Maritime India Vision 2030 envisions investment of Rs1.25 trillion
By HP Ranina/ NRI Biz Matters
Question: Despite a large coastline, India has very few large ports which would help in handling container traffic. Are any steps being taken to meet this challenge?
ANSWER: The Indian Government is working on Maritime India Vision 2030 with the object of developing world class mega ports, transshipment hubs and upgrading the existing port facilities by making an estimated investment of Rs1.25 trillion. For the first time, a transshipment port is being set up in Kerala on the southern-most tip of India to handle one million containers annually. This port will be able to handle ultra large container ships in the world. Currently, transshipment ports are in Shanghai, Shenzhen, Singapore, Busan and Hong Kong. The proposed Vizhinjam port will be strategically located between the Suez Canal and the Strait of Malacca. The port will provide automation for quick turnaround of vessels with the ability to handle Megamax container ships. This will help in lowering logistic and shipping costs as a result of cargo and container capacity going up drastically. A transshipment port is a transit hub where cargo from one ship is transferred to another on the way to its final destination. This is necessary where smaller parcels of cargo are loaded on a bigger ship which is able to travel to distant ports in other countries. At present, the largest container ships have been skipping India because its harbours are not deep enough to handle such vessels. Poor shipping connectivity has hindered India’s integration in the global value chain. When this new port is commissioned, India will be on the map of the global sea trade.
Question: Many startups in India have failed to make their mark and some have even wound up. As a result, investors are shy of putting their money in such ventures. Are there any guidelines or norms for ensuring that startups are able to inspire confidence to attract investment?
ANSWER: To ensure that startups are able to find their own feet and survive in a competitive world, the Confederation of Indian Industry has formulated a Corporate Governance Charter for startups. The guidance provided in the charter is structured to cover three key stages, namely, inception, progression and growth. Each stage enunciates specific governance principles which focus on the critical issues which arise during the startup journey. Startups thrive on innovation, disruption and pursuit of growth opportunities. If robust corporate governance practices are implemented coupled with long term strategic thinking, the quality of their decisions improves. The charter provides suggestions on corporate governance and offers guidelines to achieve the final objective. It includes an online self evaluation governance scorecard that startups can use to evaluate their current status. The tool allows startups to measure the progress made by them, indicating improvements in governance practices from time to time. This would enable them to go public after a few years so that the original investors can recoup their investments profitably.
Question: I have taken a loan in India for renovating my residential property. I have been repaying the loan on time and when funds permit I have paid two installments instead of one. However, I get the feeling that I have been charged interest on a higher amount than what is actually outstanding. Is there any remedy for the same?
ANSWER: Several similar complaints have been made by borrowers and the Reserve Bank of India has taken cognisance of similar issues. In a recent notification issued by the regulator, banks, non-banking finance companies and other financial institutions have been directed to carefully examine the calculation of interest and, if it is found that higher interest has been levied, the excess amount should be refunded forthwith.
Certain unfair practices have been mentioned in the circular where higher interest has been charged. If interest is charged from the loan sanction date or date of execution of loan agreement and not from the actual disbursement date of the loan, such practice is considered to be unfair.
Secondly, in the case of loans having been disbursed by cheque, the RBI has observed that interest was charged from the date stated on the cheque though the instrument was handed over to the customer several days later. Further, where the repayment of the loan is made by the customer during the course of the month, some financial institutions are charging interest for the entire month instead of charging interest for the period for which the loan was outstanding. Finally, where financial institutions have collected one or more instalments in advance, they have still charged interest on the outstanding amount ignoring the prepayment of installment. The Reserve Bank has therefore instructed banks and institutions to refund the excess interest charged, failing which action would be taken against the lender.
HP Ranina is a practicing lawyer, specialising in corporate and tax laws of India.