Ministry of labour turns accountable & release First Annual Report of Employment - is it a hint for labour law reforms [also contains recent updates]

Ministry of Labour & Employment presents to the People of India

the First Annual Report on Employment

with the objective of generating a healthy public debate on the issue of creating quality employment with distributive justice. We solicit valuable comments and suggestions from the people on major issues highlighted in this Report specially those relating to the employment of youth, women and the disadvantaged groups.

Though the report contains most of old statistics with few recent statistics, it was good effort by the Ministry to consolidate as Ministry is accountable to labour by all means, and it is expected that there will be regular reports released to people atleast on yearly basis.  Few excerpts from the report are under:

There are three important categories of employed persons:
1. Regular Salaried/Wage Employees are those who work in others’ farm or non-farm enterprises (both household and non household) and in turn receive salary or wage on a regular basis. This category includes not only persons getting time wage but also persons receiving piece wage or salary and paid apprentices, both full time and part-time.
2. Casual Wage Labour: A person who is casually engaged in others’ farm or non-farm enterprises (both household and non-household) and, who in return, receives wages according to the terms of the daily or periodic work contract.
3. Self Employed: Persons who operate their own farm or non-farm enterprises or are engaged independently in a profession or trade on their own account or with one or a few partners are deemed to be self-employed. Self-employed persons are further categorised as follows:
a) Own-account Workers: Those self-employed persons who operate their enterprises on their own account or with one or a few partners and who, during the reference period, by and large, run their enterprise without hiring any labour.
b) Employers: Those self-employed persons who work on their own account or with one or a few partners and, who, by and large, run their enterprise by hiring labour.
c) Helpers in household enterprises: Those self-employed persons (mostly family members) who are engaged in their household enterprises, working full or part time and who do not receive any regular salary or wages in return for the work performed. They do not run the household enterprise on their own but assist the related person living in the same household in running the household enterprise

 

Recent Amendments in Labour Laws: Promoting Equity and Welfare

• The Payment of Wages Act, 1936 amended to enhance the wage ceiling for its applicability. It is presently fixed at Rs. 10,000/- per month.
• The Payment of Bonus Act, 1965 amended to enhance the eligibility limit from Rs. 3,500/- per month to Rs. 10,000/- and calculation ceiling from Rs. 2,500 to Rs. 3,500/- per month while making employees employed through contractors on building operations eligible for payment of bonus under the Act.
• The Apprentices Act, 1961 amended, inter alia, to provide for reservation for other Backward Classes.
• The Maternity Benefit Act, 1961 amended to enhance the medical bonus from Rs. 250/- to Rs. 2,500/-and also empowering the Central Government to increase it from time to time before every three years, by way of notification in the Official Gazette, subject to a maximum of Rs. 20,000/-.
• The Employees State Insurance Act, 1948 amended to improve the quality of delivery of benefits under the scheme and also to enable ESI infrastructure to be used to provide health care to workers of the unorganised sector.
• The Payment of Gratuity Act, 1972 amended for raising the ceiling of Gratuity for employees in the private sector to Rs. 10 lakh from Rs. 3.5 lakh.
• The Plantations Labour Act, 1951 amended to provide safety and occupational health care to plantations workers.

 

VISION FOR SKILL DEVELOPMENT IN INDIA

Against the various challenges, a National Skill Development Policy has been formulated in February, 2009 which targets creating 500 million skilled people by 2022 with the following vision: Skill development should harness inclusivity and reduce economic and social divisions among Indian workforce particularly across rural-urban, male-female, organized- unorganized and traditional/ contemporary. Matching the emerging demands for skills across various industries and economic enterprises. Evolving National Vocational Qualification Framework comparable with international standards. Developing standard certification system by recognizing and including quality skills acquired through any informal system of learning. Greater and more active role for workers‟ organizations, industry, civil society, Panchayati Raj Institutions and other professional bodies. Greater reduction of poverty through enhanced earnings of skilled workers.

Download the First Report of Employment (Report to People)

Download FEMA Master Circulars on FDI/ODI, etc...issued by RBI & updated on 1st July of every year 2010 with foreign exchange law of India up to date

 Note: Master Circulars are a one-point reference of instructions issued by the Reserve Bank of India on a particular subject between July-June. These are issued on July 1 every year and automatically expire on June 30 next year. You can access the Master Circulars issued in previous years by using the Archives. For printing of these circulars please use the PDF version.

Foreign Exchange
Jul 01, 2010
	Master Circular on Establishment of Liaison / Branch / Project Offices in India by Foreign Entities	110 kb
	Master Circular on Acquisition and Transfer of Immovable Property in India by NRIs/PIOs/Foreign Nationals of Non-Indian Origin	97 kb
	Master Circular on Import of Goods and Services	298 kb
	Master Circular on Risk Management and Inter-Bank Dealings	346 kb
	Master Circular on Foreign Investment in India	368 kb
	Master Circular on Memorandum of Instructions governing money changing activities	324 kb
	Master Circular on External Commercial Borrowings and Trade Credits	220 kb
	Master Circular on Export of Goods and Services	351 kb
	Master Circular on Memorandum of Instructions for Opening and Maintenance of Rupee/ Foreign Currency Vostro Accounts of Non-resident Exchange Houses	217 kb
	Master Circular on Money Transfer Service Scheme	123 kb
	Master Circular on Compounding of Contraventions under FEMA, 1999	65 kb
	Master Circular on Direct Investment by Residents in Joint Venture (JV) /Wholly Owned Subsidiary (WOS) Abroad	362 kb
	Master Circular on Non-Resident Ordinary Rupee (NRO) Account	95 kb
	Master Circular on Remittance Facilities for Non-Resident Indians /Persons of Indian Origin / Foreign Nationals	80 kb
	Master Circular on Miscellaneous Remittances from India – Facilities for Residents	266 kb

  

Source: Click here to download updated RBI Master Circular

Life insurance benefits to Provident Fund employees increased to Rs.1lakh under Deposit linked Insurance scheme (EDLI)

EDLI Scheme amended:  In effect, on death during employment, Family member/nominee will get the following:

• if Average balance is more than Rs.50,000/-
• then Insurance Amount = Rs. 50,000/- + 40% (Excess), subject to a maximum of Rs. 1,00,000/-

Paragraph 22 of Employees Deposit Linked Insurance Scheme, 1974

22.       Scales of assurance benefit and the minimum average balance to be maintained by an employee. – (1)  On the death of an employee, who is a member of the Fund or of a provident fund exempted under section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations be paid an amount, equal to the average  balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs.50,000 (erstwhile limit was Rs.25,000/-), the amount payable shall be Rs.50,000 (erstwhile Rs.25,000/-)plus 40% (earlier limit was 25%) of the amount in excess of Rs.50,000 (erstwhile Rs.25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).

Download Notification No. GSR 523(E) dated 18th June 2010.

Revised monthly wage ceiling limit of 50% of Rs.4000 increased to Rs.8000-Employees Compensation Act for maximum compensation calculation

As you are aware, Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals, the said amendment which has removed the ceiling of monthly wage limit of Rs.4,000 for the purpose of calculation of Maximum Compensation under the Act is now amended again.

 

Now, a new monthly wage ceiling limit of Rs. 8000 is introduced for the purpose of calculation of 50% of it during computation of Maximum compensation under the Act.  Hence, the maximum compensation can go UPTO 50% of 8000 which comes to Rs. 4000/- that shall be multiplied by Age factor. Thus, effectively it was erstwhile 50% of Rs.4000 and now it is 50% of Rs.8000/-. This amendment is notified vide Central Government Notification No. S.O. 1258(E) vide Ministry of Labour & Employment dated 31st May 2010.

Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs: Notification in Official Gazette as on 24th May 2010

As you are aware Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing Rs.3,50,000

The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18^th May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10 lakhs.

The said Act shall come into force with effect from 24th May 2010 as per the Notification S.O. 1217(E) published in the Official Gazette.

Gratuity Amendment Act 2010 is notified in Official Gazette with Rs.10 lakhs as limit replacing Rs.3,50,000

The Payment of Gratuity (Amendment) Act, 2010 is notified in Official Gazette on 18^th May 2010, amending the Payment of Gratuity Act, 1972 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10 lakhs. Whereas the date of effect of the revised ceiling may be decided by the Central Government through Official Gazette as per THE PAYMENT OF GRATUITY (AMENDMENT) ACT 2010

Notification in Effective Date for Revision of Gratuity Amendment Act to Rs. 10 lakhs: Notification in Official Gazette as on 24th May 2010

Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals

Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the definition of employee includes clerical employees & casual employees also.  Further,

• the minimum compensation limits on no-fault basis are increased to Rs.1,20,000 & 1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
• under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is removed. hence, the maximum compensation can go UPTO 50% of Total Monthly Wages now, irrespective of limits [now a new ceiling of Rs.8000/- is introduced].
• Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
• The employee shall be reimbursed the actual (full) medical expenditure incurred by him for treatment of injuries caused during the course of employment.
• Time limit for disposal of cases relating to compensation introduced- The Commissioner shall dispose of the matter relating to compensation within 3 months of reference.

Old definition: "workman" means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is….

New definition: Section 2

“(dd) “employee” means a person, who is—

(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989), not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or

(ii) (a) a master, seaman or other members of the crew of a ship,

(b) a captain or other member of the crew of an aircraft,

(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle.

(d) a person recruited for work abroad by a company,

and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or

(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been” injured shall, where the employee is dead, include a reference to his dependants or any of them;’;

Source: The Workmen’s Compensation (Amendment) Act, 2009

Employees definition under Gratuity Act amended to included all types of works irrespective of salary limits

The Payment of Gratuity Act, 1972 definition of the term “employee” under Section 2 got widened.  It is no more the old definition of persons employed in administrative or managerial capacity.

 

The new definition is as follows,

Employees means any persons [NOT being an Apprentice] employed for wages in any kind of work (manual or otherwise) or in connection with work of factory, mine, plantation, oilfield, railway company, port or other establishment.

So, even teachers are eligible for gratuity now overriding the famous Ahmedabad Private Primary Teachers Association case.

Source: Payment of Gratuity (Amendment) Act, 2009

Revised ESI limit Rs.15000 (not Rs.10000) for employees/workers w.e.f 1st May 2010 - as amended by the Act [extended]

Ministry of Labour & Employment vide G.S.R. 394(E), dated 20th April, 2010 has made Employees State Insurance Act, 1948 read with ESI (Central) (Amendment) Rules, 2010 applicable to employees whose wages does not exceed Rs. 15,000/- (Fifteen Thousand Only).

 

The said notification shall come into effect from 1st May 2010.

USD 3000 foreign visits abroad, USD 5000 to Iran/Iraq, Libya, Russia & Republics of Commonwealth of Independent States - RBI FEMA currency limits

Release of Foreign Exchange for Visits Abroad – Currency Component
Attention of Authorised Persons in foreign exchange is invited to A.P.(DIR Series) Circular No. 19 dated October 30, 2000 and A.P. (DIR Series) Circular No.11 [ A.P. ( F.L. Series ) Circular No.1 ] dated November 13, 2001, in terms of which Authorised Dealers and Full Fledged Money Changers are permitted to sell foreign exchange in the form of foreign currency notes and coins, up to USD 2,000 [increased to USD 3000] or its equivalent, to the travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States, without the prior permission from the Reserve Bank (RBI).

Authorised Dealers and Full Fledged Money Changers may, as hitherto, continue to sell foreign exchange in the form of foreign currency notes and coins up to USD 5,000 or its equivalent to the travellers proceeding to Iraq or Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States.

Source: RBI/2009-10/446 A.P. (DIR Series) Circular No. 50 May 4, 2010 A.P. (FL Series) Circular No. 7 dated 4th May 2010

New definition of PIO includes Mother & Grandmother for FEMA, RBI notification as per Immovable Property Second Amendment 2009

Purchase of Immovable Property in India by Persons of Indian Origin (PIOs) – Amendment of the definition

The term PIO is defined under Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India), Regulations, 2000.

The definition is partially amended by Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) (Second Amendment) Regulations, 2009 to include Mother & Grandmother.

Now, PIO means:

• an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan),
• (i) who at any time, held an Indian Passport or
• (ii) who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955.

Source: A.P. (DIR Series) Circular No.25 dated 10th January 2o1o

FIU-IND transaction reporting under Money Laundering for Rs.10 lakh or Rs.50,000 as per Amendment Rules, 2009

Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Amendment Rules, 2009 - Obligation of banks/Financial institutions

As you are aware, Prevention of Money-laundering Act (PMLA), 2002 read with Rules is amended by Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries)  Amendment Rules, 2009 vide Records to be maintained from transaction, Non profit organisation included, Suspicious transaction defined in amendment of Money Laundering Rules 2009.

Accordingly, in view of amendments to the above Rules, banks / financial institutions are required to :
i) Maintain proper record of all transactions involving receipts by non- profit organizations of value more than Rs.10 lakh or its equivalent in foreign currency and to forward a report to FIU-IND of all such transactions in the prescribed format every month by the 15th of the succeeding month.
ii) In case of transactions carried out by a non-account based customer, that is a walk-in customer, where the amount of transaction is equal to or exceeds Rs.50,000/-, whether conducted as a single transaction or several transactions that appear to be connected, the customer's identity and address should be verified. Further, if a bank has reason to believe that a customer is intentionally structuring a transaction into a series of transactions below the threshold of Rs.50,000/- the bank should verify identity and address of the customer and also consider filing a suspicious transaction report (STR) to FIU-IND.

Source: DBOD. AML.BC. No. 68 /14.01.001/2009-10 dated 12th January 2010

DIPP Consolidated FDI Policy Circular 1 of 2010 wef 1st April and all Press Notes repealed, the legal edifice is built on FEMA RBI notifications (Master)

The system of periodic consolidation and updation of Indian Foreign Direct investment (FDI) Policy issued by Department of Industrial Policy & Promotion (DIPP) under Ministry of Commerce & Industry is introduced as an investor friendly measure (as assured by Finance Ministry in his recent Budget Speech).  The draft master Press Note was released for public comments which can be read from Download all Press Notes from 1991 to 2009 issued by DIPP as it proposes to consolidate PNs in 2010 to release a comprehensive FDI policy in India like Master Circulars with a sunset clause of 6 months

Now, it has been decided that from now onwards a consolidated circular (Master Press Notes or Consolidated FDI Policy or Circular 1 of 2010) would be issued every 6 months to update the FDI policy. This consolidated circular will, therefore, be superseded by a circular to be issued on September 30, 2010. (like you wait for RBI Master Circulars on 1st July every year).  While this circular consolidates FDI Policy Framework, the legal edifice is built on notifications issued by RBI under FEMA.

Press Notes are NOT applicable:

All earlier Press Notes/Press Releases/Clarifications on FDI issued by DIPP which were in force and effective as on March 31, 2010 stand rescinded as on March 31, 2010. The present circular consolidates and subsumes all such/these Press Notes/Press Releases/Clarifications as on March 31, 2010.  Enjoy reading the last press note, it won’t kill you any more.  Its just a single document hereon (making the life of a Corporate Legal Consultant easier and interpretations tougher).

Consolidated FDI Policy is APPLICABLE:

With effect from 1st April 2010, the Consolidated FDI Policy will be applicable.  It has the following important categories,

1. ORIGIN, TYPE, ELIGIBILITY, CONDITIONS AND ISSUE/TRANSFER OF INVESTMENT
2. CALCULATION, ENTRY ROUTE, CAPS, ENTRY CONDITIONS ETC. OF INVESTMENT
3. POLICY ON ROUTE, CAPS AND ENTRY CONDITIONS
4. AGRICULTURE
5. INDUSTRY, MINING, MANUFACTURING
6. SERVICES SECTOR
7. REMITTANCE, REPORTING AND VIOLATION/COMPOUNDING
8. ANNEXURES

• Annex-1 Form FC-GPR
• Annex-2 Terms and conditions for transfer of capital instruments from resident to non-resident and vice-versa
• Annex-3 Documents to be submitted by a person resident in India for transfer of shares to a person resident outside India by way of gift
• Annex-4 Definition of "relative" as given in Section 6 of Companies Act, 1956
• Annex-5 Report by the Indian company receiving amount of consideration for issue of shares / convertible debentures under the FDI scheme
• Annex-6 Know Your Customer (KYC) Form in respect of the non-resident investor
• Annex-7 Form FC-TRS
• Annex-8 Form DR
• Annex-9 Form DR – Quarterly

Definitions

CAPITAL
Means
Compulsorily, Mandatorily and Fully convertible
Preference Shares	Debenture Shares
and includes
DR’S	FCCB’s

Any many more interesting definitions, concepts, provisions, etc…

Download Circular 1 of 2010 on FDI Policy

Changes in Automatic Route Sectoral Cap under FEMA FIPB & treatment of additional foreign investments - Press Note 1 2010

Government Route (ie) prior approval of Government of India shall be considered by Foreign Investment Promotion Board (FIPB), under Department of Economic Affairs (DEA), Ministry of Finance.

Approval of FIPB/CCEA:

• FIPB can recommend on proposals for approval of Ministry of Finance if total foreign equity inflow is UPTO Rs.1200 crore.
• The FIPB Secretariat in DEA will process the recommendations of FIPB to obtain the approval of Minister of Finance and Cabinet Committee on Economic Affairs (CCEA) for total foreign equity inflow of more than Rs. 1200 crore.
• The CCEA would also consider the proposals which may be referred to it by the FIPB/ the Minister of Finance.

Additional Foreign Investment into Same Entity:

It has also been decided that companies may not require fresh prior approval of the Government i.e. Minister in-charge of FIPB/CCEA for bringing in additional foreign investment into the same entity, in the following cases:

1. Cases which earlier required prior approval of FIPB/Cabinet Committee on Foreign Investment (CCFI)/CCEA and who had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route;
2. Cases which had sectoral caps earlier and who had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such caps were removed/increased and the activities placed under automatic route; provided that such additional investment alongwith the initial/original investment does not exceed the sectoral caps;
3. Cases of additional foreign investment into the same entity where prior approval of FIPB/CCFIICCEA had been obtained earlier for the initial/original foreign investment due to requirements of Press Note 18/1998 or Press Note 1 of 2005 and prior approval of the Government under the FDI policy is not required for any other reason/purpose.

Thats it, this is the final and last of the classes of Press Note series.  This subsequently will be superceded by Master Press Notes which will be released for every 6 months.

Source: Press Note 1 of 2010

ODI under Automatic route for participating in Submarine Cable Systems consortium subject to FEMA online filing & other conditions

In general, Overseas Direct Investments (ODI) shall not 400% cent of the net worth of the Indian company, under the automatic route.

Now, Indian companies are allowed to participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under the automatic route on satisfying the following conditions,

1. Licence from the Department of Telecommunication, Ministry of Telecommunication & Information Technology to establish, install, operate and maintain International Long Distance Services (ILDS).
2. Certified copy of the Board Resolution approving such investment.
3. Report the same as per A.P. (DIR Series) Circular No. 68 dated June 1, 2007.
4. Comply with Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004.
5. Make Online filing for allotment of Unique Identification Number as per A.P. (DIR Series) Circular No. 36 dated February 24, 2010 which are detailed below,

• Online Filing: The new system would enable on-line generation of the Unique Identification Number (UIN), acknowledgment of remittance/s and filing of the Annual Performance Reports (APRs) and easy accessibility to data at the AD level for reference purposes.
  Transactions in respect of Mutual Funds, Portfolio Investment Scheme (PIS) and Employees Stock Options Scheme (ESOPS) are also required to be reported on-line in the Overseas Investment Application.
• FEMA Online Website: The on-line reporting would be required to be made by the Centralized Unit/Nodal Office of AD Category - I banks. The Overseas Investment Application would be hosted on the Reserve Bank's Secured Internet Website (SIW) https://secweb.rbi.org.in and a link would be made available for accessing the Application on the main page of the website.
• Physical Filing: The application for overseas investment under the approval route would continue to be submitted to the Reserve Bank in physical form as hitherto, in addition to the on-line reporting of Part I as contemplated above, for approval purposes. Further, the transactions relating to closure / disinvestment/ winding up/ voluntary liquidation of the overseas Joint Ventures/Wholly Owned Subsidiaries (JVs / WOSs) under the automatic and approval routes (Part IV of form ODI) would continue to be submitted to the Reserve Bank in physical form as is being done at present.
  

Source: Liberalisation of Overseas Direct Investment as per A.P. (DIR Series) Circular No.45 dated 1st April 2010.

Understand when lesser penalty of 100%,50% & 30% may be levied under Competition Act Regulations

Understand CCI (Lesser Penalty)

Regulations, 2009

Regulation 2(1)(b): “applicant” means an enterprise, who is or was a member of a cartel and submits an application as per Schedule for lesser penalty to Competition Commission of India (CCI);

Regulation 2(1)(h): “priority status” means the position of the applicant marked for giving the benefit of lesser penalty in the queue of the applicants;

Regulation 2(1)(i): “vital disclosure” means full and true disclosure of information or evidence by the applicant to CCI, which is sufficient to enable CCI to form a prima-facie opinion about the existence of a cartel or which helps to establish the contravention of the provisions of section 3 of the Act.

Regulation 3. Conditions for lesser penalty. – Applicant shall,

(a) cease to have further participation in the cartel from the time of its DISCLOSURE;

(b) provide VITAL DISCLOSURE in respect of violation u/s.3 of the Act;

(c) provide all RELEVANT INFORMATION, documents and evidence as may be required by CCI;

(d) CO-OPERATE genuinely, fully, continuously and expeditiously throughout the investigation and other proceedings before the CCI; and

(e) NOT conceal, destroy, manipulate or remove the relevant documents in any manner, that may contribute to the establishment of a cartel.

The discretion of CCI, in regard to reduction in monetary penalty under these regulations, shall be exercised having due regard to –

(a) the STAGE at which the applicant comes forward with the disclosure;

(b) the EVIDENCE already in possession of the Commission;

(c) the QUALITY of the information provided by the applicant; and

(d) the entire FACTS and circumstances of the case.

Regulation 4. Grant of lesser penalty. – CCI may decide in the following manner,

(a) The applicant may be granted benefit of reduction in penalty [ONLY IF no other applicant has been granted such benefit by CCI] UPTO 100%, if the applicant is the first to make a vital disclosure,

• enabling CCI to form a prima-facie opinion regarding the existence of a cartel and CCI did not, at the time of application, have sufficient evidence to form such an opinion:
• in a matter under investigation and CCI, or the Director General did not, at the time of application, have sufficient evidence to establish such a contravention:
• no other applicant has been granted such benefit by CCI.

(b) Any subsequent applicant may also be granted benefit of reduction in penalty, if CCI opines that it may provide significant ADDED VALUE to the evidence. “Added value” means the extent to which the evidence provided enhances the ability of CCI

or the Director General, to establish CARTEL as alleged. It shall be in the

following order of PRIORITY STATUS:

(i) if the applicant is marked as second, reduction may be UPTO 50% of full penalty;

(ii) the applicant is marked as third, reduction may be UPTO 30% of full penalty;

Regulation 5. Procedure for grant of lesser penalty. –

(1) an application with material information as per the Schedule, or may contact, orally or through e-mail or fax, the designated authority for furnishing the information (which may be followed by written application subsequently within 15 days).

(2) WITHIN 3 working days, the designated authority shall put the matter before CCI.

(3) CCI shall mark priority status of applicant.

(4) Designated authority shall convey the same to the applicant either on telephone, or through e-mail or fax and shall provide the written acknowledgement.

(5) The evidence will be evaluated and only then the next applicant shall be considered by CCI.

(6) CCI may accept the application on satisfaction or reject the same for want of information after giving an opportunity of being heard.

Source: No. L-3(4)/Reg-L.P./2009-10/CCI dated 13^th August 2009

IFC, the new NBFC under ECB approval route upto 50% NOF subject to RBI compliances & hedging full currency risk

Why all this?

In view of the thrust given to the development of the infrastructure sector, a separate category of NBFCs viz. Infrastructure Finance Companies (IFCs) has been introduced in terms of the guidelines contained in DNBS Notification.  In view of the new category of NBFCs being in place, the dispensation provided in “Old Position” below is not considered necessary.

New Position

Accordingly, proposals for External Commercial Borrowings (ECBs) by the IFCs, which have been classified as such by the Reserve Bank, for on-lending to the infrastructure sector, as defined in the extant ECB policy may be considered under the approval route, subject to their complying with the following conditions:

i) compliance with the norms prescribed in the aforesaid DNBS Circular dated February 12, 2010;
ii) hedging of the currency risk in full; and
iii) the total outstanding ECBs including the proposed ECB not exceeding 50 % of the Owned Funds.

Old Position

As per the extant ECB policy, Non-Banking Finance Companies (NBFCs), which are exclusively engaged in financing of infrastructure sector, are permitted to avail of ECB from the recognized lender category including international banks, under the approval route, for on- lending to the infrastructure sector, as defined in the extant ECB policy.

Source: A.P. (DIR Series) Circular No.39 dated 2nd March 2010

To know all about ECB notifications, visit http://yehseeyes.blogspot.com/search?q=ECB

New Infrastructure sector definition for ECB to include Cold storage at agricultural & allied levels

Why all this?

As announced in para 54 of the Union Budget for the Year 2010-11, it has been decided to expand the definition of infrastructure sector for the purposes of External Commercial Borrowings (ECB).

New Definition of “Infrastructure Sector”

The infrastructure sector would henceforth be defined to include (i) power, (ii) telecommunication, (iii) railways, (iv) road including bridges, (v) sea port and airport, (vi) industrial parks, (vii) urban infrastructure (water supply, sanitation and sewage projects), (viii) mining, exploration and refining and (ix) cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat.

Old Definition of “Infrastructure Sector”

As per the extant ECB policy, infrastructure sector is defined as (i) power, (ii) telecommunication, (iii) railways, (iv) road including bridges, (v) sea port and airport, (vi) industrial parks, (vii) urban infrastructure (water supply, sanitation and sewage projects) and (viii) mining, exploration and refining.

Source: A.P. (DIR Series) Circular No.38 dated 2nd March 2010

To know all about ECB, visit http://yehseeyes.blogspot.com/search?q=ECB

Rs.7,500 Currency Notes per resident individual travelling abroad can take outside or bring inside India, RBI FEMA limit amendment/extended

Export and Import of Currency
Attention of Authorised Persons is invited to clauses (a) and (c) of sub-regulation (1) of Regulation 3 of Foreign Exchange Management (Export and Import of Currency) Regulations, 2000, notified vide Notification No. FEMA 6 /RB-2000 dated May 3, 2000, in terms of which, any person resident in India may take outside India or having gone out of India on a temporary visit, may bring into India (other than to and from Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.5,000 per person.
2. As part of providing greater flexibility to the resident individuals travelling abroad, the existing limits, mentioned above, have been enhanced to Rs. 7,500 per person. The Government of India, has notified vide G.S.R.548 (E) in the Gazette of India dated July 24, 2009 [Notification No.FEMA.195/2009-RB dated July 7, 2009] (copy annexed), an amendment to clauses (a) and (c) of sub-regulation (1) of Regulation 3 of the Notification referred to above.
3. Accordingly, any person resident in India,
i) may take outside India (other than to Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.7,500 (Rupees seven thousand five hundred only) per person; and
ii) who had gone out of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.7,500 (Rupees seven thousand five hundred only) per person.

Source: RBI/2009-10/297 A. P. (DIR Series) Circular No. 30 & A.P. (FL/ RL Series) Circular No.06 dated 1st February 2010.

Download all Press Notes from 1991 to 2009 issued by DIPP as it proposes to consolidate PNs in 2010 to release a comprehensive FDI policy in India like Master Circulars with a sunset clause of 6 months

Draft Master Press Note with FDI Regulatory Framework

The Legal basis: Foreign Direct Investments (FDI) by non-resident (NRI) in resident entities through transfer or issue of security to person resident outside India (PROI) is a ‘Capital account transaction’ and Government of India and Reserve bank of India (RBI) regulate this under the FEMA 1999 and its various regulations. Keeping in view the current requirements, the Government comes up from time to time with new regulation, amends/changes in existing one through order/allied rules, Press Notes, etc. . The regulatory framework over a period of time thus consists of Acts, Regulations, Press Notes, Press Releases, Clarifications, etc.

This draft Press Note consolidates into one document all the prior regulations on FDI and reflects the current ‘regulatory framework’ on FDI. It is clarified that this is a consolidation/compilation and comprehensive listing of most matters on FDI and is not intended to make changes in the extant regulations. While attempt has been made to deal with the subject comprehensively, if some aspect(s) has been left out then that will continue to be dealt in the current way where it is listed.

It is the intent and objective of the Government to have a regulatory framework which is transparent, predictable, understandable, simple and clear to reduce the regulatory burden and promote foreign direct investment. The new system of continuous consolidation and updation is primarily evinced as a measure of investor and investment friendliness.

This Press Note will have a sunset clause of 6 months and will automatically lapse on 30th September, 2010. A new press Note on Regulatory Framework would be issued every six months which will incorporate and reflect all the changes in the regulations during the last intervening period of 6 months. Thus the Government will issue Press Note on FDI Regulatory Framework twice a year in April and October which would be the current regulatory framework on that date.

All earlier Press Notes on FDI issued by Department of Industrial Policy and Promotion (DIPP), Government of India stand rescinded.

Notwithstanding the rescindment of earlier Press Notes, anything done or any action taken or purported to have been done or taken under the resinded Press Notes shall in so far as it is not inconsistent with this Press Note be deemed to have been done or taken under the corresponding provisions of this Press Note.

Download all Press Notes issued by DIPP from 1991 to 2009 here