Foreign Investment in India up while dipping globally

Feb 4, 2016 0

BENGALURU– India was the only country with rising Foreign Direct Investment (FDI) while it was falling the world over, said Commerce and Industry Minister Nirmala Sitharaman on Thursday.

“India is the only country witnessing a 38 percent FDI rise, while globally it dipped to 16 percent,” said Sitharaman at the valedictory session of the Invest Karnataka 2016 Global Investors Meet (GIM).

SitharamanPraising Karnataka, she said the state contributes six percent of the nation’s GDP and is growing at the rate of seven percent. “Karnataka is the third largest recipient of FDI and it will be higher after the GIM,” she said.

Listing the efforts of Indian government to promote and nurture the IT industry, she said Indian government always raises the issue of free movement of people at all bilateral and multilateral engagements.

“We place great emphasis on the free movement of people at all bilateral and multilateral meetings… so that our IT employees can freely move between countries on their professional assignments,” said Sitharaman.

The commerce minister disapproved the recent US visa fee hike and said she took it up with the US government.

“Why such unreasonable visa fees should be imposed on the Indian IT companies? We are not against paying visa fees but against unreasonable visa fees.”

US President Barack Obama on December 19 signed into law a $1.8-trillion spending package, which includes a hefty $4,000 fee for certain categories of H-1B visa and $4,500 for L-1 visa.

Sitharaman lauded Tumakuru to emerge as an investment and manufacturing hub.

“Tumakuru was chosen from among 12 places by Japanese prime minister when they taking a call on where to direct Japanese investment in India,” she said.

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Karnataka mops up 121 agreements, Rs.1.33 lakh crore at investors’ meet

Feb 4, 2016 0

BENGALURU– In contrast to its high expectations, Karnataka has managed to get only Rs.1.33 lakh crore of investments at the fourth edition of its global investors meet (GIM), a state minister said on Thursday.

“We have signed 121 agreements and expression of interest to the tune of Rs.1.33 lakh crore at the GIM,” Industries Minister R.V. Deshpande said at the valedictory function on the second day of the three-day mega event here.

The state government, however, secured 56 percent (Rs.1.75 lakh crore) of the total investment (Rs.3.08 lakh crore) received during 10 months of 2015-16 since April and approved by its high power committee and single window agencies.

“The total investments (Rs.3.08 lakh crore) we garnered will generate 6.7 lakh jobs across the state,” Deshpande said.

Admitting that mobilising investments was a continuous process, he told the delegates that the state’s focus was on implementing projects since the previous Congress government had launched the GIM in 2000.

“Of the Rs.27,000 crore investments received then (2000), proposals worth Rs.18,000 crore were executed with 66 percent implementation rate,” said Deshpande, who held the same portfolio in the then Congress government (1999-2004).

The investments are in the state’s focus sectors – manufacturing, pharma, bio-technology, IT, agri-business, urban infrastructure, infrastructure and tourism.

“Investments will be made across the state, including Bellari, Bengaluru Rural, Dakshina Kannada, Kolar, Ramanagaram Shivamogga and Tumakuru,” Deshpande told the delegates, including central and state ministers.

“We have appointed an official to follow up all projects above Rs.200 crore. We also commit to have all projects approved by the high power committee and single window committee before May 15,” he added.

Giving break-up, the state industries department said of the 121 agreements entered into with investors and valued at Rs.133,177 crore would generate 193,905 jobs.

“Of the total (6.7 lakh) jobs, 1,080 projects approved since April 1, 2015, with a combined investments of Rs.175,633 crore will create 477,026 jobs,” the department said in a statement.

Of the 121 projects received at the GIM, 25 are in food and agri-business sector, followed by 16 in energy, 12 in IT, seven in real estate, five each in oil & gas, and urban infrastructure, three each in cement, industrial infrastructure, manufacturing, pharma, steel, telecom, textiles & garments and tourism, two each in aerospace, biotech, electronics, healthcare and machinery and one each in chemicals, education, engineering, infrastructure, retail, and warehousing and logistics.

Sectors like automobile, services, sports, sugar and waste management drew blank.

Of the big ticket investments, Adani Green Energy Ltd has committed to invest Rs.18,500 crore, followed by JSW Steel Ltd Rs.12,396 crore, Geitso Green Energy Ltd Rs.10,000 crore, Essel Infra Projects Ltd Rs.7,200 crore and Shriram Properties Ltd Rs.5,920 crore.

“The energy sector got the highest investment of Rs.1 lakh crore, followed by steel sector with Rs.38,000 crore and chemicals Rs.24,000 crore,” the statement added.

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Sri Lankan-born Alere CEO Namal Nawana to receive $11.1 million in one-time payout after acquisition by Abbott

Feb 4, 2016 0

WALTHAM, MA– Sri Lankan-born Alere CEO Namal Nawana would receive about $11.1 million in one-time payouts after the Alere’s acquisition id completed by Abbott Laboratories, according to media reports. Nawana took over as CEO when Alere founder and former CEO Ron Zwanzger resigned in 2014.

Namal Nawana

Namal Nawana

Quoting financial filings, Boston Business Journal reported that Nawana would receive about $11.1 million in one-time payouts, which includes a continuation of his salary for 18 months, totaling $1.3 million; a $201,000 cash award; the acceleration of vesting of what the company then estimated to be $7.9 million in restricted stock and options; and another $1.65 million in gross-up payments to help cover his tax hit form the change-in-control payout.

Nawana also holds 81,000 shares of company stock worth around $4.5 million, according to Bloomberg quoted by Boston Business Journal.

Nawana has been with the company since 2012, originally as chief operating officer. His assumption of the CEO role came after a months-long battle between the company’s former management and one of its investors, Coppersmith Capital, which had been advocating for the company to sell off less profitable parts of the business and align itself for a sale, Boston Business Journal said.

Four other officers — CFO David Teitel, and Daniella Cramp, Sanjay Malkani and Avi Pelossof, the heads of Alere’s cardiometabolic, toxicology and infectious disease units — also stand to receive change-in-control payments and benefits valued between $2.3 million and $3.6 million, according to Boston Business Journal.

Abbott and Alere this week announced a definitive agreement for Abbott to acquire Alere, for $5.8 billion. Under the terms of the agreement, Abbott will pay $56 per common share at a total expected equity value of $5.8 billion. Once the transaction is completed, Abbott will become the leading diagnostics provider of point of care testing. Abbott’s total diagnostics sales will exceed $7 billion after the close.

Nawana was born in Sri Lanka and raised in Australia. He holds an Honors degree in Mechanical Engineering and a Masters of Medical Science degree from the University of Adelaide in Australia and an MBA from the Henley Business School in the United Kingdom.

Before joining Alere, Nawana held various global leadership roles during his 15-year tenure at Johnson & Johnson. He most recently served as Worldwide President of DePuy Synthes Spine, a Johnson & Johnson company. Prior to that role, Nawana held general management positions spanning the globe, including Area Vice President for Johnson & Johnson Medical in Australia and New Zealand and Chairman of the DePuy Asia Pacific Franchise Council.

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GM India to launch notchback Essentia in 2017

Feb 3, 2016 0

NEW DELHI– Automobile major General Motors on Wednesday announced the launch of an all-new four-door Chevrolet Essentia next year. The new vehicle will be a notchback – that is a three-box car in which the rear is rather short.

The company made the announcement during the ongoing Auto Expo 2016 being held here.

“GM’s transformation in India is clearly reflected in the development of the Chevrolet Essentia,” said Kaher Kazem, president and managing director, GM India.

“We are heading into a new era with new-generation products that will catapult the Chevrolet brand in India, giving consumers vehicles that have never been seen in the market. ”

According to the company, the Essentia highlights aggressive plans to increase it’s presence in the Indian markets.

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India’s fastest-growing state: Meghalaya

Feb 1, 2016 0

By Prachi Salve & Sanjana Pandit

India’s fastest-growing state is Meghalaya at 9.7 percent in 2013-14, higher than the fastest-growing big state, Madhya Pradesh, at 9.5 percent. Arunachal Pradesh grew faster than Gujarat.

Fewer people, 12.8 million, live below the poverty line in the entire northeast than in just one large state, Karnataka, which has 12.9 million poor people.

Tripura reported India’s highest unemployment rate, 25.2 percent in urban areas, followed closely by Nagaland with 23.8 percent in 2011-12. The highest unemployment in the urban areas of a large state was 7 percent, in Jammu and Kashmir.

The eight north-eastern states – Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim (added in 2002) and Tripura – are growing fast, educating their people at a rate much faster than the rest of India, reducing their dependence on agriculture, and generally prospering, IndiaSpend research has revealed, but the growth is not creating enough jobs and livelihood opportunities.

Other thing evident is that while northeast states are often clubbed together, we found, in many cases, wide differences; for example, Manipur’s high poverty rate and Sikkim’s prosperity. Some of the economic indices are India’s highest, and some are India’s lowest.

Today, in the first of a three-part series, we analyse the northeast’s economic indicators, such as gross state domestic product (GSDP), unemployment, and population below the poverty line.

Growth driven by services, industry

Meghalaya, Tripura and Arunachal Pradesh recorded the highest growth rates in GSDP in 2013-14.

Meghalaya’s growth in GSDP of 9.7 percent was equivalent to Bihar, which had a GSDP growth rate of 9.1 percent.

Arunachal Pradesh, with a growth rate in GSDP of 8.9 percent grew faster than Gujarat, which reported 8.7 percent.

The share of the industrial sector for all eight states has increased while the share of agriculture and allied activities has declined.

Unemployment in urban areas across all north-eastern states is higher than rural areas, and is in line with the national pattern.

“The growth in manufacturing has not been accompanied by a commensurate growth of employment opportunity for the local population,” Sumarbin Umdor, professor of economics at North-Eastern Hill University, wrote in The Shillong Times. “Given the lack of job creation in other formal sectors, most of the employment outside agriculture is therefore in the low productivity informal sector, particularly in informal construction, retail trade and transportation.”

Tripura recorded the highest unemployment rate in urban areas at 25.2 percent in 2011-12, India’s highest jobless rate, followed by Nagaland with 23.8 percent, India’s second-highest rate, and Manipur with 7.1 percent.

Meghalaya had India’s second-lowest unemployment rate (after Gujarat), with 0.4 percent in rural areas and 2.8 percent in urban areas in 2011-12.

A caveat: Unemployment rates in rural India are always lower than urban, since they do not account for hidden or partial employment. In general, employment rates do not adequately reflect reality, but only offer an indication.

Poverty unevenly spread: Manipur is poorest; Sikkim richest

The northeast has widely varying rates of poverty, which largely reflect unrest and insurgency.

While 36.9 percent people live below the poverty line (the ability to spend Rs 1,170 per family per month in urban areas, Rs.1,118 in rural areas) in Manipur, where a cocktail of insurgent groups have crippled the economy, only 8.2 percent of the population is below the poverty line in Sikkim (Rs.1,226 in urban, Rs.930 in rural), where plentiful hydro power has raised incomes, as IndiaSpend has reported.

Meghalaya and Sikkim have seen some of the largest falls in poverty in India.

For instance, the percentage of population below the poverty line in Sikkim was 13.1 percent in 2009-10 and fell to 8.2 percent in 2011-12. In comparison, poverty in Bihar and Madhya Pradesh – the large states most successful in cutting poverty – fell from 36.7 percent to 31.7 percent and 37.7 percent to 29.4 percent over the same period.

Similarly, in Meghalaya, the percentage of population below the poverty line was 17.1 percent in 2009-10 and fell to 11.9 percent in 2011-12.

Although the number of people below the poverty line might be lower than the national average, the intensity of poverty in these states is much higher, according to the National Institute of Rural Development (NIRD).

Poverty in the northeast, like the rest of India, is a more rural phenomenon than urban: 11.6 million people of the 12.8 million living below the poverty line are in rural areas.

The two main reasons for poverty are under-developed agriculture and unskilled labour, according to NIRD.

To address the region’s development challenges, including infrastructure, the Central government created the ministry of development of northeastern region in 2004, allocating it Rs.2,362 crore in 2015-16. The grants from the centre and their share in central taxes together form 79 percent of their total revenue, according to the Reserve Bank of India.

Some of the grants, like the ones given out by the ministry are influenced by politics as well. For example, from 2010-11 to 2012-13, Arunachal Pradesh received the highest, with almost 19 percent of the total allocations. Later, when the government wanted to sign the Naga peace accord of 2015, the allocation to Nagaland was increased (to 20 percent) and that of Arunachal Pradesh had come down.

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Now, one billion people use Facebook-owned WhatsApp

Feb 1, 2016 0

NEW YORK–Facebook-owned mobile messaging service WhatsApp has reached the milestone of one-billion users, with 42 billion messages being exchanged daily, its CEO Mark Zuckerberg announced on Tuesday.

“One billion people now use WhatsApp. There are only a few services that connect more than a billion people. This milestone is an important step towards connecting the entire world,” he posted on Facebook.

At WhatsApp, 1.6 billion photos and 250 million videos are being shared daily in 53 languages.

“WhatsApp’s community has more than doubled since joining Facebook. We’ve added the ability for you to call loved ones far away. We’ve dropped the subscription fee and made WhatsApp completely free,” the 31-year-old Facebook founder added.

“Next, we’re going to work to connect more people around the world and make it easier to communicate with businesses.”

Founded by Ukrainian immigrants to America Jan Koum and Brian Acton in 2009, WhatsApp was acquired by social media giant Facebook for $19 billion in 2014.

WhatsApp waived its annual subscription fee because it has not worked well.

“For many years, we have asked some people to pay a fee for using WhatsApp after their first year. As we have grown, we have found that this approach hasn’t worked well,” WhatsApp had said in a blog post recently.

Despite not being able to charge its hundreds of millions of users the annual fee, WhatsApp said it would not subject its users to advertisements.

“Naturally, people might wonder how we plan to keep WhatsApp running without subscription fees and if today’s announcement means we are introducing third-party advertisements. The answer is no.”

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Vishal Chawla Joins Grant Thornton as Managing Principal

Jan 28, 2016 0

McLEAN, Va.–Vishal Chawla has joined Grant Thornton LLP as managing principal in its Cyber Risk Advisory Services practice. The cybersecurity and cyber risk specialist will be based in the firm’s McLean, Va. office and will serve clients throughout the country.

Vishal Chawla

Vishal Chawla

“Vishal is a recognized industry leader and we believe clients will benefit from his knowledge,” said Srikant Sastry, national managing principal of Grant Thornton’s Advisory practice. “Cybersecurity threats are growing, the industry is ever-changing, and Vishal joins a team that aims to keep our clients a step ahead of these bottom-line issues.”

Prior to joining Grant Thornton, Chawla served in the cyber risk practice of another accounting firm for nearly twelve years, with time spent in that firm’s Risk Advisory practice in India and its U.S.-based Cyber Risk Services practice. Before that, he was a senior manager in consulting services for Oblix, an organization that is now part of Oracle.

Chawla has also worked at public companies, including Kellogg’s, IBM, and Digital Equipment Corporation.

Chawla holds a bachelor’s degree in engineering, electronics and communication from the Delhi College of Engineering.

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India investment summit in Delhi from February 4

Jan 27, 2016 0

NEW DELHI– The government will organise a two-day India Investment Summit here from February 4 to boost investment in India’s infrastructure sector, an official said on Wednesday.

“India Investment Summit organised by the finance ministry will be held in New Delhi on February 4-5, in which global long-term investors will participate,” Economic Affairs Secretary Shaktikanta Das said in a tweet.

“India Investment Summit: Several Pension Funds,Sovereign Wealth Funds etc. from other countries will participate,” he added.

The summit will specially focus on investment opportunities in road transport, highways, ports, urban infrastructure, railways, power, renewable energy, besides state-level projects.

The government has set up Rs.40,000 crore National Investment and Infrastructure Fund with 49 percent government contribution, along with equity participation from both foreign and domestic partners, the statement added.

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Ratan Tata invests in Teabox

Jan 27, 2016 0

NEW DELHI–Tata Sons chairman emeritus Ratan Tata has invested an undisclosed amount in speciality tea company Teabox, the company said on Wednesday.

The additional capital will help fuel Teabox’s growth as it expands in other major markets around the world, said a statement from the company.

Ratan Tata

Ratan Tata

“Ratan Tata needs no introduction for the kind of strategic direction and commitment he brings to the table. We have grown up admiring and respecting his vision and business acumen on scaling the Tata group to a global level,” said Teabox founder and CEO Kaushal Dugar.

“His direct guidance and experience in the tea industry will surely help us grow Teabox to be the first global premium tea brand from India,” he added.

Teabox sources premium teas directly from plantations in Darjeeling, Assam, Nilgiri and Nepal, and ships them to customers all over the world.

Teabox has already delivered over 30 million cups of tea in over 93 countries.

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India’s Gold monetisation scheme

Jan 24, 2016 0

NEW DELHI–The government will pay banks a 2.5 percent commission for mobilising gold under the gold monetisation scheme and depositors will be permitted premature withdrawal of the precious metal deposited, an official statement said on Sunday.

“The banks would be getting a 2.5 percent commission for the scheme which will include the charges payable to the collection and purity-testing Centres/Refiners,” the finance ministry said in a statement on the gold monetisation scheme.

“It is expected that the modifications will make the scheme more attractive for potential depositors,” it said.

As per the revised guidelines, the government will pay participating banks a fee services like gold purity testing, refining, storage and transportation on medium and long term gold deposits.

Premature redemption have been now permitted under medium and long-term government deposits.

The monetisation scheme encourages individuals, households and temples to deposit gold jewellery or bars with banks or collection agents. The gold deposited would be later refined for domestic purpose and would help cut dependence on imports.

“Any Medium Term Deposit will be allowed to be withdrawn after three years and any Long Term Deposit after five years. These will be subject to a reduction in the interest payable,” the statement said.

Besides, gold depositors can now give the metal directly to the refiner, instead of only through the Collection and Purity Testing Centres (CPTCs).

“This will encourage the bulk depositors, including institutions, to participate in the scheme,” the statement added.

The finance ministry said the gold monetisation scheme, launched by Prime Minister Narendra Modi last November, provides for tax exemptions on interest earned on the gold deposited and exemption from capital gains made through trading or at redemption.

Bureau of Indian Standards (BIS) has modified the licensing condition for refiners from the existing three years of refining experience to one year towards making the scheme more attractive, it added.

“BIS has published an Expression of Interest (EOI) on its website inviting applications from more than 13,000 licensed jewellers to act as a CPTC in the scheme, provided they have tie-up with BIS licensed refiners,” the statement added.

The government has mobilised around 900 kg of gold in over two-and-a-half months’ time through the scheme, which pays depositors interest of up to 2.50 percent per annum.

In an effort to make the scheme more customer-friendly, the Reserve Bank of India (RBI) said earlier this week that depositors will be able to withdraw medium-term (5-7 year) and long-term government deposits (12-15 years) pre-maturely after the minimum lock-in period, albeit with a penalty.

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