ECONOMY AFFAIRS OCTOBER 2017

ECONOMY AFFAIRS OCTOBER 2017

• RIL, ONGC join hands to share infrastructure
  
  • After six months of negotiations, the Directorate-General of Hydrocarbons (DGH) has successfully brokered an agreement between India’s oil and gas exploration business — the public sector ONGC and Mukesh Ambani’s Reliance Industries Ltd (RIL).
  • With this agreement, RIL and its partner BP Plc will be able to transport gas from their newer fields in the Krishna Godavari Basin (KG-D6) block using a sub-sea pipeline that passes through edges of ONGC’s block in the neighbourhood.
  
  
• RBI sets up task force on ‘Public Credit Registry’
  The Reserve Bank of India has constituted a 10-member ‘High Level Task Force on Public Credit Registry (PCR) for India’, which will, among other things, suggest a roadmap for developing a transparent, comprehensive and near-real-time PCR for India.
  
  Headed by YM Deosthalee, ex-CMD, L&T Finance Holdings, the task force includes Sekar Karnam, DMD & Chief Credit Officer, SBI; Vishaka Mulye, ED, ICICI Bank; Rashesh Shah, Chairman and CEO, Edelweiss Group; and Sriram Kalyanaraman, MD and CEO, National Housing Bank.
  
  The terms of reference of the task force include reviewing the current availability of information on credit in India, assessing the gaps in India that could be filled by a comprehensive PCR, and study the best international practices on PCR.
  
  Envisaged as an extensive database of credit information for India that is accessible to all stakeholders, PCR is expected to enhance efficiency of the credit market, increase financial inclusion, improve ease of doing business and help control delinquencies.
  
• Andhra Pradesh signs MoUs with UAE firms with $7.5-billion investment
  The Andhra Pradesh government on 23rd October signed two major deals with Dubai-based firms, which could net a total investment of $7.5 billion for the state.
  
  The AP Economic Development Board signed a memorandum of understanding with Aviation City LLP for developing an aero city hub in Andhra Pradesh with an investment of $5.5 billion.
  
  The Board signed another MoU with Bin Zayed Group, which promised to invest $2 billion in various infrastructure projects in the state.
  
  The AP government will have to secure 10,000 acres of land for the proposed aero city hub - the location is yet to be decided - which is expected to create 15,000 direct jobs and 5,000 indirect ones.
  
  The Aviation City LLP team will visit the state in November to study the project and will submit a preliminary report in January in Davos. Bin Zayed International LLC will partner with the AP government for various infrastructure projects.
  
  These projects include Vijayawada Metro Rail, Bhogapuram International Airport, multipurpose port at Ramayapatnam, major arterial ring road and inner ring road (locations not specified) and Bhogapuram-Bhimili and Visakhapatnam-Addaripeta beach corridors.
  
  Emirates "showed interest" in four proposals, a government release said, citing the meeting the chief minister held with the airline's executives in Dubai.
  
• Cabinet approves bank capitalisation plan of Rs 2.11 lakh crores
  The Cabinet has approved a capitalisation plan of two lakh eleven thousand crore rupees for public sector banks. Union Finance Minister Arun Jaitley announced huge spending on infrastructure on 24th October and according to him it will give a fillip to private sector investment, direct benefit to MSMEs and employment generation.
  According to Arun Jaitley: 
  • Once the banks are strengthened, appetite for their stock will improve.
  • It was decided that a bold step needs to be taken by the government to recapitalise banks
  • Various capital infusion measures have been taken by the government to ensure health of public sector banks.
  • Public sector banks will catalyse private investments and there is a need to increase public investment
  • The fundamentals of the economy continue to be strong.
  • India has remained the world's fastest growing economy for the last three years
  • Structural reforms have short-term impact but will help in the medium and long-term
  • The government has decided on the steps necessary to sustain the growth momentum
  Secretary, Department of Economic Affairs S C Garg: 
  • The real GDP growth average in the last 3 years has been 7.5 per cent
  • Expressed confidence that the disinvestment target for this year will exceed.
  • The Current Account Deficit is at a low level. Similarly, there has been a consistent low inflation story.
  
  
• Govt approves to build 83,677 km of highways
  The government on 24th October approved a mega plan to build 83,677 kilometre of highways over the next five years at a cost of about seven lakh crore rupees which includes the ambitious Bharatmala project.
  
  An official release said, out of this, Bharatmala project will be implemented with an outlay of 5.35 lakh crore rupees and will generate 14.2 crore man-days of jobs. Bharatmala is a mega plan of the government, aims at improving connectivity in border and other areas.
  
  Terming Bharatmala as "connecting India like never before", the Prime Minister's Office said the project will include 9,000 km of economic corridors to unlock full economic potential, 6,000 km of inter-corridor and feeder routes, 5,000 km of national corridors efficiency improvement, 2,000 km of border road connectivity, 800 km of expressways and 10,000 km of balance National Highway Development Projects.
  
  On funding of Bharatmala project, the government said, 2.09 lakh crore rupees will be raised as debt from the market, 1.06 lakh crore rupees of private investments would be mobilised through Public Private Partnership and 2.19 lakh crore rupees is to be provided out of accruals to the Central Road Fund and Toll collections of National highways authority of India.
  
• Govt hikes wheat MSP by Rs 110 per quintal, pulses by Rs 200
  The government on 24th October increased the minimum support price (MSP) of wheat by Rs 110 to Rs 1,735 a quintal and of pulses by Rs 200 per quintal to help boost the output of these crops and check prices. The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the MSPs of all Rabi (winter-sown) crops for 2017-18. MSP is the rate at which government buys grain from farmers.
  
  It said, the CCEA approved Rs 110 per quintal hike in wheat MSP to Rs 1,735 per quintal for the 2017-18 rabi crop, up from Rs 1,625 per quintal last year.
  
  To encourage the cultivation of gram and masoor, their MSPs have been raised by Rs 200 per quintal each to Rs 4,200 and Rs 4,150
  
  Among oilseeds, rapeseed/mustard and sunflower seed MSP has also been increased substantially. It adds that the support prices are in line with the recommendations of the Commission for Agricultural Costs and Prices.
  
• Deadline for mandatory linking of Aadhaar to govt schemes extended till March 31, 2018
  The Centre on 25th October told the Supreme Court that the deadline for mandatory linking of Aadhaar to avail benefits of various government schemes would be extended till 31st of March next year.
  
  Attorney General K K Venugopal told the apex court bench headed by Chief Justice Deepak Misra that extension of the deadline would apply only to those persons who do not have Aadhaar and are willing to enroll for it.
  
  He told the court that no coercive action would be taken against those who do not have Aadhaar but were willing to enrol for it. He added that they would not be denied the benefits of social welfare schemes till March 31 next year.
  
  In a note given to the court, the government has said that those who have Aadhaar are required to seed/link their Aadhaar with SIM card, with bank account, PAN card and other schemes.
  
  The petitioners challenging the Centre's move to make Aadhaar mandatory for welfare schemes termed the linking of the identity number with bank accounts and mobile numbers as illegal and unconstitutional. Senior advocate Shyam Divan, appearing for the petitioners, said the main Aadhaar matter should be heard soon.
  
  He said though the government has decided to extend the deadline till March 31 next year, it has also not said that no action would be taken against those who do not want to link their Aadhaar with either bank accounts or mobile numbers.
  
  He contended that final hearing in the main Aadhaar matter which is pending before the apex court was necessary as the government "cannot compel" citizens to link their Aadhaar with either bank accounts or mobile numbers.
  
• Anti-dumping duty on some stainless steel imports to India
  India imposed anti-dumping duty on some cold-rolled flat products of stainless steel from China, the US, South Korea and the European Union, to curb the influx of cheaper imports and help local producers. The duty, which will be in effect until 10 December 2020, exempts certain grades of stainless steel, an official notification said. The government has allowed import of the product as long as the end use of the import is in the same form, it said.
  
  Earlier this month, the government imposed an anti-dumping duty on the import of some flat steel products from China and the European Union for five years.
  
  Last month, the government imposed an additional 18.95% countervailing duty on some hot-rolled and cold-rolled stainless steel flat products, a first such levy on a steel product.
  
• Ministries of Power and Textiles join hands for SAATHI initiative
  Ministries of Power and Textiles have joined hands under SAATHI (Sustainable and Accelerated Adoption of efficient Textile technologies to Help small Industries) initiative.
  
  Under this initiative, Energy Efficiency Services Limited (EESL), a PSU under Ministry of Power, will procure energy efficient power looms, motors.
  
  The SAATHI initiative will be jointly implemented by EESL and office of Textile Commissioner on the pan-India basis. It will be implemented in the key cluster.
  
• India and Asian Development Bank Sign $300 Million Loan
  The Asian Development Bank and the Government of India signed a $300 million loan to continue a series of fiscal reforms in the State of West Bengal to improve the quality of public service delivery.
  
  The Second West Bengal Development Finance Program targets a further increase in public investment through the reduction of unproductive expenditure.
  
• Govt working on new consumer protection law: Narendra Modi
  Indian Prime Minister Narendra Modi on 26th October said a new consumer protection law is on the anvil to crack down on misleading ads and ensure that grievances are redressed in a time-bound and cost-effective manner.
  
  He said, the Government is committed towards consumer interest protection and is in process of drafting new consumer Act.
  
  Addressing an international conference on consumer protection in New Delhi, Mr Modi said:
  • A Central Consumer Protection Authority with executive powers will be constituted for quick remedial action.
  • The new law will incorporate the revised 2015 UN guidelines on consumer protection.
  • Due to GST, the various indirect and hidden taxes have ceased to exist
  • The biggest beneficiaries of GST will be the consumers and middle class.
  • A new business culture has been started after the GST and poor will be most benefited out of it
  • There is a need to move ahead from only consumer protection towards best consumer practices and consumer prosperity
  • The focus of his government is on consumer empowerment and ensuring consumer faces no difficulties
  • Effective grievance redressal systems are vital for a democracy and the government is integrating technology and ensuring stronger grievance redressal mechanisms
  • The Government's efforts ensured inflation has been kept under check and the consumer saves money
  • the Government has devoted effort and resources towards digital empowerment of the rural consumer
  • One person each from 6 crore rural houses of the country will be empowered to be digitally literate.
  • Paying consumers subsidy directly on cooking LPG has led to a saving of 57,000 crore rupees
  
  
• NITI Aayog recommends strategic disinvestment
  Niti Aayog CEO Amitabh Kant on 26th October said that the Government think-tank has recommended strategic disinvestment of 34 sick public sector units so far. Mr Kant was speaking at Crisil India Infrastructure Conclave in New Delhi. The Prime Minister's Office (PMO) had asked the think-tank to look into the viability of sick state-run companies.
  
  The government has budgeted to raise 72,500 crore rupees through stake sale in PSUs in the current fiscal. This includes 46,500 crore rupees from minority stake sale, 15,000 crore rupees from strategic disinvestment and 11,000 crore rupees from listing of PSU insurance companies.
  
  Mr Kant said, in last 3 years, government has put in lots of resources in building infrastructure like roads and airports, almost making up for private sector investment in such projects.
  
  The Niti Aayog CEO also stressed that India needs strong bids and concession evaluation mechanism of PPP infrastructure projects. He also said, if India wants wants to grow at 9-10 per cent then it must develop its infrastructure because countries like South Korea, Singapore, Taiwan and Japan grew on the back of good infrastructure.
  
• Centre to ensure adequate fund flow to States under MGNREGA
  The Centre on 27th October said it was making all efforts to ensure adequate fund flow to States/Union Territories under the flagship rural job guarantee scheme, MGNREGS.
  
  In a statement, the Ministry of Rural Development said it had released Rs. 40,480 crore so far in this financial year, which was around Rs. 4,500 crore more than the release during the corresponding period of the last financial year.With regard to fund release, the Ministry said it had been scrutinising proposals with promptness and had been releasing funds.
  
• Slowdown bottomed out, GDP likely to grow 7% in FY18, says Niti Aayog
   According to Niti Aayog Vice Chairman Rajiv Kumar, the economic slowdown that began in 2013-14 has bottomed out and the GDP is likely to grow 6.9 to 7 per cent this fiscal and 7.5 per cent in 2018-19. By first quarter of 2018, there will be a stronger recovery which will continue on much more sustained basis. Fiscal 2018-19 will be the much better year than fiscal 2017-18.
  
  The country did very well from 2007-13 and the downward cycle started in 2013-14, mainly because of splurge in lending to undeserving projects since 2007.
  
• GoM on GST composition scheme holds first meeting
  The Group of Ministers (GoM) set up to make the GST composition scheme more attractive held its first meeting in New Delhi on 15th October. The five member GoM, headed by Assam Finance Minister Himanta Biswa Sarma has been tasked to revisit Goods and Services Tax (GST) rates for restaurants.
  
  The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal.
  
  It will examine whether the AC restaurants pass on the benefit of cost reduction under GST to consumers and if they are not, whether they should be disallowed input tax credit claims. Currently, GST is levied at 12 per cent on non-AC restaurants and 18 per cent on air-conditioned restaurants.
  
  The GoM was set-up by the GST Council in its last meeting on 7th of this month. It will submit its report by the end of next month. The council had also hiked the threshold for availing of the composition scheme to one crore rupees from 75 lakh.
  
  The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for restaurants.
  
• Wholesale inflation falls to 2.6% in September
  The Wholesale Price Index (WPI)-based inflation data released on 16th October provided yet another indicator of improving macroeconomic parameters.
  
  Wholesale inflation fell to 2.60 per cent in September from 3.24 per cent in August due to a subdued rate of price rise in food items, particularly vegetables. However, economists warned that data of a few more months would have to be analysed to come to any conclusion on macroeconomic improvement.
  
  Though food inflation declined to 2.04 per cent, against 5.75 per cent in August, the rate of price rise in onions was elevated. Despite moderation, inflation in onions stood at 79.78 per cent against 88.46 per cent. Otherwise, inflation in vegetable prices cooled to 15.48 per cent in September, against a high of 44.91 per cent in the previous month.
  
  Inflation in manufactured products witnessed a slight increase at 2.72 per cent, against 2.45 per cent in August. Fuel and power inflation cooled to 9.01 per cent, against 9.99 per cent in August.
  
  Industrial production grew at a nine-month high of over 4 per cent in August, mainly on account of robust performance of mining and power sectors, coupled with higher capital goods output.
  
  Exports rose to over 25 per cent in September, the second consecutive month of double-digit rise. Retail inflation remained at 3.28 per cent in September, unchanged from August, even as vegetable and cereal prices softened.
  
• India taken several measures to tackle malnutrition in children and mothers: NITI Aayog
  According to NITI Aayog:
  • India has taken several measures to tackle malnutrition in children and mothers.
  • Pregnant women and lactating mothers will now receive five thousand rupees in cash on fulfilling basic conditions of health and nutrition.
  • The Ayog released the National Nutrition Strategy focusing on interdepartmental convergence, targets and real-time monitoring.
  • Additional 12 thousand crore rupees allotted to fight malnutrition over next 3 years by revising cost norms for supplementary nutrition.
  • Fortification of food provided under government welfare programmes, like Integrated Child Development Services (ICDS) and Mid-Day Meal has now been made mandatory.
  • ICDS systems strengthening and nutrition important project extended to 162 districts over 3 years for real time outcome monitoring.
  • The proposed National Nutrition Mission recommends convergence among ministries and expands digital monitoring to all districts.
  • Over 100 of country's High burden districts, on nutrition parameters, identified for taking up action in mission mode.
  
  
• Yes Bank commits Rs 156 crores for Namami Gange Project
  Private sector Yes Bank has committed Rs 156 crore to fund first Sewage Treatment Plant (STP) to be constructed at Varanasi under Hybrid Annuity-PPP Model. The bank has signed a deal with Essel Infraprojects for the financial closure of Rs 156 crore that will fund the STP under Namami Gange Project.
  
• Banks to provide funds at 7% to women SHGs under DAY-NRLM: RBI
  The RBI on 17th October said banks will provide funds to women self help groups, SHGs, in rural areas at 7 per cent under the Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) in the current fiscal.
  
  The central bank issued the revised guidelines on interest subvention scheme under DAY-NRLM, as received from the Ministry of Rural Development for implementation by 21 public sector banks and 19 private banks.
  
  All women SHGs will be eligible for interest subvention on credit upto 3 lakh rupees at 7 per cent per annum. Banks will be subvented to the extent of difference between the Weighted Average Interest Charged and 7 per cent subject to the maximum limit of 5.5 per cent for the year 2017-18.
  
  The notification said subvention will be available to banks on the condition that they make SHG credit available at 7 per cent per annum.
  
  The Ministry of Rural Development in consultation with state governments will harmonise State specific interest subvention schemes, if any, in line with the central scheme.The interest subvention scheme on credit to women SHG during 2017-18 is applicable in 250 districts across the country.
  
• EPFO launches online facility to link UAN with Aadhaar number ahead of Diwali
  The Employees' Provident Fund Organisation (EPFO) has launched a new online facility where its members can link their Universal Account Number (UAN) and other relevant details with their respective Aadhaar number. This new facility will help the members to access EPFO services speedily and easily, Ministry of Labour and Employment stated
  
  UAN is a 12-digit portable number which acts as an umbrella for multiple member IDs that are alloted to EPF subscribers as they change jobs over the course of their career.
  
  EPFO mandatorily requires for its members to link their UAN with respective Aadhaar numbers in order to avail its online services like checking PF account balance, submit PF claims or for withdrawing some money from the PF accounts.
  
• Inflation, fiscal uncertainty induced RBI to hold rates
  RBI Governor Urjit Patel had recommended keeping the central bank’s key interest rate unchanged at 6 per cent citing risks to inflation and uncertainties on the external and fiscal fronts, the minutes of October’s monetary policy committee (MPC) meeting released on 18th October showed.
  
  Belying industry expectations, RBI maintained its hawkish stance at its fourth bi-monthly monetary policy review of the fiscal here earlier this month, refusing to cut rates in view of the rising inflationary pressure and concerns over “fiscal slippage”.
  
  On the other hand, the central bank lowered the country’s growth projection for 2017-18, pegging the Gross Value Added (GVA) to 6.7 per cent, from earlier estimate of 7.3 per cent.
  
  Declaring that inflation is expected to rise from its current level of around 3.3 per cent “and range between 4.2-4.6 per cent in the second half of this year”, Patel said the MPC remains committed to keeping headline inflation close to 4 per cent “on a durable basis”.
  
  Five members of the six-member MPC voted in favour of maintaining the key lending rate.
  
  The MPC had expressed concern about the upside risks to inflation and that implementation of farm loan waivers by states may result in fiscal slippages resulting in upward pressure on prices.
  
• 64% of Indians used banks, more than in Bangladesh, Nigeria and Pakistan
  Of over 45,000 Indians surveyed between September 2016 and January 2017, as many as 63% had a financial account of some kind, 64% of all bank account users had used their account in the last 90 days preceding the survey, but only 12% used an advanced bank account service in 2016, according to Intermedia, a research organisation that conducts financial inclusion surveys across India, Bangladesh, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda.
  
  The survey also found gaps in bank account usage across gender and geography with 47% males actively using bank accounts versus 33% females, and 46% urban Indian’s actively using banks versus 37% of those who live in rural areas.
  
  Use of banks in India is higher than in other countries: 64% of Indians used a bank account, compared to 19% in Bangladesh, 30% in Indonesia, 31% in Kenya, 41% in Nigeria and 9% in Pakistan, according to the survey.
  
  As many as 68% said they had access to a mobile phone while only 26% said they had ever received or sent a text message, showing that basic cell phone usage–key to using mobile payment systems–is still low in India. In comparison, 85% had access to a mobile phone in Bangladesh, 80% in Indonesia, 93% in Kenya and Nigeria, and 77% in Pakistan.
  
  Use of mobile money in India (which does not include services such as Paytm) is about the same as that in Indonesia, with 1%, and Nigeria (2%), but lower as compared to Bangladesh (40%), Kenya (81%) and Pakistan (9%), the survey found.
  
• Linkage of Aadhaar number to bank account is mandatory: RBI
  Reserve Bank of India on 21st October said biometric identity number Aadhaar linkage with bank accounts is mandatory.
  
  The RBI clarification followed media reports quoting a reply to a Right to Information (RTI) application which suggested the apex bank has not issued any order for mandatory Aadhaar linkage with bank accounts.
  
  But the Reserve Bank, in a statement, clarified that linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Rules.
  
  It said, these rules have been published in the Official Gazette on 1st of June this year.
  
  It also said, these rules have statutory force and, as such, banks have to implement them without awaiting further instructions.
  
• India is eighth most valuable nation brand
  India is ranked the eighth most valuable nation brand while the United States retained its top position and China took the second spot in the league of nations according to Brand Finance’s Nation Brands 2017. India went down one spot over the previous year, the report said, because the economy grew at its slowest pace. India switched places with Canada and its brand value dropped by one percentage point while that of Canada’s rose 14 per cent. China, the fastest growing nation brand in 2017, saw valuation grow 44 per cent.
  
• RBI to soon launch financial literacy drive in 9 states
  The Reserve Bank of India (RBI) is to launch a financial literacy drive in 80 blocks in nine states on pilot basis to educate people on e-transactions, formal sector borrowings and insurance purchases.
  
  The pilot project, according to RBI will be commissioned in the 9 states of Maharashtra, Chhattisgarh, Bihar, Odisha, Karnataka, Telangana, Andhra Pradesh, Haryana and Uttar Pradesh by the 6 NGOs in collaboration with the sponsor banks.
  
  The aim of the CFL is to inculcate the habit of making a household budget and recording financial transactions, encourage transactions in savings accounts, and active saving by depositing in banks through fixed deposits and recurring deposits.
  
• Ganga mission nod for Rs. 700-cr worth projects
  The National Mission for Clean Ganga (NMCG) on 9th October approved eight projects worth over Rs. 700 crore, four of which were for setting up sewage treatment plants (STPs) in Bihar, Uttar Pradesh and West Bengal.
  
  Among others were three bio-remediation projects for treating drains dumping wastewater into the Ganga and one for inventorisation and surveillance of the river, a release issued by the Ministry of Water Resources said.
  
  The funds have been allocated for building a 40 million litre per day (MLD) STP at Bally in West Bengal at an estimated cost of Rs. 200 crore, 65 MLD STP at Bhagalpur in Bihar costing Rs. 268.49 crore and two STPs in Farrukabad and one in Bargadiya in Uttar Pradesh. These UP STPs are expected to cost Rs. 213.62 crore, the release said.
  
  A project for interception, diversion and treatment of sewage in Bithoor near Kanpur at an estimated cost of Rs. 13.40 crore was also given the green signal.
  
• Digital payments to grow at 26 % CAGR during 2016-2020: World Payment Report
  A new World Payment Report said that the initiatives of the government and the National Payments Council of India (NPCI) will help non-cash transactions grow at a compound annual growth rate of 26.2 per cent during 2016 to 2020.
  
  The World Payment Report 2017 was jointly commissioned by Capgemini and BNP Paribas. The report is about digital payments and transactions all around the world and their progress.
  
  Quoting NPCI, the report said India is expected to witness a six-fold growth in digital transactions to reach 25 billion transactions during 2017-18, up from 4 billion in 2015-16. According to the report, India could potentially make its way into the global top 10 markets in terms of non-cash transaction volumes.
  
• IIT Kharagpur signs MoU with Samsung for digital academy
  IIT-Kharagpur has signed a Memorandum of Understanding (MoU) with Samsung India for the setting up of a digital academy on the institute’s campus.
  
  The Department of Computer Science and Engineering in the institute would host the Samsung Innovation Lab and train students on the Internet of Things (IoT) through Tizen-based operating systems, commonly used by the company for its mobile phones and home appliances.
  
  IoT is a network of computing devices embedded in objects of everyday use for storage and exchange of information.
  
  An IIT-Kharagpur statement said that the training would help students acquire industry-relevant skills and “become job ready”.
  
  It said, the academy was a part of the company’s corporate social initiative that aims at bridging the digital divide in the country by imparting skills to students on cutting-edge technology. It said, the academy has planned to train over 100 students in the next three years.
  
• IMF lowers India’s growth forecast to 6.7% in 2017
  While projecting a more optimistic picture of the global economy, the International Monetary Fund (IMF) on 10th October slashed India’s growth forecast by 0.5 percentage points to 6.7 per cent in 2017.
  
  The growth projection for 2017 has been revised down… reflecting still lingering disruptions associated with the currency exchange initiative introduced in November 2016, as well as transition costs related to the launch of the national Goods and Services Tax (GST) in July 2017. Earlier, in April, the IMF had pegged India’s GDP growth at 7.2 per cent for 2017.
  
  It has also lowered the growth projection for 2018 to 7.4 per cent from its earlier estimate in April and June of 7.7 per cent, which could once again turn India into the fastest growing economy in the world.
  
  However, the IMF was more optimistic about medium-term growth prospects for India through gains from the new indirect tax levy.
  
  The IMF forecast is in line with a number of recent projections that have scaled down India’s growth prospects for the fiscal due to disruptions from demonetisation and GST, despite the government’s strong defence of the moves.
  
  GDP growth hit a three-year low of 5.7 per cent in the first quarter of the fiscal. The second volume of the Economic Survey also highlighted downside risks to its earlier growth projection of 6.75 per cent to 7.5 per cent for the fiscal.
  
  Recently, the Reserve Bank of India also lowered its growth projection to 6.7 per cent for the fiscal from its earlier estimate of 7.3 per cent. The economy grew at 7.1 per cent in 2016-17.
  
  But, in some relief to policymakers, the IMF has pegged retail inflation at 3.8 per cent in 2017, which is well within the monetary policy committee’s target of four per cent. However, in 2018, consumer price index based inflation could rise to 4.9 per cent it said.
  
  The IMF has also estimated an upswing in the global economy and has upped its growth forecast for 2017 and 2018 to 3.6 per cent and 3.7 per cent, respectively, which is 0.1 percentage point higher in both years than in the April and July forecasts.
  
  The IMF has scaled up its GDP growth forecast for both the US and China by 0.1 percentage point for 2017 to 2.2 per cent and 6.8 per cent respectively.
  
• Indian IT firms to generate fewer jobs in next 6 months: Report
  Indian IT services companies would create fewer jobs over the next couple of quarters as more companies are focusing on shifting towards digital technologies, said a survey report released by human resource firm ManpowerGroup on 10th October.
  
  The report, Experis IT Employment Outlook Survey, stated that 50 per cent of the IT services companies expressed their interest to hire people during the period between October 2017 and March 2018, since the industry is re-inventing itself to automate a lot of processes using artificial intelligence and machine-learning technology.
  
  In fact, the survey report said India would see pink slips being handed over to an increased number of senior-level professionals across IT firms, on account of digitisation and a surge in recruitment of junior and mid-level professionals.
  
  A slower job growth in the $154-billion services industry is, however, in stark contrast to other sectors in the country and captive IT units of global businesses will hire more people during this period, said the report, which surveyed around 500 Indian IT employers.
  
  The industry has been witnessing a slowdown in traditional software maintenance services- a segment that has been acting as a core revenue generator for nearly three decades now. The slowdown was attributed to the increased demand of digital technology-based services on the part of the businesses.
  
  IT professionals should look for opportunities to upskill themselves during this period, noted the report.
  
  The survey report also noted that a greater number of organisations prefer to upskill their existing workforce to thrive in the intense competitive environment, while many others seek trained freshers at entry-level jobs in the IT sector. The sector is, however, expected to see new job roles in digital technologies.
  
• Cabinet approves 7th Pay Commission
  Union Cabinet has approved the benefits of 7th Pay Commission to the faculty members of Central and state Universities, technical Institutions and aided colleges.
  
  It will be applicable from 1st of January, 2016. The annual Central financial liability on account of this measure would be about 9,800 crore rupees.
  
  Over 7.5 lakh teachers will be benefited from this decision.
  According to the Human Resource Development Minister Prakash Javadekar:
  • The salaries of teachers will increase from 10 to 50 thousand rupees under the new pay scale
  • Decision will also benefit the teachers of IITs, IIMs, IIITs and other Centrally funded institutes
  • The move will provide justice to the faculty members and attract new talents
  • The vacant posts of the teachers in Central Universities will be filled up within a year
  • Cabinet has approved two new schemes of skill development. The schemes are skill acquisition and knowledge awareness for livelihood promotion (SANKALP) and skill strengthening for industrial value enhancement (STRIVE).
  • Both the schemes are supported by the World Bank. SANKALP will be a centrally sponsored scheme with an allocation of 4,445 crore rupees while STRIVE will be central sector scheme with an expenditure of 2,200 crore rupees.
  
  
• Economic Advisory Council to PM identifies major priorities
  The newly constituted Economic Advisory Council to the Prime Minister (EAC-PM) is holding its first meeting on 11th October at NITI Aayog in New Delhi.
  
  The five member committee comprising of reputed economists and experts was constituted by the Prime Minister Narendra Modi on 26th of last month to halt the downhill movement of the Indian economy.
  
  NITI Aayog Vice Chairman Bibek Debroy is leading the council which include Finance Secretary Ratan P Watal as Member Secretary, along with Surjit Bhalla, Rathin Roy and Ashima Goyal as part-time members.
  
  The council is mandated to analyze all critical issues, economic or otherwise referred to it by the Prime Minister. It is also required to address issues of macro-economic importance and presenting its views.
  
  The present meeting comes in the backdrop of increasing concerns over declining GDP growth momentum. The slowing of GDP in June quarter triggered concerns especially regarding flagging consumer demand.
  
  The revival of the council indicates the government's effort to tap economists for new ideas on the economy. The Council will address all issues of emergent importance, engage with a broad spectrum of stakeholders and formulate advice accordingly.
  
  The newly set up Economic Advisory Council to the Prime Minister 11th October identified ten major priorities for accelerating economic growth and employment generation over the next six months. The council held its first meeting in New Delhi.
  
  These include economic growth, employment and job creation, integration of informal sector, fiscal framework and monetary policy.
  
  The council will take inputs from RBI and Monetary Policy Committee while considering issues related to monetary policy framework.
  
• Cabinet approves signing of MoU between SEBI and FSC, Gibraltar
  The Union Cabinet has given its approval for signing of a Memorandum of Understanding (MoU) between Securities and Exchange Board of India (SEBI) and Financial Services Commission (FSC), Gibraltar for mutual co-operation and technical assistance.
  
  According to the Law Minister Ravi Shankar Prasad, the MoU will promote further development of economic links and cooperation between the two regulators and aims at creating conditions for an effective development of securities markets in the two countries. It will also contribute towards strengthening the information sharing framework between the two signatories.
  
• GST regime must have minimal exemptions, fewer rates: IMF
  The International Monetary Fund has lauded New Delhi’s recent efforts to lower the compliance burden under the Goods and Services Tax, but said that efforts should also be made to lower the tax slabs and minimise exemptions. However, there is also scope to simplify the tax structure and bring down the number of tax rates, IMF said. The IMF also called for further broadening the tax base and including all sectors under GST.
  
  The objective of GST should be to have a broader base with minimal exemptions. At present, electricity and fuel are out of GST, which creates issues for companies in the sector as they do not get input tax credit
  
  The current model of GST with numerous exemptions and a four-tier rate structure — five per cent, 12 per cent, 18 per cent and 28 per cent — apart from a compensation cess and exempt items and different rates for gold (three per cent) and rough diamonds (0.25 per cent), is very different from the original plan of one single tax rate.
  
• World Bank cautions against protectionism
  After years of disappointing growth, the global economy has begun to accelerate, World Bank President Jim Yong Kim said on 12th October, cautioning that a rise in protectionism and policy uncertainty could derail this fragile recovery.
  
  He expressed concern that risks such as rise in protectionism, policy uncertainty or possible financial market turbulence could derail this fragile recovery. He said countries need to build resilience against the overlapping challenges the world faces present, including the effects of climate change, natural disasters, conflict, forced displacement, famine and disease.
  
• India must pursue fiscal consolidation, says IMF
  The IMF on 13th October said India should continue to focus on fiscal consolidation despite the recent slowdown in the economy.
  
  The comments come amid talks of India planning a stimulus package to boost growth, which fell to a three-year low of 5.7 per cent of GDP in the first quarter of the fiscal.
  
  However, Finance Minister Arun Jaitley had on 13th October said that fiscal consolidation remained a top priority for the government. The Centre aims to control its fiscal deficit at 3.2 per cent of GDP in 2017-18. Though the IMF has revised down India’s GDP growth forecast to 6.7 per cent for 2017, Rhee said signs of a recovery are already showing.
  
  Apart from fiscal consolidation, India must also pursue reforms in the banking sector and labour markets, said Kenneth Kang, Deputy Director, Asia and Pacific, IMF.
  
  The IMF has also said that India should work on reforms to tackle supply bottlenecks, enhance the efficiency of labour and product markets and modernise the agricultural sector.
  
  Reducing the number of labour laws that total about 200 would promote investments and employment, said Kang, adding that female labour participation must also be encouraged.
  
  Further, efforts must be made to strengthen public sector banks and continue structural reforms to address bad loans.
  
  Noting the upswing in the global economy, the IMF said that Asia continued to play a key role. “Asia’s contribution to the global economy is 63 per cent, China and India accounts for more than 50 per cent of global growth with India contributing 17 per cent. Trade deficit narrows to 7-month low of $8.98 bn in Sept; exports rise 26%.
  
  Exports grew at a six-month-high rate of 25.7 per cent in September year-on-year, maintaining the momentum of 13 months of interrupted rise and despite the problems of getting refunds under the goods and services tax (GST) regime.
  
  This was the second month of exports expanding in double digits after outbound shipments were up 10.29 per cent in August.
  
  The pace of export growth comes after they contracted for more than a year. The country exported goods worth $28.61 billion in September against $22.76 billion in the same month last year.
  
  In the third month into the GST, export growth picked up mainly owing to rising global crude prices, which pushed up processed petroleum exports by nearly 40 per cent, apart from a broad-based improvement in exports of major foreign exchange earners such as engineering goods and gems and jewellery.
  
  This may give credence to the observations of the Economic Advisory Council to the Prime Minister (EAC-PM) that green shoots of economic revival were visible.
  
• Inland Waterways Authority of India raises Rs 660 crore through bonds
  In line with the Union government’s thrust on fund raising by tapping the capital markets, the Inland Waterways Authority of India (IWAI) on 13th October announced it has raised Rs 660 crore through bonds.
  
  This would be the second department under Union Minister Nitin Gadkari to raise finances via the capital market, during the current fiscal, after the National Highways Authority of India (NHAI) raised Rs 3,000 crore worth of masala bonds at the London Stock Exchange in May this year.
  
  The resources raised by IWAI way of these fully-serviced government bonds will be in addition to the budgetary support from the central government, which had enabled IWAI to raise Rs 660 crore through this instrument.
  
  The IWAI had engaged arrangers, credit rating agencies – CRISIL and CARE, registrars and trustees prior to raising the bonds.
  
  The e-bidding for raising the bonds was organized on October 11, 2017 on the BSE Portal with the issue size of Rs 300 crore and green shoe option of Rs 360 crore. The issue was oversubscribed and the entire amount of Rs 660 crore has been raised in single tranche at a coupon rate of 7.47 percent.
  
  The proceeds from the bonds are intended to be utilized by IWAI exclusively for capital expenditure for development of National Waterways (NWs) under National Waterway Act, 2016 during 2017-18. The interest payment will be on semi-annual basis and the principal on maturity.
  
• Direct tax collections in first half of current financial year rise 15.8 %
  The Direct Tax Collections in the first half of the current fiscal shows growth of 15.8 per cent. Finance Ministry said, the provisional figures of Direct Tax collections up to September, 2017 show that net collections are at 3.86 lakh crore rupees which is higher than the corresponding period of last year.
  
  Net Direct Tax collections represent 39.4 per cent of the total budget estimates of Direct Taxes for Financial year 2017-18.
  
  The Ministry said, an amount of 1.77 lakh crore rupees has been received as Advance Tax up to 30th of September this year, reflecting a growth of 11.5 per cent over the corresponding period of last year.
  
• IndusInd acquires Bharat Financial in Rs 15,000-cr deal
  IndusInd Bank on 14th October said it agreed to merge with Bharat Financial Inclusion (BFIL) for 639 of the bank’s shares for 1,000 shares of the microfinance company, effective January 1, as the two saw complimentary network, customers and products focused on financial inclusion.
  
  The merger will add another Rs 10,000 crore from BFIL to the bank’s existing MFI portfolio of Rs 3,000 crore, Romesh Sobti, managing director of IndusInd Bank at a press conference.
  
  The deal will also bring down the microfinance company’s cost of funds by 3-4 per cent. He said the margin would remain the same and the benefit of lower cost of funds would be passed onto the customers.
  
• Centre planning to link panchayats with private firms to boost rural economy
  The Center is planning to facilitate partnership between gram panchayats and private companies to enhance economic activities in the rural areas.
  
  The rural development ministry has selected 50,000 gram panchayats across the country where women self-help groups are active and have basic banking infrastructure and households with savings accounts for this purpose.
  
  As part of the Mission Antyodaya, Rural Development Secretary Amarjeet Sinha gave a presentation to some start-ups on how these gram panchayats can play an important role in their respective businesses.
  
• RCom, Aircel put off merger plans
  Reliance Communications (RCom) and Aircel have called off talks to merge their mobile operations due to regulatory and legal hurdles. This casts doubts over the operators’ future as the merger was seen as vital for their survival in the competitive telecom sector. RCom and Aircel had signed binding agreements in September 2016 for the merger of Reliance’s mobile businesses with Aircel.
  
  For RCom, the merger was part of a plan to pare its Rs. 45,000-crore debt. Under this plan, post the merger with Aircel, Reliance was to sell 51 per cent stake in its tower assets to Brookfield for Rs. 11,000 crore. Without the Aircel deal, the tenancy ratio and the total number of towers will come down; the tower deal may therefore have to be renegotiated at a lower valuation.
  
• RBI keeps interest rates unchanged; lowers growth forecast to 6.7 %
  Reserve Bank on 4th October kept interest rate unchanged as was widely expected in view of upward trend in inflation even as it cut the growth forecast to 6.7 per cent for the current fiscal.
  
  Consequently, the repo rate, at which it lends to banks, will stand at 6 per cent. The reverse repo, at which RBI borrows from banks will continue to be at 5.75 per cent, it said at the fourth bi-monthly policy review.
  
  The bank lowered to 6.7 per cent the economic growth projection for 2017-18 from its August forecast of 7.3 per cent in view of issues with GST implementation and lower kharif output estimates.
  
  RBI also indicated a rise in inflation. It said the inflation is expected to rise from its current level and range between 4.2-4.6 percent in the second half of this year.
  
  Addressing the media after the release of the fourth bi-monthly policy decision of 2017-2018, RBI Governor Urjit Patel said the Monetary Policy Committee reviewed evolving macro-economic and financial conditions and decided to keep the policy rate unchanged at 6% while maintaining a neutral policy stance.
  
  RBI governor expressed concern about the loss of momentum of growth in the early months of 2017-18 especially the persisting weakness in manufacturing. He further informed that the MPC noted that the implementation of the GST appears to have rendered short term prospects uncertain possibly delaying the revival of investment activity.
  
  He further added the teething problem related to the GST may get resolved relatively soon allowing growth to accelerate in the second half of 2017-2018.
  
  He said that the CPI inflation has risen since last MPC meeting. He added that factors that impart upside risks to the trajectory are implementation of farm loan waivers and salary and allowances award of seventh pay commission by the states.
  
  The RBI Governor Dr. Patel said the outlook of agriculture and allied activities is favourable and services sector performance has improved markedly. He said that it is has been reported that banks are turning away senior citizens and differently-abled. RBI governor instructed banks to put in place explicit mechanism to meet the needs of senior citizens and differently-abled so that they do not feel marginalized.
  
  Deputy Governor of RBI, Viral Acharya said it is too early to assess the loss in momentum in growth adding that real time activity indicators do not yet paint a clear picture. The next meeting of the MPC is scheduled on December 5 and 6, 2017.
  
• India's renewable energy capacity to double by 2022: IEA
  India's renewable energy capacity will more than double by 2022, which would be enough to surpass renewable expansion in the European Union for the first time, International Energy Agency (IEA) said in a report.
  
  The country's renewable energy installed capacity is 58.30 GW as per the recent government data. The government has an ambitious goal of increasing it to 175 GW by 2022 including 100 GW of solar and 60 GW of wind energy. IEA said the solar PV and wind together represent 90 percent of India's capacity growth as auctions yielded some of the world's lowest prices for both technologies.
  
• Govt has undertaken 87 reforms in 21 sectors in last three years
  According to the Indian Prime Minister Narendra Modi, the NDA government has undertaken 87 reforms in 21 sectors in the last three years and the country has come out of policy paralysis to become a nation of policy makers and implementers.
  
  He said, his government had the courage to take bold decisions like demonetisation and implementation of GST, which the previous government lacked. Prime Minister Modi was inaugurating the Golden Jubilee Celebrations of the Institute of Company Secretaries in New Delhi on 4th October.
  
  The Prime Minister said that in a crack down on the black money, registration of 2.1 lakh shell companies identified post note-ban has been cancelled.
  
  He said that in the policy and planning of the government, care is being taken to ensure that savings accrue to the poor and the middle class and their lives change for the better.
  
  Mr. Modi said there was a time when India was part of 'fragile-5' economies of the world and the BJP government pulled it out to make it the fastest growing economy. He also said, the government is aware that the growth has slowed and it is taking steps to improve it.
  
• RBI to allow inter-operability in prepaid payment instruments
  Users will be able to transfer funds from one mobile wallet to another as Reserve Bank is allowing inter-operability among prepaid payment instruments (PPI) very soon.
  
  PPIs which include the likes of e-wallets, gift cards and meal coupons are used as substitutes for cash. RBI on 5th October said in the 'Statement on Developmental and Regulatory Policies' that KYC compliant PPIs can inter-operate within six months of the revised directions.
  
  RBI will issue revised master directions on October 11 this year. The RBI said revised framework will pave the way for inter-operability into usage of PPIs, as per the vision for Payment and Settlement Systems in the country.
  
  Mobile wallet companies have supported RBI's latest move saying it will increase adoption of digital payments in the country.
  
• Govt announces major relief in GST for exporters, small and medium enterprises
  Government has announced major relief in GST for exporters and small and medium enterprises. The composition threshold limit under GST has been enhanced from 75 lak rupees to one crore. According to the Finance Minister Arun Jaitley, under composite scheme, traders will pay one percent, manufacturers two percent and restaurants five percent. GST tax payers upto 1.5 crore rupees turnover can now file their return on quarterly basis, in place of monthly basis.
  
  Exporters will start getting refunds of their input credit for the month of July from 10th of October, and for August from 18th of this month. This is an interim arrangement which will be operated by Central and State Government officials. Exporters will have e-wallet from 1st April, 2018 for getting their refunds.
  
  The Council discussed e-way bill. Karnataka is already having good experience with it and after first of January it will go to other states. Items including Khakhra, plain chapati, food packets used in ICDS scheme and unbranded Namkeen will now be taxed at 5 percent instead of 18 percent.
  
  GST rate on unbranded medicines have also been reduced to 12 percent to 5 percent. Tax on parts of diesel engine has been reduced from 28 to 18 percent.
  
  To contain the cost of irrigation schemes involving high amount of labour, GST rate has been brought down to 5 percent. The Finance Minister announced that a concept paper on GST rate fitment has been approved by GST council. He said, the council has formed a Group of state finance ministers to look into different issues.
  
• Finance Ministry makes Aadhaar mandatory for small saving schemes
  The government has made biometric identification Aadhaar mandatory for all post office deposits, Public Provident Fund, National Savings Certificate scheme and Kisan Vikas Patra.
  
  Finance Ministry has issued four separate Gazette notifications making Aadhaar mandatory for opening all post office deposit accounts, Public Provident Fund, National Savings Certificate scheme and Kisan Vikas Patra deposits.
  
  Existing depositors who have not provided Aadhaar number at the time of application for such deposit "shall submit his Aadhaar number to the post office savings bank or deposit office concerned, on or before December 31, 2017.
  
  The government has insisted on quoting Aadhaar for bank deposits, obtaining mobile phone and several other utilities to weed out benami deals and black money.
  
• Petrol, diesel prices slashed by Rs 2 per litre as government cuts excise duty
  Petrol and Diesel will be cheaper by two rupees per litre from 3rd October. The Central government reduced the basic excise duty on Petrol and Diesel by two rupees per litre to cushion the impact of rising international prices of crude oil and retail prices of petrol and diesel. The reduction will apply on both branded and unbranded Petrol and Diesel. According to Finance Ministry the revenue loss on account of these reductions will be about 26 thousand crore rupees in a full year and about 13 thousand crore rupees during the remaining part of the current financial year.
  
  The Ministry said, due to the increase in the international prices of Petrol and Diesel, during the last few weeks, the retail selling price of Petrol had risen to 70. 83 rupees per litre and Diesel 59.07 rupees in Delhi. This rise was also reflected in WPI inflation in August this year. The rising prices of the two petroleum products had evoked criticism of the government by opposition parties.
  
• Infrastructure sector growth rises to 4.9% in Aug; highest in 5 months
  Helped by robust performance of the coal and electricity sectors, the country's infrastructure sector grew at a five-month high of four point nine per cent in August this year. The infrastructure sector had grown 3.1 per cent in August last year, and 2.6 per cent in July this year.
  
  Official data released on 3rd October showed that production of coal spurted 15.3 percent in August, output of natural gas increased 4.2 percent, and electricity generation jumped 10.3 per cent during the month. Refinery production grew 2.4 percent in August, and steel output grew 3 per cent. But crude oil, fertiliser and cement recorded negative growth in the month under review
  
• India to outperform in shrimp exports in 2017: UN report
  Amid growing uncertainties in the seafood trade, exporters from India have now a reason to cheer as the country is expected to be the standout performer in 2017 along with Chile.
  
  Indian exports is set to surge by 41 per cent more due to bumper harvesting of vannamei shrimp.
  
  According to Food and Agricultural Organization, of the world's major seafood exporters, India and Chile are expected to be the standout performers in 2017. In India's case, bumper harvests of aquacultured vannamei shrimp is the main factor behind expectations of a $2.3 billion increase in Indian seafood exports in 2017. The report on seafood demand analysed the market situation until June 2017.
  
  The report will provide respite to Indian exporters at a time when the European Union (EU), the third largest market, is contemplating a complete ban on Indian shrimp imports over quality issues.
  
  For Chile, a combination of a recovery in salmon harvest volumes and the high price level for salmon products will equate to a projected rise of $1.6 billion, marking a rise of 30 per cent, in export value, it added.
  
  Exports from Ecuador primarily include shrimp and tuna, while Peru exports fishmeal and fish oil. Norway is primarily known for the export of salmon, ground ish and small pelagics. Given that exports from these three countries are also expected to swell this year, a substantial increase in the overall yearly exports is logical. On the imports side, both developed and developing markets are expected to perform well in 2017.
  
  Driven by robust demand growth worldwide, a substantial proportion of global production will be exported. The value of world trade in fish and fishery products is expected to increase by a projected 5.8 per cent to $150.9 billion in 2017.
  
  As per an earlier report of FAO, India had emerged as the largest exporter of shrimps in the world by exporting 438,500 tonnes in 2016, marking a 14.5 per cent increase over the last year. The top five shrimp exporters to the international market in 2016 were India, Vietnam, Ecuador, Indonesia and Thailand.