Infrastructure funds not to be diverted

The Reserve Bank of India has asked banks and FIs to ensure that loans given to Infrastructure projects promoted by government-owned entities is not used for financing state government budgets.   Likewise, banks and FIs should ensure that revenue stream from the project is enough to take care of the debt servicing obligations and that the repayment or servicing of debt is not out of budgetary resources.  This was indicated by the RBI in the revised guidelines for infrastructure financing by way of term loans or investment in bonds issued by government-owned entities. 

The central bank has also permitted banks to issue guarantees favouring other lending institutions in case of infrastructure projects. 

APEDA to set up five more agri export zones

The steering committee of Agricultural and Processed Foods Development Authority (APEDA) on January 23, 2002 cleared proposals for setting up of five more agri export zones (AEZs) in the country.  With this recent clearance the number of sanctioned AEZ projects is now 15.

The APEDA Chairman, Shri Anil Swarup said that the five AEZs which are cleared would require an investment of Rs.237 crore. These include Rs.15 crore pipneapple AEZ in Agartala in Tripura, Rs.35 crore mango AEZ in Maharashtra, Rs.53 crore vegetable and mango pulp AEZ in Chitoor in Andhra Pradesh, Rs.49 crore potato, onion and garlic AEZ catering to Ujjain, Indore, Devas, Dhar and Shahjapur districts in Maharashtra and Rs.85 crore apple AEZ catering to Srinagar, Baramulla, Anantnag, Kupwara and Pulwara districts in Jammu & Kashmir. 

He said that the pipeapple AEZ in Tripura is expected to export Rs.10.12 crore in value terms every year, the mango AEZ in Maharashtra is expected to export 19,500 tonne of mango per year, the vegetable and mango pulp AEZ in Andhra Pradesh is expected to export Rs.72 crore in value terms per year. 

The new AEZ in Madhya Pradesh is expected to export 25,000 tonne of potato, 25,000 of onion and 18,500 tonne of garlic every year. The apple AEZ in Jammu & Kashmir is likely to export 15,000 tonne of apple per year. 

NABARD sanctions Rs.714 cr for rural infrastructure

The National Bank for Agriculture and Rural Development (NABARD) has sanctioned Rs.713.94 crore in loans under the Rural Infrastructure Development Fund (RIDF) VII for creation of infrastructure in 12 states. This has taken the cumulative sanctions of 22 states to Rs.3,598.36 crore out of a corpus of Rs.5,000 crore for RIDF VII during the current fiscal. 

The funds will be utilised for construction of schools, anganwadi centres, roads and bridges and for rural water supply programmes. In seven states, 1079 road projects, covering 5,042 kms and 205 bridges have been sanctioned. 

The sanctioned 74 rural water supply projects are estimated to provide drinking water to 1.137 million people in 567 habitations in Haryana and Andhra Pradesh. Besides, 92 irrigation and an equal number of flood protection projects had been sanctioned, which will create and restore the potential for irrigated cultivation in 91,504 hectares in eight states. 

Govt. to convert all EPZs to SEZs

The government is to convert all export processing zones (EPZs) in the country into special economic zones (SEZ).   The EPZs at Santa Cruz, Kandla and Cochin have already been converted into SEZs.  The remaining EPZs located at Noida, Falta, Chennai and Visakapatnam would also be converted soon according to official sources.  Units functioning under certain other schemes like software technology park (STP) would also be brought under the SEZ scheme. 

The new SEZs that have been cleared now are located at Kanpur, Greater Noida, Bhadohi (all Uttar Pradesh); Paradeep and Gopalpur in Orissa; Kulpi in West Bengal, Indore in Madhya Pradesh, Hasan in Karnataka, Kakinada in Andhra Pradesh, Dronagiri in Maharashtra, Positra in Gujarat  and Nanguneri in Tamil Nadu.   The four SEZs that are functional now clocked exports of Rs.3,375 crore during April-October 2001-2002, registring a growth of 17 percent.   Exports from these units during the corresponding period of the previous financial year was Rs.2,881 crore. 

Exports from all EOUs and EPZ units during 2000-2001 was Rs.24,362 crore as compared to the country’s overall export of Rs.2,02,510 crore. This works out to a share of 12 percent.  Of this export of EPZ units stood at s.8,450 crore while EOUs did exports worth Rs.15,912 crore. 

Group exposure limit for all core projects raised

The Reserve Bank of India (RBI) has allowed banks and financial institutions (FIs) to exceed the cap of 50 percent group exposure by 10 percentage poitns for all infrastructure projects which will include power, roads, highways, bridges, ports, airports, rail system, water supply, irrigation, sanitation and sewerage system, telecommunication, housing and industrial parks. 

The RBI has also relaxed the guarantee norms for the infrastructure projects.  Banks with funded exposure of atleast 5 percent of the total project cost can now issue any amount of guarantees in favour of other lending institutions.  So far, the guarantees issued by banks could not exceed double the amount of their funded exposure.  Banks have been directed to undertake  the normal credit appraisal, monitoring and follow-up of the project before issuing guarantees. 

EOUs, EPZs, SEZs asked to refund ‘deemed export’ benefits

The government has asked hundred percent export oriented units (EOUs) and units set up in the export processing zones (EPZs) and special economic zones (SEZs) to refund the ‘deemed export’ benefits of draw-back and terminal excise duty availed of by them while clearing indigenously-procured raw materials/capital goods in the domestic tariff area (DTA).  The move is designed to prevent revenue losses arising from non-recovery of these benefits arising from the failure of the units to utilise the goods. 

The units will thus be allowed to dispose/ transfer or sell indigenously purchased goods in the DTA only on production of a certificate from the jurisdictional development commissioner (JDC)  that the deemed export benefits accrued to them at the time of procurement have been paid back to the government, according to a circular issued by the revenue department. 

But where such benefits have been taken advantage of by the units at the time of procurement of goods, a certificate to this effect from the JDC will be required. 

The circular follows doubts about payment of duty on DTA sale of those goods in respect of which deemed export benefits have been availed of and which are transferred/sold back into the DTA by EOUs/EPZs/SEZs.
As per the current export and import policy, the EOUs/EPZs/SEZ units procure goods from indigenous sources, free of duties, for manufacture of goods for export.   The supplies by DTA units to EOUs/EPZs/SEZs are treated as deemed exports.   In such cases, the DTA supplier or the EPZ/EOU units on production of suitable disclaimer from DTA unit can avail of the benefits. 

The benefits can even include advance licence for supply of intermediate goods to the EOU/EPZ units and the objective  is to ensure that the goods are ultimately used in the manufacture of finished products for export. 

NABARD sanctions Rs.54 cr for MP

The National Bank for Agricultural and Rural Development (NABARD)  has sanctioned Rs.54 crore for the construction of a small hydel plant, five minor irrigation projects, three bridges and eight roads in Madhya Pradesh. 

The hydel plant will be constructed on the left bank canal of the Bargi diversion project in the Jabalpur district.  On completion, the five irrigation projects will create an additional irrigation potential of 725 hectares.