RERA: Real Exchange Regulatory Act

Safety of money invested and assurance of time bounded completion of housing projects for the
buyers of such projects. Only 13 states & union territories have notified the rules, but expecting
others to follow suit. All sections of the Act came into force in May 1, 2017. Ongoing & new
housing projects has to register with the regulatory authorities within 3 months.

Proper display of the approved plans of the construction project must be exhibited at their
offices.
70% of the funds in both new and existing (of the unused amount) projects must be kept
in a separate account.
Both developer & buyer will have to pay penalty for delay of project.
Liability is on builder for structural defects for 5 years.

Precision Agriculture helping Indian Farmers

Drip Irrigation Systems (DIS) not only cuts down the quantity of water required for irrigation, a
much required property in dryer regions of the country, but also proved to generate significant
increases in the yield of crucial crops like horticulture products and cotton. University of
Agricultural Sciences-Bengaluru (UAS-B) has demonstrated this in the Northern reaches of
Karnataka, that water intensive sugarcane can be cultivated with 40-50% lesser water. They are
running pilot projects on the same as well as sub-surface irrigation.

Drip Irrigation & Mulching sheets have helped Telangana farmers conserve water. Regions with
acute shortage of water stands to benefit heavily from precision agriculture. Surface run-off,
evaporation and weed growths are significantly reduced by DIS & mulching sheets. Even though
DIS has a certain amount of initial investment, the results are immediate and of definite
proportion.

But the overall cost of production by micro irrigation (MI) went down to a good extent,
sometimes amounting to 40% decreased costs giving 20% more yield than the conventional
flood irrigation by allowing water to slowly drip to the water zone through a network of valves,,
pipes and tubes. Addition of water soluble fertilisers through the MI also helps in better yield.

The use of 'rain guns' combined with farm ponds shoot a high pressure jet of the harvested
rainwater into the air to be sprayed as a simulated rainfall over the crops, in Anantapur district of
Andhra Pradesh. This was adopted by the state government because of the failure of the previous
Desert Development Programme (DDP), which more or less concern Entrepreneurship on
creating check dams to retain water. But use of rain guns or springlers once the tanks and ponds
are filled up, gives protective wetting of the groundnut crops once or twice during long dry spells
until the next rain.
NITI Aayog asking for Labour Reforms
NITI Aayog in it’s 3-year draft action agenda has asked for substantive reforms in the labour
laws and not merely unifying the existing laws into four codes without reforming them, for
taking the country out of the low-productivity and low-wage jobs situation.

A panel headed by Arun Jaitley is mulling over converting the existing 44 labour laws into 4
simplified codes related to industrial relations, wages, social security & safety.

Bank Consolidation: More possible PSB mergers

The finance ministry & RBI is of the opinion of having more public sector banks to have lesser
number of healthy lenders of global size and scale. Further consolidation (after the recent merger
of 5 associate banks to SBI) among the remaining 21 PSBs, keeping in view factors like regional
balance, geographical reach, financial burden & smooth human resource transition, to ease out
the bad loans of PSBs which rose over 1 lakh crore rupees to 6.06 lakh crore rupees during the
end of 2016-17, the bulk of which came from power, steel, road infrastructure and textile sectors.
There should also not be a merger of a weak bank with a strong bank as it could pull the latter
down. (Possible mergers are like Punjab and Sind Banks with PNB, BoB taking over IOB, Dena
Bank merging with SIB.) The merger process would improve the NPA situation but needs the
clearance from the Competition Commission of India (CCI).

Privatisation of Freight Trains

Railway ministry is pondering over allowing private companies to run freight trains from their
private terminals, which will lead to faster evacuation of cargo. But this proposal has multiple
challenges:

Maintenance of the creaky signalling infrastructure & tracks remaining the same.
Added on to this is the congested routes such as the Delhi-Mumbai route, from both
passenger & freight trains.
Land acquisition & terminal utilisation.
Lack of conducive policies.
Cross-Subsidisation: Subsidised passenger traffic & premium tariff for cargo which is
benefiting other modes of traffic (roads & shipping).
Precedence given to passenger trains cause uncertainties in running freight trains in a
scheduled manner. This will pose questions on the economic viability of any such
operations to the private players in spite of the convenience of having own trains.
Uncertainty on whether the private rakes would be allowed to run on the Dedicated
Freight Corridors (DFCs) being set up in the country.
 The clarity in the time-boundedness in the approval of the private rakes with the
Research Designs & Standards Organisation (RDSO) of the Railways is another concern.

Absence of a credible dispute resolution mechanism. Railway being both operator and
regulator, could mean that the dispute resolution mechanism could not be adequately
effective. But the proposed Rail Development Authority may address this issue.

A scheme for Private Freight Terminal (PFT) was already mooted, but did not make much
success till now, though it showed the Railway's readiness to take necessary steps in the right
direction but not sufficiently. As per the provisions of this Special Freight Train Operations
Scheme of the Ministry of Railways, firms & manufacturers that transport bulk of their produce
(coal, sugar, cement, and fertilisers) through the railway network would be allowed to set up
their own private terminals from where their own trains will run on the tracks owned by the
Indian Railways to the delivery centres. The operation of the trains will remain with the railways.
Private container train operations have been introduced in 2006, but till now it hadn’t made much
headway. It might be attributed to the charges of Railways (heavy detention charges, fixed
charges irrespective of the fact whether the take is empty or full), special changes in tariffs for
some of the profitable cargo (heavy cargo and long distance haulage) & lack of guarantee of
timely delivery of consignments has not gone down well with EXIM cargo.

This might help in multi modal infrastructure development & speed up the invest in
infrastructure. This move is positive for large corporates with heavy volume of cargo, as freight
movement by railway for long distance over 500 kms.

If implemented properly, this would free up the resources of Railways and let’s them focus more
on basic infrastructure development like a modern signalling system and robust rail network
which will give more output from the existing capacities which will not only make Railways
profitable, but also the economy stands to hugely benefit from such moves.

Hiring Locally: Protectionist Policy in Foreign IT sectors

Countries like the US (H1B visa), UK, Australia and Singapore are either making rules for short
term work visas stricter or scrapping some of them entirely, to secure such jobs for their
Nationals. But the non-profit industry association of IT-BPM, NASSCOM (National Association
of Software and services Companies) is of the opinion that it is a lack of the necessary talents in
these countries that opt for out-sourcing of these skilled jobs in IT. But the Indian companies
working abroad have started to include more local work force to improve the condition and to
meet the government norms. They plan to overcome the lack of talent by bridging gap between
education and necessary skills, in a move to shift from visa-based models of working. But it is
expected that curbing the visa manipulations of foreign companies would be the maximum steps
these countries would resort to as more or less, their IT companies are strongly invested in these
work visas and foreign Nationals for their own sake. Hence no sudden cutting down of such jobs
will take place.

Government wants to create 2mn Jobs in Mobile manufacturing units

To create employment, government is taking steps to have a new phased manufacturing scheme
with mobile giants like Apple Inc to make them assemble their products with the Lions share of
the components that go into each phone to be purchased from indigenous manufacturing units
rather than importing them. This value addition process in India is expected to set up a
electronics manufacturing clusters within 8000 acres in the next 3 years and 2mn new jobs and
half-a-billion worth of manufacturing activity in the country within the next 10 years, and also a
huge incentive to large-scale mobile manufacturing in India. The government & Apple Inc and
manufacturing units in India are sitting down for talks as to clear out the requirements, the
capacity to produce, and to plan the investments needed.

The basic issue is that, after signing WTO's ITA-1 pact, under which certain inputs for IT
products were exempted from duties, it has become cheaper to import finished products and
components in India, which makes mobile manufacturers rethink of whether to produce them
here or just import them.

NITI Aayog mooted for removal of 2% import duty on mobile phone circuits
The 2% special additional duty on imports of populated printed circuit boards (PCBs), which is a
key component that goes into making mobile phones, has caused a hike in Mobile prices
manufactured in India by 1%. Though this was a semi-protectionist policy on the part of the
government to incentivise indigenous PCB production and thereby to push the Make in India
campaign.

Arguments made by NITI Aayog:

Though 2% import duty on PCBs would provide modest protection to domestic PCB
manufacturers, it would hurt the mobile phone manufacturers.
It is better to let the mobile manufacturers flourish at this stage without handicapping
them with unnecessary tariffs on their components.
As Indian mobile companies start to export their products, it would automatically pace
way for development of other component manufacturers.
The focus must be to build globally competitive industries, since the world market in
electronics products is $2 trillion compared to $65 billion in the domestic market. Hence
there should be an aggressive export strategy to prepare India effectively for the fourth
 Industrial Revolution.

[The above two news items are of conflicting interests. Job creation & Make in India conflicting
with an easy Industrial-Production atmosphere. They should be analysed like that together.]

Precision
Drip