ECONOMY AFFAIRS JUNE 2016
- ICICI Bank launches Smart City Pre-paid Card in Ahmedabad
ICICI Bank, in association with Ahmedabad Municipal Corporation (AMC), launched 'Smart City Pre-paid Card', a first-of-its kind offering in the country.
It enables the residents of the city to pay for an array of facilities including taxes, bills, entry fee to common city areas and at retail outlets by using a single pre-paid card. Chief Minister Anandiben Patel unveiled the 'Smart City Pre-paid Card' at an event held in Ahmedabad. By using this card, the people can…- Pay municipal tax and utility bills at the Ahmedabad Municipal Corporation civic centres in the city and 100 other service outlets set up by ICICI Bank
- Pay entry fee and charges for amusement rides at the Sabarmati riverfront and Kankaria lakefront and pay at various retail merchant outlets
- In a few months, customers will also be able to use this card for paying for transit charges on 'Janmarg' or Ahmedabad BRTS as well as the Ahmedabad Municipal Transport Service for bus rides.
- Additionally, they would also be able to use it at the 'Pay & Park' locations managed by AMC.
- GAAR to apply after April 1, 2017
The Finance Minister has provided clarity to investors on GAAR, which will be implemented from April 1st, 2017. According to Finance Minister:- General Anti-Avoidance Rules (GAAR) will not apply to any income earned or received from transfer of investments before April 1, 2017.
- The move will bring the anti-abuse rules that will be applicable from assessment year 2018-19 in line with the reworked India and Mauritius Double Taxation Avoidance Agreement that will grandfather all investments till April next year.
- To this end, the Central Board of Direct Taxes (CBDT) has also amended Rule 10 of the Income Tax Rules, 1962.
- However, it has said GAAR will apply to any arrangement, irrespective of its date, if there has been any tax benefit from it prior to April 1, 2017.
- Investors have been worried about the impact of GAAR on investments routed through Mauritius, as the new tax treaty allows India to impose capital gains tax on shares sold in Indian companies post-April 2017.
- States received 16.7% more funds in FY16
According to the NITI Aayog, states did not left with less funds in 2015-16 as compared to a year ago, despite transfer of a higher divisible tax pool following the 14th Finance Commission’s recommendations.
The Centre transferred 42 per cent of the divisible pool to states in 2015-16, an increase of 10 percentage points from 32 per cent in each of the previous five years. Many states have frequently complained that the increased devolution has been accompanied by more reduction in central transfers through grants, including those through centrally sponsored schemes (CSS). However, the NITI Aayog found this to be true only for Sikkim, Tripura and Uttarakhand.
According to a study conducted by it, transfers to the states (net of recovery of loans and advances), comprising devolution of taxes, non-plan grants and loans, central assistance for states and UT plans (CACP), rose 21.7 per cent in 2015-16 (revised Estimates) compared to actual transfers in the previous year.
Net resources transferred to states stood at Rs 8.2 lakh crore in 2015-16 (RE) against Rs 6.7 lakh crore in 2014-15. However, actual transfer to states and not RE turned to be a bit less at Rs 7.7 lakh crore in 2015-16. This meant a 16.7 per cent increase in 2015-16 over that in the previous year.
However, the actual increase has been unevenly distributed across states. The five big gainers that saw their total transfers rise around 30 per cent in 2015-16 over that in 2014-15 were Arunachal Pradesh, Goa, Himachal Pradesh, Kerala and West Bengal. Chhattisgarh, Jharkhand, Madhya Pradesh and Odisha experienced an increase of between 20 and 30 per cent.
At the other extreme, Sikkim, Tripura and Uttarakhand saw their transfers decline. Among these states, Sikkim lost as much as 26.8 per cent and Uttarakhand 12.9 per cent despite gaining 113 per cent and 29.5 per cent, respectively, in devolution. Tripura received 3.9 per cent less over this period, despite 73.9 per cent higher devolution.
A state’s total revenue receipts (TRR) include its own-tax revenue, non-tax revenue, its share in the central divisible pool and grants from the Centre, including those through CSS. - Govt reduces prices of 42 drugs by upto 15%
Government has capped the prices of 42 essential medicines used in treatment of various ailments including tuberculosis, cancer and cardiac diseases thereby reducing their cost by up to 15 per cent.
Drug price regulator, National Pharmaceutical Pricing Authority, NPPA in a notification on its website said it has fixed or revised ceiling prices of 45 scheduled formulations of Schedule-I under Drugs (Price Control) Amendment Order, 2016.
An official source said out of the 45, the prices of 42 medicines have been reduced by up to 15 per cent. NPPA said manufacturers not complying with the ceiling price would be liable to deposit the overcharged amount along with interest.
The government fixes the prices of essential drugs based on the simple average of all medicines in a particular therapeutic segment, having sales of more than 1 per cent. - Maharashtra remains the richest state: RBI report
Tamilnadu showed the highest gross fiscal deficit across all states in 2015-16, Maharashtra continued to be the richest state in the country while Punjab witnessed steady fall in the number of factories between 2010-11 and 2013-14, according to Reserve Bank of India’s first edition of the Handbook of Statistics on Indian States.
Maharashtra continued to remain the richest state in the country, with a gross state domestic product (GSDP) in 2014-15 recorded at about Rs 9.50 lakh crore at constant prices, rising 5.7 per cent from 2013-14. The second-richest state in terms of GSDP was Tamil Nadu, closely followed by Uttar Pradesh at about Rs 5 lakh crore each, in 2014-15.
Tamil Nadu’s gross fiscal deficit was estimated at Rs 31,830 crore, followed by Uttar Pradesh’s Rs 31,560 crore for 2014-15. Maharashtra’s fiscal deficit, third widest in the country, was at Rs 30,730 crore for the period. The total fiscal deficit of all states included was at Rs 3,33,330 crore, down 8.8 per cent from the previous year.
Punjab witnessed a steady fall in the number of factories in the past few years, according to RBI’s handbook. In 2010-11, the northern state had 12,770 factories, which fell to 12,593 in 2011-12, 12,427 in 2012-13 and 12,278 in 2013-14. Across India, the number of factories at the end of 2013-14 stood at 224,576, from 222,120 a year ago.
Maharashtra and Rajasthan witnessed considerable fall in gross sown area for agriculture. In 2012-13, Maharashtra’s gross sown area shrank to 21,874 thousand hectares, from 22,011 thousand hectares in 2011-12 and 23,175 thousand hectares in 2010-11. In case of Rajasthan, it was 23,954 thousand hectares, 24,505 thousand hectares and 26,002 thousand hectares, respectively.
Maharashtra also continues to top in terms of state-wise availability of power, generating 141,361 million units net compared with the second-highest generator Gujarat, which made available 103,540 million units as of 2015-16. For the full of India, the country made available 1,090,713 million units net of power in 2015-16, compared with 1,030,785 million units net a year ago. - Govt enhances financial powers of ministers, departments
In order to expedite project approvals, the government has revised financial limits of departments and ministries while empowering ministers to clear projects of up to Rs 500 crore as against the earlier ceiling of Rs 150 crore.
Besides, projects or schemes worth Rs 500 crore and above and up to Rs 1,000 crore can be cleared by the Finance Minister and projects over Rs 1,000 crore would require the Cabinet approval, the Finance Ministry said in a statement.
As per the revised delegation, the Committee on Non-Plan Expenditure (CNE), which serves as an appraisal forum for all non-plan proposals of Central Government Ministries or Departments, will now appraise proposals involving expenditure of Rs 300 crore and above from earlier limit of Rs 75 crore
Non-plan Schemes or projects of less than Rs 300 crore can now be appraised by Ministry or Standing Finance Committee of the Ministry concerned
The financial powers of the Minister-in-charge of the administrative ministry in case of the Non-Plan schemes or projects have also been enhanced and the schemes or project costing less than Rs 500 crore can now be approved that level.
Earlier, the Minister-in-charge could approve projects costing less than Rs 150 crore. Proposal having financial limits of Rs 1,000 crore and above shall require approval of the Cabinet or Cabinet Committee on Economic Affairs
Concurrently, it said, financial limits regarding appraisal and approval of increase in cost estimates have also been revised.
Increase in cost up to 20 per cent of the firmed up cost estimates can now be appraised by the Financial Adviser and approved by Secretary of the administrative Department, if the absolute cost escalation is up to Rs 75 crore, and by the Administrative Minister-in-charge if absolute cost escalation is above this
With this enhancement of financial powers, the financial limits for appraisal and approval of plan and non-plan schemes /projects of Central Government Ministries and Departments have been brought almost at par, it said, adding that this is expected to expedite appraisal and approval process in the Central Government Ministries/Departments. - India’s financial system remains stable despite some challenges: RBI
The Reserve Bank on 28th June said that India’s financial system remains stable despite some challenges in the banking sector, global uncertainties and transiting geopolitical risks.
RBI’s June 2016 Financial Stability Report states that India stands out in terms of growth and investment potential in view of government’s commitment to fiscal discipline, efforts to improve the 'ease of doing business' and rationalising subsidies.
According to RBI, prediction of a normal monsoon augurs well for growth of agriculture sector in 2016-17.
On the other hand, RBI has cautioned against the recent increase in India’s oil import in terms of volume. The report informs that gross non-performing assets of public-sector banks rose to 7.6 percent in March 2016 and net NPAs by 4.6 percent.
The report says that the rise in NPAs largely reflect reclassification of restructured loans as non-performing due to asset quality review. - India slips 5 notches to 105th on Human Capital Index
India is ranked at 105th position globally on a worldwide Human Capital Index, which measures countries’ ability to nurture, develop and deploy talent for economic growth. The list was topped by Finland
India ranks much below China’s 71st position, while Bangladesh, Bhutan and Sri Lanka are also placed higher on the index, released on 28th June by the Geneva-based World Economic Forum (WEF) in this Chinese city at its Annual Meeting of New Champions — also known as ‘Summer Davos’ summit. Pakistan ranks further lower at 118th place.
Giving India 105th rank out of the total 130 countries included in the index, WEF said the country had optimised only 57 per cent of its human capital endowment, placing it in the top of the bottom quartile of the index. India was ranked 100th last year out of total 124 countries included in the 2015 index.
Although the country’s educational attainment has improved markedly over the different age groups, its youth literacy rate is still only 90 per cent (103rd in the world), well behind the rates of other leading emerging markets,” it added.
On the positive side, India has got better rankings on quality of education system (39th), staff training (46th) and ease of finding skilled employees (45th) indicators. This suggests “a primary avenue for improvement for the country consists of expanding access to its numerous learning and employment opportunities”.
The report also showed that India had the largest share in the “global distribution of tertiary degree holders” at nearly 78 million while it was second largest after China on global distribution of recent graduates in STEM subjects (science, technology, engineering and mathematics) at about 2.5 million.
Globally also, an average of only 65 per cent of the world’s talent is being optimised through education, skills development and deployment during people’s lifetimes, WEF said.
Finland, Norway and Switzerland hold the top three positions, utilising around 85 per cent of their human capital. Japan leads when it comes to 55 year-olds and over. - Cabinet approves recommendations of 7th Pay Commission
Union Cabinet has approved the recommendations of the 7th Pay Commission. According to the Finance Minister Arun Jaitley the recommendations will be implemented from 1st January 2016 and arrears will paid this year itself.
He said the Pay Commission covers 47 lakh government employees and 53 lakh pensioners out of which 14 lakh employees and 18 lakh pensioners are from defence force.
Entry level salary for government employees will be 18 thousand rupees against the existing 7000 rupees per month, whereas the highest level will be two lakh 50 thousand rupees against the existing 90 thousand rupees.
Minimum pension will now become 9000 rupees against the existing monthly pension of 3500 rupees. Mr Jaitley said based on minimum pay, fitment factor of 2.57 has been approved for revising pay of all employees uniformly across all levels.
The rate of annual increment has been retained at 3 per cent. Gratuity ceiling has been enhanced from 10 to 20 lakh rupees.
The ceiling on gratuity will increase by 25 per cent whenever DA rises by 50 per cent. He said the total financial impact in the current financial year due to the implementation of the Pay Commission is likely to be 1.02 lakh crore rupees. He said efforts have been made to bring government salaries closer to private sector salaries.
Rates of Military Service Pay have also been revised to 3600, 5200, 10800 and 15500 rupees a month for various categories of Defence personnel. Mr Jaitley informed that 7th Pay Commission recommendations on Allowances will be referred to a Committee headed by Finance Secretary.
In the meantime, the existing allowances will continue. The Minister also announced setting up of a Committee to look into anomalies which may result from the implementation of the Pay Commission recommendations. - CCEA approves three major highway projects
Cabinet Committee on Economic Affairs has given its approval to three major highway projects. Government has given its nod to the four laning of 80 kilometre long Phagwara-Rupnagar Section of NH-344A in Punjab at a cost of 1444 crore rupees in Hybrid Annuity Mode. It has also approved four-laning of 151 kilometre Angul-Sambalpur Section of NH-42, which is the New NH-55 in Odisha.
The project will cost around 2500 crore rupees.Besides, four laning of 87 kilometre Aurangabad-Telwadi section of NH-211 in Maharashtra has also been approved at an estimated cost of over 2028 crore rupees. - Cabinet clears Model Bill allowing shops & other establishment to operate round the clock
The Cabinet has cleared the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016.
This Bill was finalised after detailed deliberations and discussions with public through internet and with employees, labour representatives, employers’ associations, federations and State Governments through tripartite consultative process.
The Bill will now be sent to States and Union Teritories to enable them to modify their individual Acts, if they so desire either by adopting the said Bill as it is or after modifying its provisions as per their requirements.
The law will allows shops, malls and cinema halls, among other establishments to run 24×7 throughout the year. The law covers establishments employing 10 or more workers except manufacturing units and will provide freedom to operate 365 days with flexibility on timing to open and close.
It also provides for women to be employed on night shifts with adequate security and calls for better working conditions for employees such as drinking water, canteen, first aid, lavatory and creche.
The Cabinet also approved the Cadre Review of Group 'A' Executive officers of Central Reserve Police Force, CRPF with net creation of 90 posts of various ranks from Deputy Commandant to Special DG ranks.
After creation of these posts in CRPF, the operational efficiency and capacity building of the Force including its administrative capabilities would be enhanced. - Cabinet clears National Mineral Exploration Policy
Cabinet on 29th June cleared the National Mineral Exploration Policy, NMEP, paving the way for auction of 100 prospective mineral blocks and boosting the country's mining potential. The government wants to attract private sector in exploration through the mineral exploration policy. One of the important features of NMEP is attractive provisions for private investment in the exploration sector. - Govt. presents blue print on Postal Bank
The government has come out with a blue print on postal bank. The postal payment bank will have 650 branches by September 2017. That means a branch in each district. 10% of the branches will be in north east state. Post offices in each district will be connected the main branch of postal bank in each district.
The staff of the postal bank will be different postal dept. staff. Initial bank branch staff is expected to be around 2000 people.
The India Post Payments Bank shall be set up with an investment of Rs 800 crore. The idea behind postal bank is to increase financial inclusion in the country. At present, there are 22,137 post offices with core banking facility compared to State Bank of India's 1,666 branches. - India jumps 19 spots in logistic performance
Improvement in services for exporters has pushed the country 19 places higher in the World Bank group's Logistics Performance Index (LPI). Among 160 countries, it stood at 35, based on six criteria that impact export shipment.
The LPI has been prepared by the bank's trade and competitiveness group every two years since 2007. India's overall LPI score rose from 3.07 in 2014 to 3.42 in 2016, of a maximum five. The first country Germany, while the last in Syria.
Though China outshines India at 27, it stands higher in order compared to several upper-middle income countries and BRICS members. Brazil ranks 55, Indonesia 63 and Russia is 99. The report, in fact, said India "overperformed" its income group.
The parameters include efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments and frequency with which shipments reach consignees within scheduled or expected delivery times.
The components are chosen based on theoretical and empirical research, and on the practical experience of logistics professionals involved in international freight
These six LPI indicators are grouped in two main categories of areas for policy regulation, indicating main inputs to the supply chain (customs, infrastructure, and services). Second, supply chain performance outcomes (corresponding to indicators of time, and timeliness, international shipments, and tracking and tracing). - Indian money in Swiss banks drops to record low
Money held by Indians in Swiss banks has fallen by nearly one-third to a record low of 1.2 billion franc (about Rs. 8,392 crore) amid a continuing global clampdown on the famed secrecy wall of Switzerland’s banking system.
The funds held by Indians with banks in Switzerland fell by CHF 596.42 million to CHF 1,217.6 million at the end of 2015, as per the latest data released today by the country’s central banking authority Swiss National Bank (SNB).
This is the lowest amount of funds held by Indians in the Swiss banks ever since the Alpine nation began making the data public in 1997 and marks the second straight year of decline.
The funds held by Indians with Swiss banks stood at a record high of CHF 6.5 billion (Rs 23,000 crore) at 2006-end.
However, the quantum of these funds has been falling since then, except for in 2011 and in 2013 when Indians’ money had risen by over 12 per cent and 42 per cent, respectively.
At the end of 2015, the total funds held in Swiss banks by Indians directly stood at CHF 1,206.71 million (down from CHF 1,776 million a year ago), while the money held through ’fiduciaries’ or wealth managers was down at CHF 10.89 million (from CHF 37.92 million at 2014-end). The total stood at CHF 1,814 million at the end of 2014.
This is the lowest-ever level of funds held through fiduciaries, which used to be in billions till 2007 but has been falling amid fears of regulatory crackdown.
As per the SNB data, the total money held in Swiss banks by all their foreign clients from across the world also fell by nearly four per cent or over CHF 58 billion to CHF 1.41 trillion (USD 1.45 trillion or about Rs.98 lakh crore).
On directions of the Supreme Court, India has also constituted a Special Investigation Team (SIT) to probe cases of alleged black money of Indians, including funds stashed abroad in places like Switzerland. - RIL and SBI sign agreement for payments bank
Reliance Industries Ltd (RIL) and State Bank of India (SBI), the country’s largest lender, have signed the subscription and shareholders’ agreements for their payments bank venture. While RIL is the promoter with 70%, SBI will have an equity investment of 30%. RIL and SBI entered into a non-binding memorandum of understanding in February 2015 to set out the principal terms for the venture.
The Reserve Bank of India (RBI) last year gave in-principle approval to 11 entities, including RIL, to open payments banks that will widen the reach of banking services and push the government’s goal of financial inclusion. The new category of banks will provide basic savings, deposit, payment and remittance services to people without access to the formal banking system. - India resolves tax issue with Cyprus
Two months after successfully renegotiating its tax treaty with Mauritius, the government has successfully come to an agreement with Cyprus on source-based taxes for capital gains, to take effect from the next financial year.
The government is likely to next renegotiate its tax treaty with Singapore to this effect. And, Cyprus, with an earlier reputation as a 'tax haven', is to be removed from the government's 'blacklist' in this regard. These provisional agreements will be placed before the Cabinet for approval, after which the new treaty would be signed by the two sides.
Although Delhi has provided for grandfathering for investments made before April 2017, Cyprus will not get the concessional tax rate or transitional benefit for two years, unlike with Mauritius, which got a concessional rate of 50 per cent till 2019 on fulfilling limitation of benefit conditions.
The government of Cyprus, seventh largest foreign direct investment (FDI) source here, was earlier unwilling to amend the tax treaty, citing India's with Mauritius. Cyprus was, however, keen on being taken off the blacklist or 'notified jurisdiction' list before the General Anti Avoidance Rule (GAAR) for taxes began from the coming April. This is a set of rules designed to give Indian authorities the right to scrutinise and tax transactions they believe to have been structured solely to avoid taxes.
From April 2000 till March 2016, India received FDI worth Rs 42,681 crore from Cyprus, shows official data. Cyprus was declared a 'non-cooperative jurisdiction' by the government in 2013, for not sharing information related to Indian account holders.
It was the first tax jurisdiction to be labelled that by India, leading to a 30 per cent withholding tax on all payments made to Cyprus and greater scrutiny of Indian entities receiving funds from there, requiring additional disclosures, including the source of the money. Indian entities with investments from Cyprus also have to forgo deductions on account of expenditure and allowances.
Prior to being blacklisted, Cyprus, like Mauritius, was one of the key destinations through which companies based in Europe and the US routed investments into India, deriving double tax avoidance. For, the tax treaty provided for zero capital gains tax and a low withholding tax rate of 10 per cent on interest payments made to entities based in Cyprus - SBI secures $625 mn from World Bank for solar programme
The State Bank of India has signed an agreement worth 4,200 crore rupees with the World Bank to support its solar programme. Under the initiative at least 400 MW solar capacities will be created across the country, the SBI said in a statement.
It said that this agreement will help the bank to finance grid connected rooftop solar photovoltaic projects at very competitive rates. The eligible beneficiaries under the facility would be developers, aggregators and end-users, who wish to set up solar projects mainly on commercial, industrial and institutional rooftops. - India a bright spot, pleased with progress under Modi: Kim
The World Bank appreciated developmental efforts under Prime Minister Narendra Modi, saying the country has emerged as a "bright spot", as it has pitched for bettering its ranking in the ease of doing business index.
The World Bank Group President Jim Yong Kim met Finance Minister Arun Jaitley, Power Minister Piyush Goyal and Commerce Minister Nirmala Sitharaman and discussed ways to increase funding in various projects, especially renewable energy sector.
He said the World Bank lending has gone up tremendously over the last two years to over USD 5 billion and that would continue for the next few years.
India's growth that is now at 7.6 per cent is a true bright spot and one of the few bright spots in the global economy
There is a pipeline of projects in India which needs a lot of developmental finance, he said, adding World Bank has been in the forefront assisting in those programmes.
With regard to ease of doing business ranking, India has given its viewpoint to the World Bank. Their teams will separately be coming to India to assess the progress that we made in this regard
India ranks 130th out of 189 economies on the World Bank's Doing Business report, which is topped by Singapore as the easiest country in which to do business. Though India has moved four places up, it ranks way below China, which is placed at 84th position. - FDI boost: 100% in Defence, Aviation
Government on 20th June approved
- 100 per cent FDI in a host of sectors including civil aviation, defence, pharma and single brand retail sector under automatic route.
- Other sectors in which FDI norms have been relaxed include e-commerce in food products, broadcasting carriage services, private security agencies and animal husbandry.
In Defence
In Defence sector, at present upto 49 per cent FDI participation in equity of a company is permitted under automatic route. Now, beyond 49 percent, foreign investment would be through government approval route for access to modern technology. Besides, FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
Pharmaceutical
In brown field pharmaceutical sector, the new FDI limit would be up to 74 per cent under automatic route and beyond 74 percent, government approval will continue. In green field pharmaceuticals, 100 per cent FDI is already allowed under automatic route.
Greenfield investments occur when a parent company begins a new venture by constructing new facilities in a country outside of where the company is headquartered. Brownfield investments occur when a company purchases an existing facility to begin new production.
Civil Aviation
In civil aviation, foreign investors barring overseas airlines, can now have up to 100 per cent stake in local carriers. Besides, the norms for FDI in brownfield airports have been permitted upto 100 percent under automatic route.
E-commerce in Food Products
The government has allowed 100 per cent FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.
In single brand retail trading, government has decided to relax local sourcing norms up to three years, along with relaxed sourcing regime for another five years for entities undertaking trading of products with state of art and cutting edge technology. This is the second major reform after the last radical changes announced in November last year.
Now, most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI. - Govt keeps interest rates on small savings scheme unchanged
Interest rates for Small Savings Schemes will remain unchanged for the next quarter beginning July, government on 20th June notified. Presently the rate of interest for both Five Year National Savings Certificate and Public Provident Fund Scheme is 8.1 per cent.
The rate of interest for Kisan Vikas Patra is 7.8 and Sukanya Samriddhi Account Scheme is 8.6 per cent.Interest rates for small savings schemes are notified by the government on quarterly basis. - Centre allows premature closure of PPF account
In a significant move, the Finance Ministry has allowed subscribers of the Public Provident Fund (PPF) to prematurely close their accounts after a minimum of five years for reasons such as higher education or expenditure towards medical treatment.
The Finance Ministry has also retained the interest rates on all small saving products for the second quarter of the fiscal.
But such subscribers will get one per cent interest less than other accounts. For instance, instead of an interest of the current 8.1 per cent, a subscriber who chooses to prematurely close his PPF account would earn interest of 7.1 per cent on the deposit.
At present, withdrawals from the PPF account are allowed after seven years of opening the account. But it is only up to 50 per cent of the total deposit till the end of the fourth year. The account matures after 15 years, when full withdrawal is permitted.- The return on PPF is maintained at 8.1 per cent in the July-September quarter, the same as that in the quarter ending June 30, 2016.
- Similarly, the interest rate on the Kisan Vikas Patra has been maintained at 7.8 per cent for a maturity of 110 months, while the return on the five-year National Savings Certificate is 8.1 per cent.
The government has moved to a quarterly reset of interest rates on small savings beginning this fiscal. Under the new mechanism, returns on these products are aligned with the market rates of the relevant Government securities, in order to improve the monetary transmission of interest rates by banks. - Commemorative coin on Banda Singh Bahadur
Union Finance Minister Arun Jaitley on 21st June released a commemorative silver coin on the occasion of 300th Martyrdom Day of Sikh General Banda Singh Bahadur.
Banda Singh Bahadur fought the Mughals and established the first sovereign Sikh state. Banda Singh Bahadur was born on 1670, at Rajouri in present day Jammu and Kashmir.
He came in contact with Guru Gobind Singh who later conferred him the title of Banda Singh Bahadur. He was appointed by Guru Gobind Singh as his deputy and military lieutenant. - E-insurance mandatory for Rs 10,000 or above annual premium in life insurance: Irdai
Electronic insurance will become mandatory for annual premium equal to or above Rs 10,000 (single/annual premium) in life insurance policies.
Insurance Regulatory and Development Authority of India (Irdai) in its Issuance of e-Insurance Policies Regulations, 2016, said these norms would come into force from October 1.
Electronic insurance policy will mean a policy document which is an evidence of insurance contract issued by an insurer and digitally signed.
Customers would have an e-insurance account, which will be an electronic account opened by a person with an insurance repository where the portfolios of insurance policies of a policyholder are held in an electronic form. - Cabinet clears way for mega auction of over 2300 MHz spectrum
The Union Cabinet on 22nd June cleared the way for mega auction of spectrum. According to the Finance Minister Arun Jaitley, more than 2300 Megahertz of spectrum is available for auction across seven bands.
The bands are 700, 800, 900, 1800, 2100, 2300 and 2500 MHz.
The availability of such a large quantity of spectrum will give a fillip for Digital India programme. It will allow telecom operators to purchase spectrum at par with international holding values and end spectrum shortage.
The Cabinet also approved extension of timeline for taking over 50 per cent of Outstanding Debt of DISCOMs, by States under the UDAY scheme.
The extended timeline of one year upto 31st March, 2017 will allow States which could not participate in UDAY earlier to join in. The Cabinet also gave its nod for special package for employment generation and promotion of exports in Textile and Apparel sector.
The special package announced is expected to generate one crore jobs over next three years in the textile and apparel industry.
It will also attract investment of 74 thousand crore rupees over next three years and lead to cumulative increase of 30 billion dollars in exports. - Govt okays Rs 10,000 cr corpus for Startups
The Cabinet has approved setting up of Fund of Funds for Startups under Small Industries Development Bank of India (SIDBI) for extending support to Startups. The corpus of FFS is Rs 10,000 crore, which will be built up over the 14th and 15th Finance Commission cycles.
An amount of Rs 500 crore has already been provided to the corpus of FFS in the last fiscal year, and 600 crore rupees earmarked in the current fiscal. The Fund is expected to generate employment for 18 lakh persons. - Cabinet approves fiscal incentives for textiles sector
In a bid to propel the textile sector in India to help achieve its true potential, Union Cabinet has given approval for a special package for employment generation and promotion of exports in Textile and Apparel sector.
Government has announced many steps that it will take to promote employment generation boost economies of scale and increase export competitiveness.
Govt will infuse an additional 10% subsidy on new units in textiles in addition of 15% it is already giving in the sector. It is expected that the measures will result in generation of more than one crore jobs in the sector that will also witness in-flight of a record capital of 74000 crores in the same time frame.
Besides it will boost exports and will result in a cumulative increase of US$30 Billion in the export earnings. The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce.
Govt shall bear the entire 12% of the employers' contribution of the Employers Provident Fund Scheme for new employees of garment industry for first 3 years who are earning less than Rs. 15,000 per month. - RBI allows start-ups to open foreign currency accounts
The Reserve Bank of India (RBI) on 23rd June said an Indian start-up, with a subsidiary abroad, may open a foreign currency account with a bank outside India for crediting money to the account of foreign-exchange earnings. The share of the balance in such accounts through exports should be repatriated, it said. The central bank allowed Indian exporters and importers to write 'call' and 'put' currency options.
Banks should treat such options as "unhedged exposure" and set aside additional provisions for such exposure, RBI said in its notification.
The move was first announced on 7 April, 2015 in order to encourage participation in the Over the Counter (OTC) currency options market and improve its liquidity. - India slips to 12th spot in millionaire ranking
India has slipped one place to 12th spot in terms of millionaire population, even as their numbers have grown marginally to 200,000.
Last year, India was ranked 11th, with 198,000 such high net worth individuals (HNWIs), according to a report by Capgemini, India along with China is seen as engine of growth by the global wealth managers.
The report said 13 per cent of the global wealth managers feel that India has the biggest area of high net worth individual wealth expansion through 2025, while the same is 27 per cent for China. - RBI releases framework on payments systems
Reserve Bank of India (RBI) has released its much awaited 'Vision-2018' document on 23rd June. The ‘Payment and Settlement Systems in India: Vision-2018’ aims at building best of class payment and settlement systems for a ‘less-cash’ India and ensuring access of mobile banking services to even basic phone users.
The current vision document is focussing on improving the infrastructure and regulations in the country to reduce cash transactions and increase use of technology. RBI said that its vision document focuses on responsive regulation, robust infrastructure, effective supervision and customer centricity.
RBI said the proposed new policies to be framed under the Vision with focus on electronic payments will influence trends in payment systems in the country.
Service providers will be encouraged to use technology to provide innovative easy to use mobile based payment solutions in an interoperable environment without compromising on security. RBI expects the Vision to result in a continued decrease in the share of paper-based clearing instruments. - ADB nod for $500 mn loan for bridge over Ganges
Asian Development Bank (ADB) said it has approved a $500 million loan to build a bridge across the Ganges River in Bihar. The 9.8 km road bridge in Bihar will be India’s longest river bridge and will provide a vital transport link between the northern and southern parts of the state and neighbouring Nepal. The new bridge will make it easier for people to move between jobs and markets, particularly for poorer communities in the north wishing to travel to the state capital Patna, to the south of the river, it added.
The statement said that in all, the bridge is expected to benefit over nine million people. According to a statement, the new bridge will span both channels of the Ganges and serve as an alternate route to the existing Ganga bridge, which has begun to deteriorate. - Defence Ministry gives nod for purchase of 145 Ultra Light Howitzers guns from the US.
The Defence Ministry on 25th June gave its nod for the purchase of 145 Ultra Light Howitzers guns, worth about 750 million dollars from the US. The Defence Acquisition Council, DAC chaired by Defence Minister Manohar Parrikar approved this in New Delhi. The procurement of Ultra Light Howitzers will be through the Foreign Military Sales route from the US.
While 25 guns will come to India in a fly away condition, the rest will be assembled at the proposed Assembly Integration and Test facility for the weapon system in India in partnership with Mahindra and Mahindra company. India had sent a letter of request to the US government showing interest in buying the guns which will be deployed in high altitude areas in Arunachal Pradesh and Ladakh.
During the meeting, the DAC took up 18 proposals including new schemes worth 28 thousand crore rupees for discussion. It also approved bulk production of 18 Dhanush artillery guns. - Textiles exports at $40 billion way short of FY16 target
Textiles exports for the 2015-16 fiscal stood at $40 billion, falling way short of the $47.5 billion target, a senior official said on 12th June. The ministry has set an exports target of $48.5 billion for the current fiscal. Last fiscal's shipments were also below the $41.4 billion exports achieved in 2014-15. - New scheme for stressed lenders
In a bid to enable lenders to carry out adequate financial restructuring to give projects a chance for a sustained revival, the Reserve Bank of India on 13th June unveiled a Scheme for Sustainable Structuring of Stressed Assets (S4A).
The scheme is specifically aimed at projects where lenders’ aggregate exposure to an individual account is more than Rs. 500 crore.
The central bank’s scheme comes in the wake of banks wanting more time to write down debt and make the required provisions in cases of resolution of large borrowal accounts, which are facing severe financial difficulties.
To be eligible under the S4A, the RBI said the project should have commenced commercial operations; the aggregate exposure (including accrued interest) of all lenders in the account should be more than Rs.500 crore (including rupee loans, foreign currency loans/external commercial borrowings).
Further, the debt should meet the test of sustainability — that is, debt of that principal value owed to lenders can be serviced over the same tenor as that of the existing facilities even if the future cash flows remain at their current level. For this scheme to apply, sustainable debt should not be less than 50 per cent of current funded liabilities.
The debt-resolution plan for large accounts should be agreed upon by a minimum of 75 per cent of lenders by value and 50 per cent of lenders by number in the JLF (Joint Lenders’ Forum)/consortium/bank.
The debt-resolution plan for large accounts, according to the RBI, may involve one of three options with regard to the post-resolution ownership of the borrowing entity, the RBI said. - Inflation climbs to 5.76% in May on costly food items
Rising for the second month in a row, retail inflation climbed to 5.76 per in May, amid an increase in food prices. Retail inflation measured by the Consumer Price Index has been revised upwards to 5.47 percent for April this year.
Retail inflation had stood at 5.01 per cent in May last year. According to official data, overall food inflation moved up to 7.55 per cent in May, from 6.32 per cent in April. Inflation in the vegetable basket more than doubled, to 10.77 per cent in May. - Except TN all States support GST
Finance minister Arun Jaitley said that virtually all states have supported the idea of GST. Speaking after a meeting of Empowered Committee of state Finance Ministers on the long awaited indirect tax reform, he said only Tamil Nadu has some
Lok Sabha has already approved the GST Bill, and it is pending before the Rajya Sabha.
Central government has put model Goods and Services Tax, GST Law in public domain after getting in-principle nod from Empowered Committee of State Finance Ministers.
As per the model Law:- All purchases made online will attract a uniform Goods and Services Tax. The tax, in lieu of local levies, will be imposed at the first point of financial transaction.
- This clears the air on applicability of GST in e-commerce in cases where goods were being sold in one state but was being bought in another state.
- The model GST law, which has 162 clauses and 4 schedules, has also suggested a jail terms of up to 5 years and fine for violation of the provisions of the statute.
- It prescribes a threshold of 9 lakh rupees annual turnover for applicability of the new levy and 4 lakh rupees for businesses in North Eastern states including Sikkim.
- The meeting was presided over by the West Bengal Finance Minister, Mr. Amit Mitra who is the chairman of the Empowered Committee of State Finance Ministers on GST.
- Centre orders import of 12,500 tonnes of pulses for buffer stocks
The Centre has ordered import of 12 thousand five hundred tonnes of pulses for buffer stocks to ensure the availability of commodity at reasonable prices. Of this, ten thousand tonnes will be Masur and two thousand five hundred tonnes will be Urad. So far, over 14 thousand tonnes of pulses have already been imported by the government agencies against the total contracted quantity of 38 thousand five hundred tonnes.
According to the Secretary Department of Consumer Affairs, Hem Pande the prices of essential commodities at an inter-ministerial meeting in New Delhi and discussed measures to ensure availability of these commodities at reasonable prices. National Cooperative Consumers' Federation, NCCF has been asked to start distribution of Tur and Urad pulses through mobile vans in Delhi at the rate of 120 rupees per kilogram.
The secretary expressed hope that such steps make pulses available in other states at reasonable prices. The meeting also discussed lowering of import duty on wheat besides reviewing the enforcement measures being taken by the states to check hoarding of essential commodities. The release said, procurement of Rabi pulses has reached to 64 thousand tonnes till 13th of June. With this so far total domestic procurement of pulses by government agencies has reached one lakh 15 thousand tones. - Cabinet clears Civil Aviation policy to boost regional air connectivity
Union Cabinet on 15th June cleared the new Civil Aviation Policy with an aim to increase regional air connectivity, and ease rules for airlines to fly overseas.
The Policy lays focus on regional connectivity with an aim of providing affordable aviation services in Tier-II and Tier-III cities. It will help bring down the prices of air tickets by giving exemptions including service tax, customs duty, landing and parking fee and VAT.
Under the policy, the airfares have been fixed at 2,500 rupees for one-hour long flights. Briefing reporters, Union Minister Ravi Shankar Prasad said that the policy has quashed the rule which restricted companies from flying abroad unless they have flown in India for 5 years and have fleet size of 20 aircraft. - Cabinet okays merger of associates with SBI
The Cabinet on 15th June gave its in-principle approval for State Bank of India’s proposal to bring its five associate banks into its fold. This comes barely a month after the SBI board had, on May 17, cleared a proposal to merge its five associate banks and Bharatiya Mahila Bank with itself.
Finance Minister Arun Jaitley had said on June 6 that the Centre would soon approve SBI’s proposal.
Currently, no Indian bank features in the world’s top 50 banks, but following the merger, SBI, with assets worth $550 billion will come within striking distance.
SBI’s five associate banks are: State Bank of Bikaner and Jaipur (SBB&J), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala and State Bank of Travancore (SBT).
SBI already fully owns SBH and State Bank of Patiala, and has majority stakes in the other three. Bharatiya Mahila Bank started operations in 2013 and accounts for less than 0.1 per cent of SBI’s total assets. - Govt unveils revamped scheme for traders
The finance ministry on 15th June unveiled a revamped scheme for importers and exporters, offering direct port entry, deferred duty-payment facility, fast-tracking adjudication and refunds and risk-based assessment, among others.
The Central Board of Excise and Customs (CBEC) clubbed the two existing schemes, the Accredited Clients Programme (ACP) and the Authorised Economic Operator (AEO). AEO holders will be allowed to move their cargo, as it arrives at the land or sea port to the warehouse without any checks.
An AEO programme offers members reduced examination and inspection, and acceptance of pre-arrival import declarations.
The government did away with the eligibility criterion of Rs 10 crore worth imports in the previous fiscal to encourage medium and small enterprises be a part of this scheme as against just large members.
The current ACP managed to have just 300 odd members and about 13 per cent of imports happen through the route. The programme was launched in 2005.
However under the revamped scheme, the government is aiming that at least 40 per cemt of imports occur through the revamped programme, with more than 1,000 members. The US has 11,000 members as part of the AEO programme.
For the economic operators other than importers and the exporters, the new programme offers only one tier of certification whereas for the importers and the exporters, there will be three tiers of certification.
Tier-I AEO certificate will offer expedited Investigation and fastracked dispute resolution for service tax, excise amd customs besides other benefits. However only Tier-II certificates onwards will deferred payments of customs duty be allowed.
To be eligible for Tier-III certificate, one will need to be a Tier-II certificate holder for at least two years. AEO seeks to provide tangible benefits in the form of faster customs clearances and simplified customs procedures to those business entities who offer a high degree of security guarantees in respect of their role in the supply chain.
The objective of the revised AEO is to provide businesses with an internationally recognised quality mark which will indicate their secure role in the international supply chain and that their customs procedures are efficient and compliant. - CCEA approves 10% stake sale in HUDCO
The Cabinet Committee on Economic Affairs on 15th June approved ten per cent stake sale in Housing and Urban Development Corporation Ltd (HUDCO) out of government's shareholding of 100 percent. It has also approved allowing a price discount up-to 5 percent on the Issue Price to the retail investors and the employees of HUDCO.
The paid up equity capital of HUDCO is over two thousand crore rupees. Net worth of the company is around 7,800 crore rupees. The Centre has set a disinvestment target of 56,500 crore rupees for this fiscal. Of this, 36 thousand crore is to come from minority stake sale in PSUs and 20 thousand five hundred crore rupees from strategic sale. - RBI simplifies registration process for new NBFCs
The Reserve Bank on 17th June simplified the process of registration of new NBFCS by reducing the application form and the checklist of documents from the existing set of 45 documents to about eight.
This has been done to make the process of registration of new Non Banking Financial Companies (NBFCs) "smoother and hassle free", RBI said.
Secondly, from now onwards, there would be two different types of applications for non-deposit taking NBFCs (NBFC-ND) based on Sources of Funds and Customer Interface
The processing of cases for Type I - NBFC-ND applicants would be on fast track mode. As these companies will not have access to public fund and will not have customer interface, they will be subjected to less intensive scrutiny/due diligence.
These companies will be prohibited from accessing public funds and having customer interface. In case these companies intend to avail public fund or intend to have customer interface in the future, they are required to take approval from RBI. RBI further advised that the checklists mentioned by it are indicative and not exhaustive. - SEBI to ease norms for REITs
The Securities and Exchange Board of India (SEBI) on 17th June proposed to relax norms governing real estate investment trusts (REITs) in a bid to make them more attractive. The proposed changes include allowing a larger number of sponsors and removing the investment restrictions on special purpose vehicles.
An REIT is an investment vehicle structured like a mutual fund but with real-estate as the underlying asset. SEBI introduced the concept in India in 2014 to open the cash-strapped real-estate industry to investors, but not a single REIT has been created because of the restrictive norms.
The regulator said it would bring out a consultation paper “proposing certain changes and providing some clarification in the REIT regulations”.
The paper is likely to propose removing the rule restricting a special purpose vehicle (SPV) from investing in other SPVs’ holding assets, and recommend a change in the number of sponsors as also in the responsibilities of trustees and associates. Currently, SEBI regulations for REITs allow for only three sponsors.
The paper is also expected to suggest rationalising compliance in related-party transaction requirements, aligning minimum public shareholding requirements with the Securities Contract Regulations Rules, and raising the investment cap in under-construction assets to 20 per cent. - Govt sets target of disbursing Rs 1.80 lakh crore under Mudra Yojna
Government has set a target of disbursing Rs 1.80 lakh crore under Pradhan Mantri MUDRA Yojana in 2016-17. This is 50 per cent more than last year's target of 1.22 lakh crore.
According to the Finance Minister Arun Jaitley the bank have not only achieved previous year's target, but also distributed more than Rs 12,000 crore.
More than three crore people were given loans under the MUDRA scheme in the last fiscal. The Mudra Scheme was launched in April last year, under which loans between 50 thousand and 10 lakh rupees are provided to small entrepreneurs. - India ranks second in retail potential
India jumped 13 positions and was placed second in retail potential in the 2016 Global Retail Development Index (GRDI), released by AT Kearney, a Chicago-based consultancy. The country was ranked 15 in the previous year. The report profiled 30 developing countries.
India's high ranking is driven by GDP (gross domestic product) growth, improved ease of doing business, and better clarity regarding FDI (foreign direct investment) regulations. India is now the world's fastest-growing major economy, overtaking China, and retail demand is being fueled by urbanisation, an expanding middle class, and more women entering the workforce
The government has allowed 100 per cent FDI in food retail and we believe that those kind of stores will be profitable
The report admitted that infrastructure bottlenecks and state-level power dynamics still remained big concerns. The cash-and-carry segment was doing brisk business, the report said, where existing players such as Walmart and Metro planning to expand their base and targeting 70 and 50 stores, respectively, by 2020. India's rank was further amplified by the collapse of the South American and Russian economies. - L&T wins $135 million Qatar World Cup stadium contract, official says
Larsen & Toubro Ltd (LART.NS) has secured a contract to build a $135 million stadium for Qatar's 2022 World Cup, a boost for the Indian firm facing a slowdown in its key Middle East market due to low oil prices.
As part of a joint venture, L&T will serve as a contractor building the 40,000 seat Al Rayyan stadium. In May the company's group executive chairman said L&T was bidding for projects in the Asia and Africa to counter a slowdown in Middle Eastern markets which have been hurt by declining oil prices.
Qatar, the world's top liquefied natural gas exporter and one of the richest countries per capita, faces a 46.5 billion riyal ($12.8 billion) budget deficit this year because of the continued lower oil and gas revenues.
The Gulf country cut planned spending on building healthcare facilities by about two-thirds in 2016 following the drop in energy prices but expenditure on its World Cup-related projects remains unchanged
Corruption allegations that have rocked soccer's governing body FIFA, have put renewed media focus on Qatar and its hosting of the World Cup
Al Rayyan stadium will include cooling technology to help with Qatar's fierce temperatures. The stadium's capacity will be reduced to 21,000 after the tournament with the upper tier of seats being sent to a developing nation. - RBI keeps key policy rate unchanged
Reserve Bank of India governor Raghuram Rajan on 7th June kept key policy rates unchanged. So the RBI's short-term lending rate, or repo rate, was retained at 6.5 percent, and the Cash Reserve Ratio at 4 per cent.
In the bi-monthly monetary policy, the RBI governor said data since the April policy announcement show a sharper-than-anticipated upsurge in inflationary pressures emanating from a number of food items, and a reversal in commodity prices.
He said rising crude prices and implementation of the seventh pay commission award are key risks. But Raghuram Rajan added that the central bank's policy stance will remain accommodative, provided data are supportive.
The RBI governor observed that the forecast of an above normal monsoon by the met department, various supply-side management steps, and introduction of the electronic national agriculture market trading portal should help moderate unanticipated flaring up of food inflation.
He retained the January 2017 inflation target at 5 per cent, with an upside bias. Noting that domestic conditions for growth are improving gradually, driven mainly by consumption demand, Raghuram Rajan retained the GDP forecast at 7.6 percent for the current fiscal. - World Bank cuts forecast for India's growth to 7.6-7.7%
Pointing to sluggish corporate lending despite five policy rate cuts by the Reserve Bank of India since 2015, the World Bank on 7th June cut growth projections for India by up to three percentage points to 7.6-7.7 per cent for 2016-17 and 2017-18. Even then, India will continue to be the fastest growing major economy in the world.
India will continue to grow faster than its large emerging market peers, with growth rates of 7.6-7.7 per cent from Fiscal Year 2016/17 to Fiscal Year 2018/19," the Bank said in its Global Economic Prospects.
In its January update, the multi-lateral agency had pegged India's growth at 7.9 per cent in both these fiscal years. India's economy grew 7.6 per cent in 2015-16, two percentage points lower than predicted by the Bank in January. The Bank cautioned India against "notable headwinds." - Govt releases simpler, investor-friendly FDI compendium
Seeking to make FDI policy simpler, the government on 8th May released an updated compendium by incorporating all policy changes and eliminating unnecessary explanations, but retains the UPA regime's policy on opening of multi-brand retail for foreign investment.
Besides other things, the compendium includes provisions for issue of "sweat equity" to non-resident employees and directors and defined the terms 'private security agencies', 'private security' and 'armoured car service'.
The FDI policy has been made simpler and investor friendly; facilitating 'Make In India' and ease of doing business. The circular will serve as a ready reference for foreign investors on various provisions of the FDI policy, the Department of Industrial Policy and Promotion
It said the 109-page policy has also clarified on private security agencies by borrowing definition of few terms from Private Security Agencies (Regulation) (PSAR) Act, 2005.
Also, the DIPP in the consolidated FDI policy has again retained the previous UP regime's decision allowing foreign retailers to open multi-brand stores with 51 per cent ownership. - NIIF signs MoU with Qatar Investment Authority
With a view to attracting investments from Qatar, the National Investment and Infrastructure Fund (NIIF) Ltd has signed a Memorandum of Understanding with Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar.
This MoU was signed on June 5 by Abdullah Bin Mohamed Al Thani, CEO of Qatar Investment Authority (QIA), and Amar Sinha, Secretary (Economic Relations), Ministry of External Affairs, on behalf of NIIF Ltd.
It was signed during the recent visit of Prime Minister Narendra Modi to Doha.
The objective of the MoU is to facilitate QIA to study investment opportunities in the infrastructure sector in India and develop a framework for exchange of information with regard to such investments opportunities, in order to enable both sides to decide on joint investments.
This MoU will remain in effect for 12 months during which period both parties will discuss and agree on the terms, principles, criteria for such investments. The NIIF will share with QIA a pipeline of investment opportunities available in the infrastructure sector in India. - UP set to surpass Maharashtra as largest sugar producer
The area covered under sugarcane so far for the 2016-17 crushing season is almost 7.6 per cent more than this year with Uttar Pradesh leading the way which could surpass Maharashtra as country's largest sugar producer.
In UP, sowing for the 2016-17 crushing season so far is estimated at 2.18 million hectares, the highest in five years. That in Maharashtra is estimated at 0.76 mn ha, the lowest since 2011-12.
The total sugarcane sown around 5 million ha, 4.41 million ha is complete till June 1. This is 7.6 per cent more area covered than last year. This also raises question over the estimates of an almost 2 million tonnes drop in production in 2016-17. Production in 2015-16 was a little over 25 mt.
Also, UP is making larger use of Co-0238, a higher-yielding variety. In the ongoing season (2015-16), this was planted on 0.4 mn ha in UP, about 55 per cent more than in 2014-15. The yield from this is around 80 tonnes a ha; it is 65-70 tonnes for other varieties. Sugar recovery is also better from the new variety.
The expectation of a drop in 2016-17 has pushed up retail prices since April by Rs 4-7 a kg. The Centre, in a series of measures to boost supply, first withdrew an incentive it gave to sugar manufacturers to export and followed with a stock holding limit to prevent hoarding.
It had fixed a limit of 1,000 tonnes for traders in Kolkata and neighbouring areas and 500 tonnes for traders in all other parts. It also plans a 25 per cent export duty and is contemplating lowering the import duty (now 40 per cent), to boost supply. - Sebi announces stricter norms on P-notes, effective July 1
The Securities and Exchange Board of India (Sebi) has tightened its know-your-client (KYC) and disclosure rules on issue of participatory notes (P-notes), to curb misuse of the investment route used by foreign investors not registered in India. These take effect from from July 1.
The move was approved by its board of directors on May 19, on regulation of what are formally termed Offshore Derivative Instruments (ODI). This was after considering the suggestions of the Supreme Court-appointed Special Investigation Team on undisclosed money, to ensure this route is not used for money laundering. P-notes allow foreign investors to take exposure to Indian stocks without registering with Sebi. These are issued by foreign portfolio investors registered with Sebi.
Under the new guidelines, Indian KYC or anti-money laundering rules (AML) will also apply to P-note holders. Earlier, a holder had to adhere to the KYC or AML norms of only their home jurisdiction.
The capital markets regulator has also asked ODI issuers to do the KYC review on the basis of the risk criteria, once every three years for low-risk clients and one year for all others.
Sebi has also issued curbs on transferability of P-notes between two foreign investors. And, raised the frequency of reporting by note issuers.
Presently, the details of ODI holders need to be mandatorily reported to Sebi on a monthly basis. Sebi has now decided that in these monthly reports, all intermediate transfers during the month would also have to be reported. - Hyderabad Pharma City in 12,500 acres
The Telangana State government accorded permission for establishment of ‘Hyderabad Pharma City’ in a few mandals of Ranga Reddy and Mahabubnagar districts and directed the Collectors of these districts to pool an area of 12,500 acres for it.
The government designated Telangana State Industrial Infrastructure Corporation (TSIIC) as a project proponent and nodal agency for this purpose. - ED attaches assets worth Rs.1,411 crore of Mallya
The Enforcement Directorate on 11th June provisionally attached assets, having market value of Rs.1,411 crore, belonging to Vijay Mallya and United Breweries (Holding) Limited in connection with a money-laundering case against him and the now-defunct Kingfisher Airlines. The businessman is currently chairman of United Breweries. The attachment was done as part of investigations into the alleged Rs.900-crore IDBI Bank loan default case.
The U.K.-based Diageo, which now controls United Spirits, had in February paid $40 million to Mr. Mallya outside India, as part of a severance package after he agreed to step down from the post of United Spirits chairman.
The provisionally attached assets include bank balance of Rs.34 crore, two flats in Bengaluru and Mumbai measuring 2,291 and 1,300 square feet respectively, a 4.5-acre industrial plot in Chennai, coffee plantation land in Coorg spread across 28.75 acre, besides the residential and commercial constructed areas in UB City and Kingfisher Tower in Bengaluru, spread over 8.4 lakh square feet. - Cabinet approves Rs. 3,770-crore Chennai Metro rail project
The Union Cabinet on 1st June gave its approval to the proposal for Chennai Metro Rail Phase-I Project from Washermanpet to Wimconagar, which covers a length of 9.051 km, at a total cost of Rs. 3,770 crore. The project will be executed by Chennai Metro Rail Ltd, the existing special purpose vehicle of the Centre and Tamil Nadu having 50:50 equity each.
The project is scheduled to be completed by March 2018. This extension will provide improved access to public transport for dense population comprising predominantly industrial workers to move toward the central business district of the city for work
In the total project cost, Centre’s share will be Rs. 713 crore and Tamil Nadu’s share will be Rs. 916 crore. The balance of Rs. 2,141 crore will be met from loans from multilateral /bilateral/domestics funding agency. The estimated ridership will be 1.6 lakh passengers a day in the first year of operation. - Govt approves India Post's payments bank proposal
Cabinet on 1st June approved setting up of India Post Payments Bank as Public Limited Company under Department of Posts, with 100 percent government equity.
According to the Union Minister Ravi Shankar Prasad all 650 branches of postal payment banks will become operational by September, 2017. He said Postal Payment Banks will be a game changer, especially in the rural areas. 5000 ATMs will be started for mobile and internet banking. - Govt achieves fiscal deficit target of 3.9 % in 2015-16
Government says it has achieved the fiscal deficit target of 3.9 per cent of the GDP in 2015-16 and India continues to remain a bright spot in the world economy with solid macroeconomic parameters. The Finance Ministry said the deficit figure released by the Controller General of Accounts indicates that the fiscal parameters are "very robust" and in line with Budget projections. - Income Declaration Scheme 2016: 45% tax on income declared
The Income Declaration Scheme 2016 comes into effect from 1stJune, which provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income.- Under the Scheme, such income as declared by the eligible persons would be taxed at the rate of 45% of the income declared under the scheme.
- The Income Declaration Scheme 2016 provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income. It was announced by the government with an aim to fish out black money from the domestic economy.
- To further clear doubts and questions on the scheme, I&B Ministry organised a Talkathon on Income Disclosure Scheme too.
- Such income declared would be taxed at the rate of 30% plus a surcharge 7.5% on the taxes payable and a penalty at the rate of 7.5% of the taxes payable, thereby totalling to 45% of the income declared under the scheme.
- The scheme shall remain in force for a period of 4 months from June 1, 2016 to September 30, 2016.
- The declarations can either be made online on the official e-filing website of the Income Tax department, or before the various regional Principal Commissioners of I-T.
- The scheme shall apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.
- However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.
- Assets specified in the declaration shall be exempted from Wealth tax.
- No Scrutiny and enquiry under the Income-tax Act or the Wealth tax Act shall be undertaken in respect of such declarations.
- Under the Income Declaration Scheme, people making disclosure of unaccounted assets will be given time up to November 30 to pay taxes, penalty and surcharge.
- Finance Minister Arun Jaitley, who is in Japan, has underlined that the compliance window is open to not only the companies but also the people having undisclosed income.
- Eventually, this scheme of the government will play an important role in curbing the undisclosed income in the country.
- India among top 5 green energy markets in 2015: report
The 2015 global renewable energy development had a strong Indian flavour to it, with India being ranked among the top five nations in new investments, and in the top four as regards creating jobs in the green energy sector. Emerging markets broke the record in 2015 by committing larger investments than developed nations.
China led with more than double the investment of the next largest investor, the US, followed by Japan, the UK, and India, according to a report by the Renewable Energy Policy Network for the 21st Century (Ren21). While China, the US, Japan and the UK maintained their positions relative to 2014, India moved up to displace Germany, which saw a sharp drop in investment.
India’s investments in renewable energy sector increased to $10.2 billion in 2015, when compared to $8.3 billion in 2014. The new investments saw growth for the second consecutive year, aided by a jump in utility-scale solar power financing, which reached $4.6 billion, up 75 per cent over the previous year – a direct result of the Indian government’s increased focus on renewable energy, it pointed out.
Also, $4.1 billion of asset finance was invested in wind power, an increase of 17 per cent from 2014. Record capacity-addition also led to strong growth in new jobs. Considering all renewable energy technologies, the leading employers in 2015 were China, Brazil, the US and India. Globally, the green energy sector has created about 8.1 million jobs. China created about 3.5 million, followed by Brazil at 9.18 lakh, the US at 7.69 lakh and India at 4.16 lakh.
The calendar year 2015 saw substantial activity in the Indian solar and wind power markets as the ambitious renewable energy targets are translated into concrete policy frameworks.
Central and State auctions for solar PV contributed to the installation of 2 GW in 2015, and to an impressive pipeline of 23 GW. Employment in solar PV expanded by 23 per cent in 2015, and jobs in the wind sector also rose.
However, congestion in the grid will be most immediate challenge for India’s solar sector, and for scaling up solar power capacity to achieve the target of 100 GW by 2022.
India installed about 2.6 GW, surpassing Spain’s capacity to rank fourth globally for total wind power capacity, with nearly 25.1 GW in 2015. But, the sector added less capacity than expected, largely due to shortage of available transmission capacity. - Economy can touch 8% growth with favourable monsoon: Finance Ministry
Finance Ministry has said that economy can touch 8 per cent growth level if the monsoon is favourable.
according to the Economic Affairs Secretary Shaktikanta Das, this year the projections for monsoon are good and he hoped that India will be able to reach 8 per cent growth in the current year. Mr Das said the fiscal deficit and the revenue deficit during 2015-16 were fully contained and targets were achieved.
India's economy grew by 7.9 per cent in March quarter to consolidate its position as the fastest growing major economy, leaving behind China.
The growth was 7.2 per cent in 2014-15. He said, the fiscal deficit during 2015-16 was contained at 3.9 per cent of the GDP, in line with the budget projections. Revenue deficit showed significant improvement due to increase in capital expenditure of the government. - India to invest Rs 3.3 lakh cr on three new rail freight corridors
India will spend Rs 3.3 lakh crore to set up three new arms of the dedicated rail freight corridors, crisscrossing the length and breadth of the country over the next eight years. The 5,500-km-long new corridors would supplement the existing plans to lay 3,300-km-long two dedicated freight corridors (DFC).
The feasibility study of the three corridors has been completed and submitted by RITES. The three corridors would be developed at a cost of Rs 3.3 lakh crore in around eight years. Dedicated Freight Corridor Corporation (DFCC), an arm of Ministry of Railways, implementing the Rs 82,000-crore DFCC project.
In this year’s Budget, Rail Minister Suresh Prabhu had announced three new corridors: 2,328-km North-South corridor between Delhi and Chennai; 2,327-km East-West corridor between Kolkata and Mumbai; and 1,114-km East Coast corridor between Kharagpur and Vijaywada. - Govt launches online portal to connect skilled workers with employers
In what could provide a big boost to its Skill India campaign by providing easy placement opportunities, the government has rolled out an ambitious online portal that would connect the over one crore workers trained annually with potential employers.
Developed by the National Skill Development Agency (NSDA), an alpha version of the website of the Labour Market Information System (LMIS) has just started working and a beta version is likely to be launched by Prime Minister Narendra Modi soon.
With a target of skilling 40 crore workers by 2022, the objective is to ensure that students who wish to be skilled can enrol on the website for a training course and then eventually get placed through it.
It will be linked with 10 repositories, including assessors, training providers and institutions, employers, potential candidates as well as courses, adding that at present the website allows candidates to register and connect with training and skilling institutes.
The website is being further developed to include the demand-side or the database of employers, who can then look at available candidates and recruit them. - Foreign employers
The NSDA is also in talks with the External Affairs Ministry to include foreign employers, such as those from the Gulf countries onto the LMIS. The NSDA is also developing a mobile app for the website.
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