INDIA MODI-fied: The First Propulsion

India Politics | INDIA MODI-fied Vol 3

INDIA MODI-fied: Volume-3; The First Propulsion

The Narendra Modi-led government has assumed charge, with a historic mandate after three decades of coalition politics.

Voters have delivered a decisive judgment in favor of resetting India on a path of development. The first signs emanating

point to the new government’s keenness to spend this political capital on making good the promises made, especially in the

areas of infrastructure development, urbanization, and agriculture, and in addressing issues related to investment climate

and sectoral bottlenecks. It has also indicated continuance of some of the focus areas of the erstwhile government, albeit in a

modified form, to ensure that the process of change is non-disruptive.

In volume-3 of our India MODI-fied series, we take a note of the ‘first propulsion’ that the combination of legislative and

executive action has given to the policy making. We highlight how days of parliamentary logjam and policy paralysis are

giving way to renewed resolve to make a difference. The Parliament has passed 12 bills (including the budget), deliberated on

several issues, and worked for more than its usual time, with improved efficiency. The Prime Minister signifies enhanced

government capacity, as articulated in his maiden Independence Day speech that called for going back to basics on aspects of

governance, economy, and society.

Contents

Page No.

A. Parliament succeeds in pushing through legislative agenda

................................................................

B. Modi extols economic and social basics in his maiden Red Fort speech

..............................................

C. Flashback on 3 months of MODI-fied India

.........................................................................................

First state opinion polls suggests a BJP-led alliance

.................................................................................

Annexure: Chronology of policy measures by new government

.............................................................

Investors are advised to refer through disclosures made at the end of the Research Report.

Dipankar Mitra

(Dipankar.Mitra@MotilalOswal.com); +91 22 3982 5405

Ashish Gupta

(Ashish.Gupta@MotilalOswal.com); +91 22 3982 5544

18 August 2014

India Politics | INDIA MODI-fied Vol 3

The First Propulsion

Parliament makes new beginning; Modi extols economic and social basics

We have possibly moved some distance from the days of parliamentary logjam and policy

paralysis. In the second session of the newly constituted Lok Sabha (the first being the

oath taking ceremony), besides the budget, the Parliament passed 11 bills, which among

others seek to give more teeth to the SEBI, broadbase the appointment of higher judiciary,

and do away with some archaic laws. Also, the Parliament worked longer and more

efficiently. Signifying the improved capacity of the Executive, Prime Minister Narendra

Modi’s maiden Independence Day speech called for a return to the basics of governance,

economy, and society.

A. Parliament succeeds in pushing through legislative agenda

The Parliament is back to legislating! This is a welcome change from the usual scene of

political squabbles and pandemonium. The Parliament passed 12 bills (including the

budget) in its second session, with the more important ones aimed at according more

powers to the SEBI, broadbasing the appointment of higher judiciary, and repealing some

archaic laws. Though the Insurance Bill was deferred, initial progress was made on the

labor laws front. Overall, the Parliament worked harder and smarter, with fewer

disruptions and improved efficiency in clearing bills. In its second session, the newly

created Lok Sabha outperformed the previous two terms of UPA.



Parliamentary sovereignty:

India follows a system of Parliamentary sovereignty,

and to that extent, the Parliament is the highest institution of the country.

However, of late, the Parliament has been a victim of political squabbles,

incapacitating itself of its ability to frame laws relevant for the nation’s progress.

Bills passed increase:

After the first session of the newly constituted 16th Lok

Sabha, which was largely convened for the oath taking ceremony, the second

session witnessed meaningful uptick in the business transacted. In all, 12 bills

were passed by both Houses of the Parliament (Lok Sabha and Rajya Sabha).

This exceeds the second session performance of the previous two Lok Sabhas by

a wide margin.

Key bills passed:

Apart from the budget and other finance related bills

(including Delhi budget) the three most significant bills passed were (i) the

Securities Laws (Amendment) offenders and take measures against promoters

of Ponzi schemes), (ii) the Judicial Appointments Commission Bill (that seeks to

broadbase selection process for appointments of higher Judiciary from the

current Collegium system), and (iii) Repealing and Amending Bill, 2014 (that

seeks to do away with archaic laws).

Progress in labor laws:

The Parliament made some progress in introducing

changes in labor laws, including (i) Factories (Amendment) Bill, 2014, and (ii)

Apprentices (Amendment) Bill, 2014. The second being passed in the Lok Sabha

and introduced in Rajya Sabha.

Insurance bill deferred:

The Parliament could not take up the long awaited

Insurance bill (that proposes to increase the limit on foreign investment to 49%

from the current 26%) due to opposition from various parties. The Rajya Sabha

has referred it to a 15-member Select Committee, which is expected to submit

its report on the last day of the first week of the next session.

18 August 2014

India Politics | INDIA MODI-fied Vol 3

The second session of the 16th Lok Sabha marks an improvement in number of bills passed

Bills passed by both houses of Parliament

14th Lok Sabha

(UPA-I)

15th Lok Sabha

(UPA-II)

16th Lok Sabha

(NDA)

Source: Parliament, MOSL

Many important bills introduced and passed by Parliament in the 2nd session

Name of the Bills

The National Institute of Design Bill, 2013

The Finance (No. 2) Bill, 2014

The Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities)

Amendment Bill, 2014

The Securities Laws (Amendment) Bill, 2014

The Telecom Regulatory Authority of India (Amendment) Bill, 2014

The Andhra Pradesh Reorganisation (Amendment) Bill, 2014

The Railways (Amendment) Bill, 2014

The Factories (Amendment) Bill, 2014

The Apprentices (Amendment) Bill, 2014

The Constitution (Scheduled Castes) Orders (Amendment) Bill, 2014

The Repealing and Amending Bill, 2014

The Juvenile Justice (Care and Protection of Children) Bill, 2014

The Indian Institutes of Information Technology Bill, 2014

The Central Universities (Amendment) Bill, 2014

The Constitution (121st Amendment) Bill, 2014

The National Judicial Appointments Commission Bill, 2014

The Delhi Appropriation (No.2) Bill, 2014

The Appropriation (No.3) Bill, 2014

The Appropriation (No.2) Bill, 2014

The Appropriation (Railways) No. 3 Bill, 2014

The Appropriation (Railways) No.2, 2014

Total

Bills Introduced

Lok

Rajya Sabha

Sabha

✓

Bills Passed

Lok Sabha

✓

Rajya Sabha

✓

Source: Parliament, MOSL



A good beginning made:

In comparison with past two Lok Sabhas, the current

Lok Sabha has made a good beginning. As this was one of the longest session

and also the first business session (after the session of oath taking), a

comparison of second sessions across previous Lok Sabhas provides a useful

insight. It turns out that, while the last session has made a good beginning, a

ramp up of performance is needed in the forthcoming sessions to outdo the

performance of previous Lok Sabhas.

18 August 2014

India Politics | INDIA MODI-fied Vol 3

NDA has started off well in the Parliamentary session

14th Lok Sabha (UPA-I)

15th Lok Sabha (UPA-II)

16th Lok Sabha (NDA)

18 20

12 12

000

Source: Parliament, MOSL

Good start to the current Lok Sabha session

Lok Sabha (LS)

1st LS

2nd LS

3rd LS

4th LS

5th LS

6th LS

7th LS

8th LS

9th LS

10th LS

11th LS

12th LS

13th LS

14th LS

15th LS

16th LS

Period

Apr 52 to Apr 57

Apr 57 to Mar 62

Apr 62 to Mar 67

Apr 67 to Dec 70

Mar 71 to Jan 77

Mar 77 to Aug 79

Oct 80 to Dec 84

Dec 84 to Nov 89

Dec 89 to Mar 91

Jun 91 to Oct 96

May 96 to Dec 97

Mar 98 to Apr 99

Oct 99 to Feb 04

May 04 to Feb 09

May 09 to Feb 14

May 14 onwards

No. of sessions

No. of sittings

677

581

578

469

613

267

464

485

109

423

125

356

332

No. of bills introduced

282

286

268

196

379

161

378

270

248

252

219

No. of bills passed

333

327

272

216

487

135

336

355

284

302

261

Note: Information for current (16th) Lok Sabha updated till Aug-14; Source: Parliament, MOSL

Time lost due to interruptions see trend reversal in current budget session (%)

10th LS

11th LS

12th LS

13th LS

14th LS

15th LS

16th LS

Hours disrupted as % of no. of hours sitting

Note:

Information for current (16th) Lok Sabha updated till Aug-14

Source: Lok Sabha Secretariat, Parliament, MOSL

18 August 2014

India Politics | INDIA MODI-fied Vol 3

Parliament worked harder and smarter



More sittings:

During the second session of the newly constituted 16

Lok

Sabha, the Parliament has worked for 27 sittings. This is the highest number of

sittings for the second session for the last four Lok Sabhas.

Fewer interruptions:

The ratio of time lost due to interruptions also came down

drastically. Although the Lok Sabha lost about 14 hours due to disruptions, it

more than made up the loss by sitting extra for 28 hours and 10 minutes. In the

Rajya Sabha, 34 hours were lost due to interruptions and adjournments, but it

made up by late sittings and skipping the lunch recess, accounting for 38 hours.

More work hours with higher efficiency:

The current Lok Sabha sat more hours

during its second session than any of the previous three. Yet, the average time

taken per bill was less than the previous two Lok Sabhas of the UPA regime. This

enabled more bills to be cleared. The picture was similar for the Rajya Sabha.

16 Lok Sabha: Highest sittings in the 2 session

No of sittings in second session

The least disrupted 2 session in the last three Lok Sabhas

% of time disrupted

14th Lok Sabha

(UPA-I)

15th Lok Sabha

(UPA-II)

16th Lok Sabha

(NDA)

14th Lok Sabha

(UPA-I)

15th Lok Sabha

(UPA-II)

16th Lok Sabha

(NDA)

Source: Parliament, MOSL

Average time taken per bill less than earlier

No. of actual hours (Lok Sabha)

Hours spent to pass one bill (RHS)

The same was true for Rajya Sabha too

No. of actual hours (Rajya Sabha)

Hours spent to pass one bill (RHS)

14th Lok Sabha

(UPA-I)

162

15th Lok Sabha

(UPA-II)

167

16th Lok Sabha

(NDA)

14th Lok Sabha

(UPA-I)

148

15th Lok Sabha

(UPA-II)

142

16th Lok Sabha

(NDA)

Source: Parliament, MOSL



Source: Parliament, MOSL



Legislative time increases:

The current Lok Sabha session was also marked with

an increase in time allocated on legislation in comparison with other business.

This bodes well for both improving the quality of legislations passed and the

consensus building process that have gone in to legislating.

Broadbasing of participation:

Another feature of the last session of the

Parliament has been the broadbasing of the participation in debates and

discussion. Whereas the share of women MPs remained same at 11% in the last

three Lok Sabhas, only the last session, their share in debate time exceeded

their seat share. Similarly, first time MPs made their voices heard both among

regional as well as national parties.

18 August 2014

India Politics | INDIA MODI-fied Vol 3

More time spent on legislative reforms in 2014 budget session

Budget session (2004)

14%

27%

Budget session (2009)

12%

Budget session (2014)

12%

Legislative

Questions

13%

38%

Financial

Non-legislative

41%

36%

50%

33%

Others

Source: PRS, MOSL

Participation of women MPs highest in 2nd session

Participation of women MPs in debates (%)

Women MPs in Parliament (%)

12%

11%

Active participation by first-time MPs in debates

Participation of first-time MPs in debates

97%

92% 92%

78%

40%

80%

100%

14th Lok Sabha

(UPA-I)

15th Lok Sabha

(UPA-II)

16th Lok Sabha

(NDA)

Source: PRS, MOSL

Highs and lows of current parliament session



Insurance bill stuck

TDP & TMC members

fight for office space

SEBI gaining more teeth

Judicial Accountability

Repealing archaic bills

Progress in labor laws

Young and women member

become active

Source: Media, MOSL

18 August 2014

India Politics | INDIA MODI-fied Vol 3

B. Modi extols economic and social basics in his maiden Red Fort speech

Prime Minister Narendra Modi delivered his maiden August 15 speech from the rampart of

the Red Fort. The extempore speech was marked in its emphasis on going back to basics on

issues of governance, economy, and society. Rather than listing numerous schemes, the

PM outlined six key areas of focus. Besides explaining his own effort to improve the

capacity of the government machinery to deliver, he called for larger actions by the

population to ward off various economic and social handicaps. The speech was also

marked by succinct expressions that summarized complex issues in easy phrases, greatly

enhancing public accountability.



Governance:

The Prime Minister sought to explain his approach to improve the

functioning of the bureaucracy. Describing himself as the Prime Servant (as

opposed to Prime Minister), he expressed his desire and willingness to take the

opposition along. He has attempted to break the Chinese wall within the

bureaucracy, driving it towards a common mission. He called upon society to

give up the selfish attitude of "Mera Kya, Mujhe Kya” (What is in it for me? How

do I care?). Mr Modi also gave a call to extremist groups to shun violence.

Economy:

Making a departure from the practice of announcing numerous

schemes and updates, Mr Modi announced six areas of focus, including (i)

financial inclusion (Pradhanmantri Jan-Dhan Yojana to provide for a bank

account, a debit card and an insurance amount of INR100,000 for the poor), (ii)

IT (digitally linking India through broadband to all villages), (iii) new institution to

replace Planning Commission, (iv) model villages (Saansad Adarsh Gram Yojana),

(v) toilets for all schools within a year, and (vi) cleanliness drive (Swachh Bharat

to be launched on October 2

). Besides, he also (i) emphasized the need for

creating a manufacturing hub, (ii) emphasized quality and environmental

consciousness (“zero defect, zero effect”); (iii) welcomed FDI (“make in India”),

and (iv) stressed skill development.

Mr Modi’s six-point agenda replaces numerous announcements

Financial

inclusion

Digital

Infrastructure

Clean India

Toilets in all

schools

MP Ideal Village

NDRC/Planning

Commission

Source: Parliament, MOSL

18 August 2014

India Politics | INDIA MODI-fied Vol 3



Social issues:

Perhaps the greatest thrust of the speech was on social issues,

where Mr Modi articulated most forcefully areas of improvement that included

(i) women’s safety, (ii) female foeticide, (iii) toilets, and (v) cleanliness. As

indicated earlier, the last two would be rolled out as economic schemes.

PM speech through quotes

I. GOVERNANCE

Attitude

Whose nation

Opposition

Bureaucracy

I can assure you. If you work 12 hours, I will work 13. Why? Because I am not a Pradhan Mantri, but a

Pradhan Sevak.

Politicians haven't made this nation, parties haven't made this nation, governments haven't made this

nation. Instead it is the farmers, scientists and common people who have built this nation

We don't want to go ahead with the strength of numbers; we want to go ahead with unanimity. This could

be seen in the just concluded Parliament session. We have taken the Opposition in agreement at every step.

I am an outsider in New Delhi. I have been away from the elite in this city. In the 2 months I have been here

I now have an insider view. I was astonished. I saw many governments functioning within a government.

One department fighting the other. So we are trying to break this wall; we want to have one mission and

target: Take the nation forward.

We have had enough of divisiveness and communal wounds inflicted on Mother India. Peace and

brotherhood will give strength to take the country forwards. I am sure it can be done. Lets fix a moratorium

of 10 years to shun violence.

The world has changed. India is not alone, cannot operate alone. Economic powers have changed. We have

to think differently. The government has taken some measures. We have to improve our manufacturing

sector. We invite world nations and the Diaspora, 'Come Make in India'.

The mantra of our country's youth should be to at least make 1 product that we import. Don't compromise

in manufacturing; Stress on Zero defect, Zero effect (impact of environment).

We are nation of the young. Have we ever thought of harnessing the power of the youth? We need skilled

workers. The youth needs to imparted with skills that earn them fame around the world. We want to

develop job creators.

We have to head towards a digital India. We today import a huge proportion of electronic items. If we

dream of a digital India, we have to aim for good governance via e-governance.

Why are farmers committing suicide? Who will protect the poor? We are rolling out a PM Jan Dhan Yojana

will connect the poor with bank accounts. They will be given a debit card. Every account holder will be

provided with Rs 1 lakh insurance.

Many programmes are running in the names of PMs and other leaders. Today, I announce a Sansad Adarsh

Gram Yojana. Let each MP adopt a village and take care of its sanitation, education and other needs. Make

model villages. I will place the blueprint for this programme before MPs and state government on October

11 of Jai Prakash Narayan's birth anniversary

Have these parents ever asked their sons where they have been, who they have been meeting? Rapists are

somebody's sons as well! Parents must take the responsibility to ensure that their sons don't go the wrong

direction.

India's sex ratio is 1000 boys for 940 girls. Who creates this disparity? Don't fill your coffers at the altar of

the mother's womb. People feel that sons will take care of them when they are old. But I have seen aged

parents in old-age homes or single daughter taking care of old parents. Indian athletes made us proud in the

Commonwealth Games. 29 of the medals were won by girls. Let's honour them.

Do we want to live in unhygienic conditions? Can't our nation be clean? If billions of Indians pledge to keep

the surroundings clean, can't this nation be cleaner? What do we give Mahatma Gandhi on his October 2?

People's participation is necessary to ensure that our schools, hospitals, roads and infrastructure are clean.

Can't we arrange public toilets? Why do our womenfolk need to wait till dark to use the toilets? MPs must

use their MPLAD funds to set up toilets in schools; so should corporates.

Violence

II. ECONOMY

Welcome FDI

Manufacturing

Skill Development

Digital India

Financial inclusion

Model village

III. SOCIAL ISSUES

Women safety

Female foeticide

Clean India

Toilets

18 August 2014

India Politics | INDIA MODI-fied Vol 3

C. Flashback on three months of MODI-fied India

The first three months of the new government since the historic election mandate

have been focused on enhancing the efficiency of the bureaucracy, controlling the

menace of inflation, and making India the most favored destination for capital

investment. While investors may be disappointed at the lack of big-bang policy

announcements, there have been plenty of policy actions to address policy

bottlenecks and move the investment cycle.

The government has been especially responsive to foreign policy exigencies,

whether pertaining to bringing Indian nurses back or otherwise. The PM’s attempts

to improve foreign relations were evident in his visits to Nepal and Bhutan, and

should show up in his upcoming visits to Japan and the US.

Key announcements/measures by the new government

Particulars

Announces "Pradhanmantri Jan-Dhan Yojana" to provide for a bank account, a debit card and an

insurance amount of INR100,000 for the poor

New institution to replace Planning Commission

Modeled on the best practices of PURA (providing urban amenities in rural areas) scheme, the

RURBAN mission was launched

Key bills such as Securities Laws (Amendment) Bill, 2014; Judicial Appointment Commission Bill,

Factories (Amendment) Bill, 2014 were cleared by parliament

FDI in insurance referred to a select committee by Rajya Sabha

INR125b worth of transmission projects approved

Approved road projects worth about INR400b

Fast track clearances for 3 rail lines for coal linkage

Railway fares hiked; higher fares for passenger with Fuel adjustment charge

7 big-ticket projects of INR210b cleared

Gas price deferred for 3 months to consult with all stakeholders

Firm resolve to GST implementation

FDI in defence raised from 26% to 49%. Railway operations and projects were allowed to receive up

to 100% FDI

24 Airports identified for development as Domestic Air Cargo Terminals

PSU Bank consolidation and greater autonomy

Transfer of units of debt mutual funds to be taxed at 20% (vs 10% earlier)

Conducive tax regime for REITS and Infrastructure Investment Trusts

New scheme targeting feeder separate for DISCOMs

Online environmental clearances

Large number of infrastructure projects announced (16 ports, 8,500kms of road project completion,

developing airports in Tier 2 and 3 cities, developing 100 smat cities)

Construction under EPC vs. PPP earlier

Impacted sector

Financials

Economy

Power

Infrastructure

Power

Economy

Infrastructure

Energy

Economy

Infrastructure

Financials

Economy

Infrastructure

Economy

Infrastructure

Impact

Positive

Negative

Positive

Negative

Positive

Negative

Positive

Source: Pib, Media reports, MOSL

18 August 2014

India Politics | INDIA MODI-fied Vol 3

First state opinion polls suggests a BJP-led alliance

ABP News-Nielsen suggests sweep for BJP in Maharashtra and Haryana

There seems to be a BJP wave in the upcoming state elections of Maharashtra and

Haryana based on the first opinion polls survey of ABP News-Nielsen. However, the

BJP may not be able to form the government on its own and would need some

alliance partners. The ABP News-Nielsen survey took place between July 22, 2014 to

August 6, 2014 covering a sample size of 21,711 people.

Maharashtra is likely to see the BJP, Shiv Sena, RPI and SWP alliance to bag 210

seats of the 288-seats Maharashtra assembly with BJP leading the alliance with 122

seats.

In Haryana, if BJP is to continue with its current alliance partner (HJC), the alliance is

likely to bag 56 seats of the 90-seats assembly; BJP will bag 46 seats in this scenario.

However, if it were to join the ruling INLD party to form an alliance, the number of

seats is likely to increase to 75.

Maharashtra: BJP to get clear majority (current NDA alliance) Maharashtra: BJP seats (with no alliance parties)

Particulars

NDA

BJP

Shiv Sena

Others

UPA

Congress

NCP

Other parties

MNS

Others

Total

2009

144

288

ABP News-

Nielsen

210

122

288

Lok Sabha

2014

Particulars

BJP

Shiv Sena

Others

Congress

NCP

MNS

Others

Total

2009

288

ABP News-

Nielsen

112

288

Lok Sabha

2014

Source: ABP News-Nielsen, MOSL

Haryana: BJP to form majority (with current NDA alliance)

Particulars

BJP +

Haryana Janhit Congress

BJP

Congress +

Congress

INLD

Others

Total

2009

ABP News-

Nielsen

Lok Sabha

2014

Haryana: BJP to form majority (with current NDA alliance)

Particulars

BJP +

BJP

INLD

Congress

Haryana Janhit Congress

Others

Total

2009

ABP News-

Nielsen

Lok Sabha

2014

Source: ABP News-Nielsen, MOSL

18 August 2014

India Politics | INDIA MODI-fied Vol 3

Annexure: Policy measures initiated by government since assuming

power

Chronology of measures initiated by the government

Date

13-Aug-14

8-Aug-14

Area

SEZ

Measures undertaken

Recommends restoration of SEZ benefits:

Ministry of Commerce and Industry (Department of Commerce) has

recommended the restoration of original exemption from MAT and DDT to SEZ developers and units.

8-Aug-14

27-Jul-14

25-Jul-14

18-Jul-14

15-Jul-14

RURBAN Mission launched:

Modeled on the best practices of PURA (providing urban amenities in rural areas)

Rural Infra scheme. In the first phase, INR1b will be spent on three identified projects in Warangal District of Andhra

Pradesh and Sangli and Buldhana Districts of Maharashtra.

Limiting scope for MSP procurement:

Central government would limit the procurement of foodgrains only to

the extent required for targetted PDS and other schemes in food surplus states carrying their own procurement

Food inflation

operations. Other states will have to take care of entire MSP operations in case they announce bonus over and

above MSP.

Amends All India Services (Conduct) Amendment Rules, 2014:

Rules for bureaucrats to ensure that all their

Law

policy decisions are guided solely by "public interest" and they operate with total "political neutrality

Doing business

Food inflation

Acquire ships abroad:

The Government has taken a policy decision to allow shipping enterprises based in India

to acquire ships abroad and also flag them in the country of their convenience.

APMC Act:

The government advised the States to allow free movement of fruits and vegetables by delisting

them from the APMC Act

8-Jul-14

7-Jul-14

4-Jul-14

3-Jul-14

Food inflation

Hoarding:

Government proposed amendments to make hoarding non-bailable offence

Essential commodities:

Government has proposed amendment in Essential Commodities Act to make it more

Food inflation

stringent.

Fusion between MGNREGA and agriculture:

Government has notified 30 new works under MGNREGA

MGNREGA

programmes majority of which relate to agriculture and allied activities.

From PPP to EPC:

Government is trying to take forward road construction project worth INR1.8t and address

Roads and

huge NPAs of INR2.4t from the sector. Government may take up highway building under EPC model instead of

waterways

PPP for at least two years.

Checking price rise in essential commodities:

Measures include, i) reduced import duty for wheat, onion and

pulses to zero, ii) banned export of edible oils and pulses, iii) imposed stock limit for essential commodities such

Food inflaiton

as pulses, edible oil and seeds, iv) suspended futures in rice, urad and tur, v) implementation of National

Mission on Oilseeds and Oil Palm, etc.

Model APMC Act:

As per the Committee recommendations, states are urged to amend their respective State

Agriculture

Agriculture Produce Market Committee (APMC) Acts on lines of Model Act

Labour laws

Amendment proposed to Factories Act, 1948

Common National Market for select essential commodities and Price Stabilization Fund for Market intervention

proposed

Defers hiking state specific costs on kerosene, LPG:

The Petroleum and Natural Gas Ministry deferred hiking

Energy

State-specific costs (SSC) till a review was done with the States. The SSC was announced by the UPA

Government in 2012.

Outbound investment eased:

RBI restored the limit on their overseas direct investments (ODIs) under the

Investments automatic route to 400% of net worth. The limit was cut by 3/4th to 100% in August, 2013 after the rupee

touched all-time low.

Raising minimum export price on onion export:

The Inter-Ministerial Committee has unanimously decided to

Food inflation

increase the MEP at USD500/MT FOB (INR30/kg) from USD300/MT

Food inflation

Ease of doing business:

The period of validity of Industrial License is being extended from two years to three

Doing business years. This is applicable for extension of validity of Industrial license in cases where the license holder has not

commenced production of the items within three years of issue of license.

Food inflation

Energy

Inclusion of onion and potato under Essential Commodities Act:

This will empower the State Governments to

undertake de-hoarding operations and to control the prices of onions and potatoes

3-Jul-14

2-Jul-14

1-Jul-14

29-Jun-14

26-Jun-14

18 August 2014

Hike in LPG and ATF prices:

Price of non-subsidised cooking gas (LPG) was hiked by INR16.50/cylinder and that

of jet fuel by over 0.5%.

Suspension of sugar export subsidy:

The Food Ministry has sought approval to end the subsidy for raw sugar

Food inflation exports one year earlier (by September 2014) as it is being availed only by a few sugar mills. A CCEA note has

been moved in this regard.

Industrial parks:

Government entered into a landmark agreement with China to set up at least four Chinese

Investments

industrial parks in India

Food security

Extension of 3 months for Food Security Act:

Deadline for implementation of National Food Security Act expires

on July 4, which is extended by 3 months

India Politics | INDIA MODI-fied Vol 3

26-Jun-14

25-Jun-14

24-Jun-14

Food inflation Imposition of Minimum Export Price (MEP) on Potato Export of USD 450 PMT FOB

Extension of excise duty cut for auto industry:

The government extended by another six months till December

Taxation

the cut in excise duty levied on the automobile industry

Enegy

Roads

MSP for

foodgrains

Power

Gas price hike put-off for 3 months:

The Cabinet Committee on Economic Affairs (CCEA) deferred

implementation of the domestic natural gas pricing guidelines for wider consultations.

Road blocks cleared: Ministry

of road transport and highways has approved road projects worth about

INR400b, besides setting a target of building 30 km of roads a day from 2016.

Low MSP hike:

Government effected one of the lowest hike in MSP for Kharif crops for FY15 season.

Approves INR125b transmission projects:

Ministry of Power has approved 9 new transmission projects with

cost of over INR125b

Contingency fund for low rainfall:

Minister for agriculture has directed that 10% allocation under each and

Agriculture and

every scheme in the agriculture will be set aside as contingency fund to meet the sudden expenditure arising

food prices

out of the less rainfall in the country.

Sugar

Rail fare

Foreign

investment

Raises import duty of sugar:

Food Ministry increased the import duty of sugar to 40% from 15% earlier. Subsidy

on raw sugar exports extended until September. The government will also increase ethanol blending with petrol

to 10% from current 5%. Industry experts see forex savings of USD1.6b-1.7b on ethanol blending at 10%.

Govt hikes railway fares:

Fares of all classes are set to rise by 14.2%, while the freight rates will go up by 6.5%.

23-Jun-14

21-Jun-14

19-Jun-14

18-Jun-14

12-Jun-14

10-Jun-14

5-Jun-14

27-May-14

Definition of FDI and FII:

Government has now accepted the definition of FDI and FII advanced by the

Committee, whereby in line with the international practices, where an investor has a stake of 10% or less in a

company, it will be treated as FII and, where an investor has a stake of more than 10%, it will be treated as FDI.

Cabinet reconstruction:

The Government reconstituted six Committees of the Cabinet i.e. Appointments

Committee of the Cabinet, Cabinet Committee on Accommodation, Cabinet Committee on Economic Affairs,

Governance

Cabinet Committee on Parliamentary Affairs, Cabinet Committee on Political Affairs and Cabinet Committee on

Security.

NBFCs' fund raising:

Government allowed Infrastructure Finance companies and Infrastructure Debt Fund Non-

Debt market/ Banking Financial Companies (ID-NBFCs) to issue secured debentures for a period up to thirty years. Similarly,

Infrastructure Housing Finance companies have been allowed relaxed terms for maintaining Debenture Redemption Reserve

on lines similar to NBFCs registered with RBIs.

Approvals

Inflation

7 big-ticket projects of INR210b cleared which were held up for decades

Imposes minimum export price on onion export at USD 300 per MT FOB.

ii)

Release food stock:

Government, through FCI, would release more supplies to State Governments

Railways for coal linking:

Railways and Power & Coal Ministries hold joint meeting to put three critical coal

Infrastructure connectivity projects on fast track. Multi Disciplinary Project Monitoring Unit is also being formed for better

coordination.

Governance

Minimum Government:

PM discontinues four Standing Committees of Cabinet including UIDAI

Doing Business

Environmental clearances:

Online applications for environmental clearances made operational

Governance

Black money:

Government constituted a Special Investigation Team (SIT) to unearth black money in compliance

with the judgement of Hon’ble Supreme Court.

Source: Pib, MOSL

18 August 2014

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