ECONOMY AFFAIRS NOVEMBER 2013

ECONOMY AFFAIRS NOVEMBER 2013

• The 9th International Heavy Minerals Conference (HMC 2013) was held in Visakhapatnam, Andhra Pradesh from 27 to 29 November 2013. The biennial International conference is ninth in a series of conferences that focus on the heavy minerals industry. The International conference was held for the first time in India by the Mining Engineers Association of India (MEAI) in collaboration with and support from the Government of India, other professional organizations and industry. The Conference theme is: Overcoming New Challenges. The aim of HMC 2013 was to discuss the technical, managerial, business opportunities and challenges facing the sector worldwide. Delegates attended the conference including from Australia, Canada, Africa, US, China, Vietnam, Sri Lanka and Europe.
  
• Dr. M. Veerappa Moily dedicated the country’s first state-of-the-art Styrene Butadiene Rubber (SBR) Plant to nation at Panipat, Harayana on 29 November. He described this is as a milestone achievement by Indian Oil Corporation, India’s largest company to visualize and implement such a project which will provide us the product E-SBR for which we were looking at other countries. This will result in substantial amount of savings of foreign exchange. SBR is suitable to produce various products like tyres, conveyor belts, hose, shoe soles, industrial goods, etc with superior processing properties like flexing resistance, tear and cracking resistance, improved abrasive resistance, etc. The project is considered as a path breaking venture of national importance as there is no operating capacity in the country and the entire domestic demand is met through imports. Indian Oil Corporation Limited, TSRC Corporation, Taiwan, and Marubeni Corporation, Japan, are Joint Venture Partners in this prestigious project implemented under the banner of Indian Synthetic Rubber Ltd. (ISRL). It is based on Butadiene available from Indian Oil’s Panipat Naphtha Cracker Complex.
  
• Prime Minister Dr. Manmohan Singh and UPA Chairperson, Sonia Gandhi Jointly inaugurated India’s first all-women bank, Bharatiya Mahila Bank in Mumbai on 19 November 2013,marking the birth anniversary of former Prime Minister Indira Gandhi. The main objectives of the bank will be to focus on the banking needs of women and to promote their economic empowerment. The bank will commence operations with an initial capital of one thousand crore rupees. The Union Government on 12 November 2013 appointed Usha Ananthasubramanian as the first chairperson and managing director of public sector Bharatiya Mahila Bank (BMB).The Union government approved 1000 crore Rupees seed capital for the women-focused public sector bank, announced by Union finance minister P. Chidambaram in his 2013-14 budget speech.
  
• The Reserve Bank of India on 18 November opened a 5000 crore rupees refinance window for MSME sector, for a period of one year to ease the liquidity. The view of easing the liquidity stress to the Micro and Small Enterprises sector was taken by the RBI to provide refinance to the small Industrial Development Bank of India. Basically the Micro and Small Enterprises sector is employment intensive and contributes significantly to exports. At present, the slowdown in the economy has resulted in the liquidity tightness in the MSEs in the manufacturing and services sector raising the need of liquidity support. The availability of the refinance facility will be till 13 November 2014.
  
• To boost research and innovation, twelve states and four UTs have been considered eligible to receive Rs. 120 crore each under the Research, Innovation and Quality Improvement Component of RUSA – Rashtriya Uchchatara Shiksha Abhiyan. They are – Andaman & Nicobar, Arunachal Pradesh, Assam, Bihar, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Manipur, Nagaland, Odisha, Punjab and Uttar Pradesh. All innovative schemes will be funded as per the decision of the PAB (Project Approval Board). The funds are meant to support different types of research programmes like base research, key technology (R&D), High end (R&D), etc during the current Five Year Plan. Setting up of science parks and cutting edge technology and instrumentation facility will be supported by this fund. The funds will also take care of promoting inter-disciplinary and trans-disciplinary research centres as well as promoting research and entrepreneurial activities. Some other areas to be funded under the Research and Innovation Component are: initiative to attract quality researchers and students; institutions that offer merit-based scholarships, fully funded doctoral fellowships, post-doctoral fellowships; faculty and students exchange programmes with world-class institutions; and initiatives to scale up industry-academia partnership. States may decide about unit of implementation. It can either be the State as a whole or a few select institutions.
  
• The Reserve Bank of India (RBI) on 19 November directed Public Sector Banks (PSBs) to provide loans to women self-help groups (SHGs) at 7 per cent per annum to avail the benefit of interest rate subvention scheme under the Swarnajayanti Gram Swarozgar Yojana-Aajeevika (SGSY) scheme. All women SHGs will be eligible for interest subvention to avail the credit up to 3 lakh Rupees at 7 per cent per annum. Swarnajayanti Gram Swarozgar Yojana-Aajeevika (SGSY) is an initiative by the government to provide sustainable income to poor people living in rural areas of the country.
  
• MTNL (Mahanagar Telephone Nigam Limited) and Los Alamos Technical Associates, Inc. (LATA) of the USA have signed an MOU on 12 November, for launching the state of the art training programs on Cyber Security, Risk And Crisis Management, Public Safety and Disaster Management, Homeland Security/ Critical Infrastructure Protection, Security Operations Management, Industrial Security, Fire & Safety Management etc. This will bring to India the best US practices followed in security, which has been developed over a period of time. India’s security needs are evolving rapidly and this partnership can help develop professional programs in cyber and physical security to meet the country’s growing demands. MTNL is going to start these trainings through its state of the art training centres at New Delhi and Mumbai. A dedicated resource will be allocated for this project and impart training, so that it is more relevant for Indian Conditions. First batch of training is likely to start from March 2014. MTNL will be developing a one or two day series of awareness programs for the top management of companies and the government departments.
  
• The country's largest software services firm Tata Consultancy Services (TCS) inaugurated its 10,000-seat campus at Gandhinagar on 15 November. The software development facility, inaugurated by Gujarat Chief Minister Narendra Modi, has been developed over 25.5 acres, with a built-up area of 1.6 million sq ft, TCS said in a statement."TCS has played a pioneering role to make Gujarat an attractive IT destination for global companies and also helped drive technology-led growth by investing in talented youth of the state and building long-term partnerships with state institutions," TCS CEO and MD N Chandrasekaran said. This centre will help TCS scale up its presence and drive the expansion of the IT industry in Gujarat, he added. The new centre has been developed as a 'green' campus and has applied for a LEED (Leadership in Energy and Environmental Design) Gold rating. Built with locally sourced red stone, the campus will use solar panels, LED lighting, occupancy and light-sensitive sensors to optimise power consumption. The campus, which also features a learning centre and iClass rooms (connected with other TCS learning hubs globally), is located in an approved Special Economic Zone and will serve global customers across industry segments.
  
• With surplus domestic sugar production, the government on 15 November, has relaxed a condition for exports of the sweetener by doubling the limit on overseas shipments that sellers can register. “One of the conditions was the upper limit of 25,000 tonnes per application for registration. This limit is now enhanced to 50,000 tonnes. Accordingly, an exporter can seek registration of up to 50,000 tonnes of sugar,” the Directorate General of Foreign Trade said in a circular. Welcoming the decision, the Indian Sugar Mills Association said this would help in exports of raw sugar, which is generally shipped in bulk.
  
• The Centre has proposed four Ultra Mega Solar Power Projects (UMPPs) with generation capacity ranging between 2,000 MW and 5,000 MW. These projects are planned in Rajasthan (4000 MW), Gujarat (4,000 MW), Kargil (2,000 MW) and Ladakh (5,000 MW).These projects to be developed in phases entail an investment of Rs 90,000 crore. Tarun Kapoor, Joint Secretary, Ministry Of New And Renewable Energy told reporters on 10 November, at the sidelines of Inter Solar conference that the per megawatt capital cost for proposed UMPPs has been estimated at Rs 6 crore against the existing cost of Rs 7-7.5 crore while the per unit tariff at Rs 5.50. ''The UMPP in Rajasthan will be developed on engineering procurement and construction (EPC) basis. Six public undertakings including BHEL (26%), Solar Energy Corporation of India Limited (22%), Power Grid Corporation, Hindustan Salt and Satluj Jal Vidyut Nigam (16% each) and Rajasthan Electronics & Instruments Ltd (3%) will form a joint venture company (JVC) to develop UMPP in Rajathan. As far as Gujarat UMPP is concerned, it will be developed with five to six companies. However, Kapoor said the Centre has yet to finalise details in this regard. Further, a lot of private developers have desired to develop 1,000 MW to 3,000 MW on their own. However, it won't be possible as the project will be tendered, he added. According to Kapoor, transmission is a major issue for the development of Kargil and Ladakh UMPPs.
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• Giving a big boost to the disinvestment programme to raise Rs.40,000 crore this fiscal, the Cabinet, on 7 November, gave its approval for the follow-on public offer of Power Grid Corporation of India Limited (PGCIL) to raise about Rs.7,500 crore.“The 17 per cent follow-on public offer of PGCIL has been cleared by the Cabinet Committee on Economic Affairs (CCEA). This includes 13 per cent fresh equity and 4 per cent stake sale by the government,’’ Minister of State for Power (Independent charge) Jyotiraditya Scindia said after the meeting. The government will sell 18.51 crore shares in the public sector company. The company will issue fresh 60.18 crore shares through the offer. Out of these fresh shares, about 2.4 per cent would be reserved for employees. At current market valuations, the FPO is likely to fetch close to Rs.7,500 crore. Post-FPO, the government stake in the company will come down to 57.89 per cent from 69.42 per cent. The company may garner close to Rs.5,700 crore while the government will get an estimated Rs.1,700 crore. This would be the second follow-on offering from Power Grid, which sold a 10 per cent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs.90 a share.
• The Government of India on 4 November 2013 decided to extend the sale of the non-subsidized 5 kg cooking gas (LPG) cylinders at petrol pumps across the country. The proposal to extend the scope of the scheme was approved by M. Veerappa Moily, the Union Minister of Petroleum and Natural Gas. Earlier, the scheme was in operation in Mumbai, Kolkata, Chennai and Bengaluru. The scheme was launched on 5 October 2013 by Moily in Bangalore for sale in selected company owned and company operated petrol pumps in the four cities. The cylinders will be sold at market rates. The scheme has allowed to sale the 5 kg LPG cylinders with just proof of Identity through Petrol Stations to students, IT professional, BPO employees and people with odd duty timings. As per the decision, the sale of the cylinders would be done with or without regulator for the first.
• The Reserve Bank of India has signed cooperation agreement with central banks of Australia and New Zealand for exchange of information. The MoUs provide a formal, yet legally non-binding, channel for information exchange between the supervisors, the RBI said in a statement on 7 November. With this, the Reserve Bank has signed such MoUs with 18 supervisors, it said.
• The Reserve Bank of India on 6 November 2013 permitted the Wholly Owned -Subsidiaries (WOS) of the foreign banks to acquire the domestic private sector banks. RBI also permitted the banks to set up branches anywhere in the country. As per the permission given by RBI, the foreign banks will have to seek permission of RBI to open branches in certain sensitive locations. The foreign bank subsidiaries have also been allowed to list on the local stock exchanges. Although, they will not be allowed to hold more than 74 percent in the private banks they may acquire. The order of the RBI also stated that the foreign banks that commenced banking business in India before August 2010 will be given an opportunity to convert into a wholly owned subsidiary.