Gujarat Industrial Policy 2020 A Renewed Focus on Attracting Investment

 

­­­­­­­­­The Indian economy has not been immune to the side-effects of COVID-19, particularly as far as the healthcare and financial systems are concerned. Amidst such global economic turbulence, the Indian government has made efforts to boost the economy by announcing a significant economic stimulus package under the Atmanirbhar Bharat (self-reliant India) scheme. Many state governments in India have also swung into action to incentivise investment and capitalise on the opportunity offered by the pandemic, wherein several global businesses heavily dependent on China are reconsidering their business continuity plans and looking at alternative manufacturing bases.

Gujarat has a distinct advantage in this area on account of its pro-business government initiatives, conducive business ecosystem and progressive infrastructure. The Government of Gujarat (“GoG”) is continuously pushing for reforms and has rolled out the red carpet to foreign investors looking to invest in the state, resulting in the state receiving the highest national increment of 240% in FDI inflows in financial year 2019-20 compared to the previous year.[1]
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The Covid-19 pandemic has affected the society in an unanticipated and unprecedented way. To contain its spread, the Ministry of Home Affairs (MHA), Government of India vide its order dated March 24, 2020 directed closure of commercial and private establishments for a period of twenty one days. Immediately thereafter, the Ministry of Road Transport & Highways (MoRTH) issued an order dated March 25, 2020 directing the National Highways Authority of India (NHAI) to take action as per the said MHA order (including suspension of tolling operations on the toll plazas) and added that prevailing condition may be treated as ‘force majeure’ under the concession agreements executed by NHAI with the developers.

MoRTH thereafter directed NHAI to resume toll collections from April 20, 2020. However, the suspension of toll operations until April 20, 2020, the lockdown period thereafter and the steep fall of the traffic plying on the national highways, has significantly impacted the entire transportation industry, exposing developers to high risk and financial distress with no visibility of normalcy in the near future.


Continue Reading Covid-19: Bumpy roads ahead for Highway Sector

Covid-19 – Navigating choppy waters for Port Projects

The Covid-19 pandemic has resulted in an unprecedent crisis throughout the world and has caused widespread disruptions in normal operations across industries and life in general. In India, the National Disaster Management Authority determined that India was threatened by the spread of Covid-19 pandemic and took steps to prevent the spread of the pandemic in the country under the Disaster Management Act, 2005. On March 24, 2020, the Ministry of Home Affairs declared a 21-day lockdown under the Disaster Management Act, 2005 with effect from March 25, 2020. Such lockdown has been subsequently extended three times by the Ministry of Home Affairs and now remains in force till May 31, 2020.

The Ministry of Home Affairs has been issuing guidelines to determine the operation of essential and non-essential services during the period of lockdown and has attempted to restrict movement of persons throughout the country. The guidelines have caused States to close their borders and even movement within a State has been prohibited, unless it is in relation to an essential service. At the time of the first order of lockdown, the Ministry of Home Affairs excluded the ‘operation of seaports for cargo movement, relief and evacuation and their related operational organisations’ from the ambit of the lockdown. However, due to the disruptions in the supply chain, the inter-state and intra-state movement restrictions and the spread of Covid-19 pandemic, there has been an impact on operational as well as under construction port projects.
Continue Reading Covid-19 – Navigating Choppy Waters for Port Projects

Does the relaxation on PF contribution rates really benefit employers

As part of the ‘Atmanirbhar Bharat’ (Self-Reliant India) campaign, which is the Central Government’s initiative in its war against the Covid-19 pandemic, the Ministry of Labour and Employment (“EPF Amendment”) through a notification dated May 18, 2020, has introduced an amendment to the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPF Act”).

The EPF Act is the key social security legislation in India, under which both the employer and employee are required to contribute a certain percentage of the employees’ salary to the Employees’ Provident Fund Organisation (“EPFO”) (or to a trust in case of exempted establishments). Pursuant to the EPF Amendment, read with the FAQs dated May 20, 2020 issued by the EPFO (“FAQs”)[1], the statutory rate of provident fund (“PF”) contributions under the EPF Act, for both employers and employees, has been reduced from the existing 12 percent to 10 percent, for the months of May, June and July, 2020. The EPF Amendment is applicable to all establishments except: (i) Central/State Public Sector Enterprises; (ii) establishments owned or controlled by the Government; and (iii) establishments covered under the Pradhan Mantri Garib Kalyan Yojana (for whom the Central Government is already contributing both the employer’s and employee’s share – at the rate of 12percent – for the period from March to August 2020). The EPF Amendment is expected to benefit more than 40 million members of the EPFO and more than half a million establishments.
Continue Reading Reduction in the rate of PF contributions: Some practical considerations