Daily Financial News Analysis – 9th Nov’20 – Free PDF Download

Invest in India

• Ravi Shankar Prasad: India has attracted a number of Apple’s vendors to invest in the country during the pandemic
• Eight-nine companies from the Apple ecosystem have come to India
• India wants globally competitive companies to come here
• Global smartphone manufacturers had committed investments of close to $1.5 billion (₹ 1.13 lakh crore) in local production
• This will result in smartphones worth $140 billion being exported in the next five years
• India has come out with a very robust data protection law after the widest consultation possible
• He said the government was fine with data being stored outside India as long as it was done with the consent of the Indian people.
• The minister said AI could contribute up to $500 billion (over ₹37 lakh crore) to India’s GDP by 2025 but emphasised that innovation in the field must supplement human mind and not “overtake” it, while being inclusive.
• The Haryana government’s decision to reserve 75% of private sector jobs that pay less than ₹50,000/month

Haryana – Private Job Reservation

• Haryana is thriving manufacturing and service sector hubs
• This law by Haryana Govt can kill off industrial and economic growth
• This reservation prevents industry from hiring best talent for a job vacancy
• Companies will have to spend time and energy in verifying local claim
• Further, the law calls for tedious compliance requirements and gives civil servants extraordinary discretionary powers to exempt a company’s hiring from the ‘vocal for local’ quota mandate.
• Gurugram’s thriving IT and IT-enabled services industries are likely to migrate to Greater Noida or even Pune, if the law is enforced.
• Quota for locals violates the spirit of the Constitution of India that seeks to build a unified nation out of the land’s extreme diversity.
• It can spawn similar moves elsewhere, fragmenting the polity and the economy further.
• The quota for locals violates Article 14’s guarantee of equality
• Article 15’s guarantee against non-discrimination based on place of birth
• Article 19’s guarantee of the right to work anywhere in the country
• The Haryana government must withdraw the Bill.
• If necessary, the governor must be advised by the President’s office to refer the Bill to the Centre.
• If not, the Centre must advise the President to quash the Bill.

Supply-chain partnership

• India, Japan and Australia are planning to widen the ambit of their proposed supply-chain partnership to include more like-minded countries in the Indo-Pacific region.
• ASEAN countries would be good candidates to reach out to next for bolstering this partnership

• The idea is to reduce the reliance on China for supply of goods and services.
• The initiative, currently limited to the government-to-government level, will also involve industries as well as academia of these nations.
• 10 key sectors: petroleum and petrochemicals, automobiles, steel, pharmaceuticals, textiles and garments, marine products, financial services, IT services, tourism and travel services, and skill development

Panel to review measures to boost investment

• Empowered group of secretaries for investment (EGoS)
• Chaired by Cabinet secretary Rajiv Gauba
• To expand production linked incentive (PLI) scheme to more sectors to generate foreign and domestic investment
• After PLI scheme was notified on April 1, ministry of electronics and information technology (MeitY) has approved 16 applications worth Rs 35,541 crore for electronics manufacturing in the country.
• Under the scheme, an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, is planned for eligible companies, for a period of five years subsequent to the base year as defined.
• In July this year, the Centre has also notified four production-linked incentive and pharmaceutical infrastructure schemes entailing a combined budgetary outgo of about Rs 12,000 crore over multiple years, including for domestic manufacturing of drug intermediates (DIs) and active pharmaceutical ingredients (APIs).
• Under the scheme, financial incentive will be provided on sales of 41 identified products for six years.
• After consultation with departments of revenue and expenditure, Niti Aayog has identified ten new sectors for extending the PLI scheme.
• On June 3, with a view to support, facilitate and provide investor friendly ecosystem to those investing in India, the Union Cabinet has approved constitution of EGoS for investment.
• Its objective is to bring synergies and ensure timely clearances from different departments and ministries;
• To attract increased investments into India and provide investment support and facilitation to global investors
• To facilitate investments of top investors in a targeted manner and to usher policy stability and consistency in the overall investment environment

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