Blog

The Hon’ble Kerala High Court has, by way of interim relief directed the EPFO to accept option for higher pension without the production of the copies of permission under paragraph 26(6) of the Scheme, 1952

Copy of the order is attached herewith.

The World Bank in its latest India Development Update, the World Bank India’s biannual flagship publication, has noted that although significant challenges remain in the global environment, India was one of the fastest growing economies in the world. The overall growth remains robust and is estimated to be 6.9 percent for the full year with real GDP growing 7.7 percent year-on-year during the first three quarters of fiscal year 2022/23. There were some signs of moderation in the second half of FY 22/23. Growth was underpinned by strong investment activity bolstered by the government’s capex push and buoyant private consumption, particularly among higher income earners. Inflation remained high, averaging around 6.7 percent in FY 22/23 but the current-account deficit narrowed in Q3 on the back of strong growth in service exports and easing global commodity prices.

The World Bank has revised its FY 23/24 GDP forecast to 6.3 percent from 6.6 percent (December 2022). Growth is expected to be constrained by slower consumption growth and challenging external conditions. Rising borrowing costs and slower income growth will weigh on private consumption growth, and government consumption is projected to grow at a slower pace due to the withdrawal of pandemic-related fiscal support measures.

“The Indian economy continues to show strong resilience to external shocks,” said Auguste Tano Kouame, World Bank’s Country Director in India. “Notwithstanding external pressures, India’s service exports have continued to increase, and the current-account deficit is narrowing.”

Although headline inflation is elevated, it is projected to decline to an average of 5.2 percent in FY 23/24, amid easing global commodity prices and some moderation in domestic demand. The Reserve Bank of India has withdrawn accommodative measures to rein in inflation by hiking the policy interest rate. India’s financial sector also remains strong, buoyed by improvements in asset quality and robust private-sector credit growth.

The central government is likely to meet its fiscal deficit target of 5.9 percent of GDP in FY 23/24 and combined with consolidation in state government deficits, the general government deficit is also projected to decline. As a result, the debt-to-GDP ratio is projected to stabilise. On the external front, the current account deficit is projected to narrow to 2.1 percent of GDP from an estimated 3 percent in FY 22/23 on the back of robust service exports and a narrowing merchandise trade deficit.

“Spillovers from recent developments in financial markets in the US and Europe pose a risk to short-term investment flows to emerging markets, including India,” said Dhruv Sharma, Senior Economist, World Bank, and lead author of the report. “But Indian banks remain well capitalised.”

Breaking away from a tradition of a policy lasting five years, the Government recently unveiled the Foreign Trade Policy 2023, which adapts a long-term focus. The key approach to the policy is based on the four pillars: (i) incentive to remission, (ii) export promotion through collaboration – exporters, states, districts and Indian missions, (iii) ease of doing business, reduction in transaction cost and e-initiatives and (iv) Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.

The FTP 2023 aims at process re-engineering and automation to facilitate ease of doing business for exporters. It also focuses on emerging areas like dual-use high-end technology items under SCOMET, facilitating e-commerce export, and collaborating with States and Districts for export promotion.

The new FTP is also introducing a one-time Amnesty Scheme for exporters to close the old pending authorisations and start afresh. 

The FTP 2023 encourages recognition of new towns through the “Towns of Export Excellence Scheme” and exporters through the “Status Holder Scheme”. The FTP 2023 is facilitating exports by streamlining the popular Advance Authorisation and EPCG schemes and enabling merchanting trade from India.

To develop India into a merchanting trade hub, the FTP 2023 has introduced provisions for merchanting trade. Merchanting trade of restricted and prohibited items under the export policy would now be possible. Merchanting trade involves the shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary. This will be subject to compliance with RBI guidelines, and won’t be applicable for goods/items classified in the CITES and SCOMET list. In course of time, this will allow Indian entrepreneurs to convert certain places like GIFT city etc. into major merchanting hubs as seen in places like Dubai, Singapore and Hong Kong.

Facilitation under Export Promotion of Capital Goods (EPCG) Scheme

The EPCG Scheme, which allows the import of capital goods at zero Customs duty for export production, is being further rationalised. Some key changes being added are:

• Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme has been added as an additional scheme eligible to claim benefits under CSP (Common Service Provider) Scheme of Export Promotion Capital Goods Scheme(EPCG).
• Dairy sector to be exempted from maintaining Average Export Obligation – to support the dairy sector to upgrade the technology.
• Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and Green Hydrogen are added to Green Technology products – will now be eligible for reduced Export Obligation requirements under EPCG Scheme.

Defence Minister Rajnath Singh announced the launch of the seventh round of auctions for commercial mining of coal blocks, comprising 106 mines. The auction includes 61 partially explored and 45 fully explored blocks.

Singh emphasised the significance of coal as black gold and its contribution to the country’s economic growth. He also highlighted the increase in energy consumption and the need to start working towards meeting this demand today.
The auction, which includes 95 non-coking coal mines, 10 lignite mines and one coking coal mine, is an important step towards ensuring energy security, Singh said.

As per the coal ministry, the auction will be conducted online through a transparent two-stage process based on the percentage revenue share. Interested parties can access details about the mines, auction terms, timelines, and other related information on the MSTC auction platform.

Finance Minister, Nirmala Sitharaman, conducted a review of public sector banks’ (PSBs) financial health and resilience in light of the recent global financial scenario, which originated from the failure of some international banks in the US and Europe. Meeting with the Managing Directors and CEOs of PSBs, she held an open discussion on the global scenario, including the failure of the Silicon Valley Bank (SVB) and Signature Bank (SB), as well as the issues leading to the crisis in Credit Suisse.

Sitharaman urged the banks to remain vigilant about interest rate risks and regularly undertake stress tests, while emphasising that they should adhere to regulatory frameworks by focusing on risk management and diversification of deposit and asset bases. She also exhorted PSBs to use this opportunity to frame detailed crisis management and communication strategies.

The meeting, which was attended by Minister of State for Finance Bhagwat Karad, Financial Services Secretary Vivek Joshi, and other senior officials, also discussed developing and immediate external global financial stress from both short and long-term perspectives.

The chiefs of PSBs apprised Sitharaman that they follow the best corporate governance practices, adhere to regulatory norms, ensure prudent liquidity management, and focus on robust asset-liability and risk management. They also informed her that they are vigilant of developments in the global banking sector and are taking all possible steps to safeguard themselves from any potential financial shock.

Sitharaman stressed that PSBs must leverage the full potential of branches opened in International Financial Services Centres in GIFT City Gujarat to identify international opportunities, including prospects related to Persons of Indian Origin (PIOs). She also asked banks to take focused measures to attract deposits, enhance business presence in new and emerging areas like One District One Product (ODOP), e-NAM, and drones, and focus on credit outreach in states where the credit offtake is lower than the national average, particularly in the northeast and eastern parts of the country.

NGEL, a wholly owned subsidiary of NTPC Limited, has signed a Joint Venture Agreement with IOCL for setting up of renewable energy projects to meet round the clock power requirements of IOCL Refineries.

NTPC, through its wholly owned subsidiary, NGEL, has set an ambitious target of building a renewable generation portfolio of 60 GW over the next decade to aggressively pursue its green energy business.

The signing of this Joint Venture Agreement between the two Maharatna behemoths will enable NTPC Limited and Indian Oil to meet the Government of India’s Clean Energy Targets in their respective core businesses.

The HDFC-HDFC Bank merger has been granted approval by the National Company Law Tribunal (NCLT). The Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA) have given their in-principle approval to the merger. Shareholders have also given their nod to the transaction. In addition, the merger has been cleared by the stock exchanges and the competition commission.

On April 4, HDFC Bank agreed to acquire the largest domestic mortgage lender in a deal worth approximately USD 40 billion, which is being considered as the biggest transaction in India’s corporate history. This merger will result in the creation of a financial services powerhouse with a combined asset base of around Rs 18 lakh crore. The transaction is expected to be finalised in the second or third quarter of FY24, subject to obtaining regulatory approvals.

The Minister of Agriculture and Farmers Welfare recently reviewed the matter of simplifying the documentation and sanctioning process for the National Horticulture Board (NHB) schemes, in response to the demands of the farming community. After considering the recommendations of a duly constituted committee, the scheme design, documentation, and sanctioning process have been simplified. The new scheme design will be effective from 15.03.2023, and it will significantly reduce the sanction time from 6-8 months to less than 100 days. The simplified process will require minimal documentation and greatly benefit the farming community.

The NHB, operating under the Ministry of Agriculture and Farmers Welfare, provides back-ended capital investment subsidy schemes for promoting commercial horticulture and cold chain infrastructure in the country.

The salient features of the simplified scheme design include the elimination of the two-stage system of In-Principle Approval (IPA) and Grant of Clearance (GoC). Applicants can apply straightaway for Grant of Clearance to NHB after sanction of the term loan by the bank. The IPA system has been replaced with a Letter of Comfort (LoC) to facilitate the applicants to get the term loan sanctioned from the Banks/Fls for their proposed project.

Minimal documents are required for seeking LoC/GoC. The processing of LoC/ GoC application will be completely digital, including examination and sanction of applications. The platform has been augmented with the timeline monitoring systems, so that every step can be monitored as per the pre-set target timelines.

Applicants are free to apply for LoC/GoC either at AIF or NHB portal. In case the loan is sanctioned under AIF, the entire data will be captured from AIF portal through API. NHB will follow short templates for DPR and Bank appraisal note, as prepared by NHB after taking into account the template available on AIF.

After the application is submitted, an email will be sent to the applicant along with a reply/confirmation link to the financing bank. The concerned bank needs to confirm the authenticity of documents online. Based on the confirmation of documents by the bank, NHB will issue GoC. The stage of inspection of the location for GoC has been replaced with a mobile app-based self-inspection.

Queries on GoC applications, if any, will be communicated to the applicant/Bank automatically by system/email. Subsidy claim documents will also be submitted by bank/applicant online. The revised simplified process will not only shorten the timelines for sanctioning of GoC/subsidy applications, but it will also greatly help the farming community with a minimum documentation process.

The annual rate of inflation based on all India Wholesale Price Index (WPI) number eased to 3.85% (provisional) for February, 2023 (over February, 2022) against 4.73% recorded in January, 2023. As per the Government, the decline in the rate of inflation in February, 2023 was primarily due to fall in prices of crude petroleum & natural gas, non-food articles, food products, minerals, computer, electronic & optical products, chemicals & chemical products, electrical equipment and motor vehicles, trailers & semi-trailers.

The prices of food articles (0.45%) increased in February, 2023 as compared to January, 2023., while the prices of minerals (-1.37%), non-food articles (-1.73%) and crude petroleum & natural gas (-5.42%) declined in February, 2023 as compared to January, 2023.

The index for Fuel and Power increased by 1.93% to 158.8 (provisional) in February, 2023 from 155.8 (provisional) for the month of January, 2023. Prices of Mineral Oils (2.86%) and Coal (0.74%) also increased in February, 2023 as compared to January, 2023.

The Food Index increased from 171.2 in January, 2023 to 171.3 in February, 2023. The rate of inflation based on WPI Food Index decreased from 2.95% in January, 2023 to 2.76% in February, 2023.

Consumer price index based retail inflation declined to 6.44 per cent in February from 6.52 per cent in January.