ECONOMY AFFAIRS APRIL 2016

ECONOMY AFFAIRS APRIL 2016

• India's first small finance bank launched
  Capital Small Finance Bank, India's first small finance bank, was launched in Jalandhar on 24th April. It opened 10 new branches on its inaugural day. The Jalandhar-headquartered bank had been operating as Capital Local Area Bank since January 2000 with 47 branches in five districts of Punjab.
  
  It is among the 10 entities that were given the in-principle approval by the Reserve Bank of India (RBI) to set up small finance banks.
  
  While inaugurating the bank, Nirmal Chand, regional director of RBI, Chandigarh, said it was a historic day for the banking sector in India as it would be reckoned as a day when small finance banks were introduced into the banking system.
  
  Chand noted that India has seven branches per 100,000 population compared with 40 branches per 100,000 population in developed countries. According to him, this gap can be bridged by small finance banks. The bank's business is projected to increase four-fold from Rs 3,000 crore as on March 31, 2016 to Rs 12,000 crore and branch network to 216 by March 2021.
  
• Centre to provide plastic park to Andhra Pradesh
  Union Minister for Chemicals and Fertilizers Ananta Kumar said that Andhra Pradesh would be the plastic hub in a short while from now and that the Centre would provide a plastic park to the State with Rs.1000 crore. He said research would be undertaken here on how to use the plastic for agriculture.
  
  He laid the foundation stone for the Central Institute of Plastic Engineering and Technology (CIPET) at Surampalli village of Gannavaram mandal, near Vijayawada on 22nd April along with Andhra Pradesh Chief Minister N Chandrababu Naidu. He said the Centre is planning a bulk drug park to come up in 500 acres in Visakhapatnam soon.
  
  Mr. Ananta Kumar said though the Centre wants to complete the construction of CIPET Vijayawada in 3 years time, the Chief Minister wants it to be completed in one years’ time.
  
  The new CIPET campus would be constructed at an estimated cost of Rs 50.73 crore and spread over an area of 12.04 acres. The campus will be introducing different courses in tune with future needs of the industry in a phased manner. CIPET Vijayawada had already commenced courses from its rented building in Kanur in Vijayawada since August 2015. At present, it is offering one-month, two-month, three-month and six-month skill development training programmes. CIPET is aiming to make 6.2 lakh plastic technology engineers and technicians ready in the next 3-4 years.
  
• India to clock 8% GDP growth in 2016-17: Chamber of Commerce
  India’s economy is likely to clock nearly 8 per cent growth in the current fiscal on the back of robust private consumption, which has benefited from lower energy prices and higher real incomes, according to PHD Chamber of Commerce.
  
  The Reserve Bank had retained its growth projection for 2016-17 at 7.6 per cent.
  
  Going ahead, growth in India is projected to notch up to 8 per cent in 2016-17. Growth will continue to be driven by private consumption, which has benefited from lower energy prices and higher real incomes. The chamber also estimated that India’s share in world GDP has doubled from 1.43 per cent in 2000 to 2.86 per cent in 2015.
  
  The BRICS nations account for about 42 per cent of the world’s population, a quarter of the world’s land area and a combined GDP of above $16 trillion.
  
• Finance Ministry approves 8.7% interest on EPF for 2015-16
  Finance Ministry has approved 8.7 per cent interest on Provident Fund deposits for over five crore subscribers of Employee Provident Fund Organisation, EPFO for 2015-16. The EPFO pays rate of return to its subscribers on the basis of returns it generates from its investments.
  
  Employees representatives had demanded nine per cent rate of interest for the fiscal but the CBT at its meeting held on February 16 decided to provide an interim interest rate of 8.8 per cent for 2015-16. EPFO had provided 8.75 per cent rate of interest in 2013-14 and 2014-15, which was higher than 8.5 per cent in 2012-13 and 8.25 per cent in 2011-12.
  
• FDI in India reaches “highest ever” $51 billion in 11 months of FY16: DIPP
  Foreign Direct Investment into India touched the “highest ever” mark of $51 billion during the April-February period of last fiscal ended March 31, DIPP Secretary Ramesh Abhishek said on 25th April.
  
  The Secretary the Department of Industrial Policy and Promotion (DIPP) said that healthy business climate has been created in the county so that investments are promoted.
  
  In 2011-12, India had attracted FDI worth $46.55 billion. In 2014-15, it was $44.29 billion. This FDI includes equity, re-invested earnings and other capital.
  
  Abhishek said that ease of doing business is critical for creating a suitable business climate and the government is a making lot of efforts to improve it.
  
  He also said that protection of creativity and innovation is important to create a suitable climate in the country for technology to be developed and for technology to come from outside.
  
  The FDI numbers reflects that the government has been able to create a suitable climate in which the foreign investors feel confident that interest are protected.
  
  The government is committed to doing away with the obstacles and improve the whole process, he said, adding that “we need growth rate of double digits for the next three decades to improve the quality of life and eliminate poverty but that requires lot of efforts in investment side, IPR side and at other fronts”.
  
• Mondelez opens its largest plant in APAC at Andhra's Sri City
  Mondelez India Foods, a part of the USD 30 billion Mondelez International, on 25th April inaugurated its largest manufacturing plant in Asia Pacific, built at an investment of USD 190 million.
  
  The multi-category food campus is expected to reach an annual capacity of 2.5 lakh tonnes of production in three phases by 2020, and employ over 1,600 people in five years
  
  To begin with, it will produce approximately 60,000 tonnes of Cadbury Dairy Milk chocolate annually in the first phase and the company plans to use it for exports later.
  
  The manufacturing plant was inaugurated by Andhra Pradesh Chief Minister N Chandrababu Naidu. Mondelez India partners over 1 lakh farmers across four states, and procures 40 per cent of its cocoa requirement from the domestic farmers.
  
  The company sees India as a priority market and continues to invest behind brands, routes to markets and people to drive growth. The Sri City site is spread over 134 acres. In addition to Andhra Pradesh, Mondelez India also operates manufacturing plants in Himachal Pradesh, Maharashtra, Karnataka and Madhya Pradesh.
  
• Railway Minister announces Rs 1 lakh crore safety fund
  The government will create a Rs 1 lakh crore safety fund to strengthen safety measures on the rail network to prevent accidents. Replying to a debate on Demands for Grants for Railways for 2016-17 in the Lok Sabha, Railway Minister Suresh Prabhu said his Ministry has sent a proposal to the Finance Ministry for approval.
  
  The Rashtriya Rail Sanraksha Kosh will be a non-lapsable fund which will be utilised for safety measures. Mr Prabhu also announced to revisit financial norms related to the grant of projects to adopt best practices to make them viable.
  
  The Minister said, the government is working on a long term plan for improving the financial condition of Railways. He said, government is working towards restructuring and rejuvenation of Railways. He also informed that apart from generating revenue from internal resources, the Railways is also eyeing for generating additional revenue from the market and other avenues.
  
  Mr Prabhu also brushed aside the criticism of the proposal to introduce expensive bullet trains, saying the government has managed to secure a soft loan of Rs 1 lakh crore from Japan at an interest as low as 0.1 per cent.
  
  Supreme Court asks Finance Ministry to explain NPAs recovery mechanism
  
  The Supreme Court on 26th April asked the Union Finance Ministry to inform about the mechanism in place for recovery of huge Non-Performing Assets (NPAs). The apex court also asked the ministry to inform as to what safeguards it is bringing in to curb bad debt.
  
  The court has also asked the Reserve Bank of India (RBI) and Indian Banks Association to respond to the issues being framed in this regard. Meanwhile, the government told the apex court that some amendments are already in the offing and Bankruptcy Code will soon be in place.
  
• Bankruptcy Code must cover overseas assets too: House panel
  The Joint Parliamentary Committee looking into the proposed bankruptcy and insolvency law has suggested changes to the Insolvency and Bankruptcy Code 2015.
  
  The Committee, which met on 26th April to adopt the report, has suggested including a section on resolution of cross-border insolvency so as to deal with cases such as loan default by former Kingfisher Airlines chief Vijay Mallya or the Tata Steel-Corus case. This will help in situations where a debtor has assets overseas that can be used by domestic creditors.
  
  The panel also stressed that all labour law provisions must be followed during liquidation proceedings and the interest of workmen must be a priority.
  
• Parliament passes Industries Amendment Bill, 2015
  Parliament has passed the Industries (Development and Regulation) Amendment Bill, 2015 with Rajya Sabha approving it on 28th April. Lok Sabha had passed the Bill in Winter Session of the Parliament last year.
  
  The bill seeks to bring industries engaged in the manufacture of potable alcohol under the exclusive control of States in all respects. However, the Centre will continue to be responsible for formulating policy and regulating foreign collaboration for all products of fermentation industries, including industrial and potable alcohol.
  
  The Centre conformed to the Supreme Court order in the Bihar Distillery versus Union of India case, wherein it held that where the removal or clearance is for industrial purposes, the levy of excise duty and all other control should be with the Centre.
  
• Centre takes important decision to control sugar prices
  Centre takes important decision to control sugar prices and allows states to levy stock limits on Sugar in the same way as in case of pulses and edible oil. In a major cabinet decision, the govt decided to allow States to impose and enforce stock limits to check the price rise in sugar.
  
  The Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval to bring "sugar" under the purview of imposing stock holding limits on dealers of sugar, keeping in view the recent upward trend in sugar prices.
  
  The Government has noticed that in spite of sufficient availability of sugar stocks with the Sugar Mills, the wholesale and retail prices have shown a spurt.
  
  The decision will empower State and Central agencies to impose stock limits and regulate supply, distribution, storage and trade of sugar to bring down sugar prices at reasonable level by curbing unscrupulous trading.
  
• PAC frowns on PPP contracts for KG Basin, Mumbai airport
  The Public Accounts Committee on 28th April came down heavily on errors made by various government departments in contractual agreements with private players and said the Centre needs to ensure that public money and resources are safe.
  
  In two separate reports tabled in Parliament, the PAC said such errors are what led to problems at the GVK-controlled Chhatrapati Sivaji International Airport (CSIA), Mumbai, and the production sharing contracts with Reliance Industries for the Krishna-Godavari Basin block. The PAC has urged the Centre to be careful about such agreements.
  
  The report on CSIA, handed over to Mumbai International Airport Ltd from May 3, 2006, found several shortcomings in the operationalisation of the joint venture model and implementation of the Operation, Management and Development Agreement (OMDA), and the State Support Agreement (SSA). It said the issues are similar to those found by the PAC in the case of Delhi International Airport Limited.
  
  The panel said OMDA and the SSA did not specify any cost estimate for the project. “The initial cost was Rs. 5,826 crore as on 2006 which was revised by MIAL in 2008, 2010 and finally in 2011 to Rs. 12,380 crore, that is, an increase of more than 100 per cent of the original cost estimate,” the report said.
  
• India lagging behind in garment exports: World Bank
  India is losing out to countries such as Cambodia, Indonesia and Vietnam in the race for a greater share in the global apparel market being relinquished by China. It needs to reduce duties on import of manmade fibre and increase productivity by helping firms grow in size with less complex labour policies, a World Bank report has said.
  
  Free trade pacts like the Trans Pacific Partnership (TPP) between the US and 11 other Pacific rim countries would benefit competing countries such as Vietnam, said Onno Ruhl, World Bank Country Director, India, answering a question at a press conference at the launch of the report, entitled ‘Stitches to riches? — apparel employment, trade and economic development in South Asia’ on 28th April.
  
  The Indian garments industry, too, could gain if the country became part of the TPP, but it is for India to decide, keeping other things in mind, Ruhl added.
  
• Centre to increase monthly minimum wages to 10,000 rupees for contract labourers
  Union Labour Minister Bandaru Dattatreya has said that the government has decided to bring out an executive order to increase minimum wages to 10,000 rupees per month for contract labourers across the country. He said a gazette notification will be issued
  
  According to the Dattatreya, though the government wanted to bring amendment to Minimum Wages Act to ensure hike in the wages of contract labourers, inordinate delay has occurred in the passage of amendment to this Act in Parliament due to non-cooperation from opposition parties. He said the executive order is being issued keeping in view the interests of contract workers and made it clear that all state governments are expected to implement the order without fail. The Union Minister further said that six regional conferences will be held next month to review all labour laws in the country.
  
• New BRICS-supported bank approves first loans
  A new multilateral lender set up by the BRICS nations has approved its first set of loans valued at 811 million US dollars for renewable energy projects in four of its member countries.
  
  The New Development Bank, which formally launched full operations in February, is backed by the BRICS countries - Brazil, Russia, India, China and South Africa. A bank official said, the first batch includes four projects, one each in Brazil, India, China and South Africa. According to a statement, the first group of projects approved by the bank’s board is in the area of green and renewable energy. The bank has been viewed as a challenge to other international institutions such as the World Bank.
  
• FDI inflows up 37 per cent to $39.32 bn in 2015
  Foreign direct investment (FDI) into the country increased by 37 per cent to $39.32 billion during 2015. The foreign investment inflows stood at $28.78 billion in 2014, according to data by the Department of Industrial Policy and Promotion (DIPP).
  
  Computer hardware and software sector attracted the highest FDI, followed by services, trading business, automobile industry and chemicals. Singapore emerged as the biggest FDI source, followed by Mauritius, US, Netherlands and Japan. The government has taken several steps to promote investments through a liberal FDI policy. It has relaxed norms in several sectors, including single brand retail, e-commerce and construction.
  
• India’s trade deficit declines 5.07 billion dollars in March
  India’s trade deficit touched 5.07 billion dollars in March from February’s 6.54 billion. It is attributed to fall in global crude oil prices. On year on year basis, the deficit was down to 118.46 billion dollars from 137.69 billion. According to data released by the Commerce Ministry, exports contracted by 5.47 per cent to 22.71 billion dollars in March, against 24.03 billion dollars in March last year.
  
  The cumulative exports for the 2015-2016 financial year was 261 billion dollars. Imports also declined by 21.56 per cent to 27.78 billion dollars in March as compared to last year when it was 35.42 billion dollars. Gold imports dip 80.48 per cent to 972.9 million dollars in March.
  
• Panel suggests 15-point action plan to link renewable energy to electricity grid
  A technical committee on Large Scale Integration of Renewable has suggested a 15-point Action Plan for facilitating large-scale integration of renewables in the country, in a secure and reliable manner.
  
  The Committee constituted by the Ministry of Power has recommended measures such as bringing flexibility in conventional power generation, frequency control, generation reserves and other such measures to integrate renewable energy into the national electricity grid.
  
  While some of the actions have been completed with active support of Central Electricity Regulatory Commission, State Energy Regulatory Commission (SERC), National Institute Wind Energy and other stake holders, there are a few which are still pending include Regulatory Framework for Forecasting, Scheduling and Imbalance Settlement for Renewable Energy (RE) generators at 23 States.
  
  Only six States so far have issued the regulations. India has a target of setting up 175,000 MW of renewable energy generation capacity by 2022.
  
  To ensure that this is integrated into the national electricity grid, several measures need to be taken. It is with this purpose that a high level technical committee was constituted with members from Ministry for Power, CERC, Central Electricity Authority, Power Grid Coproration of India, several private bodies and representatives from renewable energy rich States.
  
  CEA as Planners would specify Technical Standards and Protection Requirements for Renewables. Focus has also been given on Capacity Building of State Load Despatch Centres (SLDCs) particularly in RE Rich States.
  
  Report also talks about the Newer Technologies say Micro-Grids, Demand Response, Prosumers (consumers and producers), Electricity Storage, Plug-in Hybrid Electric Vehicles etc.
  
• Asian economies at greater risk now: ADB report
  Widening income inequality, slower growth and the growing dominance of China and India in the region has meant that Asian governments must integrate a more robust resilience into their national plans, according to an independent evaluation of the Asian Development Bank’s operations in South Asia. The report also finds that the Asia and Pacific regions now account for 51 per cent of the world’s poor.
  
  The report says, while the Asia-Pacific region in 1990 accounted for 1.5 billion people living in poverty, or 80 per cent of the global total, this proportion has come down to 51 per cent as of 2012, or 456 million people. Within the region, South Asia accounts for 34 per cent of this 456 million poor people. The report defines the poor as those living below $1.9 a day.
  
• Central Government allows full PF withdrawal
  Rescinding its earlier decision after employee protests, the Employees’ Provident Fund Organisation (EPFO) has decided to allow members to withdraw their entire corpus before retirement for purposes such as housing, professional education, medical treatment and the marriage of their children.
  
  The earlier notification (dated February 10 and effective from May 1) imposed restrictions on PF withdrawal before the age of 58 years.
  
  A new notification will be issued soon, after which the decision would take immediate effect, Labour & Employment (Independent charge) Minister Bandaru Dattatreya said
  
  According to the Labour Secretary Shankar Agarwal the earlier restriction on withdrawal was only on 3.67 per cent of the total 12 per cent employer contribution, as 8.33 per cent goes towards pension. That restriction (on 3.67 per cent) has now been removed
  
  In the February 10 notification, the Ministry had proposed that an employed member below 58 years could withdraw only his own contribution and the interest accrued on it.
  
  It also proposed to raise the retirement age for PF withdrawal to 58 years against the earlier 54 years.
  
  Under existing rules, a member has to be out of a job for at least two months to withdraw the entire corpus.
  
• Govt to form panel to deal with complaints of online shoppers: Paswan
  According to the consumer Affairs Minister Ram Vilas Paswan the government will set up a committee to suggest ways to deal with complaints of consumers who trade on e-commerce platforms. He said the decision has been taken in the wake of several complaints from online buyers related to delay or non-delivery and sub-standard goods.
  
  The suggestions made by the committee will be incorporated in the rules after the passage of the proposed Consumer Protection Bill in Parliament. The CCPC also recommended mandatory standards for piped drinking water. At the moment FSSAI has standards only for bottled water. It said the FSSAI should formulate standards for water being supplied through pipeline and should monitor its quality.
  
  According to the Paswan the council was also of the view that there should be guidelines for brand ambassadors of products and services and in the case misleading advertisements, they should also be held responsible.
  
  He said celebrities should understand the product thoroughly before endorsing them because there are large number of followers who trust on them. The minister said the dual maximum retail price (MRP) for the same product is illegal and strict action will be taken against owners who charge above the MRP in Multiplexes, amusement parks and other avenues.
  
• PNB becomes top mobiliser under Gold Monetisation Scheme
  State-owned Punjab National Bank on 19th April said it has become the top mobiliser under Gold Monetisation Scheme, which was launched by Prime Minister Narendra Modi in November.
  
  The bank has mobilised substantial gold deposit under Short Gold Bank Term Deposit (STGBD) for three years from one of the leading trusts of India - Tirumula Tirupati Devasthanam, Tirpuati (TTD). The bank has mobilised 1,311 kg of gold since the launch of the scheme in November.
  
  Under the GMS, banks are authorised to collect gold for up to 15 years to auction them off or lend to jewellers from time to time. Depositors will earn up to 2.50 per cent interest per annum, a rate lower than bank deposits.
  
  GMS operates under three categories, short-term deposit (for one to three years with a rollout in multiples of one year), medium term deposit (for five to seven years) and long term deposit (for 12 to 15 years).
  
• IMF, WB, UN and OECD form new group to stop tax erosion
  The International Monetary Fund and the World Bank has said they are joining forces with other international organizations to cooperate on tax issues and develop new tools and standards for taxing multinational enterprises.
  
  The new group, which will also include the United Nations and the Organization for Economic Cooperation and Development, will especially focus on building effective tax systems in developing countries and avoid tax base erosion.
  
  The decision by the organizations to formally cooperate predates the release of the Panama Papers, which highlighted the widespread use of tax haven countries by wealthy individuals to avoid taxes.
  
• WTO ruling on solar power: India to raise issue at UN event
  India on 20th April said it will raise in the United Nations this week, the recent WTO ruling which decided that the country’s solar power purchase agreements were inconsistent with international norms.
  
  According to the Environment Minister Prakash Javadekar, the WTO ruling as unfortunate, noted that the developed world should not have objections on such a small thing.
  
  During a recent meeting of BASIC countries - Brazil, South Africa, India and China - held in New Delhi, China had come out in support of India's decision to file an appeal against the WTO ruling. Supporting India's decision to challenge the WTO ruling, Greenpeace also had earlier said the ruling violates the spirit of the Paris Climate Change Agreement. The February ruling by the WTO came in the wake of a US complaint before the global trade body alleging discrimination against American firms.
  
• Telangana's share in irrigation investment doubles to 12%
  Telangana's share in the total investment of Rs 5.5 lakh crore attracted by country's irrigation sector has doubled to about 12 percent in ten years from 2004-05 to 2014-15, says a study. Andhra Pradesh attracted around 11 percent investment from both public and private sources across India in the decade, the Assocham's 'Irrigation investment in India: State level experience' study said.
  
  While regions that now comprise Telangana state have managed to almost double its share in investments attracted by irrigation sector from about 6 percent in 2004-05, share of regions in the new Andhra Pradesh state remained more or less unchanged at about 11 percent," the study said.
  
  However, Gujarat's share declined from 25 percent to just 5 percent during the said period, Assocham said in a statement. India's public sector accounted for almost 98 percent of investment projects in the irrigation sector, it said.
  
  The investment in the sector too increased at a compounded annual growth rate (CAGR) of about 11 percent during the decade from about Rs two lakh crore in 2004-05 to over Rs 5.5 lakh crore in 2014-15, Assocham Economic Research Bureau (AERB) said in a study.
  
  It has clocked highest CAGR of over 32 percent during the last decade followed by Jammu and Kashmir (25.5 percent), Chhattisgarh (22.6 percent), Jharkhand (20 percent) and Telangana (19 percent). Investments attracted by irrigation sector in Gujarat also declined at a CAGR of over 5 percent in the ten year's time.
  
  Over 84 percent of the total irrigation projects remained under implementation as of 2014-15. Out of the total 361 live investment projects in the sector, 248 projects remained stuck and of these 189 reported time/cost overrun, it noted. Cost of about 178 projects has risen by a whopping 61 percent by about Rs 2.5 lakh crore from their actual cost of Rs four lakh crore. Cost of delayed irrigation projects in Maharashtra, Karnataka, Andhra Pradesh, Gujarat and Telangana have increased by about 21 percent, 18 percent, 14 percent, 12 percent and nine percent, respectively. Projects in Jammu and Kashmir, Jharkhand, Bihar, UP and Kerala are facing maximum delay.
  
  All state governments should set up an irrigation development authority to look after such projects so they complete on time, Assocham suggested.
  
• India replaces China as top FDI destination in 2015: Report
  India has replaced China as top destination for foreign direct investment by attracting $63 billion worth FDI projects in 2015, according to fDi Intelligence, a division of The Financial Times Ltd.
  
  Also there was an 8 per cent increase in project numbers to 697. Of the top 10 destination states for FDI in 2015, India claims five places, with the top place going to Gujarat, which attracted $12.4 billion. Maharashtra has been one of the strongest performers across the years attracting $8.3 billion, respectively, in 2015.
  
  It said the Make in India campaign and the resultant boost in FDI has resulted in a whopping increase in FDI job creation from 1.16 lakh new jobs in 2013 to 2.25 lakh in 2015 - the highest number in the world.
  
• Google unveils new version of Chromecast for Rs 3,399
  Technology giant Google on 20th April launched the new version of its Internet streaming device Chromecast in India for Rs 3,399. The company has also introduced Chromecast Audio in India at the same price, which was launched in the US last year.
  
  With a sleek design, fresh content and an updated app, the new Chromecast will make streaming faster and easier
  
  Chromecast Audio is a new device that plugs into speakers to stream and control radio, podcasts and music over WiFi. Using Chromecast, users can add smart TV functionality to their television to stream content from video services like YouTube and Netflix. Chromecast is available in 31 countries and about 20 million users globally.
  
  However, the company did not disclose any country-specific data. The devices will be available through marketplaces like Flipkart, Snapdeal and Paytm as well as retailers like Reliance and Croma. The previous version of Chromecast was unveiled in India early last year.
  
  Other Internet streaming devices selling in India include Teewe and those from firms like Amkette. Sales of Internet streaming devices are expected to pick up as on-demand video services like Netflix become more popular. The devices will come bundled with six months of free subscription for Hooq and Saavn. These also let users play games like Angry Birds on their television using their smartphones as a controller.
  
• RBI allows some stressed loans to be reclassified
  The Reserve Bank of India did banks a good turn by allowing them to reclassify some loan accounts, especially those facing delays in the date of commencement of commercial operations, as performing or standard assets. The loan reclassification, which will help save on the provisioning burden, couldn’t have come at a better time as they are in the midst of finalising their annual financial results.
  
  This move is expected to have a salubrious impact on the fourth quarter financial results of banks, especially from the public sector.
  
  Following the reclassification of certain loan accounts, banks now would need to set aside only 0.40 per cent (of the outstanding loan amount) as provision for a standard loan, against 15 per cent for a bad loan. Under its asset quality review (AQR), the RBI asked banks to ensure uniformity in asset classification in the case of large loan accounts under multiple/consortium lending. It sought to correct the anomalous situation arising from the treatment of loan accounts as ‘standard’ by some banks and ‘bad’ by others. The review was part of the RBI’s attempt to get the banks to clean up their balance sheets by March 2017.
  
  This resulted in banks, especially from the public sector, downgrading large accounts in the third quarter. As a result, public sector banks had to make loan loss provisioning, resulting in them either posting huge losses or substantial slide in net profit in the third quarter ended December 2015.
  
  For all projects financed by banks, the RBI requires them to clearly spell out the ‘Date of Completion’ and the DCCO (date of commencement of commercial operations) of the project at the time of financial closure of the project and the same should be formally documented. These should also be documented in the appraisal note by the bank during sanction of the loan.
  
  DCCOs of many large projects, especially in the infrastructure sector, were impacted in the last four-five years due to delays in receiving statutory clearances, including those relating to environment, and legal challenges mounted to the allotment of mines.
  
• Centre sets up panel to prepare roadmap to double farm income
  The government has set up a panel to prepare a blueprint for doubling farmers' income by 2022 as promised by the Prime Minister.
  
  A senior Agriculture Ministry official said, the committee will chalk out a plan to shift farm policies from being production-oriented to income -based.
  
  The eight-member panel will identify potential areas of agriculture where more investment is needed. It will suggest ways to reduce the risk of farming by diversifying to horticulture and allied activities like livestock and fisheries to boost income. The inter-ministerial panel will also look at reducing the cost of cultivation and addressing unpredictability of weather and price fluctuations in farm sector.
  
  The committee will be headed by Ashok Dalwai, Additional Secretary in the Agriculture Ministry. The other members will be officials from Agriculture and Food Ministries as well as experts from the Delhi-based National Council of Applied Economic Research and National Institute of Agricultural Economics and Policy Research.
  
• India ratifies WTO's trade facilitation agreement
  India says it has formally ratified the WTO's trade facilitation agreement, which aims at easing customs procedures to boost commerce.
  
  According to the Commerce and Industry Minister Nirmala Sitharaman, the move will supplement India's ongoing reforms to bring in simplification and enhanced transparency in cross border trade in goods. India's WTO ambassador Anjali Prasad has handed over the instrument of acceptance to WTO Director-General Roberto Azevedo.
  
  The Director General said that India is one of the most dynamic economies in the world today and has become a top recipient of foreign investment.
  
  He said, ratifying the WTO's Trade Facilitation Agreement (TFA) will help India further boost economic growth by reducing trade costs and supporting its integration into the global economy.
  
• Govt aims to increase food processing sector 2.5 times in 10 years
  Faced with mounting losses of agricultural products after harvest, the government has set a target to increase food processing by 2.5 times in the next 10 years. Currently, food processing has achieved only 10 per cent of India’s total agricultural output. But, the government aims to raise it to 25 per cent by 2025, said Radha Mohan Singh, Union minister of agriculture and farmers’ welfare, on 23rd April.
  
  The minister was speaking on the sidelines of the third meeting of the Indian Grain Storage Working Group, organised by the Crop Care Federation of India.
  
  The agriculture sector is facing a huge problem with mounting post-harvest management losses due to inadequate availability of scientific storage and lack of required care of the stored crop in warehouses. A recent survey showed India’s annual loss worth Rs 1 lakh crore due to non-availability of scientific warehouses.
  
  Meanwhile, the entry of private players in warehouses and the collateral management sector through increased government focus has revived the storage management industry in the past few years.
  
  To focus on reduction in post-harvest losses, the government has promoted a region-based strategy. This is done according to the climatic diversity of every state and region by implementing the unified Horticulture Development Mission.
  
  Under this mission, the government aims to promote technical setup, extension of area under horticulture crops, post-harvest management, processing and marketing etc. India ranks second globally in horticultural crops, after China.
  
  The minister said that in spite of a severe loss to the crops owing to unseasonable rainfall, hailstorm and other natural calamities, total foodgrain production, which was 252.02 million tonnes in 2014-15 according to advance estimates, it had increased to 253.16 million tonnes in 2015-16.
  
  The government is committed to doubling farmers’ income in the next five years, as was announced in Budget 2016-17.
  
  The National Agriculture Market would help nationwide electronic trading of agricultural commodities, the minister said. In this programme, 585 agriculture mandis of India would be connected to each other. The farmers would get maximum price for their crops and the interference of mediators would be reduced to a great extent. Direct foreign investment was also being encouraged in this field.
  
  The minister further said the government was considering setting up a committee which would recommend measures to enhance efficiency in warehousing space to reduce post-harvest crop losses. This apart, attempts were being made to introduce new technology for handling harvested crops and therefore reduce pilferage in the entire system of grain management, the minister said.
  
• Tata Steel sells UK long-product plant
  Tata Steel, the country’s largest steel producer, has signed an agreement to sell the loss-making 4.5-million tonne (mt) long-product Scunthorpe steel plant in Britain to UK-based investment firm Greybull Capital for a nominal consideration, with the latter taking assets and relevant liabilities.
  
  The deal is expected to be completed within eight weeks, subject to certain conditions being met, including transfer of contracts, certain government approvals and the satisfactory completion of financing arrangements, Tata Steel and Greybull Capital said in separate statements.
  
• Transfer money via SMS unveiled
  The National Payments Corporation of India (NPCI) on 11th April unveiled the Unified Payments Interface (UPI), hailed as a next generation technology in the money transfer space that is set to completely revolutionise payments by making it as simple as sending a text message on a mobile phone.
  
  Under the new system, making payments has become simpler than other modes of online money transfer such as Immediate Payments Service (IMPS), National Electronic Funds Transfer (NEFT) or Real-time Gross Settlement (RTGS).
  
  Now, one can transfer money to another person through a unique virtual address (virtual addresses are aliases to a bank account allowing a customer's account to be uniquely mapped), or mobile number, or Aadhaar number. Customers do not need to know the payee's IFSC code, bank account details, etc, for transfer of up to Rs 1 lakh per transaction.
  
  Sector leaders believe this will drive the next leg of growth in mobile money and reduce cash transactions in the country, because of increased smartphone usage and better adoption of technology. According to RBI data, the value of mobile banking transactions jumped 46 per cent to Rs 46,029 crore in December, compared to a month ago.
  
• Global economy to grow at 3.2% in 2016: International Monetary Fund
  The global economy will grow at 3.2% in 2016 and 3.5% in 2017; the IMF forecast on 12th April in a downward revision of its previous estimates and sought an immediate and proactive response to the diminished outlook.
  
  In its latest World Economic Outlook (WEO) report, the International Monetary Fund noted that the global recovery continues but at an ever slowing and increasingly fragile pace.
  
  Global growth continues, but at an increasingly disappointing pace that leaves the world economy more exposed to negative risks. Growth has been too slow for too long, according to Maurice Obstfeld, IMF Economic Counsellor who released latest WEO report.
  
  The new World Economic Outlook anticipates a slight acceleration in growth this year, from 3.1 to 3.2%, followed by 3.5% growth in 2017. Our projections, however, continue to be progressively less optimistic over time," Obstfeld said.
  
  In January, the IMF forecast world output to grow at 3.4% this year and 3.6 in 2017. With its downside possibilities, the current diminished outlook calls for an immediate, proactive response, Obstfeld said.
  
  As this latest World Economic Outlook explains, a range of well-sequenced structural reforms can boost potential output, especially if accompanied by complementary fiscal support, Obstfeld said. Pro-competitive product-market reforms in particular, such as those implemented with considerable success in Canada, the Netherlands and Spain two decades ago and in Italy in the 2000s, can be expansionary in the near term, he added.
  Finally, further financial sector strengthening, as detailed in the Global Financial Stability Report, is essential to create a context in which monetary, fiscal, and structural policies can be more effective, Obstfeld said.
  
  The report said China, now the world's largest economy on a purchasing-power-parity basis, is navigating a momentous but complex transition toward more sustainable growth based on consumption and services. Ultimately, that process will benefit both China and the world, it said.
  
• Debt levels highest since World War II: International Monetary Fund
  Public debt has soared in advanced economies to the highest levels since World War II as governments struggle against slow growth and deflation, the International Monetary Fund warned on 13th April.
  
  Levels of government borrowing have picked up since the financial crisis and continue to rise as economic powers like Japan and Europe remain mired in very slow growth and many emerging and poorer economies struggle with the plunge in income from commodities like oil and metals.
  
  The higher borrowing makes it harder for governments to spend any more to support growth, as the Fund has urged. On average for advanced economies, the IMF said in its new Fiscal Monitor report, "public debt now exceeds the level observed during the Great Depression and is approaching the level immediately after World War II."
  
  For advanced economies, debt has risen to over 107% of gross domestic product, with Japan at almost 250%. Emerging market economies are better off at just under 50% of GDP, but their needs are rising and many face greater challenges, including sharply higher fiscal deficits, than the advanced economies.
  
  The strain between higher debt and the need to keep spending is contributing to the slow pace of growth. The IMF lowered its global growth forecast for 2016 yesterday to 3.2% and warned of the risk that growth could stall worldwide if action was not taken.
  
  Slow growth means that the financing needs of many countries are rising just as the availability of funds is tightening. The US central bank in particular has begun to raise interest rates, hiking the costs of borrowing for most countries.
  
  As a result, more countries are approaching the World Bank and IMF for support. The World Bank says loan requests have surged to levels only seen during financial crises. The IMF has also seen a rise in requests for support programs, the most recent from Angola, whose financial position has been devastated by the crash in oil prices.
  
  The IMF urges countries with some fiscal space to spend more while others need to focus spending on anything that will accelerate growth: infrastructure, education, business creation and research and development.
  
• PM Narendra Modi launches 'Gram Uday se Bharat Uday Abhiyan'
  Commemorating the 125th Birth Anniversary of Bharat Ratna Dr Bhimrao Ambedkar, Prime Minister Narendra Modi on 14th April launched the Gram Uday se Bharat Uday Abhiyan, from Dr Ambedkar's birth place Mhow in Madhya Pradesh
  
  It is a program that will last till 24th April 2016, which is Panchayati Raj day, with the aim of building social harmony.
  
  The eleven day campaign will also focus on generating nationwide efforts on promoting rural development and fostering farmers' progress.
  
  During the campaign, discussions on issues pertaining to rural development, improving farmer's income, SC and ST welfare and social harmony will be held on different platforms. Prime Minister Modi also distributed certificates of Mukhya Mantra Yuva Udyami Vikas Yozna to the SC/ ST beneficiaries.
  
• PM launches National Agriculture Market Portal
  Prime Minister Narendra Modi on 14th April said agriculture sector has to be seen holistically to ensure maximum benefits for the farmers. He also called for change in the sector according to global requirement to make the Agri products more profitable. Launching the National Agriculture Market portal( e-NAM) in New Delhi, Mr. Modi also asked farmers to adopt modern and scientific methods in farming to boost country's economy.
  
  He said the e-NAM is a pan-India e-trading portal to network existing APMC and other market yards to create a unified national market for agri commodities. The Prime Minister said the portal will provide a single window service for all APMC related information and services.
  
  He said earlier farmers used to get to know rate of their crops only after reaching Mandis but now it enables them to know the rate of their crops and production even before they load it on a tractor or cart. He said, laboratories will be established in mandis to check quality of the crops. He added this initiative will usher in transparency which will greatly benefit the farmers.
  
  Describing the portal as a turning point for the agriculture sector, Mr. Modi said it will not only benefit farmers but also other stakeholders and consumers.
  
  He also said unfortunately, the country does not have real time data on agriculture production and these structures need to be changed. He said, even in many states there is no laws on agriculture market. The Prime Minister urged states to amend the APMC rules to facilitate farmers to take benefit of the scheme.
  
  According to the Agriculture Minister Radha Mohan Singh, Government will connect 200 mandi by September this year. He said, by March 2018 all 585 mandis will be connected with e-NAM. The portal will connect e-mandis in several states and is aimed at ushering in much needed agri marketing reforms to enable farmers to get better price of their produce and double their income.
  
• India world's largest remittance recipient in 2015: World Bank
  India remained the world's largest remittance recipient in 2015 despite experiencing a one billion US dollar drop from the previous year. In its annual report Migration and Development Brief, World Bank said, India retained its top spot in 2015, attracting about 69 billion US dollars in remittances, down from 70 billion in 2014.
  
  Other large remittance recipients in 2015 were China, with 64 billion dollar, the Philippines (28 billion), Mexico (25 billion) and Nigeria (21 billion dollar). Global remittances, which include those to high-income countries, contracted by 1.7 per cent to 581 billion US dollar in 2015, from 592 billion in 2014.
  
• Port capacity to be doubled with Rs. 1 lakh-cr investment: Modi
  The Centre has drawn up an ambitious plan to double port capacity to 3,000 million tonnes per annum in the next 10 years, opening up an investment opportunity of Rs. 1 lakh crore.
  
  To start with, five new ports have been identified and work has started in three. Capacity is also being enhanced at the existing 12 major ports.
  
  Inaugurating the first-ever Maritime India Summit in Mumbai on 14th April, Prime Minister Narendra Modi said the government intends to promote port-led development and energise coastal economy with an intent to modernise ports and integrate them with special economic zones, port-based smart cities, industrial parks, warehouses, logistic parks, cold storage and transport corridors.
  
  Blessed with 7,500 km of coastline, the country offers huge investment opportunities, which includes development of strategic locations to connect with highways and productive hinterland waterways.
  
  Listing out the concessions given by the government to develop ports in the last two years, Modi said major ports have added record capacity of 165 million tonne with capacity addition by big ports accounting for 94 million tonne.
  
  Despite the global slowdown, port traffic registered a healthy growth of four per cent in the last two years. Last fiscal, the operating margins of 12 major ports increased to Rs. 670 crore.
  
• Sagarmala project
  Under the Sagarmala project, major ports have awarded 56 new projects involving investment of Rs. 25,000 crore. This will create additional port capacity of 317 million tonnes per annum, he said.
  
  The government vision is to increase port capacity to 3,000 million tonne from 1,400 million tonne by 2025. We want to mobilise investment of Rs. 1 lakh crore in the port sector
  
  The proposed increase in port capacity coupled with rise in coal production is likely to result in a four-fold increase in coastal transportation of coal by 2025.
  
  India is displaying 250 projects at the Maritime Expo for investments. These include infrastructure development opportunity in 12 major ports, projects in eight maritime States and among these 100 projects have been identified under Sagar Mala.
  
  All this is being done to empower youth in coastal communities, particular fishermen. Four million direct and six million indirect job opportunities are likely to be created. To further broaden livelihood opportunity, the government is planning to deploy modern and sophisticated fishing vessels. Modi said this was the right time to come to India and it is even better time to come through the sea route.
  
• Delhi ranked 44th among world's 50 'future-ready cities'
  National Capital, Delhi has been recognised as one of the 50 future-ready cities around the world that are embracing technology to adapt and thrive in an ever-changing and globalised future. According to a report by IT major Dell, Delhi is ranked 44th on the list which is topped by San Jose, followed by San Francisco.
  
  The 'Future-Ready Economies Model' scores large, high-growth global metropolitan areas based on attributes that enable people and organisations to access new tools and ideas that deliver better connectivity, better economic performance and a greater ability to attract talent. The cities positioned in the list were evaluated along three dimensions -- human capital, infrastructure and commerce.
  
• China economy slows down to 6.7%
  China's economic growth has slowed to 6.7 percent in the first quarter of 2016, the slowest pace seen since the height of the global financial crisis seven years ago.
  
  According to the State media the nation's gross domestic product grew 6.7 percent
  compared to the year before, reaching 2.4 trillion dollars. The National Bureau of Statistics reported that the growth rate narrowed from the previous quarter's 6.8 percent.
  But the new estimate was within the range of government expectations, keeping the economy on track to meet the official full-year target of 6.5 to seven percent.
  
  This was the slowest first-quarter growth seen in China's economy since 2009, when growth was measured at just 6.2 percent. Chinese authorities have responded by cutting interest rates and investing in public works, hoping to reduce the nation's dependence on manufacturing and exporting products.
  
• No service tax on passport, driving licence
  Ministry of Finance grants business entities exemption from service tax on certain services provided by the government and local authorities. The exemption include grant of a passport, visa, driving licence, and birth or death certificate to an individual who may be carrying on a profession or a business.
  
• Orange Renewable inks pact with SECI for 100-MW solar project
  Orange Renewable, a 100 per cent subsidiary of Singapore-based AT Holdings Pte, on 15th April said it has signed a power purchase agreement with Solar Energy Corporation of India (SECI) for development of a 100-MW solar power project in Maharashtra.
  Under the agreement, Orange Renewable will develop a 100 mega watt (MW) solar power project under Jawaharlal Nehru National Solar Mission (JNNSM) phase - II, batch - III scheme
  
  SECI has been designated as the nodal agency of the government for implementation of the Ministry of New and Renewable Energy's (MNRE) schemes for developing grid connected solar power capacity.
  
  MNRE has revised the cumulative targets under National Solar Mission from 20 GW to 100 GW by 2021-22. Orange Renewable won the contract through a competitive bidding process followed by online live reverse auction conducted by SECI.
  
  In the reverse auction process, only eight bidders were able to bag the projects, where Orange Renewable emerged as one of the largest capacity offtaker in this bidding
  Orange Renewable will receive an average power tariff of Rs 4.43 per kilowatt-hour for the next 25 years from the commercial operation date of this project, which is scheduled in 2017.
  
• India to get $250 mn for renewables from BRICS New Development Bank
   The New Development Bank, the latest multilateral funding institution in the financial world, has sanctioned a $250-million loan for India to fund its ambitious scheme on new and renewable energy
  
  New Development Bank sanctioned four loans, including a loan of $250 million for a renewable energy scheme in India.
  
  A statement from the Indian side later said the multi-tranche, $250-million loan will be given to Canara bank to, in turn, lend to renewable energy projects. The projects will result in generation of 500 MW of renewal energy and savings of about 800,000 tonnes of carbon emissions. In total, $811 million loans have been approved for projects in India, China, Brazil and South Africa.
  
  Now into its second year, the New Development Bank, with noted Indian banker K.V. Kamath as president, was formed by the BRICS leadership to fund infrastructure projects in emerging economies, as also to meet the aspirations of hundreds of millions of people through sustainable development.
  
• Govt. orders removal of humps on National Highways
  Motoring along National Highway (NH) stretches is set to become further smooth with the Ministry of Road Transport and Highways (MORTH) going ahead with removing all speed breakers from highway corridors that hinder speedier and smoother flow of vehicular traffic.
  
  The intervention of MORTH comes in the wake of speed breakers (road humps) being constructed against the Ministry’s policy of not providing them on the NH corridors.
  Scientifically designed rumble strips have been mooted by MORTH for places such has approaches to sharp curves at level crossings, and congested or accident prone locations. But, the Ministry is worried over rumble strips being put up on NHs indiscriminately.
  MORTH has asked the States to inform the Ministry by April 20 about removal of speed breakers and the location of rumble strips on NH corridors.
  
  Henceforth, the location of the rumble strip needs to be approved by the chief engineer, NH, or the appropriate authority in the NHAI.
  
  States have been asked to explore the possibility of providing foot overbridges and underpasses at pedestrian crossings on NH to prevent direct crossing and entry of pedestrians on highways.
  
  MORTH’s Road Accident Report for 2014 says 4,726 lives were lost in crashes due to humps and that 6,672 people died in accidents caused by potholes and speed breakers. Kerala has around 1,550 km of National Highways and removing speed breakers will be a risk. As there is no urban-rural divide in the State, a top PWD official in the National Highway wing said.
  
• G20 worried by 'modest' global growth, commodities weakness
  Financial leaders from the Group of 20 nations said they were heartened by a recovery in financial markets, but warned that global growth was “modest and uneven” and threatened by weakness in commodities-based economies.
  
  In a communique issued after their meeting in Washington, G20 finance ministers and central bank governors repeated their pledge to refrain from competitive currency devaluations, but offered no new initiatives to keep growth from stalling.
  
  The G20 officials took a slightly more positive view on financial markets, which they said had mostly recovered from sharp selloffs earlier this year and were in better shape since they last met in Shanghai in February.
  
  The communique also pointed to Britain’s possible exit from the European Union, geopolitical conflicts, terrorism and refugee flows as complications for the global economic landscape.
  
  The statement repeated G20 pledges to “use fiscal policy flexibly” to strengthen growth, job creation and confidence. It kept language that member countries “will continue to explore policy options,” adding that they would be “tailored to country circumstances”.
  According to US Treasur secretary there’s not a one-size-fits-all answer to boost growth, and added that each country needed to decide for itself how to apply structural reforms, monetary policy and fiscal spending.
  
  But he emphasised that it was important for Japan and China to pursue structural reforms — China to reduce excess industrial capacity and Japan to reform agriculture and other key sectors. Both of these would require some social spending to support displaced workers
  
  The G20 gathering, the highlight of the International Monetary Fund and World Bank spring meetings in Washington, came amid growing pressure on richer nations to boost infrastructure spending, deregulate industries and spur employment.
  
  After release of the so-called “Panama Papers” earlier this month stirred up controversy over global elites’ widespread use of off-shore tax havens to shield their wealth, the G20 officials strengthened their pledge to implement measures to combat exploitation of tax law mismatches and improve tax information sharing. Threatening to penalise havens that don’t share information on their banking clients, they said “defensive measures will be considered by G20 members against non-cooperative jurisdictions” if progress towards these goals is not made.
  
• India jumps to 6th place in top-10 manufacturers list
  India has been ranked sixth among the world's Top-Ten largest manufacturing countries. Previously, India was 9th rank in the United Nations Industrial Development Organization (UNIDO) report. The Yearbook, published by the UNIDO says that in India, the Manufacturing Value Added grew by 7.6 per cent in 2015 compared to the previous year.
  
  It also said that the quarterly index of industrial production shows 1 per cent growth of manufacturing output in the fourth quarter of 2015 compared to the same period of previous year. The global growth rate of manufacturing production has slowed to 2.8 per cent in 2015. China tops the list followed by US, Japan, Germany and Korea. Indonesia was at the bottom.
  
• India is close to achieving 8 per cent GDP growth: NITI Aayog
  India is close to achieving 8% GDP growth on the back of satisfactory progress in infrastructure development, according to Arvind Panagariya, vice chairman at Niti Aayog, the government's premier think-tank.
  
  The advance estimate for 2015-16 pegs the GDP growth at 7.6% and the fourth quarter is expected to clock 7.8%, which is pretty close to the target of 8%," Panagariya said.
  
  Panagariya said major improvement has been made in the roads sector but there are still concerns in the banking and financial sector. He also said the country continues to struggle with the problem of under employment.
  
  Pointing out that there is a huge disconnect in India between higher education and research, Panagariya said there is a need to introduce vocational courses in schools and colleges so as to enable skills to multiply faster.
  
• Telangana unveils new ICT Policy 2016
  The Telangana government has announced a new ICT policy along with four other policies to support innovation, gaming and animation, rural tech centres and growth of electronics aimed at attracting investments while facilitating job creation.
  
  Telangana Chief Minister K Chandrasekhar Rao on 4th April unveiled the Telangana ICT policy 2016 in the presence of Governor ESL Narasimhan and NR Narayana Murthy, Chairman Emeritus, Infosys, leading IT sector players and captains of industry.
  
  As per the vision statement of the ICT policy, it is proposed to transform Telangana into the most preferred destination for any IT company which is planning a new facility and enable it to make it a global hub for technology entrepreneurship and innovation in the country.
  
  After the new industrial policy was announced last year, 1,691 companies were accorded clearances and 883 of them have already gone into production. This would not have been possible but for the single window clearance the State promises within 15 days, he explained.
  
  State IT Minister KT Rama Rao said, “The government accords highest priority to the ICT sector in the State covering not just Hyderabad but also in the Tier-II and Tier-III cities and other small towns. The State has identified three broad areas for big boost. These include data mining and analytics, gaming and animation and cyber security.” Telangana IT sector employs more than 10 lakh people directly and indirectly, with IT alone accounting for over 4 lakh jobs.
  
  Electronics policy
  Under the electronics policy, Telangana seeks to attract $3 billion investment and create about 1.6 lakh jobs. BVR Mohan Reddy, Nasscom Chairman, said, “Telangana IT sector has logged exports of Rs. 68,000 crore in 2014-15 and given the current rate of growth, it is expected to touch exports of Rs. 1,00,000 crore within 24 months.”
  
  He advised IT firms to consider setting up bases in tier-II and -III towns where there is abundant talent.
  
  Highlighted the importance of boosting the indigenous manufacture of electronics, he said the demand for electronics is likely to go up from $100 billion now to $400 billion. The focus on indigenous manufacture was critical.
  
• Singapore bank to set up tech centre in Hyderabad
  The Development Bank of Singapore, a multinational bank which is the largest in Southeast Asia, would establish its first technology development centre globally here to develop its internal IT capabilities, it was announced on 4th April
  
  A memorandum of understanding was signed between the Development Bank of Singapore and the Telangana government for the centre, which would eventually house about 1,500 employees supporting the bank’s global IT operations.
  
• Telangana inks 28 MoUs in technology sector
  The Telangana government has inked more than 28 memorandums of understanding with various companies, including Development Bank of Singapore, Cisco, Microsoft, YES Bank coinciding with the announcement of the new ICT policy 2016.
  
  These memorandums and letters of intent include setting up of technology centres, specialised training centres for skill upgradation, banking support services to start ups and manufacture of LED lights.
  
  Under one such MoU, The Development Bank of Singapore, which is the largest bank in South East Asia in assets, plans to establish its first technology development centre for global support in Hyderabad. This is aimed at developing its internal IT requirements. It will eventually house about 1,500 employees.
  
  Karvy has inked pact to set up a facility to house 5,000 employees required to support its IT infrastructure as a backbone. Value Labs proposes to invest Rs. 1,362 crore for establishing a facility that can employ about 10,000 professionals.
  
  A number of agreements were inked to boost the professional capability of young engineers in the technology sector. These include pacts with Cisco, Microsoft India, C-DAC, Hysea, SAP, ICICI Foundation, Nasscom, University of Cambridge and Talent Sprint.
  
  Cisco and Paradigm IT plan to set up a Smart Cities Centre of Excellence at the T-Hub. Apart from working on areas of smart parking and smart lighting solutions, they propose to work with start-ups in developing solutions using IoT.
  
• RBI cuts repo rate by 25 basis points to 6.5%; Keeps CRR unchanged
  Reserve Bank of India on 5th April cut key interest rates by 25 basis points in its first bi-monthly monetary policy review for the 2016-17 fiscal. With this, Home, auto and other loans are set to become cheaper. However, RBI has kept Cash Reserve Ratio unchanged at 4 per cent.
  
  The RBI also introduced number of measures to smoothen liquidity supply so that banks can lend to the productive sectors.
  
  Accordingly, the repo rate, at which RBI lends to the financial system, has come down to 6.5 per cent. The reverse repo rate, at which banks can keep excess funds with the RBI, was hiked to 6 per cent. The policy said the average overnight borrowings by banks have increased to Rs 1,935 billion in March from Rs 1,345 billion in January.
  
  Stating the inflation objectives to be closer to reality and price-rise will hover around the 5 per cent mark during current fiscal, Rajan reaffirmed that the monetary policy will continue to remain accommodative to address the growth concerns.
  
  RBI also retained its GDP growth forecast at 7.6 per cent, on the assumption of a normal monsoon and a boost to consumption through the implementation of the Seventh Pay Commission recommendations. But it also expects that the implementation to hurt inflation by 1 to 1.5 per cent over a two year period.
  
• India remains bright spot in global economy: IMF
  International Monetary Fund said, with strong growth and rising real income, India remains a bright spot in the global economy. In a policy address, in Frankfurt, IMF Chief Christine Lagarde said, India has reduced spending on costly energy subsidies so it can invest more in growth-enhancing social infrastructure.
  
  She said, overall, the global outlook has weakened further over the last six months-exacerbated by China's relative slowdown, lower commodity prices and the prospect of financial tightening for many countries.
  
  She said, the expectation that the advanced economies would pick up the growth baton has not been fulfilled. Lagarde also said downturns in Brazil and Russia are larger than expected, and the same is true for West Asia, which has been hit hard by the oil price decline.
  
• Govt inaugurates Apparel and Garment Making Centre in Nagaland
  Union Minister of State for Textiles, Santosh Kumar Gangwar today inaugurated the Apparel and Garment making Centre at District Industries Centre Complex in Dimapur in the presence of Nagaland Chief Minister T.R. Zeliang.
  
  According to Gangwar apparel and garment making as an ambitious project and expressed happiness of the fact that Nagaland has become a pioneer of this revolution. Apparel and Garment Making Centre for Nagaland was announced by Prime Minister Narendra Modi on 1st of December 2014 during his visit to the Nagaland. Informing that the Apparel Centre was ready for operation in a record time of one year, Gangwar dedicated the centre to the people of the State.
  
  On the occasion, Gangwar also laid the foundation stone for Muga P3 Basic Seed Station Kobulong in Mokokchung district and also launched the newly approved Integrated Eri Silk Development Project under NERTPS for women empowerment and sustainable livelihood in Kohima district.
  
  The Union Minister informed that the Centre would support sericulture projects in Nagaland covering Eri, muga and mulberry seri projects, which will benefit more than 5000 cultivators engaged in plantation of these three varieties of silk.
  
• Global economy losing momentum: IMF chief
  The Head of the International Monetary Fund has warned that the global economy is losing momentum and has urged governments to take action to boost growth. IMF chief Christine Lagarde made the remarks on 5th April in a speech at Frankfurt's Goethe University.
  
  Lagarde also suggested that the IMF will cut its global economic forecasts next week. In January, the IMF forecast global growth of 3.4 percent this year, increasing to 3.6 percent in 2017.
  
  To counteract the headwinds, Lagarde is urging governments to accelerate structural reforms, increase fiscal support and continue an accommodative monetary policy. Lagarde also called for improved tax incentives for research and development investments.
  
• CCEA approves converting nearly Rs 30 cr Andrew Yule loan to equity
  The Cabinet Committee on Economic Affairs, CCEA on 6th April cleared conversion of Bank of Baroda's 29.91 crore rupees loan to Andrew Yule & Co into equity shares.
  
  It will pave the way for disinvestment of the Kolkata-based PSU in the next three months. The conversion of loan to equity would help bring down the cost of servicing of debt, resulting in improved profitability and liquidity of Andrew Yule in coming years.
  
  The CCEA also approved four-laning of Hospet -Bellary-Karnataka/Andhra Pradesh Border section of NH - 63 in Karnataka. The total length of road will be approximately 96 kilometers and it will cost around one thousand six hundred twenty one crore rupees.
  
  The CCEA also approved acquisition of 51 per cent of shareholding in Viom Networks Limited by M/s ATC Asia Pacific Limited Singapore. The approval will result in FDI inflow of over 5 thousand 8 hundred 56 crore rupees into telecom infrastructure which will spur economic growth.
  
• Cabinet gives ex-post facto approval for implementation of OROP
  The Cabinet on 6th April gave ex-post facto approval for implementation of One Rank One Pension, OROP. According to Union Minister Ravi Shankar Prasad, 2,861 crore rupees have been given to 15.91 lakh defence pensioners under the OROP scheme till 31st of March.
  
  He said, the government has fast-tracked the process to clear the OROP backlog for the remaining beneficiaries and it will be cleared soon. Mr Prasad said, after the cabinet approval, the government will pay more than 10,925 crore rupees as arrears, in addition to 7489 crore rupees as annual financial liability.
  
• Govt. approves greater autonomy for Oil PSUs
  From greater autonomy to oil PSUs for crude procurement, highway construction and expansion to the National Hydrology Project and enhancing technical expertise for Indian Railways, The Cabinet chaired by Prime Minister Narendra Modi has approved several decisions in a bid to boost economic growth of the country
  
  In a major boost to the telecom companies government has liberalised spectrum. This move will allow telecom operators to use any technology to deliver mobile services like 3G and 4G. Besides, they will be able to introduce new technologies and share and trade it with other operators for its efficient use.
  
  The move is aimed at making oil PSU more competitive like their private peers such as RIL and Essar Oil.
  
• WTO cuts 2016 global trade forecast to 2.8%
  The World Trade Organization revised its 2016 global trade forecast downward by more than one percentage point, warning that a slowdown in China and broad market volatility continued to threaten growth. In September, the WTO estimated that global trade would rise by 3.9 per cent this year, but lowered that projection to 2.8 per cent, in an updated forecast. WTO director general Robert Azevedo said in a statement in Geneva " that trade is still registering positive growth, albeit at a disappointing rate.
  
  The Geneva-based body said that various factors were continuing to apply downward pressure on global commerce. The rout on commodities prices has shown few signs of reversing, while the full extent of the slowdown in China -- the world's top commodities consumer -- remains uncertain.
  
  The WTO listed a sharper-than-expected slowing in China (and) worsening financial market volatility" as factors that could further suppress global trade this year. But, the 2.8 per cent growth forecast could prove to be an underestimate if efforts by the European Central Bank to stimulate eurozone growth are successful, the WTO said.
  
  The organisation predicted that global trade would tick upwards by 3.6 per cent in 2017, on the back of increased demand for imported goods in Asia. Azevedo issued a broad warning on "the threat of creeping protectionism, as many countries continue to apply trade restrictions.
  
• SIDBI inks pact with LIC for fund-of-funds operations
  In a bid to boost the start-up ecosystem, Small Industries Development Bank of India (SIDBI) on Thursday signed a Memorandum of Understanding (MoU) with Life Insurance Corporation of India (LIC), for supplementing the government’s efforts under Fund-of-Fund operations for the Venture Fund industry.
  
  The MoU was executed with LIC to seek contributions to the corpus of MSME-focused venture capital funds, along with SIDBI-managed India Aspiration Fund (IAF), said Kshatrapati Shivaji, CMD of SIDBI, at the SIDBI start-up conclave.
  
  As part of its Fund-of-Fund operations, SIDBI has set up the IAF with a corpus of Rs. 2,000 crore, pursuant to the budget announcement of 2015. LIC will contribute up to 10 per cent of the fund size of the IAF, said K Roy, CMD of LIC.
  
  SIDBI has supported 90 venture funds, including social venture funds such as Samriddhi Fund (anchored by DFID, UK), Ankur Capital, as well as funds focused on healthcare and agribusiness.
  
  Start-ups that have benefitted out of SIDBI’s direct and indirect initiatives include Billdesk.com, Little Eye Labs, Wildcraft, Smaash Entertainment etc.
  
  In order to bring in more professionalism, SIDBI has constituted a Venture Capital Investment Committee (VCIC) comprising experts such as HK Mittal (Head of National Science & Tech Entrepreneurship Development Board), Kiran Karnik (former NASSCOM Chief), Sanjeev Bikhchandani (Founder of Naukri.com), Saurabh Srivastava (co-founder of NASSCOM and Indian Angel Network), R Vaidyanathan (IIM-Bangalore) and TV Mohandas Pai (former CFO of Infosys). VCIC has so far cleared proposals for an aggregate commitment of around Rs. 1,400 crore to 38 venture capital funds, said Shivaji.
  
  Jayant Sinha, Minister of State for Finance, said the initiative will augment the sources of domestic capital to support venture funds – with focus on start-ups – as currently most of the capital comes from overseas, which could lead to volatility. He said the launch of the recent e-rickshaw scheme is a great example of Indian innovation.
  
  Sinha added that the country needs to be at the forefront of innovation and consequently, the Centre has set up a fund with an initial corpus of Rs. 2,500 crore and a total corpus of Rs. 10,000 crore, over a period of four years.
  
• India less susceptible to external shocks, credit positive: Moody's
  Moody's Investors Service has said, low commodity prices and better FDI inflows have reduced India's vulnerability to external shocks which is credit positive for India. The rating agency in a report released on 6th April said, that India's external financing needs have diminished significantly over the last three years. These trends are credit positive, as they lower India's susceptibility to external shocks at a time when capital flows to emerging markets are volatile.
  
  Net FDI inflows hit an all-time high in January this year at 3 billion US dollars. The report said, higher inflows suggest that government policies, such as efforts to liberalise foreign investment limits in several sectors and the 'Make in India' campaign, are bearing fruit. The report also said, development of industrial corridors, investment and manufacturing zones and 'smart cities' will further bolster investment inflows.
  
• Karnataka and Telangana clock highest growth rate in IT exports
  In the last decade or so, Information Technology (IT) and IT Enabled Services have made a significant contribution to the Indian Economy. As per data available with the Ministry of Commerce & Industry, the quantum of IT & ITES exports from India in 2014-15 stood at 5.94 lakh crore. IT bellwether Karnataka and India’s newest state of Telangana clocked the highest growth rate in exports in 2014-15.
  
  Information Technology (IT) has been one of the mainstays of the Indian Economy in the last 10 years. IT & ITES exports have been growing each year and contribute significantly to the economy. In 2014-15, the total IT exports from India was 5.94 lakh crore rupees as per the information given by the Ministry of Commerce & Industry, Government of India in response to a RTI application by Factly. South India contributes more than 2/3rd of the total exports. Karnataka & the newly formed state of Telangana clocked the highest growth rates among the states with more than 10000 crore rupees in export.
  
• IT Exports grow by more than 140% in 6 years
  Indian IT exports have grown by more than 140% in six years from 2009-10 to 2014-15. From 2.42 lakh crore in 2009-10, the exports grew to 5.94 lakh crore in 2014-15. Except for 2010-11, there was double digit growth rate in rest of the years. The growth rate was close to 25% for three consecutive years (2011-12, 2012-13 and 2013-14) and it was 17% in 2014-15.
  
  South India Contributes more than 2/3rd of the Exports: As expected, South India leads the rest of regions in IT exports by quite some distance. The share of south has been increasing in the last 3 years. From 63% in 2012-13, the share of south went to 67.6% in 2014-15. In 2014-15, West accounted for 17% of the exports (largely from Maharashtra), while the North accounted for 12.8% (largely from Noida & Gurgaon). The East accounted for only 2.5%, largely from West Bengal.
  
  Karnataka, Telangana, Tamil Nadu & Maharashtra make up for 80% of the exports: The four states of Karnataka, Telangana, Tamil Nadu & Maharashtra make up for close to 80% of the all the exports in the three years from 2012-13 to 2014-15. The rest of the country makes up for the remaining 20%. The big IT hubs of Bengaluru, Hyderabad, Mumbai, Pune & Chennai contribute significantly to this number. It has to be noted that the Ministry of Commerce has segregated exports for the current day states of Telangana and Andhra Pradesh starting from the year 2012-13.
  
  In 2014-15, IT bellwether Karnataka clocked the highest growth rate in IT Exports with a 30.6% growth followed by the newest state of Telangana with 20% growth rate. Of the other states with exports of more than 10000 crore, only Kerala had double digit growth rate of 20% in 2014-15 (largely because of a smaller base). The current state of Andhra Pradesh has only 7000 crore in exports since the IT hub of Hyderabad is now part of Telangana. It also looks like the bifurcation had little or no impact on the IT Industry in Telangana and Hyderabad.
  
• Airtel acquires Aircel’s 4G spectrum for Rs. 3,500 crore
  Bharti Airtel has acquired Aircel’s 4G spectrum in eight circles for Rs. 3,500 crore in a deal that will enable the telecom operator to offer 4G services in all 22 circles of the country. The deal comes ahead of the mega launch of telecom services by Mukesh Ambani’s Reliance Jio, which until now was the only player with pan-Indian 4G airwaves.
  
  Airtel has done three acquisitions over the last two-three years to pitch itself against the Ambani juggernaut. For Aircel, this signals a possible consolidation with the Reliance Communication-MTS combine. Talks between Aircel and RCom for a possible merger have been interrupted due to high debt on the books of both the operators.
  
  While Aircel can now retire some of its Rs. 20,000 crore debt, RCom has been trying to sell its tower assets to pare its debt.
  
• Centre releases Rs 12 thousand crore to states for MGNREGA
  The government has released a central share of 12,230 Crore rupees to the states in connection with the implementation of its flagship programme Mahatma Gandhi National Rural Employment Guarantee Act, MGNREGA.
  
  Rural Development Minister Birender Singh underlined that this fund release will take care of the pending wage liability of the states for the previous Financial Year 2015-16 and help the states to run the programme during the new financial year 2016-17. He said government is committed to ensuring flow of adequate resources for fulfilling the programme objectives.
  
  The ministry has also decided to maintain 60:40 wage-material ratio at the district level now to ensure creation of good quality assets in the rural areas.
  
  In 2016-17, as part of their Labour Budget, the States have proposed to construct 8.82 lakh farm ponds and 10.39 lakh organic compost pits to boost the agriculture sector.
  
  The States have also proposed to construct 33 lakh Individual House Hold Latrines (IHHL) as part of Swachh Bharat Mission and 63,000 Anganwadi centre buildings to strengthen rural infrastructure. Our correspondent reports, the road map for 2016-17 will focus on accelerating the momentum gained in employment generation while further strengthening the monitoring system.
  
• 98% FDI now coming into India through automatic route
  According to the economic Affairs Secretary Shaktikanta Das, 98 per cent of foreign direct investment FDI is now coming into India through the automatic route.
  
  The number of applications being routed via the Foreign Investment Promotion Board (or FIPB) approval route has started declining. This is a positive sign as we move towards the greater ease of doing business He asserted that the government is also making efforts to provide enabling environment for raising the domestic investment.
  
• India seeks Rs 3300 crore loan from China's AIIB for solar power projects
   India has sought $500 million (Rs 3326.3 crore) from the newly created, China-led Asian Infrastructure Investment Bank (AIIB) for solar power projects.
  
  India, one of the founding members of the AIIB, has been elected to the board of directors of the China-sponsored AIIB which is expected to begin loan approvals before the end of this year. The government is also negotiating $250 million loan from New Development Bank.
  
  All these are at advanced stage, he said. Last year, the Cabinet approved a Memorandum of Understanding (MoU) signed between India and Germany to expand bilateral development cooperation in the field of Solar Energy by increasing use of solar energy in India through technical as well as financial cooperation.
  
  Under the agreement, Germany would provide concessional loans in the range of one billion Euros over the next five years through KfW. The funds of KfW will also be utilised for providing soft loans to the end-users through partner banks. The MoU will help in strengthening bilateral cooperation between the two countries. India has set an ambitious target of having 100 GW solar power generation capacity by 2022 under the National Solar Mission.
  
• Revenue deficit for AP in 2014-15 after 8 years
  After eight consecutive years of revenue surplus, Andhra Pradesh registered a revenue deficit of Rs. 24,194 crore during 2014-15. Due to this, the State could not achieve the fiscal reform targets during the year, according to the Comptroller and Auditor General of India.
  
  In its report on State Finances for the year ended March 2015, the CAG reported the fiscal deficit of Rs.31,717 crore at 6.1 per cent was double the ceiling of three per cent prescribed under the Fiscal Responsibility and Budget Management Act.
  
  The report further states that the total liabilities stood at 32 per cent of Gross State Domestic Product as against a ceiling of 27.6 per cent prescribed under the FRBM Act for 2014-15.
  
  The State revenue receipts at Rs. 90,672 crore registered a shortfall of Rs. 1406 crore (1.53 per cent) during the year over the projection of Rs. 92,078 crore made in the Budget. Revenue expenditure of Rs. 1,14,866 crore at 22 per cent of GSDP was more than the projection of Rs. 98,142 crore made in the budget for 2014-15.
  
  Capital expenditure
  During the current year, the CAG observed that 78.94 per cent of the revenue expenditure was met from revenue receipts and the balance of Rs. 24,194 crore was financed from borrowed funds. While capital expenditure of Rs. 11,405 exceeded the Budget estimates of Rs. 7,070 crore by 61.32 per cent, its ratio to total expenditure stood at 8.95 per cent.
  
  And capital works and projects in irrigation and road sectors continued to languish and delays in their completion led to cost escalation of these projects. The investment blocked in such incomplete projects and works as of March 2015 was Rs. 32,646 crore.
  
  The CAG report stated that the return on investment in companies /statutory corporations continued to be poor. The level of recovery of loans was low. It further stated that the Finance Department did not maintain any centralised database of loans with entity-wise information.
  
• Government achieves fiscal targets of 3.9 percent for Financial Year 2015-16
  Government has achieved fiscal targets of 3.9 percent for Financial Year 2015-16. As per initial estimates, the fiscal deficit for the year is expected to be within 3.9 percent.
  
  In a statement, Finance Ministry said the receipts of tax revenues are also on track and the revised estimate targets are expected to be fully met. The disinvestment target of 25 thousand crore rupees has also been achieved.
  
  The Plan Expenditure for the period is expected to be around 4.7 lakh crore rupees which is higher than the Budget Estimate of 2015-16 and also higher than the actual plan expenditure in 2014-15. The Ministry reiterated its commitment to the path of fiscal consolidation.
  
• Govt sets up Welfare Fund to utilise unclaimed money
  Government has set up a welfare fund which will utilise unclaimed money lying in PPF, employees provident fund and small savings schemes to provide healthcare facilities and pension to senior citizens. The unclaimed money is estimated to be in excess of nine thousand crore rupees.
  
  It will be utilised to promote financial security of senior citizens, old age pension, healthcare, health insurance and welfare of elderly widows. It will also fund schemes related to old-age homes, day care of senior citizens and research activities related with ageing.
  
  According to a notification, public institutions like post offices, employees provident fund organisation (EPFO) will be required to assess the unclaimed amounts and transfer them to Senior Citizens Welfare Fund before 1st of March every year.
  
  However, before transferring the fund, the institutions will try to contact each of the account holder of the unclaimed amount, including by way of written notice, e-mail and telephone, twice within a period of 60 days.
  
  During his Budget speech, Finance Minister Arun Jaitley had announced creation of this fund using unclaimed deposits. The number of senior citizens in the country is over 10.5 crore. 70 per cent live in rural areas and a large number are in the BPL category.
  
• 6th Economic Census shows pick-up in establishments, jobs
  Employment generation and economic activities grew at their fastest pace in nearly two decades with over 13 crore people employed and 1.92 crore new establishments set up in the country in eight years to 2014.
  
  Final results of the Sixth Economic Census revealed that 5.85 crore establishments were operating in the country in 2014, marking an annual growth rate of 5.2 per cent from the previous Census that was carried out in 2005.
  
  The Census data is used by the government for policy and planning as well as the private sector for chalking out marketing and expansion activities.
  
  Over an intervening period of about 8 years between Fifth Economic Census and Sixth Economic Census, the growth in the number of establishments was 41.79 per cent, according to the Census that was conducted between January 2013 and April 2014. Similarly, employment levels also rose sharply with 13.1 crore workers employed, registering a growth of 4.76 per cent annually from the Fifth Census.
  
  In contrast, employment generation grew at a mere 2.78 per cent in between 1998 and 2005 and just 1.75 per cent per annum during 1990 to 1998.
  
  The growth rate in employment since 2005 was 38.13 per cent and manufacturing was the largest employer followed by retail trade.
  
  However, average employment per establishment dropped marginally to 2.24 in the Sixth Census as against 2.3 in the previous exercise.
  
  But, the data, which comes just days ahead of the launch of Stand-Up India initiative by Prime Minister Narendra Modi reveals that female employment and entrepreneurship remained at subdued levels.
  
  While just 25.07 per cent of the workforce was female, just 13.76 per cent of the establishments were owned by women.
  
  State-wise
  Amongst States, Maharashtra (11.05 per cent), Uttar Pradesh (10.75 per cent), West Bengal (9.07 per cent), Tamil Nadu (8.91 per cent) and Gujarat (7.32 per cent) accounted for almost half of the total employment in the country. But, Manipur had the highest growth rate in employment at 93.57 per cent.
  
  Not surprisingly, these States also accounted for nearly half the establishments in the country. Uttar Pradesh (11.43 per cent), Maharashtra (10.49 per cent), West Bengal (10.10 per cent), Tamil Nadu (8.6 per cent) and Andhra Pradesh (7.25 per cent) together accounted for about 50 per cent of the total number of establishments in the country. Economists also raised concerns that the growth rate in non agricultural enterprises was much lower than agriculture establishments.
  
  During the period between the two Economic Censuses, non-agricultural establishments grew at the rate of 28.97 per cent, while agricultural establishments grew at the rate of 115.98 per cent.
  
  POSITIVE TREND. 
  • 5.85 crore establishments were operating in 2014
  • This marks a 5.2% annual growth over the 5th economic census
  • Employment posted a 4.76% annual growth
  • Maharashtra and UP are the top 2 States in number of establishments
  
  
• Govt tweaks gold monetisation scheme, allows investors to redeem deposits
  To make the gold monetisation scheme more attractive, the government has allowed investors to redeem the deposits in gold also. The move is expected to attract temple trusts, many of which have significant amount of gold under their control.
  
  Now, for the gold deposited under Medium and Long Term Government Deposits (MLTGD), the redemption of principal at maturity shall, at the option of the depositor, be either in Indian Rupee equivalent of the value of deposited gold at the time of redemption or in gold
  
  For redemption of the deposit in gold, an administrative charge of “0.2 per cent” of the notional redemption amount would be levied from the depositor in Indian rupees. The interest accrued on the scheme would be calculated with reference to the value of gold in terms of Indian rupee at the time of deposit and would be paid only in cash. Earlier also, a number of modifications have been made to the scheme to facilitate monetisation of gold by people.
  
  The scheme was launched in November last year to curb imports of gold, which has a bearing on Current Account Deficit. Medium Term Government Deposit (MTGD) can be made for 5-7 years and Long Term Government Deposit (LTGD) for 12-15 years.
  
  For Short Term Bank Deposit (STBD) the redemption in gold was already permitted. Under the scheme, banks are authorised to collect gold for up to 15 years to auction them off or lend to jewellers from time to time. Depositors will earn up to 2.50 per cent interest per annum, a rate lower than bank deposits.
  
  India imports about 1,000 tonnes of gold every year and the precious metal is the second—highest component of the imports bill after crude oil. An estimated 20,000 tonnes of gold are lying with households and temples.