Govt plans to set up ombudsman to empower automobile owners and new buyers

Automobile buyers will soon have a grievance redress mechanism for their issues with manufacturers. The government plans to set up an automotive ombudsman to empower millions of automobile owners and new buyers.
The government is in the process of rolling out a National Automotive Policy and the ombudsman-led redress mechanism is one of the several proposals. The draft circulated by the Department of Heavy Industry for public and stakeholders’ comments last month did not have this clause; this was added early this week.
The draft policy seeks to establish an automotive ombudsman to address consumer grievances before adopting a legal recourse. The proposed ombudsman, according to the draft, might intervene in a variety of issues related to new car sales, service and repair of vehicles and warranties.
Besides the grievance redress mechanism, the draft also aims to set up a consumer feedback and rating system to document consumer experience at dealerships and service stations. The policy seeks to design and roll out a star-rating system allowing consumers to rate the performance of automobile dealerships, workshops and service centres, based on a set of pre-defined objective parameters. “These ratings would be made available in public domain,” the draft said. The policy wants to ensure that automakers, suppliers, service centres and workshops meet the ‘highest standards’ of service and repair.
R C Bhargava, chairman of Maruti Suzuki, said the idea of an ombudsman was excellent in theory. “Its success will depend on the functioning. The success of any institution depends on how people do their work. A good concept can become excellent or bad depending on the execution,” he said. However, he said the idea of rating dealerships was not a good one. “Since the success of a dealership depends on market forces, introducing a rating system would just add another cost of compliance.” India has had an ombudsman for banking sector since 1995 to address deficiency in banking services.
By volume, India is the fifth-largest vehicle manufacturer in the world.

It is the largest manufacturer of two-wheelers, three-wheelers and tractors, fourth-largest manufacturer of light commercial vehicles and fifth-largest manufacturer of heavy commercial vehicles. It is estimated that by 2020, the automobile industry in India will be the third largest in the world after China and the US. The country is also the fifth-biggest market for passenger vehicles — cars, utility vehicles and vans — and poised to become the third biggest by 2020. However, consumers do not have a dedicated forum to flag their grievances against manufacturers and dealerships.
India does not even have a mandatory recall policy for defective vehicles. The recall of vehicles has been a grey area under existing laws, and largely practised by manufacturers voluntarily. While most carmakers have been recalling vehicles for the last two decades, recalls of two- and three-wheelers and commercial vehicles are unheard of.
The Motor Vehicles (Amendment) Bill, awaiting approval of the Rajya Sabha, states that the government can order a recall if there is a defect in a vehicle that could harm the environment, the occupants or those on the road. A recall can also be initiated in case a percentage (to be decided when the rule is notified) of owners or a testing agency approaches the government. In such a case, the manufacturer must either replace the vehicle or reimburse the entire cost of the vehicle or repair it. There will be provisions for imprisonment and penalty in case of failure.

Govt plans to set up ombudsman to empower automobile owners and new buyers

Gold policy likely to boost supply by Indian refineries

The government’s proposed gold policy, being finalised after recommendations from a NITI Aayog panel, should lead to a big rise in India’s sourcing of refined gold from local refineries.
Data compiled by the global gold miners’ body, World Gold Council, showed India’s total dore (unrefined gold) import was 245.7 tonnes for calendar year 2017, compared to 141.9 tonnes the previous year. Recovery through melting of used jewellery was 88.4 tonnes from local refineries in calendar 2017, compared to 79.5 tonnes in 2016. Another 8.8 tonnes of gold was sourced from other sources, against 9.9 tonnes in 2016. If total import is taken as net of exports, then domestic supply is estimated over 40 per cent.
Experts gathered at 5th India International Summit organised by the India Bullion and Jewellers Association said they expected the policy to pave the way for big changes in the entire jewellery value chain.
“The new policy is likely to boost local refineries immensely. Gold supply through local refineries might increase to 80 per cent in the next few years, from over 40 per cent now,” said Rajesh Khosla, former managing director of MMTC Pamp, the country’s only refinery to produce LBMA (London Bullion Markets Association)-approved gold in India.
Industry stakeholders say gold is being regulated by a number of ministries and other bodies.

The commerce ministry makes policy on jewellery export, while the finance ministry and Reserve Bank set mechanisms to address the issue of the current account deficit if gold import rises.
“It is important to have a single regulator for the entire trade, to avoid inter-ministerial movement of papers seeking approval for various issues dealt by the gold and jewellery industry. Gold is currently regulated by many regulators, with different objectives. A single regulator is needed to address all concerns of the entire industry and formulate regulations, keeping in mind all the interested stakeholders,” said Sabyasachi Ray, executive director, Gems and Jewellery Export Promotion Council.
To address this issue, said Manoj Dwivedi, joint secretary, Union ministry of finance, a Gold Board is being formed; the announcement had actually bene made by the finance minister in this year’s Union Budget presentation. It might have statutory powers, say sources, with representation from all stakeholders in gold and the respective government departments and regulators. Dwivedi did not say when this would be set up.
“We have started working on the board, as announced by the minister. It is important that all industry stakeholders come together under one roof and the government is listening to all of them,” Dwivedi said.
The proposed policy is to address the issues of transparency in gold and jewellery retailing, hallmarking and financing against gold, among others.

Gold policy likely to boost supply by Indian refineries

Pakistan recalls envoy; it’s normal, says India on diplomats harassment row

The India-Pakistan ties witnessed a new crisis on Thursday as Pakistan called back its High Commissioner Sohail Mahmood for consultation over “harassment” of its diplomatic staff and their families in New Delhi.
India, however, has downplayed Pakistan’s move as “normal and routine”. External Affairs Ministry spokesperson Raveesh Kumar said: “It is pretty normal for an Ambassador or a High Commissioner in any country — for example the resident Ambassadors and High Commissioners who are in India — to go back to their capital to hold consultations with the foreign office.”
“This is pretty routine in nature,” Kumar said.
Pakistan claimed that last week its Deputy High Commissioner’s car was chased and his driver abused by a group of men in Delhi.
He also alleged that India had not taken measures to safeguard Pakistani diplomats and their families in New Delhi.
In response to Pakistan’s allegations, Kumar said that the Indian High Commission in Pakistan was facing “a litany of issues” which have not been resolved for several months.
“We raised these issues in good faith through diplomatic channels and not through the media. We have asked for an immediate resolution of these issues faced by our High Commission in Islamabad so that the safety and security of the diplomatic mission and our diplomatic and consular officials are assured,” Kumar added.
The relations between India and Pakistan hang in the balance, especially after the recent barbs exchanged at the UNHCR. The recent incidents of harassment also come close on the heels of frequent ceasefire violations across the Line of Control.
Here are the top 10 developments of the India-Pakistan diplomatic spat so far:
1. Pakistan recalls envoy: Pakistan on Thursday said it has decided to call back its High Commissioner in India Sohail Mahmood to hold consultations over “recent incidents of harassing of their diplomats”.
“Our High Commissioner in New Delhi has been asked to come to Islamabad for consultations,” Pakistan’s Foreign Office spokesman Muhammad Faisal said.
ALSO READ: World Happiness Report: Indians not a cheerful lot, Pakistanis more joyful
2. India failed to take notice: Announcing call back of the High Commissioner, Faisal said that the Indian government failed to take notice of the increasing incidents of intimidation of Pakistani diplomats, their families and staffers by its intelligence agencies.
3. India downplays move: Minutes after Faisal’s statement, Indian External Affairs Ministry spokesperson Raveesh Kumar said: “It is pretty normal for an Ambassador or a High Commissioner in any country — for example the resident Ambassadors and High Commissioners who are in India — to go back to their capital to hold consultations with the foreign office”.
4. Pak summons India’s Deputy High Commissioner: On Tuesday, Pakistan summoned India’s Deputy High Commissioner J P Singh over the alleged harassment of officials and families of the Pakistan High Commission in New Delhi.
A statement released by the Office of Spokesperson of Pakistan Foreign Affairs Ministry said Singh was summoned by Director General (South Asia & SAARC) Mohammad Faisal and a strong protest was lodged at the “maltreatment being meted out to the officials and families of the Pakistan High Commission in New Delhi”.
5. ISI raids Indian residential complex, power and water supply cut off: The under-construction Indian residential complex in Islamabad was allegedly raided by Pakistan’s ISI that disconnected power and water supply, according to sources. Further, the Pakistan government delayed providing clearance for the complex, forcing Indian diplomats to compromise on their safety and security, the sources added.
“Despite the Foreign Secretary’s assurance, the power supply was not restored for over two weeks.

The Pakistan High Commission faces no such disruptions (in India),” sources said, according to news agency PTI. Indian diplomats have often complained about unauthorised entry into their premises.
ALSO READ: Pakistan’s ISI raids Indian diplomats in Islamabad, power supply cut
6. ‘Harassment the new normal’: Indian High Commissioner Ajay Bisaria had earlier alleged that his car was interrupted in the middle of the road to prevent him from attending a lunch hosted by Bohra community in Karachi. “Harassment is the new normal for Indian High Commission personnel in Islamabad. The High Commissioner’s car was recently stopped by Pakistani agencies in the middle of a busy road to prevent him from attending an event,” a source told PTI.
7. Pakistan Deputy High Commissioner’s cars followed for 20 mins: Pakistan Deputy High Commissioner’s cars, on March 8, were followed during the wee hours while his children were being dropped off to British School in New Delhi’s Chanakyapuri, reported The Indian Express. The commissioner was not inside the car.
According to the report, the cars were followed for almost 20 minutes, starting from the commissioner’s residence to the school. They were “continuously obstructed and harassed” and after the children were dropped off, the driver, who was forced to get off the vehicle was told that this was in retaliation to the Indian diplomat’s harassment in Pakistan, the report added.
8. Pakistan threatens to pull out diplomats: Pakistan issued a demarche to Indian High Commission in Islamabad and to MEA in New Delhi accusing India of harassing its diplomats and their families in the country and threatened to pull out the families if the intimidation did not stop, reported Pakistani newspaper Dawn. Indian officials are yet to verify the same.
These “uncivilised” actions by the Indian government have been as “deliberate” by Pakistan diplomats, reported Pakistan Pakisan Today.
9. Indian official’s house invaded, laptop stolen: In one of the cases that showed poor security of Indian officials in Pakistan, an official’s home was broken into and his laptop was stolen, according to sources.
“The Indian High Commission in Pakistan has been facing tremendous harassment for long, particularly in the last year,” the source added, according to news agency ANI.
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10. Indian diplomats receive obscene calls and messages: Pakistan’s agency personnel have reportedly been shooting videos of Indian officers, flashing their mobile phones on their faces. Not just that, obscene phone calls and messages are constantly being sent to them.
“Aggressive surveillance, violation of physical space and tailing of officers in close and dangerous proximity is a perennial issue,” the sources said, reported PTI. “In view of such an atmosphere of intimidation, most families have returned to India and children have been withdrawn from schools.”

Pakistan recalls envoy; it’s normal, says India on diplomats harassment row

US hits Russia with new sanctions for election meddling, cyberattacks

US President Donald Trump’s administration today announced sanctions against Russians accused of trying to influence the 2016 election and of involvement in other separate cyberattacks.

Senior security officials said the sanctions target five entities and 19 individuals.


“The administration is confronting and countering malign Russian cyber activity, including their attempted interference in US elections, destructive cyber-attacks, and intrusions targeting critical infrastructure,” said Treasury Secretary Steven Mnuchin.

“These targeted sanctions are a part of a broader effort to address the ongoing nefarious attacks emanating from Russia.

US hits Russia with new sanctions for election meddling, cyberattacks

HPCL, GSPC deals to hit oil PSU dividends in FY18 by at least 17%

India’s largest hydrocarbon producer, Oil and Natural Gas Corporation (ONGC), has told the government it will not raise the dividend payout for 2017-18.
The reason is that it had to go for two major deals, both on government order. Of acquiring a majority stake in Hindustan Petroleum Corporation (HPCL) and Gujarat State Petroleum Corporation’s (GSPC’s) KG basin gas block.
According to multiple sources, this would mean a cut of about 17 per cent on the dividend collected from petroleum companies, to Rs 145 billion in 2017-18 from Rs 175 billion in 2016-17.
“ONGC has informed the finance ministry that it is not in a position to pay higher dividend and might only be able to maintain last year’s payout ratio,” said a source. Based on this, the government had agreed to restrict the dividend payout to 45 per cent of the company’s net profit.
In this financial year, ONGC had completed the acquisition of an 80 per cent stake in GSPC’s KG basin gas block for Rs 77.4 billion. In January, it bought a 51.1 per cent government stake in HPCL for about Rs 369 billion.
Last year, the government had demanded higher dividend from its three oil marketing companies (OMCs) – Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and HPCL. The reason given was that their earnings and profit had risen in the first half of the financial year.
graph “This year, the average has been kept between 40 and 60 per cent for petroleum sector companies.

IOC’s share comes to around Rs 55 billion and that of ONGC at Rs 52 billion. These numbers include the final dividend of last year and interim dividend of this one,” said a government official, on condition of anonymity.
During 2016-17, higher dividends from cash-rich public sector undertakings had provided the exchequer a fiscal cushion. Petroleum companies saw a 71.3 per cent rise in dividend to Rs 175 billion.
The net profit of the government-owned exploration and production companies — ONGC, Oil India, and GAIL (India) — together dropped around one per cent during the first half of the current financial year. That of the three OMCs dropped 23 per cent from Rs 181.1 billion during the first half of last year to Rs 140 billion during the same time this year.


HPCL, GSPC deals to hit oil PSU dividends in FY18 by at least 17%

Delhi, Chennai, Bengaluru among world’s cheapest cities: EIU survey

Three Indian cities – New Delhi, Bengaluru and Chennai, are among the cheapest cities in the world, according to an Economist Intelligence Unit (EIU) survey, that named Singapore as the most expensive city.

According to the Worldwide Cost of Living 2018 survey, South Asian cities, particularly those in India and Pakistan offers the best value for money. Bengaluru, Chennai, Karachi and New Delhi featured among the 10 cheapest locations surveyed.


“India is tipped for rapid economic expansion, but in per-head terms, wage and spending growth will remain low. Income inequality means that low wages are the norm, limiting household spending and creating many tiers of pricing as well as strong competition from a range of retail sources,” the report noted.

Moreover, cheap and plentiful supply of goods into cities from rural producers with short supply chains as well as government subsidies on some products, has kept prices down, especially by Western standards, the report noted.

Syria’s capital, Damascus is the cheapest city in the world. Joining Damascus at the bottom is Venezuela’s capital, Caracas and Kazakhstan’s business centre, Almaty, in the second and third position respectively.

Others in the 10 cheapest cities list include Lagos at the 4th place, Bengaluru (5th), Karachi (6th), Algiers (7th), Chennai (8th), Bucharest (9th) and New Delhi (10th).

“Although the Indian subcontinent remains structurally cheap, instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location. This means that there is a considerable element of risk in some of the world’s cheapest cities,” it added.

Singapore retained its title as the world’s most expensive city for the fifth consecutive year. Singapore was ranked ahead of Paris placed second on the list, Zurich (3rd) and Hong Kong (4th).

According to the report, Oslo is the 5th most expensive city in the world, followed by Geneva (6th), Seoul (7th), Copenhagen (8th), Tel Aviv (9th) and Sydney (10th).

The Worldwide Cost of Living is a biannual Economist Intelligence Unit survey that compares more than 400 individual prices across 160 products and services. These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.

Delhi, Chennai, Bengaluru among world’s cheapest cities: EIU survey

ICICI Securities IPO: Public holidays may cost ICICI Bank Rs 3 bn in taxes

ICICI Bank has been successful in launching the initial public offering (IPO) of its investment banking arm, ICICI Securities, before the end of this financial year but there remains a question on whether the private lender will be able to get the benefit of the long-term capital gains (LTCG) tax exemption on profits made on the sale of equity shares.
ICICI Securities’ Rs 40-billion public offer will open on March 22 and close on March 26. The IPO allotment process — critical for computation of capital gains — takes another five working days to complete. Ideally, the payouts in case of ICICI Securities could have taken place before March 31 but two back-to-back public holidays might result in a spillover of transaction into the next financial year.
Currently, LTCG — profits made on the sale of equity shares held for over 12 months — are entirely exempt from taxes. But it will be taxed at 10 per cent, effective April 1.
The share sale is entirely an offer for sale by the parent. The IPO proceeds of Rs 40 billion are capital gains the private lender would be booking by divesting around 24 per cent stake in the investment banking arm.
“If the allotment process gets completed before March 31, ICICI Bank will get the tax benefit. However, if the process, mainly the payouts, happens on April 1 or later, the bank will have to pay capital gains tax on the issue proceeds,” said an investment banker handling the offer.
The timeline of a maiden offer — gap between closing of an IPO and listing of the securities — is six working days.

The six-day process involves modification of bids, obtaining exchange approvals, finalisation of allotment, transfer of securities from an escrow to investors and transfer of funds from investors’ account to the issuers.
The bone of contention is public holidays on March 29 and March 30 on account of Mahavir Jayanti and Good Friday, respectively.
As banks and exchanges would be shut, the allotment and the payouts could take place on April 3 and listing on April 5, back-of-the-envelope calculations show.
“Technically, the day the shares get transferred and allotment is made, will be considered as the day of transaction for tax purposes. The day of IPO closing or listing is not that important,” a tax lawyer said.
According to sources, investment banks are in talks with exchanges to process the application during public holidays so that the transaction can be concluded in the current financial year. But the bourses have not offered any clarity on whether this can be done, a source said, adding it will be “touch and go”.
graph While the bank wants to complete the deal in the ongoing fiscal year, it will have no option but to pay the tax if it spills over to the next year, sources said.
ICICI Bank will get Rs 40 billion from the share sale. The bank will have to pay 10 per cent of the proceeds after subtracting the cost of acquisition and indexation. The exact tax outgo could be as much as Rs 3 billion.
The private bank is selling 77.25 million shares of ICICI Securities in the IPO. According to an initial filing with the Securities and Exchange Board of India, the bank had planned to sell only 64.43 million shares.
Industry players said ICICI Securities’ valuations had to be lowered by 20 per cent due to weak demand, which slightly delayed the offer process.

ICICI Securities IPO: Public holidays may cost ICICI Bank Rs 3 bn in taxes