Short Takes / NE Venture Fund

NEDFi sets up North East Venture Fund

The North Eastern Development Finance Corporation Ltd (NEDFi) under the Ministry of Development of North Eastern Region (DoNER) has set up the North East Venture Fund (NEVF).

It aims to contribute to the entrepreneurship development of the region and achieve attractive risk-adjusted returns through long-term capital appreciation by way of investments in privately negotiated equity / equity-related investments.

The proposals are considered by the NEVF. For investment decisions, an independent investment committee is formed, comprising of experts from the field of venture capital financing, banking, technocrats and representatives of investors, which regularly monitor the implementation of the projects.

The capital commitment to the fund is Rs 100 crore with an initial contribution of Rs 75 crore consisting of Rs 45 crore from Ministry of DoNER and Rs 30 crore from NEDFi. The balance fund of Rs 25 crore has been committed by Small Industries Development Bank of India (SIDBI) in-principle.

The monitoring of the investment is carried out by NEDFi on a continuous basis.

When was NEDFi set up?

In 1994, the I.K. Borthakur committee report conceptualised the formation of a North-Eastern Development Bank to cater to the needs of the region. Following this report, the then finance minister, Manmohan Singh, announced the setting up of a development bank for the North-eastern states.

Following this, the North Eastern Development Finance Corporation Ltd. (NEDFi) was incorporated under the Companies Act, 1956, on August 9, 1995 with its registered office in Guwahati. The corporation was formally inaugurated by the then prime minister, P.V. Narashima Rao, on February 23, 1996.

At the time of its establishment, the corporation was placed under the finance ministry, banking division for administrative purposes. However, with the formation of Ministry of Development of North Eastern Region (DoNER) in 2004, the corporation has been placed under the Ministry of DoNER for administrative purposes.

RBI to review regulatory framework of CICs

The Reserve Bank of India has constituted a working group that will review the regulatory and supervisory framework for core investment companies (CICs).

The six-member working group is to be headed by Tapan Ray, non-executive chairman, Central Bank of India and former secretary, Ministry of Corporate Affairs.

What are CICs?

CICs are non-banking financial companies with an asset size of Rs 100 crore and above, which carry on the business of acquisition of shares and securities, subject to certain conditions.

CICs, which are allowed to accept public funds, hold not less than 90 per cent of their net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.

In August 2010, the RBI had introduced a separate framework for the regulation of systemically important CICs, recognising the difference in the business model of a holding company relative to other non-banking financial companies.

“Over the years, corporate group structures have become more complex involving multiple layering and leveraging, which has led to greater inter-connectedness with the financial system through their access to public funds,” the RBI said.

What will the group examine?

The central bank said there is a need to strengthen the corporate governance framework of CICs.

The terms of reference of the working group include examination of the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes therein.

It will also assess the appropriateness of and suggest changes to the current approach of the RBI towards registration of CICs including the practice of multiple CICs being allowed within a group.

The working group will also suggest measures to strengthen corporate governance and disclosure requirements for CICs, assess the adequacy of supervisory returns submitted by CICs and suggest appropriate measures to enhance the RBI's offsite surveillance and onsite supervision over CICs.

The working group shall submit its report by October 31.

Aid to set up trade promotion centres

The commerce department has approved financial assistance for three projects for setting up international trade promotion centres in Manipur, Tamil Nadu and Madhya Pradesh under the Trade Infrastructure for Export Scheme (TIES).

Trade Infrastructure for Export Scheme

* TIES was launched in March 2017 to enhance export competitiveness by bridging gaps in export infrastructure, creating focused export infrastructure and first-mile and last-mile connectivity.

* The scheme has been launched for three years with total outlay of Rs 600 crore.

* TIES helps involve states in promoting export activities in the country. The commerce ministry is taking several steps to promote the country’s exports, including improving export-related infrastructure.

* It replaces a centrally sponsored scheme - Assistance to States for creating Infrastructure for the Development and growth of Exports (ASIDE).

* Unlike the ASIDE scheme, which was funded by the Centre, the cost of projects under TIES are equally shared between the Centre and the states.

* Central and state agencies, including Export Promotion Councils, Commodities Boards, SEZ authorities and apex trade bodies are eligible for financial support under the scheme.

* The central government funding will be in the form of grant-in-aid, normally not more than the equity being put in by the implementing agency or 50 per cent of the total equity in the project.

* The proposals of the implementing agencies for funding are being considered by an empowered committee, chaired by the commerce secretary.

* The scheme will provide assistance for setting up and upgradation of infrastructure projects with overwhelming export linkages like the border haats, land customs stations, quality testing and certification labs, cold chains, trade promotion centres, dry ports, export warehousing and packaging, SEZs and ports/airports cargo terminuses.

Parliament passes teachers’ quota Bill

The Central Educational Institutions (Reservation in Teachers’ Cadre) Bill, 2019, has been passed by Parliament. The Rajya Sabha passed the Bill on July 3 after it was passed by the Lok Sabha on July 1.

The Bill replaces the The Central Educational Institutions (Reservation in Teachers’ Cadre) Ordinance, 2019 and will now be sent for the president’s assent.

The Bill considers the university / college as one unit and ensures reservations in teaching positions in central institutions for persons from Scheduled Castes / Tribes, socially and educationally backward classes, and those from economically weaker sections.

Background

Following an order by the Allahabad High Court in 2017, the University Grants Commission announced that an individual department will be considered as the base unit to calculate the number of teaching posts to be reserved. This led to a move from the 200-point roster system to a 13-point roster.

After the Supreme Court rejected a review petition, the Centre brought in an ordinance, which reverts to the 200-point roster system. This was also endorsed by student and teacher organisations across the country.

The Bill allows filling up of more than 7,000 existing vacancies in central educational institutions and pave the way for filling up 3 lakh vacancies in the government (central and state) educational institutions by direct recruitment in teachers’ cadre.

It ensures compliance of the constitutional provisions of Articles 14, 16 and 21.

However, the provisions of the Bill is not applicable to all institutions. It excludes certain institutions of excellence, research institutions, and institutions of national and strategic importance which have been specified in the Schedule to the Bill. It also excludes minority education institutions.