India’s Union Finance Minister Arun Jaitley presented the Union Budget for the financial year (FY) 2017-2018 (Budget) before the Lok Sabha today. The key highlights of the Budget are set-out below:

1. Abolition of the Foreign Investment Promotion Board (FIPB): The FIPB will be abolished in FY 2017-2018. A roadmap is likely to be introduced in relation to the same. Further liberalisation of the foreign direct investment policy is being considered by the Government of India.

The Ministry of Corporate Affairs, Government of India has vide 2 (two) notifications, both dated 4 January 2017, exempted the following companies from complying with certain provisions of the Companies Act, 2013:

(a) Specified IFSC public companies: Unlisted public companies which are licensed to operate bythe Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), or the Insurance Regulatory and Development Authority of India (IRDAI) from the International Financial Services Centre (IFSC) located in an approved multi services Special Economic Zone (SEZ) set-up under the Special Economic Zones Act, 2005 (SEZ Act); and

First & foremost, we wish all our readers a very happy, healthy & prosperous 2020! Below are certain key reforms & legal developments in India during 2019 which we thought would be of interest: On 16 January 2019, the Reserve Bank of India (RBI) through its circular, consolidated the existing framework and policy for External Commercial Borrowings (ECBs) and Rupee Denominated Bonds. The framework recategorizes the Track I, II and III ECBs along with masala bonds into ‘Foreign Currency denominated ECB’

The Ministry of Corporate Affairs has, vide a notification dated 7 December 2016 (Commencement Notification), notified certain provisions of the Companies Act, 2013 (Act) and has appointed 15 December 2016 as the effective date. Set out below is a summary of some of the provisions notified vide the Commencement Notification:

Compromises, Arrangements and Amalgamations

While most of the provisions under Chapter XV of the Act (Compromises, Arrangements and Amalgamations) have been notified vide the Commencement Notification, notably, section 234 which provides for merger or amalgamation of a company with a foreign company is yet to be notified. Key features of Chapter XV are as follows

The Ministry of Corporate Affairs, vide a notification dated 7 December 2016, has notified the Companies (Transfer of Pending Proceedings) Rules, 2016 (TPP Rules) which would become effective from 15 December 2016, except rule 4 (pertaining to pending voluntary winding up proceedings) which would come into effect from 1 April 2017.

The Union Cabinet on 7 December 2016 approved a set of reforms, including simplification of labour laws, and providing production incentives through technology upgradation for the ‘Made-ups’ manufacturing sector. The key reforms are:

Contribution to the Employees’ Provident Fund (EPF) has been made optional for employees earning less than INR 15,000 (Rupees fifteen thousand) per month.
Permissible overtime in the ‘Made-ups’ manufacturing sector has been increased to 100 hours per quarter.

In order to promote ease of doing business and the “Make In India” Campaign, the Government of Maharashtra on 28 November 2016 launched the e-land management system for the Aurangabad Industrial City (AURIC) which enables businesses and individuals to apply for land in AURIC and also provides for online review and processing of applications filed in this regard, by the Aurangabad Industrial Township Limited.

Pursuant to a notification dated 25 November 2016, the Ministry of Finance (MoF), Government of India has appointed 1 December 2016 as the date on which the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (SICA Repeal Act) would come into force.

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (“Act”) was passed by the Indian Parliament on 9 August 2016 and was published in the Official Gazette on 16 August 2016 after receiving Presidential assent. The Act has amended 4 (four) legislations – the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”); the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (“RDDBFI Act”); the Indian Stamp Act, 1899 (“Stamp Act”); and the Depositories Act, 1996 (“Depositories Act”).

The Indian Parliament on 8 August 2016, passed the much awaited and widely discussed legislation over the past several years, the Constitution (One Hundred and Twenty Second Amendment) Bill (commonly known as the “GST Bill”) to introduce Goods & Services Tax (GST) intending to subsume all indirect taxes under a single indirect taxation regime. The GST Bill is the biggest tax reform by India since its independence in 1947 which will certainly ease doing business in India once fully implemented. The GST Bill provides for levying GST on all transactions involving supply of goods and services, except those specifically excluded, by conferring concurrent taxing powers to both the Government of India (GoI) and the State Governments.