Hard Facts 05 2017 (May)

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Raj Malhotra’s IAS Study Group ARCs must have minimum net corpus of Rs 100 cr by 2019: RBI The Reserve Bank of India (RBI) on Friday said all the existing asset reconstruction companies (ARCs) must have a minimum corpus of Rs100 crore by March 2019. As per amended Sarfaesi Act, 2016, no ARC can commence or carry on the business of securitisation or asset reconstruction without having net owned fund of not less than Rs2 crore or such other higher amount as the RBI may, by notification, specify. RBI notification said the existing ARCs not meeting the minimum NOF criteria have been asked by RBI to achieve the minimum NOF of Rs100 crore latest by 31 March 2019. In its last bi-monthly monetary policy, RBI had proposed to stipulate a minimum NOF of Rs100 crore for ARCs in view of their enhanced role and greater cash based transactions. The government as well as RBI have envisaged a greater role for ARCs in resolving the stressed assets issue of the Indian banking system. These companies are in the business of buying bad loans from banks to turn them around. Asset Reconstruction companies (ARCs) ARC is a company registered under Section 3 of the Securitization and reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. ARCs are regulated by the RBI. Narsimham Committee – II (1998) proposed setting up of ARCs on the similar lines with that of asset management companies present globally. The main advantage of ARCs is they help the banks to concentrate on normal banking operations rather than dealing with stressed assets. Cabinet approves New Central Sector Scheme – SAMPADA Economy The Cabinet Committee on Economic Affairs, chaired by the Prime Minister has given its approval for re-structuring the schemes of the Ministry of Food Processing Industries (MoFPI) under new Central Sector Scheme – SAMPADA (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) for the period 2016-20 coterminous with the 14th Finance Commission cycle. SAMPADA with an allocation of Rs. 6,000 crore is expected to leverage investment of Rs. 31,400 crore, handling of 334 lakh MT agro-produce valuing Rs. 1,04,125 crore, benefit 20 lakh farmers and generate 5,30,500 direct/ indirect employment in the country by the year 2019-20. The objective of SAMPADA is to supplement agriculture, modernize processing and decrease agriwaste. SAMPADA is an umbrella scheme incorporating ongoing schemes of the Ministry like Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Food Safety and Quality Assurance Infrastructure, etc. and also new schemes like Infrastructure for Agro-processing Clusters, Creation of Backward and Forward Linkages, Creation / Expansion of Food Processing & Preservation Capacities. It includes new schemes of Infrastructure for Agro-processing Clusters, Creation of Backward and Forward Linkages and Creation / Expansion of Food Processing & Preservation Capacities aim at development of modern infrastructure to encourage entrepreneurs to set up food processing units based on cluster approach, provide effective and seamless backward and forward integration for processed food industry by plugging gaps in supply chain and 16 | P a g e # 1 1 1 0 , A d j a c e n t Y M C A , S e c t o r 1 1 - C , C h a n d i g a r h P h : 9 8 1 4 7 - 1 1 6 6 1
Raj Malhotra’s IAS Study Group creation of processing and preservation capacities and modernization/ expansion of existing food processing units. Implementation will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet. It will create huge employment opportunities especially in the rural areas. It will also help in reducing wastage of agricultural produce, availability of safe and convenient processed foods at affordable price to consumers and enhancing the export of processed foods. Background: Food Processing Sector has emerged as an important segment of the Indian economy in terms of its contribution to GDP, employment and investment. During 2015-16, the sector constituted as much as 9.1 and 8.6 per cent of GVA in Manufacturing and Agriculture sector respectively. Government has taken various other measures to boost food processing sector as follows: a) To provide impetus to investment in food processing and retail sector, govt. has allowed 100% FDI in trading including through e-commerce, in respect of food products manufactured and / or produced in India. This will benefit farmers immensely and will create back – end infrastructure and significant employment opportunities. b) The govt. has also set up a Special Fund of Rs. 2000 crore in NABARD to make available affordable credit at concessional rate of interest to designated food parks and agro processing units in the designated food parks. c) Food and agro–based processing units and cold chain infrastructure have been brought under the ambit of Priority Sector Lending (PSL) to provide additional credit for food processing activities and infrastructure thereby, boosting food processing, reducing wastage, create employment and increasing farmers’ income. Cabinet approves National Steel Policy 2017 The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for National Steel Policy (NSP) 2017. The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry. Key features of the NSP 2017: 1. Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers. 2. Encourage adequate capacity additions, 3. Development of globally competitive steel manufacturing capabilities, 4. Cost-efficient production 5. Domestic availability of iron ore, coking coal & natural gas, 6. Facilitating foreign investment 7. Asset acquisitions of raw materials & 8. Enhancing the domestic steel demand. The policy projects crude steel capacity of 300 million tonnes (MT), production of 255 MT and a robust finished steel per capita consumption of 158 Kgs by 2030 - 31, as against the current consumption of 61 Kgs. The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31. 17 | P a g e # 1 1 1 0 , A d j a c e n t Y M C A , S e c t o r 1 1 - C , C h a n d i g a r h P h : 9 8 1 4 7 - 1 1 6 6 1
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Hard Facts 05 2017 (May)

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