LAKSH Career Academy

LAKSH Career Academy
Author: Hiren Dave

Tuesday 16 December 2014

16 DECEMBER 2014: Centre prepares Draft National Offset Policy (NOP)

Ø  In a major step in validation of indigenous defence technologies, the Indian built nuclear-powered ballistic missile submarine Arihant completed its harbour trials and entered the sea. Built under the highly secretive Advanced Technology Vessel project monitored directly by the Prime Minister’s Office, the nuclear-powered submarine emerged from the breakwaters of the Visakhapatnam Harbour under the watchful gaze of a low flying helicopter. The 112 metre, 6000 tonne partially submerged Arihant glided into the Bay of Bengal as part of its sea trials, sailing north along the coast before disappearing into the mist. Powered by 83 MW pressurised light water reactor, it would have to undergo comprehensive validation sea trials before it is commissioned into the Navy.
Ø  Union Minister of State for Home Kieran Rijiju pushed for the re-opening of the ‘Stillwell road’, as a trade route from Assam to China’s Yunnan province. When the Stillwell Road was closed in 1962 [after the Sino-Indian war], the movement of border trade was also restricted. Re-opening this road would open up numerous options. The statement is significant as the government has so far been silent on progress of the ‘BCIM’ corridor that runs from India to China via Bangladesh and Myanmar, and could run over the ‘Stillwell’ route built during the Second World War. The issue was raised by Chinese President Xi Jinping during his visit to India, but only found a passing reference in the India-China joint statement. Tensions over the LAC between India and China since then have also slowed progress on discussions over the trade route. The Minister, speaking at Pune’s Symbiosis University on the Modi Government’s ‘Look East Act East’ policy, stressed the need for closer integration of the States of the north-east with the rest of the country.
Ø  The Gujarat government announced a relief package of Rs. 1,100 crore for farmers in the State. The package includes Rs. 600 crore worth of subsidy on interest for agriculture loans and Rs. 500 crore on power bills. This year, the district cooperative banks and nationalized banks have disbursed loans to the tune of Rs. 2,100 crore. The interest on this amount is Rs. 1,200. The State government has decided to cover 50 per cent of the interest by paying Rs. 600 crore to the banks. Similarly, it would give Rs. 500 crore to power companies to cover 50 per cent of the total electricity bill of farmers, which stands at Rs. 900 crore.

Ø  Foreign companies selling goods worth over Rs.300 crore to the government or public sector undertakings would have to source part of their supplies from domestic manufacturers, according to the new draft National Offset Policy (NOP). According to the draft policy prepared by the Commerce Ministry, the minimum value of the offsets obligation will be 30 per cent of the estimated cost of the import, meaning the company will have to procure this percentage from local players to boost domestic manufacturing. This was proposed by the Ministry in the draft policy, which would be considered the Committee of Secretaries, headed by the Cabinet Secretary, by the end of this month and then it would be approved by the Union Cabinet. Besides, it would help in attracting investments; transfer and acquisition of new technology; acquisition of raw material and assets; improving balance of payment; increasing capacity for R long-term supply pacts; and enhancing exports. Sectors which will be covered under the NOP include civil aerospace, power, fertilizer, railways and other transportation, ports and shipyards, mining, medical equipment, medicine and telecom. However sectors including defence, atomic energy and space would not be covered under the policy. The defence sector has a separate policy while atomic energy and space would pursue offsets in their contracts independently. For smooth operation of the NOP, a 10-member National Offsets Authority (NOA) is also proposed. It would be headed by the Cabinet Secretary and comprise secretaries of commerce, expenditure, foreign, economic affairs and Directorate General of Foreign Trade.

Ø  As industry opposition mounts against new delisting norms wherein promoters planning to take their company private have to secure the consent of 25 per cent of public shareholders, the Securities and Exchange Board of India (SEBI), on Monday, indicated that it was ready to have a re-look at them. The SEBI norms issued last month, which mandate participation of at least 25 per cent public shareholders in the delisting process, has also drawn criticism from market participants. 

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