ECONOMY AFFAIRS JANUARY 2013

ECONOMY AFFAIRS JANUARY 2013

• The government on 1 February, granted Maharatna status to BHEL and GAIL, a development which will provide them greater financial and functional autonomy and also ensure better valuation for shares of the two PSUs. A Maharatna firm can take investment decision of up to Rs 5,000 crore without going to the government. For Navratna firms, this limit is Rs 1,000 crore. The apex committee, headed by Cabinet Secretary Ajit Kumar Seth, has approved both the proposals for awarding the status to these two PSUs as they meet the eligibility criteria to qualify for the status. Both the companies meet the eligibility criteria in terms of net worth, turnover and net profit. A company qualifying for the Maharatna status should have an average annual turnover of more than Rs 25,000 crore in the last three years, according to the Department of Public Enterprises guidelines. Among others, the PSU must have a net worth of over Rs 15,000 crore and net profit of more than Rs 5,000 crore during the last three years. The development will help the government get a better price for its equity in BHEL which will be offloaded as part of the disinvestment programme. The government is proposing to sell the equity in the power equipment major in the next fiscal.
  
• India’s overall food grain production in the 2012-13 crop marketing year that would end in June 2013 was expected to be around 250 million tones, nine million tones less than last year’s revised record output of almost 259 million tones because of low production during the kharif sowing season, Agriculture Secretary Ashish Bahuguna said on 29 january. According to the government’s first advanced estimate, food grain production during the 2012-13 kharif season is expected to be almost 9.8 per cent less than the kharif production of 2011-12 because of an uneven southwest monsoon in most parts of the country. However, production of wheat during the ongoing rabi harvest season is expected to near 2011-12’s harvest of around 94 million tones. According to official data, the area sown under wheat has declined to 29.4 million hectares so far in the current rabi season, from 29.5 5 million hectares in the year-ago period. Rabi (winter crop) sowing starts from October onwards and harvesting begins from February-end. The government has kept a conservative production target for wheat at 86 million tones for the current year. States like Maharashtra, Andhra Pradesh and Tamil Nadu are likely to be affected as area under rabi crops is lower, while Karnataka, Rajasthan and Gujarat (which suffered drought during the Kharif season) are doing well. Sowing of crops like wheat, rice, maize and oilseeds like soybean is taken up well by farmers as the markets for these commodities are developed. However, the same is not the case with minor oilseeds like sunflower and cereals like jowar and bajra.
  
• Government on 31 January, revised the economic growth for fiscal 2011-12 to 6.2% from the earlier estimate of 6.5%.However, as per the first revised estimates of national income, consumption expenditure, saving and capital formation, the GDP (Gross Domestic Product) for the fiscal 2010-11 has been revised upwards to 9.3% from 8.4%."GDP at factor cost at constant (2004-05) prices in 2011-12 is estimated at Rs 52, 43,582 crore as against Rs 49, 37,006 crore in 2010-11, registering a growth of 6.2% during the year as against a growth of 9.3% in the year 2010-11," the estimates showed. The estimates were released by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation for 2011-12, along with second revised estimates for the year 2010-11 and third revised estimates for 2009-10. At current prices, CSO said that GDP in 2011-12 is estimated at Rs 83, 53,495 crore as against Rs 72, 66,967 crore in 2010-11, showing an increase of 15%, as against an increase of 19% in the previous fiscal. The CSO said that the per capita income in real terms (at 2004-05 prices) is estimated at Rs 38,037 for 2011-12 as against Rs 36,342 in 2010-11, registering an increase of 4.7% during the year, as against an increase of 7.2% during the previous year. The per capita income at current prices is estimated at Rs 61,564 in 2011-12 as against Rs 54,151 for the previous year, depicting a growth of 13.7%, as against an increase of 17.1% during the previous year. The data further said that the growth in the GDP during 2011-12 has been achieved due to expansion in financing, insurance, real estate and business services (11.7%), transport, storage and communication (8.4%), electricity, gas and water supply (6.5%) and trade, hotels and restaurants (6.2%).
  
• The government on 31 January approved the Rs 200-crore revival package of ailing Lucknow-based public sector undertaking Scooters India Ltd (SIL) that includes debt waiver of nearly Rs 112 crore. The Cabinet also decided to hike salaries of employees of the two-wheeler maker. Their retirement age has also been increased to 60 years. According to sources, the clearance for revival has come in view of implications relating to the fate of about 1,000 employees of Scooter India, though the Finance Ministry had expressed reservations about providing such a package to the ailing unit. According to an official statement, the revival package will result in improvement of SIL's productivity through enhanced capacity utilization and improvement in efficiency. This would also lead to improved sales and employment generation in the area. Besides, it stated, the increase in production and sales will result in enhanced contribution to the exchequer. The automobile company has been incurring losses since 2002-03. In March 2009, the company was declared sick. SIL's net loss stood at about Rs 20 crore during the 2011-12 fiscal. Incorporated in 1972, SIL initially manufactured scooters under the brand name Vijai Super for the domestic market and Lambretta for overseas markets.
  
• The Cabinet Committee on Economic Affairs on 31 January, gave its approval to authorize ONGC Videsh Limited (OVL) to acquire Participating Interest (PI) owned by Hess Corporation's wholly-owned subsidiaries in the upstream and midstream oil and gas assets in Azerbaijancomprising 2.7213 percent PI in the Azeri Chirag Guneshli (ACG) contract area and 2.36 percent PI in Baku-Tbilisi-Ceyhan (BTC) pipeline for an investment of US$ 1001 million, plus certain adjustments including working capital, interest from the economic date and other defined elements on cash sink basis, and also authorized OVL to incur expenses so as to keep the total exposure up to the approved amount i.e. US $ 1001 million at all times. The acquisition shall provide OVL, oil production of about 1 Million Ton per year for about a decade. In addition to oil revenue, the investment would enable OVL to enter into Azerbaijan, which is rapidly emerging into a strategically important country in the CIS region. Acquiring a stake in the strategic BTC pipeline would provide OVL the opportunity to enhance its portfolio around the region and transport crude from future assets, which the company may acquire in the Caspian Sea in the future.
  
• SpiceJet, the low-cost carrier, will become the only private Indian airline to fly to China starting on 8 February, when it will launch four weekly flights from New Delhi to Guangzhou. The first flight by an Indian airline to the southern port city , home to one of the biggest Indian expatriate communities in China as well as the centre of the country’s manufacturing heartland , will leave New Delhi on February 8.While much of India's trade with China is driven by the southern manufacturing provinces, Shanghai is the only major southern mainland city that is connected directly to India, through Air India and Air China flights. The Chinese carrier operates 14 weekly flights to New Delhi, Mumbai and Bangalore, from Shanghai, Chengdu and Beijing, while Air India flies from Shanghai to New Delhi. The lack of adequate direct air connectivity between India and China has been seen by officials in both countries as an obstacle to boosting closer commercial engagement, even as trade has seen rapid growth this past decade. China became India’s biggest trade partner in 2011, with trade reaching $73 billion. Bilateral trade fell to $66 billion last year on account of the downturn.Spice Jet is looking to target the business community and will focus its China strategy on the southern part of the country. The airline is also looking into launching flights to Macau and Zhuhai, besides Hong Kong. Jet Airways became the first Indian carrier to fly to China when it launched a flight from Mumbai to Shanghai and onward to San Francisco in 2008. The flight was subsequently discontinued amid lower than expected load factors and after the carrier began to rationalise its routes on account of financial troubles.
  
• Reserve Bank of India slashed Repo Rate to 7.75 Percent and CRR to 4 Percent
  The Reserve Bank of India on 29 January 2013 slashed its key interest rates by 0.25 per cent and released 18000 crore rupees additional liquidity into the system to perk up growth through reduced cost of borrowing. RBI in its third quarter monetary policy review surprised the market by cutting short-term lending rate called repo, by 0.25 per cent to 7.75 per cent and Cash Reserve Ratio (CRR) by similar margin to 4 per cent. The repo rate cut will reduce the cost of borrowing for individuals and corporates, whereas the reduction in CRR, which is the portion of deposits that banks have to park with RBI, would improve the availability of funds. Unveiling the policy review in Mumbai, RBI stated that the stance of monetary policy in this review is intended to provide an appropriate interest rate environment to support growth as inflation risks moderate. CRR cut will have impact on long term interest rates. The RBI, however, has reduced the growth projections for the current financial year to 5.5 per cent from its earlier estimate of 5.8 per cent.
  On inflation, it moderated the rate to 6.8 per cent for March-end from earlier projection of 7.5 per cent. The repo rate, which was cut last in April 2012, stands revised at 7.75 per cent with immediate effect, while the liquidity infusing CRR stands at 4 per cent effective February 9th. Inflation has been the prime inhibiting factor that has prevented the RBI from cutting repo rate in the last nine months, which have seen a host of liquidity infusing measures like a cut of 1.75 per cent in CRR, government bond buybacks and a one percentage point cut in SLR. RBI however, added the caveat stating that the stance will depend on how the government manages the risk from the twin deficits on the fiscal and current account side, and the evolving growth-inflation dynamics. Stating that the widening current account deficit, which represents the differential between the foreign exchange, earned and expended through trade and services, is a big concern, RBI said the number is expected to widen in third quarter, beyond the 5.4 percent in the preceding quarter.
  
• Union Ministry for Commerce launched eBiz Portal to Provide one Stop Shop for all Investment
  The Union Minister for Commerce on 28 January 2013 launched an eBiz portal at the CII Partnership Summit in Agra . The portal is India’s Government-to-Business (G2B) portal developed by Infosys in a Public Private Partnership (PPP) Model. This Mission Mode Project will mark a paradigm shift in the Government’s approach to providing Government-to-Business (G2B) services for India’s investor and business communities. In order to enable businesses and investors to save time and costs and in order to improve the business environment in the country, an online single window was conceptualized in the form of the eBiz Mission Mode Project under the National e-Governance Plan. The project aims to create a business and investor friendly ecosystem in India by making all business and investment related regulatory services across Central, State and local governments available on a single portal, thereby obviating the need for an investor or a business to visit multiple offices or a plethora of websites. The core value of the transformational project lies in a shift in the Governments’ service delivery approach from being department-centric to customer-centric. E-Biz will create a 24x7 facility for information and services and will also offer joined-up services where a single application submitted by a customer, for a number of permissions, clearances, approvals and registrations will be routed automatically across multiple governmental agencies in a logical manner. An inbuilt payment gateway will also add value by allowing all payments to be collected at one point and then apportioned, split and routed to the respective heads of account of Central and State agencies along with generation of challans and MIS reports. This payment gateway is the first of its kind designed in India and can become a universal payment gateway for all e-Governance applications. The eBiz Project is the first of its kind ever implemented in the country. It marks the highest level of maturity in web-based eGovernance applications as it strives to achieve horizontal integration across various verticals of Central government, State governments and Para-statal agencies. The first phase of the project, which was being launched, provides an interactive tool that helps investors assess the Licenses and Permits requirements while setting up and operating a business in India. The License & Permit Information wizard will provide authentic information 24X7 to investors and businesses by providing answers to questions in an interview style format. 
• Diesel prices to be hiked 40-50 paise every month
  Diesel prices will be hiked by 40-50 paise per litre every month till losses on the nation's most used fuel are completely wiped out, oil minister M Veerappa Moily said on 2 February. "Until further orders, oil marketing companies can increase it (diesel price) by 40-50 paise (per litre) every month," he told reporters here. The government had on January 17 decided to move towards deregulating or freeing diesel prices from state control and gave powers to state-owned oil firms to raise prices in small measures every month till all of their losses are wiped out.
  
• Beverages giant Coca-Cola on 22 january, announced $ 100,000 fund for a WEF initiative aimed at helping young people take action on issues they care about in more than 200 cities worldwide. The Global Shapers Community, set up by the World Economic Forum in 2011 with the aim of engaging young people as active agents of change, is also supported by DST Global Advisors and Reliance Industries. The funding is offered in a competition aimed at more than 1,700 entrepreneurs, social activists and "positive disruptors" who make up the 'Global Shapers Community', WEF said in a release. "It will provide seed financing for Shapers' projects that address some of the most pressing problems in their communities," it said. Muhtar Kent, Chairman and CEO of Coca-Cola Company said a challenge to spark and expand innovative ideas from the young leaders is what the world needs.
  
• The International Monetary Fund (IMF) on 23 January 2013 projected that the economic growth rate of India in 2013 would be 5.9 percent. The IMF also projected an increased growth rate of 6.4 percent for 2014 looking forward towards the gradual strengthening of the global expansion in India’s context. In its update at the World Economic Forum , the IMF also forecasted that the global economic growth rate would be 3.5 percent, little higher than the 3.2 percent estimated earlier. As per the report of IMF, uncertainty in policy making and supply bottlenecks were one of the most visible causes that hampered the growth aspects of the economies like India and Brazil. It also stated that the scopes of easing the policy to any further extent have also gone down in these countries. The International Monetary Fund (IMF) is an organization of 188 countries that works for fostering the global monetary cooperation, promote high employment and sustainable economic growth, facilitate international trade, secure financial stability and reduce poverty around the world.
  
• FDI Inflow Decreased to Two-Year Low in November 2012
  The inflow of foreign direct investment (FDI) in India decreased to around 2-year low at 1.05 billion US dollar in November 2012 because of uncertainties of the global economies. Back in November 2011, the FDI was worth 2.53 billion US dollar. The Department of Industrial Policy and Promotion (DIPP) announced that from April-November period 2012-13, inflows of FDI decreased by around 31 percent to 15.84 billion US dollar from 22.83 billion US dollar in 2011-12. The reason why inflow of FDI decreased was because of the issues arising in the global economic scenario. Economic slowdown as well as absence of political consensus on FDI-associated issues is the main causes of decline in FDI inflow. During 2012-2013, the sectors which remained on the positive side of the FDI inflows included services, hotel and tourism, metallurgical, construction and automobile. In India, maximum FDI inflow came from Mauritius (USD 7.2 billion), Japan (USD 1.56 billion), Singapore (USD 1.5 billion) the Netherlands (USD 1.09 billion) and the UK (USD 615 million). The FDI declined to a low level earlier in January 2011 when the inflow was recorded to be 1.04 billion dollar. Foreign direct investments play a very crucial role in India’s economy. India has a requirement of FDI inflow of around 1 trillion US dollar in next 5 years time so that it can refurbish infrastructure sectors like highways, airports and ports. Decrease in the FDI inflow will pressurize the balance of payment of the country, while also impacting the Rupee.
  
• IMF: World Economic Growth Rate would be 3.5 percent in 2013
  International Monetary Fund (IMF) in at update to World Economic Outlook (WEO) on 23 January 2013, projected that the global economic growth rate would be 3.5 percent in 2013. The update mentioned that the global economic growth would strengthen gradually as the limitations of the economic activities have seen a positive note with the start of the year.
  Some of the major projections of IMF are
  • Global growth would reach 3.5 percent in 2013, from 3.2 percent in 2012
  • Crisis risks would narrow down but the downside risks will remain crucial
  • Main sources of growth would be the emerging markets, developing countries and the United States
  
  
• Government to auction 700 Mhz spectrum for 4G services next year
  The government on 21 January said it will auction spectrum in 700 Mhz band, which is used for offering high-speed Internet services through fourth generation technologies, in 2014. "We are going to auction the 700 band in any case by 2014," Telecom Minister Kapil Sibal said during the commissioning of country's first lab for measuring specific absorption rate (SAR) for mobile handsets. The 700-Mhz spectrum band ranges from 698 Mhz to 806 Mhz and has been identified by the International Telecommunication Union for telecom services. "We have set up a lab in the country so that mobile phones can be tested here for electromagnetic radiations," Sibal said. He added more such labs will be set up across the country starting with Mumbai.
  
• Aiming at providing hygienic condition at rail premises, the Railways on 22 January, has decided to undertake cleanliness drive at about 100 important stations across the country and equip maximum number of coaches with bio-toilets. Railway Minister Pawan Kumar Bansal has written to General Managers of all zonal railways to ensure cleanliness at 100 stations with more than 10 lakh population and with religious and tourists importance. The stations have been identified for taking up cleanliness drive in the first phase, Railway Minister Pawan Kumar Bansal said at the Consultative Committee meeting held in New Delhi on 22 January. The agenda of the meeting was 'Railways ongoing projects'. Bansal said that more and more coaches will be provided with bio-toilets and the washing aprons are being provided at the stations. Emphasising on cleanliness, he also informed the committee that a team of officers of Railway Board will be formed who will go around the country to undertake inspections to ensure cleanliness. Referring to the catering services, the minister said that efforts are on to provide quality catering services at station and in running trains. The committee was informed that new tenders are being floated and base kitchens are being constructed to cook food in the most hygienic environment. Expressing concern over the accidents at unmanned level crossings, Bansal said that railways is constantly working to eliminate such crossings and cooperation of state governments is being sought in this regard.
  
• State Bank of India (SBI) will open its second branch in China in the north-eastern port city of Tianjinin February, to cater to the growing trade with India, particularly from the northern part of the country. While China’s more prosperous southern provinces drive much of the annual $66 billion bilateral trade, SBI officials believe the increasing trade from northern China and particularly through the fast-developing trade hub of Tianjin will provide a platform to grow the operations of the bank’s second China branch. SBI is also considering opening a third office in the southern port city of Guangzhou. SBI Shanghai, in 2010, became the first Indian bank to acquire a licence from Chinese authorities to do business in the local Renminbi (RMB) currency. Dinesh Sharma, CEO of the SBI Shanghai Branch, said the Tianjin branch would open towards the end of February. Under Chinese rules, banks have to go through a five-year waiting period before they can acquire an RMB licence. The Tianjin branch will open with $47 million capital. SBI Shanghai operates with $76 million capital, including 300 million RMB.
  
• Union Government of India increased Import Duty on Gold and Platinum by 2 Percent
  The Union Government of India on 21 January 2013 hiked the import duty on Gold and Platinum from 4 percent to 6 percent. The step of the Government came in effect to control the import of the precious metals leading a widening gap in the Current Account Deficit of the country as the import of gold has shown tumbling effects on different economic fronts and has also played a major role in distortion of the balance of trade. The Government has also linked the Gold ETFs (Exchange Traded Funds) along with the Gold Deposit Schemes, so that the supply of the physical gold in the market can be increased. These regulations and increased in the import duty would also show changes on the customs duty as well as the excise duty of gold ores, refined gold, gold dore bars and more. Within a year, the import duty on gold has been hiked for third time. Before this, the government increased the duty on import of gold from 1 percent to 2 percent in January 2012 and it doubled the import duty on standard gold from 2 percent to 4 percent in March 2012.
  
• The Apparel Training & Design Centre (ATDC) under the Education & Training Initiatives of Apparel Export Promotion Council (AEPC) is going to set up India’s first ‘Technology Innovation Research Centre’ at the ATDC-Training of Trainers’ Academy,Gurgaon, in collaboration with JUKI India Pvt. Ltd. This Centre will demonstrate leading edge technologies and undertaking applied research. The ATDC-JUKI TECH Innovation Centre is an important initiative to strengthen the Apparel Industry, especially the SMEs, to adopt new technologies for increasing productivity, efficiency and quality for better price realisation and better global competitiveness. The Centre will be launched by Textiles Secretary Smt. Kiran Dhingra, IAS on 17 January. The ATDC-JUKI TECH Innovation Centre will be a platform where industry and academia can focus on showcasing and demonstrating leading edge technology and carrying out applied ‘Research’ which is a key word in SMART (Skills for Manufacturing of Apparel through Research and Training). Applied ‘Research’ combined with technology training can become a potent force to catalyse advancement of apparel production techniques and praxis, that would be relevant for India’s apparel manufacturing environment.
  
• Amidst a string of varying growth numbers being projected by multilateral institutions, a report by the United Nations has estimated the Indian economy to grow by 6.1 per cent in 2013, marking a recovery from the decade-old slowest pace of 5.5 per cent in 2012. The UN, in its report titled ‘World economic situation and prospects 2013’ (WESP), released in New Delhi on 16 January, said: “GDP growth in India will accelerate to 6.1 per cent in 2013 and 6.5 per cent in 2014 as a result of stronger growth of exports and capital investment... Investment demand is expected to respond to a more accommodative monetary policy stance and slightly improved business confidence. “The WESP noted that India’s economy, representing almost three quarters of the South Asian region’s GDP (gross domestic product), slowed markedly in the past years with annual growth declining from more than 9 per cent in 2010 to 5.5 per cent in 2012, the slowest pace in 10 years. Releasing the report, United Nation’s ESCAP (Economic and Social Commission for Asia and the Pacific) Chief Economist Nagesh Kumar, however, viewed that India had a huge growth potential in the long term. “India and China are playing a major role in the growth of world economy,” he said. As for the South Asian region as a whole, the report pointed out that economic growth during 2012 also fell to its lowest pace in a decade. After growing by 5.8 per cent in 2011 South Asia’s gross domestic product expanded by only 4.4 per cent in 2012.
  
• The Implementation of GAAR deferred by 2 Years, to Come into Force from 1April 2016
  The implementation of General Anti Avoidance Rules (GAAR) was deferred by two years by the government of India. It will now come into force from 1 April 2016. Earlier, the provisions of GAAR were to be implemented from 1 April 2014. GAAR will not apply to those Foreign Institutions Investors, FIIs who are not taking any benefit under an agreement under the Income Tax Act. Besides, it will also not apply to non-resident investors in FIIs. The Parthasarathi Shome Committee in its final report submitted to Finance ministry on 30 September 2012 had suggested that GAAR should be deferred by three years. The report was made public on 14 January 2013. Union Government accepted major recommendations of the Shome Committee with some modifications. Shome Committee was set up by Prime Minister Manmohan Singh in July 2012 to address the issue of GAAR.
  
• Ban on export of processed food products lifted
  Cabinet committee on economic affairs, on17 January, lifted ban on exports of processed foods and value added agricultural products. These include wheat of muslin flour, cereal flours, grouts, meal pellets and grains, milk products including casein and its products, butter and other fat derivatives from milk and dairy spread, cheese and curd and value added products of onion and peanut butter. The move will give a push to India’s sagging merchandise exports and is estimated to add $5 billion to exports over the next two year with West Asia identified as a key market for processed food from India. Besides, it will help Indian exporters to move up the value chain as well as create additional employment in the country. At present, India’s major agricultural exports comprises of raw or primary produce and unprocessed or semi processed agriculture commodities, which are susceptible to restrictions owi¬ng to various reasons such as bad weather conditions, deficient or delayed rainfall and food security issues. “The exports of processed and value added products constitute a very miniscule portion of the overall exports, and hence their continuation would not affect the availability in the domestic market owing to very marginal processing capacity in the country. Always open policy of this sector will not only help reduce wastage of perishable products but also encourage value addition,” a statement from CCEA said. For long, there has been no consistent policy on exports of agricultural products in India, as a result of which the overseas buyers were reluctant to import from India to meet their domestic requirement year-after-year. Even for the raw or primary agricultural pro¬ducts, India has been adopting switch-on and switch-off approach citing issues of domestic food security. Industry experts feel that the decision will now bring clarity on India’s stand on exports of proc¬essed food and agricultural products and help generate additional exports in coming years.
  
• Union Cabinet Approved 50 Percent Reduction in the Reserve Prices for CDMA Spectrum
  The Union Government on 17 January 2013 approved a 50 per cent reduction in the reserve price of spectrum used by CDMA mobile operators. Spectrum auction, for both GSM and CDMA, is supposed to be completed by 31 March 2013 and thereafter the markets will decide how much revenue the government will get. With the reduction of reserve price to 50 percent pan-India 5MHz of 800 MHz spectrum (CDMA radio waves) will now cost 9100 crore rupees. It was witnessed that auction of CDMA spectrum that took place in November 2012 did not attract bidders due to high reserve price. The reserve price set was 11 times higher than what operators paid in 2008. Earlier CDMA spectrum price fixed by government was priced at 1.3 times more than the GSM spectrum in 1800 Mhz band. The Cabinet has already approved a 30 per cent cut in the reserve price of 1,800 MHz band spectrum used for offering GSM services. The Supreme Court has recently allowed the companies whose licences were cancelled to continue operations till 4 February 2013 when the government is supposed to inform it of the final reserve or minimum price for the spectrum sale.
  
• The Cabinet Committee on Economic Affairs on 10 January, approved the disinvestment of 10 percent paid up equity in Engineers India Ltd. (EIL) out of its equity capital holding of 80.40 percent through a prospectus based Further Public Offering (FPO), in the domestic market as per SEBI Rules and Regulations. After this disinvestment, Government of India’s shareholding in the company would come down to 70.40 percent. The paid up equity capital of the company, as on 31st March, 2012 is Rs.168.47 crore. EIL is a listed “Mini-Ratna” Central Public Sector Enterprise under the administrative control of the Ministry of Petroleum and Natural Gas. It is one of India’s largest companies to provide design, engineering and related project management and consultancy services for the hydrocarbon sector and the process plants industry in the country.
  
• Dr M Veerappa Moily, Minister of Petroleum and Natural Gas, launched on11 january, new IT/web enabled initiatives to make distribution of domestic LPG more customer friendly and enhance transparency. Speaking on the occasion, he said, currently, the three OMCs together home-deliver over 30 lakh cylinders everyday across the length and breadth of the country, including far-flung areas like Leh and the Andaman & Nicobar Islands, making it a mammoth and challenging marketing exercise. The Government of India has launched new initiatives, Project “Lakshya”, in the LPG business focusing on greater customer empowerment, better subsidy administration, enhanced transparency in the distribution chain; along with a slew of IT-based customer service initiatives. With the launch of “Transparency portal”, the Minister said, customers have already been empowered to know their consumption and enabled civil society activists to look through and flag anomalies in the distribution of LPG cylinders. This effort has started bearing fruit.
  
• The Union Cabinet on10 January 2013 approved a proposal of infusing 12517 crores rupees in public sector banks so that bank could enhance the lending activity and meet the capital adequacy norms. As per the Finance Minister P Chidambaram about 9-10 public sector banks are going to be benefitted from the capital infusion programme. Also, the name of the banks, the amount for each bank and terms of the conditions will be decided in consultation with them at the time of infusion. The government is supposed to Provide capital funds to PSBs during the year 2012-13 to the tune of 12517 crore to maintain their Tier-l CRAR (capital to risk-weighted assets ratio) at comfortable level. The need for that is to make the PSU remain obedient with the stricter capital adequacy norms under BASEL-III as well as to support internationally active PSBs for their national and international banking operations undertaken through their subsidiaries and associates. In principle approval of the Cabinet is accorded for need based additional capital infusion in PSBs from the year 2013-14 to 2018-19 for ensuring compliance to Capital Adequacy norms under Basel- III.
  
• Empowered Group of Ministers decided to Auction four Telecom Circles in 1800 MHz Band
  The Empowered Group of Ministers (EGoM) on 7 January 2013 decided to auction the four telecom circles in 1800 MHz band, which failed to win bidders in the November 2012 auction. The EGoM also decided to reduce the reserve price fixed in November by 30 percent. The auction is planned in March 2013. Of the 1800 MHz Band the quantum of spectrum that would be put forward for auction in different states and cities are 15 MHz in Mumbai and Delhi and 10 MHz in Rajasthan and Karnataka. There also are provisions of getting an extra topping of 3.75 MHz as was in November 2012
  
• SEBI notifies regulations to set up SRO for MF distributors
  In a move to regulate mutual fund distribution business, SEBI on 9 January said it has notified regulations to set up a Self Regulatory Organisation (SRO) to monitor distributors of mutual fund and portfolio management products.“The Securities and Exchange Board of India (SEBI) hereby appoints the date of this notification as the date on which the regulations shall come into force in relation to distributors engaged by asset management companies of mutual funds and distributors engaged by portfolio managers,” the regulator said in its notification dated January 8.In August, last year, SEBI in its board meeting had approved the proposal made by its Mutual Fund Advisory Committee (MFAC), to set up an SRO to regulate the Mutual Fund distribution business. The decisions followed concerns about mutual fund distributors in India not being regulated and there having been various complaints against them for mis-selling of products to the investors. Presently, the distributors need to register with Association of Mutual Funds in India (AMFI) and their registration can be cancelled by AMFI for violation of a prescribed Code of Conduct or for any other malafide practice.
  
• Fitch's threat of India's rating downgrade fails to ruffle govt
  Fitch Ratings has warned that India still faced the risk of a sovereign credit rating downgrade despite the wave of reform measures announced in September last year, and has said that the upcoming budget will indicate the government's commitment to fiscal consolidation. But the government brushed aside the warning, saying it was taking steps to address the concerns of rating agencies. Standard & Poor's also had last month reiterated the possibility of a downgrade and on 8 January, Fitch warned that the twin deficits, on the fiscal and current account, were cause for concern. In June last year, Fitch had revised the outlook on India's BBB- rating to negative, joining S&P that had in April said that India might become the first BRIC nation to lose the coveted investment grade rating. Any downgrade will send India's sovereign debt into junk grade, which could weaken capital flows and raise the cost of borrowing overseas for Indian companies. 
• Proposing a major overhaul of corporate governance norms for listed companies, the Securities and Exchange Board of India (Sebi) has suggested an omnibus set of measures that align pay of top-level executives in companies with their performance and providing greater powers to minority shareholders. It also makes it necessary to expand the size of the boards by excluding nominee directors from the definition of independent directors. SEBI has also proposed a new concept of ‘Corporate Governance Rating’ by independent rating agencies to monitor the level of compliance by companies and regular inspection by the Sebi and stock exchanges. The measures incorporate the Adi Godrej committee report, the Companies Bill 2012 and Sebi’s own corporate governance guidelines in one document. Sebi said institutional investors should show more involvement in the boards where they have nominee directors instead of just protecting their investments. Sebi has proposed to exclude the nominee directors from the category of independent directors to align the provisions of Clause 49 with the bill.
  
• Government mulling steps to reduce gold import: FM
  The government is considering steps to reduce gold import by making it more expensive, Finance Minister P Chidambaram said on 2 January. "Demand for gold must be moderated...We may be left with no choice but to make it more expensive to import gold. The matter is under government consideration," he told. Gold import is a major constituent of India's rising Current Account Deficit (CAD). The CAD, which represents the difference between exports and imports after considering cash remittances and payment, widened to a record high of 5.4 percent of GDP, or USD 22.3 billion, in the July-September quarter. In value terms, gold imports stood at USD 20.2 billion in the April-September period of the current fiscal, a decline of 30.3 percent over the corresponding period a year ago. For the entire 2011-12 fiscal, gold imports stood at USD 56.2 billion. The decline was mainly on account of increase in customs duty on gold imports by government in January and March 2012.
  
• Mukesh Ambani 18th richest man in world: Report
  Indian business magnate Mukesh Ambani is the 18th richest person in the world with a personal wealth of $24.7 billion in 2012, according to the Bloomberg Billionaires Index, a daily ranking of the world's 100 wealthiest individuals. Mexican telecommunications magnate Carlos Slim remained the world's richest person last year holding a personal fortune of more than $70 billion, it said. Ambani, 55, chairman & MD of Reliance Industries, has also retained his position as the world's richest Indian for the sixth year in a row and increased his ranking from 19th to 18th position and personal wealth from $21 billion to $24.7 billion in the world, the Index showed. The world's top 100 billionaires got even richer in 2012, with their total wealth rising by around 15% to $1.81 trillion, it said. Microsoft founder Bill Gates and the founder of fashion retailer Zara, Amancio Ortega, rounded out the top three spots, with wealth estimated just over and just under $60 billion, respectively. Renowned investor Warren Buffett slipped to fourth place, but added around $5 billion to his fortune over the year despite donating a substantial amount to charity last year. IKEA founder Ingvar Kamprad saw his net worth rising 16.6% to approximately $40 billion, putting him in fifth place on Bloomberg's billionaire index.
  
• 5 pc cut in defence budget
  The government has imposed around five per cent cut in the Rs 1.93lakh-crore defence budget this year in view of economic slowdown. The Ministry of Finance recently conveyed to the Defence Ministry that there would be a cut of around Rs 10,000 crore in the Rs 1.93 lakh crore allocated for the defence sector, Ministry officials said here. After the cut in budget, several key acquisition plans of the three forces including the procurement of 126 combat aircraft for the IAF are expected to be pushed for the next fiscal, they said. Defence Minister A K Antony had given indications in this regard recently when he said that the Ministry would be struggling to get even the allocated amount.
  
• Union Government Doubled 12th Plan Outlay for Science and Technology Ministry
  Union Science and Technology Minister S. Jaipal Reddy on 4 January 2013 declared that the Centre’s allocation for the science and technology and earth sciences ministry had been doubled for the 12th Plan period. The declaration came in the inauguration ceremony of Children Science Congress as part of the 100th Indian Science Congress where Jaipal Reddy announced that in the 12th Five-Year Plan, the combined planned allocation for science and technology and earth sciences had been nearly doubled from 33000 crore rupees in the previous Plan period to around 60000 crore rupees in the present 12th plan period.The Minister S. Jaipal Reddy also stressed on the newly announced Science, Technology and Innovation Policy, and recommended that the policy would emphasise on the importance of greater innovation and suggested that there is a need for integrating science, research and innovation to develop valuable technologies.