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Finance ministry sets up panel to study foreign capital flows
The Union ministry of finance has set up a working group to study and suggest changes to the legal and regulatory framework on foreign portfolio investments. The committee will also study rules and regulations relating to foreign institutional investors (FIIs), non-resident Indians, and venture capital and private equity investors.
The committee will be headed by U.K. Sinha, chairman and managing director, UTI Asset Management Ltd, the fourth largest mutual fund manager in India. Ravi Narain, chairman of National Stock Exchange Ltd, economist Ajay Shah, finance ministry official K.P. Krishnan and corporate lawyers Bahram Vakil and Somasekar Sundaresan will be part of the 16-member group.
The group will review and suggest rationalization of policy on foreign inflows with a view to encourage foreign investment and reduce hurdles while maintaining know your customer norms. It will identify challenges in meeting financing needs of the Indian economy through foreign investments.
The group will also study participatory notes and re-examine the taxation of transactions through securities transaction tax and stamp duty.
Currently, different rules are applicable depending on the route of foreign capital flows - foreign direct investment (FDI), Foreign Institutional Investors and foreign venture capital investment. While some sectors have been fully opened up to FDI, there are caps on others such as insurance and retail. The government has also prescribed maximum investment levels under the different routes.
The panel has been given four months to submit the report and a meeting will be convened soon,
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Govt tightens pollution norms for industry
To help mitigate growing pollution levels in the country, the government has tightened air pollution norms, especially for industrial clusters. The new standards are almost at par with the 2008 EU (European Union) guidelines.
In its first review in 15 years after pollution standards were introduced, the government has put in place uniform and health-based air pollution limits for industrial and residential areas-which are normally governed by more stringent norms.
Existing norms for residential areas for fine particulate matter, which are suspended particles in the air, carbon monoxide and ammonia have now been extended even to industrial areas. Apart from one standard for residential and industrial areas, there is a separate, more strict standard for ecologically sensitive areas.
Six known pollutants- ozone, arsenic, nickel, benzene and benzopyrene and fine particulate matter-have been included in the list for the first time, based on research by the Central Pollution Control Board (CPCB) and the Indian Institute of Technology, World Health Organization guidelines and EU limits and practices.
Limits for pollutants, which were already on the list, such as SO2 (sulphur dioxide) and NO2 (nitrogen dioxide), have been made more stringent for residential areas as well. The standard for oxides of nitrogen has changed from 60 microgram per cubic metre to 40.
The Ministry of Environment and Forests will notify the penalties later and the apportioning will be based on the "polluter pays" principle. To fix responsibility, the ministry is undertaking a study to determine the sectoral contribution to pollution.
This will tackle the supply of clean fuels and the transition of vehicles from older to newer standards of pollution, which needs to be expedited in medium-class cities. Eleven cities will move from Euro 3 to Euro 4 in April.
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