RBI permits builders & HFCs to raise funds through ECBs for low cost housing projects, permitted to borrow $1 bn

Ireo Skyon, Gurgaon

Ireo Skyon, Gurgaon

The Reserve Bank of India has permitted to raise fund overseas for low cost housing projects. In the financial year 2012-13 developers and housing finance companies will be permitted to borrow $1 billion under the low cost affordable housing scheme, said the central bank in a notification. The RBI will review this limit annually.

Developers with minimum five years of experience in residential projects and those who have not defaulted in any of their financial commitments to banks or any other agencies will be eligible to raise funds overseas.%20%28RBI%20permits%20builders%20%26%20HFCs%20to%20raise%20funds%20through%20ECBs%20for%20low%20cost%20housing%20projects%2C%20permitted%20to%20borrow%20%241%20bn%29

The project for which the builder is raising funds overseas should not be involved in any litigation. Additionally, the central bank has also made it mandatory that the project should be in conformity with the provisions of master plan/ development plan of the area. The layout should conform to the land use stipulated by the town and country planning department for housing projects,” said the RBI. All necessary clearances from various bodies including Revenue Department with respect to land usage/environment clearance, etc., are available on record,” it said.

Read more: The Economic Times

Govt can return acquired land if unused for 5 yrs

The new Land Bill — cleared by the Union Cabinet last week — gives the government an ‘option’ to return the acquired land to its original owners if it remains unutilised for 60 months.

Land owners can then transfer such land acquired by the government for its own use or PPP projects involving public purpose to any private entity/individuals. At its earlier deliberations, the rural development ministry, the nodal body for the land Bill, had rejected the suggestions of a Parliamentary panel for returning the unutilised land to original owners.

Now, the rural development ministry has modified Clause 95 of the new Land Acquisition, Rehabilitation and Resettlement (R&R) Bill, 2011. This clause makes it clear that any land acquired under the new legislation, if unutilised for five years, can be returned to the owner or to a land bank of the government.

“When any land acquired under this Act remains unutilised for five years from the date of taking possession, the same shall return to original land owner or their legal heirs as the case may be.” The clause continues to read that such a land can also be returned to the land bank.

Read more: Financial Express

Interest rate cut needed to boost growth: Montek

CapturePlanning Commission today pitched for lowering of interest rates to boost economic growth which is beginning to look up after moderating to 5.4 per cent in the first half of the current fiscal.

“Over a longer period of time, steps are needed to bring down the interest rate. RBI looks at these things independently and we should give them freedom to decide (about interest rates),” Plan panel Deputy Chairman Montek Singh Ahluwalia said while commenting on the Reserve Bank’s mid-quarter monetary policy review.

The RBI has chosen to keep all the key rates and ratios unchanged in its policy review unveiled earlier in the day.

The deceleration in growth has bottomed out and the second half would be better, Ahluwalia said, adding “They (RBI) have decided to take no action. The economy is beginning to turn around. Everybody should support the revival of growth.’’

Economic growth forecast

On the Finance Ministry’s economic growth projection of 5.7-5.9 per cent in its Mid-Year Economic Analysis, he said: “I don’t think that this is an unreasonable forecast. That is a reasonable assumption.”

The Finance Ministry in March had projected a growth rate of 7.6 per cent for the current fiscal.

Read more: Business Line

‘Opposing FDI is outdated ideology’

Taking a dig at the opposition to policy decisions on Foreign Direct Investment in various sectors, Prime Minister Manmohan Singh said, “I am afraid that those who oppose these moves are either ignorant of global realities or are constrained by outdated ideologies.

“For example, when I hear the debate on foreign direct investment in retail, what I hear are arguments against large-scale organised retail, and not against foreign direct investment in retail.”

He said that policies on FDI in various sectors were liberalised to meet the challenge of rising current account deficit and providing good opportunity to highly risk aversed global investors. The Government took decision on FDI in multi-brand retail, civil aviation, power-trading exchanges and broadcasting. At the same Bills on liberalising the FDI limit in banking and insurance are currently before Parliament.

However, the Prime Minister’s remarks did not go well with Mamata Banerjee, Trinamool Congress leader and Chief Minister of West Bengal.

She said, “What can we do? We are grass root level people, we are the representative of the people. And the common man is always backdated (outdated). I am proud to say we are with the people.” Mamata’s party was very vocal against FDI in multi-brand retail.

Read more: Business Line

NRI Tax

Three things Indian Americans should prepare for before the tax year ends

As tax year 2012 draws to a close, it’s time for US taxpayers to make the most of current provisions and also prepare for the tax filing season ahead. We tell you the top 3 things that Indian Americans should keep in mind now.

Be prepared for expiry of Bush Tax Cuts

The Bush Era tax cuts that were introduced after the financial crisis are set to expire in 2012. Some of these include:

  • The standard deduction for married couples will fall and the ceiling of the 15% bracket for married couples will fall
  • The 10% tax bracket will expire, reverting to 15%
  • The child tax credit will fall from $1,000 to $500
  • The tax rate on long-term capital gains earned by middle- and upper-income people would rise from 15% to 20%
  • The tax rate on qualified dividends earned by middle- and upper-income people would rise from 15% to ordinary wage tax rates
  • Tax brackets would change: the 25% tax rate would rise to 28%; 28% to 31%; 33% to 36% and 35% to 39.6%

Unless the Congress votes for extension, the low tax regime will be replaced by higher rates. If the stakes are high, you may want to consult a tax planner to review your position and find ways to minimize taxes.

Read more: The Economic Times

Banking

You can soon apply and get SBI home loan sanctioned online

For the tech savy: The ‘do-it-yourself’ convenience for prospective home loan customers comes at a time when the bank is seeing a spurt in home loan applications due to competitive interest rates.

State Bank of India intends to turn up the heat on its competitors in the retail loans segment.

India’s largest bank plans to put in place an Internet-based customer acquisition solution that will allow prospective customers to not only apply for home loans but also generate in-principle loan sanction letter online.

The move to have an online customer acquisition solution could save the net-savvy GenNext customers the bother of repeat visits to the bank’s branch for completing the formalities associated with getting a home loan.

Instead, the bank’s sales executives will follow-up on the loan proposal with the customer, collect necessary documentary proofs and forward the application to Retail Assets Processing Centres for processing.

SBI’s gambit to provide the ‘do-it-yourself’ convenience for prospective home loan customers comes at a time when it is seeing a spurt in home loan applications on the back of competitive interest rates.

The bank is charging 10 per cent and 10.15 per cent interest on home loans up to Rs 30 lakh and above Rs 30 lakh, respectively. Besides, it has halved the processing charges and waived pre-payment penalty. The Web-based customer acquisition platform will provide the customer the option to request “expert callback” should he/ she get stuck at any stage.

Read more: Business Line

Now, SMS/e-mail alerts to protect you from identity thefts

Are you worried that a fraudster might fake your identity to wangle a loan/ get a credit card from a bank or get mobile phone SIM card to perpetrate fraud or other offences?

Don’t sweat. Some help may be at hand in the form of an identity theft protection service.

Credit information service provider Experian India plans to bring to its customers the security of a surveillance SMS/ e-mail alert the moment a bank or a telecom company seeks credit information report in their name. “Once you know that somebody is trying to misuse your personal information, you can take remedial steps,” said Vikram Narayan, Managing Director and Country Manager, Experian India.

Damiano Cracolici, Head of Decision Analytics, Experian Services India, said “In the UK and US, most of the applications for credit go to a credit bureau. So if a search is made in your name, you immediately get an SMS about the search….The identity theft protection service is yet to be introduced in India.”

Narayan said Experian has three businesses in India – Credit Information Bureau, which is a joint venture between Experian and seven Indian financial institutions including Punjab National Bank, Union Bank of India, and Axis Bank; and wholly-owned subsidiaries for Decision Analytics and Marketing Services.

The identification theft business will see Experian entering the Business-to-Consumer space through a joint venture.

Read more: Business Line

Logistics

Indian route is very profitable, says Cathay Pacific official

Tom Wright, General Manager – South Asia, Middle East and Africa, Cathay Pacific,flanked by Rajesh Menon (left), Area Sales Manager- Tamil Nadu and Kerala; and Rakesh Raicar, Regional Sales and Marketing Manager South Asia, at a press conference, in Chennai on Tuesday. _ Bijoy Ghosh

With 80 per cent passenger load factor in its aircraft, India is a top destination for Cathay Pacific Airways to focus. India and China are the fastest growing destinations for the airline, said Tom Wright, its General Manager, South Asia, Middle East and Africa.

The Indian route is very profitable, he told newspersons.

“We are comfortable with 75-80 per cent load factor. If it goes beyond that, it will create a spill over effect,” he said at the launch of the airline’s new business class and new premium economy cabins on the Chennai-Hong Kong route from January 1.

Turbulent time

The global aviation sector is going through a turbulent time while the Indian market is at a ‘low point.’

The plan of foreign direct investment in India’s aviation sector is a ‘great idea,’ he said. Wright made it clear that currently there is no interest in Cathay Pacific to investin Indian airlines.

“It (investing) is not a bad idea, but it is not a business model that the airline follows,” he said. On the new in-flight products in its A330-300 aircrafts, Wright said that following the recent increase of flights from four times a week to a daily service, Chennai will be first city in South India to offer a three-class configuration – new business class, premium economy class and the new long-haul economy class.

The airline had earlier launched this facility in its Delhi-Hong Kong route.

Read more: Business Line

Info-tech

Time to improve IT sector competitiveness: Pranab

Sandip Somany, President, PHDCCI, presenting a sketch to President Pranab Mukherjee during the PHD Chamber’s Chief Ministers’ Conclave and its 107th Annual Session in New Delhi on Saturday. Photo: V. Sudershan

As competition from emerging countries is rising to the Indian information technology (IT) industry, it is time to improve the sector, said President Pranab Mukherjee.

“Though India has an important position in the global IT and IT-enabled services, its prominence is being challenged by new emerging economies. We have to therefore, improve the competitiveness of this sector,” he said here at the annual session of PHD Chamber of Commerce and Industry.

He said research and development is the basic constituent of promoting innovation. The culture of research needs to be further augmented.

“Only about 6,000 patent applications were filed by Indians in 2010, which is a mere 0.3 per cent of the total applications filed in the world. India spends only 0.9 per cent of GDP on R&D whereas China spends about 1.2 per cent, UK 1.7 per cent and Israel 4.3 per cent,” he said.

National manufacturing policy

The National Manufacturing Policy, which was announced a year ago has addressed this opportunity, by aiming to increase the growth rate in manufacturing to 12 to 14 per cent over the medium term.

“In another decade, the share of manufacturing in the country’s GDP is envisaged to rise to 25 per cent,” Mukherjee said.

Read more: Business Line

Google India gives Web sites free to shops in Delhi

Google India on Saturday unveiled a special initiative in the county’s oldest market — Chandni Chowk of Delhi — by providing free Web sites to 2,500 shops to be accessed by users worldwide.

The company along with HostGator (company hosting Web sites) visited each shop to build this Web site in 30 days between mid-October and mid-November.

The companies will soon build Web sites for the rest 5,000 shops. Developing of the Web sites and hosting for the first year will be free of cost and Google India would charge around Rs 700 annually for each Web site after one year.

“For a business, having a Web site today is as important as having a mobile phone. As part of our commitment we will build over 300,000 Web sites by end of next year and 500,000 free Web sites for small and medium businesses (SMBs) by end 2014,” Rajan Anandan, Vice- President and Managing Director – Sales and Operations, Google India, told reporters here.

He said the company has already created 150,000 Web sites for Indian SMBs located in 7,850 cities.

“Such initiative will help our SMBs to grow their businesses and boost our exports as 40 per cent of exports from India comes from SMBs only,” said the Communications and Information Technology Minister, Kapil Sibal said.

Read more: Business Line

Employment

Hiring activities may improve in next 3 months

Hiring activities are expected to pick up in the next three months as companies, especially in the IT and FMCG sectors, seem to be bullish on business prospects, says a survey.

According to the survey by recruitment tendering platform MyHiringClub.com, the country’s net employment outlook, an indicator of recruitment intentions, rose by two percentage points to 40 per cent in January-March quarter reflecting a positive environment for job seekers.

“Employers seem to have positive attitude toward hiring new employees for the next three months. Despite several economical and political issues, recruitment outlook for coming quarter is expected to be healthy compare to the last quarter,” MyHiringClub.com CEO Rajesh Kumar said.

“It would not be strong employment, but we will get some good months where jobs will surprise on the upside,” he added.

On a quarter-on-quarter basis, the outlook has improved by three percentage points and on a year-on-year basis it has seen an improvement by two percentage points, the survey said.

“Indian employers predict steady headcount growth during the fourth quarter, with 41 per cent predicting an increase in headcount, 8 per cent forecasting a decrease, 39 per cent anticipating no change and 12 per cent does not know, the resulting net employment outlook stands at a favourable 40 per cent,” the survey said.

Read more: Business Line

Transportation

Toll smart card sale near Ambience

In addition to three toll plazas on the Delhi-Gurgaon expressway, “touch-and-go” smart cards have now been made available at another sale point near Ambience Mall.

Moreover, according to the private concessionaire, Delhi-Gurgaon Super Connectivity Ltd (DGSCL), around 3,500 cards have already been distributed so far to commuters.

Under the memorandum of understanding (MoU) signed between the National Highways Authority of India ( NHAI) and DGSCL, smart cards were to be made available by mid-January.

Following Punjab and Haryana high court’s directions to all stakeholders to find workable solutions to end the traffic mess on the e-way, Gurgaon police have directed DGSCL to popularize the smart cards and also made them available at various outlets including petrol pumps.

A DGSCL spokesperson said, “We are actively promoting the use of smart cards by reaching out to the commuters directly along the expressway. Apart from the point of sale offices at the three toll plazas, another counter has been opened between the 32-lane toll plaza and Ambience Mall.”

Read more: The Times of India

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