ECONOMY AFFAIRS DECEMBER 2017

ECONOMY AFFAIRS DECEMBER 2017

• NK Singh appointed Chairman of 15th Finance Commission
   Former Expenditure and Revenue Secretary NK Singh will chair the Fifteenth Finance Commission. Former Economic Affairs Secretary Shaktikanta Das and adjunct professor of Georgetown University Anoop Singh will be its full- time members. Chairman of Bandhan Bank Ashok Lahiri and NITI-Aayog member Ramesh Chand will be part-time members. IAS officer Arvind Mehta will be the Secretary to the Commission. The Union Cabinet had on November 22 approved the setting up of the Fifteenth Finance Commission.
  
  The panel, which is a statutory body under Article 280(1) of the Constitution, will prescribe the formula for devolution of taxes between the Centre and States for the five years commencing on April 1, 2020. It is expected to submit its report by October 30, 2019.
  
  This time around, the Finance Commission will have to finalise its recommendations in a new setting — after the abolition of the Planning Commission and Plan and Non-Plan expenditure as well as the roll out of the Goods and Services Tax (GST).
  
  It will also review the current status of the finance, deficit, debt levels, cash balances and fiscal discipline efforts of the Union and the States and suggest a fresh fiscal consolidation roadmap. Significantly, Singh, who is a former Member of the Rajya Sabha, had recently chaired a committee to review the FRBM Act and goalposts.
  
  The panel has also been tasked with proposing measurable performance-based incentives for States based on deepening the GST net, population, progress in capital expenditure, sanitation and drinking water efforts as well steps to curb populist measures.
  
• PM Narendra Modi flags off Hyderabad Metro Rail
  Indian Prime Minister Narendra Modi dedicated to the nation Hyderabad Metro Rail on 28th November. Mr Modi unveiled a pylon at Miyapur metro railway station on the outskirts of Hyderabad to mark the formal inauguration of the first phase of Hyderabad Metro from Miyapur to Nagole.
  
  The stretch of 30 kilometres with 24 metro stations will be open for commercial operations from 29th November onwards.
  
• PM Modi, Ivanka Trump inaugurate Global Entrepreneurship Summit in Hyderabad
  Indian Prime Minister Narendra Modi on 28th November gave a clarion call to global Entrepreneurs to invest and take part in the Indian growth story. He said India has provided an enabling atmosphere by removing redundant laws and improving ease of doing business.
  
  He was addressing the 8th Global Entrepreneurship Summit after formally inaugurating the three-day event along with US President Donald Trump's advisor and daughter Ivanka Trump.
  
  Stating that several measures have been taken to provide enabling atmosphere in favour of entrepreneurship, Mr Modi said fiscal deficit has been contained and stringent measures have been taken against black money.
  
  The Prime Minister further said that by December next year, every household will be provided electricity through Sowbhagya programme. He said a comprehensive energy policy is in the pipeline.
  
  He further said infrastructure projects are progressing well and agriculture and food processing industry is flourishing in the country. Stating that India will not satisfy herself by the improvement of the world bank ranking to 100 from the 140, he said, the country will strive to achieve 50th rank.
  
  Mr Modi said India has been giving women honour and due respect from ancient times. Mr Modi said about 50 per cent of the loans under Mudra programme have been given to women.
  
  Ivanka Trump said without growth of women, humanity will not prosper. Strongly advocating that the cutting edge technology will help entrepreneurs, she asked them to be innovative and think to stand apart.
  
  Ivanka Trump will take part in two plenary sessions mainly on women entrepreneurship during the summit. She leads a delegation of entrepreneurs that has representation from 38 states of the US.
  
  Over 1500 delegates from 150 countries are taking part in the summit focusing on 'Women first-Prosperity for all'. Ten countries are being represented by all women delegations. Prime Minister Narendra Modi presented Ivanka Trump a wooden box of Sadeli craft.
  
  Sadeli craft is a highly skilled craft technique, native to Surat, of fabricating geometric patterns in wood. It was traditionally used for decorating doors, windows and furniture. It is now also used for embellishing jewellery boxes, containers and photo frames.
  
• Telecom Regulatory Authority of India upholds net neutrality
  The Telecom Regulatory Authority of India (TRAI) has upheld the basic principles of an open and free internet in its recommendations on net neutrality.
  
  Net neutrality means that telecom service providers must treat all internet traffic equally, without any regard to the type, origin or destination of the content or the means of its transmission.
  
  TRAI on 29th November recommended prohibiting Internet service providers from making any discrimination in traffic while providing web access by either blocking or throttling some apps, websites and services or by offering fast lanes to others.
  
  The telecom regulator's recommendations pave the way to end all sorts of discriminatory practices that telecom operators may exercise to differentiate among services. It has suggested changing licence terms of players to explicitly restrict any form of discrimination in Internet access based on content.
  
  TRAI has also restrained service providers from entering into pacts with any person which discriminates on content, protocol or user equipment.It has recommended that the Department of Telecommunication (DoT) may identify specialized services.
  
  However, the specialized services may be offered by the service provider only if they are not usable as a replacement of Internet access services. Internet of Things (IoT) as a class of services are not excluded from the scope of restriction on non-discriminatory treatment.
  
  However critical IoT services identified by DoT would be automatically excluded. The other recommendations include reasonable measurement for traffic management by Internet access service provider.
  
  In finalising these recommendations the TRAI issued a pre-consultation paper in May last year and followed it up with a detailed consultation paper on 4th of January this year focussing especially on questions of requirements, design, scope and implementation of net neutrality framework in India.
  
• Ivanka Trump, Cherie Blair, Chanda Kochhar share common ideas at GES
  Advisor to US president Donald Trump, Ivanka Trump, and wife of former British Prime Minister Cherie Blair, and ICICI bank MD, Chanda Kochhar have shared common ideas that cutting edge technology and a strong family support will take forward women Entrepreneurship.
  
  They took part in a plenary panel discussion along with Karen Hughes Quntos of Dell company on 29th November on Innovations in Workforce development and Skills training during the ongoing GES in Hyderabad.
  
  The plenary session was moderated by Telangana IT minister K Taraka Ramarao. He stressed on 3 Cs for growth of women entrepreneurs they include confidence, capacity and capital.
  
  Ivanka laid emphasis on technology as it reduces the barriers in starting businesses for women entrepreneurs. She said technology opened tremendous opportunities for women.
  
  She also added that US government is actively considering a policy in support to providing enabling environment for women entrepreneurs by New Year are so.
  
  Taking part in the deliberations, Cherie Blair said using IT advantages will help women to reach their goals. Referring her own experience, she said by taking advantage of technology, she is reaching out women in need across the world.
  
  Laying emphasis on strong family support for each step that women take, Chanda Kochhar said her bank is providing wide training programmes that bridge the digital divide. She said one lakh youth are being trained every year in various sectors out of which 50 percent are women.
  
  In another panel discussion, Badminton National coach Pullela Gopichand and Mithali Raj and Sania Mirza opined that community has to connect with the champions and sports winners.
  
  Gopichand pointed out that the country should have a vision to encourage local sports as sports itself is local one. Sports need to be played at regional level and asked intellectuals to put their brains together to promote this.
  
  Harsha Bhogley who moderated the discussion said women are doing well but athletes are facing tough situations.
  
  There are discussions held on various topics such as future of cinema, mentoring and networking, innovations to bridge the digital divide, investments in healthcare and Agritech Matters- Feed billions by harvesting technology are among others on 29th November on the GES.
  
• ADB approves $500-mn loan for rural roads in five states
  Multilateral funding agency Asian Development Bank (ADB) on 29th November said it will provide a $500 million loan to improve rural road connectivity in five states, including Assam and West Bengal.
  
  The board of directors of ADB has approved the multi-tranche financing facility (MFF) for the 'Second Rural Connectivity Investment Programme' to improve rural roads in five states of India
  
  Under this project, ADB will invest to construct and upgrade over 12,000-kilometre rural roads in Assam, Madhya Pradesh, Chhattisgarh, Odisha and West Bengal. It will also support state governments to improve rural road maintenance and safety.
  
  ADB is building on the success of previous assistance for rural roads in India. The agency will work closely with the government to improve connectivity for the rural people to access markets, health centers, education and other opportunities
  
  In the first tranche, ADB is expected to invest $250 million in December for construction of initial 6,254 km all-weather rural roads in these states.
  
  This leg of the ADB loan assistance for rural roads builds on the first 'Rural Connectivity Investment Programme in 2012' financing $800 million MFF to add about 9,000 km all-weather rural roads in these five states.
  
• Telangana govt to set up World’s first IT Campus for differently abled persons
  The Telangana State Government will be setting up the World’s first IT Campus for differently abled persons on the occasion of the World Disability Day to be observed on 3rd December.
  
  The state Government has entered into an agreement with a private entrepreneur to set up the Information and Technology campus to focus on creating employment opportunities for persons with disabilities.
  
  The Department of IT in a note said the proposed campus will be set up in an area of 10 acres in eth IT park developed by the state Government near the Hyderabad international airport. The Government also said the campus will have all the amenities like Training, Residential facility and Delivery centers that will cater to various clients both domestic and International. The campus is expected to create two thousand jobs in next 5 years by providing apt training.
  
• India saved $15 billion on energy subsidies in past two years: Report
  India has saved over $15 billion on energy subsidies in the past two years, on the back of reforms to curb wasteful consumption in oil and gas subsidies along with the decrease in global oil prices, said a report by the International Institute of Sustainable Development (IISD).
  
  According to the report, the total value of energy subsidies from the central government has declined substantially between financial years (FY) 2014 and 2016- from Rs 2,16,408 crore ($35.8 billion) to Rs 1,33,841 crore ($20.4 billion).
  
  The report reveals that India has been steadily increasing central government subsidies on electricity transmission and distribution, while reducing subsidies on oil and gas over the past three years. Central government subsidies for electricity transmission and distribution increased from Rs 40,331 crore ($6.7 billion) in 2014 to Rs 64,896 crore ($9.9 billion).
  
  As a member of the G-20, India had in 2009 committed to “phase out inefficient fossil fuel subsidies that encourage wasteful consumption, while providing targeted support for the poorest.” In 2016, transmission and distribution became the main recipient of energy subsidies in India.
  
  These figures, however, do not include the even larger volume of state government subsidies that have been provided through the government’s UDAY program that provided an additional Rs 1,70,000 crore ($25 billion) over 2016 and 2017.
  
  Total subsidies to coal mining and coal-fired electricity have remained stable due to a slight decline in the said period and stood at Rs 14,979 crore ($2.3 billion) in FY16.
  
  In 2016, around Rs 28,500 crore was collected through the Clean Environment Cess- a tax on coal whose revenues are allocated to a clean energy fund. However, out of this total sum, only Rs 9,310 crore was utilised for clean energy development. In the same year, India incurred an expenditure of Rs 14,990 crore to coal subsidies, it added.
  
• India’s GDP growth at 6.3% in 2nd quarter
  GDP growth rate at constant prices during the second quarter of this fiscal is estimated at six point three per cent which is up from five point seven per cent over the first quarter. It was 7.5 per cent in the corresponding period of last year.
  
  Releasing GDP data in New Delhi on 30th December, Chief Statistician of India T C A Anant said the GDP growth has seen a reversal trend from declining trend in the last five quarters.
  
  He said, this growth happened on the back of good growth in manufacturing sector, electricity, gas, water supply and other utilities. Mr Anant said, the manufacturing sector in the second quarter of 2017-18 grew by 7 per cent. Mr Anant said, agriculture, forestry and fishing sectors are estimated to have grown by 1.7 per cent.
  
• 50 new airports to come up under Udan scheme for regional connectivity: Finance Minister
  Finance Minister Arun Jaitley said India needs to upgrade its infrastructure in coming two decades to become a developed economy. Addressing a Defence Estate function in New Delhi, Mr Jaitley said, no one can expect infrastructure to come out of thin air.
  
  He said the users have to pay for better infrastructure. Saying tax non compliant is impediment on country's development, the Finance minister stressed that government is making more efforts to make system more compliant.
  
• NITI Ayog announces its support to women entrepreneurs
  NITI Ayog on 30th November announced its support to women entrepreneurs in a big way. Addressing a press conference on the conclusion of the Global Entrepreneurship Summit in Hyderabad, Niti Ayog CEO Amitabh Kant said, Atal tinkering labs will be specially set up at women-owned schools to promote innovation and instilling entrepreneurship among women at an early stage.
  
  He said, a special cell will be set up to handhold women entrepreneurs and assist them to get fund. He further said, the Atal innovation will have a tie-up with T- Hub, the incubation centre of Telangana.
  
  Earlier, Telangana IT Minister Taraka Ramarao announced that a separate We- Hub, Women entrepreneurs Hub, will be set up to encourage entrepreneurship among women. He also announced a corpus fund of 50 crore rupees to extend assistance to women entrepreneurs.
  
  The summit witnessed nearly 2000 delegates from over 140 countries including 500 investors. Prime Minister Narendra Modi inaugurated the GES on 28th November. US President’s Advisor Ivanka Trump led a delegation of nearly 40 entrepreneurs to the Summit.
  
• Union Cabinet has approved setting up of National Nutrition Mission: Maneka Gandhi
  The NNM, as an apex body, will monitor, supervise, fix targets and guide the nutrition related interventions across the country. According to Women and Child Development Minister Maneka Gandhi, the Government is committed to ensure that every child and pregnant woman and lactating mother gets adequate nutrition to eliminate malnutrition and stunting.
  
  The NNM will strive to reduce the level of stunting, under nutrition, anemia and low birth weight babies. It will create synergy; ensure better monitoring and issue alerts for timely action. Ms Gandhi said, food which is being served to children will be monitored by the Ministry.
  
  She said, the government will encourage states/ UTs to perform, guide and supervise the line Ministries and states/ UTs to achieve the targeted goals. She said, results of setting up National Nutrition Mission will show up within a year.
  
  The Women and Child Development Ministry has already designed a real-time monitoring system ‘ICDS -CAS’ to track nutrition goals and Anganwadi functionality.
  
• Central Government eases mine auction rules
  More than two years after it introduced auctions as a means to allot mining rights for major minerals, the Centre on 30th November significantly eased the auction rules in a bid to rekindle investor interest in a process that has been marred by failed auctions.
  
  While 33 blocks of minerals have been successfully auctioned since May 2015, when the mineral auction rules were introduced, as many as 60 auctions have flopped for lack of interest. The development assumes significance as the Centre is looking to auction more than 100 blocks over the next 15 months with a potential value of about Rs. 2 lakh crore.
  
  States can now allocate blocks even if there are less than three bidders in the fray during the second round of auction, as opposed to the existing rule that requires the process to be annulled if there are less than three bidders in the first three rounds.
  
  For an average annual output of up to Rs. 2 crore, bidders now need a net worth of just Rs. 0.5 crore. Similarly, for an average annual output of up to Rs. 20 crore, the net worth norm has been slashed from Rs. 40 crore to Rs. 10 crore.
  
  Rigid end-use conditions on minerals excavated from a block, have been done away with. Miners can now dispose of 25% of unused low-grade ore.
  
  The Centre aims to spur increased interest in the upcoming auctions — 34 mineral blocks are in the pipeline for the rest of 2017-18. The new norms also have a clause to discourage miners from ‘squatting’ on mine leases.