ECONOMY AFFAIRS NOVEMBER 2016
- Prime Minister Narendra Modi launches Pradhanmantri Awaas Yojana (Gramin) in Agra
Prime Minister Narendra Modi on 20th November launched an ambitious rural housing scheme, Pradhanmantri Awaas Yojana in Agra.
The scheme is expected to provide affordable housing to all those living below the poverty line by the year 2022. PM also distributed allotment letters to beneficiaries at a function in Agra. Under the scheme, one lakh fifty thousand rupees will be given for each house which will be equipped with many facilities like kitchen and toilet. Besides, Prime Minister also inaugurated Mathura-Palwal rail line. - RBI eases norms to fight cash crunch.
With several small business, farmers and home loan borrowers finding it difficult to service debt following the present cash crunch due to the withdrawal of Rs.500 and Rs.1000 denomination currency notes, the Reserve Bank of India (RBI) on 21st November relaxed asset classification norms for banks, which will allow borrowers more time to repay.
The central bank has given an additional two months of time before lenders need to classify a loan as non-performing, provided the value of the loan is less than Rs.1 crore. In addition, the relaxation is meant for repayments which are due between November 1 and December 31.
Borrowers working capital accounts or crop loans, with any bank where the sanctioned limit whereof is Rs.1 crore or less will be eligible for the relaxation, RBI said. In addition, term loans, both business or personal, including home loans, loans to non-banking companies and micro-lenders by banks, are eligible for the relaxation.
Both banks and NBFCs will get the additional 60 days before they need to classify the loan as NPA. Importantly, RBI has clarified that the move is a short-term deferment of classification and should not be seen as restructuring of a loan. Banks need to increase provisioning if a loan is restructured.
Separately, RBI has also said holders of overdraft and cash credit accounts, which are operational for the last three months or more, can withdraw up to Rs.50,000 in cash, in a week – in line with current account holders.
A whopping Rs.5.12 lakh crore has been deposited in the bank accounts between November 10 and November 18, latest data released by the central bank showed, while Rs.33,000 crore has been exchanged during this period. At the same time, Rs.1.03 lakh crore has been withdrawn from the banking system in the period, the central bank said. - Demonetisation: NABARD sanctions Rs 21,000 cr to district central co-op banks
According to Economic Affairs Secretary Shaktikanta Das, for the benefit of farmers, National Bank for Agriculture and Rural Development (NABARD) has sanctioned Rs 21,000 crores to rural areas to enable district cooperative banks to pass the money to primary agri-societies to help farmers for the present Rabi season.
He said, all switching charges on digital transactions have been waived till December 31 on all debit cards including RUPAY cards, and no service charge will be levied on digital financial transactions using feature phones till 31st December.
Mr. Das said, all government organizations and public sector undertakings have been asked to use only e-payments via. Card, digital platforms and AADHAAR enabled payments.
He also informed that Telecom Regulatory Authority of India has decreased USSD charges from 1 rupee 50 paise for feature phones. He said, the government will also promote digital transactions at toll plazas and Ministry of Road Transport and Highways has told manufacturers to include Electronic Toll Collection complaint RFID facility in all new cars.
The Economic Affairs Secretary said, more than 80 thousand ATMs out of two lakh ATMs in the country have been re calibrated and new 500 and 2000 rupee notes have been made available in more than 1.5 lakh post offices. - Cabinet approves new Merchant Shipping Bill
Union Cabinet on 23rd November approved the Merchant Shipping Bill, 2016 for introducing it in the Parliament. The bill is a revamped version of the Merchant Shipping Act, 1958. The Bill provides for repealing of Merchant Shipping Act, 1958 as well as for the repealing of the Coasting Vessels Act, 1838. An official release said, the provisions of the Bill, will simplify the law governing the merchant shipping in India. - Centre eased demonetisation norms, unaccounted bank deposits to attract 60% income tax
The government extended the facility of using old Rs 500 notes in public utilities till December 15 and included more services such as mobile recharge but stopped over-the-counter exchange of defunct currencies and use of Rs 1,000 notes with immediate effect from midnight 24th November.
Payment towards pre-paid mobile top-up to a limit of Rs 500 per recharge has been allowed while purchase from consumer cooperative stores will be limited to Rs 5,000 at a time. Also, payment of fees up to Rs 2,000 per student has been allowed in schools and colleges run by central and states governments, municipalities and local bodies.
Current and arrears dues payments will be limited to only water and electricity, a facility that will continue to be available only for individuals and households. However, the release said payments for the transactions under all the exempted categories will now be accepted only through old Rs 500 notes.
The Ministry of Road Transport and Highways have continued the toll free arrangement at the toll plazas up to December 2, it has been decided that toll payment at these toll plazas may be made through old Rs 500 notes from December 3 to December 15.
The Union Cabinet late on 24th November cleared a proposal to amend the Income Tax (I-T) Act to levy close to 60% deduction on unaccounted deposits in banks above a threshold.
The decision was purportedly prompted by a surge in deposits — about Rs 20,000 crores, according to some reports — in Jan Dhan accounts since November 8, when the central government announced the demonetisation of Rs 500 and Rs 1,000 currency notes. The amount deposited in this period is almost 50% of the total deposits in these accounts in the two years since their launch. The move is also aimed at preventing black money holders from circumventing existing I-T Act provisions.
Foreign citizens will now be permitted to exchange foreign currency up to Rs 5,000 per week. Necessary entry to this effect will be made in their passports. Explaining the reason for discontinuance of exchange of the defunct notes, the release said it has been observed that over-the-counter exchange of the old notes has shown a declining trend. - FDI goes up by 60% after Make in India Campaign launch
Foreign Direct Investment in the country has gone up by 60 percent to 77.86 billion dollar after the launch of Make in India campaign.
In a written reply in the Lok Sabha on 24th November, Commerce Minister Nirmala Sitharaman said that after the launch of this initiative, there has been an unprecedented increase in FDI during the period October 2014 to September 2016.
Make in India was launched with an aim to promote India as an important investment destination and a global hub for manufacturing. - 5th International Tourism Mart Inaugurated in Imphal, Manipur
The Fifth International Tourism Mart for the North Eastern Region was formally inaugurated on 24th November by Manipur Chief Minister Okram Ibobi Singh at the City Convention Centre at Palace Compound in Imphal. The annual event organized in the north eastern region is to highlight the tourism potential of the region to domestic and foreign tourists.
The event has been planned and scheduled to facilitate interaction between buyers, sellers, media persons, government agencies and other stakeholders to promote tourism in the region. The main focus of the International Tourism Mart this time is the 10-day Manipur Sangai Festival which was started on 21st November. The International Tourism Mart will provide a good platform for the state to build relationship and also to create future association through the business meeting. - Committee constituted to convert all Govt-Citizen Transactions to digital platform
With an aim to weed out black money and corruption, government has constituted a committee to enable cent per cent conversion of Government-Citizen Transactions to the digital platform.
The panel, under the leadership of NITI Aayog CEO Amitabh Kant, will identify and operationalise user-friendly digital payment options in all sectors of the economy in the earliest possible time frame. It will engage regularly with Central Ministries, State governments, district administration, local bodies and trade and industry associations.
The panel will also attempt to estimate costs involved in various digital payments options and oversee implementation of measures to make such transaction between Government and Citizens cheaper than cash transaction. - RBI Introduces Incremental CRR to Manage Excess Liquidity in Banking System
In order to absorb the surge in liquidity of banking system following the demonetisation of high value notes, the Reserve Bank introduced an incremental Cash Reserve Ratio of 100 per cent for the fortnight since 25th November.
CRR is the portion of the deposits which banks are required to park to the RBI. Currently it is at 4 per cent. RBI said it will review the decision on 9th of December or earlier.
The incremental CRR is intended to be a temporary measure within RBI's liquidity management framework to drain excess liquidity in the system. The regular CRR would however continue to be at 4 per cent. - Govt. releases revised draft model GST/IGST/SGST compensation law
The government has released Revised Draft Model GST Law, Draft IGST Law, and Draft GST compensation law to public domain. According to the Revenue Secretary Hasmukh Adhia, these laws will be considered by GST Council in its meeting scheduled for 2nd and 3rd December and finalized.
Centre had on November 16 circulated the draft legislation among the states. The Integrated GST law would deal with inter-state movement of goods and services. Also, the states will draft their own State GST based on the draft model law with minor variations incorporating state-based exemption.
The compensation law will list out how states will be compensated in the initial five years for revenue loss on account of GST rollout. - FDI in services sector jumps to $5.3 billion during April-Sept
With the government taking steps to improve the ease of doing business and attracting foreign investment, FDI inflows into the services sector jumped over two-and-a-half times, to 5.3 billion dollars in the April to September period of the current fiscal. The services sector, which includes banking, insurance, outsourcing, R&D, and courier services, had received foreign direct investment of 1.5 billion dollars during the April to September 2015 period, according to the Department of Industrial Policy and Promotion. With this, overall foreign inflows into the country have climbed 30 per cent, to 21.6 billion dollars during the first half of 2016-17. - President inaugurates India International Trade Fair 2016
President Pranab Mukherjee on 14th November inaugurated the India International Trade Fair, which is expected to witness participation from more than 27 countries.
2016 year's theme is 'Digital India'. 2016 edition of the mega trade fair, being held from November 14 - 27 will have over 7,000 participants.
The partner country is South Korea and the focus country is Belarus. While, partner states are Madhya Pradesh and Jharkhand while Haryana is participating as the focus state. - Ujjivan Small Finance Bank gets RBI’s final ‘small bank’ licence
Ujjivan Small Finance Bank Ltd (a wholly owned subsidiary of Ujjivan Financial Services Ltd) has got the final licence from the Reserve Bank of India to undertake small finance bank (SFB) business in India.
Ujjivan Small Finance Bank Ltd is expected to commence banking operations in the first-quarter of 2017 after receiving the necessary approvals, registrations and licensing from various departments of the RBI and other agencies.
The approval comes at the backdrop of a profitable second quarter of FY 2016-17 results. Ujjivan reported 89.69 per cent increase in its profit to Rs. 73.01 crore for the quarter ended September 30, 2016 and a gross loan book growth of 58.65 per cent to Rs. 6,485.93 crore. - Supreme Court refuses to stay Govt's demonetization notification
Supreme Court on 15th November refused to stay the government's notification demonetising 500 rupees and 1,000 rupees currency notes but asked it to spell out the steps taken to minimise public inconvenience.
A bench comprising Chief Justice T S Thakur and D Y Chandrachud said, they will not be granting any stay as some advocates had insisted on it.
The bench asked Attorney General Mukul Rohatgi to file an affidavit about the measures already undertaken by the government and the RBI to minimise public inconvenience and also the steps likely to be undertaken in future. Without issuing any notice to the Centre or the RBI, the bench posted the matter for further hearing on November 25. - India's income will go up by 27% with women participation
According to the IMF Managing Director Christine Lagarde, India's national income will increase by 27 per cent, if the participation of women in the workforce matches the level of men.
Delivering a speech on "Women's Empowerment: An Economic Game Changer" in Los Angeles on 14th November, Mr. Lagarde said equal pay and better economic opportunities for women boost economic growth.
She said, if women were to participate in the labour force to the same extent as men, national income could increase by five per cent in the US, nine per cent in Japan, and 27 per cent in India. Lagarde said, better opportunities for women also promote diversity and reduce economic inequality around the world. - Cabinet approves higher MSP for Rabi crops
The Cabinet has increased the minimum support price (MSP) for all Rabi crops for the 2016-17 season. The MSP for wheat has been raised by Rs. 100 (6.6 per cent) to Rs. 1,625 per quintal.
The Commission for Agricultural Costs & Prices (CACP) had recommended that the wheat MSP be raised by Rs. 100, in October 2016.
The MSP for barley has gone up by 8.2 per cent, gram by 14.3 per cent, masur by 16.2 per cent, rapeseed/mustard by 10.4 per cent and safflower by 12.1 per cent. A higher MSP is expected to encourage farmers to sow crops in the ongoing Rabi season.
Sowing in the Rabi season is gaining pace with total acreage till November 11 at 146.85 lakh hectares. This is 15.9 per cent higher than 127.71 lakh hectares, in 2015. - Currency in circulation shrinks: RBI
Following the central government’s decision to demonetise all existing Rs 500 and Rs 1,000 notes, the currency in circulation shrank by 50 basis points in the week ended November 11, 2016.
According to the Reserve Bank of India (RBI)’s data on reserve money, the currency in circulation during the week under review declined by Rs 9,700 crore to Rs 17,87,700 crore, compared to the previous week. In the week ended November 4, the currency in circulation had grown by Rs 20,100 crore (1.1%) to Rs 17,97,400 crore.
In the week ended October 28, the stock of currency in circulation had risen by Rs 18,200 crore to Rs 17,87,700 crore, according to the RBI.
On November 8, the Centre had announced the demonetisation move. Holders of old Rs 500 and Rs 1,000 notes were asked to deposit them in their bank accounts or exchange them at bank counters before December 30.
With the currency in circulation shrinking, small businesses such as roadside restaurants, vegetable vendors and grocery stores that use cash as a mode of transaction, have been hit.
Daily labourers, too, were rendered jobless as construction and other activities came to a standstill in view of cement, sand and other supplies not coming in.
Truckers were reportedly stranded on highways as drivers ran out of valid currency notes, affecting the movement of goods in several parts of the country.
Vegetable and fruit wholesale markets, as well as foodgrain mandis in many parts, also reported very low business due to a shortage of cash. Even big hotels and malls reported a drop in footfall as out-of-cash public decided to skip them. Meanwhile, to stop repeat money exchangers thronging banks with invalid currency notes, banks have started applying indelible ink mark on the right-hand index finger of customers in the select metro cities. - Maharashtra taps solar energy to power agriculture sector
Maharashtra government has drawn up a scheme to ensure power supply to the agriculture sector for 12 hours a day through feeder-based solar energy
So far, 10,000 solar agricultural pumps have been set up across the state, 16 renowned companies dealing in these instruments from across the world have approached the government to facilitate their installation. Maharashtra Chief Miinster Devendra Fadnavis addressed a gathering of farmers, agriculture scientists and representatives of allied business groups after inaugurating the 8th edition of "Agro Vision"
Giving statistics, Fadnavis said 94,303 pumps were cleared for installation in the last two years in Vidarbha followed by Marathwada (66,790), Western Maharashtra (48,000) and North Maharashtra (18,000). Under the scheme, farmers can use feeder-based solar pumps instead of individually buying pumps.
Fadnavis called on farmers to reduce input cost and enhance production and said agriculture is now treated as a part of science and scientific farming is need of the hour.
Productivity must be increased to make agriculture sustainable, he said. The government has decided to set up integrated textile units in 11 cotton-producing districts as part of its 'cotton to fashion' push, the Chief Minister said.
Situation on the agriculture front is improving since the last two years when the sector recorded a negative growth of 16 per cent (2014-15). This year, the Government is hopeful of achieving positive growth of 5 to 10 per cent.
"Agro Vision" is a combination of exhibition, workshops and conference which provides an excellent platform for farmers and the agriculture sector to explore various opportunities. The event will last for four days (Nov 11-14).
It was conceptualised to help farmers from Vidarbha, where a large number of agriculturists have committed suicide due to debt burden and crop failure. - Nasscom cuts IT growth forecast to 8-10% in FY17
Software industry lobby National Association of Software and Services Companies (Nasscom) has revised the information technology (IT) sector’s growth forecast downwards to 8-10 per cent this year, as its biggest members such as Tata Consultancy Services, Wipro, Cognizant and Infosys struggle to grow faster because of an uncertain environment.
This will be the second time that Nasscom has projected single-digit growth in a decade after the industry saw its lowest growth of five per cent in 2009-10 in the aftermath of the banking meltdown in the US. In April, Nasscom had projected the $108-billion export-focused software and back offices sector to grow 10-12 per cent this year.
Indian firms have witnessed growth from clients in newer areas such as adoption of automation, cloud and digital technologies, but this has not been able to offset the drastic dip in volume in traditional IT services.
At the same time, customers are also asking for massive price cuts, expecting the Indian firms pass on benefits from productivity improvement and automation than retaining themselves.
Both Infosys and Cognizant have cut their annual revenue forecast twice for these reasons, while Wipro has forecast flat growth in the quarter to December. Nasscom said the sector has been impacted because of short-term factors and growth would return faster in the next few quarters.
India’s IT industry would also face challenges if US President-Elect Donald Trump implements his stricter immigration norms, pushing firms to hire more people locally to serve clients there. Such a move will put pressure on their margins. - Govt announces new measures to tackle demonetisation problems
Government on 17th November announced new measures to contain the problems faced by people following the demonetisation of 500 and 1000 rupees notes.
Farmers have been allowed to withdraw 25 thousand rupees a week against crop loan and Kisan credit card to ensure sowing in the rabi season. According to Economic Affairs Secretary Shaktikanta Das, traders registered with Agriculture Produce Market Committee (APMC)markets and mandis have also been permitted to draw 50 thousand rupees in cash per week to pay for sundry expenses like wages.
He said, the time limit for payment of crop loan insurance premium will be extended by 15 days. Mr Das said, up to 2.5 lakh rupees cash can be drawn from bank account for a marriage during ongoing wedding season. He said, one member of the family, be it father or mother, bride or bridegoom can withdraw the amount. He said, Central government employees up to group C can draw salary advance up to 10 thousand rupees in cash that will be adjusted against their November salaries. He said, the Task Force constituted for re-calibrating ATMs held a meeting and a road map has been formed to re-calibrate all the ATMs and it will be done soon. - RBI lifts restriction on FPI investment in bonds
The Reserve Bank of India (RBI) on 17th November allowed foreign portfolio investors (FPIs) to invest in any kind of debt instrument provided the residual maturity of the paper is three years and the proceeds are not used in real estate.
The step was first announced in the Union Budget 2016-17.“Investment by FPIs in the unlisted corporate debt securities and securitised debt instruments shall not exceed Rs 35,000 crore within the extant investment limits prescribed for corporate bond from time to time, which currently is Rs 2,44,323 crore. However, investment by FPIs in securitised debt instruments would not require having minimum three-year residual maturity.
Securitised debt instruments are defined as any certificate or instrument issued by a special purpose vehicle set up for securitisation of assets where banks, financial institutions or non-banking finance companies are originators; and/or any certificate or instrument issued and listed in terms of the Securities and Exchange Board of India regulations on public offer and listing of securitised debt instruments. - Centre sanctions Rs 5,800 crore for implementation of urban infra projects
The Centre has approved investments of over Rs 5,800 crore in five states for timely implementation of basic urban infrastructure projects under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). These states are Gujarat, Rajasthan, Punjab, Bihar and Tripura. With these approvals, total investment approved in water supply, sewerage and other components under AMRUT has gone up to Rs 51,505 crore.
According to Urban Development Ministry, an inter Ministerial apex committee of AMRUT on 18th November approved the investments of 2,279 crore rupees for Gujarat, one thousand 232 crore for Rajasthan, one thousand 200 crore for Punjab, one thousand 42 crore for Bihar and 62 crore rupees for Tripura for the next three financial years.
Under AMRUT, providing water taps to all urban households is given top priority followed by improving sewerage networks, storm water drains and public transport. - Govt issues order to attach Rs 18,866 cr properties under PMLA
Government on 18th November said it has issued provisional orders to attach properties worth Rs 18,866 crore for offences under the Money Laundering law.
It has also taken a host of initiatives, including effective enforcement of law, to curb the menace of money laundering in the country.
As of October 31, 2016, 658 provisional attachment orders have been issued by attaching properties worth Rs 18,866 crore. Further, 283 prosecution complaints have been filed for the offence of money laundering (under Prevention of Money Laundering Act).
Under the Black Money (undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015, 648 declarations involving undisclosed foreign assets worth Rs 4,164 crore were made. The amount collected by way of tax and penalty in such cases is about Rs 2,476 crore.
As part of enforcement measures, during April 2014 to October 2016, the Income Tax department has conducted searches in 1,242 groups of assessees, seizing undisclosed assets worth Rs 2,029 crore. These assessees admitted undisclosed income of Rs 28,567 crore.
During the same period, 13,690 surveys conducted resulted in detection of undisclosed income of Rs 30,001 crore. Also the I-T department has filed 1,514 prosecution complaints while offences were compounded in 2,244 cases and 75 persons have been convicted by the courts
Under the Income Declaration Scheme (IDS), the government has received 64,275 declarations disclosing undisclosed income of Rs 65,250 crore. - Over Rs 6 lakh cr deposits, Rs 1.35 lakh cr withdrawals
According to Indian Banks’ Association, the money deposited with banks by customers crossed Rs 6 lakh crore from November 10, 2016, after government decided to demonetise Rs 500 and Rs 1,000 notes. Withdrawals, including exchange of old notes, were above of Rs 1.35 lakh crore till end of November 18.
Public sector bank executives said the pressure on operation at branches will subside only when most of the ATMs are recalibrated. Thus, it is going to be a gradual process. Meanwhile, Punjab National Bank (PNB) has trimmed interest rate on fixed deposits by up to 0.25%, in line with competition. Earlier, State Bank of India slashed deposit rates by 0.15%. - AP sets solar target of 4,000 MW in two years
The Andhra Pradesh government proposes to generate 4,000 MW of solar power in the Rayalaseema region in the next two years. It was stated at a review meeting held at Amaravati by Chief Minister N Chandrababu Naidu. Three major solar parks are coming up at Anantapur, Kadapa and Kurnool and in the first phase, 1,250 MW of solar power will be generated. It was also stated that ten waste-to-energy plants would be set up in the State, seven of them by 2017 and the rest by 2018. Naidu instructed the officials to expedite work on these projects.
The Chief Minister said the land acquisition for the new international airport at Bhogapuram in Vizianagaram district should be expedited. The officials told him that 82 per cent of the land had been acquired, and only the environmental clearance was awaited. The GMR group, the GVK group, Adani Ports, Essel Infra and the Tatas are in the race for the airport project. - India rises to second spot on global business optimism index: Report
A survey says, India has improved its ranking by one spot in a global index of business optimism, with policy reforms and Goods and Services tax expected to become a reality soon.
According to the latest Grant Thornton International Business Report, India was ranked second on the optimism index during the third quarter (July-September 2016).
Indonesia took the top spot, with the Philippines coming in third. The report says, the improvement in the optimism ranking in the recent past clearly reflects that the reform agenda of the government and its efforts on improving the climate for doing business are having an impact.
The report is prepared on the basis of a quarterly conducted global business survey of 2,500 businesses across 36 economies. - HCC becomes first company to get S4A approval; to recast Rs. 5,107 cr debt
The RBI mandated overseeing committee has approved the Scheme for Sustainable Structuring of Stressed Assets (S4A) for Hindustan Construction Company Ltd. The ICICI-led Joint Lenders’ Forum had proposed the scheme for the infrastructure major, the company said in a statement on 6th November.
HCC said it is the first company to secure approval from the committee under the RBI’s S4A scheme. Its total funded debt of about Rs. 5,107 crore has been considered under the scheme, which will be divided into two parts.
The first part (sustainable debt) amounts to Rs. 2,681 crore (52.50 per cent of the total debt). The second part (unsustainable debt) totals Rs. 2,426 crore (47.50 per cent). The lenders will subscribe to 24.44 per cent fresh equity ( Rs. 1,008 crore, assuming a Rs. 40 rate), which will bring down the promoter holding from 36.07 per cent to 27.44 per cent.
The share price will be determined as per SEBI guidelines and, accordingly, debt will go down to the extent of the conversion amount. The balance of the unsustainable debt will be converted into Optionally Convertible Debentures for 10 years, with a coupon rate of 0.01 per cent
S4A is the RBI’s latest attempt to chip away at the mountain of stressed loans smothering Indian banks. The scheme tries to strike a compromise between banks with problematic accounts and corporate defaulters of the non-wilful kind, by converting a portion of large loan accounts into equity. - Odisha govt signs MoU to set up four more STPI centres
Odisha Government has signed an MoU with the Software Technology Parks of India (STPI) for setting up of four more centres in the State. The new centres would come up at Angul, Jajpur, Koraput and Sambalpur. With this, the number of STPI centres will rise to eight in the State which is highest in the country.
A Memorandum of Understanding was signed between Odisha government and Software Technology Parks of India for setting up of four more centres at Bhubaneswar on 5th November. The existing centres are at Bhubaneswar, Rourkela, Brahmapur and Baleswar. The state government would provide 3 acres of developed land and minimum 20,000 sq ft built-up space for each centre. - Govt scraps Rs 500 and Rs 1000 currency notes
1,000 and 500 rupee notes will cease to be legal tender from midnight 8th November and those who are in possession of these notes can deposit the notes in their accounts in banks and post offices from 10th of this November to 30th of December 2016.
In a special nationwide televised address on 8th November in New Delhi, Prime Minister Narendra Modi said, those who are unable to deposit the notes within the deadline for some reasons, can change them till 31st of March 2017 by furnishing ID proof. He said, new currency notes of 500 and 2000 rupees denomination notes to be introduced. He said, RBI has decided to limit the notes with higher value.
Mr. Modi said, ATMs will not work for next 48 hours and thereafter amounts upto 2 thousand rupees can be withdrawn from ATMs. He said, during this period, old notes of 500 and 1000 denominations will be accepted in Government hospitals for the time being.
Petrol Pumps, CNG Stations, Milk Booth, Consumer Cooperative stores and crematoriums will accept old notes in the next 72 hours. Railway booking counters, ticket counters of Government Buses and airline ticket counters will also accept the old notes for the next 72 hours.
Mr Modi said, his government has waged a war against corruption. He said, corruption, fake currency and terrorism are festering wounds, holding back the economy. He said the Government has unearthed 1.25 lakh crore rupees black money. - New notes won’t have ‘tracking chips’: RBI
The Reserve Bank of India (RBI) has scotched rumours that the new Rs 500 and Rs 2,000 currency notes will have "nano GPS tracking" or a chip embedded in them. Social media has been awash with talk that the new notes will contain chips to ensure tracking.
There is no such thing in the notes. It is a canard. The new notes will be in circulation from 9th November, according to RBI.
The government's move to scrap the existing Rs 500 and Rs 1,000 notes and replace them with new Rs 500 and Rs 2,000 notes is aimed at curbing black money and weeding out counterfeit notes. Experts say the volume of fake notes is as high as 18% of the total currency in circulation.
While experts agree that the move will put temporary brakes on black money, they are unsure how it will help in the long term. According to RBI data, 86% of the total transactions by value and over 24% in volume are via Rs 500 and Rs 1,000 currency notes.
However, this is likely to be a slow and time-consuming process. Those hoarding black money cannot generate new currencies as fast as they generated the older ones. This, it is believed, will give the government and the RBI time to move a sizeable chunk of the population to cashless channels like digital wallets, unified payment interfaces and other mediums like regular online payments.
Also, since people now have to quote their permanent account numbers mandatorily for transactions over Rs 50,000 in banks, it might become a challenge to transact in big volumes. - RBI overhauls debt restructuring schemes
In a step to address corporate stress, Reserve Bank of India (RBI) on 10th November made sweeping changes to existing loan recast schemes like S4A, 5/25 and SDR.
It has given lenders additional time up to 180 days for hammering out a restructuring package under the scheme for sustainable structuring of stressed asset (S4A). Previously, the time limit was 90 days.
There was a need to provide reasonable time to the overseeing committee to review the processes involved in the resolution plan, RBI said in a late night notification.
This is step also intended to harmonise rules across various recast schemes, as time given in other schemes such as joint lenders’ forum (JLF) is 180 days.
One of the significant changes made to the strategic debt restructuring (SDR) scheme is that the new promoter should have acquired at least 26 per cent of the paid-up equity capital of the borrower company. The regulations state the new promoter of the company will also be in ‘control’ of the borrower company, according to the definition of ‘control’ provided in the Companies Act, 2013.
It also adds the new promoter should be the single-largest shareholder of the borrower company, which will allow the promoter to make sweeping changes vis-à-vis board and operations
RBI has also made changes to schemes that allow banks to extend repayment schedule of loans to 25 years, with the option to refinance at the end of five years.
Now, it has allowed lenders to extend the 5/25 scheme to new project loans. The scheme can also be extended to existing project loans with an aggregate exposure of Rs 250 crore to banks, compared to the earlier mandate of Rs 500 crore.
Bankers explain this will allow several mid-sized infrastructure companies to get included. The 5/25 scheme can also be extended to construction companies. However, this will only be applicable to certain specific projects.
In another circular, RBI has also diluted the provisioning of the S4A scheme, a move welcomed by the bankers. The revisions give banks relief from incremental provisions and allow lenders to dig into the provisions already made.
A portion of the loan, which could not have been serviced with the existing cash flow, can now be treated as ‘standard’ loan for provisioning, even as the project technically continues to remain a bad debt in the bank’s book.
According to the revised scheme, RBI said banks can now upgrade the unsustainable part of the debt to standard category (or normal loans that require minimum provisioning) and “reverse the associated enhanced provisions after one year of satisfactory performance” of the sustainable part of the loans. - Ford to set up tech and biz centre in Chennai
American automobile major Ford Motor Company will invest Rs 1,300 crore ($195 million) in setting up a new global technology and business centre near here and also increase the head count by 3,000. The proposed facility will serve as a hub for product development, mobility solutions and business services for India and other markets around the world.
Ford has invested over $2 billion in India. This will be third global product development centre in the Asia Pacific region. The company will increase headcount by 3,000 people over the next five years and would be deployed at Ford's business and technology centres. - States have right to levy entry tax on goods coming in: Supreme Court
The Supreme Court on 11th November upheld the constitutional validity of the state legislations with regard to levy of entry tax on goods coming into its territory. A 7:2 majority verdict by the apex court ruled that the tax legislation by the State does not require the consent of the President under Article 304 B of the Constitution.
The nine-judge bench headed by Chief Justice T S Thakur said, though state governments are empowered to impose tax on goods coming from other States, there cannot be discrimination between the goods.
Further, the apex court said, if a State imposes entry tax on products made within the State it was not empowered to impose higher tax on the identical products entering from other States. Entry tax is imposed by State governments on movement of goods from one state to another.
It is levied by the state that receives goods. The entry tax provisions of various States were challenged by some companies on the ground that they are against the concept of free trade and commerce under Article 301 of the Constitution. - Govt extends use of old Rs 500/1000 notes
The use of old 500 and 1,000 rupee notes for paying household utility bills, fuel, taxes and fees as well as purchase from co-operative stores has been extended till 14th November, the Finance Ministry said in a statement, informing that the decision has been taken considering representations received from different quarters in the matter.
Court fee and payment of penalty to central and state governments, including municipalities and local bodies, will also be allowed to be paid in old notes till 14th November.
The Ministry said, ID proof of customers will be required for transactions in consumer co-operative stores. Transport and Highways Minister Nitin Gadkari said, to ensure smooth traffic movement across all National Highways, the toll suspension has been extended till 14th November.
Meanwhile, the Centre has asked all states to ensure proper security to all banks, ATMs and vehicles transporting cash. Sources said, the Home Ministry has deputed three officials to be in touch with state governments to ensure security of banks and ATMs. The government has conveyed to the states that if they require any assistance, it will be provided immediately. - Delhi a wakeup call for world on air pollution: UNICEF
The United Nations Children's Fund (UNICEF) has said the record air pollution in Delhi is a wakeup call for the world and if decisive actions are not taken to check it, the smog in National Capital and its adverse impact on the daily lives of its citizens will become a commonplace phenomenon.
The UNICEF said it is a wakeup call to all countries and cities where air pollution levels have resulted in death and illness amongst children. Air pollution level hit record high in New Delhi in the past week following Diwali celebration.
The capital's smog, said to be its worst in 17 years, lead to the closure of the city's over 5,000 schools to minimise the risk for children to be exposed to the polluted air and resulted in an estimated 4.41 million children missing three days of school, the UNICEF said.
According to estimates, air pollution levels hit 999 micrograms of particulate matter per cubic meter in some areas of the national capital, more than 15-16 times the limit considered safe.
The agency underscored that the alarming level of air pollution is not just a challenge in Delhi but for many cities around the world. Air pollution levels in other Indian cities, such as Varanasi and Lucknow, have been equally extreme in recent days.
And over the past year, air pollution levels in London, Beijing, Mexico City, Los Angeles and Manila have exceeded international guidelines - in some cases by considerable margin, it said. - World Bank appoints first adviser to tackle LGBTI discrimination
The World Bank has appointed its first adviser tasked with promoting the lesbian, gay, bisexual, transgender and intersex (LGBTI) issues in its development work.
The newly created senior position is part of the bank's efforts to solidify its commitment to researching and curbing discrimination against LGBTI persons across the 136 countries where it has offices.
The initiative by the poverty-fighting institution comes at a time when discrimination against LGBTI people is facing increased scrutiny globally.
The bank, which makes loans in developing countries and conducts research, named Clifton Cortez to fill the position. With two decades of experience in development, Cortez most recently managed partnerships for the United Nations program on HIV/AIDS UNAIDS.
In recent years, the bank's research has increasingly turned to the economic impact of discrimination on LGBTI persons.
In 2016, the Washington-D.C.-based organization has been collecting data on the socioeconomic status of LGBTI persons worldwide and launched several research projects on LGBTI discrimination.
The World Bank's announcement comes a day after the U.S. Agency for International Development (USAID) publicized a new rule barring its foreign aid contractors from discriminating against LGBTI persons in the services it funds.
In September, 2016, the United Nations appointed its first independent investigator to help protect the community worldwide from violence and discrimination.
A U.N. report in 2015 said hundreds of LGBTI people have been killed and thousands injured in recent years, in violence that included knife attacks, anal rape and genital mutilation. - AP, Telangana top Ease of Doing Business list
Andhra Pradesh and Telangana have topped the list in the Ease of Doing Business rankings. Commerce and Industry Minister Nirmala Sitharaman on 31st October released the report on State-wise Ease of Doing Business rankings in New Delhi.
The rankings are on the basis of 340-point business reform action plan and their implementation by the States. Andhra Pradesh and Telengana topped the all-India ranking with 98.78 per cent each, followed by Gujarat with 98.21 per cent, Chhattisgarh with 97.32 per cent and Madhya Pradesh with 97.01 per cent. Gujarat has slipped to third position from the first rank. - Maharashtra offers best environment for agri-business: NITI Aayog index
Maharashtra tops in implementing agricultural reforms and offers the best environment for doing agri business, according to an assessment carried out by NITI Aayog. Maharashtra scored 81.7 on the index partly due to its decision to exclude fruits and vegetables from the APMC Act.
Gujarat, Rajasthan and Madhya Pradesh are in the next three positions in the ‘Agricultural Marketing and Farm-Friendly Reforms Index’ launched by the Aayog on 31st October. The Centre is trying to encourage States to carry out reforms in the three broad areas of agricultural market, land lease and reforms related to forestry on private land-felling and transit of trees.
Criteria for ranking
The index is based on implementation of seven provisions under the model Agriculture Produce Market Committee (APMC) Act, joining the online marketing platform eNAM, special treatment to fruits and vegetables for marketing and levels of taxes in mandis.
NITI Aayog is in consultations with States that have not performed well to find out what are the constraints that they face and why are they reluctant in carrying out reforms.
The index is aimed at helping the States identify and address problems in the farm sector, which suffer from low growth, low farm income and agrarian distress.
These indicators reveal ease of doing agribusiness as well as opportunities for farmers to benefit from modern trade and commerce and have wider option for sale.
NITI Aayog has asked States to bring about changes in its APMC Act based on a model legislation to make it more flexible and allow a national agriculture market to emerge that would give farmers the freedom to sell there produce wherever they want.
While the Centre is talking about bringing in reforms in the APMC Act, there are some States that are yet to adopt the Act or have revoked it. These include Bihar, Kerala, Manipur, Daman and Diu, Dadra and Nagar Haveli, Andaman & Nicobar. They are not included in the ranking. - Centre notifies rules for Real Estate Act for five UTs
The Centre has notified the rules for Real Estate Act that seeks to regulate the housing sector besides bringing transparency and ensuring timely completion of projects in five Union Territories.
The rules notified by the Housing Ministry will be applicable to Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, and Lakshadweep.
Ministry of Urban Development will come out with such rules for the National Capital Region of Delhi while the other States and UTs will come out with their own rules. The Act, which is touted as a major reform measure to regulate the vast real estate sector, requires registration of all projects with state-level Real Estate Regulatory Authorities to ensure protection of the interests of both buyers and builders. - Govt marks Rs 10 lakh each for mandis for waste management
Agriculture Ministry has prepared a Swachhta Action Plan under which Rs 10 lakh will be provided to each mandis for setting up waste management plants.
The fund will be spent under e-National Agriculture Market, e-NAM scheme. According to the Agriculture Minister Radha Mohan Singh under Rashtriya Krishi Vikash Yojana, one percent funds will be spent on Solid and Waste Management.
As part of Clean India Campaign, Swachhta Pakhwada was observed between 16th to 31st October in all department of the Ministry. It was also carried out in agriculture mandis, fish markets and villages near each Krishi Vigyan Kendras across the country.
The Ministry held video conferencing with representatives of states to sensitize them and make adequate provisions in their existing schemes to prepare compost manure from farm waste. - Unimpressed by reforms, S&P retains India rating
The government’s reform agenda failed to pass muster yet again as international ratings agency Standard and Poor’s (S&P) has retained India’s rating at ‘BBB-/A-3’ with a Stable outlook and ruled out a review even 2016.
This is the lowest investment grade rating and the government has been pitching for an upgrade after reforms such as the Insolvency Code and Constitution Amendment Act for the Goods and Services Tax.
According to the ratings agency statement the outlook indicates that do not expect to change rating on India in 2015 or next, based on our current set of forecasts. A rating upgrade may be possible if the government’s reforms improve the fiscal situation and the net general government debt falls below 60 per cent of the GDP, it added. At present, it is about 69 per cent of the GDP. In September, Moody’s Ratings had said a review of India’s ratings may be possible only after one to two years.
S&P was more optimistic about the economy and pegged the GDP growth rate at 7.9 per cent in 2016 and an average of eight per cent over 2016-18.
The ratings on India reflect the country’s sound external profile and improved monetary credibility - Four-tier GST rate structure finalised: Arun Jaitley
Goods and Services Tax (GST) Council has finalised four-tier GST rate structure of 5, 12, 18 and 28 per cent. According to the Finance Minister Arun Jaitley:- Five percent tax will be levied on mass consumption items used by common people.
- To safeguard the interest of poor and keeping inflation under check, half the items in Consumer Price Index basket like foodgrains, would not be taxed at all.
- Luxury items like high-end cars and demerit goods including tobacco and aerated drinks, will be taxed at the highest rate and would also attract a cess in a way that the total incidence of tax remains at almost the current level.
- The items which are taxed at present at the rate 30 to 31 percent will now be taxed at 28 per cent.
- Some of the luxurious items will be transferred to 18 per cent tax bracket.
- Fifty thousand crore rupees will be required to pay to states for loss of revenue in the first year of GST rollout.
- Compensation pool would be for five years. Surplus amount in the pool will be shared on the basis of formula determined by the GST Council.
- Tatas slip to seventh spot in attractive brands list
Once among the top five most attractive brands in India, the venerable house of Tatas has fallen off that perch 2016, according to a study of the country’s most attractive brands released on 3rd November.
The annual study, which comes out every October-November, has ranked Tata at seventh position, a drop of three spots from 2015 when it was ranked fourth.
The fieldwork for this study was done in August-September 2016, before the boardroom battle erupted between ousted Tata group chairman Cyrus Mistry and interim chairman Ratan Tata began.
The Tata brand was among the top five in 2013 and 2015, the last two times released the (attractive brands) report. The drop now indicates that key influencers no longer consider the Tata brand to be aspirational. This has partly to do with the issues that the Tata group has been grappling with for a few years now, which is showing up in how key influencers perceive the brand.
TRA assigns values to brands based on their attractiveness quotient. Tata’s attractiveness quotient has seen a 20 per cent drop in 2016 over 2015. - RBI allows banks to issue masala bonds
The Reserve Bank of India (RBI) on 3rd November allowed banks to issue rupee-denominated bonds, or masala bonds, in the overseas market to shore up their capital base as well as for financing infrastructure and affordable housing.
To strengthen their capital base, banks can raise perpetual debt instruments, which can be considered for calculating a bank’s additional tier-1 capital, or debt capital instrument that can go into calculating a bank’s tier-2 capital.
These bonds will be issued according to the Basel-III norms and therefore, will have loss absorption clause. Under this clause, a bank can choose not to honour the coupon payment in case of financial stress. For financing infrastructure and affordable housing, the banks can issue long-term bonds, which doesn’t have the loss absorption clause.
The central bank had first announced its intention for letting banks tap the overseas market with rupee bonds on August 25 when the RBI announced a slew of measures to develop the bond and currencies market. Companies were already allowed to raise money through masala bonds and a few issuances totaling Rs 7,472 crore have been done.
The rupee bond route will open an additional avenue to raise funds for banks and will help develop the market of rupee-denominated bonds abroad, the RBI said.
The borrowing by the banks would still has to be within the overall limit of foreign investment in corporate bonds, which is pegged at Rs 2,44,323 crore at present. Of this, foreign investors have exhausted Rs 1,66,120 crore so far. - GST Council meeting remains inconclusive on dual control issue
The government says Goods and Service Tax Council meeting remained inconclusive on cross empowerment or dual control issue.
According to Finance Minister Arun Jaitley:- State Finance Ministers will meet on 20th of November to sort out pending issues. GST council completed a substantial part of discussion.
- Tax exemption limit under the GST will be 20 lakh rupees and further four drafts will be prepared for discussion in this connection.
- All the taxation officers have to administer one tax which is the GST and therefore there has to be clearly defined guidelines.
- There cannot be two competing assessing authorities for the same assessee. Five suggestions were made on how to divide the assessee base.
- NITI Aayog pitches for easing single-brand retail sourcing norms
NITI Aayog Chief Executive Officer Amitabh Kant has proposed to Prime Minister Narendra Modi that the mandatory domestic sourcing norms for single-brand retail entities with foreign direct investment (FDI) beyond 51 per cent be eased.
The proposal, which favours lowering the threshold of domestic sourcing from 30 per cent of purchase value of products sold for five years to 15 per cent, could, if implemented, make it more attractive for companies such as Apple and Ikea to do business in India.
Kant has also proposed that domestic sourcing for global operations by foreign investors be allowed to be set off against domestic sourcing requirements.
Under the existing policy, for the first five years of their operation, the entities do not have to meet their 30 per cent domestic sourcing obligations annually, but as an average of five years.
To attract big foreign companies such as Apple, the government had done away with domestic sourcing norms for those producing “cutting-edge products”, but in June 2016, the exemption period was restricted to three years. - Govt to launch clean consumer fora, clean market schemes
Consumer Affairs Department on 4th November decided to launch clean consumer fora and clean market schemes under Swachh Bharat Mission for the next two years.
The scheme Clean Consumer Fora financial assistance will be provided to Consumer Fora for sanitation facility at district Consumer Forum.
Under the Clean Market scheme financial assistance will be provided to the voluntary consumer organisations, VCOs. They will be asked to adopt a market place to carry out awareness activities on cleanliness in association with the market association and local authorities.
100 rain water harvesting systems have been planned for construction by Central Warehousing Corporation in the next two years. The Corporation has also planned to construct toilet blocks in ten schools. Rs 1.78 crore have been provisioned for Swachh Bharat Kosh during the current fiscal.
The Swachhta Pakhwada was observed by the Ministry of Consumer Affairs, Food and Public Distribution from 16th to 31st of October, 2016.
The Minister of Consumer Affairs inaugurated a Consumer Mela on 20th during the Pakhwada at Central Park, Connaught Place with the main objective of bringing the consumers and the companies face to face so as to resolve the grievances and also to make the consumers aware of their responsibility towards cleanliness. - Govt imposes anti-dumping duty on certain Chinese steel products
Centre has imposed anti-dumping duty on imports of steel wire rods from China to protect domestic manufacturers from cheap in-bound shipments. The Department of Revenue in a notification said the duty is being imposed for six months.
The measure follows recommendation by the Directorate General of Anti-Dumping and Allied Duties that steel wire rods was being exported by China below the normal value and the domestic industry has suffered material injury because of such imports.
Wire rod of alloy or non-alloy steel finds applications in many sectors such as automotive components, welding electrodes, fasteners, binding wires for construction industry and armoured cables.
India has already slapped anti-dumping duty on certain cold-rolled flat steel products from four nations, including China and South Korea. - India Ideas Conclave 2016 begins in Goa
The 3rd India Ideas Conclave is taking place between November 4 and 6 in Goa. The central theme of the Conclave is India at 70 - Democracy, Development and Dissent.
The three days Idea exchange program will have Defence Minister Manohar Parrikar, Rail Minister Suresh Prabhu, BJP president Amit Shah and leaders from all walks of life exchange ideas.
With an aim to discuss and debate central theme of India at 70: Democracy, development & Dissent, the 3rd India Idea Conclave kicked off in style in Goa.
The three day event, to be held from November 4 to 6th, will see participation of over 350 intellectuals including government leaders, corporate leaders, scholars, journalists, politicians and social activists.
Developments in defence, railways, aviation, governance, education, foreign policy are likely to be discussed at length in the Conclave. The inaugural session saw interventions by Union Railway Minister Suresh Prabhu and BJP president Amit Shah.
Chairman Prasar Bharati, Dr A Suryaprakash along with eminent journalist turned MP Swapan Das Gupta, Tavleen Singh, Madhu Kishwar, Arnab Goswami, Film maker Vivek Agnihotri and other dignitaries will share their ideas on road ahead for media.
The first two editions of the conclave saw the participation of scholars from over 25 countries including several Heads of State. - NCAER pegs GDP growth for FY16 at 7.6%
National Council of Applied Economic Research has forecast 7.6 percent GDP growth rate in financial year 2016-17. The think tank in it's mid-year review said, the anticipated improvement in the agricultural sector and the associated increase in rural demand will give an upward push to country's economic growth.
The think tank also said, food inflation is also showing signs of dampening in the latter part of the second quarter and fuel inflation may revive. It said, urban demand is predicted to remain strong and external demand continues to be volatile.
The report said, unlike past two years, 2016 witnessed a normal rainfall. With that, the area under Kharif sowing is about 3.5 per cent more than 2015, with the sowing of pulses being about 29.1 per cent more than 2015.
It said, 10 to 11 per cent increase is expected in the output of Kharif foodgrains over 2015 output of 124 million tonnes.
It said, the manufacturing sector is also giving positive signals with the 'Purchasers' Managers Index' and 'Index of Industrial Production' for core sectors and auto sales are going up. NCAER said, domestic aviation sector growth continues to be robust. However, it said, other service index indicators continue to be muted. - CII launches unique platform ‘Startup Mentorship Circle’
In view of Prime Minister Narendra Modi’s vision of nurturing entrepreneurship, Confederation of Indian Industry (CII) has launched a unique platform called ‘Startup Mentorship Circle’ to help in connecting start-ups with the global marketplace.
CII provides perhaps the largest network for start-ups with its 8000 direct and 2 lakh indirect members. During the ‘Speed Meeting with Mentors’, leaders of Indian industry chatted with some of the start-ups, assessed their plans and fine-tuned their business plans.
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