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Insights Daily Current Events, 17 January 2015

Insights Daily Current Events, 17 January 2015

JBIC Survey Ranks India as No. 1 Destination for Future Investments

India has been ranked as the No.1 destination for future investments followed by Indonesia (ranked No.2) and China (ranked No.3) by a survey conducted by Japan Bank for International Cooperation (JBIC).
Japan Bank for International Cooperation (JBIC) had conducted a survey of 1000 companies for Japanese manufacturing sector.

Quick facts:

  • In October 2014, the number of Japanese companies in India had reached 1209, which is 13% higher over the same period last year with a CAGR of 13.67% (for the last five years (2010 to 2014)).
  • Some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75,000 crores (approx. US$12 billion) in next 2-3 years.
  • During the period June 2014 to September 2014, FDI inflow from Japan amounted to US$ 618 million against US$ 273 million for the corresponding period in 2013. FDI inflow of US$103.14 million took place in October 2014.

Recent initiatives by GOI:

  • The Government has set up Japan Plus, a special management team, to facilitate Japanese investors. The team is actively interacting with Japanese companies and handholding them through various approval processes, as and when required.
  • Also, the issues related to the State Government of Rajasthan concerning Sojitz, working for Dedicated Freight Corridor (DFC), has been resolved.
  • One of the mandates of Japan Plus is to help develop Japanese Integrated Industrial Parks. For this, discussions are going on with Japanese companies and the State Governments concerned.

Japan Plus:

It is a special management team set up by DIPP to facilitate and fast track investment proposals from Japan.

Composition of the Team: The team will comprise representatives from Government of India and METI (Ministry of Economy, Trade and Industry), Government of Japan.


  • The mandate of the “Japan Plus” team runs through the entire spectrum of investment promotion – research, outreach, promotion, facilitation and aftercare.
  • The team will support the Government of India in initiating, attracting, facilitating, fast tracking and handholding Japanese investments across sectors.
  • The team will also be responsible for providing updated information on investment opportunities across sectors, in specific projects and in industrial corridors in particular.
  • In addition, the “Japan Plus” team will identify prospective Japanese companies, including, Small and Medium Enterprises (SMEs) and facilitate their investments in India.
  • The “Japan Plus” team will also provide assistance to DIPP in undertaking regular benchmarking studies, identifying bottlenecks and areas of concern in sectors of interest to Japanese companies, and analyzing their impact on industrial development production in India.

India and Japan:

Japan is the 4th largest FDI contributor to India, with major interests in pharmaceuticals, automobiles and services sectors and accounts for 7.46% of total FDI equity inflows into India. Over the last decade, the number of Japanese establishments in India have increased by 11 times, reflecting the positive sentiments of Japanese investors for Indian market.

Sources: PIB.


Govt. cuts petrol, diesel price; hikes excise duty

The fuel retailers have announced a Rs. 2.42 per litre cut in the price of petrol and Rs. 2.25 a litre in that of diesel.

  • It is the ninth straight reduction in petrol prices since August, and fifth in diesel since October.
  • The cuts were announced after global Brent slumped to nearly $45 a barrel.
  • A $1bn reduction in global crude reduces India’s trade deficit by $900 million annually.

GOI’s move and its effects:

  • The Centre notified a Rs. 2 per litre hike in the excise duty on both, reducing the benefit for consumers.
  • Retail prices of diesel and petrol have not kept pace with the 50-per cent fall in global crude since June 2014.
  • The Centre, Finance Ministry estimates, will raise Rs. 20,000 crore additional revenue this fiscal year on account of the hikes, helping it keep its fiscal deficit within the Budget target of 4.1 per cent of GDP at a time tax revenues are falling short.

The government has deregulated petrol and diesel (partially) prices in India

Excise Duty is an indirect tax levied and collected on the goods manufactured in India. Generally, manufacturer of goods is responsible to pay duty to the Government.


Sources: The Hindu.


Kasturirangan report: subcommittee to give priority to people’s concerns

The Karnataka State government had formed a cabinet subcommittee to look into the Kasturirangan report. People living on the borders of the Western Ghats were apprehensive that all development and agricultural activities might come to a standstill due to the Kasturirangan report.

  • The state government has assured that report on the panel’s recommendations will take the concerns of the people into consideration and will give a pro-people report.
  • The State government will submit its response to the Kasturirangan Committee Report on ecologically sensitive area (ESA) zones of the Western Ghats. It is for the Union government either to accept or reject the response.

Kasturirangan Report:

The Kasturirangan panel was set up to study the Gadgil committee report on the Western Ghats. The Gadgil panel report had faced unanimous opposition from state governments for recommending that almost three-fourth of the hills, including plantations, cultivated lands and large habitations, be turned into a restricted development zone with an over-arching authority to regulate the region superseding the elected authorities’ role.

Recommendations made by the Kasturirangan panel:

  • Around 60,000 sq km of Western Ghats, spread across six states, should be turned into a no-go area for commercial activities like mining, thermal power plants, polluting industries and large housing plans.
  • It has suggested that 90% of the natural forests left in the Western Ghats complex – adding upto 60,000 sq km and constituting 37% of the entire hilly belt — be conserved under the Ecologically Sensitive Area (ESA) provisions of the green law. The forest area falling within the ESA would also cover 4,156 villages across the six states. The villages falling under ESA will be involved in decision making on the future projects. All projects will require prior-informed consent and no-objection from the gram sabha (village council) of the village.
  • The panel has recommended that there should be a complete ban on mining activity in this zone and current mining activities should be phased out within five years, or at the time of expiry of the mining lease.
  • It has banned development of any township or construction over the size of 20,000 sq m in the ESA zone. It has not recommended a ban on hydroelectric projects in the zone, but put a regime of stricter clearances for dams and other projects.
  • The report suggests doing away with the complete moratorium on industrial and mining activity in the two Maharashtra districts of Sindhudurg and Ratnagiri. It has suggested persisting with the ban only on the area of the two districts falling within the ESA and a strict regulation in the rest.
  • The report has steered clear from demanding a strict ecological control over the Western Ghat complex requiring changes and regulations on agricultural practices the way Gadgil committee report had suggested.

Sources: The Hindu, PIB, Wiki.


EZC meet focuses on internal security, developmental issues

The 21st Eastern Zonal Council Meeting was held recently in Patna.

  • Union Home Minister has assured all possible assistance to four eastern states – Bihar, Jharkhand, Odisha, West Bengal – for enhancing internal security, and emphasised the need for better coordination between state and central agencies to combat Maoists.
  • Apart from naxalism, the meet also took up issues related to the modernisation of police, border disputes, road connectivity, railway projects, water management, flood control measures, food problems, rural housing, and central allocation of resources for developmental activities.
  • The Council also took up issues related to release of water by West Bengal for Upper Mahananda irrigation project in Bihar.

The EZC met after a gap of around two years and reviewed the progress of the implementation of the recommendations made at its last meeting at Kolkata in 2013.

Zonal councils:

Zonal councils have been established by the Parliament to promote interstate cooperation and coordination.
Zonal councils are statutory bodies established under the States Reorganisation Act 1956 and not constitutional bodies.

  • The idea of creation of Zonal Councils was mooted by the first Prime Minister of India, Pandit Jawahar Lal Nehru in 1956 when during the course of debate on the report of the States Re-organisation Commission, he suggested that the States proposed to be reorganised may be grouped into four or five zones having an Advisory Council ‘to develop the habit of cooperative working” among these States.
  • They are only deliberative and advisory bodies.


There are 5 five Zonal councils namely:

  • The Northern Zonal Council, comprising the States of Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, National Capital Territory of Delhi and Union Territory of Chandigarh;
  • The Central Zonal Council, comprising the States of Chhattisgarh, Uttarakhand, Uttar Pradesh and Madhya Pradesh;
  • The Eastern Zonal Council, comprising the States of Bihar, Jharkhand, Orissa, and West Bengal;
  • The Western Zonal Council, comprising the States of Goa, Gujarat, Maharashtra and the Union Territories of Daman & Diu and Dadra & Nagar Haveli; and
  • The Southern Zonal Council, comprising the States of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and the Union Territory of Puducherry.

The North Eastern States i.e. (i) Assam (ii) Arunachal Pradesh (iii) Manipur (iv) Tripura (v) Mizoram (vi) Meghalaya (vii) Sikkim and (viii) Nagaland are not included in the Zonal Councils and their special problems are looked after by the North Eastern Council, set up under the North Eastern Council Act, 1972.


  • Chairman – The Union Home Minister is the Chairman of each of these Councils.
  • Vice Chairman – The Chief Ministers of the States included in each zone act as Vice-Chairman of the Zonal Council for that zone by rotation, each holding office for a period of one year at a time.
  • Members- Chief Minister and two other Ministers as nominated by the Governor from each of the States and two members from Union Territories included in the zone.
  • Advisers- One person nominated by the Planning Commission for each of the Zonal Councils, Chief Secretaries and another officer/Development Commissioner nominated by each of the States included in the Zone.
  • Union Ministers are also invited to participate in the meetings of Zonal Councils depending upon necessity.

The main objectives of setting up of Zonal Councils are:

  • Bringing out national integration;
  • Arresting the growth of acute State consciousness, regionalism, linguism and particularistic tendencies;
  • Enabling the Centre and the States to co-operate and exchange ideas and experiences; and
  • Establishing a climate of co-operation amongst the States for successful and speedy execution of development projects.

A Zonal Council may discuss, and make recommendations with regard to:

  • any matter of common interest in the field of economic and social planning;
  • any matter concerning border disputes, linguistic minorities or inter-State transport; and
  • any matter connected with, or arising out of, the re-organisation of the States under the States Reorganisation Act.

Sources: PIB,, Laxmikanth.