The DIPP, under the Commerce and Industry Ministry, has proposed that while determining if a company has breached the sectoral FDI ceiling, the indirect foreign investment in an investing Indian company should not be included if it is owned and controlled by resident Indian companies.

To illustrate the point better: Consider HDFC Standard Life Company, an insurance joint venture (JV), promoted by India's HDFC and UK-headquartered Standard Life. In insurance, India allows 26 per cent FDI, so technically Standard Life can hold 26 per cent in the JV. But, Standard Life originally held a partial stake in HDFC itself and this translated into an indirect foreign holding in the insurance JV. So, it had to restrict its holding in the insurance JV to 18 per cent. Subsequently though, Standard Life sold its stake in HDFC, and the insurance regulator allowed it to pick up the entire 26 per cent in the insurance JV.

Under the new norms proposed by the DIPP, Standard Life could have taken 26 per cent in the JV and still retain its holding in HDFC. In fact, this issue became quite controversial in the case of many Telecom JVs in India, Essar-Hutch being one. A pyramid holding structure, with foreign equity participation in layers of Indian companies, can technically take the total foreign holding in the operational company much beyond the prescribed sectoral levels.

Quoting industry body Nasscom, Scindia said in a written reply to the Rajya Sabha, "Most companies are working to increase their levels of utilisation of resources and look to redeploy personnel within the organisation where possible."

He further said that the meltdown being a global phenomenon, there is only a limited amount of measures that individual companies are able to take.

Organisations are focusing on productivity, efficiency, resource utilisation, wage moderation, optimal lateral hiring, increasing levels of efficiency for asset utilisation like real estate, IT infrastructure and others, he added.

As per the NASSCOM, the total software and services exports in 2007-08 was $40.3 billion and the sector targeted to achieve an export revenue of $60 billion this year.

The total amount of Foreign Direct Investment (FDI) inflows in Telecommunications and IT sector in 2007-08 has been Rs 111,587.69 million.

To another query, Scindia said DoT has suggested the telecom regulator TRAI to undertake a review of mobile termination charges based on present and projected cost and traffic.

As per TRAI, the Telecommunication Interconnection Usage Charges Regulation, call originating operator pays 30 paise per minute as termination charge which is applicable for all types of calls--local, national long distance and international long distance.

The project will be completed with an investment of Rs 20,000 crore. The project will be completed in four phases.

The first phase will create an aviation facility, the second will have an air-cargo and logistics hub, the third will develop an industrial or agro-processing park, while the fourth phase will create a township, medical tourism, a biotech university and a leisure destination.

"The state government has joined hands with the company as an equity partner against a land area, which has been impounded under the Ceiling Act and a case is pending in this regard at the High Court," said Kailash Vijayavergiya, government spokesperson and cabinet rank minister, adding, "the project will provide jobs to thousands of people".

The Project Clearance and Implementation Board (PCIB) had given in-principle clearance to the project. This project also involves foreign direct investment of Rs 6,000 crore.

The political class, on the other hand has been rather ambivalent on the matter. Union Commerce Minister Kamal Nath, who so far has maintained that this was an internal matter of the West Bengal Government, is now making an open offer to the TATAs to come and set up the plant to manufacture Nano in Madhya Pradesh.

"The Central Government can't do much about it, as it matter of state government and the company. If TATAs want to come to Madhya Pradesh, we will give them full assistance," Nath says.

While Nath may have making a pitch keeping in mind the Madhya Pradesh elections, no other leader of the Congress has spoken out so far on the matter.

Meanwhile, the West Bengal's Left Government is blaming Trinamool Congress chief Mamata Banerjee for TATA's decision to pull out its staff from the Singur plant.

The West Bengal Industries Minister Nirupam Sen said, "If TATAs pulls out of Singur, it will send a wrong signal about West Bengal."

The Gwalior SPU will produce TMT bars in 8 mm to 25 mm diameter from billets supplied by Steel Authority of India's Bhilai Steel Plant (BSP). Being built at a cost of around Rs 83 crore, the unit will have a mill of 100,000 tonnes per annum (tpa) capacity.

Other major facilities will include a pusher-type reheating furnace, mill trains, crop-cum-cobble shear, TMT line, cooling bed, dividing shear, cut-to-length and bundling and tying facilities for TMT bars. The SPU will also have warehousing facility. The entire project is expected to be completed in 18 months.

This will be SAIL's third SPU in Madhya Pradesh. Mr Paswan had earlier laid the foundation stone for an SPU in Hoshangabad district, which will produce angles, channels, beams/joists and TMT bars, being set up with an investment of around Rs. 154 crore.

The other SPU at Ujjain, being set up with an investment of around Rs 100 crore, will produce TMT bars in 8 mm to 25 mm diameter.

State chief minister Shivraj Singh Chauhan, Union minister of state for telecommunications and IT Jyotiraditya Scindia, Gwalior MP Yashodhara Raje, members of the Vidhan Sabha, SAIL chairman SK Roongta and MD of BSP R Ramaraju were also present on the occasion.

The company, which had signed a deal with the state government in this regard in Gwalior, has asked for 300 acres. It also has reportedly, plans to set up a maintenance facility and a technical training institute in Tamot village of Raisen.

"The apex empowered committee on investment today cleared the proposal and has offered a customised package for the company and others in accordance with the industrial promotion policy. The company will have to acquire land, for which the process is going on," said Praveen Garg, managing director of Madhya Pradesh State Industrial Development Corporation.

Hero Associate Managing Director Pankaj Munjal had in Gwalior confirmed setting up the facility but declined to divulge details on the project.

The committee has also cleared SPJ Steel Ltd's Rs 2,250 crore integrated steel plant project in Damoh district, Rs 2,800 crore integrated steel project of Rashmi Metaliks, Rs 674 crore expansion plan of Bridgestone Tyres in Pithampur (near Dhar), Rs 26 crore proposal of Parakh Industries in Nimrani Food Park (district Khargone), Rs 91 crore food park project of SKM Infrastructure near Mandideep (Raisen district), Rs 121 crore ethanol project of Dollex Industries in Sagar, Rs 300 crore polyfilm project of Nahar Polyfilms and Rs 60 crore project of Surya Roshni in Chhindwara district.

The committee also extended the deadline of registration for investment promotion incentives till March 31, 2009. The company may apply for incentives and concessions till next year.

Further, the committee has also approved a proposal of awarding `C' category to Sehore district (near Bhopal) to offer maximum concessions to industrial investment.

Companies that make investment in the `C' category backward district are offered more concessions and sops. This was the last meeting of the empowered committee on investment. The Election Commission will declare the code of conduct next month.

We are pleased to introduce us as a small entrepreneur operating as freight forwarder at Inland Container Depot (ICD) Malanpur, near Gwalior, in Madhya Pradesh. It is since last three years that we have been operating at this location and would like to put forth the following observations to your kind consideration:

ICD Malanpur was initiated by the Container Corporation Of India Limited (CONCOR) in the year 1998 keeping in view the potential of export import traffic of the area and the CONCOR has put in a substantial investment in the project and successfully started the facility for the trade. As a trade we understand that in spite of all the efforts and hard work, till date the Inland Container Depot Malanpur, is not able to get 50% of the total volume of exim business even after 8 years of its commencement.

The area is known to produce mustard crop in volumes, which is the major source of income for the farmers in this area. The produce is processed at the local units extracting oil and thus getting the bi product De Oiled Cake in huge volumes. This is being exported to the Far East Asian countries such as Indonesia, Vietnam, and Thailand etc. Due to the high protein content, it is used as a dietary supplement for the cattle.  

The total cost of transportation the goods up to Mumbai through CONCOR is approx. Rs 1900 per MT where as the cost from Mumbai to the various countries varies from Rs 300 - Rs 600 per MT. The figures clearly indicate that the inland costs play major role in deciding the competitiveness of such low value produce in the international market. The potential of exports is 150,000 MTs per annum, for the said commodity from this area, which is presently being stuffed in the containers at the ports. It would not be out of place to mention that the stated commodity is very low priced and even the slightest hike in the freight may disturb the entire economics of the routings.

Due to the disparity in the freight structures of the CONCOR as compared to the rail wagons, the huge facility and infrastructure goes waste without being used by the major volume clients.

Furthermore this creates a dual negative impact at the gate way ports; firstly the cargo is carried through the alternative arrangements such as rail wagons or road, which adds to the decongestion of the ports, secondly the CONCOR has to run the empty flats to the ports to get the import volumes to the various ICDs in this region. These rakes can be effectively utilized by the CONCOR to carry the export volumes at a rational freight level for the agriculture produce.

On one hand the Container Corporation of India resists to compromise on their freight tariffs to carry the goods at a reduced price, and on the other hand they are running empty rakes to NSICT/JNPT from North Indian ICDs to decongest the ports hence losing huge revenues. Further more, the condition of the ports gets worsened as the rail wagons are carrying the goods directly to the gateway ports adding to the congestion at a lower freight structure.
The very purpose of establishing the Inland Container Depots' to decongest the ports and offer a faster clearance gets defeated also the industries and agro producers located in the hinterlands lose business to the industries located around the ports adding to the further congestion.  We as a trade suffer and are not able to sustain the business, which originates from our area, and are getting deprived of from participating in the exim trade just because of the higher costs involved and disparity as compared to the alternative solutions.

This has a significant repercussion on the trade also that the manufacturers are not able to compete with the cost ingredients as per the international market standards. They are left with no other option except to sell the goods to the middlemen or in the domestic market.

There has been a tremendous restoration of the freights imposed by Container Corporation of India in the last 18 months. As compared to the railways that did not changed their tariff since than till date.

We have continuously followed up the matter with the top officials in Container Corporation of India since last 12 months and got a little relief of Rs 1750 per TEU recently, which was overruled with an immediate hike of Rs 3550 per TEU a few days after the receipt of the previous order.

We here by pray to you to kindly intervene in the situation and grant us some relief as an industry located farther from the gateway ports. We all are looking forward for your positive response in this regard.

Regards,

Anurag Khurana
R S international
810, Silver Estate
University Road
Gwalior 474 011 M.P.