Monthly Archives: June 2016

Penalty for not filing annual returns – NGOs

As per a recent notification dated 16th June, 2016 issued by the Ministry of Home Affairs, the penalties for not filing annual returns by NGOs under the Foreign Contribution (Regulation) Act and Foreign Contribution (Regulation) Rules and the officer who will compound the offence has been specified.

Accordingly penalty for not furnishing returns upto 3 months after 31st December every year is 2% of the amount of foreign contribution received during the financial year or Rs.10,000/-, whichever is less. The officer competent for compounding in this case would be Director or Deputy Secretary in charge of FCRA in Ministry of Home Affairs (MHA).

If the returns are filed between 3 months and 6 months after 31st December every year, then the penalty is 3% of the amount of foreign contribution received during the financial year or Rs.50,000/-, whichever is less. The officer competent for compounding in this case would be Director or Deputy Secretary in charge of FCRA in Ministry of Home Affairs (MHA).

If the returns are filed between 6 months and 1 year after 31st December every year, then the penalty is 4% of the amount of foreign contribution received during the financial year or Rs.200,000/-, whichever is less. The officer competent for compounding in this case would be Director or Deputy Secretary in charge of FCRA in Ministry of Home Affairs (MHA).

If the returns are filed between 1 year and 2 years after 31st December every year, then the penalty is 5% of the amount of foreign contribution received during the financial year or Rs.500,000/-, whichever is less. The officer competent for compounding in this case would be Director or Deputy Secretary in charge of FCRA in Ministry of Home Affairs (MHA).

If the returns are filed between 2 years and 3 years after 31st December every year, then the penalty is 10% of the amount of foreign contribution received during the financial year or Rs.10,00,000/-, whichever is less. The officer competent for compounding in this case would be Director or Deputy Secretary in charge of FCRA in Ministry of Home Affairs (MHA).

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Model Shops & Establishment Bill

PIB press release dated 29th June, 2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has considered the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016. The Bill will now be sent to States/UTs to enable them to modify their individual Acts, if they so desire either by adopting the said Bill as it is or after modifying its provisions as per their requirements. This Bill was finalised after detailed deliberations and discussions with public through internet and with employees/labour representatives, employers’ associations/federations and State Governments through tripartite consultative process.

The main features of the draft model Bill are as follows:-

• It will cover only establishments employing ten or more workers except manufacturing units.

• The Bill provides for freedom to operate 365 days in a year and opening/closing time of establishment.

• Women to be permitted during night shift, if the provision of shelter, rest room ladies toilet, adequate protection of their dignity and transportation etc. exists.

• No discrimination against women in the matter of recruitment, training, transfer or promotions.

• Online one common Registration through a simplified procedure.

• Powers of Government to make rules regarding adequate measures to be taken by the employer for the safety and health of workers.

• Clean and safe drinking water.

• Lavatory, creche, first aid and canteen by group of establishments, in case, it is not possible due to constraint in space or otherwise by individual establishment.

• Five paid festival holidays in addition to national holidays etc.

• Exemption of highly skilled workers (for example workers employed in IT, Biotechnology and R&D division) from daily working hours of 9 hours and weekly working hours of 48 hours subject to maximum 125 over-time hours in a quarter.

The Model Bill would bring about uniformity in the legislative provisions, making it easier for all the States to adopt it and thereby ensuring uniform working conditions across the country and facilitate the ease of doing business and generate employment opportunities.

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National Mineral Exploration Policy

PIB Press Release dated 29th June, 2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the National Mineral Exploration Policy (NMEP).

The NMEP primarily aims at accelerating the exploration activity in the country through enhanced participation of the private sector. There is a need for comprehensive mineral exploration of the country to uncover its full mineral potential so as to put the nation’s mineral resources (non-fuel and non-coal) to best use and thereby maximize sectoral contribution to the Indian economy.

The policy emphasizes on making available baseline geoscientific data of world standards in the public domain, quality research in a public-private partnership, special initiatives for search of deep-seated and concealed deposits, quick aerogeophysical surveys of the country, and creation of a dedicated geoscience database etc.

NMEP has the following main features for facilitating exploration in the country:-

i. The Ministry of Mines will carry out auctioning of identified exploration blocks for exploration by private sector on revenue sharing basis in case their exploration leads to auctionable resources. The revenue will be borne by the successful bidder of those auctionable blocks.

ii. If the explorer agencies do not discover any auctionable resources, their exploration expenditure will be reimbursed on normative cost basis.

iii. Creation of baseline geoscientific data as a public good for open dissemination free of charge.

iv. Government will carry out a National Aerogeophysical Program for acquiring state-of-the-art baseline data for targeting concealed mineral deposits.

v. A National Geoscientific Data Repository is proposed to be set up to collate all baseline and mineral exploration information generated by various central & state government agencies and also mineral concession holders and to maintain these on geospatial database.

vi. Government proposes to establish a not-for-profit autonomous institution that will be known as the National Centre for Mineral Targeting (NCMT) in collaboration with scientific and research bodies, universities and industry for scientific and technological research to address the mineral exploration challenges in the country.

vii. Provisions for inviting private investment in exploration through attractive revenue sharing models.

viii. On the lines of UNCOVER project of Australia, the government intends to launch a special initiative to probe deep-seated/ concealed minerals deposits in the country in collaboration with National Geophysical Research Institute and the proposed NCMT and Geoscience Australia.

In order to implement the recommendations of the NMEP, initially an amount of about Rs.2116 crore over 5 years would be required over and above the annual plan budget of the Geological Survey of India under the Ministry of Mines. The NMEP will benefit the entire mineral sector across the country.

The major impact of NMEP are:-

1) The pre-competitive baseline geoscientific data will be created as a public good and will be fully available for open dissemination free of charge. This is expected to benefit public and private exploration agencies.

2) The collaboration with scientific and research bodies, universities and industry for the scientific and technological development necessary for exploration in public- private partnership.

3) Government will launch a special initiative to probe deep-seated/concealed mineral deposits in the country. Characterizing India’s geological cover, investigating India’s lithospheric architecture, resolving 4D geodynamic and metallogenic evolution, and detecting and characterizing the distal footprints of ore deposits, would be the main components of this initiative.

4) A National Aerogeophysical Mapping program will be launched to map the entire country with low altitude and close space flight to delineate the deep-seated and concealed mineral deposits.

5) Government will engage private agencies for carrying out exploration in identified blocks / areas with the right to certain share in the revenue accruing to the State government through auction.

6) Public expenditure on regional and detailed exploration will be prioritized and subject to periodical review based on assessment of criticality and strategic interests.

Background:

The Ministry of Mines has, in the recent past, taken a series of measures for the growth of the mineral sector, including allowing 100% FDI. However, these initiatives have fetched only limited success. Further, over the years the dynamics of the mineral sector have undergone sea change thereby creating new demands and imperatives. There is a compelling need to provide an impetus to exploration activity in the country. This has prompted the Government to carry out a comprehensive review of its exploration policy and strategy. The amendments brought in to the MMDR Act in 2015 is a step in this direction. The most important feature of this amendment is that mining leases (ML) and prospecting license-cum-mining lease (PL-cum-ML) will be granted only through an auction process. This is expected to bring in transparency, expeditiousness and simplification in procedures in grant of mineral concessions. Against this background, the NMEP has been framed so as to provide a new set of objectives, sense of purpose and direction to exploration within the amended legal framework.

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Draft Real Estate Rules

Minister of Housing & Urban Poverty Alleviation has formulated Draft Real Estate Rules within two months of some sections of the Real Estate (Development and Regulation) Act,2016 coming into force on first of May this year. With the approval of the Minister of HUPA Shri M.Venkaiah Naidu, the draft rules were hosted on the Ministry’s website (www.mhupa.gov.in) seeking suggestions and objections from the public within two weeks.

If fulfillment of its responsibility towards five Union Territories without legislatures, the Ministry of HUPA has come out with the ‘Union Territories of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep’ Real Estate (Regulation and Development) Rules, 2016.

The Rules provide for payments to be made for registration of projects and real estate agents with the Regulatory Authority, documents and information to be furnished by developers, procedures to be followed for registration,  extension and  renewal of registration, procedures for filing and hearing of complaints and appeals, appointment and service conditions of the Chairpersons and Members of Real Estate Regulatory Authorities and Appellate Tribunals and their powers etc.

Under the Rules, promoters can’t discriminate against anyone in the allotment of any apartment, plot or building on any ground. This has been incorporated further to the assurance of Shri Venakaiah Naidu during the debate on the Real Estate Bill in the Parliament.

Rules require the Real Estate Regulatory Authority to be set up in States/UTs to ensure availability of information in respect of 60 aspects relating to the promoters and the projects. These relate to the profile of developer of group, track record of promoter, details of past or ongoing litigations relating to real estate projects, apartment and garage related details, location, details of registered agents and consultants, development plan, financials of the promoter, status of project along with that of approvals, contact details , copies of legal title deed, details of encumbrances etc.

The promoter will be required to upload updates on the webpage of the project, within seven days from the expiry of each quarter, regarding number and types of apartments or plots booked, garages booked, status of construction of each floor with photographs, status of approvals, modifications if any issued by the competent authority with regard to any license, permit or approval for the project.

Fee proposed for registration of projects with the Regulatory Authority is Rs.10 per sq.mt if the plot area is below 1,000 sq.mt and Rs.20 if the area for development is more than that for residential projects and Rs.50 and  Rs.100 per sq.mt for commercial projects.

Upon the notification of sub-section (1) of section 3, promoters of all ongoing projects which have not received completion certificates shall apply for registration of projects within three months and disclose all relevant information including the size of the apartment based on carpet area.

Functions prescribed for real estate agents include assisting the allottee and promoter to exercise their respective rights and fulfill their respective obligations at the time of booking and sale of any plot, apartment or building.

Draft Real Estate Rules also provide for payment of 10% of the estimated cost of the project for compounding of imprisonment of promoter for non-registration of the project or violation of the order of the Real Estate Appellate Tribunal. Imprisonment of real estate agent and buyer for violating Tribunal’s Order can be compounded upon payment of 10% of the estimated cost of the plot, apartment or building. However, the reasons for imprisonment shall be complied with in one month.

For any delay in payment by the promoter and buyer has been proposed to be the State Bank of India Prime Lending Rate plus 2%.

Selection Committee headed by the Chief Justice of respective State/UT or his nominee with Housing and Law Secretaries as members will recommend names for appointment as Chairperson and Members of Real Estate Regulatory Authorities and Appellate Tribunals.

After eliciting public comments/suggestions over the next two weeks, the draft rules will be discussed with officials of the five Union Territories and further to revision if required, the rules will be sent for legal vetting. Thereafter, the rules will be notified.

AAR

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Special package for textiles & apparel sector

PIB press release dated 22nd June, 2016

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given approval for a special package for employment generation and promotion of exports in Textile and Apparel sector.

 The move comes in the backdrop of the package of reforms announced by the Government for generation of one crore jobs in the textile and apparel industry over next 3 years. The package includes a slew of measures which are labour friendly and would promote employment generation, economies of scale and boost exports. The steps will lead to a cumulative increase of US$ 30 bn. in exports and investment of Rs. 74,000 crores over next 3 years.

The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce. Thus, the package would help in social transformation through women empowerment.

Salient features of the package announced are:

  1. Employee Provident Fund Scheme Reforms
  • Govt. of India shall bear the entire 12% of the employers’ contribution of the Employers Provident Fund Scheme for new employees of garment industry for first 3 years who are earning less than Rs. 15,000 per month.
  • At present, 8.33% of employer’s contribution is already being provided by Government under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). Ministry of Textiles shall provide additional 3.67% of the employer’s contribution amounting to Rs. 1,170 crores over next 3 years.
  • EPF shall be made optional for employees earning less than Rs. 15,000 per month
  • This shall leave more money in the hands of the workers and also promote employment in the formal sector.
  1. Increasing overtime caps
  • Overtime hours for workers not to exceed 8 hours per week in line with ILO norms.
  • This shall lead to increased earnings for the workers
  1. Introduction of fixed term employment
  • Looking to the seasonal nature of the industry, fixed term employment shall be introduced for the garment sector
  • A fixed term workman will be considered at par with permanent workman in terms of working hours, wages, allowanced and other statutory dues.
  1. Additional incentives under ATUFS
  • The package breaks new ground in moving from input to outcome based incentives by increasing subsidy under Amended-TUFS from 15% to 25% for the garment sector as a boost to employment generation.
  • A unique feature of the scheme will be to disburse the subsidy only after the expected jobs are created.
  1. Enhanced duty drawback coverage
  • In a first of its kind move, a new scheme will be introduced to refund the state levies which were not refunded so far.
  • This move is expected to cost the exchequer Rs 5500 crores but will greatly boost the competitiveness of Indian exports in foreign markets.
  • Drawback at All Industries Rate to be given for domestic duty paid inputs even when fabrics are imported under Advance Authorization Scheme
  1. Enhancing scope of Section 80JJAA of Income Tax Act
  • Looking at the seasonal nature of garment industry, the provision of 240 days under Section 80JJAA of Income Tax Act would be relaxed to 150 days for garment industry

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Relaxations in FDI Policy

extracts from PIB Press Release dated 20th June, 2016.

The Government has decided to introduce a number of amendments in the FDI Policy. Changes introduced in the policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionalities for foreign investment. These amendments seek to further simplify the regulations governing FDI in the country and make India an attractive destination for foreign investors.  Details of these changes are given in the following paragraphs:

  1. Radical Changes for promoting Food Products manufactured/produced in India

It has now been decided to permit 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.

  1. Foreign Investment in Defence Sector up to 100%

Present FDI regime permits 49% FDI participation in the equity of a company under automatic route.  FDI above 49% is permitted through Government approval on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country. In this regard, the following changes have inter-alia been brought in the FDI policy on this sector:

  1. Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.  The condition of access to ‘state-of-art’ technology in the country has been done away with.
  2. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
  1. Review of Entry Routes in Broadcasting Carriage Services

FDI policy on Broadcasting carriage services has also been amended. New sectoral caps and entry routes are as under:

Sector/Activity New Cap and Route
5.2.7.1.1

(1)Teleports(setting up of up-linking HUBs/Teleports);

(2)Direct to Home (DTH);

(3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability);

(4)Mobile TV;

(5)Headend-in-the Sky Broadcasting Service(HITS)

100%

 

Automatic

5.2.7.1.2 Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))
Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require FIPB approval

 

  1. Pharmaceutical

The extant FDI policy on pharmaceutical sector provides for 100% FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74% FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74% will continue. 

  1. Civil Aviation Sector

(i)  The extant FDI policy on Airports permits 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under government route.

(ii)   With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects.

(iii) As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. It has now been decided to raise this limit to 100%, with FDI up to 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and  non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy. 

  1. Private Security Agencies

The extant policy permits 49% FDI under government approval route in Private Security Agencies. FDI up to 49% is now permitted under automatic route in this sector and FDI beyond 49% and up to 74% would be permitted with government approval route.

  1. Establishment of branch office, liaison office or project office

For establishment of branch office, liaison office or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information and Broadcasting, it has been decided that approval of Reserve Bank of India or separate security clearance would not be required in cases where FIPB approval or license/permission by the concerned Ministry/Regulator has already been granted.

  1. Animal Husbandry

As per FDI Policy 2016, FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture is allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities.

  1. Single Brand Retail Trading

It has now been decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology.

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No fee for MSME registration

PIB press release dated 20th June, 2016.

Ministry of MSME has clarified today, that Udyog Aadhar Memorandum is the only form of registration for MSMEs in India and there is no fee for the registration. This has been clarified in view of some complaints received by the ministry, regarding fee charged by certain agencies for facilitating the registration.

It may be pointed out that filling of Udyog Aadhar Memorandum can be done only on the portalhttp://www.udyogaadharmemorandum.gov.in created by the Ministry. There is no fee charged for this purpose. The filling process is simple and the entrepreneurs can register without seeking any third party assistance. If required, assistance can be sought from the General Manager of their respective District Industries Centre for filing their Udyog Aadhar Memorandum.

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Civil Aviation Policy

PIB press release dated 15th June, 2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for the Civil Aviation Policy. This is the first time since Independence that an integrated Civil Aviation Policy has been brought out by the Ministry of Civil Aviation.

Highlights

The Policy aims at:

  • India to become 3rd largest civil aviation market by 2022 from 9th
  • Domestic ticketing to grow from 8 crore in 2015 to 30 crore by 2022
  • Airports having scheduled commercial flights to increase from 77 in 2016 to 127 by 2019
  • Cargo volumes to increase by 4 times to 10 million tonnes by 2027
  • Taking flying to masses – Enabling Indians to fly at Rs. 2,500 per hour under Regional Connectivity Scheme at unserved airports
  • Requirement of 5 years of domestic flying for starting international operations removed
  • Flexible and liberalized ‘open skies’ and ‘code share’ agreements
  • Incentives to MRO sector to develop as hub for South Asia
  • Ensuring availability of quality certified 3.3 lakh skilled personnel by 2025
  • Development of green-field airports and heliports
  • Enhancing ease of doing business through deregulation, simplified procedures and e-governance
  • Promoting ‘Make In India’ in Civil Aviation Sector

Areas covered in the Policy:

  1. Regional connectivity
  2. Safety
  3. Air Transport Operations
  4. Route Dispersal Guidelines
  5. 5/20 Requirement for International    Operations
  6. Bilateral traffic rights
  7. Code-share agreements
  8. Fiscal Support
  9. Airports developed by State Govt, Private sector or in PPP mode
  10. Airports Authority of India
  11. Air Navigation Services
  12. Aviation security, Immigration and Customs
  13. Helicopters
  14. Charters
  15. Maintenance, Repair and Overhaul
  16. Ground handling
  17. Air-cargo
  18. Aeronautical ‘Make in India’
  19. Aviation education and skill development
  20. Sustainable aviation
  21. Miscellaneous
  22. Essential Services Maintenance Act, 1968

 Salient features of the Policy

  1. The Viability Gap Funding (VGF) will be funded by a small levy per departure on all domestic routes other than Cat II/ Cat IIA routes, RCS routes and small aircraft at a rate as decided by the Ministry from time to time. A detailed scheme will be put up in the Public domain for stakeholders consultations.
  2. The 5/20 rule for commencement of international flight in operation since 2004 is replaced by a formulation which provides a level playing field and allows airlines, both new and old, to commence international operations provided they continue to meet some obligation for domestic operation. All airlines can commence international operations provided they deploy 20 aircraft or 20% of total capacity (in term of average number of seats on all departures put together), whichever is higher, for domestic operations.
  3. Necessary administrative and financial flexibility will be provided to Director General of Civil Aviation (DGCA) for an effective aviation safety oversight system and for creating a transparent single-window system for all aviation safety related issues.
  4. The Route Dispersal Guidelines (RDG)  have been rationalised by making the criteria for declaring a route as Category I (trunk route) more transparent, while the traffic to be deployed on Cat II and IIA expressed in terms of a percentage of CAT I traffic remains the same. The criteria proposed for a Cat I route are a flying distance of more than 700 km, average seat factor of more than 70% and annual traffic of 5 lakh passengers. The percentage for CAT III will be reduced in view of the Regional Connectivity Scheme coming into operation. Uttarakhand and Himachal Pradesh have been included as part of category II routes.
  5. The regime of bilateral rights and code share agreements will be liberalised leading to greater ease of doing business and wider choice to passengers. “Open skies” will be implemented on a reciprocal basis for SAARC countries and countries beyond 5000 kms from Delhi. A method will be recommended by a Committee headed by the Cabinet Secretary for the allotment of additional capacity entitlements wherever designated Indian carriers have not utilised 80% of their bilateral rights but the foreign airlines/countries have utilised their part and are pressing for increase in the capacity.
  6. The Ministry will continue to encourage development of airports by the State Government or the private sector or in PPP mode and endeavour to provide regulatory certainty. Future greenfield and brownfield airports will have cost efficient functionality with no compromise on safety and security.
  7. Airport Authority of India (AAI) will continue to develop and modernise its airports and upgrade quality of services. AAI will be suitably compensated in case a new greenfield airport is approved in future within 150 km radius of an existing operational AAI airport which is not yet saturated.
  8. Upgradation and modernisation of Air Navigation Services will continue in line with global trends.AAI will provide a fully harmonised Air Navigation System considering International Civil Aviation Organisation (ICAO) Global Air Navigation Plan, Aviation system Block Upgrade and modern performance based technologies and procedures.
  9. The Government will promote helicopter usage by issuing separate regulations for helicopters and development of four heli-hubs initially. Ministry of Civil Aviation will also coordinate with all the agencies and stakeholders concerned to facilitate Helicopter Emergency Medical Services.
  10. In the budget for 2016-17, the customs duty for MRO’s  has been rationalised and the procedure for clearance of goods simplified, in particular duty on tools and tool kits. Further incentives have been proposed in the policy to give a push to this sector :-
  • MoCA will persuade State Governments to make VAT zero-rated on MRO activities
  • Provision for adequate land for MRO service providers will be made in all future airport/heliport projects where potential for such MRO services exists.
  • Airport royalty and additional charges will not be levied on MRO service providers for a period of five years from the date of approval of the policy.

11.The existing ground handling policy is being replaced with a new framework to ensure fair competition. The airport operator will ensure that there will be three Ground Handling Agencies (GHA) including Air India’s subsidiary/JV at all major airports as defined in AERA Act 2008. At  non-major airports, the airport operator to decide on the number of ground handling agencies, based on the traffic output, airside and terminal building capacity. All domestic scheduled airline operators including helicopter operators will be free to carry out self-handling at all airports. Hiring of employees through manpower supplier will not be permitted.

 

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Central Port Authorities Act, 2016

The Ministry of Shipping has prepared a draft bill ‘The Central Port Authorities Act’ 2016 ’ to replace the ‘Major Port Trust Act, 1963’. This step is being taken keeping in view the need to give more autonomy and flexibility to the Major Ports and to bring in a professional approach in their governance.

Salient Feature of the ‘The Central Port Authorities Act’ 2016

The salient features of the new Bill are:

a) Composition of board has been simplified. The board will consist of 9 members including 3 to 4 independent members instead of 17-19 under the Port Trust Model. Provisions has been made for inclusion of 3 functional heads of Major Port as Members in the Board apart from a Government Nominee Member and a Labour Nominee Member. (Section 3(2)).

b) The disqualification of the appointment of the Members of the Board, duties of the Members and provision of the meetings of the Board through video conferencing and other visual means have been introduced on the lines of Companies Act, 2013. (section 5,10 & 12)

c) Port related and non-port related use of land has been defined. A distinction has been made between these two usages in terms of approval of leases. The Port Authorities are empowered to lease land for Port related use for upto 40 years and for non-port related use upto 20 years beyond which the approval of the Central Government is required. (Section 21)

d) The need for Government approvals for raising loans, appointment of consultants , execution of contracts and creation of service posts have been dispensed with. The Board of Port Authority have been delegated power to raise loans and issue security for the purpose of capital expenditure and working capital requirement. (Section 30)

e) The provision for maintenance of books of account and financial statements in accordance with the accounting standards notified under the Companies Act, 2013 or as prescribed by Central Government has been provided. (Section 44)

f) Concept of internal audit of the functions and activities of the Central Ports has been introduced on the lines of Companies Act, 2015 (Section 25)

g) The Board of the Port Authority has been delegated the power to fix the scale of rates for service and assets. The regulation to tariff by TAMP has been removed. (Section 25)

h) An independent Review Board has been proposed to be created to carry out the residual function of the erstwhile TAMP for Major Ports, to look into disputes between ports and PPP concessionaries, to review stressed PPP projects and suggest measures to review stressed PPP projects and suggest measures to revive such projects and to look into complaints regarding services rendered by the ports/private operators operating within the ports would be constituted. At present, there is no independent body to look into the above aspects and the Review Board will reduce the extent of litigation between PPP Operators and Ports. (Section 59)

i) Power of Central Govt. to take over the control of the Port Authority is limited to the event of grave emergency or in case of persistent default by Port Authority in performance of their duties. (Section 53)

j) Provisions of CSR & development of infrastructure by Port Authority have been introduced. (Section 65)

k) The status of Port Authority will be deemed as ‘local authority’ under the provisions of the General Clauses Act, 1887 & other applicable Statutes so that it could prepare appropriate regulations in respect of the area within the port limits to the exclusion of any Central, State of local laws. (Section 66).

The detailed draft bill has been uploaded on the website of the Ministry of Shipping (www.shipping.nic.in) for review and comments from various stakeholders.

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Unified guidelines for LPG distributorships

The Ministry of Petroleum and Natural Gas (MoPNG) is committed to provide clean fuel to all households in the country with key focus on rural and difficult areas. In this endeavor, strengthening supply chain of LPG distribution is one of the key initiatives of the Ministry. In this direction, after an elaborate and comprehensive review of the existing distributorship selection policies, a new set of Guidelines have been finalised with the objective of strengthening LPG supply chain with focus on rural areas and creating job opportunities through supply chain system. Union Minister of State (I/C) Petroleum and Natural Gas Shri Dharmendra Pradhan today unveiled the guidelines. Key features of the Unified Guidelines for Selection of LPG distributorships are:-

 Four broad types of distributorships with varying refill ceiling limits- Sheheri, Rurban, Gramin and Durgam Vitrak.

 Eligibility norms for age, education, fund requirement and ownership of land for godown & showroom have been relaxed to make selection process more participative.

 33 % reservation to women across all categories has been introduced to encourage women entrepreneurship. 3% reservation for Divyang candidates.

 As a part of Government’s Digital India campaign, Online filing, processing and selection has been introduced for Sheheri distributorships on a pilot basis.

 To take care of interest of Defence personnel and their dependents, inter-se priority in selection under Government Personnel category has been introduced.

 Monetary norms for security deposit have been relaxed for the selected candidates belonging to SC/ST and OBCs.

 In order to address the issue of last mile reach of LPG in difficult areas, LPG Suvidha Kendra facility will be introduced for improving delivery of services.

 LPG distributorships would be set up in active collaboration with the State Government agencies to strengthen the supply chain in Durgam areas.

Unified Guidelines will pave the way for a more broadbased, participative and transparent system of selection of distributors across the country. In this year, the Oil Marketing Companies will start the process for selection of new distributors in 10,000 new locations. Setting up of these new distributorships will give a tremendous boost to the rural employment opportunities.

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Cyber Security Framework in Banks

RBI circular dated 2nd june 2016 follows:

Introduction

Use of Information Technology by banks and their constituents has grown rapidly and is now an integral part of the operational strategies of banks. The Reserve Bank, had, provided guidelines on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds (G.Gopalakrishna Committee) videCircular DBS.CO.ITC.BC.No.6/31.02.008/2010-11 dated April 29, 2011, wherein it was indicated that the measures suggested for implementation cannot be static and banks need to pro-actively create/fine-tune/modify their policies, procedures and technologies based on new developments and emerging concerns.

2. Since then, the use of technology by banks has gained further momentum. On the other hand, the number, frequency and impact of cyber incidents / attacks have increased manifold in the recent past, more so in the case of financial sector including banks, underlining the urgent need to put in place a robust cyber security/resilience framework at banks and to ensure adequate cyber-security preparedness among banks on a continuous basis. In view of the low barriers to entry, evolving nature, growing scale/velocity, motivation and resourcefulness of cyber-threats to the banking system, it is essential to enhance the resilience of the banking system by improving the current defences in addressing cyber risks. These would include, but not limited to, putting in place an adaptive Incident Response, Management and Recovery framework to deal with adverse incidents/disruptions, if and when they occur.

Need for a Board approved Cyber-security Policy

3. Banks should immediately put in place a cyber-security policy elucidating the strategy containing an appropriate approach to combat cyber threats given the level of complexity of business and acceptable levels of risk, duly approved by their Board. A confirmation in this regard may be communicated to Cyber Security and Information Technology Examination (CSITE) Cell of Department of Banking Supervision, Reserve Bank of India, Central Office, World Trade Centre-I, 4th Floor, Cuffe Parade, Mumbai 400005 at the earliest, and in any case not later than September 30, 2016.

It may be ensured that the strategy deals with the following broad aspects:

Cyber Security Policy to be distinct from the broader IT policy / IS Security Policy of a bank

4. In order to address the need for the entire bank to contribute to a cyber-safe environment, the Cyber Security Policy should be distinct and separate from the broader IT policy / IS Security policy so that it can highlight the risks from cyber threats and the measures to address / mitigate these risks.

5. The size, systems, technological complexity, digital products, stakeholders and threat perception vary from bank to bank and hence it is important to identify the inherent risks and the controls in place to adopt appropriate cyber-security framework. While identifying and assessing the inherent risks, banks are required to reckon the technologies adopted, alignment with business and regulatory requirements, connections established, delivery channels, online / mobile products, technology services, organisational culture and internal & external threats. Depending on the level of inherent risks, the banks are required to identify their riskiness as low, moderate, high and very high or adopt any other similar categorisation. Riskiness of the business component also may be factored into while assessing the inherent risks. While evaluating the controls, Board oversight, policies, processes, cyber risk management architecture including experienced and qualified resources, training and culture, threat intelligence gathering arrangements, monitoring and analysing the threat intelligence received vis-à-vis the situation obtaining in banks, information sharing arrangements (among peer banks, with IDRBT/RBI/CERT-In), preventive, detective and corrective cyber security controls, vendor management and incident management & response are to be outlined.

Arrangement for continuous surveillance

6. Testing for vulnerabilities at reasonable intervals of time is very important. The nature of cyber-attacks are such that they can occur at any time and in a manner that may not have been anticipated. Hence, it is mandated that a SOC (Security Operations Centre) be set up at the earliest, if not yet been done. It is also essential that this Centre ensures continuous surveillance and keeps itself regularly updated on the latest nature of emerging cyber threats.

IT architecture should be conducive to security

7. The IT architecture should be designed in such a manner that it takes care of facilitating the security measures to be in place at all times. The same needs to be reviewed by the IT Sub Committee of the Board and upgraded, if required, as per their risk assessment in a phased manner. The risk cost/potential cost trade off decisions which a bank may take should be recorded in writing to enable an appropriate supervisory assessment subsequently.

8. An indicative, but not exhaustive, minimum baseline cyber security and resilience framework to be implemented by the banks is given in Annex 1. Banks should proactively initiate the process of setting up of and operationalising a Security Operations Centre (SOC) to monitor and manage cyber risks in real time. An indicative configuration of the SOC is given in Annex 2.

Comprehensively address network and database security

9. Recent incidents have highlighted the need to thoroughly review network security in every bank. In addition, it has been observed that many times connections to networks/databases are allowed for a specified period of time to facilitate some business or operational requirement. However, the same do not get closed due to oversight making the network/database vulnerable to cyber-attacks. It is essential that unauthorized access to networks and databases is not allowed and wherever permitted, these are through well-defined processes which are invariably followed. Responsibility over such networks and databases should be clearly elucidated and should invariably rest with the officials of the bank.

Ensuring Protection of customer information

10. Banks depend on technology very heavily not only in their smooth functioning but also in providing cutting-edge digital products to their consumers and in the process collect various personal and sensitive information. Banks, as owners of such data, should take appropriate steps in preserving the Confidentiality, Integrity and Availability of the same, irrespective of whether the data is stored/in transit within themselves or with customers or with the third party vendors; the confidentiality of such custodial information should not be compromised at any situation and to this end, suitable systems and processes across the data/information lifecycle need to be put in place by banks.

Cyber Crisis Management Plan

11. A Cyber Crisis Management Plan (CCMP) should be immediately evolved and should be a part of the overall Board approved strategy. Considering the fact that cyber-risk is different from many other risks, the traditional BCP/DR arrangements may not be adequate and hence needs to be revisited keeping in view the nuances of the cyber-risk. As you may be aware, in India, CERT-IN (Computer Emergency Response Team – India, a Government entity) has been taking important initiatives in strengthening cyber-security by providing proactive & reactive services as well as guidelines, threat intelligence and assessment of preparedness of various agencies across the sectors, including the financial sector. CERT-IN also have come out with National Cyber Crisis Management Plan and Cyber Security Assessment Framework. CERT-In/NCIIPC/RBI/IDRBT guidance may be referred to while formulating the CCMP.

12. CCMP should address the following four aspects: (i) Detection (ii) Response (iii) Recovery and (iv) Containment. Banks need to take effective measures to prevent cyber-attacks and to promptly detect any cyber-intrusions so as to respond / recover / contain the fall out. Banks are expected to be well prepared to face emerging cyber-threats such as ‘zero-day’ attacks, remote access threats, and targeted attacks. Among other things, banks should take necessary preventive and corrective measures in addressing various types of cyber threats including, but not limited to, denial of service, distributed denial of services (DDoS), ransom-ware / crypto ware, destructive malware, business email frauds including spam, email phishing, spear phishing, whaling, vishing frauds, drive-by downloads, browser gateway fraud, ghost administrator exploits, identity frauds, memory update frauds, password related frauds, etc.

Cyber security preparedness indicators

13. The adequacy of and adherence to cyber resilience framework should be assessed and measured through development of indicators to assess the level of risk/preparedness. These indicators should be used for comprehensive testing through independent compliance checks and audits carried out by qualified and competent professionals. The awareness among the stakeholders including employees may also form a part of this assessment.

Sharing of information on cyber-security incidents with RBI

14. It is observed that banks are hesitant to share cyber-incidents faced by them. However, the experience gained globally indicates that collaboration among entities in sharing the cyber-incidents and the best practices would facilitate timely measures in containing cyber-risks. It is reiterated that banks need to report all unusual cyber-security incidents (whether they were successful or were attempts which did not fructify) to the Reserve Bank. Banks are also encouraged to actively participate in the activities of their CISOs’ Forum coordinated by IDRBT and promptly report the incidents to Indian Banks – Center for Analysis of Risks and Threats (IB-CART) set up by IDRBT. Such collaborative efforts will help the banks in obtaining collective threat intelligence, timely alerts and adopting proactive cyber security measures.

Supervisory Reporting framework

15. It has been decided to collect both summary level information as well as details on information security incidents including cyber-incidents. Banks are required to report promptly the incidents, in the format given in Annex-3.

An immediate assessment of gaps in preparedness to be reported to RBI

16. The material gaps in controls may be identified early and appropriate remedial action under the active guidance and oversight of the IT Sub Committee of the Board as well as by the Board may be initiated immediately. The identified gaps, proposed measures/controls and their expected effectiveness, milestones with timelines for implementing the proposed controls/measures and measurement criteria for assessing their effectiveness including the risk assessment and risk management methodology followed by the bank/proposed by the bank, as per their self-assessment, may be submitted to the Cyber Security and Information Technology Examination (CSITE) Cell of Department of Banking Supervision, Central Office not later than July 31, 2016 by the Chief Information Security Officer.

Organisational arrangements

17. Banks should review the organisational arrangements so that the security concerns are appreciated, receive adequate attention and get escalated to appropriate levels in the hierarchy to enable quick action.

Cyber-security awareness among stakeholders / Top Management / Board

18. It should be realized that managing cyber risk requires the commitment of the entire organization to create a cyber-safe environment. This will require a high level of awareness among staff at all levels. Top Management and Board should also have a fair degree of awareness of the fine nuances of the threats and appropriate familiarisation may be organized. Banks should proactively promote, among their customers, vendors, service providers and other relevant stakeholders an understanding of the bank’s cyber resilience objectives, and require and ensure appropriate action to support their synchronised implementation and testing. It is well recognised that stakeholders’ (including customers, employees, partners and vendors) awareness about the potential impact of cyber-attacks helps in cyber-security preparedness of banks. Banks are required to take suitable steps in building this awareness. Concurrently, there is an urgent need to bring the Board of Directors and Top Management in banks up to speed on cyber-security related aspects, where necessary, and hence banks are advised to take immediate steps in this direction.

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National Disaster Management Plan

Prime Minister Shri Narendra Modi today released the National Disaster Management Plan (NDMP). This is the first ever national plan prepared in the country.

Minister of Home Affairs Shri Rajnath Singh, Minster of State for Home Affairs Shri Kiren Rijiju, and senior officers of the Prime Minister’s Office, Ministry of Home Affairs and National Disaster Management Authority were present during the function.

Following are the highlights of the NDMP:

  • The NDMP has been aligned broadly with the goals and priorities set out in the Sendai Framework for Disaster Risk Reduction.
  • The Vision of the Plan is to “Make India disaster resilient, achieve substantial disaster risk reduction, and significantly decrease the losses of life, livelihoods, and assets – economic, physical, social, cultural and environmental – by maximizing the ability to cope with disasters at all levels of administration as well as among communities.
  • For each hazard, the approach used in this national plan incorporates the four priorities enunciated in the Sendai Framework into the planning framework for Disaster Risk Reduction under the five Thematic Areas for Actions:

o   Understanding Risk

o   Inter-Agency Coordination

o   Investing in DRR – Structural Measures

o   Investing in DRR – Non-Structural Measures

o   Capacity Development

  • The Response part of the Plan has identified eighteen broad activities which have been arranged into a matrix to be served as a ready reckoner:

o   Early Warning, Maps, Satellite inputs, Information Dissemination

o   Evacuation of People and Animals

o   Search and Rescue of People and Animals

o   Medical Care

o   Drinking Water/ Dewatering Pumps/ Sanitation Facilities/ Public Health

o   Food & Essential Supplies

o   Communication

o   Housing and Temporary Shelters

o   Power

o   Fuel

o   Transportation

o   Relief Logistics and Supply Chain Management

o   Disposal of Animal Carcasses

o   Fodder for livestock in scarcity-hit areas

o   Rehabilitation and Ensuring Safety of Livestock and other Animals, Veterinary Care

o   Data Collection and Management

o   Relief Employment

o   Media Relations

  • The Plan has also incorporated a Chapter on Strengthening Disaster Risk Governance. The generalized responsibility matrix given in this section summarizes the themes for strengthening Disaster Risk Governance and specifies agencies at the Centre and State with their respective roles. The matrix has six thematic areas in which Central and State Governments have to take actions to strengthen disaster risk governance:

o   Mainstream and integrate DRR and Institutional Strengthening

o   Capacity Development

o   Promote Participatory Approaches

o   Work with Elected Representatives

o   Grievance Redress Mechanism

o   Promote Quality Standards, Certifications, and Awards for Disaster Risk Management

  • The National Disaster Management Plan (NDMP) provides a framework and direction to the government agencies for all phases of disaster management cycle.
  • The NDMP is a dynamic document in the sense that it will be periodically improved keeping up with the emerging global best practices and knowledge bases in disaster management.
  • Globally, the approach towards post-disaster restoration and rehabilitation has shifted to one of betterment reconstruction. The NDMP provides a generalized framework for recovery since it is not possible to anticipate all the possible elements of betterment reconstruction.
  • The Plan also highlights that the disaster risk reduction will be achieved by mainstreaming the requirements into the developmental plans.

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NCLT & NCLAT constituted

The Ministry of Corporate Affairs has issued notification for constitution of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) with effect from today i.e. 1st June, 2016. Hon’ble Justice S.J. Mukhopadhaya, Judge (Retd.), Supreme Court of India has joined as the Chairperson of the NCLAT and Hon’ble Justice M.M.Kumar, Judge (Retd.) has joined as the President of the NCLT.

With the constitution of the NCLT, the Company Law Board constituted under the Companies Act, 1956 stands dissolved.

Initially, NCLT will have eleven Benches, two at New Delhi and one each at Ahmedabad, Allahabad, Bengluru, Chandigarh, Chennai, Guwahati, Hyderabad,Kolkata and Mumbai.

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