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LEGAL VOICE
Investment worth 100 bn dollars has applied for visa to India: Modi
Indian Prime Minister Narendra Modi declared that following his recent summit level interactions with Japan, China and the US, "investment worth 100 billion dollars had applied for a visa to India." Delivering the inaugural address at the "Invest Madhya Pradesh - Global Investors Summit - 2014" at Indore, the Prime Minister said that following his recent summit level interactions with Japan, China and the US, "investment worth 100 billion dollars had applied for a visa to India." It is now up to the states to grab a share of this investment, he added. He also added that the Centre would stand shoulder to shoulder with all states, irrespective of political affiliation of the state government, to facilitate investment and eco-
Narendra Modi inaugrating the Global Investors Summit in Madhya Pradesh
nomic growth. He also said he wanted the Centre and each state government to work together in the spirit of "one and one - eleven." The Prime Minister emphasized that India's strength is inherent in its states, and if India is to be developed, states must go forward. He said he stands for Team India - a team consisting of the Prime
Minister and all Chief Ministers. If this team works together, a lot can be accomplished, he added. Prime Minister Modi said the Centre and states are not competitors or enemies; they are complementary. Complimenting the Madhya Pradesh government and Chief Minister for rapid strides in development, the Prime
www.abplgroup.com - Asian Voice 18th October 2014
Minister said that the team of Shivraj Singh Chauhan deserves full credit for it. He said Madhya Pradesh has ample land, good infrastructure, and effective governance; and therefore is an excellent investment destination. He also complimented the state government for quick follow-up action to derive benefit from key policy initiatives of the Centre, such as the "Make in India" vision and defence manufacturing policy. The Prime Minister said India is a country of youth, and therefore employment is the primary aim of all investment initiatives. The Global Investors Summit, which has seen participation by ambassadors of 28 countries, also has nine partner countries.
The love affair of Indians for gold
In this article, Deborah Gottlieb of Bullion Broker “Sharps Pixley” looks at the fascinating connection between gold in the Diwali festival.
With only a few days to go for October 23, Indians are eagerly preparing for the first day of the nation’s favourite festival: Diwali. This ancient Hindu festival, also known as the “festival of lights”, is a reminder of how closely Indian tradition is tied with gold and how the love of Indians for the precious metal is timeless. Many Indian festivals and auspicious days are linked to demand for gold and it comes as no surprise that India is one of the largest consumers of gold in the world (second largest after China). It could be said that buying gold is in the DNA of Indians. Data provided by Credit Suisse suggests that the current demand for gold in India is about 800 tonnes; a number expected to climb even higher following the upcoming festival. The uptake of gold will be of particular interest on the first day of Diwali or “Dhanteras” as there is a particular celebration around 'wealth' and giving.
This surge is also expected to have a profound impact on the price of gold in the short term. Speculators and investors who closely monitor the current bearish sentiment surrounding the gold market (including a stronger dollar and rising real US interest rates) are likely to follow demand predictions with interest. It is, however, gold jewellery that is closely linked with India, as gold ornaments are regarded as a symbol of wealth, a fundamental part of many rituals and a store of value. According to the World Gold Council (WGC), in the last decade, 75% of gold demand in India has taken in form of jewellery. Moreover, the WGC car-
Underscoring the need for financial sector reforms, Reserve Bank of India governor Raghuram Rajan has stressed that the "time to deliver begins now" and there is political will to undertake reforms and improve India's economic growth. "Financial reform is not difficult - we have the political will to improve," the Indian Consulate in New York tweeted the RBI governor as saying during an event. The head of India's central bank addressed a select gathering of prominent
and influential IndianAmerican businessmen from the finance and investment banking sector at an event organised by the Consulate General in collaboration with the India-America Chamber of Commerce. Outlining the major areas that require change and immediate implementation, Rajan said it was a good time to invest in the Indian economy now. Developing infrastructure, improving quality of human capital, optimum regulation for good busi-
ried out a survey in 2012 which showed that over 60% of Indian women and men approached intend to buy 22 carat jewellery as opposed to designer handbags, designers shoes, luxury cosmetics and personal electronic items. Bars and coins are also favoured given that they are portable and easily exchangeable during poor harvests. This year was expected to be an El Nino year with a commensurate poor harvest in India; in the event, the crops were more than adequate across much of India and consequently demand has remained more robust than forecast. An unintended consequence of gold's popularity in India is the corrosive effect it has had on the country's current account deficit. Hoping to reduce the CAD ($32.4 billion in the year ended March 31) and support the rupee, new taxes were introduced (including higher import duties, strict import quotas and limitations on gold-related lending and coin sales)
which has meant that Indians in India can be paying a premium of in excess of 12% over the price being paid by their colleagues here in England for a given gold item. Data provided by the WGC also shows that gold imports into India fell 44% to 350 tonnes in the first 6 months in 2014; however, the scale of illegal smuggling is hard to quantify and research at Sharps Pixley suggests that the overall level of total imports are actually rising. With inflation in India running at over 8.5%, locals will appreciate gold's ability to maintain its value in inflationary periods. As said by Devendra Pant, chief economist at India Ratings & Research: “I don’t see the measures going away immediately”. In spite of these counter actions set forth, consumers in India continue to indicate a strong intention to purchase gold over the coming years, and the love affair is nowhere to be ended.
More stick than carrot
Maria Fernandes
There are a number of concerns about the way in which visits are conducted. When the visiting officers arrive for a visit, they approach whoever is on duty that day regardless of the fact that he/she may not be in charge of the human resources part of the business. It is a well known fact that Asians particularly do not question the reason for the visit or decline to answer if they do not have the knowledge or authority to do so. Many are too timid in the presence of Immigration Authorities. It is quite common that a junior person has answered questions, as has happened on many occasions, and this has resulted in inaccurate information being given and relied upon. A sponsor licence has an Authorising officer who should be identified prior to the visit and should be the person who is questioned unless this responsibility is delegated by this person to someone else. The other more worrying aspect of the licensing system is that suspensions and revocations are meted out when there are minor infractions. Employers are expected to have experience of an online system and where they fail to report issues, they are dealt with severely. This is so even though the UKVI themselves continue to make mistakes on a regular basis. They want a gold standard that they are not able to meet themselves. The unequal relationship should not give them an unfair advantage. Employers are not immigration officers. Take one example that has come up again and again. On a visit the Immigration Officers concludes that
an employee concerned is an overstayer and not permitted to work. They only cave in once provided evidence from the helpline for employers that they set up, that the employee concerned is in fact allowed to work. There is a recurring theme of employers accused of breaching their duties without evidence being presented to back up the claims. In many cases suspicion takes precedence over the facts. Immigration is a civil matter and as such the burden of proving a fact must be on a balance of probabilities, in other words more likely than not. Criminals are given better treatment and judges would not hesitate to throw out a case which did not strictly comply with the rules of fairness. In immigration there is no right of appeal, no means of challenging a decision other than expensive proceedings in the High Court which does not consider the merits of the case as such. The licencing system was brought in to allow employers the ability to employ staff providing they followed the rules. When the system began there was a measure of collaboration and an opportunity to put right things that went wrong as they must in any organisation from time to time. There has been a sea change in that attitude now with more emphasis on penalties for breaches. As an employer recently remarked there are visits by other bodies but none are so punitive as the Immigration Authorities. It is time that the employers who have licences make their views known as a body. Less of the stick and more of the carrot.
Good time to invest in India, says RBI governor Rajan
Raghuram Rajan
ness and extensive financial sector reform should
be the next steps for improvement and development of the Indian economy, according a press statement issued by the Consulate. Rajan encouraged the Indian-American business community to get involved in the "nitty gritty of the implementation process," saying such involvement was not difficult especially since the Indian government has the political will to reform.
"Over the years, India has outgrown its institutions," Rajan was quoted as say-
To contact Maria Fernandes, please email at: info@fernandesvaz.com
ing. "Such institutions only worked well when we had the practice of resource allocation, which was a source of revenue. This was a time when coal could be extracted from the ground with your bare hands." Rajan said the Indian economy can no longer work with this model, adding that just as there were drastic democratic changes that reacted to the economic slump in the past decade, institutions also have reacted. He emphasized on the need to convert talk about change
into delivering and implementing reforms. Making crucial recommendations to creating a more investment-friendly market in India, Rajan said stalled projects need to get back on track and "clearance should be from capital and on ground." He further said that complex labour laws need to be improved to benefit both employers and workers and self-certification should be allowed to eliminate the stressful and cumbersome process of inspections.