain on announcement stages, says an ASSOCHAM Bizcon Study.

The study in which 266 corporates were interviewed by ASSOCHAM Research Bureau on issues of ‘Constraints on Corporate Investments’, 67 per cent of those interviewed said that environment clearances, infrastructure shortfall and land acquisition problems still remain the top 3 constraints due to which uncertainties prevail in realizing their investments.

The other concerns include beaureaucratic approvals, availability of labour with suitable skills, cost of credit and labour cost, besides demand conditions, said ASSOCHAM President, Dr. Swati Piramal while releasing ASSOCHAM Bizcon findings here.

Environment clearances take away hell lot of a time of corporates as projects for expansion and modernization including new projects have to pass through over 36 channels at state and central levels before being finalized. On top of this political clearances are also needed as some of the projects involving thousands of crores of investments need to be cleared off strategically, said over 70 per cent of business leaders whose opinion were sought in this regard.

Despite liberalized economic environment for close to 20 years, infrastructure pitfalls go on with electricity and power including roads and highways creating problems for corporates in terms of moving their logistics which multiply their production costs and render them uncompetitive. As a result of higher production cost due to poor infrastructure facilities, inventories pile up at production centers and industries suffer immense losses and release of inventories cause challenge for factory owners, felt 80 per cent of such CEOs.

Fifty per cent of business leaders have stated that bureaucratic ways of functioning have improved drastically at centre in which higher echelon of government machinery is supportive and sensitive towards industry needs but at states’ level not visible improvement is seen in operational methodologies of bureaucrats. This leads to delays as projects have to be implemented in states in the federal set up of Indian constitution.

The ASSOCHAM Bizcon survey also highlights glaring deficiencies in terms of recruitment of skilled labour. Seventy per cent of corporates have felt that low labour is available at extremely competitive conditions in India, availability of skilled labour will remain a problem until systems are evolved by state-owned investments for imparting skills to a vast section of labour pool.

In addition to aforesaid problems, cost of credit is another problem for India Inc. which gets liquidity at a cost through which business operations cannot be sustained for longer period. Interest rates remain very high for majority of corporates with exception in large industries as these are denied credit at relaxed rates especially in MSMEs sector and other areas below it, felt 55 per cent of CEOs.

The survey has recommended a host of measures to fructify corporates investment plans by assuring for them congenial industrial atmosphere in which bureaucratic approvals and infrastructure shortfalls are streamlined and land acquisition is made simpler. Other measures recommended in the survey comprise tax concessions, relaxed rates of credit, better regulation of imports and liberal exit policy.

Source: http://www.assocham.org/prels/shownews.php?id=2525

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Switzerland: Official figures state that up to now at least 1500 people have died in the floods. About 3.2 million people need help. Switzerland is taking action to alleviate the distress. In the Swat Valley three specialists from the Swiss Humanitarian Aid Unit are working together with a Swiss partner and the Pakistani authorities to assess needs and the possibilities of providing aid.

Already in the first days of the flood disaster the Swiss Agency for Development and Cooperation (SDC) took rapid action. An emergency aid project distributed food and hygiene articles in the districts of DI Khan and Karak. 4,000 plastic sheets for emergency accommodation for about 1,000 families have already been purchased locally and will be transported to the affected areas.The emergency aid project run by Humanitarian Aid has already been topped up financially and has provided assistance totalling CHF 250,000. Support for international organisations (UNICEF, WFP, ICRC) in favour of the flood victims is currently under consideration.

On 3 August the Pakistani authorities requested Switzerland to provide humanitarian aid. The flooding in the various regions of Pakistan continues to threaten human lives. The unrelenting heavy rains have caused rivers to overflow their banks, and regions further south are now also endangered. There is also a risk that the third largest dam in the country may burst. In the eastern region of Punjab, which produces most of Pakistan’s corn, hundreds of villages are flooded and the entire harvest has been destroyed.

Source: http://www.sdc.admin.ch/en/Home/News/Close_up?itemID=194194

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Australia: The NSW Farmers’ Association welcomes the Coalition’s commitment to undertake an audit of the “green tape” choking agricultural production in Australia.

Shadow Minister for Agriculture, Fisheries and Forestry John Cobb has told the Association that the Coalition, if elected next month, will conduct a $2 million audit of all environmental Legislation currently applicable to food production at all levels to highlight green tape which is putting lives at risk, is unworkable, contradictory or incompatible with other legislation.

NSW Farmers’ Association’s President Charles Armstrong says the Association is very pleased that this commitment would include property rights in its study.

“Farmers are subject to a massive amount of environmental legislation, a lot of which is directly impacting our property rights. Farmers are not receiving just - terms compensation,” Mr Armstrong said.

“Farmers are Australia’s front line in environmental protection. It is our job to ensure the land is looked after.

“An audit will identify which environmental regulations are practical, workable and enforceable and is clearly needed,” he said.

Mr Armstrong also welcomed Mr Cobb’s commitment to ensure that a comprehensive Senate Inquiry into proposed Animal Welfare Standards and Guidelines is undertaken.

“The Association is also calling on the Federal Government to establish a Senate inquiry to investigate all the issues and ramifications of the proposed Animal Welfare Standards and Guidelines,” he said.

“The Association believes animal welfare in Australia is already and always has been well taken care of by the Prevention of Cruelty to Animals Act and the animal welfare codes.

“There is concern in the community that the new rules would create a licence to farm. A Senate Inquiry to address these concerns is urgently required,” Mr Armstrong concluded.

Source: http://www.nswfarmers.org.au/__data/assets/pdf_file/0004/65920/158_10nr.pdf

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Australia: The Federal Government needs to explain how much revenue from the Mineral Resources Rent Tax
(MRRT) will be invested in infrastructure projects in NSW mining regions, NSW Minerals Council CEO
Nikki Williams said.

The NSW Minerals Council is campaigning for a fair and proportionate return of the MRRT funding generated in the Hunter. The new tax will reap an estimated $10.5 billion over the first two years.

Dr Williams said it was deeply concerning that NSW had so far only been promised $2 million when the Federal Government had announced $2 billion each for Queensland and Western Australia from the $6
billion MRRT Regional Infrastructure Fund.

“We welcome the plans for a New England Highway rail overpass in Scone, but you have to question whether NSW is at risk of missing out,” Dr Williams said.

“The MRRT only applies to coal and iron ore. NSW produces 42 per cent of Australia’s black coal and that’s going to generate billions in new taxes for Canberra, but no promises have been made to recognise the magnitude of that contribution.

“The New England Highway overpass is long overdue and we congratulate the people of Scone who have been calling for this important project. But more needs to be done. Our mining regions shouldn’t be worse off because of a perception that NSW isn’t a resource State.

“That’s why the NSW Minerals Council will work with community and business leaders to develop a priority projects list to ensure that our governments are aware of the region’s needs.”

Dr Williams said questions should also be asked about why new infrastructure projects in NSW were so far only being funded from mining tax revenues, when Queensland, for example, has been promised $742 million for the Moreton Bay Rail Link from existing revenues.

Source: http://www.nswmin.com.au/Media-Speeches-and-Info/Media-Releases/default.aspx

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India: Welcoming the RBI initiative to undertake mid quarter review at the interval of about one and a half months, Mr A. Sakthivel, President, Federation of Indian Export Organisations (FIEO) said that this will ensure better timely response to the evolving macro economic developments. President, FIEO said that though the global growth in the second half of 2010 may be lower as compared to the first half but the same will not affect Indian exports which are exhibiting a robust growth in sectors such as engineering, chemicals, petroleum, gems and jewellery which are important constituents of exports.

However FIEO Chief added that increase in the repo rate by 25 point basis and reverse repo rate by 50 point basis may impact interest regime thereby increasing the cost of credit which, if happens, will disappoint industry.

Source:http://fieo.org/view_Press_Releases_detail.php?lang=0&id=0,21&dcd=632&did= 1280217355033tekb1dhfmnvhl80ncsbfq73

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India: Mr A Sakthivel, President, Federation of Indian Export Organisations (FIEO) while anticipating announcements in the Monetary Policy stated that the alarming rate of inflation coupled with fuel inflation adding 100 basis points to the WPI are pointers to the fact that RBI necessarily would hike repo and reverse repo rates. The extent of increase would be determined by the assessment of the requirement of credit off-take and the liquidity in the banking system so as not to hamper growth while reining in inflation which is an onerous task as is evident from recent experience.

FIEO Chief elaborated that the recent RBI release of 23rd July, 2010 indicates a credit off-take of 21.7% vis-à-vis corresponding period last year at around 16%. In the existing environment which is tight on liquidity and banks are borrowing from repo window of the RBI, the repo rate becomes the policy rate and may increase to 5.75% from the existing 5.5%. If the reverse repo is increased by an equal measure than the differential of 1.5% between the two may result in volatility in interest rate. This in turn could impact credit off-take which at present is largely skewed towards the infrastructure and retail segments. Also, its impact on the newly introduced base rate particularly for the MSME export sector needs to be monitored periodically to assess the credit growth for the MSME export sector for which there is no separate data/ monitoring available in the RBI (DESACS). This data monitoring at frequent intervals for the MSME export segment may be crucial in the existing global slowdown if we are continue to nurture / sustain exports as a segment as has been done in the last four decades.

Mr A Sakthivel also suggested that exports is a national priority and therefore export credit should be pegged at the base rate so as to impart competitiveness to the sector.

Source:http://fieo.org/view_Press_Releases_detail.php?lang=0&id=0,21&dcd=630&did= 128013386320bpnrpkbpp7rc1mesgjau3cd4

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Victoria: The One Million Homes Alliance welcomed the Victorian Government’s commitment to increase the energy efficiency of Victorian homes to an average of five stars by 2020 and to a comprehensive retrofit program that includes support for low-income households and public housing tenants.

Kelly O’Shanassy, the CEO of Environment Victoria, said: “The best way to achieve a five-star standard in low-income homes is through a One Million Homes energy and water efficiency retrofitting program.”

The One Million Homes program has the backing of leading social and environment groups, including the Alternative Technology Association.

“The commitment to a comprehensive retrofit program must now be backed up by financial investment to ensure low income households have no out of pocket expenses,” said Ms O’Shanassy.

Damian Sullivan, Manager – Equity and Climate Change, Brotherhood of St Laurence said “Helping low income households improve the energy efficiency of their homes is an important step, as it reduces the impact of rising energy prices on their cost of living whilst also assisting people to live more sustainably.”

Ian Porter, CEO of the Alternative Technology Association, said: “A five-star standard is a big step up from the one-two star standard of most houses today and should ensure measures such as low-flow shower roses, insulation, sealing of gaps and cracks, efficient hot water and compact fluorescent globes are in place in all homes. These changes don’t have to be expensive as many Victorians have shown over recent years.”

Kate Colvin, Policy and Public Affairs Manager Victorian Council of Social Service said “Minimum rental standards and additional investment in retrofitting public housing will be needed to achieve the Victorian Government’s 5-star goal for low income renters.”

Source: http://www.riagb.org.uk/news/ORR%20H&S%20Report.pdf

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