Government Polices Current Affairs

Maharashtra becomes first state to unveil Public Cloud Policy

Maharashtra became first state in country to unveil Public Cloud Policy that virtually mandates state government departments to shift their data storage onto cloud.

Earlier in October 2017, State Government had formed four-member committee to draft policy framework on cloud usage, which had submitted a policy document that’s being now adopted as public cloud policy.

Key Facts

The policy will result in additional private sector investments worth US $2 billion for cloud industry as government is one of biggest creators and consumers of data. It will aim to generate 5 lakh jobs in next five years.

The policy is likely to be formally set in motion through detailed government resolution. In coming days, five to six top cloud service providers like Amazon or Microsoft will be empanelled for data storage onto cloud.

Under the policy framework, state government will make mandatory its various departments for storing data within country and to use public cloud in cases wherever Right to Information Act (RTI) is applicable. Later, it will also allow for enhanced security features for private and sensitive data to be stored on the cloud.

State Innovation and Start-up Policy

The State Cabinet headed by Chief Minister also had approved State Innovation and Start-up Policy. Its objective is to attract Rs.5,000 crore investments in development of incubation and start-ups. It will be applicable till 2022.

Under it, on an average three incubators in each of the 12 designated sectors and develop at least 2,000 start-ups will be established in next five years. It will result in development of at least 10 lakh sq ft of incubation space within the state. It will provide Rs.2,500 crore for youth entrepreneurship activities (1% of State Budget).

Under it, an establishment up to 5 years from date of its registration will be considered as start-up. Its annual turnover must be up to Rs. 25 crore. It should be based on innovative concept, innovative commercialisation of products and services or it can also be based on innovative production methods and processes.

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Cabinet approves amendments to FDI Policy

The Union Cabinet has approved number of amendments to Foreign Direct Investment (FDI) Policy. The purpose of amendments is to simplify and liberalise FDI policy in India to provide ease of doing business in country. The liberalized policy will lead to larger FDI inflows contributing to growth of investment, employment and income.

Key amendments approved

  • 100% FDI for Single Brand Retail Trading (SBRT) under automatic route.
  • 100% FDI under automatic route in Construction Development.
  • Foreign airlines allowed investing up to 49% in Air India under government approval route.
  • FIIs/FPIs allowed investing in Power Exchanges through primary market.
  • Definition of ‘medical devices’ amended in FDI Policy.

FDI policy on SBRT

The existing policy FDI policy on SBRT allows 49% FDI under automatic route, and beyond 49% up to 100% is allowed through government approval route. The amendment now permits 100% FDI for SBRT under automatic route. It also permits SBRT entity to set off its incremental sourcing of goods from India for global operations during initial 5 years against mandatory sourcing requirement of 30% of purchases from India.

Incremental sourcing means increase in terms of value of such global sourcing from India for that single brand (in Indian Rupees term) particular financial year over preceding financial year. After completion of 5 year period, SBRT entity shall be required to meet 30% sourcing norms directly towards its India’s operation on annual basis.

Construction Development

The amendment clarifies that real-estate broking service does not come under real estate business. Therefore, it is eligible for 100% FDI under automatic route.

FDI in Civil Aviation

Foreign airlines are allowed to invest capital in Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital under government approval route. However, this provision was not applicable to Air India, implying that foreign airlines could not invest in Air India. The amendment does away with this restriction and allows foreign airlines to invest up to 49% under approval route in Air India.

Power Exchanges

The present FDI policy allows 49% FDI in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 under automatic route. However, Foreign Portfolio Investors (FPIs) and Foreign Institutional Investors (FIIs) purchases were restricted to secondary market only. The amendment now allows FIIs/FPIs to invest in Power Exchanges through primary market as well.

Medical devices

The approved FDI Policy changes definition of ‘medical devices’. Earlier FDI policy on pharmaceuticals sector provided definition of medical device as contained in FDI Policy will be subject to amendment in Drugs and Cosmetics Act. As Now the reference to Drugs and Cosmetics Act from FDI policy will be dropped.

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