ECONOMY AFFAIRS JUNE 2015

ECONOMY AFFAIRS JUNE 2015

• Number of centrally sponsored schemes likely to be reduced to 30
  The number of centrally sponsored schemes is likely to be reduced to 30 from 72 with a Chief Ministers' Sub-Group of NITI Aayog reaching a broad consensus on the issue. The panel has also recommended increasing the share of flexi funds to 25 per cent from the current 10 per cent.
  
  According to the Niti Aayog’s Sub Group and Madhya Pradesh Chief Minister Shivraj Singh Chouhan, there is a broad consensus on reducing number of centrally sponsored schemes and having two types of schemes. The recommendations will be finalised by 5th of next month and consent of all members will be sought before submitting the final report to Prime Minister Narendra Modi.
  
  The draft report suggested centrally sponsored schemes to be divided into two broad groups. The first, Core Scheme, comprising of national development agenda that includes legislatively backed schemes such as MNREGA, Swachh Bharat Mission and Mid Day Meal. The second is Optional Schemes for social protection and social inclusion.
  
  Based on the division of schemes into two part, the number of centrally sponsored schemes will be 30. According to draft, the centre's share would not be less than 50 per cent.
  
  In each of the identified Core Schemes, ordinarily, Centre will implement umbrella programme having a large number of components with a uniform funding pattern to suit states' requirement. For general category states, under Core Schemes, Centre and state would share funding in the 60:40 ratio. However in schemes where Centre's share is below 60 per cent, it will remain the same.
  
  Under the Optional Schemes for general category states, the funding would be shared equally. But in schemes where Centre's share is below 50 per cent, it will remain the same. For 11 special category states under Core Sector scheme, Centre and state sharing will be in the ratio of 90:10 per cent while for optional schemes it would 80:20 per cent. The draft report also said that for all projects under centrally sponsored schemes in which 30 per cent of the work has been completed, funding should be continued.
  
  The sharing pattern under which the project was approved should also continue till March 2017. If the projects remain incomplete even thereafter, state would have to complete the project using their own funds. The draft report also says that the schemes in sector including poverty elimination, drinking water, Swachh Bharat, rural electrification, women and child health nutrition, Housing for All and urban transformation should be given priority for realising 'Vision 2022'. As per the draft, the rationalisation of schemes and restructure funding patter of centrally sponsored schemes should be implemented from 2016-17.
  
• FSSAI to regulate salt, fat & sugar in eating joint
   The Food Safety and Standards Authority of India, FSSAI has set up an expert group to recommend health dietary intake of fat, sugar and salt in Indian food products
  
  The decision came after the Delhi High Court asked the Central food regulator to issue guidelines in this regard. In its order, the FSSAI said, the 11-member expert panel comprises doctors, dietitians and others from AIIMS and various other institutions. The panel will also recommend FSSAI on prescriptions of regulations for display of fat, sugar and salt on food products sold and served in eating joints or catering facilities besides labelling requirements for packaged food.
  
  The panel will also advise the regulator about the health risks associated with high intake of fat, sugar and salt. On 5th of June, the FSSAI had banned Nestle's Maggi after the products were found unsafe for consumption due to excessive content of lead and monosodium glutamate
  
• India slips to 61st place on Swiss money list; Pak at 73rd
  India has moved down to 61st place in terms of foreigners’ money in Swiss banks and it now accounts for a meagre 0.123 per cent of the total global wealth worth $1.6 trillion in Switzerland’s banking system.
  
  While the UK and the US have retained their top two positions with the largest shares of the foreign clients’ money with Swiss banks, Pakistan has inched up to 73rd place.
  
  According to the latest data released by Switzerland’s central banking authority SNB (Swiss National Bank), Indians’ money in Swiss banks declined by over 10 per cent to about 1.8 billion Swiss francs ($1.98 billion or Rs 12,615 crore) in 2014.
  
  This accounts for just 0.123 per cent of the total funds kept in the Swiss banks by people from across the world. This is the second lowest level of Indian money in Swiss banks — after an increase of over 40 per cent in 2013 — and the latest data comes amid an enhanced clampdown against the famed secrecy wall of Switzerland's banking system.
  
  The funds, described by SNB as ‘liabilities’ of Swiss banks or “amounts due to the customers of banks in Switzerland” are official Swiss figures and do not indicate to the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland.
  
  Besides, SNB's official figures do not include the money that Indians or others might have in Swiss banks in the names of entities from different countries.
  
  At the end of 2014, there were 275 banks in Switzerland, but only two -- UBS and Credit Suisse -- were classified as 'big banks' by Zurich-based SNB at that time. There are also many foreign-controlled banks operating in the country. The two big banks' share also rose in the case of the UK, the US and a number of other countries.
  
  Their share almost doubled in case of Pakistan to 472 million Swiss francs, but still accounted for just 36 per cent of the total amount of 1.3 billion Swiss franc held in all Swiss banks by their clients from that country (up from just about one billion Swiss franc a year ago).
  
  This pushed Pakistan one place higher to 73rd place on the overall list of the countries in terms of foreigners' money in Swiss banks. India has come down three places.
  
  In the top-ten, the UK and the US are followed by West Indies, Guernsey, Germany, Bahamas, Luxembourg, France, Jersey and Hong Kong.
  
  The UK alone accounts for 22 per cent of total global funds in Swiss banks. Just four top nations together account for over half of all foreigners' wealth in Swiss banks, which rose to 1.47 trillion Swiss franc (about Rs 102 lakh crore or USD 1.6 trillion) in 2014.
  
• Sidbi sets up Rs 1k cr fund for MSMEs
  The Small Industries Development Bank of India (Sidbi) has set up a Rs 1,000 crore 'Make in India' fund to create a world-class manufacturing hub of MSMEs.
  
  The government has already named 25 sectors and identified borrowers who will be eligible under this scheme
  
  SIDBI which has promoted Mudra Bank announced in the budget to fund small businesses has tied up with 122 banks, financial institutions and microfinance companies for disbursement of loans. The government institution has managed to raise $500mn line of credit from World Bank for small businesses and fiancial inclusion.
  
• EPFO makes UAN mandatory for all employers
  Retirement fund body Employee Provident Fund Organisation (EPFO) notified on 22nd June, an order to make Universal Account Number (UAN) mandatory for all employers covered under the Employees Provident Funds and Miscellaneous Provisions Act 1952. The government was considering the proposal to make UAN mandatory for availing benefits of the scheme. The UAN facility was launched by Prime Minister Narendra Modi in October last year.
  
  The UAN remains portable throughout the lifetime of an employee and they don't have to apply for PF transfer claims while changing jobs. It is even more beneficial for workers in the construction sector, who often change their contractor after short spans of time, finish contracts and take up new jobs. EPFO had issued over four crore UANs to employers across the country in July last year.
  
  These UANs were then provided to workers and the process of seeding these accounts with KYC details like PAN, Bank Account and Aadhaar started.
  
• SoftBank, Bharti, Foxconn form JV
  Japanese telecom and internet giant SoftBank Corp. along with Sunil Mittal’s Bharti Enterprise and Taiwan-based manufacturing major Foxconn Technology, on 22nd June announced a joint venture, SBG Cleantech, to promote adoption of clean and safe energy in India, which will be investing $20 billion to generate 20 GW (gigawatt) of solar power, billed as one of the biggest foreign direct investment (FDI) projects in the sector.
  
  The JV will be led by SoftBank, while the other two will be minority partners. The equity structure is being worked out
  
  The company had, last October, announced investment of $10 billion in India over a 10 year period. In the past nine months, SoftBank has invested nearly $1 billion into Indian e-commerce and technology firms such as Snapdeal, Ola Cabs and Housing.com.
  
  Under the National Solar Mission (NSM), Indian government is targeting solar power generation capacity of 100 GW by 2022. SBG Cleantech intends to participate in the 2015-16 round of solar power plant tenders under the NSM and state-specific solar programmes.
  
  he Japanese telecom and Internet major SoftBank Corp had in 2011 set up SB Energy Corp to develop clean energy projects following the Fukushima nuclear disaster in Japan. It is working on 20 such projects there.
  
• Exploring mineral wealth
  The Telangana Government and Union Government have decided to set up a unit of Rashtriya Ispat Nigam Limited in Telangana Region. A meeting between Chief Minister K. Chandrasekhar Rao and Union Steel Minister Narendra Singh Tomar happend on 22nd June, where the proposal took place.
  
  A unit of Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant, will be set up in Warangal.
  
• SEBI makes IPOs cheque-free; unveils start-up listing norms
  Capital markets regulator Securities and Exchange Board of India, SEBI has allowed startups to list and raise funds with an easier set of norms within India, while it made investments cheque-free for all IPOs. Besides, the regulator also fast-tracked the process of raising funds for companies through IPOs by reducing the listing time by half to six days after the public offer.
  
  The SEBI also allowed a larger number of companies to tap the 'fast-track' route for raising funds from the existing and new investors. It said that the streamlining of public issue norms would obviate the need to issue cheques, help more retail investors access IPOs.
  
  The new start-up listing norms are aimed at encouraging Indian entrepreneurs and their technology and other ventures to remain within the country, rather than moving to overseas markets for funds. Under the new norms, the minimum amount that an investor would need to invest in such ventures would be 10 lakh rupees. However, small retail individual investors would not be allowed to invest.
  
• Rs. 1-lakh cr to be disbursed under MUDRA for micro-entrepreneurs
  To promote very small businesses, the Centre aims to facilitate credit up to Rs. 1 lakh crore under the MUDRA scheme in the current fiscal. The credit facility issue was discussed at a meeting between the Finance Minister and bankers recently.
  
  It was proposed that for the current fiscal, the target under ‘Shishu’ category would be Rs. 40,000 crore, for ‘Kishor’ Rs. 35,000 crore, and ‘Tarun’ Rs.25,000 crore.
  
  The Centre has already made it clear that it would facilitate more credit to the first category at it promotes not only self entrepreneurship but also more employment opportunities.
  
  Under the new scheme, there are three categories of loans — ‘Shishu’ (loan up to Rs. 50,000) ‘Kishor’ (loan above Rs. 50,000 up to Rs. 5 lakh) and ‘Tarun’ (above Rs. 5 lakh up to Rs. 10 lakh) — that will be disbursed by the banks. The amount will be refinanced through the new scheme which is being implemented by a subsidiary of SIDBI.
  
  The MUDRA concept is based on National Sample Survey Organisation’s (NSSO) 2013 study which talked about 5.77 crore informal enterprises.
  
  They are unincorporated, single person or two person enterprises. They get just 4 per cent of their credit requirements from the institutional mechanism, while 96 per cent comes from informal sources even while they give employment to about 12 crore people.
  
  To help these entrepreneurs, the Government has offered 27 public sector banks, 17 private sector banks, 27 regional rural banks, 25 micro financial institutions (MFIs), and 21 non-banking financial institutions (NBFCs) to be enrolled as partner institution.
  
  Apart from credit facilities by these institutions, an overdraft facility of up to Rs. 5,000 under Pradhan Mantri Jan Dhan Yojana will also be covered under the scheme.
  
  Credit guarantee
  Under the scheme, refinance/credit guarantee will be provided. Keeping this in mind, the process to get Expenditure Finance Committee (EFC) nod for Rs. 3,000-crore credit guarantee fund has been initiated and approval is expected soon. The corpus can guarantee up to Rs. 40-45,000 crore loans. This will enable various small-small banks, NBFCs and MFIs to give loans to people at cheaper rates. Because once the guarantee is given, the risk margin will come down.
  
  MUDRA cards, similar to debit cards, are also being proposed. It will work on RuPay platform and can be used in ATMs and merchant establishments. The plan is to provide 20-30 per cent of the loan requirement through this card.
  
  In the next stage, the Centre aims to set up MUDRA Bank with a corpus of Rs. 20,000 crore. A Bill will be introduced soon in Parliament to set up a refinance mechanism on the lines on SIDBI.
  
• India emerges as third largest FDI source for U.K
  India has emerged as the third largest source of Foreign Direct Investment (FDI) for United Kingdom (UK) after United States (US) and France in terms of number of projects.
  
  According to a recent report released by UK Trade and Industry (UKTI), the U.S. remained the largest source of inward investment, with a total of 564 projects in 2014-15, followed by France (124 projects) and India (122 projects).
  
  During the year, investment from India increased by 65 per cent. This resulted in creation of 7,730 jobs as well as protection of 1,620 jobs. The key sectors where Indian companies invested include healthcare, agri-tech, food and drink.
  
  As per the Inward Investment Report 2014-15 of UKTI, 70 countries invested a record £1 trillion in UK in 2014-15, making it Europe’s top FDI destination.
  
  Indian Venture Capital Fund Vistaar Group has been named in the report as a key foreign investor in the creative industry for establishment of post production studio at MediaCity, Manchester. The fund plans to invest £13 million this year and £20 million over the next five years as per the report.
  
• Telangana Govt approvals for 17 companies
  Telangana chief minister K Chandrashekhara Rao on 23rd June handed over approvals to 17 companies regarding their investment proposals in the state.
  
  These approvals were obtained for the companies under ‘TS-iPASS, the single-window clearance system recently introduced by the government. The government promises to issue clearances for setting up new units or for expanding the existing operations just in two weeks. Total investment involved in these proposals was Rs 1,501.42 crore, according to the chief minister’s office.
  
  These include approvals for nine new units with a major investment being the food processing project proposed at an investment of Rs 774 crore by ITC Limited . Other proposals pertain to power generation and dairy among other sectors.
  
  The remaining eight proposals pertain to the expansion plans with the investment size ranging from Rs 25 crore to Rs 80 crore.
  
  About TS-iPass
  TS IPASS – Telangana State Industrial Project Approval and Self Certification System – TSIPASS bill to provide speedy processing for issue of various licenses, clearances and certificates required for setting up of industrial undertakings for the promotion of industrial development and also to provide for an investor friendly environment in the Telangana State.
  
  Key Features
  • Approval based on self-certification
  • Processing all clearances within 30 days
  • Applicants get right to timely clearances
  • Clearances for mega industries within 15 days
  • Common application form for all types of industries
  • Tax concessions for industries
  • Zero tolerance for corruption
  • Provision of penalty if departments delay clearances
  • Nodal Officer on lines of Singapore Economic Development Board
  • Minimum inspection and maximum facilitation
  • Pollution Clearances
  • Industries will be divided into four categories, green, orange, red 1 and red 2
  • Except red 2, rest will be cleared by State government.
  
  TS iPASS Key Sectors
  Life sciences, biotechnology, pharmacy, IT hardware, medical devices, communications, aviation, aerospace, defence, food processing, nutrition products, automobiles, farm equipment, transport vehicles, textiles, leather and apparel, plastics, polymers, fast moving consumer goods (FMCG) etc
  
• Cabinet clears Rs 81,459 crore revised estimate for East-West freight corridor
  The Cabinet Committee on Economic Affairs has given its approval for the revised cost estimate of Rs 81,459 crore for the Eastern and Western Dedicated Freight Corridor (DFC) Project, including land costs and financing plan.
  
  The Eastern and Western DFC passes through the States of Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Maharashtra, Gujarat and Rajasthan. He said, the Eastern and Western DFC project will add substantial transportation capacity, help in reducing unit cost of transportation and would provide efficient transportation services to benefit power houses, mines, ports, trade and industry and the container sector.
  
  The Eastern DFC is expected to carry 153 million tonne of traffic in 2021-22, which will increase to 251 million tonne in 2036-37. The Western DFC is expected to carry 161 million tonnes of traffic in 2021-22, which will increase to 284 million tonnes in 2036-37.
  
  Earlier, the CCEA in Feb, 2008, gave approval for implementation of the Eastern and Western DFC projects and so far, expenditure of over Rs 13,000 crore has been made.
  
  CCEA also gave its approval for conversion of interest of Rs 39.53 crore accrued on the loan of Rs 21.82 crore provided to Artificial Limbs Manufacturing Corporation of India (ALIMCO), Kanpur. The increase in capital base support will strengthen the financial position of the corporation to fulfill the objectives for which it was established. It will ensure availability of increased working capital required for enhanced targeted business and also enable the corporation to seek loans from Financial Institution.
  
• Rajasthan becomes new leader in solar energy
  According to the Union Ministry, Rajasthan has become new leader in solar energy recently with an installed capacity of 1,167 megawatt against Gujarat's 1000 megawatt. The state has grabbed the number one position in the country in solar energy to left behind its close rival Gujarat state. Last year, state government released its Solar Policy which aims at installation of 25000 megawatt of solar power through State or Private Enterprises or through Public-Private partnership. State government has inked agreements with private companies to develop solar parks with a cumulative capacity of 26,000 MW.
  
  The state have all natural advantage for solar such as abundant barren land and high solar radiation in the country. After the new solar policy released last year, many big private players has shown interest to invest in green energy in the state.
  
  Government has provided several facilities in the policy to the inverters. The state has also signed MoUs with power developers like Sun Edison, Adani, Reliance, IL &FS and Azure power that will require about Rs 85,000 crore for generating 14,000 MW solar powers.
  
  National Thermal Power Corportion-NTPC is already in the process of commissioning 680 MW in the state. Sources said that there are many line up project which will be developed in near future.
  
• UNCTAD report on FDI
  India moved up six places to become, for the first time, one of the top 10 destinations for foreign direct investment (FDI) in 2014, according to the United Nations Conference on Trade and Development (Unctad)'s World Investment Report 2015. It was 15th on the list in 2013.
  
  FDI inflows into India were $34 billion in 2014, up 22 per cent rise from $28 billion in 2013. In fact, Inflows into the country were 83.5 per cent of South Asia's $41.2 billion, including Iran and the seven other member nations of the South Asian Association for Regional Cooperation.
  
  Among the top 10 recipients, China, Hong Kong and the US accounted for the biggest share (in that order). China took the top spot with FDI of $129 billion in 2014 ($124 billion in 2013). The US, which attracted $231 billion worth of FDI in 2013, only garnered $92 billion in 2014. Hong Kong got $103 billion of FDI in 2014.
  
  Others in the top 10 in 2014 were the UK (fourth), Singapore (fifth), Brazil (sixth), Canada (seventh), Australia (eighth) and the Netherlands (10th).
  
  The Unctad report said India's FDI inflows would continue to rise in 2015 as an expected economic recovery gained ground.
  
  In terms of structural composition, manufacturing is gaining strength, as policy efforts to revitalise the sector are sustained, including, for instance, the launch of the 'Make In India' initiative in mid-2014
  
  Under the 'Make In India' initiative, the Narendra Modi government has identified 25 industrial sectors in which India has the potential to be a world leader, including automotives, chemicals, pharmaceutical and textile industries
  
  In the manufacturing sector in South Asia, FDI success stories have emerged at country, industry and local levels, with the automotive industry in India showing how large-scale FDI inflows can reshape the trajectory of industrial progress in low income countries
  
  The report said automotive industry, which India opened up to FDI in 1991, was a key part of the Indian economy and had been identified as a key sector in which India could become a world leader.
  
  The country accounted for most of the new investment projects announced by global automobile makers and first-tier parts suppliers in South Asia during 2013 and 2014, including 12 projects above $100 million, the report said. "Investment from the growing automotive industry in India shows potentials of a positive 'spillover effect' to productive capacity building in South Asia as a whole," the Unctad report said.
  
  As an example, the report noted Mahindra's $200-million (about Rs 632-crore) proposed investment in a plant in Bangladesh for trucks and utility vehicles.
  
  Among the positive trends in South Asia, the report said Pakistan and Sri Lanka were receiving greater FDI flows from China, Bangladesh saw an increase in new projects and Nepal was attracting more attention from multinational companies.
  
  The report noted there was greater need for coherence between international taxation and investment policies. It said the policy imperative should be to take action against tax avoidance to support domestic resource mobilisation and to continue to facilitate productive investment.
  
  Other important points
  • After 2008, for the first time, India again broke in to the top 10 recipients of foreign direct investment (FDI) during 2014, the UNCTAD
  • India was at the 15th position in the previous two years.
  • India, however, is the only BRIC (Brazil, Russia, India and China) country that hasn’t yet crossed the $50 billion-a-year FDI mark.
  • China became the largest recipient of FDI in 2014 with $129 billion inflows, followed by Hong Kong (China) that received $103 billion and the U.S. with $92 billion.
  • At 39 per cent, Hong Kong saw the biggest surge in inflows during the year.
  • Russia dropped out of the top 10 as foreign investors exited its oil sector and other projects after Western countries slapped economic sanctions on it. Among the top 10 FDI recipients in the world, half are developing economies - Brazil, China, Hong Kong (China), India and Singapore.
  • In a development of significance to India, for the first time FDI inflows in to China’s services sector were greater than into its manufacturing sector.
  • Global FDI fell 16 per cent to $1.23 trillion in 2014 mainly due to the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks, according to the report. New investments were also offset by some large divestments.
  • India, however, dropped out of the top 20 countries in the outward FDI flows.
  • The report also found that developing countries lost $100 billion in tax revenues owing to investors routing FDI through tax havens such as Mauritius, and has made a strong case for multilateral action to address the issue.
  • The report records the big surge in investments from China into every region of the world, and especially in India’s neighbourhood.
  • FDI inflows to Pakistan increased by 31 per cent to $1.7 billion as a result of rising Chinese FDI flows in services. Further, the country will benefit significantly from the China-Pakistan Industrial Corridor and associated Chinese investment in infrastructure and manufacturing in the overall context of implementing the “One Belt, One Road” strategy.
  • According to agreements signed between the two governments in April 2015, Chinese companies will invest about $45.6 billion in Pakistan over the next few years — $33.8 billion in electricity and $11.8 billion in transport infrastructure.
  • In Sri Lanka, where China has become the largest source of FDI in recent years, FDI flows from it rose. For example, a joint venture between two local companies and China Merchants Holdings (International) Company has invested $500 million in Colombo International Container Terminals, the largest foreign investment project in Sri Lanka. After two years of construction, the port started operation in August 2014.
  • A China-Sri Lanka FTAwill be signed in June 2015. Moreover, if the implementation of the China-led 21st Century Maritime Silk Route Economic Belt gains ground, an increasing amount of Chinese investment will flow to Sri Lanka, particularly in large infrastructure projects.
  
  
• Significant improvement in macro-economic environment: RBI
  Accordng to the report of Reserve Bank of India on 25th June, there has been a significant improvement in the macro-economic environment, and going forward, economic performance is expected to be better. In a six-monthly Financial Stability Report released by RBI said that the strong macroeconomic fundamentals offer India a "reasonable degree of resilience" to address uncertainties, but poor asset quality of banks and managing expectations are key challenges for regulators and the Government.
  
  The report said that a relatively stronger macro-economic fundamentals in terms of growth, inflation, and current account and fiscal deficits provide a reasonable degree of resilience to financial system.
  
• Banks can borrow from international institutions without RBI nod
  Easing norms for accessing foreign funds, RBI on 25th June allowed banks to borrow from international financial institutions for general banking business without seeking its permission
  
  With a view to providing greater flexibility in seeking access to overseas funds, it has now been decided to permit... banks to borrow from international/multilateral financial institutions without approaching Reserve Bank for a case by case approval," the RBI said on 25th June.
  
  The flexibility has been provided for international/ multilateral financial institutions of which Indian Government is a shareholding member or which have been established by more than one government or have shareholding by more than one government and other international organisations.
  
  Such borrowings, RBI added, should be for the purpose of general banking business and not for capital augmentation.
  
  In another circular, RBI allowed all non-deposit taking NBFCs to act as sub-agents under Money Transfer Service Schemes (MTSS) without seeking prior approval from it.
  
  Deposit accepting non-banking financial companies (NBFCs) are however, not permitted to undertake such activity, RBI added.
  
  As per a August 2014 circular, NBFCs desirous to act as sub-agents under the MTSS required prior approval of the RBI. The August circular has been reviewed in the "light of certain representations" received by the Reserve Bank.
  
• RBI extends deadline to exchange pre-2005 currency notes
  Reserve Bank of India on 25th June extended the deadline for exchanging pre-2005 currency notes of various denominations, including of Rs 500 and Rs 1,000, by six months till December 31, 2015.
  
  The earlier deadline was expiring on June 30. "The Reserve Bank of India has extended the date for the public to exchange their pre-2005 banknotes till December 31, 2015. RBI had, in December 2014, set the last date for public to exchange these notes as June end.
  
• World trade registers modest growth in Jan-Mar of 2015: WTO
  World trade grew by a modest 0.7 percent during January-March quarter of this year, the World Trade Organisation (WTO) has said.
  
  The volume of world merchandise trade "increased modestly" in the first quarter of 2015, with both exports and imports registering slower growth than over the previous six months
  
  According to preliminary estimates, "world trade as measured by the average of exports and imports grew 0.7 percent in the first three months of 2015, based on seasonally adjusted data," it said. It said world exports increased by 0.4 percent in the first quarter of this year, down from the 2.1 percent growth registered in the previous quarter.
  
  Similarly, imports grew by 0.9 percent in the same period, down 1.5 percent from the previous quarter. "Exports from developing and emerging economies rose 1.5 percent in the first quarter, with all regions except Asia registering growth of 3 percent or greater," it added.
  
  In contrast, exports from developed countries fell by 0.5 percent in the same period, with US exports decelerating by 4.5 percent.
  
  Further, it said developing and emerging economies increased their imports by 0.6 percent in the first quarter, with South and Central America and the Caribbean registering strong import growth at 6.8 percent. Developed economies increased their imports by 1.3 per cent, led by stronger import growth in Europe and North America. Growth in imports in the developed countries particularly in these two regions is good news for India at a time when the country's exports continue to be in the negative zone.
  
  Europe and North America are the major export destinations for Indian goods. It accounts for about 30 percent of India's total exports. Contracting for the sixth month in a row, India's exports dipped by 20.19 percent in May to USD 22.34 billion mainly due to global slowdown and dip in crude oil prices. According to a WTO forecast, global trade is set to expand by 3.3 percent this year and by 4 percent in 2016, less than previous forecast due to sluggish growth in the global GDP
  
• Govt steeply hikes minimum export price for onion to $425 ton
  Government on 26th June increased sharply the minimum export price (MEP) of onion by 175 US Dollars per tonne to 425 US Dollars per tonne to ensure adequate domestic supply and contain price rise. Directorate General of Foreign Trade (DGFT) said in a notification that the new MEP - rates below which no exports are allowed -will be applicable with immediate effect. The government imposes MEP to restrict out bound shipments and check price rise in the domestic market.
  
  The wholesale price of onion have risen to Rs 16-17 per Kg from Rs 11 per kg in last one month at Lasalgaon in Maharashtra -- Asia's biggest onion market.
  
  The wholesale prices have started increasing in view of marginal fall in the domestic production, which is estimated at 189.23 lakh tonnes for 2014-15 crop year (July-June), as against 194 lakh tonnes in the previous year, as per the government data. The country's onion exports declined to 10.86 lakh tonnes in the 2014-15 fiscal due to high MEP, as against 13.58 lakh tonnes in the previous year.
  
• Highly indebted Corporates responsible for poor credit growth: RBI report
  The Reserve Bank of India has said, corporates working with highly borrowed money are slowing the growth of bank lending and therefore preventing better monetary transmission as they may not be in a position to benefit from falling interest rates. The Bank said this would be due to their high levels of debt in the past few years.
  
  The half-yearly Financial Stability Report (FSR) released in Mumbai on 25th June, says, RBI has reduced its short-term lending rate by 75 basis points since the start of this year but banks have passed on only up to 30 bps by reducing their base rates.
  
  It further states that while borrowing has increased, the ability to repay debt and debt servicing ability of the corporates has declined.
  
  The gross non-performing advances (GNPAs) ratio may increase to 4.8 per cent by September 2015 from 4.6 per cent in March 2015. The report states there is a need to go beyond capital requirement and adequacy as it may be a consideration with the public sector banks.
  
  In the forward to the Financial Stability Report, Reserve Bank Governor Raghuram Rajan has said that macro-economic fundamentals of the country have improved over the past two years and emerging market economy like India is better placed to face any eventuality.
  
  Rajan cautioned against volatility, caused by conflicting action of the developed world. Mr.Rajan said the country has been able to build buffers to fight any future uncertainty. Reiterating the need for consensus, Rajan said there is a need to be vigilant about the spill over of the Federal Reserve ending the almost nil interest rate regime.
  
• India ranked best for investment
  A ranking of destinations for attractiveness to foreign investors has placed India at the top among 110 countries. China has secured the 65th position and the U.S. is at the 50th. In the 2014 index, India was at the sixth position and Hong Kong was number one.
  
  The ranking is based on an index for baseline profitability that assumes that three factors affect the ultimate success of a foreign investment: how much the value of an asset grows; the preservation of that value while the asset is owned; and the ease of repatriation of proceeds from selling the asset. The index combines measures for each of these factors into a summary statistic that conveys a country’s basic attractiveness for investment.
  
  A high ranking indicates high returns and improving economic institutions. The index, thus, compares how local policies and conditions affect the same investment in different countries. Or how the value of the principal and the return will change depending only on where the investment is made.
  
  Local factors can erode profits. These include payment of bribes and kickbacks, the risk of which is compared across countries using the Transparency International’s Corruption Perceptions Index, a measure for the perceived levels of public-sector corruption worldwide. In 2014, the country was at the 85th position out of 175 countries as compared to its ranking of 94 out of 177 in 2013.
  
  World Bank index
  BPI calculation also uses an index of investor protection compiled by the World Bank. In 2014, the average BPI score across all countries was 0.99; this year it is 1.03 — meaning the expected returns over the next five years are about three-quarters of a per cent higher a year. 
  • A ranking of destinations for attractiveness to foreign investors has placed India at the top among 110 countries.
  • The index combines measures for each of these factors into a summary statistic that conveys a country’s basic attractiveness for investment.
  • The Baseline Profitability Index (BPI) is back for its third year with some answers, and Narendra Modi’s India is the place to start, wrote Daniel Altman, creator of the index and an Adjunct Professor at New York University’s Stern School of Business, in the Foreign Policy magazine.
  • economic growth alone doesn’t determine the returns to investing abroad; you have to worry about things like financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls, and exchange rates as well.
  • The big story in the BPI in 2015 is India coming out on top, with growth forecasts up, perceptions of corruption down, and investors better protected following the election of a government led by Prime Minister Narendra Modi.
  
  
• Task force on financial redress agency
  Union Ministry of Finance on 5 June 2015 constituted a Task Force on Financial Redress Agency (FRA). The 10-member task force will be headed by Dhirendra Swarup who served as the first chairman of the Pension Fund Regulatory and Development Authority (PFRDA) in 2004. The Task Force was set up to begin the preparatory work for FRA that was recommended by the Financial Sector Legislative Reforms Commission (FSLRC). FRA would act as a unified redress agency for financial consumers across the country.
  
  The committee.........
  • Review the international best practices in consumer grievance redress, including ombudsman and other dispute resolution mechanisms, with a focus on the financial sector.
  • Review the present practices of management of financial consumer redress in India.
  • Support the Ministry of Finance in procuring the services of competent consultants to operationalise the FRA
  
  
• FDI in services sector up 46 pc in 2014-15
  With the government taking steps to improve ease of doing business and attracting investments, FDI inflows into the services sector grew by over 46 percent to USD 3.25 billion in 2014-15
  
  The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received foreign direct investment (FDI) worth USD 2.22 billion in 2013-14.
  
  However, the total foreign inflow in 2014-15 in the services sector was low as compared to 2012-13 when it was USD 4.83 billion, according to the Department of Industrial Policy and Promotion (DIPP) data. The government has announced a series of steps such as fixing timeliness for approvals to improve the ease of doing business in the country and attracting domestic as well as foreign investments.
  
  In step with the growth in FDI in important sectors like services, overall foreign inflows in the country too rose by 27 percent to USD 30.93 billion during the previous fiscal. The amount was USD 24.29 billion in 2013-14. Services contribute about 60 percent to India’s GDP and it receives high foreign inflows in this sector.
  
  The other sectors where inflows have recorded growth telecommunications (USD 2.89 billion), automobiles (USD 2.57 billion) and computer software and hardware (USD 2.20 billion).
  
  To attract investment in the services sector, the government has raised the FDI cap in insurance sector to 49 percent from 26 percent. The policy was also relaxed in other sectors such as defence, railways and medical devices.
  
  Foreign investments are considered crucial for India, which needs around USD 1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Growth in foreign investments helps improve the country’s balance of payments (BoP) situation and strengthen the rupee.
  
• Coal India now sixth-largest mining company: PwC
  The country’s top dry-fuel miner Coal India Limited (CIL) has become the sixth-largest mining company in the world in terms of market capital, says a recent PwC report. Earlier, the company was at the eighth spot among top 40 global mining firms, according to the report.
  
  Another state-run company, NMDC, the country’s top iron ore miner which also figures in the list, has improved its position by coming to the 21st slot from 24th earlier.
  
  The report — ‘Mine 2015’, which analyses the financial performance of the top 40 mining companies by market capitalization — says though there have been improvements in most financial statement metrics across the top 40 companies, market values continued to decline.
  
  The market capitalization for the top 40 was $791 billion at the end of 2014, which is where it sat 10 years ago, it said. The decline in market value in 2014 was driven largely by iron ore miners, in particular the diversified companies with large exposure.
  
  Iron ore was the hardest hit in 2014 with prices falling by half due to oversupply and a negative short-term demand outlook. About coal, it said coal miners in the BRICS countries saw their value increase 19 per cent over the period, recovering under half of the value they lost in the prior year.
  
  There was greater diversity in share price performance among the top 40 in 2014, with 15 miners seeing their values appreciate, while 25 witnessed a decline.
  
  The average ROCE (return on capital employed) is largely below the minimum hurdle investment rate of 15 per cent to 20 per cent set by several companies, the report said.In 2014, the top 40 made no significant new investment commitments, but some moved to significantly increase production.
  
• India's banking norms more 'rigorous' than Basel framework: Panel
  India's banking norms in certain aspects are more rigorous than what has been prescribed under the Basel-III framework for capital adequacy, says a report. After a detailed assessment that took into account 14 components, the Basel Committee on Banking Supervision on 15th June said India complies with Basel standards.
  
  The panel, which works towards improving the quality of banking supervision worldwide, on 15th June released its Basel-III implementation assessment reports of India and South Africa.
  
  According to committee overall, the assessment outcomes for both India and South Africa are highly positive and reflect various amendments to the risk-based capital and LCR (liquidity coverage ratio) rules undertaken by the authorities during the assessment
  
  With regard to India, the panel said that overall the domestic implementation of the risk-based capital framework is found to be “compliant” with the Basel standards as all 14 components are assessed as “compliant”.
  
  The committee also assessed India's implementation of the LCR norms under the Basel framework.
  
  Regarding the LCR, India is assessed overall as 'largely compliant', reflecting the fact that most but not all provisions of the Basel standards were satisfied
  
  The implementation of the LCR regulation's component is assessed as “largely compliant” and implementation of the LCR disclosure standards' component is assessed as “compliant”, it added.
  
  The assessment has been done under the committee's Regulatory Consistency Assessment Programme (RCAP) — which assesses the consistency and completeness of a jurisdiction's adopted standards and the significance of any deviations from the regulatory framework.
  
  However, RCAP does not take account of a jurisdiction's bank supervision practices nor does it evaluate the adequacy of regulatory capital and high-quality liquid assets for individual banks or a banking system as a whole.In March 2014, the Reserve Bank of India had extended the deadline for banks to implement global capital norms, Basel-III, to March 2019.
  
  The government has been pumping in funds to recapitalize state-owned banks and has earmarked Rs 7,900 crore in the Budget for the current financial year ending March 31, 2016.
  
  PSUs, Central depts to get Rs1 crore per MW to set up solar units
  
  To boost the country’s energy security, the government has decided to give a push to solar power generation by roping in public sector units and Central departments and ministries. The government has asked them to set up 1 MW solar power plant each on their rooftops or land for which they would be given viability gap funding of Rs 1 crore per MW
  
  The projects have to be implemented by 2017 and the PSUs and ministries would be free to use the power so generated for either self-use or sell it to third party or discoms, the official said. The incentives are being given under the scheme to set up 1,000 MW of grid-connected solar PV power project to give fillip to generation of solar power, which will help in promoting ecological and sustainable growth while meeting India’s energy needs.
  
  The viability gap funding (VGF) will be given in two tranches — 50 per cent on successful commissioning of the full capacity of the project and the rest after one year of successful operation of the project,” the official said. For encouraging domestic manufacturers, the government will give VGF of Rs 1 crore/MW if the cells and modules are procured from domestic source while it will give Rs 50 lakh/MW if only the modules are procured from the domestic source. The PSUs such as NTPC, NHPC, CIL, IREDA, and railways would be allowed to participate in Central or state government tenders from time to time up to 2016-17 for selling solar power to state utilities, discoms or any other organization. They will also be allowed to sign power purchase agreements and power sale agreements with state utilities and discoms at tariff determined by the Central or state regulators. “They can also develop the projects for their own use or for sale of power to a third party at mutually negotiated rates,” the official added. The VGF will be provided through Solar Energy Corporation of India (SECI), which will be given a fee of one per cent of the VGF disbursed for handling the funds and managing the scheme. However, if the project fails to generate any power continuously for any year within the 25 years or the major assets are sold or the project is dismantled during this tenure, SECI will have a right to refund of VGF on pro-rata basis. The project falls under the Jawaharlal Nehru National Solar Mission to meet the energy demand and tackle challenges of climate change. The mission has set a target of deploying grid-connected solar power capacity of 20,000 MW by 2022 to be achieved in three phases — first phase up to 2012-13, second phase by 2017 and the third phase by 2022.
  
• Govt's labor reforms remove shield for workers: ILO
  The International Labour Organization (ILO) has flayed some of the recent labour reforms proposed by the union government, saying these would take away a chunk of workers from the protection of basic laws. The ILO said instead of taking into account unions' recommendations to simplify the laws, a separate law for small-scale industries was proposed, exempting factories with 40 workers from the ambit of 14 labor laws.
  
  This is the first time the ILO has hit out at the Union government and highlighted the trade unions' concerns after a slew of labor law reforms were proposed.
  
  Recently, the Union labor ministry had proposed a slew of labor law changes, including allowing more flexibility to employers to retrench workers, restricting formation of trade unions and tightening norms for declaring a strike. The trade unions have unanimously opposed these.
  
• Center announces additional package of Rs 2,437 cr for J&K
  The Center on 16th June announced an additional package of 2,437 crore rupees for reconstruction and rehabilitation of flood-ravaged Jammu and Kashmir.
  
  Devastating floods ravaged the state last year and the Prime minister had also monitored the situation then and 762 crore rupees additional amount was given. The additional food grain for the state has been approved. The finance minister said 75,000 damaged houses will be rebuilt. The government said that a special grant will be given to revive tourism in Jammu and Kashmir and rebuild 12 tourist locations.
  
• TS aims to be hub of smart tech
  Telangana government is gearing up to create a national repository of smart technologies which will be useful for the development of smart cities across India. This unique proposal assumes significance in the wake of the central government announcing its intention to develop 100 cities in the country as smart cities
  
  The repository is expected to have the best smart technologies being adopted around the world to enable the states to identify those which suit their requirements and needs. For this, the IT department has constituted a 12-member team to evaluate various smart technologies and their costs.
  
  Based on their recommendations, the government will identify the best technologies for implementation in five cities - Hyderabad, Warangal, Karimnagar, Nizamabad and Khammam – which have been selected for development under the 100 smart cities programme of the central government.
  
  The technologies will also be useful for other cities being developed under the programme. As a first step towards developing the national repository, a national conclave on smart technologies will be held in Hyderabad in the last week of July.
  
  Mayors and municipal commissioners of the 100 smart cities, municipal commissioners of 500 cities identified under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and experts and government officials from across the country will be invited for the conclave which will showcase smart technologies and solutions.
  
• ADB to increase India lending by 50 % to $12 b by 2018
  Asian Development Bank proposes to increase lending to India by almost 50 per cent to $12 billion by 2018, ADB President Takehiko Nakao said on 16th June.
  
  ADB aims at increasing its sovereign and non-sovereign lending from the present $7-9 billion in three years from 2015 to 2017 to $10-12 billion between 2016 and 2018 using ADB’s expanded lending capacity
  
  ADB’s annual lending capacity, was expected to increase to as much as $20 billion a year from the current level of $13 billion based on the merger of its Asian Development Fund lending operations with its Ordinary Capital Resources balance sheet.
  
• BSNL to invest Rs 6,000 cr for setting up 40,000 wi-fi hot spots by 2018
   BSNL will set up 40,000 wi-fi hot spots across the country entailing an investment of about Rs 6,000 crore. The project is likely to be completed by 2018.BSNL inaugurated wi-fi facility at Taj Mahal as part of the government's plan to put such services at major tourist places.
  
  BSNL will be providing free wi-fi services for 30 minutes per 24 hours (three times a month) which visitors can utilize in multiple sessions.
  
  After the usage limit of 30 minutes is exhausted, one can continue using the service on paid basis for which subscription plans are available in the denomination of Rs 20 for 30 minutes, Rs 30 for one hour, Rs 50 for 2 hours and Rs 70 for a day.
  
• AP to set up 100 cr startup fund
  The Andhra Pradesh State government is gearing up to set up Rs 100-crore innovation fund, in addition to expanding incubation infrastructure in Visakhapatnam.
  
  The innovation fund will be launched during the course of this year. However, draft guidelines will be finalised soon. The AP government, as a part of its innovation and startup policy announced in August 2014, would reimburse 15 per cent of the seed capital that an incubator or the investor had infused into a startup in the State. At present, Andhra Pradesh boasts incubation infrastructure of one million sft spread across Visakhapatnam, Kakinada, Tirupati and Ananthapur. The government is now planning to create additional space of 3 lakh sft near the Vizag Startup Village and it is scheduled to be ready by next year. The Vizag Startup Village was incubating 107 startups as of now. Government is looking to have 500 startups by coming December and 5,000 by the year 2020
  
  To create a requisite ecosystem for startups, the AP government is trying to rope in major corporates and establish seven centres of excellence (CoEs) with their support.
  
  Earlier, global tech giant Intel launched Innovate for Digital India Challenge in association with the central government’s Department of Science and Technology (DST). The unique challenge, which is being executed by Center for Innovation, Incubation and Entrepreneurship (CIIE) of II M-Ahmedabad, is designed to encourage a culture of innovation and create an ecosystem for technology adoption in the country.
  
• Cabinet approves Solar power capacity target to be 1 lakh MW by 2022
  The Cabinet on 17th June gave its approval for stepping up of India’s solar power capacity target under the Jawaharlal Nehru National Solar Mission by five times, reaching 1,00,000 Mega Watt by 2022.
  
  The target will principally comprise of 40,000 mega watt Rooftop and 60,000 mega watts through Large and Medium Scale Grid Connected Solar Power Projects. With this ambitious target, India will become one of the largest Green Energy producers in the world, surpassing several developed countries.
  
  The Cabinet Committee on Economic Affairs approved setting up of over 2,000 Mega Watt of Grid-Connected Solar Power Projects on Build, Own and Operate basis by Solar Power Developers with Viability Gap Funding under Jawaharlal Nehru National Solar Mission.
  
  It would help in generation of additional 2000 Mega Watt capacity of Grid-connected solar power projects. It will create employment of about 12,000 people in rural and urban areas. It will also reduce about 3.41 Million Tonnes of carbon emissions into the environment every year. The total investments expected under this scheme is about 12,000 crore rupees.
  
  In another decision, the Cabinet approved signing of an agreement with Spain on the abolition of the visa requirement for holders of diplomatic passports. The agreement will facilitate visa-free travel for holders of diplomatic passport of one country while entering into, transiting through, exiting from or staying for up to 90 days in the territory of the other country with additional safeguards.
  
  The Cabinet also gave its approval for the transfer of a portion of land and building of erstwhile National Instruments Limited by Jadavpur University, West Bengal to the Defence Research and Development Organization on a long-term lease.
  
  The land will be transferred for an establishment of a defence research centre, Jagadish Chandra Bose Centre for Advanced Technology. The Cabinet Committee on Economic Affairs also gave its approval for the four laning of the 'Amravati-Chikhli, Chikhli-Fagne and Fagne-Gujarat-Maharashtra border section of National Highway 6 in Maharashtra.
  
  The Government approved hike of 50 rupees per quintal to 1,410 rupees in the minimum support price (MSP) of paddy for the current season. The decision was taken at the meeting of Cabinet Committee on Economic Affairs which met this morning in New Delhi. An increased MSP will encourage farmer for greater sowing of paddy. The CCEA also approved MSPs for other Kharif Crops of 2015-16 Season.
  
  The new MSP of Tur (Arhar) has been fixed at 4625 rupees, Moong 4850 rupees and Urad 4625 rupees per quintal. MSP of Jowar has been hiked by 40 rupees per quintal, Bajra by 25 rupees, Maize by 15 rupees and Ragi by 100 rupees per quintal.
  
  The MSP of ground nut has been hiked by 30 rupees per quintal, Soybean 40 rupees, Sunflower seed 50 rupees, Sesamum 100 rupees and Niger seed 50 rupees per quintal. The new MSP of Medium Staple cotton has been fixed at 3800 rupees and long Staple cotton at 4100 rupees with an increase of 50 rupees.
  
  The Cabinet also gave its approval for continuation, strengthening and establishment of Krishi Vigyan Kendras with an outlay of 3900 crore rupees. The scheme envisages continuation of 642 Krishi Vigyan Kendras and establishment of 109 new Krishi Vigyan Kendras to carry out its wide range of activities. The Cabinet also gave its nod for inclusion of Uttarakhand, Jharkhand and Chhattisgarh in the list of States to be covered under the National Dairy Plan. Jharkhand and Chhattisgarh are such states which are having substantial milch animal population.
  
• Cabinet approves new Bureau of Indian Standards Bill 2015
  The cabinet on 17th June approved a new bill to replace the existing Bureau of Indian Standards, BIS Act with an aim to bring in more products under the mandatory standard regime and end the inspector raj. The new bill proposes to bring in more items under the mandatory system to ensure quality products to consumers. Currently, only products and systems come under the ambit of standards and the bill proposes to include services, besides articles and processes under the standardization regime.
  
  It will also enable the government to bring under the mandatory certification regime such article, process or service which it considers necessary from the point of view of health, safety, environment, prevention of deceptive practices, security etc. The mandatory certification will help consumers receive ISI certified products and will also help in prevention of import of sub-standard products.
  
  The bill also provides for compulsory hallmarking of precious metal articles, widening the scope of conformity assessment, to enhance penalties and to make offenses compoundable. The new bill also envisages setting up of the Bureau of Indian standards (BIS) as the National Standards Body of India, which will perform its functions through a governing council consisting of a President and other members.
  
• Negotiable Instruments Ordinance, 2015 promulgated
  Center has promulgated Negotiable Instruments (Amendment) Ordinance - 2015 to tackle cheque bounce cases. President Pranab Mukherjee gave his assent to the Ordinance on 17th June.
  
  The ordinance will allow filing of the cheque bounce case at the place where the cheque was presented for clearance and not at the place of issue. There are about 18 lakh people facing cheque bounce cases across the country. The ordinance was necessitated as a bill to help the litigants in the cheque bounce case was passed by the Lok Sabha earlier this year but could not go through the Rajya Sabha.
  
• Asia overtakes Europe as world's second richest region: BSG
  Asia has overtaken Europe as the world's second richest region. According to an annual report by the Boston Consulting Group, a global management consulting firm, the Asia Pacific, excluding Japan, held 47 trillion dollars in private wealth last year as the number of new millionaires rose in China and India.
  
  North America is the world's richest region with 51 trillion dollars but is expected to be surpassed by Asia in 2016. Asia is also projected to hold 34 per cent of global wealth in 2019. As in both 2012 and 2013, Asia-Pacific, excluding Japan, remained the fastest growing region in 2014.
  
• Center hikes steel import duty
  In an effort to protect the domestic steel industry from surging Chinese imports, the Finance Ministry has hiked the duty imposed on various categories of steel.
  
  However, categories such as stainless steel (flat) and CRGO (cold rolled grain-oriented electrical) steel have been exempted.
  
  Barring exempted categories, steel products with 5 per cent duty will attract 7.5 per cent duty from 17th June, a 2.5 percentage point increase. Products (barring a few) having 7.5 per cent duty will now have 10 per cent duty, again a 2.5 percentage point increase.
  
• Bandhan gets final RBI nod
  Bandhan Financial Services got the final approval to become a full-fledged bank from the Reserve Bank of India. The new Bandhan Bank will be headquartered in Kolkata and will launch operations in August.
  
  Bandhan, the country’s largest micro-finance institution, and IDFC were the only two entities that bagged the central bank’s in-principle approval to set up banks from among 26 applicants
  
  Currently, three public sector banks – Allahabad Bank, UCO Bank and United Bank of India – have their headquarters in Kolkata. Bandhan will become the fourth.
  
• Two panels to facilitate roll out
  Union Finance Minister Arun Jaitley has approved the formation of two committees to facilitate the implementation of the Goods and Services Tax (GST) from next April.
  
  A steering committee, chaired by the Additional Secretary, Department of Revenue, and the Member Secretary of the Empowered Committee of State Finance Ministers, will monitor the setting up of IT infrastructure for the GST network, the Central Board of Excise and Customs and other tax authorities. The committee will monitor the progress of consultations with stakeholders such as trade and industry and the training of officers.
  
  The other committee, chaired by Arvind Subramanian, Chief Economic Adviser, will recommend possible tax rates under the GST that would be consistent with the present level of revenue collected by the Center and the States.
  
  While making recommendations, the committee will take into account the expected levels of economic growth, the different levels of compliance, and the broadening of the tax base. The panel would assess the sector- and State-wise impact of the GST on the economy.
  
• AP to take over first private power plant set up by GVK
  The Andhra Pradesh (AP) government has given the permission to its power utilities to buy out the 216-Mw Jegurupadu project, India’s first private gas power plant set up by the GVK Group in 1997. The move is based on an option provided in the power purchase agreement (PPA), which is due to expire on June 20.
  
  AP Transco had in April sought the state government's permission to exercise the buy-out option, even though the company had applied for renewal of contract as the PPA also provides for extension of the contract based on a partial or a full refurbishment of the plant at the cost of the company.
  
• PM reviews Aadhaar benefits scheme
  Prime Minister Narendra Modi on 18th June held a review of the Unique Identification or Aadhar and Direct Benefit Transfer (DBT) and called for accelerating the delivery of benefits through both schemes.
  
  Reviewing the progress at a high-level meeting, he called for expansion of the applications of the Aadhaar platform so that its benefits can be extended to as many public services as possible. He directed officials concerned to identify applications, where concrete results can be achieved in the next two months
  
  Appreciating the progress made in some areas, Modi sought the strengthening of the institutional mechanism related with Aadhaar and DBT.The prime minister was informed that a total of 14 to 15 percent saving is being achieved in cooking gas subsidy alone, as a result of the elimination of leakages, and duplication.
  
• Mumbai continues to be most expensive city in India: Survey
  Mumbai, the financial capital of the country, held its position as the most expensive city in India and is ranked above Dallas, Frankfurt and Vancouver, according to a recent survey.
  
  Luanda, the capital of Angola, has been rated the world’s costliest city to live in, for third consecutive year, as per Mercer’s ‘Cost of Living Survey 2015'.
  
  India’s most expensive city, Mumbai (at 74th place), climbed 66 places in the ranking due to its rapid economic growth, inflation and services basket and a stable currency against the US dollar
  
  It (Mumbai) has witnessed higher inflation over the last one year compared to other metro cities, higher cost of fuel, transportation, increased prices of food items, home services and rentals, impacting the cost of living
  
  The survey further said that Mumbai is ranked higher and more expensive than cities like Dallas (77), Munich (87), Luxembourg (94), Frankfurt (98) and Vancouver (119).
  
  Mumbai, the most populous city in the country, is followed by New Delhi (132nd place) and Chennai (157), which rose in the ranking by 25 and 28 spots, respectively. Besides, Bengaluru (183) and Kolkata (193), the least expensive Indian cities, climbed in the ranking as well
  
  The survey includes 207 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.
  
  Asian cities dominate the top 10 costliest cities rankings along with major cities in Switzerland. Hong Kong (2), Zurich (3), Singapore (4) and Geneva (5) top the list of most expensive cities for expatriates, while Bishkek (207), Windhoek (206) and Karachi (205) are considered world’s least expensive cities for expatriates, according to the survey. Tel Aviv (18) continues to be the most expensive city in the Middle East for expatriates.
  
  The survey also revealed that South Africa, UAE, the UK and USA are expected to witness the highest increase in the number of Indian international assignees.
  
• RBI fixes rate of interest on FRB,2020
  The Reserve Bank of India (RBI) has fixed the rate of interest on the floating rate bonds, 2020 (FRB, 2020), applicable for the half year June 21 to December 20 at 7.80 per cent per annum. Earlier the rate of interest was set at average rate of the implicit yields at the cut-off prices of the last three auctions of 182 day treasury bills held up to period preceding the coupon reset date,which is June 21.
  
  Loat rate bonds - Bond whose interest amount fluctuates in step with the market interest rates, or some other external measure. The price of floating rate bonds remains relatively stable because neither a capital gain nor a capital loss occurs as market interest rates go up or down.
  
• To curb surge in imports, Center unveils sovereign gold bonds
  The government on 19th June spelt out the broad contours of a scheme involving the issue of sovereign gold bonds that is aimed at partly shifting the estimated 300 tonnes of physical gold bars purchased every year to the demat gold bond format.
  
  The proposed bonds, which may attract capital gains tax as applicable on bars and coins, will be marketed through post offices and brokers on the commission basis and will be based on the current market price. Based on the current market price, issuance of gold bonds equivalent of 50 tonnes would be around Rs 13,500 crore, a discussion paper floated on the scheme said. Japanese financial services firm Nomura has estimated that these bonds provide a good alternative for investors and if subscribed fully in the first year, it will result in a saving of $2 billion on imports of the precious metal at current prices.
  
  The draft report said that the bonds will be issued in 2, 5, 10 grams of gold or other denominations with a proposed tenor of minimum 5-7 years so as to protect investors from medium-term volatility in gold prices.
  
  The bonds will be issued with a nominal rate of interest, linked to international rate for gold borrowing and an indicative lower limit of 2 per cent may be given but the actual rate will have to be market determined.
  
  On maturity, the investor will receive the equivalent of the face value of gold in rupee terms. Market insiders said that the bonds are unlikely to take off if the rate of interest remains around 2 per cent given high inflation of almost 5 per cent in the country. India is the world’s largest consumer of gold and imports around 800-900 tonnes of the yellow metal annually. During May, gold imports grew 10.47 per cent to $2.42 billion. Such bonds will be issued by RBI on behalf of the government and the issuing agency will need to pay distribution costs and a sales commission to intermediate channels, to be reimbursed by the government. However, the upside gains and downside risks will have to be borne by the investor, who needs to be aware of the volatility in gold prices, the paper said.
  
• ONGC to invest Rs 41,678 crore on new fields
  State-owned Oil and Natural GasCorp (ONGC) will invest Rs 41,678 crore for bringing to production newer oil and gas fields and redeveloping ageing fields as it looks to boost output. The company, which produced 25.94 million tonnes of crude oil and 23.52 billion cubic meters of gas in 2014-15, is boosting investment to reverse the declining trend in output at bulk of its old and ageing fields. ONGC will invest Rs 24,188 crore in development of six projects both on the east and west coast. Another Rs 17,490 crore will be spent on redeveloping its prime Mumbai High fields as well as Heera-South Heera fields in western offshore
  The biggest project is the western offshore Daman field development where Rs 6,086 crore is being invested to produce 27.67 billion cubic meters (bcm) of gas by 2034-35.
  
  The project will be completed by December 2018. ONGC is investing Rs 5,813 crore in redeveloping the Mumbai High North field with a view to enhance recovery factor and increase the longevity of the prime asset.
  
• RBI empowers banks to take control of debt-stressed firms
  The RBI on 8th June empowered banks to take control of a company if it fails to meet specific milestones under the corporate debt restructuring (CDR) plan. Under a new strategic debt restructuring (SDR) scheme, banks, as majority owners, can then find professionals to run the company and then divest stake in order to recover their dues.
  
  The central bank has proposed a slew of measures, including setting a timeline of 30 days from the review of the restructured loan account for invoking the SDR. All loan agreements will include clauses to invoke the SDR.
  
  Before a loan account turns non-performing, banks are required to identify the stress signs, and set up a Joint Lenders’ Forum (JLF) to draw up a corrective action plan involving rectification and restructuring.
  
  If this too fails, the recovery action kicks in. Under the SDR, the conversion of debt into equity is to be completed within 90 days of the date of approval of the SDR package by the JLF.
  
  To encourage new promoters to come in, the asset classification of the account may be upgraded to ‘Standard’ post divestment of stake by the lending banks. The conversion of outstanding debt (principal as well as unpaid interest) into equity should be at a ‘fair value’. In the case of listed companies, the acquiring entity will be exempt from the obligation of making an open offer.
  
• Govt turns down FDI in retail e-commerce
  The Union government will not ease foreign direct investment (FDI) rules for electronic commerce, according to Minister of State for Commerce and Industry Nirmala Sitharaman In the month of May, Minister met executives of Flipkart and Snapdeal and representatives from the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (Ficci) to assess the impact of FDI on Indian e-commerce companies.
  
  During Sitharaman's meeting some of the points that emerged were allowing FDI in e-commerce would face attack from small retailers and the market would be flooded with imported goods.
  
  In a representation to the DIPP, the CII stated foreign companies should be allowed after Indian e-commerce players had acquired the strength to take on the competition. The chamber sought safeguards for Indian companies like local sourcing, privacy, safety against tax evasion and checking e-wastage.
  
  At present, 100 per cent FDI is allowed in business-to-business (B2B) e-commerce, while it is banned in the business-to-consumer (B2C) segment. Besides, there is a 30 per cent local sourcing rule for foreign players.
  
  Large Indian e-commerce companies like Flipkart and Snapdeal have grown significantly since their inception in 2007 and 2010, respectively. Global e-commerce giants like Amazon can operate in India under the marketplace model. In some cases, foreign players have tied up with local companies to enter the Indian market. According to a report by Technopak, the adoption of marketplace models by e-tailers is fuelled principally by business scalability and FDI policy compliance.
  
• Centre okays Rs. 6,000-cr loan package to help sugar mills clear farmer dues
  The sugar industry got from the Centre with a Rs. 6,000-crore interest-free loan package ostensibly to help mills clear dues owed to sugarcane farmers that currently stands at Rs.21,000 crore. The decision, taken by the Cabinet Committee on Economic Affairs (CCEA) on 10th June, is likely to cost the government Rs. 600 crore, which will be borne by the Sugar Development Fund.
  
  According to an official from the Indian Sugar Mills Association (ISMA), the move does little to address the basic issues of depressed prices and surplus sugar. The decision to bear the loan interest for just one year compared to five earlier meant expecting the industry to make profits of Rs. 6,000 crore in a year’s time which, according to Abinash Verma, Director-General, ISMA, seemed unlikely.
  
  With a 10 million tonne surplus likely at the end of this season, ex-mill prices are Rs. 10 below the production cost of Rs. 32-33/kg. “The debt burden of the industry has tripled to Rs. 36,601 crore in 2012-13 fiscal from Rs. 11,443 crore in 2007-08.
  
• Center decides to import pulses to keep domestic prices under check
  The government said it will import pulses in large quantities to boost supply and to check rising price. Informing of this cabinet decision, Road Transport minister Nitin Gadkari said the Prime minister has directed for the import of pulses in large quantities to keep domestic prices under check.
  
  As per 3rd advance estimates of food grain production for 2014-15 the country's estimated pulses production is about 174 lakh tonnes which is 19 lakh tonne lower than the previous crop year. The consumption of pulses is in the range of 220 to 230 lakh tonnes leaving a gap of about 50 lakh tonnes.
  
  The Cabinet Committee on Economic Affairs approved continued production of urea from three units from Madras Fertilizers limited, Manali, Mangalore Chemical and Fertilizers Limited-Mangalore and Southern Petrochemicals Industries Corporation -Tuticorin using Naphtha as feedstock till availability of gas through gas pipeline or by any other means.
  
  Continuation of operation of these three units would substantially ease the problems of urea supply in Southern states during the ensuing Kharif season. 
• Government to bring in ordinance to amend Negotiable Instruments Act
  The Cabinet decided to bring in an ordinance to amend the Negotiable Instruments Act. According to Road transport Minister, Nitin Gadkari, it will benefit 18 lakh persons battling cheque bounce related cases. The proposed Ordinance will enable filing of cheque bounce cases in place where the cheque was presented for clearance or payment.
  
  Government had brought a Bill in this regard in Parliament. However Rajya Sabha could not pass it, so to give relief to these people government has brought this ordinance.
  
• India figures in top 5 emerging economies for highest investment commitments: WB
  According to a World Bank report, India has figured in top five emerging economies for highest investment commitments in private sector, infrastructure sectors - energy, transport and water. India has figured in the list despite a drop in investment commitments of 6.2 billion dollar last year.
  
  According to World bank sources, the top five countries with the biggest investment commitments in 2014 are Brazil, Turkey, Peru, Colombia and India. These five countries together attracted 78 billion dollar. It represents 73 percent of the investment commitments in developing world in 2014. Investment commitments in China in 2014 were 2.5 billion dollar, its lowest level since 2010.
  
• Amazon opens India’s largest centre in TS
  E-commerce major Amazon which is betting big on India on 10th June opened 2.8-lakh sft fulfillment center (FC), its largest such facility in India, near Kothur in Mahabubnagar district of Telangana
  
  The new facility will allow e-commerce major to offer its Fulfilment by Amazon (FBA) service to thousands of small and medium businesses (SMBs) in Telangana and the nearby region and empower them to gain access to and service customers across the country at significantly low operating costs. It will also enable faster and quicker delivery of products to Amazon.in customers in the region.
  
  The State government has allotted 10 acres of land for the 2.5-million sft campus which has already received all the approvals. As part of their Memorandum of Understanding (MoU) with Telangana government, the e-commerce major will also train thousands of sellers across the state in e-commerce and take advantage of the digital economy. It will also offer training to SMEs through seminars, workshops, video aids and ready reckoners on how to list & manage inventory for an e-commerce business.
  
  Since its launch in June 2013 in India, Amazon’s marketplace (Amazon.in) has grown to be India’s largest store with over 22 million products from a continually growing base of thousands of small and medium-sized businesses, serving millions of customers across India.
  
• World Bank: Indian economy to grow fastest, outpace China too
  With an expected growth rate of 7.5 per cent this fiscal, India has for the first time topped the World Bank’s growth chart for major economies.
  
  The World Bank’s 2015 Global Economic Prospects report says that India will this year race ahead of China, where growth is likely to moderate to a still robust level of 7.1 per cent. It says that 2015 will most likely be the first full calendar year when India outpaces China in decades.
  
  According to the report, the expected hike in the US interest rates could lead to greater financial market volatility and significantly reduce capital flows to emerging countries, including India. In the same breath, it also asked the Fed to hold off rate hikes till 2016.
  
  For the global economy, the World Bank cut its growth forecast to 2.8 per cent this year from 3 per cent estimated in January. It lowered its forecast for US growth this year to 2.7 per cent from 3.2 per cent in January. It expects the euro area to grow 1.5 per cent in 2015 up from a January estimate of 1.1 per cent.
  
  India’s GDP expansion is expected to accelerate to 7.5 per cent in calendar 2015, 7.9 per cent in 2016 and 8 per cent in 2017, says the report. At the same time, over the next three years, China’s economy is projected to slow from 7.1 per cent this year to 7 per cent in 2016 and 6.9 per cent in 2017. But the expected lift off in US interest rates could lead to a reduction in capital flows to emerging countries by up to 1.8 percentage points of GDP, it says.
  
  As a large, financially open emerging market economy, India remains exposed to volatility in global financial markets and shifts in global portfolio allocations that may follow policy rate hikes in the US, expected later this year.
  
• RBI allows AIFIs to reverse excess provision on sale of NPAs
  Reserve Bank of India has allowed All-India Term Lending and Refinancing Institutions (AIFIs) such as Exim Bank and Nabard to reverse the excess provision on sale of non-performing assets (NPAs) sold prior to February 26, 2014 to asset reconstruction companies to their profit and loss account.
  
  The guidelines will be also applicable to National Housing Board and Sidbi.
  
  The RBI in a notification issued in Mumbai said that it has now been decided to permit financial institutions to reverse the excess provision, when the sale is for a value higher than the Net book value (NBV), on sale of NPAs sold prior to February 26, 2014 to Securitisation Company (SC) Reconstruction Company (RC) to their profit and loss account. NBV is the value at which an asset is carried on a balance sheet.
  
  Earlier, the reversing of excess provision on sale of NPAs was available only for NPAs sold on or after February 26, 2014. The RBI said it has re-iterate that AIFI can now reverse excess provision arising out of sale of NPAs only when the cash received is higher than the NBV of the NPAs sold to ARCs. The Central bank also asked these financial institutions to disclose the quantum of excess provision reversed to the profit and loss account on account of sale of NPAs in the financial statements in `Notes to Accounts'.
  
• US becomes world's largest oil producer, surpasses Saudi Arabia
  United States became the world's largest oil producer in 2014, according to a report by the BP energy company. BP economist Spencer Dale credits the shale revolution for a surge in American oil production that helped US producers leapfrog over Saudi Arabia. American output of natural gas and oil combined is now greater than that of Russia, the previous global leader.
  
• Telangana forms task force for Pharma City development
  The Telangana government has constituted a task force committee for the development of the proposed Pharma City project at Mucherla village in Rangareddy district.
  
  Last year, the government announced a project of the size of about 11,000 acres, comprising processing and non processing areas and common effluent treatment plants and research and education facilities, will be developed near Hyderabad to attract more investment into the pharma sector.
  
  Telangana has a large base of pharmaceutical industry and the necessary ecosystem for its further growth. The committee will meet once in a month or whenever necessary and monitor the project, it said.
  
• India nuclear insurance pool launched
  General Insurance Corporation of India (GIC Re) and 11 other non-life insurers have formed the India Nuclear Insurance Pool. It will have a capacity of Rs 1,500 crore.
  
  New India Assurance will issue the policy and deal with management of cover to the operators and suppliers, on behalf of all direct insurance companies participating in the pool.
  
  Apart from GIC Re, New India, Oriental Insurance, National Insurance and United India Insurance from the public sector, the private ones are ICICI Lombard General Insurance, Tata AIG General, Reliance General Insurance, Chola MS General Insurance, IFFCO Tokio General Insurance, SBI General and Universal Sompo General.
  
  The policies offered will be a nuclear operators liability insurance policy and a nuclear suppliers' special contingency (against right to recourse) insurance policy.
  
  This pool will be the 27th such market pool globally. It is expected to address third-party liability insurance to begin with and later expand into property and other hot zone (inside reactor areas) risk. This will cover both operators and suppliers. At present, only cold zones (outside reactor areas) are covered.
  
  The idea of forming a pool was mooted in early 2013 and got stuck due to differences among stakeholders on certain clauses. In 2010, Parliament passed the Civil Liability of Nuclear Damage(CLND) Act, which creates a liability cap for nuclear plant operators for economic damage in the event of an accident.
  
  This pool will provide the risk transfer mechanism to the operators and suppliers to meet their obligations under the CLND Act. At a later stage, this pool also looks to provide reinsurance support to other such international pools.
  
  The CLND Act also provides for state-run Nuclear Power Corporation of India, which operates all atomic power plants in India, to seek compensation from suppliers in an accident due to faulty equipment.The CLND Act provides for Rs 1,500 crore as maximum liability for nuclear damage.
  
• Singapore tops in India investment
  Singapore has emerged as the most sought after destination for foreign direct investment by Indian companies, which invested over USD 500 million there in May. According to a study from industry body Assocham, of the total outward investment of USD 2.35 billion in May, Singapore accounted for about a fourth of the total outflows.
  
  The US, the UK, Hong Kong, the UAE, the Philippines and Mauritius were the other favourite destinations. While Mauritius remained the top source of FDI into India, it was not the same in case of outflows to that country, said the study.
  
  Of the 467 companies which invested abroad, only 24 preferred Mauritius, which is a haven for corporates wanting to bring in FDI because of the India-Mauritius Double Taxation Avoidance Agreement, it said. Since the island nation has zero capital gains, it makes sense for the inward FDI from there, rather than outward FDI for India, said the Assocham study.
  
  About 138 companies invested in manufacturing followed by services. In the services sector, close to 100 Indian companies put their money in foreign ventures. As many as 68 domestic firms invested abroad in sectors such as wholesale, retail, hotels and restaurants. India, meanwhile, is yet to open the multi-brand retail to FDI.
  
  The industry body said cheaper assets available at attractive valuations could be one of the plausible reasons for a vibrant outward FDI. In services sector, health care, information technology and asset management are seen as prominent areas of interest, said the study.
  
  In manufacturing sector, outward FDI was finding assets in the areas of pharmaceuticals, shipyards, metals, engineering and textiles, it said. In services, India has made its mark but there is a need to scale up the value chain, found the study.
  
• Telangana unveils industrial policy
  The Telangana government unveiled its new industrial policy on 12th June which focuses on time-bound approvals for setting up projects in the state.
  
  A "chasing cell" was formed to monitor the progress of various proposals.
  
  According to the new policy Telangana State Industrial Project Approval and Self-certification System (TS-iPASS), penal action will be taken against government officials if there is any undue delay in processing applications.
  
  The mega projects would get permissions in 15 days. The industrial policy framework, which was passed in the Telangana Assembly in November 2014, had promised to offer minimum inspection and maximum facilitation.
  
  The policy prescribed norms for giving permissions to mega (investments of Rs 200 crore and above), large (Rs 10 crore-Rs 200 crore) as well as small and medium project proposals.
  
  The government identified 14 core areas for a focused approach which include life sciences, pharma, information technology, aerospace, automobiles, textiles, minerals and transportation and logistics, among others.
  
  The CM also launched a solar power policy which will ensure single window clearances to solar projects.The government has created a bank of 1.5 lakh acres of land which can be used for industrial purposes and transferred it to the Telangana State Industrial Infrastructure Corporation.
  
• Govt notifies Black Money Act
  The government has notified the Black Money (Undisclosed Foreign Income as Assets) and imposition of Tax Act, 2015. It will come into effect from April 1 next year. The Act prescribes tax of 30 per cent and penalty up to 90 per cent on undisclosed bank accounts and assets abroad. However, this provision will apply only to those who do not use the compliance window.
  
  The government will notify separate dates for the compliance window during which any Indian can disclose his/her foreign bank account and assets, pay 30 per cent tax along with 30 per cent penalty and protect him/herself from legal action.
  
• Service tax to go up to 14 %
  Service tax will go up to 14 percent from 1st June onwards.Some of the key services that will attract higher tax and hence become costlier are railways, airlines, banking, insurance, mobile, advertising, architecture, construction, credit cards, event management and tour operators.
  
  According to railway ministry officials, fares for First Class and AC classes in passenger trains, besides freight charges, will go up by 0.5 per cent from tomorrow. Finance Minister ArunJaitley in his Budget had proposed to raise service tax from 12.36 per cent, including education cess, to 14 per cent. The tax is levied on all services, except a small negative list.
  
• Vijayawada airport to become international
  In a move to develop world-class infrastructure and promote rapid economic growth, the AP government has decided to upgrade Tirupati and Vijayawada airports into international airports and develop ports along coastal districts. The Union government also agreed to extend financial aid for land acquisition for the expansion of Vijayawada, Tirupati and Visakhaptnam airports.
  
• RBI allows banks to invest in infra bonds of other lenders
  In a bid to boost infrastructure development, the Reserve Bank has allowed banks to invest in long term infra bonds of other lenders. In a notification on 31st May, the RBI said that after a review, it has been decided that henceforth, banks can invest in the long term bonds issued by other banks.
  
  However, it said, the primary objective of allowing regulatory exemptions on Cash Reserve Ratio and Statutory Liquidity Ratio requirements as well as priority sector lending is to encourage issue of long term bonds for lending to infrastructure projects and affordable housing. It said, such long term bonds are exempted from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects. Banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to long term projects in infrastructure sub-sectors, and affordable housing.
  
• RBI cuts key policy rate by 0.25 pc
  Reserve Bank Governor Raghuram Rajan on 2nd June cut the key interest rate by 0.25 percent, third time this year, meeting market and government expectations of boosting growth by lowering borrowing cost.The Governor asked banks to follow suit and pass on the rate cuts -- 0.75 percent since January -- to individual and corporate borrowers.
  
  After RBI’s reduction, Public sector Allahabad Bank became the first to reduce the lending rate by 0.3 percent. RBI cut the repo rate (short-term lending rate) from 7.5 percent to 7.25, but left all other policy tools like cash reserve requirement unchanged at 4 percent and Statutory Liquidity Ratio (SLR) at 21.5 percent.
  
  RBI lowered projections of the economic growth as measured by GVA (gross value added) to 7.6 percent from 7.8 percent estimated in April due to global factors and likely impact of below normal monsoon.
  
  At the same time, inflation still remains a worry for the central bank as it expects price rise to remain subdued till August before rising to 6 percent by January 2016. It asked the government to put in place a contingency plan to manage the impact of low food production on inflation, mainly because of expected lower than normal rains. The other concern for the RBI is rising crude oil prices. Since the last policy in April, the crude oil prices have witnessed an increase of 9 percent.
  
  Following the downward revision in the repo rate, the reverse repo rate (short-term borrowing rate) has got adjusted to 6.25 percent and Marginal Standing Facility rate as well as Bank rate to 8.25 percent.
  
• India’s average import tariffs up marginally in 4 years: WTO review
  India’s average applied import tariffs have increased to 13 per cent in 2014-15 from 12 per cent four years ago, largely due to a 3 per cent rise in duties for agriculture products such as cereals, oilseeds, fats, sugars and confectionary, says India’s latest trade policy review by the World Trade Organisation (WTO).
  
  The review, circulated on 2nd June, is mildly critical of India for not reducing its peak customs duty (duties markedly higher than the average applied rates) for non-agriculture products since 2007-08.
  
  India’s last review was carried out in 2010-11. In the past four years, the average tariff on agriculture products rose to 36.4 per cent from 33.2 per cent, while tariff on non-agriculture items rose to 9.5 per cent from 8.9 per cent.
  
• Govt approves 40 electronics manufacturing proposals
  According to data from the department of electronics and information technology, the January-March period has seen a 900 per cent jump over the same period last year in the value of investment approvals under the Modified Special Incentive Proposal Scheme (M-SIPS).In January-March 2014, proposals worth Rs 289 crore were cleared. In the same period of 2015, these were worth Rs 3,059 crore.
  
  According to a separate set of statistics, the government has got a total of 63 proposals under the policy, worth Rs 20,825 crore. Of these, 40 worth Rs 9,565 crore have been approved and the rest are being considered. Of the 40 approved, eight worth a total of Rs 1,152 crore were cleared before May 2014. The present government took office in May last year.
  
  Under the M-SIPS policy, the government provides 20-25 per cent subsidy on capital expenditure for manufacturers of electronics, under 26 categories. Proposals by Korean white goods major Samsung India, Bosch Automotive Electronics, Tessolve Semiconductor Manufacturing Industries and Tejas Networks are among those approved. 
• India's LIC gets clearance to do business in Bangladesh
  India's Life insurance Corporation (LIC) has been cleared to do business in Bangladesh, thus intensifying competition in the insurance market. They will be able to start operations once the conditions are fulfilled. LIC will start business as the joint venture entity called LIC Bangladesh Ltd with a paid-up capital of 1 billion Takas with LIC holding half of it.
  
  The rest will be held by Bangladesh which will be raised in the capital market and local entrepreneurs. LIC's proposal to operate in Bangladesh was rejected by Bangladesh Insurance Development and Regulatory Authority in 2013 citing small capital base.
  
  Following an appeal by LIC, the IDRA cleared the proposal with a substantially higher capital base. Insurance experts say the move will stiffen competition in the insurance market and benefit customers. Bangladesh has over 77 local insurance companies in the market, the only other foreign insurance company is a US-based company which operates as a branch office, and not as a registered company.
  
• Govt faces ‘daunting’ task meeting disinvestment target of Rs. 69,500 cr
  The Finance Ministry has targeted raising Rs. 69,500 crore through disinvestment in the current fiscal year. Of this, it aims to raise Rs. 41,000 crore through sale of a minority shareholding in Central Public Sector Enterprises (CPSEs) and Rs. 28,500 crore through strategic sales. So far, there has been just one minority stake sale, with the Government selling 5 per cent in Rural Electrification Corporation and garnering Rs. 1,610 crore. The Disinvestment Department has approval to sell a 5.15 per cent stake in over a dozen CPSEs, including ONGC, BHEL, NTPC, IOC, NALCO and NMDC. The Cabinet Committee of Economic Affairs has also given its nod for the Initial Public Offerings of two CPSEs — Hindustan Aeronautics Ltd and RashtriyaIspat Nigam.The Centre is also looking at a strategic sale of some CPSEs — that is, a 51 per cent divestment, handing over management to a private party.
  
• India signs multilateral pact on financial info exchange
  India has signed a multilateral agreement that specifies the details of what financial account information will be exchanged and when, as set out in the internationally approved single standard for automatic exchange of information (AEOI).
  
  This agreement is called the multilateral competent authority agreement (MCAA) on automatic exchange of financial account information, which implements the internationally approved standard for automatic exchange.
  
  While the agreement is multilateral, the actual exchanges are bilateral.It would be instrumental in getting information about assets of Indians held abroad, including through entities in which Indians are beneficial owners.
  
  The declaration to comply with the MCAA provisions was signed by Mohan Kumar, Ambassador of India to France, in Paris on June 3, with as many as six countries, including India, joining the MCAA.
  
  The other five countries are Australia, Canada, Costa Rica, Indonesia and New Zealand. With this, the total number of countries agreeing to exchange information automatically in accordance with MCAA has gone up to 60.
  
  So far, 94 countries have committed to exchange information on an automatic basis 2017 onward, as per the new global standards, known as ‘Common Reporting Standards (CRS) on AEOI’.The new global standards are very wide in scope and oblige the treaty partners to exchange a wide range of financial information after collecting the same from financial institutions in their country/jurisdictions, including information about the ultimate controlling persons and beneficial owners of entities.
  
• World Bank approves $ 250 million loan for J&K
  World Bank has approved 250 million US dollars loan for Jhelum and Tawi Flood Recovery Project for reconstruction of flood-affected public infrastructure in Jammu and Kashmir. The multi-lateral lender said in a release that in addition to reconstruction, which includes reconstruction of roads, bridges and public infrastructure, the project will also help the region be better prepared for the future.
  
  The project will be funded by credit from World Bank's concessionary - International Development Association. A continuous spell of rains in September last year had caused Jhelum, Chenab and Tawi rivers, their tributaries and many other streams to flow above the danger mark which had severely affected livelihoods in the state. Due to the unprecedented heavy rainfall, the catchment areas, particularly low lying ones, were flooded for more than two weeks, while Jhelum breached its banks at several places.
  
• Govt finalizes guidelines for Smart Cities Mission & AMRUT
  Government has finalized the guidelines for Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). The two programmes aim at recasting the urban landscape of the country to make urban areas more livable and inclusive besides driving the economic growth. Central government will spend about one lakh crore rupees under two missions over the next five years.
  
  Under the Smart Cities Mission, 100 smart cities will be developed to promote adoption of smart solutions for efficient use of available assets, resources and infrastructure for enhancing the quality of urban life.
  
  The AMRUT adopts a project approach to ensure basic infrastructure services relating to water supply, sewerage, storm water drains, transport and development of green spaces and parks with special provision for meeting the needs of children. The Mission will be implemented in 500 cities and towns each with a population of one lakh and above.
  
• WTO urges India greater tax reform, FDI liberalisation
  The 161-member World Trade Organization (WTO) on 4th June urged India to undertake greater tax reform and liberalise the country’s Foreign Direct Investment (FDI) policy.
  
  Concluding the country’s sixth trade policy review, the WTO stated India needed greater tax reforms to increase investment in infrastructure. Members also stated effort by the government to introduce a goods and services tax (GST) were a welcome step.
  
  Trade policy reviews are a mandatory WTO exercise to examine policies of its member countries. India’s trade policy review was previously conducted in 2011. The review took place at the WTO headquarters in Geneva and the Indian delegation was led by Commerce Secretary Rajeev Kher.
  
  Lauding the government’s initiative to increase FDI limits in insurance and railways, the WTO stated there was scope for further improvement.The members also applauded the Make In India programme to transform India into a manufacturing hub and the setting up of a portal to facilitate business.
  
  The WTO also patted India on the back for taking steps to facilitate trade under the Trade Facilitation Agreement (TFA) signed last November, which is yet to be ratified.
  
  However, the WTO expressed concerns of over the “complexity and uncertainty” in the country’s tariff structure, including an additional duty and a special additional duty, and the large difference between applied and bound rates.
  
  Some of the members also complained against India’s customs valuation and import licensing requirements on particular products, although they noted India had not introduced any new trade barriers to safeguard its agriculture or manufacturing sectors.
  
• India loses poultry import case to US in WTO
  India on 4th June lost a long-pending dispute over poultry imports from the US at the World Trade Organization (WTO)'s dispute settlement body.
  
  In its ruling, the appellate body said India violated international trading norms by not allowing import of poultry products from the US. The WTO had also stated India's import prohibition did not meet international standards and was not based on a scientific risk assessment. Therefore, the dispute settlement body concluded, India violated WTO's agreement on sanitary and phytosanitary measures.
  
  India had blocked the import of American poultry products fearing the spread of bird flu in the country in 2007. On March 6, 2012, the US had dragged India to the WTO.
  
  India had informed the dispute settlement body the primary reason for restricting the entry of various agricultural products from the US was because it was concerned about the spread of the Avian influenza.
  
• Solar power at cheaper rate in Telangana; 2,747 MW to be generated
  The Telangana government on 4th June announced its broad framework for solar power that envisaged making available 2,747 MW of power before kharif in 2016 with the power purchase agreements (PPAs) for a lion’s share being much less than Rs. 6.45 a unit.
  
  The tender process was in progress for 2,000 MW out of 2,747 MW and the last date was June 15. The response was overwhelming as bids were received for 6,000 MW so far, but they will be pegged at 2,000 MW and agreements entered into at Rs. 6.45 a unit which will be the ceiling price under reverse bidding. It meant that all quotations will be finalised at less than Rs. 6.45 a unit.
  
  The price for 515 MW, which was finalised in November last whose works were in progress, was Rs. 6.72 a unit while it was Rs. 6.49 a unit for the remaining 232 MW entered into by the Congress government.
  
  A unique feature of the new policy is that the generation will be as per the requirement of each district and capacity of substations. The utilisation of power will be local. The power deficit at the substations will be filled with solar power. Only 40 MW will be supplied to the substation, for instance, if its capacity to handle was 50 MW and the solar plant in the area generated 10 MW.
  
  It will eliminate problems of maintenance on the grid and power production could be decentralised. There will also be clarity on the quantum of solar power to be supplied for each district An upper limit has been fixed district wise in the tendering for the 2,000 MW. Thus, Mahabubnagar has been allotted 400 MW, Medak – 500 MW, Nalgonda – 600 MW, Ranga Reddy (south) – 100 MW, Warnagal – 300 MW, Karimnagar – 300 MW, Khammam – 200 MW, Nizamabad – 400 MW and Adilabad – 200 MW.
  
• Govt sets up panel to review Companies Act
  The government on 5th June formed an eight-member panel to review the Companies Act, 2013, and suggest necessary changes.
  
  Chaired by Anjuly Chib Duggal, secretary, ministry of corporate affairs (MCA), it is to give the report within six months of its first meeting. It is to "make recommendations to the government on issues arising from implementation of the Act".
  
  The panel would be examining recommendations from the Bankruptcy Law Reforms committee, High Level Committee on Corporate Social Responsibility, Law Commission and other agencies on the issue. It may invite subject experts and those from regulatory bodies as needed.
  
  Others on the committee are Manoj Fadnis, president of The Institute of Chartered Accountants of India; A S Durga Prasad, president, Institute of Cost Accountants of India; Atul H Mehta, president, Institute of Company Secretaries of India; Reva Khetarpal, former Delhi high court judge; Bharat Vasani, chief legal and group general counsel, Tata Sons, and Y M Deosthalee, chairman, L&T Finance Holdings. The joint secretary (policy), MCA, would be member-convener.The government has already made many changes in the year since the Act came into implementation, with Parliament recently okaying amendments, including easing thee norms for related-party transactions.
  
• $400 mn World Bank loan for urban renewal project in TN
  An agreement for $400 million loan assistance to implement the sustainable urban development project in Tamil Nadu was agreed between the World Bank, Union government and the Tamil Nadu government.
  
  The project aims to improve urban services by following financially sustainable methods besides introducing improved urban management practices in the identified cities.While the total project costs $600 million, World Bank is supporting with $400 million.It targets improving the urban services like water, sewerage, municipal solid waste, transportation, sewerage management among others.