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UPDATE

MISCELLANEOUS EXTERNAL

Panel seeks more powers for SEZ Cabinet approves
board major changes in

A committee constituted by the committee, under the chairmanship of FDI policy
Department of Commerce — to make LB Singhal, recommended, “The BoA
recommendations for aligning the [the highest decision-making body on The Union Cabinet, on 10 January
Special Economic Zone (SEZ) Rules SEZs] may, in public interest, pass such 2018, allowed foreign airlines to invest
with the Goods and Services Tax (GST) orders or grant such exemption, upto 49 per cent under approval route
laws as well as for removal of various relaxation or relief, as it may deem fit in Air India. However, this nod comes
difficulties faced — on 26 December and proper, on grounds of genuine with two conditions - foreign
2017 suggested that the inter- hardship and adverse impact on trade investment including that of foreign
ministerial Board of Approval (BoA) to any person or class or category of Airlines should not exceed 49 per cent
be accorded powers to grant persons from any provisions of SEZ either directly or indirectly and
exemption, relaxation or relief to units Rules.”
substantial ownership and effective
and developers from certain rules to While granting such exemption, the control of Air India would continue to
promote these zones. BoA may impose such conditions as it
be vested in Indian national.
In its 39-page report, the may deem fit, it added.
The other amendments in FDI
BANKING Policy include 100 per cent FDI under
automatic route for single brand retail
Govt. injects funds into 6 public banks trading. Also, 100 per cent FDI under
automatic route in construction
The Centre, on 30 December 2017, (CAR) plus a capital conservation development has been allowed.
released the much-required equity buffer of 2.5%. Within the CAR,
capital to six stressed public sector minimum common equity tier-I (CET 1) Foreign Institutional Investors
banks (PSBs) as some of these capital ratio is prescribed at 5.5%. (FIIs)/Foreign Portfolio Investors
lenders were on the verge of According to latest RBI data, (FPIs) have been allowed to invest in
breaching minimum capital norms on capital adequacy ratio of PSBs as on power exchanges through primary
December 31, 2017. The PSBs are Bank September 30 was 12.2% while the CET market. The definition of ‘medical
of India (Rs. 2,257 crore), Central Bank 1 ratio was 4.7%. UCO Bank, for devices’ has been amended in the FDI
of India (Rs. 323 crore), Dena Bank example, had a CET 1 of 6.64% and policy.
(Rs. 243 crore), IDBI Bank (Rs. 2,729 gross non-performing asset ratio of The existing FDI policy on Single
crore), Bank of Maharashtra (Rs. 650 19.74% as on 30 September. Brand Retail Trading (SBRT) allows 49
crore) and UCO Bank (Rs. 1,375 crore). All these banks are saddled with per cent FDI under automatic route,
These lenders would be asked to huge non-performing assets and are and FDI beyond 49 per cent and up to
improve on parameters such as bad under the prompt corrective action 100 per cent through Government
loans and recovery to which effect a (PCA) framework of the Reserve Bank
communication would be sent shortly. of India — which means certain approval route. It has now been
decided to permit 100 per cent FDI
Banks are mandated to maintain operations of these banks have been
minimum 9% capital adequacy ratio curtailed by the regulator. under automatic route for SBRT.
It has been decided to permit
SOCIAL single brand retail trading entity to set
off its incremental sourcing of goods
MPLAD scheme to continue from India for global operations during

till March 2020 initial 5 years, beginning April 1 of the
year of the opening of first store
The Cabinet Committee on Economic allocation of Rs 3,950 crore and total against the mandatory sourcing
Affairs, on 9 January 2018, approved outlay of Rs 11,850 crore over the next requirement of 30 per cent of
continuation of the Members of three years with additional annual purchases from India.
Parliament Local Area Development allocation of Rs 5 crore per year for For this purpose, incremental
scheme through the term of the 14th monitoring through independent sourcing will mean the increase in
Finance Commission (March 31, agency/ies and for capacity-building/ terms of value of such global sourcing
2020). training to state/district officials to be from India for that single brand (in INR
The scheme would entail annual imparted by the Ministry. terms) in a particular financial year
March 2018 Competition Wizard 69