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All You Want To Know About Call Termination Charges,BAK And IUC

interconnect charges and bak

Yesterday’s TRAI open house on Interconnect Usage Charges or IUC seemed like a war zone with heated arguments between the operators, precisely between Reliance Jio at one side and the incumbents like Airtel, Vodafone and Idea Cellular at the side.

While country’s largest operator Bharti Airtel is pushing for increasing the IUC, which is set at 14 paise per minute, Reliance Jio at the other hand asking for a complete removal of the same and implement the Bill and Keep or BAK rules.

What Is IUC

IUC or interconnect usage charge is a fee that an operator needs to pay to the other operator if a mobile call terminates at the later’s network. Simply put, if you are an Airtel customer and make a call to Idea, then Airtel has to pay 14 paisa of IUC to Idea for minute.

Incumbent operators like Airtel, Vodafone and Idea want the IUC fee of 14 paisa per minute to be increased as they claim the actual cost of terminating a call on their network costs 35 paisa per minute. So, in their money, they are loosing 21 paisa for every minute a call from other operator lands on their network.

Airtel further submitted to the regulator that because there is an assymetry of voice calls between Jio and Airtel, meaning calls from Jio landing on Airtel network are more than the other way round, the largest operator is loosing Rs 500 crore every quarter, just for Jio.

To counter that Jio said the incumbent operators have earned excess revenue of Rs 1.2 lakh crore on account of IUC as they have not yet impplemented the TRAI ruling to go by BAK.

“Operators have made significant excess recovery over actual cost of termination. The number one operator has made excess recovery of Rs 73,385 crore and the number 3 operator has made Rs 45,940 crore,” Jio said. The company however did not name the operators.

TRAI, in 2011, had suggested and in fact filed an affidavit in the Supreme Court that operators should implement BAK method for interconnect usages and they should be given time till 2014 to implement it.

What Is BAK

BAK stands for Bill and Keep. The rule says under this method, no interconnect charges will levied on any operator, means abolishment of the IUC. Simply put, BAK means ‘you (B)ill for the IUC (A)nd (K)eep’ it to yourself.

In this method, each operator agrees to terminate calls from other network at no charge.

The incumbents, like Airtel, are however not in favor of BAK as they allege it will help Jio in building its monopoly over the market. By proposing a transition to the ‘Bill and Keep’ regime with zero MTC, Reliance Jio wants to simply transfer its cost to Airtel and other operators, Airtel said.

“In effect, Reliance Jio aims to build its business by getting a free ride on the highways built by Airtel and other operators. Their proposal to move to Bill and Keep will further burden other operators and make them weak. At the same time, it allows Reliance Jio to continue with its strategy of predatory pricing and ultimately throttle all competition. This is the sinister design of Jio. The question to ask is does India want a monopoly situation in telecom?,” said Ravi Gandhi, Chief Regulatory Officer, Bharti Airtel.

Many countries including the US have gone for the BAK which is a more scientific way to bring down the retail tariff of call charges.

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NationalNewsPolicy

New Telecom Policy To Focus On Services Than Connectivity -Manoj Sinha

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The Indian government is working on a new telecom policy that would primarily focus on end users getting right kind of services as compared to older policies that mainly focused on providing connectivity, the telecom minister Manoj Sinha said.

Speaking at a seminar on the topic of ICT: Engendering New Governance Structure, he said that the new telecom policy has to be focused on the end users and should look at the newer opportunities for expanding the availability of Telecom services.

He said, the advent of high speed data services and enhanced expectations of the users to get real time on-demand bandwidth to run near real time live applications enjoins us to prepare new policies and he underlined that for the first time, the Ministry has decided to involve a large pool of experts from outside the department to get more inputs from the citizens and stakeholders for the new policy.

The new telecom policy is expected to be announced in 2018.

The Minister said that communications Sector has assumed the position of an essential infrastructure for socio-economic development in an increasingly knowledge-intensive world. He said that as of April 2017, the country has close to 1.2 billion telephone connections, including 1.17 billion wireless telephone connections and similarly witnessed the rapid growth of the broadband connections that now stands at 276.52 million. He said, more than the number, it is heartening to see the six-fold increase in data traffic in India from 561 million GB in the first quarter to 2988 million GB in the third quarter of 2016-17, which is a whopping 400 % jump.

Shri Sinha said that while our service providers are rapidly deploying the 4 G technology, his focus is on two important aspects- the need to expand the connectivity to all parts including the north-eastern and Left Wing Extremism affected areas and Secondly to keep an eye on future generation that is 5 G technology and ensure that India plays a key role in standards development and get a healthy share of the innovations and patents in the 5G technology pool.

He also said that the FDI equity inflow in telecom sector from April, 2016 to March, 2017 was US $ 5564 million, which is more than four times the average inflow of about 1.3 billion dollars every year since 2013-14.

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Policy

Govt To Set Up Malware Detection Center To Fight Cybercrime

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The Indian government is mulling to set up a malware detection center to protect the country’s computers and mobile phones from increasing cybercrime and virus attacks.

The center will analyse various attacks from malwares, virus and botnets and would hep clean the infected systems in the country.

“Government is establishing Botnet cleaning and Malware Analysis centre to detect and clean infected systems in the country,” minister of state for electronics and information technology P.P Chaudhary told the Lok Sabha.

He said the Indian Computer Emergency Response Team (CERT-IN) is also working with various organisations including the Reserve Bank of India (RBI) and banks to track and disable phishing websites.

With the advancements of technology and rise in usage of cyber space, the cyber attacks such as phishing and malicious software or malware are also on the rise. Malware propagate through different methods such as spam and infection on websites. Such phishing and malware target users to trick them to divulge information such as online credentials and steal data from computers facilitating cyber crime, he added.

In a written reply to the lower house, the minister said some of the prominent malwares affecting computers and cell phones in the country are Android Gooligan, Cerber,Android HummingBad, Ranscam, Nivdort, Xcodeghost, Fleercivet, Locky, Caphaw, Dorkbot, Corebot, Zero Access, Ramnit, etc.

He said the government in collaboration with CERT-In is taking all possible measures to protect the cyber space from such attacks and protect country’s IT and communication infrastructure from all sort of cybercrime.

CERT-In issues alerts and advisories regarding latest cyber threats, malware and countermeasures on regular basis. Measures to be taken to detect infected systems, tools to dis-infect the same and prevent further propagation are also being advised regularly to organisations and published on its website for all users. CERT-In also notifies owners of websites infected by malicious links and advises measures for disinfection and securing the websites, and to address cybercrime, he added.

 

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Policy

Cybercrimes In India To Rise By 65% By 2017 : Study

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Cybercrimes and mobile frauds in India are set to increase by a whooping 65% by next year as more and more people are going to access the internet and related services including financial services over their smartphone and computers, a recent study said.

The study said rapid increase in use of computers and the emergence of the Internet has led to the evolution of cyberspace, about 40-45% of financial transactions are done via mobile devices.

“And this menace (mobile frauds) is expected grow to 60-65% by 2017,” says a joint study by industry body ASSOCHAM and EY.

Though the fraud is part of cybercrime, the study calls it mobile frauds as around 45% of such activities are happening over mobile devices. Such instances would increase, the study fears.

According to joint study – ‘Strategic national measures to combat cybercrime’ – credit and debit card fraud cases top the chart of cybercrimes. There has been a sixfold increase in such cases over the past three years.

According to the data, about 46% complaints of online banking are related to/credit/debit card fraud followed by Facebook (39%)-related complaints (morphed pictures/cyber stalking/cyber bullying). Other major cyber complaints were cheating through mobile (21%), hacking of e-mail ID (18%), abusive/offensive/obscene calls and SMS (12%), and others.

Enforcing data security measures and creating proactive security monitoring capability are vital for an organization to maintain a lead over emerging threats and protect their financial, intellectual and customer-related information, adds the study. A secure cyberspace and government’s influence in keeping tabs on cybercrime have become important criteria for businesses to establish, operate and flourish in any region.

As the nation embarks to connect over 1.2 billion people and leapfrog into next generation infrastructure including smart cities, millions of people, devices and machines are getting hyper-connected across India every day. Enormous amount of real-time information is moving across the ever expanding network at increasing speeds.

From critical communications network to power distribution to financial well-being of the nation depends on the robustness of the cyber network. Each day, there are growing reports of spread of malware, misinformation and systemic cyber-attacks. These malicious forces know no physical boundaries. This is a huge challenge and needs unprecedented collective action. Indeed, it is now a paramount national priority.

Countries, such as the United States of America (USA) and the United Kingdom (UK) have reached an advanced stage as far as the implementation of their cybersecurity strategy is concerned. Australia has formulated a national plan to combat cybercrime with a vision of safe and secure digital environment for all Australians. Canada’s cybersecurity strategy is focused on a plan for meeting cyber threat and help Canadians to be secure online.

What Is Required

The study says global menace of cybercrime and threats originating from the digital world require dedicated resources and efforts. While India is in the process of defining key initiatives with regard to cybersecurity, many mature countries have already implemented various key initiatives aimed at the improvement of critical infrastructure for cybersecurity and addressing cybercrime.

“A dedicated national governing unit may be established in India, which will be the central agency for all state government cybercrime agencies to coordinate, integrate and share information related to cybercrimes,” the study said. “Such a central agency will be responsible for driving all the cybercrime prevention initiatives, such as collaboration with private sectors, and training and awareness across the country.”

The Government should provide well defined citizen awareness programs aimed at preventing cybercrime as a proactive mitigation. Cybercrime awareness shall be introduced in academics in the early stages of education as a mandate for all the state and central, and public and private schools. Mechanisms shall be established for independent monitoring of awareness program at regular intervals to evaluate the number of people/regions covered. Awareness material shall be updated regularly to cover up-to-date information.

Maintaining centralized cybercriminal database. A centralized database of cybercriminals should be maintained so that the criminals released from jails may be monitored. Such checks will discourage cybercriminals from engaging in spurious activities in cyberspace. Many countries, such as the USA and Australia have maintained a central repository of cybercriminals.

It will be beneficial, the Assocham-EY study suggests, to have collaborations with International Cyber Security Protection Alliance, such as the Australian Cyber Security Centre (ACSC), National Crime Agency’s National Cyber Crime Unit (NCCU) and the UK’s CEOP. This will help in not only adopting the best practices by other countries for prevention of cybercrime, but also in increasing the capability, knowledge, training, skills, capacity and expertise of cybersecurity task forces. Additionally, it will help to reduce the harm caused to businesses, customers and citizens due to international cyberattacks.

There is a need to increase the number of cybercrime cells and laboratories in the states and provide requisite manpower, training and infrastructure to them. Initiatives to setup the cybercrime cells and laboratories in states where these do not exist, and also upgrade and strengthen the existing cybercrime cells is required to cope up with the rapid cybercrimes. There is a need to establish a centralized repository for cybersecurity standards, best practices and guidelines, which can be used by law enforcement agency for preventing and investigating cybercrime.

India should be actively engaged as part of the international cybercrime associations centered on Asia/Europe and America to seek help and contribute for international cybercrime issues. According to study, Andhra Pradesh, Karnataka and Maharashtra have occupied the top three positions when it comes to cybercrimes registered under the new IT Act in India.

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EnterpriseNewsPolicy

What Experts Think of BRICS Rating Agency

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The proposed BRICS agency was discussed by participating executives in a seminar at the BRICS trade fair

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When leading executives came for the Seminar on Financial Services Cooperation amongst BRICS countries at the BRICS trade Fair, they discussed the nuances and modalities of the proposed BRICS Rating Agency, International Payment Card System and Sustainable Financing.

Each of them shared some interesting viewpoints in favour of this proposed rating agency. Here is what they said while discussing the proposed BRICS Rating Agency and the various nuances for its formation which included need for such an agency, services offered ownership of the agency, regulatory framework and jurisdiction.

Naina Lal Kidwai, Chairperson, BRICS Business Council Financial Services Working Group, thinks that infrastructure financing is a pre-requisite for economic growth of any country and BRICS. She said that the New Development Bank’s effort for loan transfer for renewable energy development was commendable. She also highlighted the objective of the NDB institute as infrastructure development amongst BRICS and said that the purpose of NDB institute is to act as a think tank for BRICS group.

BRICS rating agency would not only increase competition but also give better quality outcome, feels Gert Gouws, Divisional Executive Deal Support and Post Investment, Industrial Development Corporation of South Africa.

Alexey Kechko, CEO, Sberbank, India called it the need of the hour. He said that there is a need to harmonize regulation which is a long-term process. He called for the need to deliberate on the business model and set a higher bar on regulation and governance at the board level to ensure success. He went on to say that the BRICS rating agency should be financed primarily through governments in the initial stage since it would be a developmental project.

Anatoly Valetov, Deputy Head of the Department for External Economic and International Relations of Moscow, stressed upon ‘credibility’ and said that it is the most important element for any rating agency. He also mentioned that an index is a better parameter than rating as it will provide predicative power and better management.

Commenting on the BRICS Rating Agency A P Hota, Managing Director & CEO, National Payments Corporation of India (NPCI) said that the idea of New International Payment Card System (NIPCS) for BRICS has been introduced under Russian Presidency. The card payment system is a highly standardized one. The discussion has been to build a system without the international card schemes – VISA and MASTER. There are two sides to it, the card issuing scheme and the card acceptance scheme. The acceptance for VISA and MASTER worldwide is the maximum. In recent years, China Union Pay has overtaken VISA in close acceptance level worldwide. Many countries have their own system. India introduced RuPay in 2012 and it is now the largest card scheme in India with a market share of around 42 per cent. RuPay is accepted everywhere in India. Internationally they have a tie-up with Discover and Diners cards. The creation of acceptance footprint is very important.

Deliberating on the need of having a common card platform for BRICS Alexey Kazarstev, PL Cards and Financial & Banking Association of Euro-Asian Cooperation from Russia said, “Firstly, commission can be removed. Secondly, security information would remain within the countries and finally, capitalization fee would be twice less than VISA. If this New International Payment Card system fructifies, it will be of great profit. All the domestic payment cards will be included.”

The session also deliberated on the possibility of the plastic money giving way to mobile banking. The panelists agreed in the changing times mobile banking will definitely take over but cards will still remain relevant.

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NationalNewsPolicy

India Inc. Reacts To The GST Bill

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GST_bill

The Goods and Services Tax bill was passed in the Rajya Sabha yesterday paving the way for a uniform tax structure in the country. This is a significant step in the right direction as it, besides other things, will help making business easier in India.

We bring you the reaction of India Inc on this historic GST Bill.

Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises

A truly remarkable day in India’s economic history. The transformational legislation will not just significantly improve ease of doing business in a vast and complex federal setup like ours by creating a single market but will help prop up our GDP growth rate by an additional 1.5 – 2 percent. The Prime Minister and Finance Minister deserve all praise for their untiring efforts towards bringing bipartisan support in favour of this important legislation.”

Bhaskar Pramanik, Chairman, Microsoft India

I am pleased that the Goods and Services Tax (GST) Bill was passed in the Rajya Sabha today. It is a positive development and I hope the Government will implement this long pending reform by April 1, 2017. The Government’s idea of a single tax regime is crucial to improve ease of doing business in India and address the ambiguities of the current indirect tax landscape, proving beneficial for the economy, at large.”

Narendra Bansal, CMD, Intex Technologies

Finally India gets united, which was living in a legacy of almost 30 different markets within the country. We were saddled with a plethora of diverse state-level taxes and levies of around 25-30% – or even higher in the case of some sectors. GST will ensure India finally emerges as one common market with an approximate tax rate of around 18%, with no double taxation and no cascading effect of multiple levies.

Being a manufacturing entity, Intex Technologies stands to benefit from a uniform tax regime because this will boost operational efficiencies, increase cost savings and make products more competitive. This will help in a major way to simplify the way we do business and will boost government initiatives on “ease of doing business in India”. The world will now recognise India’s potential and the government’s willingness to take bold steps to boost the economy.

As 1.3 billion consumers across India benefit from lower prices, GST will spur higher consumption and increase the tax base through better compliance with the held of information technology enablement. In the long run, these factors will raise India’s GDP growth by 1 or 2 points, generating millions of new jobs and driving greater prosperity.

Rajan S Mathews, Director General, COAI

The passing of the GST Bill is a major turning point in India’s history driven by the visionary leadership of Prime Minister Mr. Narendra Modi and Finance Minister Mr. Arun Jaitley, to support the growth of businesses in the country. The industry welcomes and celebrates this iconic reform, while urging the government to ensure that the rate applied for the telecom services should be no more than the existing 15% to meet the government’s vision of a connected digital India and ensuring affordable services. This paradigm shift in India’s indirect tax regime must play an enabling role in the growth of key sectors like telecommunications. There are certain aspects relevant for the telecom sector that would need to be considered by the policy makers while finalising the GST legislation. We look forward to our continued engagement with the committee and working with them to make the implementation seamless, transformation meaningful and optimal.”

Abidali Z. Neemuchwala, Chief Executive Officer and Member of the Board, Wipro Ltd.  

We welcome the passing of the Constitutional Amendment Bill paving the way for implementation of GST in the country. We congratulate the Government on this significant milestone. We are sure that the implementation of the GST would go a long way in strengthening the economy as one common market for taxation as well as address key issues of transparency, ease of doing business and simplification of tax laws. In the process of implementing GST through legislations, we must collectively ensure there is no drifting away from the intent of the Bill and the cornerstone principles of this Government in improving Ease of Doing Business and reduced tax related litigation in India. I am sure the Government would engage meaningfully with the Industry on its concerns and arrive at an effective framework for implementation of GST.”

Alok Dubey, CFO, ACER

The IT Industry has been actively engaging with the industry associations after the introduction of the model GST law. The discussions to understand business models and devise appropriate solutions have already begun. In many cases, the tax departments currently are solely catering to the needs of tax efficacy. With the introduction of the new law however, businesses will be motivated to remodel their financial infrastructure and bring more efficiency. Duties paid can now be claimed back/taken credit as opposed to the existing chain effect of taxes (CST, Octroi/local body tax/central excise/Service tax) levied upon previous ones. Such additional cost will now not get absorbed at each level. The tax cascading will be minimised.
 
The law, giving enough incentive for companies to declare transaction in order to claim tax credits will reduce overall tax evasion. Businesses will now only have to deal with State and Central GST Departments instead of variety of state and central departments. This will hopefully bring down disputes, litigation and cost of compliance.

Unless the final GST rate on each product category is known, the calculation of the pricing shall remain speculative. With GST, overall taxes on goods are likely to come down and make them cheaper. However, there may be some teething troubles as the new law comes into effect. In the long run, the lower tax burden could translate into lower prices on goods for consumers.

The new law will motivate businesses to remodel their logistics and warehousing solutions. Most organisations have put any major warehousing or logistics decisions on hold till they have clarity on GST law.”

Ashish Goel, CEO and Co-founder at Urban Ladder.

Introduction of GST will be a huge step by the government in backing it’s promise of ease of doing business. As a consumer e-commerce brand, our focus is on building a seamless supply chain and logistics network that helps us fulfil customer orders in different parts of the country. GST will help create a single unified market across India and allow free movement and supply of goods in every part of the country. Additionally, it will also eliminate the cascading effect of taxes on customers which will bring efficiency in product costs.  Overall, GST is going to be a game changer for most industries and especially for e-commerce.”

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NationalNewsPolicy

Govt To Provide Virtual Network Operators License In 60 Days

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Govt-To-Provide-Virtual-Network-Operator-License-In-60-Days
Telecom Minister Ravi Shankar Prasad

The government has issued guidelines for grant of Virtual Network Operators (VNO) license to be finalized in 60 days.

As per Department of Telecommunications (DoT) guidelines there would not be any restriction on the number of virtual network operators license per service area and the license shall be issued on a non-exclusive basis for a period of 10 years.

The applicant can apply for Virtual Network Operators license for any services like: unified license VNO (all service); access service (service area-wise); ISP – Cat A; ISP – Cat B; ISP – Cat C; NLD service; ILD service; GMPCS servce; PMRTS service; VSAT CUG; INSAT MSS-R; and resale of IPLC service.

The broad guidelines for Virtual Network Operators are: applicant must be an Indian company; one company can have only one VNO license but they can apply for more than one service subject to the fulfillment of all conditions; foreign direct investment holding in the company should be as per FDI policy announced by the government of India; VNOs that enter the network would do so based on arriving at a mutual agreement between an NSO and VNO; VNOs shall be allowed to create their own service delivery platforms irrespective of customer service, billing and VAS; and no spectrum shall be assigned to the VNOs.

Virtual Network Operators will be charged one time non-refundable entry fee for authorisation of each service and service area. The total amount of entry fee will be subject to a maximum of Rs 7.5 crore. In addition to entry fee an annual license fees and spectrum usage charge of 8 percent will be charged as per AGR.

As per the guideline, no one VNO and another NSO (network service operator) and a VNO and another VNO in the same service area directly or indirectly shall have not any beneficial interest in each other.

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AnalysisPolicy

How India Replaced China To Become No 1 FDI Destination?

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How-India-Replaced-China-To-Become-No-1-FDI-Destination-?India has replaced China to become the highest ranked country by capital investment in 2015 with $63bn-worth of FDI projects announced says fDi Intelligence, the Financial Times’ specialist unit dedicated to foreign direct investment.

After a long period of trailing behind China, India is now racing ahead thanks to China’s 23 percent decline in capital investment and 16 percent drop in FDI projects.

The biggest change in greenfield FDI in 2015 was the near tripling of greenfield FDI into India, with an estimated $63 bn. In 2015, India was for the first time the leading country in the world for FDI, overtaking the US (which had $59.6 bn of greenfield FDI) and China ($56.6 bn).

Globally, coal, oil and natural gas is the largest generator of capital investment with $113.5 bn of announced FDI recorded in 2015, followed by renewable energy sector where project numbers increased by 50 percent and capital investment reached $76 bn.

In 2015, greenfield FDI continued to show signs of recovery, with capital investment increasing by nearly 9 percent to $713 bn and increase in job creation by 1 percent to 1.89 million. However, the number of FDI projects declined 7 percent to 11,930.

Top 7 FDI Destinations Globally
Country – Projects – Investment ($bn)
India – 697 – 63
US – 1,517 – 59.6
China – 789 – 56.6
UK – 974 – 53.3
Mexico – 351 – 24.3
Egypt – 49 – 15.5
Brazil – 268 – 17.3
Source: fDi Report 2016

India replaced China as the top destination for FDI by capital investment following a year of high-value project announcements, specifically across the coal, oil and natural gas and renewable energy sectors. India was the highest ranked country thanks to Foxconn and SunEdison investments as they have agreed to invest in projects valued at $5 bn and $4 bn respectively.

The rapid growth of greenfield FDI in India shows that while economic development organisations try to attract FDI for the contribution greenfield FDI can make to employment and GDP, FDI is strongly attracted to high-growth economies. Success breeds success and to attract high volumes of FDI, locations need to create the conditions for strong economic growth and development to take place.

Increased domestic capital investment and job creation through the supply chain and the wealth effect further increases the direct and indirect impact of greenfield FDI.

According to fDi Markets, the motives cited by companies investing in India are domestic market growth potential and proximity to markets as the two main reasons for investing.

“India’s dramatic ascension in the FDI rankings has largely been due to dynamic Modi-led government focusing on ‘big bang’ FDI and labour law reforms. Relative stability within the government coupled with an effort to reduce the stagnating effects of bureaucracy has given foreign investors, across many industries, confidence in India as a remunerative investment opportunity,” says Kavan Bhandary, managing director, Wavteq India.

“Modi’s iconic ‘Make in India’ campaign is structured to attract more FDI to India and make the country a global manufacturing and industrial hub. This campaign has garnered global attention as he has encouraged foreign investors to privatise key sectors such as the railways, defence manufacturing and insurance, as well as the liberalisation of medical devices. Ease of doing business has always been a problem in India, and Modi’s campaign has addressed this by removing archaic laws,” added Bhandary.

The fDi Report 2016 estimates that greenfield capital investment by foreign investors was $700bn in 2015, an 8.6 percent increase over the previous year.

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AnalysisPolicy

Niti Aayog Finalizes Action Plan For India’s Double Digit Growth

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Govt-Finalizes-Action-Plan-For-Good-Governance,-Employment,-Health-&-Education,-Agriculture...Niti Aayog has finalized action plan based on 8 themes proposed by group of secretaries to see that India’s GDP grows at 10 percent year after year.

The eight themes finalized by group of secretaries are: Accelerated growth with inclusion and equity; employment generation strategies; health and education; good governance; farmer centric issues in agriculture & allied sectors; swachh bharat and ganga rejuvenation; energy conservation & efficiency and innovative budgeting and effective implementation.

Niti Aayog has created an action-plan based on 8 themes finalized by group of secretaries so that the country’s economy reaches $10 trillion economy with no poverty in 2032.

Accelerated Growth with Inclusion and Equity: More than 2 lakh crore investment in roads and railways (FY17), complete 10,000 Kms of road projects (FY17), upgradation of 50,000 Kms of state highways into national highways and increase rural tele-density to 100 percent by 2020.

Employment Generation: Linking all employment exchanges with e-platform (National Career Service) (March, 2017) and to place skill gap analysis of 600 districts on official website of MSME by April 2016.

Health and Education: Opening up of 3,000 Jan-Ausadhi centres in the country (FY17), opening of 62 new Navodaya Vidyalayas (FY17), promotion of medical tourism and creating an enabling regulatory architecture for creation of world class research and teaching institutions (FY17).

Good Governance: Introduce bill to amend the Companies Act, 2013 (FY17), setup online procurement platform via FCI (FY17) and repeal 1,053 archaic laws pending for Parliament approval (FY17). Nation-wide toll collection system (September, 2016), broadband connectivity through optical fibre for all gram panchayats (December, 2018), last mile mobile connectivity using space technology (June, 2017) and 175 million broadband connections (2017).

Farmer Centric Issues in Agriculture & Allied Sectors: Setup long term irrigation fund in NABARD (FY17), bring 14 crore farms under soil health card scheme (FY18), organic farming via Parmparagat Krishi Vikas Yojana (FY19), distribution of HYV seeds and technical know-how to entire country (FY17) and online order of farming equipment and products via post offices (FY18).

The government will also focus on integration of digitized record of rights (RoR), cadastral maps and registration process in 30 new districts (FY17) and creation of crop genetic enhancement network (FY18). Operationalisation of 4 mega food parks, 29 cold chain projects (FY17), implementation of Jal-Mitra concept and 2 lakh solar pumpsets with micro irrigation under PMKSY (Sep – 2016). Pashu-Sanjivani scheme for animals in milk (FY19), E-Pashu haat, portal for bovines & germplasm (FY17), and blue revolution target of 15 MMT fish production (FY20).

Swachh Bharat and Ganga Rejuvenation: Power PSUs to adopt railway stations, schools, bus stands, hospitals, religious, heritage sites for cleanliness (FY17) and development and dissemination of IT tools created for sanitation and SBM (FY17). Develop proof of concept for bio-degradable packaging systems (FY17) and additional waste management facilities in 50,000 villages.

Energy Conservation and Efficiency: Improve fuel efficiency norms for vehicles (FY17) and incentivize construction of energy efficient buildings (FY17). Develop proof of concept for polymer electrolyte membrane based fuel cell to increase efficiency (FY17) and techniques for conversion of municipal solid and liquid waste to energy via creation of demo-plants (FY18).

Innovative Budgeting and Effective Implementation: DBT for fertilizers to improve service delivery (FY17), planning/monitoring of projects using GIS in North Eastern Region (December, 2016). Alignment of corporate tax rates with global average while removing excessive exemptions (FY17).

Aadhaar bill (FY17), seeding of Aadhaar number in 90 percent ration cards (FY17) and PAN made mandatory for all businesses and entities and serve as unique business identifier (FY17).

To implement these 8 themes, Niti Aayog plans to have workshops with all stakeholders say ministries, state government departments, institutions, experts and academics to synergize actions. The government also needs to ensure that the final delivery is at par with global benchmarks.

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AnalysisPolicy

Budget 2016: Industry Reactions

Budget 2016-17

Budget-2016:-Industry-ReactionsThe union finance minister Arun Jaitley presented Budget 2016 to the parliament with prime focus on Rural First strategy.

TeleAnalysis compiles Budget 2016 reactions from ICT industry.

“Enhanced investment in the budget for infrastructure, agriculture, rural and social sectors would support India’s continued journey of inclusive and sustainable growth. Protected and secure technology infrastructure fostering engendering trust will be critical to success of projects like e-marketplace, digital vaults for certificates and e-procurement. Legislative backing for Aadhaar should have requisite privacy provisions. Overall, a prudent budget, indeed” – Shrikant Shitole, managing director, India, Symantec

“The overall budget from indirect tax perspective aims to incentivize the domestic value addition to boost make in India. It has also introduced few cesses such as Krishi Kalyan Cess 0.5% on all taxable services and levy of infrastructure cess at 1% on petrol and 2.5 to 4% on diesel cars. For ease of doing business there is rationalization of credit rules, allowing improved credit flow, reducing the compliance burden and associated litigation. There is also a mandate to set up 11 new benches of Tax TriService tax on spectrum trading deals” – Anita Rastogi, Partner – Indirect Tax, PwC India

“Once again, no attention has been given to SEZ and IT sector units which are contributing a lot to the economic development of the country. MAT was imposed on SEZ units few years back which discouraged service sector exporters and particularly IT sector exporters to set up business inside SEZs and since then, every year, there has been expectations that it would be rolled back. In general, there is nothing for medium sized corporates and individuals in this budget and rather cost of services have been increased in form of increased service tax which is a major disappointment for all” – Ashish Jain, director – Finance, Xavient Information Systems

“Specifically for the IT industry, the proposals outlined in the Union Budget 2016 promise a significant expansion of the domestic market and add thrust to the government’s overall digitization agenda. Schemes like digital literacy mission to e-educate rural households will work towards bringing more and more Indians into the folds of the connected world. Initiatives like the creation of an online repository of qualification documents, an e-platform for an unified agriculture market and other such measures will ensure robust IT platforms are deployed towards furthering automation – advancing the government’s Digital India mission in earnest. We expect this to translate into more business opportunities in the IT sector locally, and also drive skills development as well as creation of new jobs across the industry” – Umang Bedi, managing director – Adobe South Asia

“This government clearly understands the power of technology as reflected in the larger flagship initiatives like Digital India. The digitisation of the government sector, like setting up of Digital Literacy mission which will cover six crore rural households in India ensures transparency and the huge focus on promoting Start-ups’ will only help create more jobs and propel the economy further. The budget could have spelt out more steps to accelerate Digital India” – Anil Valluri, president, NetApp India & SAARC

“Proposals introduced in Finance Bill 2016 is a mixed bag for the telecom sector. While clarification introduced in taxation of spectrum fee and applicability of BCD may result in increased financial burden for the ailing telcos, the same may reduce future litigation. Withdrawal of customs duty exemption on battery, chargers and headsets and introduction of lower excise duty regime for routers, modems and other CPE equipment is in line with the government focus on local manufacturing and digital India. Reduction in rate of withholding tax on commission to 5% is a welcome step for the telecom” – Prashant Singhal, global telecommunications leader, EY

“We are happy with the general direction of the budget as it lays emphasis on development of the rural sector, digitisation and reforms in banking. The digital literacy mission that has been announced which will target 6 crore households with financial literacy, with this the digital connect and payments connect will play an important role. Also, statutory status to Aadhaar will play a very big role in promoting digital payments, social benefit transfers and allowing several services beyond banking and insurance to be also be brought into its fold, whether it is government subsidies or government payments it will open a way for more government payments and subsidies to flow into the financial inclusion program” – Pramod Saxena, chaiman & MD, Oxigen Services

“The rationalisation of custom duties and excise duties for raw materials, manufacturing for the IT and Hardware sector apart from various sectors to boost the government’s ‘Make In India’ sector are definitely going to boost the manufacturing sector and lower costs for firms looking to do business in India. Passing on duty differential benefits to components and accessories that go into manufacturing of phones is clearly an extension of promoting Make in India. It should also help built the domestic component ecosystem in the long term. But till a competitive supplier base is established in India, there may be a marginal increase in cost of the box due to higher cost of accessories” – Sudhin Mathur, director – Smartphone, Lenovo Mobile Business Group

“The Digital Literacy Mission Scheme and other measures to give a fillip to education, skill development and job creation are in line with the country’s priorities. However, India needs radical transformation in all spheres of life and businesses with initiatives like ‘Make in India’ and ‘Clean India’ surging ahead at a quick pace. I would have liked to see more bold steps to upgrade infrastructure and leveraging the power of ICT with good governance” Srikripa Srinivasan, senior director – Finance, EMC India CoE

“Overall, it is a robust budget amidst rough global times, with bold moves that will enable rural development. A total outlay of Rs 2.2 lakh crore, for roads, highways and Railways, shows heavy focus on infrastructure development to boost connectivity. The outlay on Digital National Rural Mission is very positive in line with the BharatNet creation. With the aim to achieve the targets of ‘Digital India’, two schemes enabling digital literacy for rural India, e-procurement for agricultural produce, and digital depository to store school and college certificates, come at a crucial time when the country is about to leapfrog through the deployment of BharatNet. The budget has missed the industry expectation for a clear roadmap for GST rollout. However, the clarity on lack of Dividend Distribution Tax on InvITs clears out the confusion on this matter and paves the way for listing of Infrastructure Investment Trusts” – Dr Anand Agarwal, CEO, Sterlite Technologies

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