Wednesday, 31 August 2016

Marginal / Peripheral / Incremental ?


Hindustan Times ( 01 Sept 2016 ) carries a news report titled :

 " Government approves permanent residency status for foreign investors "

Following are the highlights of the report  :


" The Centre approved on Wednesday a plan to allow foreign investors to settle, emulating a policy in countries such as the United States and Singapore to woo investment from abroad.



Foreigners need to invest 100 million rupees ($1.49 million) over 18 months, or 250 million rupees over three years, resulting in jobs for at least 20 resident Indians every fiscal year to be allowed to settle, the government said in a statement.


Those who meet the criteria would be eligible to stay for 10 years. The residency permit can be extended by a decade. Up to now, such investors have been eligible for business visas lasting up to five years.


NDA government has pointed to a 23% rise in foreign direct investment (FDI) to $55.5 billion in the fiscal year to March as proof the policies are gaining traction.


Investors with the permanent residency status would be free to buy one home, and spouses and dependents would be allowed to take private jobs and study, the government said "



QUESTION :

Other than some very poor people of nearby Bangla Desh , which other " foreigners " are " itching " to get a  Permanent Residency Status  in India ? - even without having to invest and pot holes not coming in the way !


ANSWER :

None  !

Even if some of that FDI ( $ 55.5 billion ) was made by " Individuals " , it was certainly not for getting a Permanent Residency !


On Sept 01 , 2017 , if someone files a RTI application , he will be informed that this new initiative has managed to attract 10 foreigners to come forward and invest Rs 100 cr  !


But , if NDA government is serious to attract , not Rs 100 cr , but Rs 100 LAKH*CRORE , then it needs to take some BOLD / GAME-CHANGING measures , such as one described in my following suggestion ( earlier sent as email to all central Ministers ) :


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Friday, 1 July 2016


FDI : By any other name ?



Many years ago , Shakespeare wrote :

" A Rose by any other name , would smell as sweet "

English-speaking Americans have turned this around to say :

" FDI by any other means , would work as well "

They are calling their FDI , " Invest in US and get Green Card " scheme

Officially called , " The EB-5 Immigrant Investor Program " , it invites foreigners to invest in USA , through following routes :

#   " Direct Investment Route " , which requires,

     *  Starting a new Business and creating at least 10 full time local jobs by bringing in $ 1 million

        But this process is very cumbersome

#   " Central Investment Program " , which requires,

     *  Bringing in and investing $ 500,000 in a Government approved EB - 5 project in America

     *  Get your full money back after 5 years

     *  If you are lucky , you may earn 0.5 % - 1 % return every year


In 2015 , 18,000 foreign citizens invested ( approx ) $ 9 Billion in US under these programs  - peanuts compared to a total of over $ 231 billion worth of FDI in USA in 2014 . Among these were 111 Indians

Now , I admit that no foreigner is dying to get a " Green Card " in India - and therefore unlikely to take advantage of a similar scheme , if we were to launch one !

But , we can come up with a scheme that will motivate 111,000 Indians to bring in and invest $ 500 billion within ONE YEAR !
( remember that amount siphoned out of India illegally and stashed abroad by Indians , between 2005-2015 ? )


MY  SUGGESTION :


#  NAME  OF  THE  SCHEME :

    EB-3 Scheme ( Earn by Bring Back Black )


#  WHO  CAN  INVEST  ?

    Any Indian citizen who has stashed away undisclosed / illegal assets abroad


#  WHERE  CAN  THEY  INVEST  ? 

    Scheme A 

#  Repay those loans taken from Indian Banks forming Rs 7 lakh*crore of NPA

                        Willful Defaulters repaying bad loans will be spared prosecution

                        No need for Govt money ( er , Tax-Payer Money ) , to bail out those banks !
  
    Scheme B 

#  Invest in State-wise Infrastructure SPVs ( not Central SPVs ) , managed by Private Sector

                       These will be approved by each state for implementation of the following projects within the state:

    *  Roads / Bridges / Ports / Airports / Smart Cities / Dams / Lakes-Ponds for water conservation / Forestation

    *  Healthcare / Education / Skills Development / Swatchh Bharat / Methane from Garbage  / Digital India

    *  Renewable Energy / Manufacture of Electric Vehicles / Setting up of Electric Charging Stations etc 

   
    All such State SPVs will need to be approved by the Central Government , for which the State will need to agree
    for full cooperation in implementation of the Central River Interlinking Project


#  HOW  MUCH  MUST  THEY  INVEST  ?

    No upper limit but a minimum of Rs 10 crores


#  WHAT  PROTECTION FOR  INVESTORS  ?

    No questions asked as to the source of funds , whether brought in from abroad using official channels or
    deposits made in CASH from local lockers ! No penalty , nor any civil / criminal action against investors


#  WHAT  INCENTIVE  FOR  INVESTORS  ?

    All interest / dividends paid out by the SPV , will be tax-free for 10 years if re-invested in any other similarly approved SPV


#  HOW  LONG  CAN  THEY  AVAIL  OF  THIS  SCHEME  ?

    This scheme will open on 01 April 2017 and close on 31 March 2018



#  HOW  CAN  INDIA  BENEFIT  FROM  THIS  SCHEME  ?

   *  Inflow of $ 500 Billion ( Rs 34 lakh*crore ) within ONE YEAR

   *  Generate 50 million jobs by 2020

   *  State Governments will go all out to

        #   Motivate private sector to set-up Infrastructure SPVs within their State

        #   Vastly simplify government approval process

        #   Eliminate / Reduce , rules , procedures and permissions

        #   Introduce " State level Incentives " to attract those BLACK MONIES into SPVs



I believe , with introduction of EB-3 Scheme , there will be such fierce competition between the States that India's rank in " Ease of Doing Business " will jump from current 130 to within TOP FIVE !


And all of this without having to pass any law in the Parliament - and with least dependence on bureaucrats !

Dear Policy Makers :

With two years already gone without making much of a dent ,  I urge you to stop tinkering with  INCREEMENTAL IMPROVEMENTS

Promising freebies before State Elections , won't take you beyond 2019 !

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01  Sept  2016

www.hemenparekh.in / blogs





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