Some economy ...

INDICATIVE PLANNING

Indicative planning which involves the establishment of sectoral targets which are not compulsory for the private sector and are embedded in macroeconomic projections that pertain to a period of several years. Indicative planning has been widely practiced in developing countries during the post war period.

This form of economic planning implemented by a state in an effort to solve the problem of imperfect information in market and mixed-market economies and thus increase economic performance. When utilizing indicative planning, the state employs "influence, subsidies, grants, and taxes [to affect the economy], but does not compel." Indicative planning is contrasted with directive or mandatory planning, where a state (or other economic unit) sets quotas and mandatory output requirements.

NDC

The National Development Council (NDC) or the Rashtriya Vikas Parishad is the apex body for decision making and deliberations on development matters in India, presided over by the Prime Minister. It was set up on August 6, 1952 to strengthen and mobilize the effort and resources of the nation in support of the Plan, to promote common economic policies in all vital spheres, and to ensure the balanced and rapid development of all parts of the country. The Council comprises the Prime Minister, the Union Cabinet Ministers, Chief Ministers of all States or their substitutes, representatives of the union territories and the members of the Commissions. It is an extra-constitutional and non-statutory body. Its status is advisory to planning commission but not binding.

SEZ

Designated areas in countries that possess special economic regulations that are different from other areas in the same country. Moreover, these regulations tend to contain measures that are conducive to foreign direct investment. Conducting business in a SEZ usually means that a company will receive tax incentives and the opportunity to pay lower tariffs.

The objectives of SEZs can be clearly explained as the following:- (a) Generation of additional economic activity; (b) Promotion of exports of goods and services; (c) Promotion of investment from domestic and foreign sources; (d) Creation of employment opportunities; (e) Development of infrastructure facilities.

The major incentives and facilities available to SEZ developers include:-

•     Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.

•     Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.

•     Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.

•     Exemption from dividend distribution tax under Section 115O of the Income Tax Act.

•     Exemption from Central Sales Tax (CST).

•     Exemption from Service Tax

NMIZs

Central government   intend to establish National Manufacturing and Investment Zones (NMIZs) to push the manufacturing share in the GDP. The proposed National Manufacturing Policy for these NMIZs would act as the key enablers in driving the growth of the sector in India. Main objectives of NMIZs are: (i) To promote investments in the manufacturing sector and make the country a hub for both domestic and international markets; (ii) To increase the sectoral share of manufacturing in GDP to 25% by 2022. (iii) To double the current employment level in the sector; and (iv) To enhance global competitiveness of the sector.

DUTY   ENTITLEMENT   PASSBOOK SCHEME

The Duty Entitlement Pass book Scheme is a part of Duty Remission Scheme. It is a scheme which is offered by the Indian government to encourage exports from the country.

DEPB means Duty Entitlement Pass Book to neutralise the incidence of basic and special customs duty on import content of export product. This is provided by way of grant of duty credit against the export product at specified rates. The DEPB Scheme which was notified on 1/4/1997 consisted of (a) Post-export DEPB and (b) Pre-export DEPB. The pre-export DEPB scheme was abolished w.e.f. 1/4/2000. Under the post-export DEPB, which is issued after exports, the exporter is given a duty entitlement Pass Book at a pre-determined credit on the FOB value. The DEPB allows import of any items except the items which are otherwise restricted for imports.

CAPITAL ACCOUNT CONVERTIBILITY

Capital account convertibility implies the freedom to convert domestic financial assets into overseas financial assets at market determined rates.

It can also imply conversion of overseas financial assets into domestic financial assets. Broadly, it would mean freedom for firms and residents to freely buy into overseas assets such as equity, bonds, property and acquire ownership of overseas firms besides, free repatriation of proceeds by foreign investors.

Once a country eases capital controls, typically, there is a surge of capital flows.The inflow of capital can help augment domestic resources and boost growth.

For global investors, capital account convertibility helps them to seek higher returns by sharing risks. It also offers countries better access to global markets, besides resulting in the emergence of deeper and more liquid markets. Capital account convertibility is also stated to bring with it greater discipline on the part of governments in terms of reducing excess borrowings and rendering fiscal discipline.

ECBs

An external commercial borrowing (ECB) is an instrument used in India to facilitate the access to foreign money by Indian corporations and PSUs (public sector undertakings). ECBs include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments such as floating rate notes and fixed rate bonds etc., credit from official export credit agencies and commercial borrowings from the private sector window    of multilateral financial Institutions such as International Finance Corporation (Washington), ADB, AFIC, CDC, etc. ECBs cannot be used for investment in stock market or speculation in real estate. The DEA (Department of Economic Affairs), Ministry of Finance, Government of India along with Reserve Bank of India, monitors and regulates ECB guidelines and policies.

ADRs & GDRs

American Depositary Receipt (ADR): A security issued by a non-U.S. company, but is traded on U.S. stock exchanges. ADRs are issued to offer investment routes that avoid the expensive and cumbersome laws that apply sometimes to non-citizens buying shares on local exchanges. ADRs are listed on the NYSE, AMEX, or NASDAQ.

Global Depository Receipt (GDR): Similar to the ADR described above, except the GDR is usually listed on stock exchanges outside the US, such as Luxembourg or London. Dividends are usually paid in U.S. dollars ADRS and GDRs are shares without voting rights. The ratio of one depository receipt to the number of shares is fixed per scrip but the quoted prices may not have strict correlation with the ratio.

Any foreigner may purchase these depository receipts whereas shares in India can be purchased on Indian Stock Exchanges only by Non-Resident Indians, Persons of Indian Origin or Foreign Institutional Investors. The purchaser has a theoretical right to exchange the receipt without voting rights for the shares with voting rights

(RBI permission required) but in practice, no one appears to be interested in exercising this right.

IMF

The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

As the Second World War ends, the job of rebuilding national economies begins. The IMF is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate exchange restrictions that hinder trade.

The IMF oversees the international monetary system and monitors the financial and economic policies of its members. It keeps track of economic developments on a national, regional, and global basis, consulting regularly with member coun­tries and providing them with macroeconomic and financial policy advice.

WORLD BANK GROUP

The World Bank Group consists of five organizations:

The International Bank for Reconstruction and Development (IBRD)lends to governments of middle-income and creditworthy low-income countries.

The International Development Association (IDA) provides interest-free loans—called credits— and grants to governments of the poorest countries.

The International Finance Corporation (IFC) provides loans, equity and technical assistance to stimulate private sector investment in developing countries.

The Multilateral Investment Guarantee Agency (MIGA) provides guarantees against losses caused by non-commercial risks to investors in developing countries.

The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.