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Centre unveils list of 98 smart cities; UP, TN strike it rich
Urban Development Minister Venkaiah Naidu on Thursday urged local and international investors to put their money on the Smart City Mission, assuring them that it was a safe bet. Mr. Naidu unveiled a list of 98 cities with Uttar Pradesh taking the largest share of developing 13 smart cities followed by Tamil Nadu, which qualified to develop 12. “Both national and international investors are looking for opportunities in the backdrop of the recent financial crisis,” said Mr. Naidu. “People are searching for safe investments. I offer smart cities as the safest investment because land is going to be there, structures are going to be there, so the returns are assured.” With an aim to achieve “inclusive growth”, the Smart City Mission promotes integrated city planning, where the government’s policies such as Swachh Bharat Mission and Atal Mission for Rejuvenation and Urban Transformation complement each other. Taking a tough stance over the delay of project approvals at the State-level, Mr. Naidu said the new parameters set by the Ministry have created a “perform or perish” situation where municipal councils “cannot afford to miss this opportunity of recasting the country’s urban landscape”. The Ministry will impose fines on States that violate the timeline of 60 days of finalising the projects.
|602||The new GDP is for real|
Hence, the fact that Humpty Dumpty could not be put together again, the search for a new method of computing GDP for WRT, and the arrival of the new “order”—henceforth, GDP in WRT would be computed on the basis of growth in sales taxes. What was nominal sales tax growth in the doubtful high growth year of FY14? A healthy 17.2%; with GDP deflator inflation of 6.3%, this is a high 10% real growth for 20% of the economy which is not on the radar screen of most analysts and market players. While analysts were looking at corporate balance sheets to get a sense of how India was growing, the real story was under their feet in unorganised Bharat. the other big change is for manufacturing. Here, the explanation is simply usage of much better balance sheet data, available for more than 500,000 companies (the MCA-21 data base). Previously, the CSO relied on an old and aged warhorse to deliver information on industrial production, IIP data; now, the government harnesses the modern IT sector by processing balance sheet information on heretofore unimaginable large number of companies. The “feel” conclusion of a slow economy was derived from insipid IIP growth for FY14—a -0.1%—hence, the angst in the pink pages and among TV anchors. Manufacturing growth on the basis of MCA-21 balance sheet data reveals a recovering economy—growth of 5.3%. In FY15, the same data source reveals manufacturing growth at 6.8%.
Modi's infrastructure splurge revives investment in India
Prime Minister Narendra Modi's bet on higher public spending to spur economic activity in India has started paying off, as capital investment shows signs of sustained revival after years of uneven growth. But corporate spending is still tepid and federal revenues remain stressed, raising the risk of another false dawn for Asia's third largest economy as it tries to recover momentum. Annual growth in capital goods production, a proxy for capital investments, hit a 14-month high of 22 percent in August, government data showed on Monday. That helped overall industrial output expand at its fastest pace in almost three years. While the figures, notoriously volatile and lumpy, were inflated by a favourable statistical base, the annual pace of expansion in the sector, measured on a three-month moving average, was 10.1 percent in August versus 3.8 percent a month ago. Encouragingly, the recovery also appears to be becoming broad-based. "It's a very positive sign," said a senior official at the finance ministry, who asked not to be identified because he was not authorised to speak to the media. "It shows the strategy is showing results." Weak capital investment has been a key factor behind India's struggle to realise its growth potential. Statistically, the economy matched China's growth in the June quarter, but very few analysts think it is growing full steam. With factories running nearly 30 percent below capacity, private companies are in little rush to make fresh investments. Stretched corporate balance-sheets are not helping, either. That has led the government to step up to the plate. At the risk of inviting the wrath of investors and ratings agencies, Modi's administration loosened fiscal deficit targets in this year's budget to double spending on roads and bridges. Since April, public capital spending has clocked healthy growth of nearly 19 percent on the year, compared with a fall of 1.4 percent in the corresponding period last year. The government reckons economic growth could increase by at least a percentage point if its departments don't underspend. That will help it meet a growth target of 8 percent to 8.5 percent for the year ending in March 2016, up from 7.3 percent a year ago. The IMF, though, has lowered its estimate for India's 2015/16 growth to 7.3 percent, from 7.5 percent. "Overall, the industrial production data indicate that despite slowing external demand, the domestic growth cycle is improving," said Sonal Verma, an economist with Nomura.
India named top investment destination in business poll
India has been named the most attractive country for investment in a survey of more than 500 global investors published by accounting firm EY (Ernst & Young) on Wednesday. Thirty-two percent of the 505 executives questioned said India was their favoured market for investment, with China second on 15 percent of the vote, followed by Southeast Asia, Brazil and North America. "There is no doubt that interest in India has increased," Mark Otty, EY area managing partner for Europe, Middle East, India and Africa said. "Investors increasingly see the potential and understand the fundamentals." In an apparent vote of confidence in Prime Minister Narendra Modi's reform agenda, the number of those who said ease of doing business in India was an attractive factor jumped 17.5 percent on last year. India's notorious red tape, complex investment rules and poor infrastructure have long posed huge obstacles for companies, with the World Bank ranking it 142 out of 189 countries in its Ease of Doing Business index. Industrial policy secretary Amitabh Kant said Wednesday the government was "determined to make India an extremely easy and simple place to do business". India is poised to become the fastest-growing major economy this year, according to the IMF, at a time when other emerging markets are suffering slowdown or recession. Greenfield foreign direct investment (new ventures) in India rose 32 percent to $25 billion in 2014 after declining in the previous two years, according to Financial Times data service fDi Markets.
How government's LED bulb push is helping save Rs 2.71 crore every day
In recent months, cottage industries in Puducherry that make incense sticks, mats and perfumed candles have been staying open late into the night with their electricity costs intact. Nearly 600 km away in Guntur district of Andhra Pradesh, farmers living in mud houses along the Krishna River no longer fret about shooting power bills while switching on lights at dusk. This is all thanks to a government-sponsored LED distribution programme, which outlines the replacement of incandescent bulbs and CFLs with energy-efficient LED lamps. "Today, almost 90% of all households in AP and Puducherry have replaced incandescent bulbs with LED lamps and the electricity bills of a household have reduced by up to Rs 200 every month."
Govt to create 40K tons of buffer stock of pulses to check prices
The government today said it will buy 40,000 tonnes of pulses from farmers to create a buffer stock for controlling prices, which have soared up to Rs 190 per kg in the retail markets. The government will purchase 30,000 tonnes of tur dal and 10,000 tonnes of urad dal from farmers at market rates, Minister of State for Agriculture Sanjeev Kumar Balyan told reporters here today. In order to give relief to common man, he said the Kendriya Bhandar and Mother Dairy's Safal outlets would sell imported tur at Rs 120-130 per kg in Delhi. Andhra Pradesh and Tamil Nadu have also started selling imported lentils.
September coal imports slump 27% to 12.6 mn tonne as domestic production grows
India's coal imports fell 27% to 12.6 million tonne in September from a year earlier as local output jumped, Coal Secretary Anil Swarup said on Monday. "With unprecedented increase in coal production by Coal India Ltd , import of coal comes down for third successive month," Swarup tweeted. India is opening a mine a month as it races to double coal output by 2020.
India records steel demand growth in difficult external environment
India, according to WSA, is one of the few countries to remain a "resilient" economy in the face of a "global slowdown" because of its commitment to "reforms". Indian steel demand in 2015 is to rise to 81.5 mt from 75.9 mt in 2014. WSA says its use will further improve by 7.6 per cent to 87.6 mt next year. Hopefully, the three-year high of 6.4 per cent rise in industrial growth in August, supported by good showing in manufacturing, mining and electricity, will be sustained to generate good demand for steel in the months ahead.
Have initiated reforms to improve banking sector: PM Narendra Modi
The Prime Minister also listed out the seven-point agenda to improve operations of the state-owned banks. It includes capitalisation, setting up of Bank Board Bureau and introduction of a framework for accountability. "We have decided to bring improvements in the appointments at the top levels of the banks. This improves efficiency," he said, adding private sector professionals have been hired in PSU banks after nationalisation of banks in 1969. Modi said the government would be infusing Rs 70,000 crore in the public sector banks in the next few years to help them deal with the distress assets issue. He also said import duties have been hiked on certain items to help the sectors facing problems and account for distress assets of the banking sector. Talking about NPAs in the banking system, Modi said: "Bad loans in the past few years are a problem but we can't only cry about it. We are trying to solve this problem."
|610||Road construction picks up 36% this year|
The government's ambitious plan to increase the pace of road construction has started showing results. During April-September 2015, the total length of the road constructed in the country under various programmes of the road ministry was 36 per cent higher than the corresponding period the last financial year. According to the ministry of road, transport and highways data, 2,446 km of roads, including highways, were constructed during April-September 2015 compared to 1,795 km during the corresponding period of the previous financial year. Also, the award of contracts for 4,482 km of roads this year was much higher than the last year's 1,809 km. Officials added road construction would further gain momentum in the coming months since the pace of construction during the month of July-August is slow because of monsoon. It is likely to touch 10,000 km compared to 6,308 km last year.
|611||Jaitley warns pulses hoarders of penal action|
As prices of pulses, particularly tur, continued to remain above Rs 200 a kg in some retail markets, the central government said 41,000 tonnes of pulses have been imported or recovered from hoarders in recent days, leading to an ease in supply. About 36,000 tonnes have been recovered from hoarders in 3,290 searches by state governments in the past three days (23,340 tonnes from Maharashtra alone) and 5,000 tonnes of imported pulses have arrived, finance minister Arun Jaitley, who heads an inter-ministerial group to monitor the situation, told reporters after its meeting, the second in a week. Another 3,000 tonnes of imported pulses would soon come, he added. Tamil Nadu has demanded 500 tonnes and Andhra Pradesh 1,500 tonnes, he said.
Cluster in Tirupati to make 7 crore smart phones a year
Four major domestic brands are joining hands to set up units at the country’s first phone manufacturing hub – Sri Venkateshwara Mobile and Electronics Manufacturing Cluster – coming up in Tirupati. Micromax, Celkon, Karbonn and Lava will invest ₹2,000 crore in phases in the 120-acre hub located near Renigunta airport. Indian companies account for 45 per cent of the 24 crore phones sold in the country. Prime Minister Narendra Modi will lay the foundation stone for the hub on Thursday. The hub, which is expected to commence production in the next six months, would have an aggregated capacity of 7 crore smart phones a year. The hub will also house all the players in the ecosystem that includes manufacturers of earphones and adopters. “The hub would provide 45,000 direct and indirect jobs when fully completed in the next two years. A couple of Chinese firms Vikin Communications and Gaungdong Wivtak Technology too are setting up units to support the mobile manufacturers,” Celkon Mobiles Chairman and Managing Director Y Guru told BusinessLine. “Mobile phone manufacturing in 2015-16 will grow by more than 110 per cent compared with 2014-15. The Tirupati hub will create more than 10,000 jobs within a year and we expect this hub to contribute at least 5 per cent of our all-India target to create 15 lakh jobs by the year 2019,” said Pankaj Mohindroo, National President of Indian Cellular Association (ICA).
India's gold monetisation scheme may be ready in weeks - Modi
A programme to attract gold owned by households into a bank deposit scheme to monetise the precious metal could be ready in weeks, Prime Minister Narendra Modi said on Sunday, a step aimed at cutting expensive imports. The scheme would allow people to put their gold into banks in return for interest payments in an attempt to mobilise thousands of tonnes of the metal sitting idle in Indian households.Indians prize gold as gifts and as a way of storing wealth. The country consumes nearly 1,000 tonnes of gold every year, most of it imported, and gold is the second-biggest expense on the import bill after oil. In his monthly radio address, Modi said the programme should be ready before Dhanteras next month, a festival when it is considered an auspicious period to buy gold. "Please, don't let your gold be dead money," Modi said. "Gold is very important for the country. Gold can become an economic strength for us." Huge gold imports were blamed for pushing the country's current account deficit to a record $190 billion in 2013, prompting the government to hike its duty on imports to 10 percent, an all-time high.
RBI Issues Norms for Gold Monetisation Scheme: 10 Facts
Captive coal mines production rises 34% to 53 MT in FY15
Coal production from captive mines last fiscal witnessed a significant rise of 33.64 per cent at 52.769 million tonnes (MT) over the previous year. Coal production in FY 2013-14 stood at 39.484 MT, according to provisional data from the last fiscal, according to provisional coal production data of the last fiscal. The government is eyeing to achieve 1.5 billion tonnes of coal production by 2020. "During the year 2014-15, captive coal blocks contributed 52.769 MT of coal to all India coal production of 612.435 MT," it said.
|616||Tesla plans battery plant in India: Elon Musk|
While Tesla is looking at the possibility of building a car factory in China, the California-based electric car maker might consider a car battery factory in India, Elon Musk, founder and CEO of Tesla, said in a tweet. PM Narendra Modi had visited the Tesla factory while on his Silicon Valley visit last month. "Given high local demand, a Gigafactory in India would probably make sense in the long term," Musk said in response to a specific question about whether he would consider a factory in India too. Electric cars use lithium ion batteries and a manufacturing facility for such batteries is called Gigafactory. Incidentally, Modi's Tesla sortie in September was primarily focused on the company's Powerwall battery packs, with an eye towards procuring off-grid electric power technology for India. The fundamentals arise from Tesla's work on its highly-rated electric cars.
India Moves Up in World Bank's Ease of Doing Business List
|618||India's external borrowings drop to five-year low|
The country's external borrowings fell to a five-year low in the April-September period to $11.8 billion as companies preferred borrowing domestically. External borrowings include external commercial borrowings (ECBs) and foreign currency convertible bond. Data from Reserve Bank of India (RBI) show that borrowings dropped 17.7 per cent, year-on-year, to $2.6 billion in September. “Looking at the all-inclusive cost and hedging cost, ECBs turn out to be slightly expensive compared with onshore borrowings. A few years ago, the hedging costs were slightly low due to which it turned out to be cheaper to borrow overseas. This was also because at that time, the interest rates onshore were on the higher side,” said Ajay Manglunia, senior vice-president (fixed income), Edelweiss Securities. Data from the Securities and Exchange Board of India (Sebi) shows the funds raised by Indian corporates through private placement of corporate bonds have been picking up and in the April-September 2015 period, it stood at Rs 2.43 lakh crore. Last month, the central bank came out with a draft paper that allowed Indian companies to raise funds from a wider class of lenders. RBI said companies would be able to borrow up to $50 million in ECBs with three-year maturities and $50 million for five-year maturities, from the earlier $20 million.
India less exposed to global risks & has strong forex rate: Moody’s
India's relatively resilient growth and policy reform momentum will slowly stabilize inflation, improve the regulatory environment, increase infrastructure investment and lower government debt ratios, ratings agency Moody's said in a report. The ratings agency has a positive outlook on India's Baa3 rating, the lowest investment grade. India appears to be the best placed out of the 29 countries defined as frontier markets, being less exposed to external shocks than others. It also has a resilient exchange rate compared to the others. "India's current account deficit, estimated at 0.8 per cent of GDP for 2015, reflects the sharpest adjustment driven by low oil prices," noted the report, which assumes the low oil price environment will persist. The agency expects WTI crude to hover at $50 per barrel for the remainder of this year and fall further to $48 per barrel in 2016. India's current account deficit has improved to 1.2 per cent of GDP in the quarter ended June from 4.8 per cent in 2012. In terms of economic strength, India has outperformed while Brazil has underperformed. "We forecast strong growth in India of around 7-7.5 per cent per year in 2015-16, the highest growth rate among the G20 economies, which is supported by lower oil prices that will reinforce gradual growth-enhancing reforms," Moody's said, adding that the fiscal space was improving. Weak fiscal ratios are the key constraint on the Baa3 rating, but an improvement in its government debt-to-GDP and interest-payment-to-revenue ratios to 66.8 per cent and 22.3 per cent, respectively, in 2014 from 79.5 per cent and 28.3 per cent in 2005 have helped country get a positive outlook with the possibility of an upgrade. "India's significant monetary tightening in 2013, coupled with some fiscal consolidation, was an example of effective macroeconomic management that restored macroeconomic stability, albeit at the expense of near-term growth," the agency said. It said structural reforms to address regulatory and infrastructure weaknesses, lower inflation and current account deficit outcomes have set the pace for the monetary loosening that commenced in 2015.
Once a month, PM Narendra Modi steps in to revive stalled projects
Prime Minister Narendra Modi is personally taking on India's notorious red tape to clear tens of billions of dollars worth of stalled public projects, hoping that his hands-on intervention can bend a vast, dysfunctional bureaucracy. Once a month, Modi holds a meeting with top state and federal bureaucrats to check why projects have not got off the ground. Since March this year, his intervention has helped revive nearly $60 billion in federal and state projects, according to government data through September seen by Reuters. Modi has won plaudits for the initiative that has chipped away at a $150 billion backlog of planned roads, ports, railways, power stations and other projects. But equally, critics say, the fact he needs to personally intervene shows the level of government inertia in Asia's third-biggest economy. "It is a systemic problem that the prime minister needs to work on," said Arun Maira, a management consultant and member of the previous Congress government. The initiative, launched by Modi in March and publicised on his personal web site and Twitter feed, is called pro-active governance and timely implementation, or Pragati, which means "progress" in the Hindi language. Federal and state bureaucrats are linked by video to Modi's office for the meeting, usually held on the fourth Wednesday of each month. They are typically from the finance, law, land, environment, transport and energy ministries whose clearances are needed for many projects. The agenda is set the previous week and usually has about a dozen stalled projects, public grievances and other governance issues. A senior official who has attended said that when a project comes up for discussion, Modi turns to the representative of the ministry where it is being held up. He simply asks, "Please tell me why it hasn't happened," the official said. Several months into Pragati, the official said, a majority of the projects are cleared before they come up for discussion. The chief minister of Uttar Pradesh state, Akhilesh Yadav, a political rival of Modi, wrote to the prime minister's office requesting the inclusion of a $1 billion metro rail project in the state capital at one Pragati meeting. It got the clearances, including a pledge of federal funding, at the September meeting. "This is a welcome move which would go a long way in doing away with avoidable delays," said Alok Ranjan, the state's top bureaucrat.
Govt eyes bankruptcy reform to ease decades of gridlock
A group of government-appointed advisors has recommended sweeping changes to India's overburdened bankruptcy system, aiming to modernise a process that takes several years and costs investors and taxpayers billions. The changes would be the most ambitious overhaul to date of rules governing the liquidation or revival of companies in India, a country with no single bankruptcy code and where competing laws, unclear jurisdictions and inadequate resources can leave cases languishing for decades. The proposals, to be handed to the Finance Ministry as early as Monday, will impose deadlines for the first time and establish a network of insolvency professionals to lighten courts' workload and tackle delays, T K Viswanathan, chairman of the Bankruptcy Law Reform Committee, told Reuters. Under current rules, even deciding whether to save or liquidate an ailing company can take years, leaving it in the hands of managers who can - and do - strip assets with impunity. Under the proposed changes, a decision would have to be reached in 180 days - even 90 days for fast-track applications, Viswanathan said. "The whole essence of our exercise is that everything is done within time," he said. Foreign and domestic investors say the difficulty in exiting ventures can deter them from entering. Cases such as the protracted collapse of liquor tycoon Vijay Mallya's Kingfisher Airline empire have burnt investors. The airline was grounded in 2012 with some $1.5 billion in debt and its shares are now worthless, but creditor banks seized his former Mumbai headquarters only this year. The fate of his Goan villa is stuck in a prolonged court tussle. India ranks 130 out of 189 in the World Bank's Ease of Doing Business report, below Lesotho and Cameroon, not least because of its poor performance in resolving insolvency. The World Bank says it takes 4.3 years on average, more than twice as long as in China, with an average recovery of 25.7 cents on the dollar, one of the worst among similar size economies.
Govt showers duty benefits to arrest slump in exports
The government on Friday extended duty incentives under the Merchandise Exports from India Scheme (MEIS) to 110 products, including sports goods and medical equipment. The move, which will further hit the exchequer by Rs 3,000 crore, is aimed at arresting a fall in merchandise exports, which declined for the 10th consecutive month in September. The Centre, however, didn't announce interest subvention, as sought by exporters. Through the MEIS, introduced by the Ministry of Trade and Commerce on April 1 this year, a certain percentage of the value of exports can be used to offset various duties, including customs, service tax and excise duty. Though the government retained this at two-five per cent, it increased the rate for some items such as industrial machinery, machine tools, textiles and paper. It has also extended the countrywide coverage to items such as iron, steel, base metals and leather products, while global coverage has been accorded to commodities such as textiles, pharmaceuticals, auto components, computers and electrical products. As many as 2,228 products would get either higher MEIS rates or these incentives for export to more countries. Federation of Indian Exports Organisation (FIEO) President S C Ralhan said the new items added to the MEIS list contributed about $10 billion to exports a year, or about three per cent to the overall value of exports. Now, the exports for which MEIS is applicable would account for about 55 per cent of the overall exports in a year ($180 billion), he added.
|623||Relatively less of fiscal strain so far|
The Centre’s fiscal deficit position improved in the first half of the current financial year against that in the corresponding period of 2014-15, even as it raised capital expenditure by almost 30 per cent to spur economic growth. The gap between expenditure and revenue was 68.1 per cent of the budget estimate in the six months till September at Rs 3.78 lakh crore, much lower than the 82.6 per cent in the corresponding period of last year, show figures issued on Friday by the Controller General of Accounts. September's fiscal deficit was the lowest in any month this financial year, excluding the surplus in the previous month. The government’s capital spending accounted for 62.1 per cent of what has been estimated in the year's budget. At Rs 1.28 lakh crore in the first half, it was a rise of 29.3 per cent of the Rs 99,104 crore incurred in April-September 2014. September saw the highest such spending this financial year, at Rs 30,206 crore. The government is targeting gross domestic product (GDP) growth between 7.5 and eight per cent in 2015-16. It was seven per cent in the April-June quarter, the first of the year
India becomes world's 7th most valued 'nation brand'
India has moved up one position to become the world's seventh most valued 'nation brand', with an increase of 32 per cent in its brand value to $2.1 billion. The US remains on the top with a valuation of $19.7 billion, followed by China and Germany at the second and the third positions respectively, as per the annual report on world's most valuable nation brands compiled by Brand Finance.
Government to launch a series of policy reforms after Bihar polling ends
The government plans to launch a series of policy reforms as soon as polling ends in Bihar on November 5, signalling its intent to get moving again on economic changes and putting the Opposition on notice before Parliament convenes for the winter session. Key to the Narendra Modi government's renewed development push will be power, labour and infrastructure, three senior government officials told ET. Among the highlights are a revival package for power distribution companies, freeing up labour rules and a possible push for the railways. "The government is not going to wait till the Budget to kick in reforms in various sectors. We will start witnessing action right after the Bihar elections," said one of the officials. The road map for the phasing out of corporate tax exemptions and reduction in the tax rate to 25% is being drawn up. Besides this, the Startup India, Standup India plan and the rollout of the National Investment and Infrastructure Fund (NIIF) are also being worked on. A simpler foreign direct investment ( FDI) policy, further easing of the external commercial borrowing (ECB) regime and changes in the public-private partnership (PPP) framework to attract more private investment could also be announced. "A lot of work is going on in the government. You will see action after the Bihar elections are over," said one of the officials. By pushing hard on its reforms agenda, the government wants to set the stage for passage of the goods and services tax (GST) Bill in Parliament. GST is scheduled to be rolled out on April 1 next year. "In the 20 days window between the Bihar elections and the winter session of Parliament, lot of action should happen," said one of the officials cited above.
|626||Why India's Tortoise May Beat China's Hare|
In part because of China’s faltering, the progress of Indian economic reform is now front and center, with a debate about how in the years ahead the trajectory of India’s economy will stack up against China’s. Indeed, the intense draw of India to business headlines around the world has been the country’s strong macroeconomic growth performance in the past few years, especially when compared with China. New IMF data indicate that not only did India’s rising real GDP growth rate catch up with where China’s growth rate had decreased to in 2014–7.3 percent–but they project that as China’s growth rate continues to decline–to 6.8 percent in 2015 and then decrease further to 6.3 percent in 2016—India’s growth rate will substantially exceed China’s over the same period, reaching 7.5 percent in 2016. Like Aesop’s Hare, China has been growing at a blazing pace for years. According to China’s official statistics, average GDP growth of the country over 1980-2014 was 9.8 percent. Few if any other nation in modern times has come close to such an accomplishment, and there is little question about the incredible ingenuity of the China’s leaders. India’s GDP growth over 1980-2104 averaged 6.2 percent–more the speed of Aesop’s Tortoise. Still, a strong performance by any standard, and certainly enviable for most countries around the world
Core sector growth up 3.2% in September; fastest in 4 months
Fertilisers and electricity were two beacons of hope among the eight core industries, which in September grew at a four-month-high rate of 3.2 per cent on a year-on-year basis, showed data released on Monday. However, the main number hid the dismal growth registered by most of the six other industries, three of which showed a decline in output in September. The growth rate in August as well as September, 2014 was 2.6 per cent. The September, 2015 growth rate, as such, might look magnified because of a low base of a year earlier. In the first six months of the current financial year, the core industries’ production grew 2.3 per cent, a rate less than half the 5.1 per cent seen in the corresponding period of 2014-15. Core sector industries account for almost 38 per cent of the Index of Industrial Production (IIP). The IIP numbers for September are due later this month. Production in three key industries — crude oil, steel and cement — saw contraction in the month. By comparison, only one industry, steel, had seen production decline in August. Fertilisers continued to grow at the highest rate, registering an 18.1 per cent increase in September, against 12.59 per cent the previous month. Much of the increase, though, came on the back of a huge contraction of 12.6 per cent seen in September last year. The case was similar for the electricity sector, where generation rose 10.8 per cent, compared with 3.6 per cent in the same month a year ago.
7.5% growth in FY16, higher growth next year: Moody's
Projecting stable growth rate for India, Moody’s Investors Service on Monday said the economy would grow at 7.5 per cent in the current financial year and improve marginally in the following year. “We expect that India's real GDP will grow at 7.5 per cent in the financial year ending March 31, 2016 (FY16) and 7.6 per cent in FY17. These rates would be slightly faster than the 7.4 per cent recorded in FY15 and substantially better than FY12-14,” it said in a report, adding “India's economic growth will remain stable”. India’s average annual expansion of 7.7 per cent over the past decade is one of the fastest growth rates globally, as its favourable demographics and the opportunities, afforded by a large and diverse national market with high levels of savings, have overcome the effects of weak physical infrastructure and sometimes disjointed policies. However, during this long growth period, the country experienced a significant slowdown in FY12-13, driven in part by policy bottlenecks impacting project investments, the report said.
|629||Gold monetisation scheme to help cut loan rates|
As the gold monetisation scheme is all set to start from Thursday, non-banking financial companies (NBFCs) active in gold loan business are looking to cash in. Rolling out new schemes, these companies seek to attract more customers, as interest rates applied on loans against gold are expected to come down. “Definitely interest rates will come down,” said Thomas George Muthoot, director of Muthoot Fincorp, a leading gold loan company. Gold bond schemes will trigger fresh monetisation and competition in the business, as even physical infrastructure to handle and store gold is not a must for doing business. Gold loans can be released online or by bank transfers on the basis of demat accounts of gold deposits or bonds which will be used as collateral. So, “new players will enter the business. Obviously, this will cut down the interest rates," he said. At present, interest rates on various gold loans range from 12 to 18 per cent. New attractive packages offering loans at lower rates will also be there once the scheme becomes successful. Most leading players are planning new schemes such as special over draft facilities on gold bonds. One can take loans against gold bonds, just like one can take loans against shares. Besides, the credit amount could be higher than one could get against shares. "This will enthuse business and it is likely that there will be manifold increase in business," said a top-level officer of another NBFC. At present, the average annual business is Rs 50,000 crore in the organised gold loan business segment with an average combined annual growth rate of 43 per cent. "We are in the process of devising new schemes to attract more customers to our branches. It is inevitable," the officer quoted above said.
Nitin Gadkari announces Rs 10,000 crore projects for Nagaland
The Union government today announced Rs 10,000 crore road and bridge development projects for Nagaland besides committing a slew of road projects for the entire northeast India in five year period. Road and Highways minister Nitin Gadkari told reporters here that Nagaland road project will be taken up till March 2017. Turning to the infrastructure development of entire northeast India, Gadkari pledged the Centre's wish in according the highest priority for development of the region. Towards that objective, the Centre decided to have roads of more than 10,000km in length in the region which would incur an approximate cost of Rs 1 lakh crore in a five-year span, he said. Gadkari was talking to media at the Raj Bhavan after laying the foundation stone for four-laning of Dimapur-Kohima National Highway 29 near Chathe River Bridge, Patkai College junction Chumukedima in Dimapur district and gracing the Birth Centenary Celebration of Rani Gaidinliu at Peren district. On the Nagaland projects, Gadkari said the 43 km-long four laning of NH-39 will be completed at an estimated cost of Rs 1,200 crore.
|631||Services PMI at 8-month high in Oct|
Activity in India's services sector touched an eight-month high in October as new business orders rose significantly and discounting increased, according to a Nikkei survey, issued on Wednesday. The Nikkei Business Activity Index climbed to 53.2 in October, from 51.3 in September, as fresh orders expanded at the best pace since February. On Monday, another Nikkei survey had said India's manufacturing growth had cooled to a 22-month low in October. "Services companies saw a faster rise in new business than their manufacturing counterparts," said Pollyanna De Lima, economist at Markit, which compiled the survey. The improvement in activity became visible as companies cut prices in October. This was the second month in a row that companies had to resort to discounting to get new business. A sub-index measuring prices was 49.6, only marginally higher than the previous month's 49.5. A reading above 50 indicates expansion and one below it shows contraction.
|632||Six-month limit likely to declare firms bankrupt|
The government-appointed Bankruptcy Law Committee has recommended a speedy process and a timeline of six to a maximum of nine months to deal with insolvency and enable winding-up of operations of a company or a limited liability entity. The draft law prepared by the panel has also proposed early identification of financial distress so that steps can be taken to revive the ailing company. The committee has prescribed a timeline of 180 days for dealing with applications but it can be extended for another 90 days by the adjudicating authority, only in exceptional cases. During the insolvency resolution period, an interim resolution professional would manage the debtor. The professional would prepare a plan that needs to be approved by a majority of 75 per cent of voting share of the financial creditors. Once the plan is approved, the adjudicating authority must give its nod. However, if an insolvency resolution plan is rejected, the adjudicating authority will order for liquidation.
|633||India wants people to turn in their gold|
India’s Prime Minister Narendra Modi has launched a program to lure tons of gold from households into the country’s banking system. The program consists of three schemes; a gold monetization scheme, gold sovereign bonds and Indian gold coin. The gold monetization scheme aims to unlock about 20,000 tons of gold worth over $800 billion lying idle in homes and temples. Under the plan, banks will collect gold for up to 15 years and pay 2.25-2.50 percent interest per year. This is higher than previous rates of around one percent. The government hopes that higher interest rates will help in mobilizing the gold as previous attempts have been unsuccessful. Gold is a security, it gives you earnings and now on it is going to be a part of our nation building," Modi said. By launching sovereign gold bonds with 2.75 percent interest, Indian authorities hope to cut the physical buying of the precious metal. Modi has also unveiled the first Indian gold coin which is initially to be available in denominations of 5 and 10 grams The program wants to cut the country’s reliance on gold imports, estimated at around 1,000 tons a year. "The government wants to reduce the reliance on gold imports over time," an Indian finance ministry official said. The Prime Minister said the country has overtaken China as the world's largest gold consumer, buying 562 tons so far this year, against China's 548 tons.
|634||Bankruptcy law to help debt-heavy companies|
Highly leveraged Indian companies, which are unable to repay bank loans in time, will get help from the new bankruptcy law. The norms will help restructure operations faster and even pave the way for a change in management to revive operations. Chief executives say bankruptcy is a major challenge as several projects have become non-viable, especially in the infrastructure sector due to internal and external reasons. Due to this, Indian banks are inundated with bad loans which have blocked capital for creation of new assets. Most of the existing laws have failed to either help lenders in getting their funds back or the companies in restructuring their operations. The World Bank's Doing Business sub-index on 'resolving insolvency' ranks India quite low at 136, and India's rank in 'enforcing contracts' is 170.
|635||Infrastructure development top priority: PM|
Asserting that infrastructure could play a pivotal role in bolstering India's economic growth, Prime Minister Narendra Modi today said concerted efforts have led to rolling out of stuck projects worth Rs 4 lakh crore. Modi was addressing a public rally at Sonipat in Haryana after laying the foundation stone of three major highway projects in the state - Western Peripheral Expressway, Eastern Peripheral Expressway and eight-laning of Highway section from Mukarba Chowk (Delhi) to Panipat. No body would have imagined during 60 years that highways building would pick up such fast pace in the country under the leadership of Road Transport and Highways Minister Nitin Gadkari, the PM said, adding that the projects include Bharatmala, Sagarmala and Sethu Bharatam. Citing example of Korea, Modi said a network of highways was the basis of modern Korea and the government would lay emphasis that a wide network of highways be created in the country, including linking of 123 districts with National Highways, which sadly were devoid of it despite over six decades of independence. "Korea is a good example, see how it has progressed by leaps and bounds. Their rulers started a modern highway cutting through the country, but there was much controversy as it was reasoned at that time that the nation is poor... "... It does not have schools, hospitals and spending so much money on roads was not a wise step, but rulers of that country at that time, still went ahead and did this and it changed the fate of entire Korea," Modi said. The PM said under Sethu Bharatam, 375 bridges were needed for connectivity because the project aimed at providing vital connectivity through bridges.
Gold monetisation may do better than expected: UBS survey
Gold schemes, including the monetisation schemes launched on Thursday, might yield better than expected results, according to a UBS survey. “A significantly large proportion of respondents are likely or highly likely to participate in the govt’s GMS (gold monetisation scheme) and are not resistant to the idea of temple gold also being deposited. This suggests that the scheme has the potential to perform better than previous initiatives which is not in line with current consensus expectations.” Gold monetisation scheme being implemented through banks, is aimed at mobilising idle gold in the system and use that gold for productive purpose and avoid imports. Deposits will fetch less than one% returns for short term but for medium and long term he will get interest of 2.25 to 2.5% per annum. In most circles fears were raised about success of monetisation scheme but UBS says that the response would be better than anticipated. Indians directly or indirectly hold an estimated 22,000 tonnes of gold ($800 bn or 39% of Indian GDP). Incremental gold demand in India is largely met by imports (1.7% of GDP in FY15), driving current account deficit (1.4% of GDP). Government has announced plans to facilitate deposit of gold as well as a gold bond, to hopefully monetise it into more productive use and also curtail imports. UBS survey said “nearly 50 per cent of respondents were ‘likely’ or ‘highly likely’ to deposit gold/gold jewellery.” It also said awareness was quite high. 80 per cent of respondents surveyed were aware of the schemes.
|637||Income tax reforms that will make life less taxing|
Taxpayers will no longer need to physically go and present the case and documents to assessing officers. To make the process easy, simple and effective, the Central Board of Direct Taxes (CBDT) has come up with a proposal for paperless income tax assessment over emails. This would save taxpayers visits to the I-T office, especially in cases involving small amounts. If the response and other information are found satisfactory as per automated closure rules, the issue will be treated as closed.
|638||UDAY will lead to annual savings of Rs 1.8 lakh cr|
The Centre’s ambitious Ujwal Discom Assurance Yojana (UDAY) will lead to annual savings of $30 billion (Rs 1.8 lakh crore) by 2018-19. The proposed saving is on account of energy efficiency to be achieved by reduction in interest rate; takeover of discoms’ debt by states; reduction in aggregate technical and commercial (AT&C) losses by discoms; increase in coal availability; coal swapping; and demand-side management. “It will be savings worth Rs 1.8 lakh crore, which means saving of Rs 1.2 per unit when compared to business as usual. Banks do not have to take any haircut under UDAY,” minister for power, coal and renewable energy Piyush Goyal told reporters after his interaction with stake holders. The minister said practically all states have come on board. Goyal allayed fears that state-run Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) will be impacted adversely due to the implementation of UDAY as both have lent substantially to discoms. “Instead, PFC and REC will be able to unlock and lend $50-60 billion of fresh loan in transmission and renewable energy in the next five years,” he noted. The minister said PFC and REC are not deposit-taking institutions and clarified that the government will not stress their balance sheets with eight-nine per cent bond.
|639||Indirect tax collection up 36% in first seven months||Economy|
Export volumes up in some sectors despite slow down in demand
The fall in Indian merchandise exports for the tenth straight month, ended September, 2015, was mainly driven by falling global commodity prices and not necessarily declining export volumes, economic research firm and ratings agency India Ratings and Research (Ind-Ra) said on Monday. Saying the volume demand for Indian exports may not have suffered significantly during the period, Ind-Ra said a global freefall in export prices of agricultural, crude oil and related products were to blame for heavy decline in the outbound shipments, value-wise. The rating agency said export volumes in certain categories continued to increase. For instance, it said automobiles exports rose 14.9 per cent in FY15, jumping from 7.3 per cent in FY13. Value of agriculture exports, which account for 9.7 per cent of total export in value, fell 19.1 per cent on a year-on-year basis. Similarly, crude oil and its products, (18.3 per cent of FY15 merchandise exports) declined in value, 45.4 per cent year-on-year. The decline in these two categories alone accounted for around three-fourths of the overall decline in merchandise exports, it said. Also, the sharp fall in the prices of other commodities along with lower crude oil rates has depressed prices of many intermediate and manufactured goods. Consequently, the value of exported items has shrunk. A weak euro also contributed to Indian merchandise exports witnessing an aggregate 15.1 per cent year-on-year fall, in dollar terms, over eight months leading to September.
OECD: India to see relatively robust growth at 7.2% in FY16
In its latest economic outlook report, it retained India's economic growth, but cut the global growth forecast for the current year to 2.9 per cent citing a "further sharp downturn in emerging market economies and world trade". The growth rate for India projected by the Paris-based OECD, which comprises high income countries like the US, Australia, Japan as well as most European nations, would mean lower growth rate in 2015-16 than 7.3 per cent recorded in 2014-15. OECD put future growth projection for 2016-17 at 7.3 per cent and 7.4 per cent for the succeeding year. However, the figures will be achievable only if structural reforms are further implemented, it cautioned. The report said rising public investment complemented by faster clearance of key projects has boosted growth. The private sector, on the other hand has increased investments due to better infrastructure and greater ease of doing business.
Gas price pooling leads to breakthrough in urea production
It is reassuring to know from fertiliser secretary Anuj Bishnoi that India’s urea production, which has been stagnating at 22 million tonnes (mt) for some years, is to rise to 24 mt in 2015-16. The breakthrough in urea production, which will reduce our import dependence to some extent, is mainly due to the pooling of gas prices and promotion of energy efficiency, which in turn would reduce the government’s subsidy burden. India is short of gas and supply of indigenous gas to fertiliser plants is unfailingly much lower than the requirement of 42.4 million standard cubic metres a day (mscmd).
|643||Govt announces FDI reforms in 15 key sectors|
These involve allowing composite foreign investment to come in the private banking sector by up to 74%, easing of exit norms for construction sector, raising FDI cap in uplinking of news and current affairs in TV channels, DTH, cable network and regional airlines. In altogether, 15 areas and 32 investment points would benefit from the FDI liberlisation. The government also increased the financial power of the Foreign Investment Promotion Board to give single window clearance for investment projects of up to Rs 5,000 crore from the current Rs 3,000 crore. This means that any proposal, which is not under the automatic route, beyond Rs 5,000 crore would now go to the Cabinet Committee on Economic Affairs (CCEA). In a major reform, the government allowed composite foreign investment up to 74% in private sector banking. This was an area which did not see the complete fungibility of foreign investment, when the government allowed it for other areas earlier. In the construction sector, the current conditions of area restriction of the floor area of 20,000 sq. mtrs in development projects and minimum capitalisation of $5 million to be brought in within the period of six months of the commencement of business, have been removed. A foreign investor will be permitted to exit and repatriate foreign investment before the completion of project under the automatic route, provided a lock-in period of three years has been completed. The lock-in period will be calculated in refrerence to each tranche of foreign investment. Besides, transfer of stake from one foreign investor to another would not be subject to lock-in period or any government approval. However, condition of lock-in period will not apply to hotels & tourist resorts, hospitals, special economic zones (SEZs), educational institutions, old age homes and investment by non-resident Indians (NRIs). FDI will still not be permitted in any entity, which is engaged in real estate business, construction of farm houses and trading in trasferrable development rights. The government also allowed foreign investment up to 49% in defence sector under the automatic route from the current approval route. Besides, portfolio investment and investments by foreign capital venture investors have been raised to 49% from 24% at present. In media, FDI cap in DTH, media networks was raised from 74% to 100%. However, condition of seeking approval from FIPB remains same. Uplinking of news and current affairs on TV channels would draw FDI of 49% from the current 26%. In non-news, uplinking is allowed up to 100% as is the norm now, but it could be done under automatic route against the government approval at present. Manufacturers will now be allowed to sell their products through e-commerce without the government approval. The government can relax mandatory sourcing of 33% resources from domestic manufacturers in case of cutting technology single brand stores. Single brand companies are now allowed to sell products through e-commerce. Besides, 100% FDI was now allowed in duty free shops located in customs bonded areas.
|644||Exclusive - Govt charts strategic sales in ailing PSUs|
With pressure mounting to meet the fiscal deficit target for FY16, the government is drawing up a policy for sale of loss making PSUs to meet the disinvestment target of Rs 69,500 crore, sources told Bloomberg TV India on Monday. The news sent loss-making HMT shares higher by as much as 4 per cent while MTNL was up 1.1 per cent. "Policy for sale of loss-making PSUs is likely in few weeks," an official said requesting anonymity. The sale of loss-making PSUs may include ceding management control, the official said. In the Budget for FY16, Finance Minister Arun Jaitley projected total disinvestment receipt at Rs 69,500 crore--Rs 41,000 crore from the normal PSU stake sale and Rs 28,500 crore from "strategic" disinvestment.
Money Manager Gundlach Says Buy India. Here’s How
Jeffrey Gundlach is a big fan of India’s stock market. So are investors in exchange-traded funds. “Buy India … and don’t look at your statement for 25 years,” DoubleLine Capital’s chief executive officer told an audience of ETF investors last week at ETF.com’s annual Inside Fixed Income conference, citing the country’s demographics. The World Bank this year predicted India would overtake China as the world’s fastest-growing major economy in the next two years, with gross domestic product growth of 7.1 percent by 2017. Many investors at the ETF event may have patted themselves on the back, since $4.7 billion has poured into India ETFs in the past two years. That’s helped to almost triple assets over that period, to $7.2 billion. While India ETFs rank 10th in single-country ETF assets, they rank second in inflows. Only flows into Japan ETFs top them, at $14.6 billion.
India eases rules for foreign investment in government bonds
India's market regulator has allowed foreign investors to reinvest in government bonds the same day, according to a emailed circular seen by Reuters, hoping to sustain outside interest in the country's debt market. India limits the amount of government bonds available to foreign investors, and some 90 percent of that allocation was filled in September last year, following the election of Prime Minister Narendra Modi's government earlier in 2014. However, foreign investors who bought government bonds before September had been unable to switch those bonds to different tenors - once debt was sold, they could not buy back in without going through the lengthy auction process. "This will revive foreign investor interest in government bonds and help investors to switch to longer end bonds from shorter end, given a benign interest rate outlook in India," said Ajay Manglunia, head of fixed income markets at Edelweiss Securities. Allowing foreign investors to reinvest in sovereign paper could also indicate that the government has no intention of relaxing overall limits on their investment anytime soon, Manglunia added. SEBI, in an email sent late on Wednesday to the custodian banks of foreign investors and seen by Reuters, said the facility to buy and sell government bonds the same day would be applicable on the entire $30 billion ceiling on government debt purchases by foreign investors.
States may soon raise funds by selling bonds to Foreign portfolio investors
Foreign portfolio investors (FPIs) in Singapore, London and Hong Kong may soon take calls like 'buy' Maharshtra, 'sell' Tripura, and 'hold' Haryana with the Reserve Bank of India and the government planning to allow offshore institutional investors to trade in bonds floated by state governments. The proposed move, besides widening investor base, would let better-run states raise funds at cheaper rate than those whose finances are in a shambles. Overseas investors' combined exposure to debt securities is now capped at $80 billion, of which $30 billion is permitted in gilts or sovereign bonds issued by the central government and the balance $50 billion can be invested in bonds sold by corporates. No investment is allowed in state governments bonds - commonly known as state development loans - and treasury bills issued by the Centre to raise less than one-year money. Though fiscal situation vary from state to state, their costs of borrowing do not differ dramatically. Most institutional investors attach little significance to finances of states. But FPIs, once allowed to invest in state papers, are likely to pay a premium on bonds of states with better financial health. Over the past two years, the states borrowing mechanism has been streamlined with regular auctions held every alternate Tuesdays. Seven to 14 states borrow a total Rs 8,000-10,000 crore in each auction. For the first time, the central bank has issued a tentative calendar for selling state securities in line with central government bonds. In the July-September quarter, 10 states and one of the union territories are likely to sell Rs 45,000-50,000 crore bonds. State bonds come in maturities of 10-year, but issuers like Gujarat and Karnataka have introduced five-year papers too. At present, the combined FPI investment in central government bonds has touched the $30-billion ceiling. Even though there is about $20 billion headroom for FPIs to buy corporate bonds, some of the investors may be waiting for the yield to widen. Yields are comparative lower on corporate bonds with many issuers deferring bond issuances amid expectations of interest cuts by RBI.
|648||Japan's retail investors get a yen for rupee bonds|
Japanese retail investors cannot seem to have enough of rupee-denominated bonds. And, financial institutions from all corners are happy to oblige. Each issuance size is small, as investors are still testing the waters. Even so, Rs 4,132 crore worth of rupee bonds so far this year have been issued to Japanese investors and another Rs 681 crore is lined up till December. In 2014, Rs 907 crore of such bonds were issued and Rs 744 crore was raised between 2011 and 2013. These 'uridashi bonds' are papers issued to Japan's retail investors, commonly known by the moniker of 'Mrs Watanabe' as the matron responsible for maximising returns on her family's earnings. Long years of low interest rates in Japan forced retail investors there to bet on currencies worldwide from the 1990s and are now considered a significant force in the world currency market. As speculators and carry traders, the Watanabes invest in markets where currencies are stable but offer relatively higher yields.
|649||Cargo traffic at 12 major ports up 3.67% in Apr-Oct|
Cargo volume handled by country's 12 major ports rose by 3.67% to 347.88 million tonnes during April-October 2015 over the same period a year ago. The state-run ports had handled 335.57 million tonnes (MT) of cargo during April-October 2014. Kandla Port handled the maximum 57.31 MT of cargo during the period, which was up 4.79% against 54.69 MT during April-October 2014. Paradip Port handled 42.50 MT, during the first seven months of the current fiscal. The port had handled 40.27 MT during the same period a year ago. JNPT at Mumbai handled 37.38 MT while Mumbai Port handled 36.12 MT and Visakhapatnam port handled 32.97 MT of cargo respectively during April-October period. Chennai handled 29.97 MT, Kolkata 29.16 MT, New Mangalore 19.58 MT, VO Chidambaranar 21.78 MT, Kamarajar (Ennore) 18.36 MT, Cochin 13.11 MT and Mormugao 9.59 MT during the April-October period. Mormugao port registered the highest growth of 25.27% during the period followed by V O Chidambaranar 19.06% growth. There are 12 major ports under the control of the Centre besides 187 minor/intermediate ports under the jurisdiction of states along the 7,517 km long coastline of the country.
holesale prices drop for 12th straight month in October, longest decline in 40 years
General wholesale prices fell in October for 12th month in a row by 3.81 per cent, official data released on Monday show. It was back in 1975-76 that there was Wholesale Price Index (WPI)-based deflation for a full year. It was in October 2014 that inflation was last seen, at 1.66 per cent. However, there are a few price pressure points, particularly in food articles. Pulses in particular — these saw inflation rise to almost 53 per cent in October from 38.56 per cent the previous month. Inflation in onions also remained elevated, though it moderated to 85.66 per cent from 113.70 per cent. “It appears that imports (of pulses) have not been able to quell the prices. Separately, insufficient rain during the monsoon seems to be having a limited effect on vegetables, as overall inflation remains muted at 2.56 per cent but inflation in onion prices has remained high and stands at 85.7 per cent,” said Richa Gupta, senior director, Deloitte in India. Food inflation rose to 2.44 per cent in October from 0.69 per cent the previous month. In non-food items, oilseeds also showed a rising tendency, to 6.52 per cent in October from 2.21 per cent the previous month. In other broad categories, deflation decelerated to 16.31 per cent in October from 17.71 per cent in September. In manufactured products, the rate of price fall declined to 1.67 per cent from 1.73 per cent earlier .
|651||No speed brakes in transport reforms|
In what could be a major revival move for the languishing highway construction sector, the Cabinet Committee on Economic Affairs (CCEA) allowed extension of the concession period for all stuck road projects for reasons beyond the control of the concessionaire or the delay caused by the government in giving necessary clearances. The CCEA also gave approval to segregate construction cost from cost for land acquisition, centages and pre-construction activities for the purpose of appraisal and approval of national highway projects. For railways, the Cabinet approved an investment of Rs 8,349 crore ($1.3 billion) for laying down multiple freight-specific rail lines in Odisha, Chhattisgarh and Andhra Pradesh.
Labour ministry to table 9 reform bills in Winter Session
The government wants to rationalise labour laws and these laws are in the interest of workers and will protect their rights. The purpose of this is employment generation and ease of doing business," Labour Minister Bandaru Dattatreya told reporters. The legislations that the Ministry plans to table in Parliament include Child Labour (Prohibition & Regulation) Amendment Bill, 2012, and Payment of Bonus (Amendment) Bill, 2015, which have already been approved by the Cabinet. Dattatreya said his ministry will place the Small Factories (Regulation of Employment and Conditions of Services) Bill before the Cabinet for vetting after which it will be placed before Parliament. To simplify and rationalise laws, the 44 existing central labour laws will be converted into four codes, of which two -- the Labour Code on Wages and the Labour Code on Industrial Relations -- are being prepared to be placed before the Cabinet. "Tripartite meetings are over on these two codes. We have tried our best to reach a consensus and there are a few differences, which will be solved. We are preparing a Cabinet note and we expect this to be cleared to be tabled in the coming session," Dattatreya hoped. The ministry will also place before the Cabinet an amendment Bill for the Employees' Provident Fund & Miscellaneous Provisions Bill and upon clearance, this too shall be placed before Parliament for discussion and clearance. "That apart, we will be approaching the Cabinet with amendments to the Minimum Wage Amendment Bill and the Employees' State Insurance Act," the minister said. Asked why the government wants to bring two separate laws on wages, Dattatreya said: "The minimum wage in different forms will be featured in the wage code and the second part touches on a national minimum wage that will be statutory and all state governments will have to implement it," he added. The ministry will also seek the Cabinet nod for a proposal to amend the Building and Other Construction Workers Related Laws Amendment Bill, which will also be placed in the winter session. Even as the Labour Ministry is working on the next wave of labour reforms, the central trade unions are not on board on the industrial code, the Small Factories Bill and the EPF Amendment Bill. They are strongly opposed to some amendments, including those relating to easing retrenchment, lay-offs and closure of units provision and forming unions under the proposed New Industrial Relations Code. The Bill allows companies employing up to 300 workers to lay off staff without seeking official sanction. At present, industries hiring up to 100 workers are allowed to lay off without permission. Besides, the unions are opposing the Small Factories Bill, which exempts units with less than 40 workers from 14 labour laws, including ESI and EPF Acts. That means they can buy health insurance and provident fund schemes for their workers from the open market and need not subscribe to ESIC schemes as per the new law.
Norms will be relaxed to push gold monetisation scheme
Following a fortnight of tardy progress for gold monetisation scheme, the Finance Ministry and Bureau of Indian Standards took a lead to simplify administration of the scheme to provide impetus to the scheme, sources in North Black, industry and banks informed Business Standard. In the first fortnight from 5 November when the scheme was launched only 400 gram gold has been deposited under gold monetisation scheme and that too with only one bank during the launch day because no other banks have been able to sign tripartite agreement with hallmarking centres who are acting as collecting centers and gold refineries. Interestingly response to gold bonds is much better compared to GMS and even gold coins with Ashok Chakra embossed on it have also received comparatively better response. A government source said that retail investors have applied for Rs 100 crore worth of soveriegn bonds. The source added that some 6,000 gold coins have been sold. Coins are at present sold only by MMTC centres, which are not big in numbers. Contrary to gold bonds whose price is fixed for whole issue, coin prices are changed daily depending upon market prices of gold. RBI has fixed price of gold per gram at Rs 2,684 for bonds till the issue closes on 20 November while today's market price is lower by 5-6 per cent depending upon city. Despite lower market price, Rs 100 crore subscription is seen as good response. A banker said on the condition of anonymity that in next 4 months of this financial year, 3-4 tranche of bonds can be expected. Sources also said that the government would address the tax concerns surrounding the scheme.
Jan Dhan Yojana 5.37 crore bank a/cs. Deposits grow from Rs 4.27 lakh to Rs 27,000 crore in a year
Resurgent Rajasthan sees proposals worth Rs 3.3 lakh cr ($52 billion)
In the past year, Rajasthan has undertaken a raft of economic and industry reforms to create an investment-friendly image. Her government was left with a huge debt, including Rs 70,000 crore of debt from the power sector, by the previous Congress government. THE PROMISES Rs 11,000 cr investments announced by Kumar Mangalam Birla Rs 10,000 cr pledged by Gautam Adani Rs 6,500 cr worth investments by Anil Ambani Rs 10,000 cr worth projects to be undertaken by chemical & fertiliser ministry 24 model railway stations to be developed in the state Lauding Raje's role, Union Finance Minister Arun Jaitley said, after leading the state in reforms, the chief minister should now lead the state in ease of doing business. The government should provide land for business. "The India of 2015 is not the India of 1971. For that matter, it is also not the India of 1991. The aspirational constituency, which supports growth wants India to reform at a much faster speed," he said. "Everything should be corruption free. Taxation should be reasonable and the policy should not be so aggressive that it deters investors, " he added. Among the investments made public on Thursday, the biggest perhaps came from Kumar Mangalam Birla, chairman of the Aditya Birla Group. Birla promised investment of nearly Rs 11,000 crore, including Rs 7,000 crore for setting up two new cement plants and Rs 3,000 crore for establishing a 500 MW solar power plant in the state. Gautam Adani, head of the Adani Group, also promised to invest an additional sum of Rs 10,000 crore over four years for the expansion of thermal power plants and generation of solar power in the state.
Surge in award of projects puts road construction in top gear
The pace of national highway construction, which has been slow for the last few years, is slowly gathering momentum. The National Highways Authority of India (NHAI) and the ministry of road transport and highways have together got some 2,400 km of highways constructed during April-September this year compared with 1,800 km in the corresponding period last year. With the recent surge in award of projects — NHAI itself awarded 3,067 km of highway projects in 2014-15 and its target for the current year is 5,000 km — and the considerable additional flexibilities being built into the public-private partnership (PPP) model, the government is confident of meeting the target of expanding the country’s road network by 30 km every day in the next few months, official sources told FE. The rate of road construction is currently some 13 km a day, up from around 2 km a day when the NDA government took over, the sources added. NHAI, significantly, awarded 870 km of highways in the build, operate, transfer model in the first six months of the current fiscal, a sign of gradual improvement in the PPP segment. “The fact that 870 km roads have already been awarded through the BOT (toll) mode itself signifies that private sector is now coming back to the sector,” Rohit Kumar Singh, joint secretary (highways) in the ministry, told FE. The government has set a target of 6,300 km for construction and 10,000 km for project awarding for the current fiscal. Against 6,300 km highway construction target for the last fiscal, only about 4,400 km could actually be achieved. Sources said road project awarding has more than doubled during the April-September period of the current fiscal at 4,500 km compared with 2,200 km during the same period of last fiscal. NHAI is more proactive on this front, awarding about 2,500 km during the period and the ministry, 2,000 km.
Rs.3 lakh crore ($47 billion) mobilized from coal auctions, 8 more mines to be e-auctioned
The government today kick-started the process of online auction for eight blocks in the fourth round for sectors like steel, cement and iron. The government has already mobilised over Rs 3 lakh crore in the first three rounds of coal auction and allotment. “It has been decided to auction eight Schedule III coal mines earmarked for non-regulated sectors like, iron and steel, cement and captive power plants in the fourth tranche. The e-auction for these mines will be held from January 18 to January 22, 2016,” Coal Secretary Anil Swarup said addressing the media here. Directions have been issued to the nominated authority for auctions, Joint Secretary, Coal, Vivek Bhardwaj, to conduct the auction, and the notice inviting tenders will be issued tomorrow, Swarup said. The Secretary said Coal India is “well on way of achieving 550 million tonne coal production target” for the current fiscal and has crossed the 300-MT output mark this week.
|658||India Reforms Are Gathering Pace|
A comprehensive note from Jupiter Investment Management's Avinash Vazirani (Manager of the Jupiter India Fund) highlights how Prime Minister Modi's recent high profile visit to the UK shines a light on Anglo/India relations, and the potential for closer ties between the two countries on issues such as climate change and defence. While this is very interesting for politicians and general observers, Modi's comments on the attractiveness of India as an investment destination should be a focal point for investors, he says. As a long term investor in the Indian market, the background changes discussed below, and which are receiving little or no publicity, are setting the scene for a transformation of the Indian economy the likes of which we have not seen in recent history. Indian stocks have been an isolated area of relative calm amid the storm that has raged across global emerging markets in recent months. Vazirani believes the game-changing reforms that have helped drive growth in India are continuing to gain momentum, and together with strongly positive business conditions, will help power the next leg of Indian economic growth. Meetings with government have also left him confident that the government will do whatever it takes to ensure fiscal and monetary policy are aligned to protect India's low-inflation, rate-cutting cycle. One of the flagship reforms of the Modi government has been its introduction of a programme of universal social security designed to help lift hundreds of millions out of poverty, for the first time establishing minimum living standards and bringing vast swathes of the population out of the shadow economy and into the formal banking system. A system of biometric identity records, linked to bank accounts and mobile phone accounts will provide basic health and life insurance and social security benefits. This should dramatically reduce the waste and inefficiency of the state's payment of subsidies. The speed and success of this scheme has been breath-taking. Since its launch in September 2014, 190m bank accounts have been opened and 165 million debit cards issued. Shared ownership of bank accounts means that this figure already covers a large portion of the estimated 600,000 Indians who did not have access to bank accounts before the programme was rolled out. With around 2 million new accounts opening per week, the remaining pool of 200-300 million people without access to a bank account is decreasing fast. It's easy to overlook the amount of job creation that's happening in India as a result of other government initiatives, he says. The ‘Make in India' scheme aimed at persuading foreign companies to manufacture in India has already seen Taiwanese electronics giant Foxconn sign up to spend US$5 billion building its factories in Maharashtra State, while the ‘Skill India' programme aims to give 4 million Indians the skills that should help fuel India's burgeoning economy. Meanwhile the MUDRA programme of microenterprise funding that seemed to be in its planning stages just months ago has already disbursed $3.5 billion dollars in loans to small businesses. Under the scheme, banks make loans to small businesses, laying off this risk to this to a government agency. According to government sources, at least half a million jobs have been created, while the boost to GDP (gross domestic product) of the extra economic activity from these newly-funded businesses is clear.
Deep in India's Desert, a Crucible for Modi's Economic Plan
The capital of the northwestern state of Rajasthan saw one of India’s steepest surges in foreign direct investment in the year through March 2015. Chief Minister Vasundhara Raje, taking advantage of her absolute dominance over the state and municipal legislatures, has pushed through reforms Modi has struggled with, relaxing contentious labor rules and making it easier for companies to acquire land. Fettered by an opposition-controlled upper house of parliament where national bills lie blocked, Modi’s counting on India’s 29 states to individually ease restrictions and compete for investment. Some are heeding his call: a spate of lavish investor summits by state governments has seen FDI into India poised for a record this fiscal year. "It isn’t incongruent with what Modi had initially launched in terms of decentralization and a smaller government," said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. "The more the individual states show they are in favor of such reforms, that kind of momentum will seep through at the national level.” India’s constitution allows state governments to tinker with certain federal laws to meet local requirements. Raje, 62, a descendant of the former royal family and a member of Modi’s Bharatiya Janata Party, last year made it easier to hire and fire workers. Modi’s attempts to do so have been stymied by national labor unions. Raje has also relaxed land acquisition rules to set up factories in special economic zones and is now looking to extend the provisions state-wide, after Modi was forced to backtrack from his proposals. In other areas, she’s a step ahead of Modi: Rajasthan in October unveiled a new start-up policy, vowing to provide funding for new companies, months ahead of Modi’s promised incentives. Finance Minister Arun Jaitley called on the state to hasten the pace of project implementation, adding that "the aspirational constituency of India has increased," which is demanding faster reforms.
|660||President clears Madhya Pradesh labour reforms|
The wait of the Shivraj Singh Chouhan-led Madhya Pradesh government to usher in labour reforms in the state is over with President Pranab Mukherjee approving amendments to 15 central labour laws. Some of the key amendments include easing retrenchment norms, three months’ compensation to retrenched workers, raising overtime hours and night shift for women. Madhya Pradesh is the second state after Rajasthan to be granted presidential assent to its labour law amendments. Gujarat, which had passed a slew of labour law amendments earlier this year, is awaiting presidential assent.
|661||Govt contemplates tax incentives to boost housing|
In order to spur investment in the housing sector, the government is considering to provide tax incentives for certain projects to ensure ‘Housing for All’ by 2022. The tax incentives, which could be announced in the Union Budget, would aim at promoting investments in rental housing by institutional players. The draft National Urban Rental Housing Policy have suggested a host of fiscal incentives to encourage rental housing with a view to achieve the goal of housing for all by 2022. Housing is considered as one of the key sectors to promote growth by increasing demand for steel, cement, besides creating additional jobs. The tax department, according to sources, is looking at the draft rental housing policy to ascertain the tax incentives that can be doled out to the sector to encourage investments in housing sector.
RBI to make gold monetisation scheme simpler to help it take off
According to the plan that has now been envisaged, banks would be allowed to deposit the tendered metal directly at refineries, instead of involving Collection and Purity Testing Centres (CPCT).
FAME-India scheme to save Rs 60,000 crore on oil import bill: Government
"We will spend about Rs 800 crore in the first two years. Overall, Rs 14,000 crore are needed to make the scheme succeed. However, we will save fuel worth Rs 60,000 crore through this spend," Union Heavy Industries Minister Anant Geete
|664||Pace of rail project awards doubles this year|
Railway projects worth Rs 10,594 crore were awarded in the April-October period, first seven months of this financial year, more than double the value of those awarded in the same period last year, at Rs 4,279 crore. This comes some months after the railway ministry was rapped by the Prime Minister’s Office (PMO) for slow pace of capital spending and progress on key projects. Suresh Prabhu, the minister, has pushed hard to lure investors, to meet the financial year’s targeted spending of Rs 1 lakh crore. Among the projects awarded last month was a Rs 1,102- crore contract to Alstom Transport India by Lucknow Metro Rail Corporation, for train sets and signaling systems for the new network planned for the city. The contracts for civil works and electrification of the under-construction Rs 82,000 crore Dedicated Freight Corridor project has also pushed up projects award activity. Most of these projects involve engineering, procurement and construction (EPC) contracts. Relying on EPC in the wake of limited success in PPP (public-private partnerships) is a correct strategy. If the current rate of project award continues in the railways, the government would be able to award around Rs 2 lakh crore of EPC contracts over five years,” said Abhaya Agarwal, partner-infrastructure at research and ratings agency Ernst & Young. He said a major cause for the improvement in award of rail projects is the ministry’s decentralising of powers to delegate works to the zonal railways, apart from the huge budgetary support. “This is a very encouraging sign and would allow the railways to create more capacities within a short time frame,” he said. The railways’ plan size is Rs 1 lakh crore for this financial year, a 53 per cent jump over 2014-15’s spending target of Rs 65,000 crore.
Gold Bond scheme gets Rs 246 cr; excellent response: FinMin
The gold bond scheme has evoked "excellent response" with the government receiving 63,000 applications for purchase of bonds worth Rs 246 crore in the first tranche, a top official has said. "Gold Bond Scheme: 63,000 applications for 917 kg. Gold amounting to Rs 246 crore in first tranche. Excellent response for an innovative product," Economic Affairs Secretary Shaktikanta Das tweeted. Aimed at providing an alternative to buying physical gold, the government had sold gold bonds through banks and post offices between November 5-20. The allotment will take place on November 30. The gold bond scheme will offer investors an interest rate of 2.75% and a choice to buy bonds worth 2 grams of gold, up to a maximum of 500 grams. The issue price of the sovereign gold bond for this tranche was Rs 2,684 per gram. The tenor of the bond will be for a period of eight years with exit option from 5th year to be exercised on the interest payment dates.
|666||WSJ: India’s GDP Growth Likely Accelerated To 7.4%|
India’s economic expansion may have gained speed last quarter as manufacturing and services output improved even as weak rains hurt agriculture, economists said. Gross domestic product in the three months ended Sept. 30 rose 7.4% from a year earlier, according to the median estimate in a poll of 14 economists by The Wall Street Journal. That is a step up from the 7.0% expansion in the preceding quarter. The government is scheduled to issue the data on Monday. “India’s GDP growth is expected to have improved as industry clocked the highest output gains in over four years, while services remained resilient,” said Sujit Kumar, an economist at Union Bank of India. Industrial production data that were released earlier show output of manufacturing, mining and utilities firms rose 4.7% from the previous year during the quarter. That is a modest pickup from the 3.2% increase in the previous quarter and the strongest pace of expansion since the three months ended June 2011. Still, the country received 15% less than the average level of rainfall during the June to September monsoon season—the second successive year of shortfall. That is expected to weigh on farm production.
July-Sep GDP growth at 7.4%; Manufacturing grows 9.3%, farm output at 2.2%
India’s gross domestic product (GDP) growth for the three-month period ended September 30 stood at 7.4 per cent, compared with seven per cent in the previous quarter and 8.4 per cent in the same quarter last year. The increase in the rate of growth over the June quarter was mainly on account of good numbers for the manufacturing sector. Earlier, several economists had estimated the rate of economic growth in the July-September quarter to be 7.3-7.6 per cent, and analysts polled by Reuters and Bloomberg had put the figure at 7.3 per cent. After the September quarter GDP growth numbers, there is likely to be a downward revision in official GDP growth estimates for the full financial year 2015-16 — the 2014-15 economic survey had estimated it to be between 8.1 per cent and 8.5 per cent. The gross value added (GVA), comprising agriculture, industry and services, increased 7.4 per cent in the September quarter, against 7.1 per cent in the previous three-month period. Manufacturing growth during the quarter was 9.3 percent, against 7.2 per cent in the previous quarter. The agricultural sector grew 2.2 per cent, against 1.9 per cent.
Govt to tighten curbs on steel imports to aid local producers
India will step up curbs on steel imports before the end of the year to combat a rising tide of cheap shipments and aid local producers, according to Steel Secretary Aruna Sundarajan. Shares of Tata Steel and JSW Steel rallied. The basket of products that face a 20 per cent safeguard tax may be widened beyond hot-rolled coil, Sundarajan said. The curbs, which could include additional measures, may be announced in about two weeks, Sundarajan told the station on Wednesday. India is among countries facing a surge in steel shipments from China, the world's top producer, where slowing local consumption has spurred mills to ship unprecedented volumes. India's plan for additional barriers adds to signs that importers are pushing back with greater vigor against the tide, potentially capping China's exports into 2016. "In the coming few weeks, India will have tough measures in place to provide a level playing field for domestic producers," Sundarajan said, estimating that imports were set to jump to 14 million tonnes (mt) to 15 mt in the financial year ending March 31. Inbound shipments were 10 mt in 2014-2015, ministry data shows.
Now a DBT for cotton farmers' minimum support prices
In a landmark change in the way it adminsters minimum support prices (MSPs) for crops, the central government is set to begin direct transfer of cash into farmers' accounts, instead of physical procurement of cotton from wholesale markets. Normally, it intervenes through state federations or its Cotton Corporation of India (CCI) arm, when the market price falls below the MSP. Under MSP operations, CCI has so far this year procured a little over 100,000 bales (170 kg each), largely in a few districts of Telangana and Andhra. Last year, it had procured a record 8.6 million bales, nearly a fourth of overall cotton output. The Centre is now introducing a 'Direct Payment Deficiency System (DPDS)' under which the difference between selling price and MSP would be borne by it. The amount of the price difference would be transferred from the ministry of textiles to the respective state governments for distribution.
World’s richest, Tirupati Temple may move stash to Modi’s gold scheme
The richest Hindu temple in the world could soon come to the rescue of Prime Minister Narendra Modi’s plan to recycle tonnes of idle gold and cut economy-hurting imports. The gold monetisation scheme, aimed at persuading individuals, institutions and rich temples to deposit some of their gold stash with banks to recycle, has only attracted about one kg in a month out of a total hoard of over 20,000 tonnes.But the Sri Venkateswara Swamy Temple, popularly known as the Tirupati Temple that is believed to have been the abode of Lord Venkateswara for 5,000 years, may become the biggest contributor with more than 5.5 tonnes of gold.“It’s a good scheme,” said Yanamala Ramakrishnudu, the finance minister of Andhra Pradesh, where the temple is located. “We have already issued a directive to go for the scheme.” India is the world’s second-biggest consumer of gold after China and the country’s insatiable appetite meant imports of the precious metal accounted for 28% of India’s trade deficit in the year ending March 2013.Seeking divine blessings, devotees have offered billions of dollars worth of jewellery, bars and coins to temples over the centuries. Most temples are secretive about their stash and their gold is often stored in subterranean vaults.Tirupati has already deposited most of its gold with banks under previous monetisation schemes that offer interest of about 1%, said D. Sambasiva Rao, executive officer of the trust that manages the temple.“They (temple investment committee) will evaluate and whichever scheme is beneficial we are going to do that,” he said, adding the temple will move its entire hoard to Modi’s programme if convinced.The new scheme offers annual interest of up to 2.5%.Rao said the temple would take a final decision in the next 10-15 days.The temple gets offerings of almost one tonne of gold every year and all of that could also be deposited under the new scheme once a decision is made, he added.But Mumbai’s two-century-old Shree Siddhivinayak temple, which is devoted to Lord Ganesha, remains unconvinced as banks accept deposits only after gold is melted down, leading to a potential loss in weight due to impurities.The government remains hopeful individuals and institutions will participate in the scheme under which banks will melt the deposited gold and loan it to jewellers.The scheme “will help in reducing our gold imports and save foreign exchange and deal with the problem of current account deficit”, the finance ministry said in a statement on Friday.
|671||Indirect tax collections up 34% during Apr-Nov|
Indirect tax collections rose 34.3 per cent in the first eight months of 2015-16, led by high excise collections, signaling a pick-up in economic activity. A part of the collections was on account of additional revenue measures announced in the current year, data released by the ministry of finance on Wednesday showed. Revenue on account of indirect tax stood at Rs 4.38 lakh crore in the April-November 2015 period from Rs 3.26 lakh crore in the year-ago period. Collections in the first eight months of FY16 were 67.8 per cent of the entire financial year's target. Indirect tax collection in November rose 24.3 per cent to Rs 55,297 crore. The government's additional revenue measures including the excise rise on diesel and petrol, increase in clean energy cess, withdrawal of exemptions for motor vehicles, capital goods and consumer durables, and the increase in service tax from 12.36 to 14 per cent were attributed to the high collection. The growth in indirect tax collections in the first six months including service tax, excise duty and customs are close to double the 19 per cent estimated in the Budget.
|672||Siddhivinayak temple to give gold scheme a boost|
One of the most popular temples in India may soon make the first substantial contribution to Prime Minister Narendra Modi's plan to recycle tonnes of idle bullion to reduce imports and the country's current account deficit. Mumbai's two-century-old Shree Siddhivinayak temple, devoted to Ganesha, is considering depositing some of its 160 kilogrammes (kg) of gold with banks, according to a spokesman. The deposit would be a big boost for the gold monetisation scheme that has attracted only one kg in its first month. "We are planning to melt 40 kg of jewellery with lower purity to make bars and deposit those bars under the gold monetisation scheme," Sanjiv Patil, executive officer of the temple trust told Reuters on Wednesday.
|673||CCEA okays 150,000 tonnes of pulses buffer stock|
To insulate against any sudden spike in the price of pulses, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday cleared a proposal to create 150,000 tonnes of buffer stock through domestic procurement at market rates. Of this, 50,000 tonnes would be purchased from farmers during the 2015-16 kharif season, while another Rs 1 lakh tonnes would be purchased from the rabi crop of the same year. The Food Corporation of India, National Agricultural Cooperative Marketing Federation of India, Small Farmers’ Agribusiness Consortium and other agencies would be engaged in purchasing the crop from farmers. The payment for these purchases would be made from the price stabilisation fund created by the government. “This will encourage farmers to take up pulses production on a larger scale and will enable India to help achieve self-sufficiency in pulses in a few years,” said an official statement.
Domestic passenger car sales jump 10% in November
Passenger car sales in India rose 10.39 per cent in November — 13th consecutive month of growth — as the domestic auto industry continues to drive on the slow road to recovery. According to the data released by Society of Indian Automobile Manufacturers (SIAM), domestic car sales in November stood at 1,73,111 units compared with 1,56,811 units in the same month last year. Overall passenger vehicle sales during the month grew by 11.4 per cent to 2,36,664 units as against 2,12,437 units in the year-ago period. Sales of commercial vehicles were up 8.56 per cent to 51,766 units in November, Siam said.
Cabinet allows states to mine & sell coal, ends monopoly of Centre
Ending 41-year-old monopoly of central government over mining and sale of coal, the Cabinet Committee of Economic Affairs (CCEA) approved allotment of coal mines to states for mining and commercial sale to medium and small industries in their state. The statement of the government said, CCEA gave its approval for allotting coal mines to central and state PSUs for sale of coal, especially to medium, small and cottage industries under the provisions of the Coal Mines (Special Provisions) Act, 2015. This move is likely to benefit the mineral rich states to earn surplus revenue which were until now getting only royalty amount from private companies mining coal for captive use. This is pursuant to the enabling act on commercial mining and sale of coal in the new Coal Ordinance (Special Provisions), 2014. Currently, states are allotted coal blocks but with specified end use such as power production, steel and iron production etc.
Make in India has tremendous impact on investments
"The Make in India initiative of the government has made a tremendous impact on the investment climate of the country, as shown by significant growth of the overall foreign direct investment (FDI)", Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Rajya Sabha. The flagship program of the Modi government aims at developing the country as a global hub for manufacturing, innovation and design for both domestic and foreign markets. The initiative was launched in September last year by the Centre to focus on invigorating the country's manufacturing sector. India received $ 32.87 billion in FDIs from October 2014 to September this year.
|677||India recorded $17.5 b PE investments in 2015: PwC|
Private equity (PE) investments in India touched a record high of $17.5 billion in 2015 across 685 deals, breaching the previous high of $14.7 billion recorded in 2007, a PwC report says. According to the report, PE investments (excluding real estate deals) till December 14, this year stood at $17.5 billion, registering a jump of 34% over calendar year 2014, which saw $13 billion invested across 560 deals. The surge in PE investments this year was largely owed to the e-commerce sector, which saw deals worth $5.3 billion across 290 deals. The other sectors, which outperformed this year were, financial services and healthcare, which contributed deals worth $2.4 billion and $1.58 billion, respectively.
|678||Roads lead the way in government spending|
In November alone, roads comprised 59% of the tenders issued, representing a growth of 62% in value terms over the year-ago period, shows analysis
Govt's Mid-Year Eco Review Says "We Don't Know"; But CEA Arvind Subbu Should Chill
Harry Truman, US President for eight years from 1945, expressed his exasperation with economists who tried to give him equivocal answers and two sides to a picture. “Give me a one-handed economist! All my economists say, On the one hand, on the other.” Prime Minister Narendra Modi, who would have been happy to announce the arrival of “achche din” after two years in power, will have to be satisfied with “on the other hand” answers for now, if one were to peruse his Chief Economic Advisor’s Mid-Year Economic Analysis for 2015-16, which actually lowered the projected GDP growth rate from an eight-percent-plus seen at the start of the year to something like 7.2-7.5 percent. First half GDP is lower than last year’s (7.2 percent versus 7.5 percent), which will give P Chidambaram a reason to crow over the performance of Arun Jaitley in 2015-16. The Mid-Year Analysis, presented last Friday (18 December) by CEA Arvind Subramanian, is an economist’s delight and a common man’s nightmare since it avoids direct answers to the two basic questions everyone wants answers for: Is the economy out of the woods? Are we on track for faster growth with lower inflation?
Govt gives ultimatum to road developers on stalled projects
Running out of patience for their "lack of commitment and lackadaisical approach", the government has warned non-serious developers and bankers of terminating highway projects worth Rs 20,000 crore. "The concessionaires and bankers are not realising that we are reaching a stage of impatience, and people who are users of these roads are not going to be waiting any more," Road Transport and Highways Secretary Vijay Chhibber told PTI in an interview. "If developers and bankers fail to mend their ways and initiate correctives to roll out projects by January-end, the government will start terminating contracts in PPP mode and repackage them." Out of the total 77 stalled projects, issues have been sorted out for all barring 19, which are still stuck. The secretary's remarks assume significance as the highway sector has been saddled with stuck projects worth about Rs 3.8 lakh crore ($60 billion).
Bankruptcy Bill introduced in Lok Sabha as a money Bill
The government introduced the 'Insolvency and Bankruptcy Code 2015', or the bankruptcy Bill, in the Lok Sabha on Monday. The Bill is one of the steps that Finance Minister Arun Jaitley has identified as crucial for India to improve ease of doing business. The Bill has been introduced as a money Bill, which means it will not have to be passed in the Rajya Sabha, where the government has struggled to get legislative work done. The Bill provides for resolution of the bankruptcy process in a time-bound manner. It provides a timeline of six months, or 180 days, to a maximum of nine months, or 270 days, to deal with insolvency and enable winding-up of operations of a company or a limited liability entity. It also provides for fast-track resolution of corporate insolvency within 90 days. The Bill also proposed early identification of financial distress so that steps can be taken to revive the ailing company. It also provides for setting up of a 'Insolvency and Bankruptcy Board of India' to regulate professionals, agencies and information utilities engaged in resolution of insolvencies of companies, partnership firms and individuals. The Bill states that during the insolvency resolution period, an interim resolution professional would manage the debtor. The professional would prepare a plan that needs to be approved by a majority of 75 per cent of voting share of the financial creditors. Once the plan is approved, the adjudicating authority must give its nod. However, if an insolvency resolution plan is rejected, the adjudicating authority will order for liquidation. Among other recommendations, the Bill suggests an insolvency regulator, for oversight over professionals in this regard. It lays down a transition provision during which the Central government will exercise all the powers of the regulator till the time one is set up. "This will enable quick starting of the process on the ground, without waiting for the proposed institutional structure to develop," the report states.
|682||Banks see credit pick up as India Inc borrows again|
Alarm bells rang when loan growth slowed to 12.6 percent in the financial year to March, making it the weakest pace since 1997. Banks, laden with bad debts, were reining in loans, and firms were warier. For the financial year ending March 2016, India's top bankers expect growth of about 14 percent, closer to the rate of 13.9 percent seen in the financial year ended March 2014, but less than half the heady pace seen about a decade earlier. "New projects are still few and far between. But having said that, I think you know it's getting closer. The trajectory, if you ask me, is upward, definitely," she told Reuters. However, India remains the world's fastest growing major economy, and government support for stalled infrastructure projects is beginning to trickle down, bankers say. Roads and renewable energy are the sectors leading the pack for borrowing, followed by the auto sector, bank executives say.
Railways signs Rs 500-cr pact with CIL for supply of wagons
The railway ministry on Wednesday signed an agreement with state-owned miner Coal India Ltd (CIL) for procurement and supply of 2,000 high capacity wagons. The move is aimed at ramping up coal loading for Indian Railways amid a shortfall in freight traffic and helping CIL meet production targets. “This agreement will result into speedy supply of wagons for coal loading in dedicated circuits. The initial investment of Rs 500 crore will lead to an anticipated investment of Rs 5,000 crore (over years),” said railway minister Suresh Prabhakar Prabhu. Power, coal and renewable energy minister Piyush Goyal, who was also present, said the initial agreement will help CIL meet its target of producing one billion tonnes of coal annually over the next five years. “There is not a single power plant today that falls in the critical (coal shortage) category. This became possible only because of the support of the rail ministry,” he said.
Skill training soon to get labour for 3 crore houses under Indira Awaas Yojana
India will embark on a massive skilling exercise to train workers in construction under its 'rural mason' programme, the first time it's planning such an initiative at this scale. The rural development ministry, which has the task of building 3 crore houses in the next seven years under the Indira Awaas Yojana, wants to ensure there is enough skilled labour available to meet this goal. Funding for the training will come from the capacity building component of the Rs 35,000-crore Mahatma Gandhi National Rural Employment Generation Scheme, A pilot programme will be launched in Jharkhand, Maharashtra and Uttarakhand to train 50,000 workers in 35 days, after which it will be rolled out across the country. The Construction Skill Development Council of India will provide the training to unskilled workers besides mentoring them at worksites. It will also issue certificates to workers after they complete the master training programme. "We are trying to work out a completely new profile for a rural mason since such a course does not exist presently," the official cited above told ET. The idea is to train workers onsite in broad areas of construction and the new technology. Rural masons will be trained in scaffolding and bricklaying besides casting of cement and concrete. These skills will help in upgrading the quality of rural housing India as well, it is expected.
|685||Investment in an Indian start-up every 8 hours|
Indian start-ups raised $5.5 billion (Rs 36,000 crore) from venture capital (VC) firms and angel investors in 1,096 deals during 2015, as they looked to participate in the country’s economic growth story, according to VCCEdge, the research arm of online publisher VCCircle that tracks start-up funding. Nearly two-thirds of the investments or 632 deals were made by angel and seed investors, pitching in with small funding in the initial stage of the start-ups. Angel and seed investors funded $313 million in 2015. VC investments stood at $5.18 billion in 464 deals, said the study reported on techcircle.in. In fact, there was an investment in an Indian start-up every eight hours. The share of private investments contributed by angel and VC firms in India rose to 25.4 per cent in 2015, compared to 17.2 per cent during 2014. Private equity investments in India clocked in at $11.8 billion, lower than its peak of $12.5 billion in 2012.
UDAY has 15 takers, Jharkhand first state to sign MoU
Mineral-rich but energy-deficit Jharkhand will become the first state to sign a memorandum of understanding (MoU) with the Centre, on Tuesday, for the Ujwal Discom Assurance Yojana (UDAY) reforms for state-owned power distribution companies (discoms). The MoU is a tripartite agreement is between the state government, the power distribution companies and the Union ministry of power. With this, the total number of states that would be joining UDAY will become 15. The other states that are on board UDAY are Andhra Pradesh, Jharkhand, Punjab, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Rajasthan, Gujarat, Haryana, Chhattisgarh and Madhya Pradesh. Besides, four major states — Uttar Pradesh, Bihar, Maharashtra and Odisha — have already given their in-principle approval to join UDAY. “Close to 90 per cent of the discom losses is under reform plan with these four major states joining UDAY,” said Piyush Goyal, minister of state for coal, power and renewable energy. The Centre is hopeful that 21 states would join UDAY by March 2016. For the states that sign up for UDAY, one of the first steps is to take over 75 per cent of discom debt as on September 30, 2015 over two years - 50 per cent in 2015-16 and 25 per cent in 2016-17.
Work on $1-bn Chinese industrial park in Sanand to begin soon
Work on the $1 billion (over Rs 6,500 crore roughly) Chinese industrial park near Sanand in Gujarat is set to begin soon, China Development Bank (CDB) vice managing director Xiao Meng Zhen told the state government on Monday. In a meeting with Gujarat chief minister Anandiben Patel to discuss the project, Zhen briefed the state government about steps being taken by the bank for setting up of the park and investments. A memorandum of understanding (MoU) was signed for the industrial park between CDB and Gujarat government during the Vibrant Gujarat Summit 2015. China Development Bank will invest $1 billion to set up industrial park near Sanand in Gujarat. The bank vice-managing director met Gujarat Chief Minister and other officials to discuss the project.
Top Indian cities absorb 38 mn sq ft office space, highest in 5 years
The country’s top seven cities absorbed 38 million sq ft of prime office space last year, the highest till date, says a new study. The absorption in 2015 is 18 per cent higher than the previous year. The annual office demand was led by Bengaluru with a 32 per cent share of the total absorption across leading cities during the year, followed by the National Capital Region with a 23 per cent share. Suburban and peripheral office districts of major cities attracted steady occupier demand in the fourth quarter of 2015. Prominent micro-markets included Gurgaon in Delhi-NCR; Powai, Vikhroli, Kanjurmarg and Thane-Navi Mumbai in Mumbai; the Outer Ring Road (ORR) in Bengaluru; the IT Corridor in Hyderabad; the Old Mahabalipuram Road stretch along Perungudi in Chennai; Viman Nagar in Pune; and Salt Lake Sector V in Kolkata. According to the findings of CBRE’s latest report, India Office Market View for Q4 2015, absorption of Grade-A office space across key cities in India witnessed a quarterly growth of approximately 26 per cent during the October-December period, translating into more than 12 million sq ft of leased office space.
RBI Governor Raghuram Rajan & other bankers lead campaign to clean up banking system
When Raghuram Rajan declared after taking charge as the governor of Reserve Bank of India ( RBI) that promoters have 'no divine right' to continue running a business after messing it up, many thought it was just another rhetoric from a new administrator. The reality is beginning to bite. In 2016, many like the Thakurs of Jyoti Structures, Khaitans of Electrosteel and even well-known names like Mallyas or Ruias run the risk of losing empires in case of defaults, thanks to Rajan following up on his words with action. Banks tightening the screws on defaulters has forced many to put units on the block. Given the relentless pursuit by bankers, valuation expectation of promoters are also getting realistic and transactions are beginning to happen. Go-getter bankers such as Arundhati Bhattacharya of State Bank of India, Chanda Kochhar of ICICI, Shikha Sharma of Axis Bank, PS Jayakumar of Bank of Baroda and Bill Winters of Standard Chartered Bank and are making the most of the 'freedom' from the political class, whose meddling has reduced, say bankers.
As Modi Triples Spending, India Road Stocks Cheer With 73% Rally
Prime Minister Narendra Modi’s decision to triple spending on roads and highways is cheering builders in India, especially the smaller contractors, as he steps up efforts to upgrade the nation’s creaky infrastructure. A custom index of eight stocks has gained 8.6 percent this year, compared with the 3.3 percent drop in the benchmark S&P BSE Sensex. The gauge has surged 73 percent since Modi’s Bharatiya Janata Party swept to power last May, as construction rebounded fourfold to about 13 kilometers (8 miles) a day. Spending jumped threefold to 350 billion rupees ($5.3 billion) in the April-August period this year, sparking a rally that more than quadrupled the market value of Gayatri Projects Ltd. in 2015. “Infrastructure is a sector that has high visibility,” said Arvind Gupta, chief financial officer at Mumbai-based J. Kumar Infraprojects Ltd., whose shares have advanced 48 percent. “Any government needs to follow the development mandate. The voter sent a clear signal that she will vote only for someone who will enable development.” The outperformance of road builders stands in contrast to the nation’s power producers that are grappling with erratic fuel supplies and losses from selling below cost to state-owned distributors. An index of 19 generators has slid 8 percent this year, underscoring the challenge to Modi’s goal of improving public utilities. India is ranked 90 out of 144 by the World Economic Forum for the quality of its infrastructure.
India to be star performer with 7.7% GDP growth; China to slow down in 2016: PWC
India will be a “star performer” among emerging market economies and is expected to clock 7.7 per cent growth in 2016, outshining China for the second consecutive year, a PwC report says. According to the global consultancy firm, of the emerging economies, only India is expected to grow faster in 2016 than its long-term average growth rate. Among the seven emerging economies (China, India, Brazil, Mexico, Russia, Indonesia and Turkey), India will be a “star performer”, while the Brazilian and Russian economies will contract and China will slow down, the report said. “For the second year in a row, we expect India to grow faster than China, expanding by around 7.7 per cent in real terms,” it said. According to PwC, the Chinese GDP growth will ease to 6.5 per cent in 2016, as growth in manufacturing and exports will continue to slow gradually.
|692||India second largest fruit producer in world|
Annual growth in horticulture has seen fruit production grow faster than vegetables though the latter constitute the largest segment of this sector of agriculture. The stellar performance of fruits has attracted attention of statisticians with the agriculture ministry's 'horticultural statistics at a glance 2015' noting that India was making its presence felt as the second largest producer of vegetables and fruit."Grapes occupy the premier position in exports with 107.3 thousand tonnes .. China tops the list of fruit production with 154.364 million tonnes (MT) in 2013 followed by India (82.631 MT), Brazil (37.774 MT), USA (26.986 MT), Spain (17.699 MT), Mexico (17.553 MT), Italy (16.371 MT) and Indonesia (16.003 MT). Surprisingly, though productivity is a weak spot, India does better than China and Spain.
Government plans easier layoff, minimum wage and severance laws
KEY PROPOSALS * Companies with up to 300 employees to be allowed to retrench staff without government's permission. Earlier, the ceiling was 100 * If an employee is retrenched, they would be given salary of 45 days for each year in series. If they have worked for five years, compensation would be five times the 45 days salary. * Labour ministry is proposing to increase minimum wage
|694||Deposits in Jan Dhan accounts cross Rs 30,000 cr|
Deposits in accounts opened under the government's flagship financial inclusion programme — Pradhan Mantri Jan-Dhan Yojana (PMJDY) —have crossed the Rs 30,000 crore mark. As many as 20.38 crore bank accounts were opened under the PMJDY as on the January 20, as per the latest data available. These bank accounts had deposits of Rs 30,638.29 crore (about $4.5 billion). The accounts that can be opened under PMJDY are Basic Savings Bank Deposit Accounts (BSBDA) which can be of zero balance, as per RBI guidelines. According to the trends available, the percentage of accounts with 'Zero Balance' have actually shown a significant decline. Accounts with no balance in them were as high as 76.81 per cent of the total opened under the scheme as on September 30, 2015. They have come down to just about 32 per cent at the end of December. The Finance Ministry data further showed that 8.74 crore of the accounts were seeded with Aadhaar and 17.14 crore account holders were issued RuPay cards. The data further revealed that as on January 15, banks had offered 53.54 lakh account holders over-draft facility of which the sanction was issued for 27.56 lakh cases and 12.32 lakh account holders availed it. The total amount availed was Rs 166.7 crore.
|695||Core sector output recovers, rises 0.9% in December|
The combined output of eight crucial infrastructure sectors rose by a slight 0.9 per cent in December after contracting the month before. The industries, carrying a total weight of nearly 38 per cent in the Index of Industrial Production (IIP), continue to be hit by falling international crude oil prices coupled with weakening global consumer and industrial demand. Data released by the ministry of Commerce and Industry on Thursday showed the eight core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — grew by a cumulative 1.9 per cent in the months leading up to December in the current financial year 2015-16. Core sector growth had contracted for the first time in seven months in November after maintaining steady growth at 3.2 per cent in the two months before. The December figures were brought on by continued and accelerating decline in crude oil, natural gas. However, coal production and electricity generation linked to it, both recovered significantly to manage a slight uptick in overall figures.
|696||Rice procurement up 25% to 24.47 MT|
Government's rice procurement has increased 25% to 24.47 million tonnes in the 2015-16 marketing year so far despite prospects of lower production due to poor monsoon. The Food Corporation of India (FCI) and state government owned agencies undertake the procurement operations. The Centre has kept rice procurement target of 30 MT for the current marketing year, which started in October. These agencies had procured 19.66 million tonnes in the year-ago period, while the total purchases had reached 32 MT. At present, procurement has been completed in Punjab and Haryana, while the operations are in full swing in Uttar Pradesh, Chattisgarh, Andhra Pradesh and Telangana.
Manufacturing PMI rises to four month high in January
After contracting in the previous month, manufacturing registered a four-month high growth in January following inflows of new business from both domestic and export sources, showed a widely tracked Nikkei purchasing managers'index (PMI) survey. However, investment goods output and new orders fell which may have impact on future growth of manufacturing. However, inflationary pressures remained on upside because of which a commentator associated with PMI does not expect the Reserve Bank of India to cut the policy rate on Tuesday. Firms hired additional hands to keep up with the production demand. PMI rose to 51.1 points in January from 49.1 in December. A reading below 50 denotes contraction and one above that is expansion. "Alongside a resumption of output at some firms impacted by December’s flooding, manufacturers also benefited from rising inflows of new business from domestic and export clients," said Markit Economics, a compiler of PMI data. Although the rate of expansion was only moderate, it was the sharpest signalled for four months, it added. Both levels of production and total new business registered mild increases following contractions in December. The consumer goods sub-sector remained the principal growth engine at the start of the year, seeing substantial expansions of both output and new orders. In contract, producers of investment goods saw output and new orders fall, while production volumes stagnated in the intermediate goods category. The trend in new export order inflows strengthened during January, amid reports from companies of improved sales demand. "The level of income new export business has now risen in each of the past 28 months," Markit said.
|698||Shipshape performance at India's 12 major ports|
India's 12 major ports registered an overall improvement in the performance parameters during the April-December 2015 period compared to the first nine months of FY15. These ports handled 447 million tonnes (mt) up to December 2015 against 433 mt in the year-ago period. While overall growth in traffic stood at 3.18 per cent during the period under review, nine ports witnessed positive growth and three registered negative growth. The overall performance of the major ports is measured by three parameters - average turnaround time (ATT) of vessels on port (in days), average pre-berthing time on port (in hours), and average output per ship berth day (in tonnes). Between April and December 2015, ATT reduced to 2.12 days from 2.30 days a year ago. Besides, average pre-berthing time fell to 3.97 hours from 5.55 hours. Also, the average output per ship berth day increased to 12,614 tonnes from 12,313 tonnes.
|699||Polavaram is reaping the Jan Dhan benefit|
Not just Andhra Pradesh, but the PMJDY numbers are stunning nationally. About 20.20 crore people across the country have opened accounts under the scheme; with over a half of them operating the accounts through the RuPay cards, the Indian version of a Mastercard or Visa debit cards. According to the AP Hota, Managing Director and CEO of National Payment Corporation of India, the new account holders generate 27 lakh transactions per day. This figure will touch 30 lakh per day very soon, says the Managing Director of NPCI, which is the umbrella organisation for retail payment systems in India. The accounts together hold deposits of ₹32,000 crore, with an average transaction value of ₹2,000. An enquiry with the bankers show that the numbers continue to grow as people open accounts even after the banks have stopped campaigns for new enrolments. The drivers The trends lead to a simple, yet vital question: What is driving these numbers when the old financial inclusion plans thrust by the Reserve Bank of India on public sector banks, which failed to generate enthusiasm in people, as well as the bankers? As has been the case of Ravamma, the increasing awareness about the social security being offered under the scheme has been an attraction, says Venkatappa Rao, the 24-year-old Manager of Andhra Bank’s Polavaram branch. A post-graduate in biotechnology, Rao wanted to be a scientist but now has found his calling in the banking sector. “Luckily, the claims in cases were settled very fast, spreading the message about the scheme’s inherent financial protection,” says Rao. There is a huge gap in insurance for the underprivileged in the country. The insurance penetration, measured as a percentage of insurance premiums to the Gross Domestic Product (GDP), stands at 3.3 per cent in India last year, according to data of Insurance Regulatory and Development Authority of India (IRDAI). It is the lowest level of insurance penetration since 2005. Under the Jan Dhan scheme, the RuPay card comes with an inbuilt accident insurance cover of ₹1 lakh for up to 90 days after the cardholder carries out a successful financial or non-financial transaction at a merchant establishment, an ATM or an e-commerce platform. There are other drivers too. Prakash Goud, a vegetable seller in Kandi village in Sangareddy district of Telangana, is elated about the overdraft facility for ₹5,000 that comes with the PMJDY account. “This is quite a sum for me and helps in mobilising daily working capital for my business,” he says. Till recently, Goud had to depend on the local money lenders who would provide call money, to buy vegetables. Call money is a form of private lending where a loan is available immediately, but comes with exorbitant rate of interest. He would walk back with little returns after paying back the borrowed money to the money lender, who would charge an average interest rate of 10 per cent. But now, thanks to the overdraft facility, the vegetable seller doesn’t need the call money anymore.
|700||Farmers to have pan-India access to mandis: Modi|
Come April and Indian farmers will have pan-India access to all agriculture mandis for selling their farm yield. The platform, to be known as National Agricultural Market, will allow farmers to know best rates for their yield through the internet. He also asked governments and farmers to join hands to take a pledge to double income for farmers by 2022, when India will mark 75th anniversary of its Independence. “The platform will be launched from April 14, to mark the birth anniversary of B R Ambedkar this year. The e-platform will provide Indian farmers access to minimum five hundred mandis of the country,” Prime minister Narendra Modi said in Sherpur village, Sehore district, Madhya Pradesh. He was in the village to launch guidelines of a newly launched crop insurance scheme at a rally called Kisan Mahasammelan. “A famer can have access to all mandis through his mobile phone, so he can know where he can fetch best rates for his commodity. He can trade the commodity anywhere in India through this facility. This way, he need not go to a nearby mandi or do distress-selling. This is what the real meaning of Digital India is, which we want to implement for our farm community,” Modi said.