QBiz: Nod for 49% FDI in Air India; PM Modi and Economists Meet
Top business stories of the day.
1. Govt Liberalizes FDI Regime, Nod for 49% Foreign Investment in Air India
Burnishing its reform credentials ahead of Prime Minister Narendra Modi’s hard-sell of the India growth story at the World Economic Forum (WEF) in Davos, later this month, the cabinet on Wednesday unveiled measures to liberalise the foreign direct investment (FDI) regime in aviation, single-brand retail, power exchanges and real estate broking.
The government allowed foreign airlines to buy a stake of up to 49 percent in Air India with prior government approval ahead of the state-owned airline’s proposed privatisation. Existing rules allow foreign airlines to own as much as 49 percent in private Indian airlines, but not in Air India.
2. SC Asks JAL to Submit Details of Its Ongoing Housing Projects
The Supreme Court, on Wednesday, directed realtor Jaiprakash Associate Limited (JAL) to give details of its ongoing housing projects in the entire country while reiterating its direction that its directors shall not alienate their personal properties.
A bench headed by Chief Justice Dipak Misra also directed amicus curie Pawan Shree Agrawal to set up a portal to take note of the grievances of the home buyers of JAL. The bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said it would decide at a later stage the application of Reserve Bank of India (RBI) seeking its nod to file insolvency proceedings before the National Company Law Tribunal (NCLT) against the promoter company JAL.
3. 100% FDI in Single-Brand Retail via Automatic Route Gets Cabinet Nod
The Union cabinet on Wednesday allowed 100% foreign direct investment (FDI) in single-brand retail without prior government approval and liberalised local sourcing norms— steps that could benefit companies like Swedish furniture retailer IKEA of Sweden AB and fashion house Hennes and Mauritz AB (H&M).
Although 100% FDI is already permitted in single-brand retail, only up to 49% was allowed through the so-called automatic route and investment above that needed government approval. Wednesday’s decision smoothens the way for new entrants to start retail operations in the country.
4. PM Narendra Modi-Economists Meet: Job, Farm, Manufacturing, Exports Focus Areas
Leading economists have batted for maintaining fiscal discipline and aggressive disinvestment with a focus on development and sale of assets like ports to increase revenue. They also suggested steps to boost farm income, manufacturing and exports which can lead to employment generation.
At an over four-hour meeting with Prime Minister Narendra Modi, ministers and bureaucrats on Wednesday, the 42-odd experts suggested short-term and long-term measures, including need for labour reforms, to the government to put the economy on high growth trajectory, a senior government official told ET.
(Source: The Economic Times)
5. Satyam Case: SEBI Bars Price Waterhouse Entities From Issuing Audit Certificates for 2 Years
Nine years after sending the first notice to Price Waterhouse for anomalies in auditing the books of scam-hit erstwhile Satyam Computers System, the market regulator SEBI today barred its network entities from issuing audit certificates to any listed company in India for two years. It also ordered disgorgement of over Rs 13 crore wrongful gains from the audit major and its two erstwhile partners who worked on the IT major’s accounts.
In a 108-page order posted on its website, the markets regulator imposed a two-year ban on “entities or firms practicing as chartered accountants in India under the brand and banner of Price Waterhouse from directly or indirectly issuing any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with SEBI.”
6. India to Be Fastest Growing Economy Again in 2018: World Bank
After conceding its position as the fastest growing major economy to China for a year in 2017, India is likely to reclaim the position in 2018, with growth expected to accelerate to 7.3% in the year, according to the World Bank’s Global Economic Prospects report released on Wednesday.
The report projected China’s economic growth to slow down to 6.4% in 2018 from 6.8% in 2017. The World Bank also revised India’s growth estimate for 2017 to 6.7% from 7% projected in October, blaming short-term disruptions caused by the newly introduced goods and services tax (GST) and a softer-than-envisioned recovery in private investment.
7. AirAsia India May Soon Go Public: Tony Fernandes
AirAsia India may go public soon and will seek board approval to hire a banker to initiate the process, founder Tony Fernandes said on Twitter, on Wednesday morning.
“Not far from 20 planes and a potential IPO. AirAsia will be seeking approval at the next AirAsia India board to pick a banker to start prelim (preliminary) process. Very valuable asset with huge growth potential,” Fernandes said in a series of tweets.
AirAsia India, which started operations in June 2014, has a 4% domestic market share, with a fleet of 14 Airbus A320 aircraft, and competes with budget airlines like IndiGo and SpiceJet.
8. Mistry Demands Proportionate Board Representation at Tata Sons
Ousted Tata Sons chairman Cyrus Mistry, on Wednesday, sought that his Shapoorji Pallonji Group, the single largest shareholder in Tata Sons with over 18 percent ownership, be given board representation proportionate to its holdings.
At the ongoing hearing of two petitions filed by Mistry family firms at the National Company Law Tribunal (NCLT) here, the SP group put forth its demand besides others "to put an end to acts of oppression and mismanagement of Tata Sons".
9. Buffett Elevates Abel or Jain as Likely Successor With New Roles
Warren Buffett finally confirmed what many investors have already guessed about who will succeed him as chief executive officer of Berkshire Hathaway Inc, the sprawling conglomerate he’s built over the past five decades.
In naming two senior executives – Ajit Jain and Greg Abel – to the company’s board and giving them each responsibility for large swaths of Berkshire’s businesses, he positioned one of the two men to probably be his replacement.
(The Quint is available on Telegram. For handpicked stories every day, subscribe to us on Telegram)
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.