Business Line ( 02 Sept ) carries a news report, titled :
" Zero foreign Investment till date in Modi's smart city mission "
In part , it reads as follows :
" Almost two years ago, the Narendra Modi government announced the 100 Smart Cities Mission to transform urban India.
But, till date, not a single dollar has come in as foreign investment for the mission.
On an RTI query filed by BusinessLine on how much foreign funding Indian cities identified under this mission have garnered, the Ministry of Urban Development said that “no investment has been received ”.
Moreover, on the size of foreign investment, which the government expects to receive under this mission, the RTI reply stated, “ No study has been done by the Ministry of Urban Development in this regard. ”
The Cabinet has approved ₹48,000 crore, that is ₹100 crore per city per year for five years for the mission. States have to match this amount and gather funds via public-private-partnership and convergence from other schemes. "
There is no doubt that :
# BusinessLine will , once again , file a similar RTI query , next Sept
# The answer will be , more or less , similar
NDA government comes up with an AMNESTY SCHEME to attract BLACK MONEY into " XYZ / ABC , SMART CITY SPV " ( Each city to have a separate SPV )
If my following suggestion is implemented , not only ALL the States will compete fiercely with one another to set up those Smart Cities , they will themselves go after the BLACK MONEY holders and motivate them to invest !
Friday, 1 July 2016
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 ?
# 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 !
# 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 similarlyapproved 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 !
06 Sept 2016
www.hemenparekh.in / blogs