ECONOMY AFFAIRS AUGUST 2016

ECONOMY AFFAIRS AUGUST 2016

• Panel to study pricing by cab operators
  The Transport ministry is setting up a high-level committee to look into various issues pertaining to taxi operators, including existing permits and surge pricing by app-based service providers like Ola and Uber.
  
  The panel is being constituted as per the direction of the Delhi High Court which fixed August 22 as the deadline after which such entities and other taxi operators cannot charge passengers more than the government-fixed rates. The 12-member panel will be headed by Road Transport and Highways Secretary Sanjay Mitra and will also address the issue of surge pricing by app-based aggregators and other taxi service providers.
  
  The August 22 deadline was fixed after Uber had told the High Court that it needeed 10 days to make changes to its software to ensure passengers were not charged more than the rates stipulated by the Delhi government in June 2013. Ola told the court it had already stopped charging passengers more than the notified rates.
  
  According to the prescribed rates, fare for Economy Radio Taxi is Rs.12.50 per km, while it is Rs.14 per km for non-AC black and yellow top taxi and Rs.16 per km for AC black and yellow top taxi.
  
  The notified fare of Radio Taxi cabs (distinguished by an LCD board on roof top displaying ‘Radio Taxi’) is Rs.23 per km. Additional night charge (25 per cent of the fare) is applicable between 11 P.M. and 5 A.M.
  
  While addressing the issue of surge pricing, the court observed that while taxi aggregators like Ola and Uber reduce the pressure on public transport, “a uniform policy must be devised” for regulating them.
  
• RBI Forecasts 7.6 percent GDP growth for this fiscal
  The Reserve Bank of India has said the near-term economic growth outlook for the country appears brighter than during the last fiscal. In its Annual Report 2015-16, the RBI forecast 7.6 per cent GDP growth this fiscal, up from 7.2 per cent growth in the last fiscal.
  
  RBI Governor Raghuram Rajan noted, in the Annual Report, that the room to cut policy rates can emerge only if inflation is projected to fall further.
  
  The RBI Governor observed that the apex bank is also working with the government and banks on ensuring that banks have the capital to make provisions, support new lending, and thus pass on future possible rate cuts.
  
  The RBI's report said economic growth is showing signs of picking up. It said the key weakness is in investment, with private corporate investment subdued. And Governor Rajan further observed that the willingness of banks to cut lending rates is muted.
  
• Centre raises minimum wage
  The Centre on 30th August sought to appease Central trade unions, which have given notice for a nationwide strike on September 2, by raising the minimum wage for non-agricultural unskilled workers (Category C) to Rs. 350 per day from Rs. 240 per day, as recommended by the Minimum Wage Advisory Board.
  
  After an inter-ministerial meeting, Finance Minister Arun Jaitley said the Centre has also decided to give bonus to Central government employees on a revised basis for 2014-15 and 2015-16. This will imply a financial liability of about Rs. 1,920 crore a year for the government.
  
  However, most of the trade unions, except for the RSS-affiliated Bharatiya Mazdoor Sangh, were unimpressed, and said they would go ahead with the strike.
  
  According to Jaitley, in the past year and a half, the inter-ministerial committee had met with trade unions, who had placed various demands — some of which related to labour issues, and others that related to economic policy issues. The Centre would implement the Bonus Amendment Act strictly and support the legislation and take steps to resolve cases pending in High Courts and the Supreme Court with regard to payment of bonus.
  
  On the issue of registration of unions, Jaitley said advisories would be sent to the State governments to ensure such registrations within 45 days. Sector-specific meetings would be held to resolve issues, he added. The government, he said, is committed to the tripartite consultation process.
  
  The registration of contract workers and their staffing agencies is mandatory, and States will be advised to strictly implement them.
  
• Cabinet approves permanent residency plan for foreign investors
  The Union Cabinet has approved the scheme for grant of Permanent Residency Status (PRS) to foreign investors subject to the relevant conditions in the FDI Policy notified by the Government from time to time. The scheme is expected to encourage foreign investment in India and facilitate Make in India Programme. Under the scheme, suitable provisions will be incorporated in the Visa Manual to provide for the grant of PRS to foreign investors.
  
  The PRS will be granted for a period of ten years with multiple entry. This can be reviewed for another 10 years if the PRS holder has not come to adverse notice. The scheme will be applicable only to foreign investors fulfilling the prescribed eligibility conditions, his/her spouse and dependents.
  
  In order to avail this scheme, the foreign investor will have to invest a minimum of 10 crores rupees to be brought within 18 months or 25 crores rupees to be brought within 36 months. Further, the foreign investment should result in generating employment to at least 20 resident Indians every financial year.
  
  PRS will serve as a multiple entry visa without any stay stipulation and PRS holders will be exempted from the registration requirements. PRS holders will be allowed to purchase one residential property for dwelling purpose.
  
• Cabinet approves simplification, liberalisation of FDI Policy:
  The Union Cabinet has given its ex-post-facto approval for the FDI policy amendments announced by the Government on 20th June, 2016. The FDI policy amendments are meant to liberalise and simplify it to provide ease of doing business leading to larger FDI inflows contributing to growth of investment, incomes and employment.
  
  As per the liberalised norms, foreign investment in defence sector is now permitted up to 100 per cent. Earlier policy permitted 49 per cent FDI participation in the equity of a company under automatic route. With a view to aid in modernisation of the existing airports to establish a high standard and help ease pressure on the existing airports, 100 per cent FDI under automatic route has been allowed in brownfield airport projects.
  
  In case of single brand retail trading, the government has relaxed local sourcing norms for up to three years, with prior government approval, for entities undertaking trading of products having state ­of­ art and cutting edge technology. For private security agencies, FDI up to 49 per cent is now permitted under automatic route and beyond that and up to 74 per cent, government approval is required.
  
  Norms for foreign invesment in pharmaceutical sector too have been liberalised. FDI ceiling in sectors like teleports, Direct to Home (DTH), Cable Networks, mobile TV and Headend-in-the Sky Broadcasting Service has been increased to 100 per cent.Besides, 100 per cent FDI under automatic route for trading, including through e-commerce has been permitted in respect of food products manufactured in India.
  
• CCEA approves initiatives to address issues ailing to construction sector
  Cabinet Committee on Economic Affairs (CCEA) on 31st August approved short term and long term initiatives to address the issues ailing the construction sector.
  
  Finance Minister Arun Jaitley said, the new norms will help in quicker resolution of disputes to kick start stalled projects and make access to easier financing. He said, it is important to quickly address the issues related to the construction sector, which contributes eight per cent to the country's gross domestic product.
  
  The Finance Minister said, the government and the Reserve Bank of India will also consider to de-stress stalled construction projects to help improve liquidity in the short run. Highlighting some advantages of the new norms, Mr Jaitley said, wherever there are disputes pending between public bodies and construction sector under the old arbitration Act, which was time consuming, there will be an option with consent to shift toward to the new arbitration procedures where there is a procedure for a cheaper and quicker arbitral process.
  
  He said, in all new contracts relating to construction, there will be a conciliation board provision and this borad will comprise of independent subject experts. Among the measures approved are, Circulation of a model draft for turnkey projects, release of 75 per cent of money earmarked for infrastructure companies towards completion of existing projects and coverage of disputes between companies and civic bodies under a new arbitration law. The proposals were set forth by NITI Aayog to give a boost to the construction sector.
  
• Country's economic growth recorded 7.1 percent in first quarter of current fiscal
  The country's economy grew at 7.1 per cent in the April to June quarter of the current fiscal. This is the slowest growth in the last six quarters and was mainly due to subdued performance of the mining, construction and farm sectors.
  
  GDP had expanded 7.5 per cent growth in the year-ago quarter, and 7.9 per cent in the January to March 2016 quarter. According to data released by the Central Statistics Office, growth in the farm sector was 1.8 percent, and in construction it was 1.5 per cent during the quarter under review. But manufacturing sector growth accelerated to 9.1 per cent.
  
• Rs. 500-crore fund to help push India Inc presence in Laos, Cambodia, Myanmar, Vietnam
  The Union Cabinet has given a go-ahead to a Project Development Fund (PDF) with a corpus of Rs. 500 crore to help Indian business explore economic opportunities in Cambodia, Laos Myanmar and Vietnam (CLMV) which could serve as a gateway to other markets including China and the European Union.
  
  Sectors such as agro-processing, oil and gas, pharmaceuticals, wood and timber, light engineering, garments, automobiles, education, IT, small & medium enterprises, tourism and skill development have been identified as focus sectors for the region in a report brought out by Delhi-based research body RIS.
  
• RBL becomes first private bank to list in 11 years
  Shares of RBL Bank, the first private bank to hit the capital market since 2005, made a strong debut at the bourses on 31st August. As against the issue price of Rs. 225, the stock opened atRs. 274.2 on the NSE and rose to a high of Rs. 305.5. YES Bank was the last private bank to list in the capital market in 2005. RBL Bank’s offer received a good response from all categories of investors. The IPO was subscribed close to 70 times.
  
• HP, Chhatisgarh Assemblies ratify GST constitutional amendment bill
  Himachal Pradesh and Chhattisgarh assemblies on 22nd August ratified Goods and Services Tax Constitutional amendment bill.
  
  The Himachal Pradesh assembly unanimously ratified the constitutional amendment bill on Goods and Services Tax (GST), passed by the Parliament in August, 2016. The bill was introduced by Chief Minister Virbhadra Singh on the first day of five-day monsoon session that began in Shimla.
  
  The Himachal Pradesh became the fourth state after Assam, Bihar and Jharkhand to ratify the bill. Chhattisgarh Vidhan Sabha also unanimously ratified the Goods and Service Tax constitutional amendment Bill after a marathon debate
  
• India world's third biggest tech startup hub: Study
  India is home to the third largest number of technology driven startups in the world, with the US and the UK occupying the top two positions, according to a report by Assocham.
  
  The study, done by Assocham in association with Thought Arbitrage Research Institute, also revealed that Bengaluru is host to the largest share of technology startups in the country, followed by Delhi NCR and Mumbai, while Hyderabad and Chennai are also quite popular among budding tech entrepreneurs.
  
  In the technology driven startups, India has moved up to third position with the US occupying the top position with more than 47,000 and the UK with over 4,500. India’s tech startups numbered around 4,200 up to 2015.
  
  In terms of total number of startups, comprising both tech and non-tech areas, India again figured among the five largest hosts in the world, along with China (10,000 each). The US occupies the top slot with 83,000 startups. IT hub Bengaluru is host to 26 per cent of domestic tech startups, followed by Delhi NCR (23 per cent) and Mumbai (17 per cent). In the ‘catching up’ category were Hyderabad (8 per cent), Chennai and Pune (6 per cent each).
  
• Gujarat Assembly ratifies GST Constitution amendment bill
  Gujarat Assembly has passed constitutional amendment bill on GST on 23rd August. Former Finance Minister and senior BJP leader Saurabh Patel has told the media persons outside the state assembly that the Constitutional Amendment bill on GST was passed unanimously.
  
  GST bill has been passed amidst the absence of majority of opposition members. State Assembly session was called to ratify the Constitutional Amendment bill on GST. The GST constitutional amendment bill was passed by both Houses of Parliament recently, needs to be ratified by at least 15 state legislatures before the President can notify the GST Council. GST council will decide the new tax rate and other issues. Gujarat becomes the sixth state which had ratified the constitutional amendment bill on GST.
  
• NITI: Manufacturing only option to create jobs
  India's burgeoning labour force can only be absorbed in the manufacturing sector and not in services or technology-based industries, as some policymakers have suggested, a group of experts said.
  
  The experts, who participated in a meeting with the NITI Aayog on its 15-year vision document, were also of the view that the country won't be able to realise its ambitious Digital India dream unless it improved and expanded its optical fibre network.
  
  The meeting was attended by Anand Mahindra, chairman of Mahindra Group; Shikha Sharma, MD and CEO of Axis Bank; Ajith Balakrishnan, founder of rediff.com; Bhavish Agarwal of Ola Cabs; Nachiketa Mor, India country director for Bill and Melinda Gates Foundation; and Rana Hasan from Asian Development Bank.
  
  According to officials, the ideas and views generated in the meeting would form part of the Aayog's 15-year vision document, which would come out in the next few months. The second document, a 7-year strategic paper, is now expected to become part of the broader vision document itself. The meeting was organised by McKinsey Global Institute, which is an arm of global consultancy firm McKinsey Ltd.
  
  Officials said the meeting also discussed the technological innovations and advancements which would happen in the next 15 years and how could India make use of these.
  
  As part of its process on framing the 15-year vision document that has replaced the five-year plans, the NITI Aayog is holding a series of meetings with industry players, experts, policymakers, academicians, etc.
  
• Maharashtra first to sign up for regional connectivity scheme
  Maharashtra on 23rd August became the first state to sign up for the civil aviation ministry's regional connectivity scheme, fast-tracking the development of its smaller airports and providing incentives to smaller airlines. A tripartite memorandum of understanding (MOU) to that effect was signed between the ministry of civil aviation, the Maharashtra government and the state-run Airports Authority of India
  
  An active state-Centre relation is integral to the scheme announced earlier this year. An airline signing up for it will connect small towns in flights of about 1 hour with ticket charges capped at Rs 2,500. As the fares are low and wouldn't cover costs, there will be viability gap funding, 20% of which will be borne by the governments of states which are part of the scheme. There will also be a levy on scheduled carriers flying on trunk routes such as Delhi-Mumbai.
  
  State governments signing up for the scheme shall also implement incentives such as zero airport charges, reduced service tax on tickets (on 10% of the taxable value) for one year initially and also reduced excise duty at 2% on jet fuel.
  
• Union Cabinet enhances compensation to civilian victims
  The Union Cabinet has enhanced the compensation to victims of terror and left extremism from three lakh rupees to five lakh. Minister of State in the Prime Minister's office Jitendra Singh said, for the first time, civilian victims of cross border firing along the Indo-Pak border will be given a compensation of five lakh rupees similar to those who die due to terrorism or Naxal violence.
  
  Jitendra Singh said, now onwards, any civilian who dies anywhere in the country due to terror attack, naxal violence, firing from across the border and IED explosion will be given 5 lakh rupees as compensation uniformly. The amount will be given to the next of kin of the victim.
  
  The Minister said that five lakh will also be given to those who receive 50 per cent or more disability or incapacitation due to the same reasons. Giving a major push to the Railways’ effort to de-congest busy routes, Cabinet Committee on Economic Affairs, CCEA has given its approval for nine projects worth over 24 thousand 374 crore rupees in nine states for expansion of railway network and enhanced connectivity.
  
• JNPT signs agreement with SBI, Bank of Singapore for ECB of $400mn
  India’s premier container port, Jawaharlal Nehru Port in Navi Mumbai, has signed 400 Million US Dollar agreement with State Bank of India and Development Bank of Singapore for External Commercial Borrowing, ECB. The agreement was signed by JNPT Chairman Anil Diggikar in the presence of the Shipping Secretary Rajive Kumar in Mumbai on 24th August.
  
  The ECB of 400 Million Dollar will be primarily utilised for expansion of JNPT’s existing road network connecting to its port project. It will help JNPT to double its existing capacity.
  
• SBI to raise up to Rs 11,000 crore via debt securities
  Country's largest lender State Bank of India (SBI) on 24th August said it will rise up to Rs 11,000 crore through Basel III compliant debt instruments on a private placement basis.
  
• RBI opens debt market with masala bonds, access for FPIs
  The Reserve Bank of India on 25th August announced a slew of debt market reforms to simplify participation and enhance liquidity, besides allowing the use of newly-introduced instruments such as Masala Bonds. The measures accept many of the recommendations made by HR Khan Committee.
  
  To improve market liquidity, the RBI allowed market making in Government Securities (G-Secs), accepted corporate bonds as eligible collateral under its Liquidity Adjustment Facility, removed the 7-day restriction for lending by listed companies in G-Sec market repo, besides introducing the electronic platform for corporate bond repos.
  
  According to RBI Foreign Portfolio Investors (FPIs) would be allowed access — through primary members — to its NDS-OM (an electronic platform owned by the RBI where secondary market trading in G-Secs is done), ) besides allowing them direct access to the corporate bond market sans brokers.
  
  To improve retail participation in G-Secs, the RBI said it would remove the remaining restrictions on seamless transfer of G-Secs between depositories and itself. This would prove beneficial as retail investors with demat accounts have recently been allowed to trade directly on the NDS-OM.
  
• RBI asks banks to provide loans to women self-help groups in rural areas at 7% per annum
  RBI has asked banks to provide loans to women self-help groups in rural areas at 7 per cent per annum, as per the government's revised guidelines for the current financial year.
  
  The Reserve Bank said in a notification that all women self-help groups (SHGs) will be eligible for interest subvention on credit up to three lakh rupees at 7 per cent per annum under the Deendayal Antyodaya Yojana - National Rural Livelihoods Mission in 250 districts. It said, SHGs availing capital subsidy under the Swarnajayanti Gram Swarozgar Yojana in their existing credit outstanding will not be eligible for benefit under this scheme.
  
• World Bank sanctions Rs 980 cr for Brahmaputra dredging: Assam minister
  The World Bank has sanctioned Rs 980 crore to dredge the Brahmaputra as an initiative to develop waterways to Bangladesh and to other South East Asian countries in a bid to boost trade and industry in the Northeast. Opening up of the Brahmaputra waterways for trade will lead to a reduction in the cost of transportation of goods. It will ultimately result in Assam becoming an export hub for the South East Asian countries.
  
  Centre's Act East Policy has focused aggressively on trade with South East Asian countries and opening up the waterways will be the first step in this direction. With this step, Assam gets a readymade market of Bangladesh and West Bengal with 25 crore consumers and trade can be extended to Thailand, Myanmar, Laos, Cambodia and other South East Asian countries. Patowary informed that Centre has also agreed to link up Assam and South East Asia with air connectivity.
  
• RBI might not meet inflation target: IMF
  An IMF paper has raised question marks over the ability of RBI to target inflation through monetary measures, saying the size of formal financial sector is small in India and may undermine the effectiveness of interest rate changes on aggregate demand.
  
  The IMF working paper assumes significance as the Reserve Bank of India has recently implemented an inflation-targeting regime that requires it to hit publicly announced targets for retail inflation, based on Consumer Price Index (CPI).
  
  Under the new dispensation, RBI will be required to meet retail inflation target of 4 per cent, plus or minus 2 per cent over the next 5 years.
  
  The interest rate from next policy, due on October 4, will be decided by a six-member monetary policy committee (MPC) instead of the central bank governor.
  
  It said that careful studies of the effectiveness of monetary transmission in low-income countries have often found monetary policy effects that are counterintuitive, weak, and/or unreliable.
  
  On the other hand, the small size of the formal financial sector in India would tend to undermine the effects on bank lending rates on aggregate demand.
  
  According to the paper, in case of India, the response of the exchange rate to monetary policy shocks is in the right direction but the magnitude is very small.
  
  The implication is that any effects of monetary policy on aggregate demand in India are more likely to operate through the trade balance than through interest-sensitive components of aggregate of aggregate demand, but any such effects are likely to be weak
  
  The paper noted that there is no reason to expect that mechanisms of monetary transmission in low-income countries would be similar to those that have been found to operate in high-income ones.
  
  The IMF working paper pointed out that if we think of monetary transmission through the bank lending channel in two steps - from policy rates to bank lending rates and from bank lending rates to aggregate demand - there is some evidence that the first step is operative in India, unlike in many other developing countries.
  
  While pass-through from policy rates to bank lending rates is incomplete, there is some evidence that such pass-through exists.
  
• ONGC sets up Rs 100-crore startup fund
   Flagship explorer ONGC has created a Rs 100-crore venture capital fund to incubate innovative ideas for the oil industry, becoming the first state-run company in the sector to set up a startup fund under the government's initiative to promote entrepreneurship
  
  A company release on 14th August said the fund would be used for supporting "fresh ideas in the oil and gas sector" and providing "seed capital, hand-holding, mentoring, market linkage and follow-ups".
  
  To encourage its own employees to innovate, ONGC also awarded three young officers – Rajendra Bhambhu, Deepak Naik and Prajesh Chopra - for their innovative ideas.
  
  Bhambhu and Naik developed an innovative safety device for rigs that facilitates setting up of an emergency brake to augment the safety mechanism on drilling rigs.
  
  Chopra innovated a unique Dual SIM Cellular Router System that provides data connectivity at work-over rigs. This system curtails the hassle of frequent dismantling and re-installation during rig transportation, thus, saving time and money.
  
• Rules eased to import, export human biological samples
  In its attempt towards ease of doing business, the central government has relaxed norms for import and export of human biological samples. A recent notification of the Union government stated that companies importing or exporting human biological samples for commercial or research purposes would not require import licences or export permits. While the industry welcomed the move, some said this notification was just doing away with the paperwork. Revenues won't be impacted drastically, nor would it increase the number of samples into the country.
  
• Bihar becomes 2nd state to ratify Constitutional amendment bill on GST
  The Bihar state Legislature on 16th August unanimously ratified the constitution amendment bill on Goods and Services Tax, GST. The bill was moved by the commercial taxes minister Bijendra Prasad Yadav which was unanimously adopted by both of the houses. After passage of the bill by the state legislature, Bihar now becomes the second state to ratify the GST.
  
  A daylong session of Bihar state legislature was convened to ratify this bill. Taking part in discussion n Chief Minister Nitish Kumar said revenue of the state will increase after GST bill.
  
  Mr Kumar said the state will get share of those service taxes which were earlier collected by the central government only. He said there will be uniform tax system throughout the country and there will be simplicity in the tax system. The Chief Minister said, before GST bill manufacturing state was getting lion's share of taxes, now the consumer states will also get benefit.
  
• Tata Steel signs MoU with IIT Madras to set up research centre
  Tata Steel has signed a Memorandum of Understanding (MoU) with Indian Institute of Technology, Madras (IITM) to set up a research centre in IIT Madras Research Park as part of its long term strategic roadmap in the area of advanced materials.
  
  The Tata Steel Advanced Materials Research Center (TSAMRC) will be developing new materials, which are unique combinations of physical and chemical properties that were either absent or difficult to obtain using conventional materials.
  
  Gopichand Katragadda, group chief technology officer, Tata Sons said that the centre is part of the Tata group's effort to advance progress in science and materials into technologies that meet market needs.
  
  IIT Madras and Tata Steel will be working closely together to come up with new materials, which will include graphene, that will have new applications, said Bhaskar Ramamurthi, director, IIT Madras.
  
  Anand Sen, president (Total Quality Management and Steel Business), Tata Steel Limited added that the Centre will initially focus on developing green energy and light weight technologies using carbon- based materials.
  
• 7 Indian companies among top 200 carbon clean firms
  Seven Indian companies have made it to a carbon-clean list of 200 largest companies worldwide ranked by their total clean-energy revenues. The list is topped by Japan's Toyota Motor followed by Germany's Siemens AG. The ranking has been done by As You Sow and Corporate Knights.
  
  Among Indian companies are Suzlon Energy at 68 rank for its wind farms, Bharat Heavy Electricals Ltd at 106 for its wind electric generators and solar cells, andTata Chemicals at 114 for chemicals for biodiesel, solar energy, and fuel cells. Thermax Ltd is at 139 andExide Indus at 153 for electric storage batteries. Besides, IDFC Ltd is at 155 for its green infrastructure financing and Havells India at 166 for energy meters.
  
  Four Indian companies — Godrej Industries, NHPC Ltd, SJVN, and Bharat Electronics — have moved out of the rankings for being laggards and being utilities producing less than 50 per cent green energy.
  
  The Carbon Clean 200: Investing in a Clean Energy Future said in a report released on 17th August. COP21 refers to 21st annual Conference of the Parties in Paris from November 30 to December 11 2015.
  
  The Carbon Clean 200 (Clean200TM)-a list of the 200 largest companies worldwide was created based on their total clean energy revenues. The report said it is intended as the clean energy inverse of the Carbon Underground 200TM. Where the Carbon Underground 200TM (which evolved from the Carbon Tracker Initiative report, Unburnable Carbon: Are the World's Financial Markets Carrying a Carbon Bubble), ranks the largest publicly listed companies by the carbon intensity of their coal, oil, and gas reserves.
  
  The report said coal, which accounts for over 40 per cent of global greenhouse gas emissions, is declining rapidly in value, especially in the United States. Peabody Energy, the largest private-sector coal company in the world, filed for Chapter 11 bankruptcy protection this April, following Arch and Alpha.
  
• Centre hikes monthly pension of freedom fighters kept in Cellular Jail
  Centre has hiked the monthly pension of freedom fighters, who were kept in Cellular Jail in Andaman Islands, by Rs. 5,000 to Rs. 30,000. The pension of freedom fighters, who suffered outside British India, has also been raised from 23,000 to Rs. 28,000 per month.
  
  Besides, the pension of Indian National Army (INA) has also been raised from Rs. 21,395 to Rs. 26,000. The hike will be effective from 15th of this month. The emoluments given to dependents and eligible daughters have also been raised in the range of Rs. 13,000 to Rs. 15,000. According to an official release, the existing annual dearness relief system has been replaced with DA system applicable to government employees twice a year for freedom fighter pensioners.
  
• India Post Payments Bank gets RoC nod
  The India Post Payments Bank has received the Certificate of Incorporation from the Registrar of Companies, Ministry of Corporate Affairs, making it the first public sector unit under the Department of Posts (DoP). With the incorporation, the board of the India Post Payments Bank (IPPB) is likely to be constituted soon. The Department is expected to complete the roll-out of its branches throughout the country by September 2017. This could be the fastest roll-out of a bank anywhere in the world, it said.
  
  The Cabinet, on June 1, had cleared the proposal to set up the India Post Payments Bank with a corpus of Rs. 800 crore and 650 branches. The Rs. 800 crore will be made available in the form of Rs. 400 crore of equity and Rs. 400 crore grants. The bank will be run by a chief executive officer and will be professionally managed. It will have representations from various other government departments, including the Department of Posts, Department of Expenditure, and Department of Economic Services, among others.
  
  At present, core banking network of post offices, at 22,137, is more than State Bank of India’s 1,666 core banking branches.
  
  Coupled with the physical presence across 1.55 lakh post offices (of which around 1.39 lakh are in rural areas), India Post Payments Bank aims to become a powerful and effective vehicle of real financial inclusion in the country.
  
• Centre to give special assistance of Rs 1976.5 cr to AP
  The Centre on 18th August announced its decision to give Special Assistance of Rs. 1976.50 crore to Andhra Pradesh during current financial year. This is part of center's commitment to the people of Andhra Pradesh. Rs 01976 crore includes Rs.450 crore for a new capital city.
  
  The Andhra Pradesh Re-organisation Act, 2014 calls for the Centre to make appropriate grants in the form of special assistance to the backward areas of successor States and provide assistance for creation of new capital of Andhra Pradesh.
  
• Panel suggests corporate bond index, easier norms for FPIs
  With an aim to develop corporate bond market in India, an expert panel suggested easing of norms for foreign investors, a corporate bond index on the lines of Sensex or Nifty, and making it mandatory for large corporates to tap this market for funds beyond a threshold.
  
  The panel, comprising nominees from Reserve Bank, Finance Ministry, markets watchdog SEBI as also insurance and pension regulators IRDAI and PFRDA, also wanted tightening of norms for credit rating agencies by mandating them to strictly adhere to timely public disclosure of defaults.
  
  The ‘Report of the Working Group on Development of Corporate Bond Market in India’ has been submitted to RBI Governor Raghuram Rajan in his capacity as Chairman of the FSDC (Financial Stability and Development Council) Sub Committee, which comprises members from various regulators . The report was released by SEBI, whose Chairman U.K. Sinha is a member of the FSDC Sub Committee.
  
  The group was constituted in September 2015 under chairmanship of the then RBI Deputy Governor H.R. Khan and has now submitted its report after taking into account various structural issues impinging on the development of a deep corporate bond market in India.
  
  The panel has said, “Large corporates with borrowings from the banking system above a cut-off level may be required to tap the market for a portion of their working capital and term loan needs. Necessary guidelines may be issued by RBI taking into account market conditions by September 2016.”
  
  It has recommended amendments in FEMA regulations to allow investments by FPIs (Foreign Portfolio Investors) in unlisted debt securities and pass through securities issued by securitisations.
  
  In a rare case of suggesting specific timelines for its various suggestions, the Working Group has sought necessary notification with regard to allowing FPI investments in these segments by August-end 2016.
  
  It also wanted amendments in both FEMA notification and SEBI guidelines to facilitate direct trading in corporate bonds by FPIs in the OTC segment and on an electronic platform of a recognised stock exchange.Banks may be encouraged to submit loan overdue information to credit information companies (CICs) on a weekly basis to start with.
  
  Corporate bond issuance in India is dominated by private placements as bonds account for more than 95 per cent of the total issuance of corporate debt. Besides, a majority of the issuances are concentrated in the 2-5 year tenor, while the investor base is limited as the investment mandates of large investors such as insurers, pension funds and provident funds provide limited space for going down the credit curve as the investments are made in fiduciary capacity to protect the interests of subscribers.
  
• Reforms, inclusive growth India's focus areas at G20 summit
  India's focus at the G20 summit in China next month will be on global structural reforms to generate jobs, spur inclusive growth and discuss issues relating to the $100 billion climate financing committed by developed nations, the economic affairs secretary said on 19th August.
  
  Shaktikanta Das also said the BRICS summit in Goa in October will discuss a proposal to set up a rating agency for the five-member bloc on the lines of US-based rating agencies.
  
  Das, who is to attend the 8th India-China Financial and Economic Dialogue, said the main thrust of India at the G20 summit to be held in eastern China's Hangzhou city on September 4-5 will be the implementation of structural reforms by the member-countries to spur job growth.
  
  The other important aspect will be Prime Minister Narendra Modi's bilateral meetings with various world leaders on the sidelines of the G20 summit. The details of his visit are being worked out
  
  Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the US and the European Union constitute the G20.
  
  Many countries are undertaking structural reforms and India's emphasis is to appeal to the world community to continue with reforms "because that is the only way you can revive global growth. India has undertaken a number of structural reforms
  
  The Aadhaar Bill also mandates the financial backing for disbursements of subsidies and other government assistance directly to people. It plugs a lot of leakage, he said. Added to that is ease of doing business, process simplifications, auction of natural resources, he said.
  
• India ranks 39th in Asia Pacific on fixed broadband
  India ranks a low 39th in terms of fixed broadband adoption among Asia Pacific countries, with just 1.3 per cent of its citizens subscribing to such a service in 2015, according to a study by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
  
  India ranks lower than countries such as Bhutan, Sri Lanka and Bangladesh in fixed broadband subscriptions per 100 inhabitants in ESCAP countries in 2015, according to the report ‘State of ICT in Asia and the Pacific 2016: Uncovering the Widening Broadband Divide’ released on 19th August.
  
  Hong Kong, New Zealand, Japan, Macao, Australia and Singapore topped the list of 53 countries covered in the report. According to the latest ITU data for 2015, more than half of the global fixed broadband subscriptions are from Asia and the Pacific (52.3 per cent). This is followed by Europe (21.9 per cent) and North America (14.1 per cent).
  
  The report pointed out that this was a dramatic increase from 2005 when subscriptions in the ESCAP region merely constituted 38.1% of the global total fixed broadband subscriptions, followed by Europe (28.6 per cent) and North America (26.5 per cent). However, the subscriptions per 100 inhabitants in the ESCAP region is behind Latin America and the Caribbean, and far lower than Europe and North America. Fixed broadband penetration in Asia and the Pacific is even below the world’s average of 11.2 subscriptions per 100 inhabitants in 2015, it said.
  
• Merger with associate banks to add Rs. 8 lakh crore to asset: SBI
  State Bank of India on 20th August said the ongoing merger of five of its associate banks and Bharatiya Mahila Bank will add Rs. 8 lakh crore or 120 billion dollar to its assets and will create a banking behemoth of global scale.
  
  The bank also said the merger of State Banks of Bikaner and Jaipur, Travancore, Patiala, Hyderabad and Mysore, and also of Bhartiya Mahila Bank, a bank for women set up in November 2013, will lead to a 36 per cent increase in the SBI's total assets at about 447 billion dollar. The bank said, mergers will dwarf ICICI Bank assets to just one-fourth of SBI and will also catapult the bank into the top 50 banks globally.
  
  The combined entity will have network of over 24,000 branches with 2,70,000 employees and 58,000 ATMs serving over 50 crore customers.
  
• India jumps 15 spots to become 2nd most innovative middle income economy in world
  India has jumped 15 spots to become 2nd most innovative middle income economy in world. This was revealed in the latest report of Global Innovation Index report released by Commerce and Industry Minister Nirmala Sitharaman in New Delhi on 20th August. Now, it has moved to 66th rank from 81 in 2015.
  
• Niti Aayog suggests closure of 8 sick PSUs
  Tasked by Prime Minister's Office to look into viability of sick state-run companies, government think-tank Niti Aayog has identified eight PSUs for closure after finding them unfit for revival.
  
  These eight units are out of 74 loss-making public sector undertakings identified by the Niti Aayog for closure or sell off. Once the Prime Minister's Office (PMO) gives the in- principle approval to the proposal, the ministry responsible for administration of these PSUs will prepare detailed plan for closure of these firms. The detailed plan will include identification of assets to be liquidated and the compensation for employees of these firms.
  
  The closure plans will be placed before Union Cabinet for approval to start the process of liquidating the firms. Earlier, Niti Aayog was asked by the PMO to identify one sick PSU, along with a detailed plan for its sell-off or eventual liquidation, before moving on to other such cases.
  
  The Aayog had submitted two separate lists of sick and loss-making PSUs - one comprising those that can be closed down and the other of those where government can divest its stake. It is also in the process of preparing a list of PSUs for strategic sale or privatisation.
  
  Finance Minister Arun Jaitley in his Budget 2016-17 speech had said the Aayog would identify PSUs for strategic sale and disinvestment. The government aims to collect Rs 56,500 crore through disinvestment in PSUs this fiscal, as per the Union budget for 2016-17.
  
  Of the total budgeted proceeds, Rs 36,000 crore is estimated to come from minority stake sale in PSUs and the remaining Rs 20,500 crore from strategic sale in both profit and loss-making companies. In 2015-16, the government was able to meet less than half of the disinvestment estimates at Rs 25,312 crore against the target of Rs 69,500 crore.
  
  It had raised around Rs 24,500 crore in 2014-15 by selling stake in public companies, about Rs 16,000 crore in 2013-14 and Rs 23,960 crore in 2012-13.
  
• Lok Sabha unanimously passes GST amendment bill
  Parliament on 8th August passed 122nd Constitution Amendment Bill with Lok Sabha approving the amendments made by the Rajya Sabha.
  
  The bill was passed by 443 votes in favour and none voting against. The bill will pave the way for the roll out of Goods and Services Tax, GST regime across the country.
  
  Intervening at the end of four hour long discussion, Prime Minister Narendra Modi said the GST is a great step by Team India towards transformation and transparency in tax regime. He said it will bring freedom from tax terrorism.
  
  Terming the bill as consumer as well as business, Mr Modi said small business will feel more secure and assured it will have no impact on inflation as many items of common man use including medicines have been kept out of it.
  
  He said, the GST will benefit mainly those states which are considered backward states and also address the problem of imbalanced development. He said the bill will help curtail black money and traders will be compelled to give proper bills. He said, GST will work as a catalyst to strengthen federal structure of the country.
  
• Overstated output led to Rs 18,627-cr ONGC burden: CAG
  The comptroller and auditor general (CAG) of India on 8th August said the state-run ONGC (Oil and Natural Gas Corporation) overstated its production, thereby bearing an additional subsidy burden of Rs 18,627 crore between 2011-12 and 2014-15.
  
  The company had to bear a larger share of subsidy due to overstatement of reported crude oil production by inclusion of natural-gas condensate and off-gas (seven per cent of condensate and one per cent of off-gas).
  
  The additional subsidy burden borne by the company due to inclusion of condensate was Rs 16,331.9 crore and due to the inclusion of off-gas was Rs 2,294.7 crore, it said. During the period under review, ONGC has borne a subsidy burden of $56 per barrel of its total production of crude oil. Condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields.
  
  In its response to the auditor, ONGC said that it has been taking up the issue of exclusion of condensate from overall crude oil production with the ministry of petroleum and natural gas at various levels over the period from October 2012 to May 2014. On the other hand, since the third quarter of 2015-16, off-gas has been shown separately in the crude oil tally statement given to the ministry.
  
  In the report, CAG said that ONGC had said that condensate was neither crude oil and nor was it sold. However, the company has been reporting production of crude oil inclusive of condensate since 1990.It is this incorrect practice of reporting condensate as crude oil, even as the company was aware of the difference of the two, that has led to the present situation of additional subsidy share on this account.
  
  CAG added that the company may report condensate as a separate stream as opined by an international consultant. By including basic sediment and water of 3.9 per cent, off-gas one per cent, and recoverable internal consumption of 0.12 per cent, the production performance was overstated, it said.
  
  CAG highlighted that there was an incorrect reporting of crude oil in Ankleshwar asset. Crude oil from various fields at Ankleshwar is transported to Indian Oil Corporation refinery in Koyali through a pipeline. On February 18, 2013, this pipeline was punctured by miscreants to steal crude oil. The security team of the asset reached site on that day and seized 550 litres of crude oil.
  
  According to CAG However, in the crude oil tally statement as on March 2013, the asset indicated pipeline leakage of 3,556 mt as against a reported theft of 550 litres. The excess reporting was done to reconcile the differences between reported production and sale of crude oil by the asset.
  
• Reserve Bank announces bi-monthly monetary policy review; keeps rates unchanged
  The Reserve bank of India (RBI) on 9th August kept the key policy rates unchanged while maintaining an accommodative policy stance. While announcing his bi-monthly monetary policy RBI governor Raghuram Rajan said that it has been decided to keep the policy repo rate unchanged at 6.5 per cent. He said Cash reserve ratio (CRR) has been kept unchanged at 4.0 per cent while the reverse repo rate remains unchanged at 6.0 per cent.
  
  Going forward, RBI said risks to the inflation target of 5 per cent for March 2017 continue to be on the upside. It said the inflation which climbed to a 22-month high of 5.8 per cent in June continues to be high on factors like food inflation, services and the effect of the seventh pay panel implementation to government employees.
  
• e-Marketplace launched
  Commerce minister Nirmala Sitharaman on 9th August launched the government e-marketplace. It's a one stop online marketplace for govt buyers and is expected to be a game changer. The "e-marketplace" has been launched online purchase of goods and services by various central government ministries and departments. The e marketplace is expected to bring tranparency and improve governance.
  
  To begin with common use items in 26 categories like computers, office equipments, stationery has been placed on the portal. By april 1, 2017 more items will be included in the list.
  
  A call center has been step up for the market place that will help both buyers and sellers in conducting transactions.all in all govt e market place is expect to bring in new ear of govt procurement.
  
• Cabinet liberalises FDI norms for NBFC sector
  Expanding the list of NBFCs which can attract FDI, the Cabinet on 10th August permitted foreign investment through automatic route in "other financial services", if they are under regulators like RBI and SEBI
  
  The present regulations on Non-Banking Finance Companies (NBFCs) stipulate that FDI would be allowed on automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalisation norms mentioned therein.
  
  The Cabinet chaired by Prime Minister Narendra Modi has given approval to amend regulation for foreign investment in NBFCs. This is the third major relaxation in FDI norms since November 2015. In June this year, the government had announced liberalisation in eight sectors, including defense and civil aviation sectors. The amendment in the Foreign Exchange Management (Transfer or Issue of Security by the Person Resident Outside India) regulations on NBFCs will enable inflow of foreign investment in "Other Financial Services" on automatic route provided such services are regulated by any financial sector regulators (RBI, SEBI, PFRDA) or government agencies.
  
  Foreign investment in other financial services, which are not regulated, can be made on approval route. Further, minimum capitalisation norms as mandated under FDI policy have been eliminated as most of the regulators have already fixed minimum capitalisation norms. This will induce FDI and spurt economic activities. It will cover whole India and is not limited to any State/Districts
  
  In the Budget 2016-17 Speech, Finance Minister Arun Jaitley had announced about this liberalisation. Currently, 100 per cent FDI through automatic route is permitted in 18 NBFC activities including merchant banking, under writing, portfolio management services, financial consultancy and stock broking. In 2015-16, foreign direct investment in India grew by 29 per cent year-on-year to USD 40 billion.
  
• Govt to set up committee to review e-commerce rules
  The government has decided to set up a committee to look into all issues including foreign direct investment norms pertaining to the fast growing e-commerce industry in the country. The committee will be headed by the NITI Aayog CEO.
  
  The other members in the panel will include officials from commerce and industry ministry and department of electronics and IT among others. Representatives from four states including Maharashtra and Karnataka will also be the members of the panel. Setting up of this panel also assumes significance as the government has recently permitted 100 per cent FDI in food processing sector.
  
• Govt allocates Rs 200 crore for Nirbhaya fund
  Rs 200 crore has been allocated by the central government for the Nirbhaya Fund to provide compensation to women and child victims of sexual crimes, Rajya Sabha was informed on 10th August.
  
  Minister of State for Home Hansraj Ahir said all states and union territories have notified victim compensation scheme in their respective state and UT. He said record of disbursement made by states and UTs under their victim compensation scheme is not maintained centrally.
  
  It will also encourage states and UTs to effectively implement the victim compensation schemes notified by them under the provisions of section 357A of CrPC and provide financial support to victims of various crimes like sexual offences including rape, acid attacks, crime against children, human trafficking etc
  
  Nirbhaya fund was set up following an announcement in the 2013 Union Budget after the brutal gangrape on December 16, 2012 of a Delhi girl. The fund is created to support initiatives by the government and NGOs working towards protecting the dignity and ensuring safety of women in India.
  
• Jaitley launches data bank portal of MSMEs
  Finance Minister Arun Jaitley on 11th August launched a data bank Portal of micro, small and medium enterprises, MSME in New Delhi. The portal aims to gather information about micro, small and medium enterprises.
  
  An Online Finance Facilitation Web Portal was also launched to provide collective funding options for MSMEs. Secretary in the MSME Ministry K K Jalan said, six Online Finance Facilitation Centres in Jalandhar, Ludhiana, Guwahati, Lucknow, Peenya near Bangaluru and Delhi have been opened and six more will be unveiled in the near future.
  
• India’s ranking as business destination improves: Survey
  India’s ranking as a business destination has improved as per a recent survey of Transparency International. It now ranks 76th as compared to the 94th position it held earlier. As per a World Bank report on ease of doing business, India’s position has improved to 130 this year from the 142nd position last year among the 189 countries surveyed.
  
• India moves up in MasterCard consumer confidence index
  The MasterCard Index of Consumer Confidence for the first half of 2016 has placed India in “extremely optimistic” territory. The country also further solidified its position with a score of 97.6, moving up to the second spot in the Asia Pacific (APAC) region.
  
  The overall consumer confidence and the five-component index scores range from 0 to 100, where 0 represents maximum pessimism, 100 maximum optimism and 50 neutrality. The five components include regular income, employment, quality of life, economy and stock market.
  
  It said India's emergence as an economy with an extremely optimistic outlook was attributed to a rise in scores across the five major components that serve as parameters for evaluating an economy's success. Here, regular income and employment were the key factors leading to the extreme optimism in the economic outlook.
  
  While regular income took a leap of 7.9 points to reach 98.7 points, the outlook towards employment rose 6.1 to 97.8 points. The other key parameters included quality of life (97.5 points), followed by economy (97.4 points) and stock market (96.8 points).
  
  Overall, consumer confidence in the Asia Pacific markets remained stable, increasing by only 0.05 points to 59.72 in the first half of 2016, from 59.67 points in the second haft of 2015. The number of markets below the 50 neutral line remain the same (eight of the 17 markets) as the last survey.
  
  The emerging economies exhibited the highest gains, with Taiwan leading the pack, recording the largest gain of 16.3 points to 45.3 points — a leap from ranking the lowest amongst the 17 markets in the previous survey in H2 2015.
  
  Apart from India, the developing markets of Philippines (95.2), Vietnam (94.9) and Myanmar (99.8) remain extremely optimistic in their outlook. Declines were recorded in seven out of 17 Asia Pacific markets, with significant deterioration seen in Indonesia (-14.7), Hong Kong (-12.4) and Singapore (-10.7).
  
  The decreases recorded in Hong Kong, Japan (-8.8) and Singapore moved these markets from neutral into pessimistic territory. China’s consumer confidence score improved by 1.4 points to 76.0.
  
  This survey was conducted between June and July 2016 on 8,746 respondents aged 18-64 years in 17 Asia Pacific markets including India, China, Australia, Japan, Singapore, Sri Lanka, Indonesia among others. Respondents were asked five questions pertaining to their six-month outlook on the economy, employment prospects, the local stock market, their regular income prospects and their quality of life.
  
  The results of their responses were converted into five component index scores, which were subsequently averaged to form the MICC score.
  
• Over 57,400 schemes to provide drinking water in rural areas
  Over 57,400 schemes are going on in different states to provide drinking water to the rural population and over Rs 4,300 crore utilised for the purpose in 2015-16, the government said on 11th August.
  
  Drinking Water and Sanitation Minister Narendra Singh Tomar informed Lok Sabha that Rs 4,373 crore was allocated to states under the National Rural Drinking Water Programme in 2015-16, of which Rs 4,369.55 crore has been utilised.
  
  Citing data, he said there are 57,489 ongoing schemes in different states to provide drinking water to the rural population as on August 8. In Jammu & Kashmir, there are 1,838 ongoing rural drinking water supply schemes
  
  With regard to Swachh Bharat Mission-Gramin (SBM-G), Tomar said the programme aims at achieving Swachh Bharat by October 2, 2019 and focusses on behavior change and community engagement. In 2015-16, Rs 6,525 crore was allocated for SBM-G and out of it, Rs 6,524.52 crore has been utilized
  
  Since launching of SBM-G on October 2, 2014, 212.98 lakh toilets have already been constructed till August 8. In addition to this, a total of 17 districts, 232 blocks, 32,395 gram panchayats and 72,727 villages have been declared Open Defecation Free.
  
• Centre constitutes national committee on trade facilitation
  Centre has constituted national committee on trade facilitation under the Chairmanship of the Cabinet Secretary to develop the pan-India road map for trade facilitation.
  
  This committee is constituted in consequence of India’s ratification of the World Trade Organisation Agreement on Trade Facilitation in April 2016.
  
  Finance Ministry in a release said, the objective behind setting up the committee is to have a national level body that will facilitate domestic co-ordination and implementation of Agreement on Trade Facilitation provisions. The Ministry said, it will be instrumental in synergizing the various trade facilitation perspectives across the country and will also focus on an outreach programme for sensitization of all stakeholders about Agreement on Trade Facilitation.
  
• Government, oil firms inflated PAHAL subsidy savings: CAG
  The Comptroller and Auditor General of India (CAG) on 12th August said in a report that the government and the oil marketing companies had overstated savings on subsidy due to implementation of direct benefits transfer on liquid petroleum gas (LPG), or the PAHAL scheme.
  
  The CAG claimed that 92 per cent of the Rs 23,316.21 crore the government saved in subsidy payout in 2015-16 occurred due to a drop in crude oil prices.
  
  According to the auditor, the savings from the fall in crude oil prices were Rs 21,552.28 crore, while the savings from the reduced offtake of subsidised cylinders through schemes like PAHAL were Rs 1,763.93 crore for the first three quarters of 2015-16.
  
  The actual subsidy payout during April-December 2015 was Rs 12,084.24 crore against Rs 35,400.46 crore during the same period in 2014. The report stated that there was a significant reduction of Rs 23,316.21 crore in the LPG subsidy payout due to a combined effect of a decrease in offtake of subsidised cylinders by consumers and lower subsidy rates arising from the sharp fall in crude oil prices during the first three quarters of 2015-16.
  
  The auditor also highlighted that it had noticed inconsistencies in the estimates of the government (Rs 9,211 crore) and oil marketing companies (Rs 5,107 crore).
  
  The difference came about because the ministry of petroleum and natural gas assumed that the blocked consumers who were not eligible for subsidy would have availed their entire quota of 12 cylinders against the national average per capita of 6.27 cylinders in 2014-15.
  
  Indian Oil Corporation, co-ordinating agency of oil marketing companies for LPG, considered the average subsidy rate in 2014-15 while working out the savings for 2015-16. While the average subsidy for 2015-16 was Rs 169.45 per cylinder, the average subsidy in 2014-15 was Rs 338 per cylinder.
  
  According to the auditor, based on an average of Rs 169.45 per cylinder, and after considering the savings due to the GiveItUp scheme in which 6.72 million consumers gave up their subsidy voluntarily, the savings would reduce to Rs 3,473 crore instead of Rs 5,107.48 crore estimated by the oil marketing companies.
  
  OTHER CAG REPORTS
  • Highlighting inconsistency in the govt data, the CAG suggested the Centre take steps to ensure the Fiscal Responsibility and Management Act disclosure statements are transparent and complete in all respects
  • The CAG pulled up the revenue department for failure to take stringent action against assessees who took advantage of the immunity provisions under the service tax compliance scheme and again became non-filers
  • The CAG in its report on Union Territories pointed to irregularities in accounts and poor financial management resulting in loss of crores of rupees
  
  
• Assam becomes the first state to ratify GST
  According to the Finance Minister of Assam, the state has become the first state to ratify the Goods and Services Tax (GST) constitution amendment Bill. It was the last day of Assam’s ongoing legislative assembly session, its first full session after the new Bharatiya Janata Party-led coalition government was sworn in after the assembly polls in May.
  
  The GST constitution amendment Bill needs to be ratified by at least 16 of the 31 state assemblies, including the assemblies of Union Territories Delhi and Puducherry. It would receive a presidential assent when that is done and the empowered committee of finance ministers would turn into the GST Council to draft the subsequent Central GST, Integrated GST and State GST Bills.
  
  Apart from the above three states, Bihar has promised a special session while West Bengal and Delhi could ratify the Bill at their respective assembly sessions at the end of the month.
  
• Hindustan Copper Limited inaugurates country's first facility to produce nickel
  Hindustan Copper Limited (HCL) inaugurated the nickel, copper and acid recovery plant at Indian Copper Complex, Ghatsila (Jharkhand). This is the first facility in India to produce nickel metal of LME grade from primary resource. The Singhbhum Copper Belt has unique ore characteristics which contains appreciable quantity of nickel. Hindustan Copper has installed and commissioned the technology to recover as nickel metal.
  
  At present the capacity of the plant is 50 metric tonne (MT) per annum considering the current production rate from the Surda mines. The nickel output is expected to increase by eight times after the completion of mine expansion projects located at Ghatsila. The annual demand for pure nickel in India is around 45,000 MT and its market in the country is totally dependent on import.
  
  Currently, copper is recovered from bleed electrolyte as liberator cathode having only 50-90 percent copper content, and liberator sludge with 50-60 percent copper content. Interestingly, the process consumes around 30 MT LME-A grade copper starter sheet per annum.
  
  The proposed project will replace the age-old process of liberator cell operation with EMEW & APU technology in the refinery.
  
• Govt approves Rs 1,911 crore highway projects in six states
  Government has approved Rs 1,911 crore highway projects for six states, including Karnataka and Maharashtra. The standing finance committee (SFC) has approved six road projects in Nagaland, Andhra Pradesh, Maharashtra, Karnataka, Uttarakhand and Arunachal Pradesh to be built at a cost of an estimated Rs 1,910.87 crore
  
  The official said SFC approved the NH-61 stretch in Nagaland for an estimated Rs 343 crore, besides upgradation of Rayachoti-Kadapa stretch on NH-18 for an estimated Rs 350 crore in Andhra Pradesh.
  
  In Maharashtra, it gave nod to two-laning of Nagpur-Umred-Bramhapur-Armori stretch for Rs 269 crore and reconstruction and widening of a highway stretch on NH-94 in Uttarakhand for Rs 209 crore. Arunachal Pradesh will see a stretch to be widened at a cost of Rs 44 crore.
  
  Two projects in Karnataka relating to widening of Bidar to Humanabad section of NH-50 for a cost of Rs 367 crore and a stretch on NH-150 for Rs 39 crore were also approved.
  
• Indian drones to aid crop cover scheme
  
  The central government is working on a project to develop indigenous drones to settle insurance claims under the newly launched crop insurance scheme — Pradhan Mantri Fasal Bima Yojana (PMFBY) — and other such products.
  
  The drones are expected to enable insurance firms to assess damage accurately and vet claims so that settlement can be expedited. Under PMFBY, insurers have to settle claims within 45 days of the application made.
  
  The drones, being developed by the Indian Council of Agricultural Research, are part of a comprehensive project to develop a drone-based crop and soil monitoring system using hyperspectral remote sensing sensors called Sensagri.
  
  The project is funded by the Department of Electronics and Information Technology, Information Technology Research Academy, and Indian Council for Scientific Research.
  
  If successful, this technology could be integrated with satellite-based technologies for large-scale applications, which would further smoothen the crop damage assessment.
  
  Officials said drone technology-based unmanned aerial vehicles have the ability to scout over farms, gather precise information and transmit the data on a real-time basis.
  
  The information on drone- based technology for crop damage assessment was also shared by Sudarshan Bhagat, minister of state for agriculture, in Parliament recently.
  
  The Directorate General of Civil Aviation had in May released a draft paper with guidelines for permission to fly civil unmanned aircraft. It had highlighted the increasing civil use of unmanned aircraft for damage assessment of property and life due to natural calamity, and infrastructure monitoring. Till date, 22 states and Union territories are implementing PMFBY, of which 19 have already issued tenders.
  
• RBI clears decks for universal banking
  The Reserve Bank of India on 1st August unveiled guidelines for ‘on-tap’ licensing of new private banks, opening the door for entities such as Edelweiss Financial Services, JM Financial, LIC Housing Finance, Magma Fincorp, Muthoot Finance, Shriram Capital and UAE Exchange & Financial Services, which had missed the bus in the last round, to float universal banks.
  
  The guidelines in respect of promoter eligibility, corporate structure, foreign shareholding, dilution of promoter group shareholding and listing on the stock exchanges appear liberal as compared to the 2013 guidelines under which IDFC Ltd and Bandhan Financial Services were allowed to set up banks.
  
  Under the new guidelines, resident individuals and professionals with 10 years’ experience in banking and finance are eligible to promote universal banks. Previously, only entities/groups in the private sector, entities in the public sector and non-banking financial companies (NBFCs) were eligible.
  
  Large industrial houses are excluded as eligible entities, but can invest in the (universal) banks up to 10 per cent. A universal bank is a bank offering retail, wholesale and investment banking services under one roof.
  
  Under the new guidelines, a Non-Operative Financial Holding Company (NOFHC) is not mandatory for setting up a bank in case the promoters are individuals or stand-alone promoting/converting entities who/which do not have other group entities.
  
  The RBI has said that in case a bank is to be set up through an NOFHC, a promoter/promoter group should hold not less than 51 per cent of the total paid-up equity capital in the holding company. Earlier, entities/groups had to set up a bank through a wholly owned NOFHC.
  
  Entities/groups in the private sector that are ‘owned and controlled by residents’ and have a track record of at least 10 years, are eligible as promoters. If such entity/group has total assets of Rs. 5,000 crore or more, the non-financial business of the group should not account for 40 per cent or more in terms of total assets/gross income.
  
• RIL financials to be adversely affected by report: CAG
  The Comptroller and Auditor General of India (CAG), in its latest report, stated the financials of the Mukesh Ambani-led Reliance Industries (RIL) would be adversely affected if the government accepts a third-party report, effectively bringing to an end the continuity of the company's reservoir, adjacent to the Oil and Natural Gas Corporation fields in the Krishna-Godawari basin.
  
  The CAG report also said the total financial impact of excess cost recovery allowed by the government during 2012-14 - and pointed out by the CAG - was about Rs 9,307 crore. Later, audit for the same period noticed additional issues of excess cost recovery of Rs 278 crore.
  
  The independent expert, DeGolyer and MacNaughton (D&M), in its report filed in 2013 had stated that there can be a possible migration of gas between the fields.
  
  In the case, ONGC had moved the Delhi High Court alleging theft of its gas by RIL by drilling wells close to its block. RIL had started production in the KG-D6 block (KG-DWN-98/3) in 2009. ONGC had alleged that RIL had stolen gas worth Rs 30,000 crore from its block in the Krishna-Godavari (KG) basin.
  
  The ONGC petition says four wells have been drilled by RIL within distances ranging from 50 to 350 metres from its own block. After instruction by the Delhi High Court, a one-member committee of A P Shah was set up on December 15 last year to file a report on the issue. The Shah panel is expected to submit its report by the end of this month. The D&M report is currently under the consideration of Shah panel. KG-DWN-98/2 and Godavari PML, which came under the possession of the ONGC in 2005 and 1997, are adjacent to RIL's KG-DWN-98/3.
  
  The ONGC petition states that four wells (KG-D6-B8, KG-D6-A5, KG-D6-A9 and KG-D6-A13) were drilled by RIL in a calculated angular incline, with a clear idea to tap the former's reserves. RIL had started production in the block in 2009.
  
• UIDAI extended undue favour to Wipro: CAG
  The Unique Identification Authority of India (UIDAI) extended “undue favour” to Wipro Ltd. and as a result incurred an avoidable expenditure of Rs.4.92 crore on an annual maintenance contract, according to CAG report tabled in Parliament.
  
  The Comptroller and Auditor General of India also pointed that UIDAI, which manages Aadhaar, also incurred a loss of Rs.1.41 crore by not routing advertisements through the Directorate of Advertising and Visual Publicity.
  
  UIDAI had in May 2011, entered into a contract with Wipro for supply, installation and commissioning of servers, storage systems, security systems and accessories with incidental services in the data centres of the authority in Bengaluru and Delhi/NCR at a cost of Rs.134.28 crore.
  
• Centre, state governments spent 1.3% of GDP on healthcare in 2015-16
  The expenditure on healthcare in last fiscal by the Centre and state governments was 1.3 per cent of the GDP, the Rajya Sabha was informed on 2nd August.
  
  As per the Economic Survey 2015-2016, the expenditure by government (Central and state governments combined) on health as percentage of GDP was 1.3 per cent, according to the Minister of State for Health and Family Welfare, Anupriya Patel.
  
  She said as per World Health Statistics 2015, India's per capita government expenditure on health in 2012 was $60, while the US spent $4,153. As on March 31, last year, there was shortage of 3,002 doctors at primary health care centres in rural areas
  
  Based on the projection of the country's population for 2011-2016 by the Office of Registrar General of India, the per capita public health expenditure for 2014-15 (revised estimate) and 2015-16 (budgetary estimate) is estimated at Rs 1,117 and Rs 1,202 respectively.
  
• Rajya Sabha passes GST bill
  The Rajya Sabha on 3rd August passed the 122nd Constitution Amendment Bill to facilitate rollout of the Goods and Services Tax (GST) in the country.
  
  The GST Bill is aimed at bringing uniform tax regime in the country by subsuming state levies. Under it, a single rate of GST will replace Central Excise, State VAT, entertainment, entry and luxury taxes to ensure seamless transfer of goods and services. Now, the Bill will again go to the Lok Sabha and then ratified by at least 50 per cent of the states Legislative Assemblies, to become a law.
  
  According to Finance Minister Arun Jaitley:
  GST will become more efficient and there will be no tax on tax and evasion will become more difficult.
  
  Clarified that Centre will not have veto power in the proposed GST Council and said it would have only one third weightage in it.
  
  Earlier moving the Bill, Finance Minister Arun Jaitley termed the legislation as one of the most significant tax reforms in the country’s history. He said, the GST Bill will boost the economy which is now in a critical stage and put in place a uniform market in the country.
  
  Mr Jaitley said the bill will enable a seamless country-wide transfer of goods besides empowering the Centre and the states to increase their revenues. He said it will also bring down tax evasions and bring all transactions under the ambit of taxation. The Finance Minister said the GST will serve the interest of the federal system in the best possible manner.
  
• Centre aims to roll out GST from April 1 next year
  The Government has set the target of 1st April next year for roll out of the Goods and Services Tax, GST. The Union Finance Minister Arun Jaitley on 4th August unveiled a detailed road map for GST implementation. According to him…
  
  The government is aiming for an optimal rate of taxation though the final decision will be taken by the GST Council.
  
  As regards the impact of GST roll out on inflation, the tax rates will come down over the years and hence the prices of many commodities will also decline.
  
  Once GST is rolled out, doing business in India would be easier and it would help a large body of traders, business people and also the citizens.
  
• RBI eases norms in cheque dishonour cases of Rs 1 cr and above
  The Reserve Bank of India on 4th August relaxed cheque-book norms leaving it to the lender's discretion on whether to issue fresh cheque-books or not in cases of dishonour of 1 crore rupees and above.
  
  RBI said in a notification issued that banks should put in place an appropriate policy approved by the board or its committee taking into consideration the need to prevent misuse of cheque drawing facility and avoid penalising customers for unintended dishonour of cheques.
  
  The bank regulator also asked the banks to make the policy transparent and bring it to the knowledge of the customers. As per the existing directive, banks are not allowed to issue fresh cheque books in the event of cheque dishonour valuing 1 crore rupees and above on four occasions during a financial year for want of sufficient funds.
  
  Also, in such cases the bank may consider closing the current account at its discretion. RBI said it has reviewed these instructions and it will be now up to the discretion of banks how to respond in such cases.
  
• RBI sets up panel on household finance
  The Reserve Bank of India (RBI) has set up a committee to look at the various facets of household finance in India so as to benchmark India’s position against both peer countries and advanced countries and identify areas of priority for growth and change.
  
  The Committee will be chaired by Tarun Ramadorai, Professor of Financial Economics, University of Oxford, and will have representation from financial sector regulators, namely, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority apart from RBI.
  
  The terms of reference of the Committee include characterising and evaluating Indian households’ demands in formal financial markets (for assets such as pensions as well as liabilities such as home loans) over the coming decade; considering whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour (such as the large household allocation to gold).
  
• Inflation target fixed at 4% for five years
  The government on 5th August announced an inflation target of 4 per cent, plus or minus 2 per cent. The monetary policy committee, which will be set up soon, will have to adhere to the target till March 31, 2021, or else the central bank will have some explaining to do.
  
  This RBI's monetary policy review on August 9 could be the last one to set the repo rate. The notification, placed in Parliament by Minister of State for Finance Arjun Meghwal, has put to rest speculation over the inflation target. The government and the RBI had last year reached an agreement on a monetary policy framework that had set the inflation target at 4 per cent, plus or minus 2 per cent. However, there was no legal backing to it.
  
  The government in June notified rules for setting up the monetary policy committee, giving effect to amendments in the RBI Act. The inflation target was not notified that time, fuelling speculation the government might change it.
  
  Once the monetary policy committee is set up, it will set the policy interest (repo) rate with the objective of keeping inflation in this range. The RBI Act has been amended to state the primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
  
  The monetary policy committee will have six members, RBI governor, deputy governor and a central bank officer, and three nominees of the Centre. The RBI governor will have a casting vote but no veto. RBI Governor Raghuram Rajan recently said the committee should be set up before he stepped down early next month. The move is seen as government approval of Rajan's inflation-first monetary policy.
  
• Renovation, maintenance delays cost NTPC Rs. 1,911 crore: CAG
  The Comptroller and Auditor General (CAG) has found that delays in implementing renovation and modernisation of its power plants has had a financial impact of Rs. 1,911.16 crore for NTPC Ltd.
  
  In a report tabled in Parliament on 5th August, the government auditor said that NTPC lost the amount due to reduced tariff recovery, outages, avoidable expenditure, generation loss and excess coal consumption for delay in implementation of its renovation and modernisation policy.
  
  The report audited the financial year 2014-15. There was a total delay of three to 109 months in completing activities relating to R&M works in 19 out of 20 schemes selected for audit in nine power stations. Out of 335 contract packages, only 197 were awarded, 107 of these packages were completed of which 41 were delayed
  
  This led to reduced tariff recovery of Rs. 199.65 crore in four power stations and refund of tariff with interest of Rs. 23.42 crore, it added
  
  The report that delay in the renovation and modernisation policy led to avoidable or extra expenditure ofRs. 47.13 crore, generation loss of Rs. 269.78 crore and excess coal consumption of Rs. 881.89 crore.
  
  The CAG in its report also criticised Steel Authority of India Ltd for its declining market share. It found that during the years 2009 to 2015, steel consumption grew 30 per cent. However, SAIL’s market share fell to 14.2 per cent from 18.5 per cent.
  
• India to impose anti-dumping duty on imports of certain cold-rolled steel products
  India will impose anti-dumping duty on imports of certain cold-rolled steel products from four countries - China, Japan, Korea and Ukraine.
  
  Directorate General of Anti-Dumping and Allied Duties (DGAD), under the Commerce Ministry, in its preliminary findings, has found that 'cold-rolled flat products of alloy or non-alloy steel' has been exported to India from these countries at below-normal value.
  
  The DGAD has also recommended anti-dumping duties on hot-rolled flat products from six countries including China, Japan and Korea. Anti-dumping measures are taken to ensure fair trade and provide a level-playing field to the domestic industry.