Agriculture Export Policy 2018

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the Agriculture Export Policy, 2018.  The Cabinet has also approved the proposal for establishment of Monitoring Framework at Centre with Commerce as the nodal Department with representation from various line Ministries/Departments and Agencies and representatives of concerned State Governments, to oversee the implementation of Agriculture Export Policy.

          The Government has come out with a policy to double farmers’ income by 2022. Exports of agricultural products would play a pivotal role in achieving this goal. In order to provide an impetus to agricultural exports, the Government has come out with a comprehensive “Agriculture Export Policy” aimed at doubling the agricultural exports and integrating Indian farmers and agricultural products with the global value chains. The Agriculture Export Policy has the following vision:         

          “Harness export potential of Indian agriculture, through suitable policy   instruments, to make India global power in agriculture and raise farmers’     income.”

Objectives:

Objectives of the Agriculture Export Policy are as under:

• To double agricultural exports from present ~US$ 30+ Billion to ~US$ 60+ Billion by 2022 and reach US$ 100 Billion in the next few years thereafter, with a stable trade policy regime.
• To diversify our export basket, destinations and boost high value and value added agricultural exports including focus on perishables.
• To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products exports.
• To provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phyto-sanitary issues.
• To strive to double India’s share in world agri exports by integrating with global value chain at the earliest.
• Enable farmers to get benefit of export opportunities in overseas market.

Elements of Agriculture Export Policy:

          The recommendations in the Agriculture Export Policy have been organised in two categories – Strategic and Operational – as detailed below:

Strategic	Policy measures
	Infrastructure and logistics support
	Holistic approach to boost exports
	Greater involvement of State Governments in agri exports
	Focus on Clusters
	Promoting value-added exports
	Marketing and promotion of “Brand India
Operational	Attract private investments into production and processing
	Establishment of strong quality regimen
	Research & Development
	Miscellaneous

ECB Policy - Review of Hedging Decision

Gist of RBI notification dated 26th November, 2018 follows:

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11418&Mode=0

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to paragraphs 2.4.2 and 2.5 of Master Direction No.5 dated January 1, 2016 on “External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers”, as amended from time to time and A. P. (DIR Series) Circular No. 11 dated November 06, 2018, in terms of which certain eligible borrowers raising foreign currency denominated ECBs under Track I, having an average maturity between 3 and 5 years, are mandatorily required to hedge their ECB exposure fully.

2. On a further review of the extant provisions, it has been decided, in consultation with the Government of India, to reduce the mandatory hedge coverage from 100 per cent to 70 per cent for ECBs raised under Track I of the ECB framework by eligible borrowers given at paragraph 2.4.2 (vi) of the aforesaid Master Direction for a maturity period between 3 and 5 years. Further, it is also clarified that ECBs falling within the aforesaid scope but raised prior to the date of this circular will be required to mandatorily roll-over their existing hedge(s) only to the extent of 70 per cent of outstanding ECB exposure.

3. All other provisions of the ECB policy remain unchanged. AD Category - I banks should bring the contents of this circular to the notice of their constituents and customers.

4. The aforesaid Master Direction No. 5 dated January 01, 2016 is being updated to reflect the changes.

5. The directions contained in this circular have been issued under section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Cost Audit Report

Under Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014 every company which is covered under these Rules, is required to furnish to the Central Govt., a copy of the Cost Audit Report, within 30 days of the receipt of the cost audit report by the company, in XBRL format in form CRA4. The cost auditor is required to furnish his report to the company within a period of 180 days from the closure of the financial year to which it pertains and the Board of Directors of the company is required to examine the same. This is provided in Rule 6(5) ibid.

Now vide an amendment to the aforesaid Rules,  where a company has got an extension of time to hold AGM, then the company may file the cost audit report in form CRA4 within the extended time for filing the financial statements.

A proviso has been added to Rule 6(6) as follows:

"Provided that the companies which have got extension of time for holding AGM under section 96(1) of the companies act, 2013 may file form CRA4 within the extended period of filing financial statements under section 137 of the companies act, 2013."

issue of shares at a discount

Issue of shares at a discount is covered under section 53 of the companies act, 2013. A company cannot issue shares at a discount and any such issue shall be void. Subsequently vide the 2017 amendment, issue of shares at a discount was allowed for limited provisions of converting debt into shares pursuant to a statutory resolution plan or debt restructuring scheme in accordance with the guidelines of RBI. So basically the debt restricting scheme should be under the aegis of RBI. The statutory resolution plan can be under IBC also.

Now vide the 2018 Ordinance, contravention of this section has been made more stringent. Now where any company violates this section, the company and every officer who is in default shall be liable to a penalty which shall be equal to the amount raised through issue of shares at a discount of Rs.5 lakhs, whichever is LESS, AND the company shall also be liable to refund all the monies received with interest at the rate of 12% per annum to all the persons to whom the shares were issued.

The earlier provision was penalty of not less than Rs.1 lakh extending upto Rs.5 lakhs for the company and jail term for every officer which may extend to 6 months or with fine of not less than Rs.1 lakh but which could go upto Rs.5 lakhs or with both.

Now to end the confusion, the jail term has been removed for the officer in default but the penal fines has been increased considerably. 

conversion of public company into private company.

MCA has vide an amendment through the Companies Act (Ordinance), 2018 specified that conversion of a public company into a private company will require the approval of the central government,  which means basically it will be the RD office which will manage that. Hitherto it was with the Tribunal.

This is part of the ease of doing business initiative of the government, wherein they first make a provision as inordinately draconian and then keep on relieving the pressure bit by bit to make it seem as a great initiative. This should never have gone to the tribunal considering the kind of pressure and load that our NCLT have ever since its inception, it has been loaded with all and sundry kinds of judicial work.

All pending applications, will, however be handled by the Tribunal only.

regd office

MCA has introduced a new sub-section (9) in section 12 of the companies act, 2013 wherein it gives powers to the Registrar to visit any registered office of a company where it believes that there is no business going on in that premises, and in case there is default, i.e. he finds that there is actually no business or operations going on in that premises, he can take action for striking off the name of the company from the records of MCA.

This is a very draconian provision in the sense that it gives vast powers to a government official to strike off the name of the company where he believes that the company is not doing any business or operations in its registered office.

Therefore, compliance for companies to show that business or operations are taking place in their registered offices - name plate of the company on the outside of the regd office, copy of certificate of incorporation and other statutory licenses to be displayed prominently on the walls of the R/O, keeping books of accounts, statutory registers, original documents, licences, share certificates, common seal, invoice books, bank documents (passbook, cheque book etc.) etc. to be kept at the R/O. All official documents like letter heads should carry the name, CIN, registered office address, GST no., telephone no., e-mail id, website (if any).  

Payment Banks and Small Finance Banks

RBI has clarified that Payment Banks and Small Finance Banks are now allowed to access the call money market both as borrowers and lenders. This is allowed even while the process to get themselves included in the second schedule of the RBI Act, 1934. Second schedule are basically scheduled banks and includes commercials banks and co-operative banks.

The payment banks and small finance banks have to adhere to the prudential limits and other guidelines on call money market. They have to follow the master directions on money market instruments which can be found here.   Call money market includes the call/ notice/ term money market.

The RBI notification can be accessed here