New industrial policy for Delhi
The Delhi Government approved the new industrial policy on 4 January 2010.
The policy promises to revolutionise Delhi's industrial scene as it identifies education, fashion designing, financial services and IT as industries. Separate hi-tech hubs for these service industries are being planned and the government's role will include allotting land and providing infrastructure.
National Fibre Policy by March
The Union Ministry of Textiles is likely to unveil the National Fibre Policy in March 2010.
Currently, discussion on the comprehensive policy is in the final stage and soon, the policy is likely to be put up before representatives of all states. The policy aims at removing disparity in taxation and pricing of various fibres.
Sector analysts have pointed out that India's consumption of natural fibre to man-made fibre (MMF) stood at 50:50 against the world ratio of 35:65. Thus, over-dependence on natural fibre could be brought down through policy changes.
In case of MMF, anti-dumping duties and safeguard measures against imports are making fibre unavailable to the sector, while export incentives are making it available to competing nations. The proposed policy is expected to focus on requirement of fibres, aspects of pricing, product development, rationalisation of duties, among other things, to enable development of this primary material in the textile value chain. While cotton fibre and yarn are exempted from various duties, MMF carries huge burden of duties on them.
Ministry seeks new norms for highway projects
An Inter-Ministerial Group is mulling over an amendment in the model concession agreement for highway projects to enable concessionaires to take up additional work without any financial assistance from the Union Government.
The proposal submitted by the Union Ministry of Road Transport and Highways, is for increasing the concession period so that a developer can charge toll over a longer period and recover the investments in the additional works like building concrete boundaries on the sides of the road.
In November 2009, the NHAI said it will give highway developers an option of extending the concession period by up to five years if the traffic reaches the maximum level. The condition was to raise the capacity of the road by building more lanes.
Private companiesto be banned from mining in tribal areas
The Union Government is likely to introduce a new provision in mining regulations to restrict mining by private sector companies in tribal areas.
The latest version of legislation on mining sector in India - known as the Mines and Mineral Development and Regulation or the MMDR Bill -- proposes making large parts of mineral-rich areas in India out of limits for private and foreign companies. The MMDR Bill is still in the drafting stage after which it is likely to be introduced in Parliament for enactment into law.
The new provision has been included in a revised draft of the Bill to build proper safeguards for the tribal population affected by mining operations. The new Bill has been prepared with a view of modernising and streamlining the existing practice of mining.
According to sources, the new provision will not be applicable to JVs with private miners so long as "the public sector character" of the operations is maintained. The term, public sector character, in the Indian context usually refers to government companies owning a majority stake in a company.
MERC hikes power tariff for Sugar cooperatives, cogeneration units
The Maharashtra Electricity Regulatory Commission (MERC) has reportedly revised the tariff upwards for sugar cooperatives and cogeneration units that produce electricity by burning bagasse.
The newly revised tariff has become effective from 11 January 2010. Under this, the cogeneration units are to get Rs 4.79 per unit, around 57 per cent more than the existing price of Rs 3.05 per unit.
The interim order, passed by MERC is expected to benefit 77 cogeneration units, of which 32 have already attained capacity to generate 362 MW. It is likely to encourage those sugar cooperatives, which have the capacity but are undecided about the cogeneration units.
One company will get only three UMPPs
The Union Government has reportedly decided to limit the number of ultra mega power projects (UMPPs) awarded to a company to three at any point in time.
The decision has been taken to ensure that these large projects, typically around 4,000 MW, achieve financial closure and start generating power at the earliest. Each UMPP requires an investment of about Rs 20,000 crore and RBI norms on exposure limits the ability of domestic institutions to provide funds to a particular sector or the business group, which cause funding problems for these mega power projects. According to sources, a company with three UMPPs could bid for a fourth only after work on one of the three is completed. However, the specific conditions under which a company implementing three projects could bid for a fourth have not been disclosed.
The government has also decided to prevent UMPPs from sourcing equipment from abroad. This decision is likely to benefit domestic suppliers like BHEL and L&T, but could also raise electricity tariffs.
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