ECONOMY AFFAIRS SEPTEMBER 2015

ECONOMY AFFAIRS SEPTEMBER 2015

• Gujarat accords industry status to tourism
  Gujarat will be one of the top five states in India in terms of tourist footfalls by 2025, according to the Gujarat Tourism Policy for 2015-2020 released on 27th September. The policy document pegs the investment potential in the tourism sector in the state at $4 billion or around Rs 26,000 crore by 2025. It also envisages an employment potential for three million people by then.
  
  Releasing the policy which would be effective from the date of notification till March 2020, State Tourism Minister Saurabh Patel said the government has decided to accord 'industry' status to tourism.
  
  Since the foundation of Gujarat, it is for the first time that tourism has been granted the status of an industry.
  
  Tourism sector will now get all the benefits that industry gets The government also announced a slew of tax relaxations to boost entrepreneurship in the tourism sector. For example, a 100 per cent reimbursement on stamp duty, apart from exemption on luxury tax, entertainment tax and electricity duty have been provided for. As such, investments of around Rs 50 crore will get admissible subsidy of 15 per cent with a maximum limit of Rs 10 crore.
  
• FMC-SEBI merger to bring convergence, widen size and scope of markets: Jaitley
  In an industry-first, two regulators - Forward Markets Commission (FMC) and capital markets watchdog-the Securities and Exchange Board of India (SEBI) Sebi-were on 28th September merged to create a unified regulatory body. The formal merger ceremony took place in Mumbai.
  
  The move aims to streamline regulation and curb wild speculations in commodities market, while facilitating further market growth.
  
  Although, the merger of these two independent regulatory bodies was under discussion for long time, the move gathered pace, especially, after the commodity market was rocked by the outbreak of a multi-crore scam at National Spot Exchange (NSEL) unearthed two years back.
  
  Now that the merger has been done with, below is the drawdown of the journey of the commodities regulatory body and what led to the eventual convergence with the capital markets regulator Sebi.
  
  History of the two regulatory bodies: The Forward Markets Commission regulated commodities market since 1953, while the Securities and Exchange Board of India was set up in 1988 as a non-statutory body for regulating the securities markets and became an autonomous body in 1992 with full independent powers. Currently, India boasts of three national and six regional bourses for commodity futures in the country. The persisting global economic slowdown coupled with slackening growth in China fuelled a sharp fall in commodity prices over the past year or so. So much so that the consolidated turnover of all the exchanges put together fell to nearly Rs 60 lakh crore in 2014-15 from over Rs 101 lakh crore in the preceding financial year.
  
  Issues stifling commodities markets: FMC oversaw the commodities market for over 60 years, but it lacked powers which led to wild fluctuations and alleged irregularities remaining untamed in this market segment. Also, the commodities market faced challenges with respect to speculative activities and illegal activities like 'dabba trading' flourishing in this segment.
  
  Talks of merger: The merger talks between the two regulatory bodies was first mooted in 2003, and continued in next few years before the Rajan committee in 2009 reiterated consolidation of all financial sector regulators under one umbrella. In the events before the outbreak of NSEL crisis came to light, Justice BN Srikrishna-led FSLRC recommended unified regulation. But the fallout of NSEL prompted finance ministry to bring FMC under its fold in that same year. Finally, in his budget speech this year in February, finance minister Arun Jaitley announced the merger of FMC with Sebi.
  
  What merger aims to achieve: The merger is aimed at streamlining the regulations and curb wild speculations in the commodities market, while facilitating further growth there. Cautioning small investors, Sebi chairman UK Sinha had said, "If you put your hard-earned money into this market, it may not be ultimately good for you. The commodities market is for those who are experts in this space. For non-experts, it is a risky area."
  
  Measures by Sebi: Sebi has also created a separate Commodity Cell and has set up new departments for regulation of commodities derivatives market. Sebi has formed a Commodity Cell by posting its senior officials, while two internal departmental committees (one each in Integrated Surveillance Department and Market Intermediaries Regulation and Supervision Department) have been set up. The market regulator has also sought help from the Agriculture Ministry with regard to the data sources for the prices and to improve the methodology for determination of final settlement price.
  
• Reserve Bank of India cuts interest rate by 0.5%
   The Reserve Bank of India on 29th September cut the repo rate, its short-term lending rate to banks, by 0.5 per cent, to 6.75 per cent, with immediate effect. But in its monetary policy review, the Reserve Bank kept the Cash Reserve Ratio unchanged at 4 per cent.
  
  RBI Governor Raghuram Rajan said further monetary policy accommodation will be conditioned by the abating of inflationary pressures, the full monsoon outturn, possible US central bank actions, and greater transmission of the RBI's front-loaded past actions.
  
  According to RBI Governor Rajan, the outlook for food inflation could improve if the increase in sown area translates into higher output that moderate increases in minimum support prices should keep cereal inflation muted, and that subdued global food inflation should continue to put downward pressure on food inflation.
  
  Inflation is expected to touch 5.8 per cent in January 2016, a shade lower than the August projection.
  
  The RBI Governor said the focus of monetary policy will now shift to working with the government to remove impediments to passing on a bulk of the cumulative 1.25 per cent repo rate cuts to borrowers.
  
  To give a boost to the housing sector, the RBI has proposed to reduce the risk weights on affordable housing applicable to lower value but well-collateralised individual housing loans.
  
  The RBI also cut its GDP forecast to 7.4 per cent for the current fiscal, from the 7.6 per cent forecast earlier. The Reserve Bank also hiked the limit for FPI investment in government securities to 5 per cent of the outstanding stock by March 2018, a move that will bring in an additional Rs 1.2 lakh crore.
  
• India up 16 spots to 55th in global competitiveness
  India has jumped 16 places on the Global Competitiveness Index, according to the latest rankings released by the World Economic Forum (WEF) on 29th September. It now ranks 55th among 140 countries, against 71st in 2014-15. But, despite this massive jump, which follows five years of a decline on the list, India still ranks seven notches lower than it did in 2007.
  
  Switzerland tops the latest rankings, followed by Singapore, the US, Germany and Netherlands. The WEF report attributes the jump in India's ranking "to the momentum initiated by the election of Narendra Modi.
  
  The report, however, says if a constant sample of 135 countries is considered for both 2014-15 and 2015-16, India's ranking would remain unchanged at 55th.
  
  The Global Competitiveness Index is an annual assessment to gauge the factors driving productivity and prosperity across 140 countries. It measures a country's performance on 12 pillars -institutions, infrastructure, macroeconomic environment, heath and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation. The World Bank's ease-of-doing-business survey ranks India at 142. The government has repeatedly promised to implement reforms to push the ranking to within the top 50.
  
  The latest WEF rankings show India's institutions are now "judged more favourably" (ranked 60th against 70th in 2014-15). The report says in terms of trust in politicians, India ranks 31st, while on favouritism in the decisions of government officials and burden of government regulations, it ranks 32nd and 27th, respectively.
  
  A big improvement was seen in the country's macroeconomic stability through the past year, with its ranking jumping 10 places to 91st in 2015-16. Part of this could reflect the recent moderation in inflation, the fall in the current account deficit and steps taken by the government to control its fiscal deficit.
  
  On infrastructure, the ranking moved up six notches - now, it ranks 29th on the quality of railroad infrastructure and 11th on the available airline seats per km. But on other key parameters, it fares poorly, ranking 61st on the quality of roads and 98th on electricity supply.
  
  The WEF report is rife with anomalies. Health and primary education is seen as an area of improvement, with India's ranking jumping 14 places. This is surprising, as on one of the indicators - quality of primary education - it ranks 52nd, which is at odds with various surveys such as the Annual Status of Education Report that show how poorly the country fares in this regard.
  
  Another surprise is India ranks 25th on hiring-and-firing practices in the labour market, a sharp contrast to public discourse in India that sees restrictive labour laws as thwarting growth in the manufacturing sector.
  
  The report lists corruption, policy instability, inflation, access to financing, government instability and inadequate supply of infrastructure as the top concerns in terms of doing business in India.
  
• India pips US, China as No. 1 foreign direct investment destination
  India has emerged on top of the foreign direct investment league table, overtaking China and the United States, according to the FT data service.
  
  A ranking of the top destinations for greenfield investment (measured by estimated capital expenditure) in the first half of 2015 shows India at number one, having attracted roughly $3 billion more than China and $4 billion more than the US, according to the Financial Times newspaper.
  
  While there has been a demand for accelerating the reforms drive, the government has unveiled several initiatives such as 'Make in India' and 'Digital India' to lure investors. It has moved to ensure that the country moves up the ranking on the World Bank's Ease of Doing Business and states have started their clean-up act on this parameter.
  
• Microsoft India’s cloud services in Maharashtra
  Maharashtra Chief minister Devendra Fadnavis launched Microsoft India's local cloud services (LCS) from the company's state-of-the-art data centres in Mumbai, Pune and Chennai.
  
  Fadnavis said the state would host a range of digital services on Microsoft's local cloud, including citizen services, applications and other people-oriented government initiatives to enhance economic productivity, prosperity and overall efficiency in governance to meet the objective of digital Maharashtra. Microsoft CEO Satya Nadella had assured commercial cloud services in India by the year-end, but practically launched it on Tuesday, ahead of the deadline.
  
  These services accelerate digital transformation, handle a wide range of data and help create speedy and innovative applications. Billing services and government schemes will get faster and easier in terms of accessibility and delivery. Cloud-computing with data storage and analytics offers convenient, on-demand access to a shared pool of resources and provides users and enterprises with various capabilities to store and process their data with third-party data centres.
  
• Link rural job scheme, Swachh Bharat with Aadhaar: Public Accounts Committee
  The Public Accounts Committee of Parliament is likely to come up with a set of suggestions to improve the rural employment guarantee scheme.
  
  These include adding works under the Swachh Bharat Abhiyan to the MGNREGA, linking the scheme with Aadhaar, strengthening the independent auditing of the scheme, avoiding contractors, and improving the functioning of the Central Employment Guarantee Council.
  
  This is the third time that the PAC is evaluating the performance of the scheme. The panel has also found several discrepancies in the spending of funds and pulled up the Rural Development Ministry for not exercising adequate control over expenditure.
  
  The PAC has also noted that the chief accounting authority and financial adviser of the Ministry are personally responsible in ensuring that the funds sanctioned by the Legislative department are spent in the public interest and for the purposes for which money is sanctioned.
  
  It said the audit has exercised only a test-check and urged the Ministry to find out the magnitude of losses by carrying out a 100 per cent check of all transactions.
  
  The members in the panel, while appreciating the Centre’s efforts to plug loopholes, wanted Aadhaar linked with the scheme. They have also suggested that an independent social audit should be carried out on expenditure. The members also appreciated the Centre’s decision to link the scheme with agricultural activities.
  
• Fiscal deficit last month 66.5% of FY16 target
  India's fiscal deficit for April-August was Rs 3.69 lakh crore, or 66.5 per cent of the full-year target of Rs 5.56 lakh crore. The fiscal deficit was Rs 3.98 lakh crore in the same period a year ago, about 75 per cent of the FY15 target.
  
  The encouraging year-on-year trend was primarily due to receipts for April-August 2015. Total receipts for the period were Rs 3.63 lakh crore, or 30 per cent of the full-year target of Rs 12.22 lakh crore, compared with Rs 2.75 lakh crore, or 21.7 per cent in the year-ago period, government data released on Wednesday showed.
  
  The net tax revenue for the first five months of 2015-16 was Rs 2.1 lakh crore, or 23 per cent of the full-year budgeted estimates, compared to 19 per cent in the comparable period of 2014-15.
  
  The non-tax revenue for the period under review was Rs 1.26 lakh crore, or 61.2 per cent of the budgeted estimates, compared with 40 per cent in the same period a year ago. Non-debt capital receipts reached a staggering 21.6 per cent of full-year estimates, compared with only six per cent in April-August in the past year.
  
  The total expenditure for April-August 2015 was Rs 7.32 lakh crore, or 41.2 per cent of the full-year budgeted estimates of Rs 17.77 lakh crore.
  
  For the same period a year ago, the total spending was Rs 6.73 lakh crore, or 37.5 per cent of 2014-15 target. The higher year-on-year spending came on the back of increased capital expenditure by the government, in line with its stated commitment of boosting public spending in infrastructure at a time when the private sector has little appetite for larger projects.
  
  The total capital expenditure, Plan and non-Plan, for April-August was Rs 92,000 crore, the highest ever by some distance for the first five months going back to 1998-99, according to available data.
  
  Non-Plan expenditure for April-August 2015 was Rs 5.45 lakh crore, or 41.6 per cent of the full-year budgeted estimate, compared with 40.6 per cent for the comparable period in the last financial year. Plan expenditure for April-August 2015 was Rs 1.87 lakh crore, about 40 per cent of the full-year target, compared with 31 per cent for the same period in FY15.
  
• World trade to grow only 2.8% this year: WTO
  World trade will grow by 2.8 per cent this year and could be pegged back further by a US interest rate rise, China's economic slowdown or Europe's refugee crisis, the World Trade Organization (WTO) said on 30th September.
  
  The forecast, revised down from a 3.3 per cent forecast made in April, means 2015 will be the fourth year in a row with trade growth of less than 3 percent, half the annual average in 1990-2008 before the financial crisis hit.
  
  The WTO's forecast implies growth will quicken this year, from 2.5 per cent growth in 2014. But its expectations have repeatedly proved overly optimistic as hopes of global economic recovery have receded. There were still big potential risks to its latest numbers.
  
  In 2016, world trade is expected to grow by 3.9 per cent, a revision of the WTO's previous forecast of 4.0 per cent. That rebound is predicated on Asian import growth bouncing back from 2.6 per cent in 2015 to 4.3 per cent, as well as Latin America flipping from a 5.6 per cent import contraction this year to 5.7 per cent import growth in 2016. The WTO forecasts covered trade in goods, but not trade in services.
  
• Telangana announces tax sops for handset industry
  The Telangana government has come out with a policy to make the State “a hub for mobile phone manufacturing” by announcing tax sops for the units.
  
  The government issued two orders on September 29th one to announce the policy and the other to allot 18.66 acres to Micromax to set up a manufacturing facility, giving it all the benefits under the new policy.
  
  The policy has called for allotment of land for at least 10 anchor units, with a capital subsidy of 20 per cent (with a ceiling of Rs. 10 crore per company). The units will get an interest subvention of 5.25 per cent on term loans for 5 years. The units will be eligible for reimbursement of 100 per cent stamp duty. The VAT rate has been fixed at 5 per cent.
  
  The State government wants to utilise the two electronic hardware clusters allotted by the Centre to promote manufacture of mobile phones, components that go into phones and accessories.
  
  The two clusters are coming up at Fabcity (602 acres) and Maheshwaram (310 acres) in Ranga Reddy district. The Telangana State Wide Investment Facilitation Board (T-SWIFT) has been created to process the applications for the clearance of mega projects.
  
• Govt gets Rs 3,770 cr from one-time black money compliance window
  Government has received an amount of Rs 3,770 crore from 638 declarations under the onetime black money compliance window which was closed on September 30th, 2015. This was informed by an official statement issued by the Ministry of Finance today. It also said these figure are subjected to final reconciliation.
  
  Talking to All India Radio CBDT chairperson Anita Kapur said that the tax at the rate of 30 per cent and penalty at the rate of 30 per cent is to be paid by 31 December.
  
  The compliance window opened on 1st of July, 2015 and was till 30th of September 2015 for a limited period to persons, who have undisclosed foreign assets which they had not disclosed for the purposes of Income-tax so far.
  
  The window, created under the new anti-Black money Act to deal with the menace of black money stashed abroad.
  
• Ministry releases National Offshore Wind Energy policy
  The winners of the offshore wind energy blocks will lose their contracts if they fail to start commercial production within a specified time frame from date of signing the contract. This has been stipulated in the National Offshore Wind Energy Policy.
  
  The policy, to be notified shortly, has authorised the National Institute of Wind Energy (NIWE) to conduct the auction. The policy was approved by the Cabinet last month and the details have been put up on the Ministry of New & Renewable Energy’s website on 1st October.
  
  Oil & gas exploration firms, sea-bed mining firms and others who have existing leases on offshore blocks can participate in installation of wind farms on their existing acreages. However, such lease holders would need to route their proposals through NIWE, which will be nodal agency for development of offshore wind energy.
  
  The blocks will be leased out through an international competitive bidding mechanism which is yet to be finalised. NIWE will also be the sole facilitator for obtaining clearances and no-objection certificates for such offshore blocks.
  
• India pips China to emerge as world’s largest cotton producer
  India has finally surpassed China in cotton production and emerged world’s largest cotton producer in the season ended September 30, 2015. The country became the world leader and produced 6.51 million tonnes (mt) of the fibre against 6.48 mt registered by China in the cotton year 2014-15, according to the data released by the International Cotton Advisory Committee.
  
  In a related development, the US Department of Agriculture has predicted that India will retain its top slot for next cotton season by producing 29 million bales or 27 per cent of the global cotton crop though the country’s yield is much below the global average.
  
  The cotton economy in India witnessed a depressing trend last year, with prices ruling much below the previous cotton season with government agency procuring 93 lakh bales as part of minimum support price mechanism.
  
  Latest data from ICAC show the global ending stock is estimated to have risen by nine per cent to 22 million tonnes, reflecting a stock-to-use ratio of 90 per cent, he said. From 2010-11 to the end of 2014-15, world has accumulated 13.4 million tonnes of stock due to production exceeding consumption. In 2015-16, stocks are projected to decrease five per cent to just below 21 million tonnes reducing the excess volume by about one million tones.
  
• Odisha to provide 50 more work days under MGNREGA
  Odisha government has announced to increase work days from 150 to 200 in drought-affected areas under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The state government will bear all costs for the additional 50 days work. It also said the government has already spent 802 crore rupees under the scheme, while it has a target to spend more than two thousand crore rupees by the end of this year.
  
• India received $19.78 billion in FDI in 2014-15 from countries that PM Narendra Modi visited
  India received $19.78 billion (Rs 1.3 lakh crore) in FDI in 2014-15 from a dozen major FDI source countries that Modi has visited since taking over in May last year. This accounts for nearly two-thirds of the $30.93 billion FDI the country received in the fiscal year, which was 27 per cent more than the year before.
  
  FDI grew quicker after the launch of the Make in India programme in September 2014 — inflows jumped 48 per cent between October 2014 and April 2015 over the year-earlier period, data from the Department of Industrial Policy and Planning showed.
  
  Among the countries that Modi visited, Japan has committed to invest about $35 billion in five years and South Korea about $10 billion. China has assured $20 billion in the next five years, while France has announced $2 billion euros ($2.26 billion).
  
  The UAE, which the PM visited last month, has assured to pump in money for India's $75-billion infrastructure fund. The UK has launched a programme for investments here ahead of Modi's planned trip in November and Germany is expected to make some announcements related to the Make in India initiative during Chancellor Angela Merkel's visit to New Delhi in the first week of October.
  
• India slips in UN’s broadband penetration ranking
  According to the State of Broadband 2015 report by the United Nations, India’s broadband penetration ranking has fallen to 155 from 113. This despite the fact that the number of people with broadband access on mobile phones has gone up to 5.5 per cent of the population compared with just 3.2 per cent in 2013.
  
  Released on 21st September, just ahead of the forthcoming meeting of the Broadband Commission for Sustainable Development on September 26, the report reveals that 57 per cent of the world’s people remain offline and unable to take advantage of the enormous economic and social benefits the Internet can offer. While India's overall broadband penetration (mobile and fixed line) ranking improved to 136 from 142 in 2014 it is still way behind countries such as Syria, Zimbabwe and Ghana.
  
  New figures in the report confirm that globally 3.2 billion people are now connected, up from 2.9 billion last year, and equating to 43 per cent of the global population.
  
  But while access to the Internet is approaching saturation levels in the developed world, it isonly accessible to 35 per cent of people in developing countries.
  
  The situation in the 48 UN-designated Least Developed Countries is particularly critical, with over 90 per cent of people without any kind of Internet connectivity. This year’s figures show that the top 10 countries for household Internet penetration are all located in Asia or the Middle East.
  
  The Republic of Korea continues to have the world’s highest household broadband penetration, with 98.5 per cent of homes connected; Qatar (98 per cent) and Saudi Arabia (94 per cent) are ranked second and third, respectively.
  
• Black money: Declare foreign assets by September 30 or face consequences, says Finance Ministry
  
  With less than 10 days being left for close of compliance window under the black money law, the government on 21st September said there will be no harassment to foreign asset holders who declare their wealth by September 30.
  
  However, the Finance Ministry warned that failure to declare an undisclosed foreign asset "will entail severe consequences", including higher penalty, prosecution, and may also result in forfeiture of assets under the Prevention of Money Laundering Act.
  
• Banks can buy up to 10% equity without prior RBI approval
  Banks having a capital adequacy ratio of at least 10 per cent, besides being profitable in the last fiscal, do not require prior approval from the Reserve Bank of India (RBI) for equity investments in financial institutions, stock exchanges, depositories and the like in case the investment is less than 10 per cent of the investee company’s equity.
  
  Additionally, the RBI said, the bank’s stake in the investee, along with those of its subsidiaries or joint ventures, should not exceed 20 per cent.
  
  At present, prior RBI approval is required for such investments. The investment is also subject to a cap of 10 per cent of the bank’s equity. Furthermore, total investments by the bank and its subsidiaries should not exceed 20 per cent of the bank’s equity.
  
• Cabinet approves extension of order regulating trade of edible oils & pulses for 1 year
  Union Cabinet on 22nd September gave its nod to Extension of Order regulating trade of edible oils and pulses under Essential Commodities Act, for one year till 30 September next year. According to, Union Minister Ravi Shankar Prasad, the Extension of Order will help States in ensuring adequate availability of pulses and oils and keep their prices under control.
  
• ADB lowers India's growth forecast for 2015-16 to 7.4%
  The Asian Development Bank has lowered its GDP growth forecast for India to 7.4 percent for the current fiscal, from the earlier 7.8 per cent. The ADB cited a weak monsoon, poor external demand, and concerns over economic reforms for the revised projections.
  
  While the ADB, in its update on Asian Development Outlook, retained the retail inflation forecast at about 4 per cent, it cautioned that a possible increase in global crude oil prices could have adverse implications for inflation.
  
  The ADB also said that growth is expected to pick up to 7.8 per cent in 2016-17, as key elements of the government's economic reform package reach fruition.
  
• Telangana, Chhattisgarh ink power supply pact
  The Telangana and Chhattisgarh governments inked a power purchase agreement on 22nd September for supply of 1000 mw of power. This power supply arrangement will be for 12 years and in addition to 1000 mw of power supply agreement inked by the two States earlier.
  
  The State Government is in the process of developing a transmission network to evacuate power from Chhattisgarh. The line is coming up along Wardha and Dichpalli. The 765-kv double-circuit line will have capacity to handle 4,350 mw of power.
  
• RBI eases overseas borrowing rules for domestic companies
  The Reserve Bank of India (RBI) proposed relaxing some of the rules for domestic companies looking to raise funds overseas through external commercial borrowing, a long-anticipated move.
  
  The RBI said companies will now be able to borrow up to $50 million in ECBs with 3-year maturities and more than $50 million for 5-year maturities. The previous limits had been around $20 million.
  
  The RBI also said it would now allow real estate investment trusts and infrastructure investment trusts to raise rupee-denominated funds offshore, a step likely to provide some relief to the cash-strapped real estate sector in India.
  
  India has long imposed tight rules on companies raising money abroad. In a country with a chronic current account deficit, excessive overseas borrowing could create a weaker external position. A narrowing deficit and growing foreign exchange reserves mean the central bank can now ease some of those rules.
  
  As part of the proposals, the RBI also said it would allow funds raised from ECBs to be directed to additional purposes, including certain infrastructure lending and some overseas direct investments.
  
  However, the RBI also proposed tightening how many companies can pay to borrow via ECBs, saying it would lower by 50 basis points the current all-in-cost ceiling of 350 bps over 6-month Libor for 3-5 year loans and 500 bps over Libor for above 5 year maturities. Relaxing the guidelines had been expected after a government committee in April had submitted its recommendations.
  
• Govt to disburse Rs 1.22 lakh cr loan under MUDRA by March
  The government has set a target of disbursing Rs 1.22 lakh crore loan to micro and marginal businesses under MUDRA scheme by the end of the current fiscal. According to Finance Minister Arun Jaitley unorganised sector provides employment opportunities to 11 crore people in the country and PMMY will help in funding them via banks in an organised manner. Mr Jaitley said, loans have been disbursed through PMMY to 37 lakh persons so far in the current financial year.
  
  The Mega credit campaigns are being conducted all over the country by banks and will continue upto 2nd of October.
  
  MUDRA Ltd has been established with an initial corpus of Rs 5,000 crore to provide capital to all banks seeking refinancing of small business loans under Pradhan Mantri Mudra Yojana.
  
  Under the scheme, so far over twenty four thousand crore rupees have been distributed to the beneficiaries. Of them, 52 per cent are Women and about 50 per cent new Enterprises.
  
  The scheme covers three categories, Shishu, upto Rs 50 thousand Kishore between Rs 50,000 to Rs 5 lakh and under Tarun category loans between Rs 5 to Rs 10 lakh are covered.
  
• Govt exempts Foreign firms without permanent establishment from paying MAT
  The government has exempted foreign companies from paying Minimum Alternate Tax (MAT) retrospectively from April 2001, provided they did not have a permanent establishment in India. The provisions of Section 115JB of Income Tax will not apply to foreign companies with effect from 1st of April 2001, if they are resident of a country with which India has Double Taxation Avoidance Agreement DTAA.
  
  It also said, in case the companies belong to countries with which India does not have a DTAA, the MAT exemption will apply if they are exempted from registration under Section 592 of the Companies Act 1956, or Section 380 of the Companies Act 2013.
  
  Earlier this month, the government had exempted foreign institutional and portfolio investors from payment of MAT on the capital gains made by them before April 1, 2015.
  
• RBI to put into circulation Rs 500 & 1000 notes with revised features
  In its continuing effort to curb the menace of fake notes, RBI has said that it will shortly put into circulation banknotes in the denominations of 500 rupees and 1000 rupees incorporating three new/revised features. These revised features will be ascending size of numerals in the number panels, introduction of bleed lines, and enlarged identification mark.
  
  Reserve Bank had recently put into circulation 500 rupees banknotes with numerals in ascending size in number panels but without bleed lines and enlarged identification mark.
  
  The notes will bear signature of RBI governor Raghuram Rajan and the year of printing will appear on the reverse. RBI has clarified that all banknotes issued hitherto or until now in these denominations will continue to remain legal tender.
  
  RBI has informed that banknotes of 500 rupees denomination will have five angular bleed lines in three sets while 1000 rupees banknotes will have six angular bleed lines in four sets. The apex bank has also enlarged the existing identification mark that is circular shape in 500 rupees and diamond in 1000 rupees that is present near the left edge of the banknotes.
  
• RBI relaxes change in ownership norms
  The Reserve Bank of India (RBI) has notified norms that allow banks to upgrade credit facilities extended to borrowing entities upon a change in ownership, so long as the ownership has been changed outside ‘Strategic Debt Restructuring Scheme’.
  
  The decision will give banks more flexibility to bring in a change in ownership of borrowing entities which are under stress.
  
  The move would “further enhance banks’ ability to bring in a change in ownership of borrowing entities which are under stress primarily due to operational/ managerial inefficiencies despite substantial sacrifices made by the lending banks”.
  
  However, RBI said the ‘new promoter’ should not be a person/entity/subsidiary/associate etc. (domestic as well as overseas), from/belonging to the existing promoter/promoter group.
  
  Further, RBI said that the new promoter should have acquired at least 51 per cent of the paid up equity capital of the borrower company.
  
  At the time of takeover of the borrowing entity by a ‘new promoter’, banks are allowed to refinance the existing debt of the borrowing entities, considering the changed risk profile, without treating the exercise as ‘restructuring’.
  
  RBI also said that provisions held against the said account can be reversed if the outstanding loan/facilities of the borrowing entities perform satisfactorily during the ‘specified period’.
  
• SEBI fines PACL Rs 7,269 cr for illegal raising of funds
  Securities and Exchange Board of India (SEBI) fined a Pearl Group company, PACL for over 7000 crore for illegal raising of funds. This is the biggest ever fine by SEBI. PACL's four directors have also been fined for illegal and fraudulent mobilisation of funds from the public.
  
  SEBI has said the company deserves maximum penalty for such large-scale duping of the common man.
  
  Through this massive fine SEBI has sought to send a strong message to the securities market at large, that such violations would not be viewed lightly.
  
• South Asia is an urban mess, says World Bank report
  Well-managed urbanisation can lead to sustainable growth but cities are a messy affair in India and other South Asian countries, says a report by the World Bank, issued on 24th September.
  
  Titled ‘Leveraging urbanisation in South Asia', it says for the very poorest in India, Nepal, Bangladesh and Pakistan, the under-five years mortality rate is higher in urban than in rural settings. Besides, South Asia’s cities are notable for polluted air.
  
  South Asia — which also has Afghanistan, Bhutan, the Maldives and Sri Lanka — produced only eight per cent of global gross domestic product in 2011, while having 14 per cent of the world’s urban population, the report said.
  
  On the other hand, East Asia — China, Hong Kong, Japan, Mongolia, North & South Korea, and Taiwan — produced 29 per cent of global GDP, with 32 per cent of the urban population.
  
  Messy urbanisation in India is reflected in the nearly 65.5 million who, in the country’s 2011 Census, lived in urban slums, as well as the 13.7 per cent of the urban population that lived below the national poverty line. Mismanaged cities are also reflected in the increasing sprawl that afflicts many Indian cities, the report said.
  
  Among various other suggestions, it recommended land pooling and land readjustment to tackle the problems. This refers to land assembly through a process by which land parcels with different owners are combined into a larger, contiguous land area for more efficient subdivision and development. In this connection, it praised Gujarat for using the policy effectively.
  
  The World Bank said there has been difficulty in dealing with pressures that increased urban populations put on basic services, infrastructure, land, housing and environment, fostering “messy and hidden” urbanisation. This has constrained the region’s full realisation of the prosperity and livability benefits of urbanisation.
  
  The report said India added seven multi-city agglomerations between 1999 and 2010, for a total of 30, Yet, cities are not able to take full advantage of these agglomerations. The largest metropolitan centres — Mumbai, Delhi, Bengaluru, Kolkata, Chennai, Hyderabad, and Ahmedabad — saw a 16 per cent loss in manufacturing jobs between 1998 and 2005 within 10 km of their city centres. On the other hand, job growth in their immediate peripheries increased by almost 12 per cent.
  
  Even population growth has been fastest on the peripheries (beyond official administrative boundaries) of these major cities. For example, population growth for the district of Delhi was 1.9 per cent a year between 2001 and 2011, while the population growth in Gautam Budh Nagar (or Noida, its eastern periphery) was 4.1 per cent a year.
  
  For many major Indian agglomerations, rapid growth in peripheral areas has been accompanied by evidence of stagnation at their core, where land management policies are limiting the extent and intensity at which land can be used by industry, commerce and housing
  
  The economic push away from city cores is also imposing a burden on businesses and people by elevating market connection costs for firms and commuting costs for workers, with negative consequences for productivity, welfare, mobility, and livability in the major cities.
  
  Report in a nut shell
  For the very poorest in India, Nepal, Bangladesh and Pakistan, the under-five years mortality rate is higher in urban than in rural settings. Besides, South Asia’s cities are notable for polluted air
  South Asia produced only 8% of global gross domestic product in 2011, while having 14% of the world’s urban population
  Messy urbanisation in India is reflected in the nearly 65.5 million who, in the country’s 2011 Census, lived in urban slums, as well as the 13.7% of the urban population that lived below the national poverty line
  The report suggests measures, such as land pooling and land readjustment, among others, to tackle the problems
  
• RBI allows banks to provide partial credit enhancement to corporate bonds
  The Reserve Bank of India (RBI) has allowed banks to provide partial credit enhancement (PCE) to bonds issued by corporate entities and special purpose vehicles (SPV) for funding projects, subject to certain riders. It added the purpose of allowing banks to extend PCE was to enhance the credit rating of bonds issued to enable companies to access funds from the bond market on better terms.
  
  The aggregate PCE provided by all banks for a given bond issue would be limited to 20 per cent of the bond issue size. The PCE facility, to be provided at the time of the bond issue, will be irrevocable. The central bank said banks could offer PCE only in respect of bonds whose pre-enhanced rating was at least ‘BBB-’. Banks cannot provide PCE by way of guarantee.
  
  RBI said banks providing PCE to bonds issued by a corporate entity or an SPV wouldn’t be eligible to invest in those bonds. They might, however, provide other need-based credit facilities, funded or otherwise, to the entity. RBI has urged banks to have a board-approved policy on PCE, covering issues such as the extent of the PCE, underwriting standards, assessment of risk, pricing and limits.
  
  In case the PCE facility is partly drawn and interest accrues on it, the unpaid accrued interest will be excluded from the calculation of the remaining amount available for drawing, RBI has said. According to the norms, in the event of project failure or bankruptcy, the PCE must rank below the claims of the enhanced bond holders, in terms of repayment priority.
  
  The norms say PCE facilities to the extent drawn should be treated as an advance in the balance sheet. Un-drawn facilities would be an off-balance sheet item and reported under ‘contingent liability’ according to RBI.
  
• Green nod for Ramagundam urea plant
  Union govt asked Telangana to extend all the benefits to the proposed unit under the new industrial policy. A committee under the Ministry of Environment and Forests (MoEF) has given environmental clearance for the proposed Rs 5,465-crore fertiliser plant in Ramagundam, Telangana.
  
  National Fertilizers Limited (NFL), Engineers India Limited (EIL) and Fertilizer Corporation of India (FCIL) had earlier signed an agreement to form a joint venture company (JVC) for setting up two new -- Ammonia and Urea -- plants at the existing site of Ramagundam Fertilizer plant.
  
  The JV formed a new company called Ramagundam Fertilizers and Chemicals Limited. "After detailed deliberations, the committee recommended the project for environmental clearance and recommended the following specific conditions along with other environmental conditions while considering for accord of environmental clearance," the Expert Appraisal Committee said in the minutes of meeting held last month.
  
  The gas-based plant which will have the capacity to produce 1.1 million tonnes of urea per annum is expected to commission in 2018-19, a senior official of Telangana Government said.
  
  The plant which has become defunct for the past decade was originally established a coal-based plant. Subsequently, the plant could not survive due to shortage of raw material such as Phosphate.
  
  Union Chemicals and Fertilizers Minister Ananth Kumar had earlier said that in next four years, about Rs 40,000 crore will be invested in the country for revival of old fertiliser plants and setting up of new units.
  
  Ramagundam Fertilizer Unit is located about 240 kms from Hyderabad. It was established at Ramagundam due to abundance of coal that was being used as feedstock. After a series of Cabinet Committee on Economic Affairs (CCEA) decisions in August 2011, May 2013 regarding revival of FCIL, the Cabinet decided to revive Ramagundam Unit on 'nomination basis' by a consortium of EIL, NFL and FCIL for setting up the Urea plant.
  
• Kharif crop sown area rises by 12-lakh hectare
  The country has recorded an increase of nearly 12-lakh hectares in total Kharif sown area this year as compared to the corresponding period last year. According to Agriculture Ministry the Kharif sown area under summer crops reached 1026.23 lakh hectares as compared to 1014.24 lakh hectares last year at this time.
  
  According to data, the sown area under rice is 374 lakh hectares as compared to 373 lakh hectares last year. While sown area under pulses stands at 113.45 lakh hectares as compared to 101.83 lakh hectares last year, the area under oilseeds reached 183.68 lakh hectares as compared to 177.49 lakh hectares in 2014.
  
• Govt to auction 27 oil fields off Mumbai, 15 in KG basin
   About a third of the 69 small and marginal oil and gas fields that the government plans to auction to private firms are in Mumbai offshore and the biggest of these holds about 15 million tonnes of oil reserves.
  
  Of the 69 idle oil and gas fields of state-owned ONGC and Oil India Ltd which are to be auctioned, 27 are in Mumbai Offshore while another 15 are in the prolific Krishna Godavari (KG) basin. As many as 10 discoveries in the Assam Shelf are also on offer.
  
  The discoveries, which the government says were given up by the two oil companies as they were unable to develop these for varied reasons, include ones made as late as 2012-13.
  
  In all, seven marginal discoveries of ONGC date back to less than five years, with 2012-13 Koravaka gas field in K-G basin being the youngest. An equal number of finds were made between 2005-06 and 2008-09. Cumulatively the surrendered small and marginal fields hold about 50.8 million tonnes of oil and 53.45 billion cubic metres of gas, the biggest discovery is the D-18 in Mumbai Offshore that along holds 14.78 million tonnes of in-place oil reserves.
  
  Among the gas discoveries, the largest is ONGC's B-9 find in the offshore Kutch basin that has an in-place reserve of 14.67 bcm.
  
  The 69 fields will be grouped with those adjacent, to form on unit. So far, the clubbing has brought down the number of fields to be offered in the auction to 48, they said adding the final number of offer may be a little lower.
  
  The new revenue sharing regime will replace the controversial Production Sharing Contract (PSC) model where oil and gas blocks are awarded to those firms which show they will do the most work on a block.
  
• Jharkhand: Govt sets up special camps to give loans under PM Mudra Yojana
  Government is setting up special camps with a view to give loans to the people under the Pradhan Mantri Mudra Yojana in Jharkhand. According to Jharkhand Chief Minister Raghubar Das Mudra Yojana would lead to people getting economic freedom for employment in states like Jharkhand.
  
  Under the Government's ambitious Mudra Yojana, Jharkhand is on a mission mode to disburse loans in easy terms to the lowest rungs of the society. The state Government is leaving no stone unturned and has embarked on a programme to give loans to more than 25,000 people from 25th September to 2nd October under the Pradhan Mantri Mudra Yojana.
  
  Over 1 lakh people are slated to benefit from this Yojana in this fiscal year. Minister of State for Finance, Jayant Sinha himself met bank officials in the state and called upon them to tell people about this Yojana. In Jharkhand, small entrepreneurs for their business have to borrow loans with ten per cent monthly interest from money-lenders.
  
  Under the Yojana, business loans to the tune of 50,000 to 10 lakh rupees will be disbursed, and beneficiaries would not have to pay collaterals on these loans.
  
  Efforts would be made to reach out to rickshaw drivers and small traders running cycle puncture shops and link them to the banking system, instead of their dependence on money lenders for costly loans.
  
• RBI cancels Sahara India Financial Corp’s NBFC registration
  Reserve Bank has cancelled Sahara India Financial Corporation’s certificate of registration as NBFC. Following the cancellation of registration certificate, the above company cannot transact the business of a non- banking financial institution as laid down under clause (a) of Section 45-I of the Reserve Bank of India Act, 1934. The registration of the Lucknow-headquartered NBFC stands cancelled with effect from September 3. The NBFC was registered in December 1998.
  
  Earlier in July, market regulator Sebi had cancelled the registration of Sahara Mutual Fund saying it was no longer ‘fit and proper’ to carry out this business and ordered transfer of its operations to another fund house. Sebi had also cancelled the Portfolio Management licence of a Sahara firm. Sahara Group chief Subrata Roy is in jail since March 4, 2014.
  
  The group is engaged in a long-running battle with Sebi in a case related to refunds totalling thousands of crores of rupees to investors.
  
• India difficult place for business; reforms needed: WB
  The World Bank said that India remains a difficult place to do business. It advised the central and state governments to pursue more reforms in the areas of inspection norms, digitisation of requisite business documents and comprehensive data on available land.
  
  The report does list positive steps in the areas of taxation and labour rules. However, it points to a poor showing in inspection norms, digitisation of records and adoption of (information) technology as serious drawbacks in increasing the ease of doing business.
  
  India is ranked 142nd among 189 nations in the World Bank's Ease of Doing Business 2015 study. The present government aims to improve the country's ranking to 50 in the next couple of years.
  
  All India's states are yet to begin implementing electronic courts - district courts which allow for e-filing of disputes, issuance of e-summons, online payments, e-cause lists and digitally signed court orders. And, 26 states are yet to introduce reforms along a wide range of labour inspections under various acts or on inspections related to building permits. Twenty five states lack online availability of information on land banks and use of GIS systems to track industrial land parcels.
  
• World Bank ranks Gujarat first and Andhra Pradesh second in ease of doing business
  The World Bank report on Ease of Doing Business has ranked Andhra Pradesh 2nd, below Gujarat. Andhra Pradesh is ranked in the category of ‘Aspiring Leaders’ which means the overall implementation status should be between 50 to 75 per cent.
  
  Seven states – Gujarat, Andhra Pradesh, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha and Rajasthan are part of this group.
  
  Only Andhra Pradesh, Chhattisgarh and Uttar Pradesh have scored Yes on all 4 of these questions, the Other points
  • Andhra Pradesh, Jharkhand, Chhattisgarh and Madhya Pradesh feature in the top five in the report compiled by the Department of Industrial Policy and Promotion with technical assistance from the World Bank, consultancy firm KPMG, and CII and FICCI.
  • The assessment, which is the first of its kind, has been conducted to take stock of reforms implemented by States in the period January 1 to June 30, 2015, based on the 98-point action plan for business reforms agreed between the DIPP and States last December
  • The report would give potential investors an idea of the environment prevailing in different States and is also aimed at helping the states identify areas they need to improve in.
  • The exercise is part of the Centre’s efforts to improve the country’s ranking in the World Bank’s ‘Ease of Doing Business’ report, where it was placed a poor 142 among 189 countries in 2015.
  • These rankings were based on States’ performance in the identified areas only over six months, when the rankings would be based on a full year’s performance, they may change
  
  
• AP unveils tourism policy
  According to the Andhra Pradesh Chief Minister N Chandrababu Naidu the State government is planning to tap Rs 10,000 crore investment in tourism sector to develop Andhra Pradesh as number one tourist destination.
  
  After launching Tourism Mission and Tourism Policy 2015-20, on 14th September, the CM disclosed that immediately after announcing the new tourism policy investments to a tune of nearly Rs 6,000 crore poured in from the stakeholders.
  
  Later several stakeholders entered into an MoU with AP government over grounding tourism projects including hotels, beach resorts, adventure tourism projects, water sports tourism projects, heritage tourism, heli-tourism and others.
  
• RBI for limiting lenders in consortium
  After a 17-member banking consortium failed to prevent their combined lending of around Rs 7,500 crore to Kingfisher Airlines from turning into a 'loss asset', the banking regulator is now looking at limiting the number of lenders in a loan so that responsibility does not get diffused.
  
  Consortium lending refers to the process where lenders come together to give a loan to a corporate on the same terms, with each taking a fixed share. Public sector bankers find it safer to join a consortium because the onus for credit appraisal falls on the lead bank. However, this structure is not conducive to recovery of bad loans. In the case of Kingfisher Airlines, each decision on the loan required a meeting of all lenders until members decided to authorize the large banks.
  
  At present, bad loans in banks have surged faster than the growth in loans. As on March 2015, gross non-performing assets (NPAs) stood at 4.6% of the gross advances of the banks in comparison with 2.4% of the gross advances as on March 2011.
  
• Foreign direct investment norms eased
  The Centre has further eased foreign direct investment (FDI) norms by allowing partly-paid shares and warrants as eligible capital instruments. This means an Indian company looking to bring in funds can now issue such instruments without any approval.
  
  On 15th September, the Department of Industrial Policy and Promotion (DIPP) said it has amended the ‘Consolidated FDI Policy circular of 2015’ issued this May.
  
  With this, an Indian company can issue warrants and partly-paid shares to non-residents so long as conditions specified by the Reserve Bank of India are met. Prior to this, the Consolidated FDI policy had stipulated that these instruments can be issued to a non-resident only after approval through the government route.
  
  The Centre’s move comes more than a year after the RBI had said that partly-paid shares and warrants issued by an Indian company would qualify as eligible instruments for FDI/Foreign Portfolio Investment.
  
  The central bank had, however, stipulated that the company issuing paid-up shares/warrants needs to ensure that sectoral caps are not breached even after the shares get fully paid-up or warrants get converted into fully paid equity shares.
  
  The government has also clarified that ‘facility sharing’ agreements between group companies through leasing/sub-leasing arrangements will not be treated as ‘real estate’ business for FDI policy purposes. The only condition is that the arrangement should be on an arm’s length price and the annual lease rent earned by the lesser company should not exceed 5 per cent of its total revenue. This clarification could bring relief to multinational firms and foreign-owned companies operating in India. The existing FDI policy has several restrictions on foreign companies undertaking ‘real estate’ activities.
  
• RBI gives ‘in-principle’ nod for 10 small banks
  The Centre’s thrust to take banking services to the rural and backward areas got a major boost with the Reserve Bank of India on 16th April granting ‘in-principle’ approval to 10 entities to start small finance banks. This includes Au Financiers, Capital Local Area Bank, Disha Microfin Pvt Ltd, Equitas Holdings Pvt Ltd, ESAF Microfinance and Investments, Janalakshmi Financial Services, Ujjivan Financial Services, and Suryoday Micro Finance.
  
  Barring Jaipur-based Au Financiers (an asset finance company) and Jalandhar-based Capital Local Area Bank, all the other entities are microfinance institutions. This is an indication that the RBI sets great store by microfinance institutions to further the cause of financial inclusion.
  
  The 10 companies have been given 18 months to comply with the guidelines for licensing of small finance banks.
  
  Of the 72 companies that applied for a licence, the prominent names that did not make it in this round include Dewan Housing Finance Corp, IIFL Holdings Ltd, Lulu Forex Pvt Ltd, Satin Creditcare Network, SKS Microfinance, and UAE Exchange & Financial Services.
  
  Small finance banks are different from traditional banks because they will primarily undertake basic banking activities, of acceptance of deposits and lending, to un-served and underserved sections, including small business units, small and marginal farmers, micro and small industries and unorganised sector entities. These banks are required to extend 75 per cent of their loans to the sectors eligible for classification as priority sector lending (agriculture, micro, small and medium enterprises, education, housing, etc). At least 50 per cent of their loan portfolio should constitute loans and advances of up to Rs. 25 lakh.
  
  Accprdomg to the central bank said the selection involved three stages – preliminary scrutiny by the RBI team, an external advisory committee (under the chairmanship of Usha Thorat, former RBI Deputy Governor) recommended applications to be taken up for detailed scrutiny, and an internal screening committee.
  
• Govt approves promulgation of Negotiable Instruments Ordinance
  The Union Cabinet on 16th September approved a proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015. The ordinance provides for filing of cheque bounce cases at the place where the cheque was issued.
  
  The clarity on jurisdictional issues for trial of cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. It will also help trade and commerce in general and allow the lending institution, including banks, to continue to extend financing to the economy, without the apprehension of loan default on account of bouncing of a cheque.
  
  The objective is to ensure that a fair trial is conducted keeping in view the interests of the complainant by clarifying the territorial jurisdiction of trial in case of dishonour of cheques. The Negotiable Instruments (Amendment) Act, 2015 was passed in the Lok Sabha in May this year seeking to overturn a Supreme Court ruling of 2014 which said that the case has to be initiated where the cheque-issuing branch was located. However, it could not be approved by the Rajya Sabha, necessitating an ordinance.
  
• RBI eases norms for banks to grant loans to CEOs, directors
  Reserve Bank on 16th September relaxed norms for banks to grant certain loans to their CEOs and directors by doing away with the prior approval requirement.
  
  Section 20 of Banking Regulation Act, 1949 (BR Act, 1949) prohibits banks from granting any loan or advance to any of its directors. However, banks can give loan to Chief Executive Officer/ Whole Time Directors for purchasing of car, personal computer furniture, constructing/acquiring a house for personal use, festival advance and credit limit under credit card facility. "
  
  In order to streamline the existing processes and to obviate the need to approach RBI on case-to-case basis, it has been decided...commercial banks can grant loans and advances to the Chief Executive Officer/ Whole Time Directors, without seeking prior approval of RBI," the central bank said.
  
  Also, the guidelines on 'Base Rate' will not be applicable on the interest charged on such loans. However, the interest rate charged on such loans cannot be lower than the rate charged on loans to the bank's own employees, the RBI said.
  
  Another condition is that the loans and advances should form part of the compensation/remuneration policy approved by the Board of Directors or any committee of the Board to which powers have been delegated or the Appointments Committee, as the case may be.
  
  The RBI further said: "Banks should note that in view of the prohibition under Section 20 of the BR Act, 1949, apart from the (specified) loans...no other loan can be sanctioned to directors."
  
• India ranks 34th out of 60 nations in biz growth environment: Thornton
  India has been ranked 34th among 60 leading economies in terms of 'business growth environment' but the country has been ranked among the bottom ten when it comes to 'business operating environment', says a report. In the Grant Thornton Global Dynamism Index (GDI), which ranks business growth environments of 60 leading economies, India was ranked at the 34th place, registering a gain of 14 places since the last version of the index, largely driven by a strong and productive workforce.
  
  However, India was ranked 53rd out of 60 in the GDI when it comes to its business operating environment, the report said, adding that "a poorer regulatory environment and a lack of investment in science and technology dragged down India's overall ranking".
  
  India scores high on economic situation and growth (overall ranking 2) and availability of labour and human capital (15) and very poorly on financing environment (36), science and technology (41) and is lowest on business operating environment (53).
  
  According to Grant Thornton's International Business Report (IBR) survey, the strength of India's GDI ranking for workforce and growth is recognised by many businesses. Six in ten cite low cost labour as a reason to choose the country, while 45 per cent say the availability of skilled workers.
  
  On the other hand, international investors also recognise that the country's business operating environment requires improvement. According to IBR, 58 per cent of firms operating or looking to operate in the country see local legislation and regulatory requirements as a major challenge of working in India. Another area of concern is cultural barriers which are cited by 56 per cent of firms.
  
  Globally, Singapore offers the best business growth environment for dynamic businesses as a result of a strong financing and regulatory environment, followed by Israel and Australia in the second and third place, respectively. Finland and Sweden were ranked in the 4th and 5th place across the world due to favourable business operating environments and an advanced technology infrastructure.
  
  The Grant Thornton Global Dynamism Index (GDI) is an annual research project designed by the Economist Intelligence Unit and commissioned by Grant Thornton, which ranks the development of the business growth environments of 60 of the world's largest economies over the past 12 months.
  
• India's Ranking Slips Further in Global Innovation Index 2015
  India's ranking has slipped further to 81 in the list of Global Innovation Index, compared to 76 in 2014, on account of factors like consistently poor performance in ease of doing business, slow pace of policy decision-making and changing political environment.
  
  The study, which ranked 141 economies across the world on their innovation capacity and efficiency, however, said that India has outperformed its peers in the Central and Southern Asian Region (CSA) and positioned itself as innovation achiever in the lower-middle income category.
  
  Switzerland, the UK, Sweden, the Netherlands and the US are the world's five most innovative nations, according to the Global Innovation Index 2015, while China, Malaysia, Vietnam, India, Jordan, Kenya, and Uganda are among a group of countries outperforming their economic peers.
  
  The GII study, released today, was published by Cornell University, INSEAD France and World Intellectual Property Organization (WIPO).
  
  Over the last four years, India has witnessed a reduction in its overall GII ranking, which dropped from 62nd place in 2011 to 76th in 2014.
  
  According to GII data, the input parameters in which India has consistently performed poorly during the last four years are political stability, ease of starting a business, tertiary inbound mobility, and environmental performance.
  
• Centre comes out with details of twin gold schemes
  The Centre has came out with details of the twin gold schemes aimed at reducing the demand for physical gold and said that interest rate on the schemes would be decided in consultation with the RBI. The twin schemes Gold Monetisation Scheme (GMS) and Gold Bond Scheme was approved by the Cabinet in September 2nd week of 2015. The schemes will come into effect after notification by the Finance Ministry.
  
  The GMS provides an option to people to monetise physical gold by depositing them with authorised banks and earning interests from such deposits.
  
  The Finance Ministry said there are a total 331 recognised Assaying and Hallmarking Centres wherein the purity of physical gold will be verified. The interest rate on these two schemes will be decided by the Government upon consultation with the RBI. Through the GMS, gold in any form can be deposited with banks for a period of one to 15 years. Banks will be allowed to sell the gold, deposited with them, to jewellers to boost domestic supply and cut reliance on imports under the GMS.
  
• UIDAI shifted to IT Ministry from NITI Aayog
  The Unique Identification Authority of India (UIDAI), which issues Aadhaar cards, has been shifted to the administrative control of the Ministry of Communication and Information Technology from Niti Aayog.
  
  The decision to shift UIDAI from NITI Aayog was taken keeping in mind the government's ambitious ‘Digital India’ programme as the Aadhaar numbers are being linked with several services. The issuance of Aadhaar cards has come under the scrutiny of the Supreme Court which recently held that the card would not be mandatory for availing benefits of government's welfare schemes.
  
  The Cabinet Secretariat has amended Government of India (Allocation of Business) Rules, 1961 and put it under Department of Electronics and Information Technology (DeITy), Ministry of Communication and Information Technology, a notification issued by the government said. Earlier, UIDAI was the part of Planning Commission. NITI Aayog is headed by Prime Minister Narendra Modi as its chairperson. Aadhaar is a 12-digit individual identification number issued by UIDAI.
  
• India, the bright spot in emerging economies: OECD report
  India is expected to be the fastest growing major economy over the next two years, says a new report from OECD, a club of rich nations.
  
  OECD now sees India’s GDP growth at 7.2 per cent in 2015 and 7.3 per cent in 2016, a tad lower than a projection of 7.3 per cent and 7.4 per cent, respectively made in June this year.
  
  The Paris-based think tank said in its interim economic outlook report released on Wednesday that India will be an exception to the worsening picture among major emerging economies. The outlook is weaker for many commodity exporting nations, said the report.
  
  In 2015, China is expected to grow by 6.7 per cent and at a slower rate of 6.5 per cent next year. Brazil’s economy is expected to shrink by 2.8 per cent in 2015 and an additional 0.7 per cent rate in 2016, OECD has said. It has now trimmed the global growth forecast to 3 per cent this year from 3.1 per cent.
  
• IDFC gets RBI nod for using Rs 2,500 cr reserve as provision
  Infrastructure finance firm IDFC on 19th September said it had got regulatory approval to utilise Rs 2,500 crore non-distributable reserves for provisions against bad loans as part of exercise to clean its book before venturing into universal banking.
  
  The regulator has now granted the approval to utilise non-distributable Statutory Reserves up to Rs 2,500 crore for creation of specific provisions against stressed assets. These provisions are far in excess of the regulatory requirement and exceptional in nature as indicated in our investor call post our quarterly results for quarter ended June 30.
  
  In an earlier filing, IDFC had said that it will make an additional provision in the second quarter of this fiscal against coal and gas power assets, as it transitions into a bank by the end of the period. IDFC said with these additional provisions, its net worth will reduce by approximately Rs 1,600 crore.
  
  It said that the volume of net restructured assets, non- performing assets (NPAs) and security receipts (SRs) as of June 30, 2015 was 8.4 per cent of its loan book.
  
  In line with generally accepted accounting principles, these additional provisions will be charged to the Statement of Profit and Loss in the current quarter resulting in a significant one-time loss for the period. However, this will not impact the distributable profits since an equivalent amount will be transferred from the non distributable statutory reserves, as approved by the regulator, it added.
  
• 25% manufacturers want to add capacity: Ficci survey
  The manufacturing sector is expected to witness subdued investments for a few months more, according to the latest Quarterly Manufacturing Survey by industry body Federation of Indian Chamber of Commerce and Industries (Ficci).
  
  The survey, which asked manufacturing firms whether they have investment plans in the next six months, received only 25 per cent affirmative responses.
  
  In terms of investment, the survey noted the subdued mood in the manufacturing sector, which was the case in previous quarters as well.
  
  In the first quarter of FY16, almost 75 per cent respondents reported they didn't have any plans for capacity additions for the next six months against 73 per cent in the fourth quarter of FY15 and 74 per cent respondents in the third quarter of FY15. Among the reasons cited are delay in regulatory clearances, poor demand conditions, and high cost of borrowing.
  
• AP aims to attract US 1.3 bn investments from Telugu diaspora
  In a bid to make Non-Resident Telugu speaking diaspora part of Andhra Pradesh's development, the government has set up an entity that aims to raise at least USD 1.30 billion investments into the state by next year.
  
  Ravikumar Vemuru, advisor to the government on Non- Resident Telugu Affairs, including Services and Investments, said Non Resident Telugu Inc (NRT), which is an independent corporation of the government has been set up with an aim to bring the Telugu speaking diaspora on a single platform and involve them in the developmental activities through investments in AP.
  
  Quoting statistics, Vemuru said there are nearly one million Telugu speaking families living in various countries and each family remits USD 5,000 annually (as per 2013 statistics).
  
  NRT will function as a single window for assisting all Non Resident Telugus considering investing in projects within the State. Pre-screened investment packages suitable for small and medium scale investors for development within the state also will be offered for consideration by NRTs in future, he said. According to Vemuru, the focus of NRT Inc will be to concentrate on the people with income range from USD 50,000 to USD 300,000 and convince them to invest in the state, thus, making them part of the developmental activates.
  
• India ranks low on inclusive growth, development ranking: WEF
  A new study by World Economic Forum (WEF) has ranked India very low globally on most of the parameters for inclusive growth and development. However, it fares much better internationally when it come to business and political ethics.
  
  WEF said that the new study, which was conducted over the past two years, seeks to identify the various ways policymakers can drive economic growth and equity.
  
  India has mostly been ranked in the bottom half of the 38 countries that make up lower middle income bracket. However, India does demonstrate leadership in some areas, WEF said, while naming areas like corruption and rents where it comes 8th.
  
  For business and political ethics, India ranks 12th, while it ranks 11th on the financial intermediation of real economy investment pillar, which suggests that money invested in the economy generally gets directed towards productive uses.
  
• Govt panel for tax changes
  A government-appointed panel has recommended abolition of the securities transaction tax (STT) in equity derivatives. The standing council on international competitiveness of the Indian financial sector also suggested doing away with the stamp duty on cash-settled products such as index derivatives.
  
  After the Special Investigative Team (SIT) on undisclosed money noted any investor wanting to invest through participatory notes could invest afresh as a foreign portfolio investor (FPI), the council said it wanted regulatory clarifications on these instruments, through which unregistered investors invest in Indian markets.
  
  It has also suggested the government take measures to internationalise the rupee on the lines of the Chinese renminbi and remove uncertainty about availing of treaty benefits under the proposed General Anti-Avoidance Rules (GAAR) on taxes.
  
  The council was constituted in 2013 under the chairmanship of the economic affairs secretary. It also comprises the chief economic advisor, financial sector experts and economists.
  
  The report said since STT and stamp duty add to transaction costs in equity derivatives, “STT should be removed. Stamp duty should not be applicable to cash-settled products such as index derivatives, as there is no delivery of the underling (product) taking place.”
  
• Government relaxes rules for sugar exports
  The government has relaxed norms for sugar exports by doing away with the registration requirement with the Commerce Ministry. In a notification, Director General of Foreign Trade (DGFT) said, the requirement of registration of quantity with DGFT for export of sugar has been dispensed with.
  
  Earlier, prior registration of quantity with DGFT was mandatory. At present, the exporters have to take Registration Certificate from DGFT, which are issued for a maximum 50,000 tonnes. India exported 1.26 million tonnes of sugar during October 2014 to April 2015 of the ongoing marketing year.
  
• Swiss govt discloses new name in India's black money probe
  In a fresh disclosure on suspected black money cases being probed by tax authorities in India, Switzerland on 8th September said it has received request for information about Indore-based textiles firm Neo Corp International Ltd.
  
  Neo Corp, which began as a small woven sack maker in 1985 and now claims to be a multinational technical textiles group, had incidentally faced income tax searches on its various premises earlier in February for alleged tax evasion.
  
• India Plans $35 Billion Defense Offsets Push
   The Indian defense ministry will be clearing projects for defense offsets that could cross $35 billion by the end of this year.
  
  A majority of projects cleared by the Defense Acquisition Council over the past year will be manufactured in India by foreign companies in partnership with Indian firms. The DAC has so far approved projects worth $28 billion to modernize the armed forces
  
  “The projects for defense offset could cross $35 billion by this year. This will be the biggest boost to the 'Make in India' initiative
  
  Since June 2014, the government has issued 70 industrial licenses in the defense sector while another 60 applications were as on July 2015. So far, India has issued a total 287 industrial licenses in defense sector.
  
• Cabinet clears spectrum trading norms
  The Government on 9th September approved telecom spectrum trading norms, allowing mobile operators to buy or lend airwaves from one another. The move is likely to ease the recent spurt in call drops in India - the world's second-biggest market by total mobile customers.
  
  The issue of call drops - when the phone connection gets broken in between a call, has turned into a new battle between operators and the government. The Govt has done some straight talking and asked telecom operators to take responsibility.
  
  Now the telecom regulator TRAI has proposed that the mobile operators should compensate their subscribers for the call drops by crediting either the talk-time or the amount to their accounts. The regulator proposed that there should be no charge for any call that drops within five seconds.
  
  In case call drops after five seconds, the operator should not charge for the last pulse in which call was dropped.
  
  But industry has given 2 reasons for the call drops
  1. Lack of telecom towers. The industry has said that it faces stiff resistance from local bodies and citizens regarding putting telecom towers due to radiation fears.
  
  2. Shortage of spectrum. Spectrum to support data and voice calls.
  
  The government, however, rejects these claims. Govt has asked telecom operators why suddenly resistance to telecom towers has suddenly cropped up and issue of call drops rose in last 7 months only.
  
  On availability of spectrum, it said that since 2010, each year saw spectrum auction and there is enough spectrum. The country's telecom regulator TRAI has found a two-fold jump in call drops on 2G networks and by 65 percent on 3G networks in a one-year period ending March 2015.
  
• Cabinet approves introduction of Sovereign Gold Bond Scheme
  The Cabinet gave its nod to introduction of the Sovereign Gold Bonds Scheme. According to Finance Minister Arun Jaitley, the Bonds will be issued with a rate of interest to be decided by Government and calculated on value at the time of investment.
  
  The scheme will reduce demand for physical gold by shifting a part of estimated 300 tonnes per annum for investment into gold bonds. The Minister said, tenor of Gold Bond could be for minimum of five to seven years to protect investors from medium term volatility in gold prices.
  
  The Cabinet also approved introduction of Gold Monetization Schemes, GMS to reduce country’s reliance on the import of gold and put it to productive use. Cabinet also approved a proposal to give coal linkage to Barh power plant in Bihar given coal linkage to generate 1320 Mega Watt electricity.
  
• Cabinet clears National Offshore Wind Energy Policy
  The Cabinet cleared National Offshore Wind Energy Policy for use of offshore areas within Exclusive Economic Zone, EEZ, of the country. The National Institute of Wind Energy will be nodal agency for allocation of offshore Wind Energy blocks. The approval will pave the way for offshore wind power projects upto seaward distance of 200 nautical miles.
  
• Cabinet gives ex-post-facto nod to capital infusion in EXIM Bank
  Union Cabinet 9th September gave its ex-post-facto approval to the capital infusion made in the Export Import Bank of India (EXIM Bank) of 800 crore rupees to support the future growth of the Bank. The Bank was set up as a statutory Corporation in 1982 for providing financial assistance to exporters and importers. It said, this was with a view to promote the country's international trade.
  
• Cabinet approves 100% FDI in white-labelled ATMs
  The Union Cabinet has approved the proposal to allow 100 per cent foreign direct investment (FDI) in white-labelled automated teller machines (ATMs) through the automatic route. The decision is likely to result in faster growth of the white labelled ATMs (WLAs) — set up by non-banking entities — as flow of foreign funds will now get expedited.
  
  The government’s decision on WLAs is primarily aimed at improving financial inclusion as such ATMs are also set up in smaller towns and cities. The RBI gave licences for setting up WLAs in 2013 to drive ATM penetration in the country.
  
  According to the RBI’s guidelines, the white-labelled ATMs would provide banking services based on debit, credit or pre-paid cards issued by banks.
  
  The growth of WLAs has, so far, been slow in the country. Over the last two years, the RBI has issued licences to just a handful of players including Tata Communications Payment Solution, BTI Payments and Hitachi Payments Solution having more than 1,000 ATMs. Other companies with WLAs include Muthoot Finance, Srei Infra, Vakrangee Software, Prizm Payments and AGS.
  
  According to the RBI guidelines, the non-bank entities applying for WLA licence must have net worth of at least Rs. 100 crore.
  
• Railways to invest Rs 9 lakh cr in 5 years for modernisation
  Japan has agreed to modernise 400 railway stations across the country while participating in Indian Railways’ $140 billion (Rs 9,24,000 crore) investment plan over the next five years.
  
  A Japanese delegation will soon visit India to study the opportunities for industries in the railway station development plan of railways as the public transporter has identified 400 stations to be upgraded in private investment
  
  Railways Minister Suresh Prabhu, in Japan to strengthen cooperation in the sector, held meetings with Japanese Prime Minister Shinzo Abe, Deputy Prime Minister and Finance Minister Taro Aso, among others. Participation of Japanese railways and Japanese companies in various areas of Indian Railways with the aim of modernisation and technology upgradation was also emphasised in the discussions.
  
  While agreeing for cooperation on modernisation and upgradation, Japan has agreed to assist the public transporter in achieving its zero-accident mission.
  
  Railways research wing, the Research Designs & Standards Organisation (RDSO), will sign an agreement with Railway Technical Research Institute of Japan for research work on acquiring modern technology for the public transporter, according to the finalisation of the action plan.
  
  Prabhu also held meetings with heads of leading financial institutions and highlighted the investment prospects in railways in the coming years.
  
  Japan will also provide its expertise and technology in solving problems of sanitation including the development of waterless, odourless toilets in trains and at stations, it added.
  
  Besides, the country has also agreed to assist Indian Railways in development of a legal and regulatory framework on high speed railway.
  
• Govt to import additional 1000 tonnes of onion to check prices
  The Government will import additional 1000 tonnes of onion to check prices. This is in addition to earlier decision of importing 10,000 tonnes of Onion. According to Food and Consumer Affairs Ministry, the sale of onions at subsidised rates by Delhi government and Mother Dairy will continue till prices come under control.
  
  It said, 100 tonnes of onions is being supplied daily in Delhi. Any difference in the cost of sale operations by the Delhi government and Mother Dairy will be reimbursed from Price Stablization Fund, a central sector scheme.
  
• Global developments no immediate cause for worry: RBI panel
  India’s macroeconomic fundamentals are quite strong and there is no immediate cause for worry due to the international economic developments, a high-level panel headed by RBI Governor Raghuram Rajan said on 10th September.
  
  The Rajan-chaired sub-committee of the Financial Stability and Development Council (FSDC) however, said there was a need to be vigilant over the emerging situation. All eyes are now on the US Federal Reserve meeting on September 16-17 to see if there will be a lift-off — a rate hike in the world’s largest economy after a decade of near-zero interest rates.
  
  This will be a challenging decision for the US Federal Reserve given the mixed trends in inflation outcomes and employment data coming out in the US.
  
• Nod to installation of mobile towers on government buildings
  To resolve the menace of call drops, the urban development ministry has allowed telecom service providers to install towers/sites on government buildings. This would help the operators in increasing the coverage area of their network, thereby improving the quality of services for mobile subscribers.
  
  Telecom firms had asked the telecom department to allow installation of towers on central and state government buildings and on defence land. Communications and IT Minister Ravi Shankar Prasad had also written to all state chief ministers for giving permission.
  
  Call drop in a network can occur due to various reasons, including insufficient coverage due to paucity of mobile towers and handover failure due to network congestion on account of more users in a particular area.
  
  The department of telecommunications has been meeting operators on a regular basis to ascertain the causes of the issue and find a solution. Operators have been asked to take immediate measures to address issues of call drops by radio frequency optimisation, installation of new sites and adding more in-building solutions. TRAI has come out with a consultation paper on compensation to mobile users for call drops. TRAI also met CEOs of all telecom companies to find ways of resolving call drops situation.
  
• Rs. 2.4 lakh-crore investments pledged at TN’s investors meet
  The Tamil Nadu Global Investors Meet 2015 not only exceeded its target but tied up more investments than the State has done through similar MoUs in the last two decades.
  
  Announcing the numbers at the valedictory of the two-day event, Chief Minister J Jayalalithaa put the total investments finalised during the GIM 2015 at Rs. 2,42,160 crore, which is more than double the targeted amount. The Chief Minister said the investment proposals have come through 98 MoUs.
  
  Manufacturing accounts for Rs. 1,04,286 crore and energy Rs. 1,07,136 crore with the balance spread across a range of sectors. The government will ensure that the entire system of statutory and pre-project clearances is online.
  
  It will sustain the investment momentum by organising a GIM once in two years. The next one will be in 2017, she said.
  
• Govt to import additional 5,000 tonnes of Tur dal to check prices
  The Government has decided to import an additional quantity of five thousand tonnes Tur Dal to increase its availability and control prices of pulses. According to Food and Consumer Affairs Ministry, the decision was taken in a high level committee meeting chaired by the Secretary, Consumer Affairs. Import of ten thousand tonnes of Tur and Urad Dal is already in the pipeline and the first consignment will reach by 23rd September.
  
  The Committee directed the agencies like MMTC and NAFED to get in touch with States and also with SAFAL to supply imported dals through retail outlets.
  
• Current account deficit narrows to 1.2% of GDP in April-June
  A decline in merchandise imports helped the country narrow its current account deficit to 1.2 per cent of GDP in the first quarter of the current financial year compared with 1.6 per cent in the year ago period. The reduction in the CAD was also enabled by higher net earnings through services exports and lower outflow on account of primary income (profit, dividend and interest), according to RBI data on balance of payments
  
  In absolute terms, the CAD, which arises when a country’s total import of goods, services and transfers is greater than exports, was at $6.2 billion in the April-June quarter, compared with $7.8 billion in the year ago quarter.
  
  However, quarter-on-quarter, the CAD widened. In the January-March quarter, the CAD was at $1.3 billion (0.2 per cent of GDP).
  
  In the reporting quarter, private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $16.2 billion, a marginal decline from their level a year ago. In the year ago period, gross private transfer receipts were at $17.5 billion. NRI deposits received by commercial banks doubled during the quarter at $5.9 billion.
  
• Vijayawada Metro to cost Rs. 6,770 cr.
  The Delhi Metro Rail Corporation will implement the ambitious Vijayawada Metro Rail Project, Andhra Pradesh Chief Minister N Chandrababu Naidu announced on 12th September.
  
  The state government has handed over the Vijayawada metro rail project to the Delhi Metro Rail Corporation (DMRC). The first tender for civil works under the project will be called by DMRC next week. Meanwhile, DMRC also submitted a Detailed Project Report (DPR) of Visakhapatnam Metro Rail project to state government.
  
  2018 is the deadline for completion of Vijaywada metro rail project. Vijayawada is the part of Andhra Pradesh Capital Region.
  
  Vijayawada Metro Rail project has two corridors with a distance of 26.03 kms and is estimated to cost Rs 6,769 crore. A Special Purpose Vehicle (SPV) will be constituted to take up the project. The CM informed that DMRC has handed over the DPR on Visakhaptanam Metro Project to government.
  
  The Visakhapatnam Metro project will have three corridors. Initially, it was decided to run the project to a distance of 34.91 km but was extended to 42.55 km considering the importance of the project as a result of which its cost increased from Rs 10,862 crore to 12,725 crore.
  
• Centre identifies 305 cities, towns for implementing 'Housing for All' scheme
  The government has identified 305 cities and towns across nine states for implementation of its ambitious 'Housing for All' scheme. The Housing and Urban Poverty Alleviation (HUPA) Ministry (HUPA) would provide assistance of over 2 lakh crore rupees over the next six years for enabling two crore urban poor own their own houses. 
  • The selected cities and towns are in Chhattisgarh 36, Gujarat 30, Jammu and Kashmir 19, Jharkhand 15, Kerala 15, Madhya Pradesh 74, Odisha 42, Rajasthan 40 and Telangana 34.
  • Under the 'Housing for All' initiative of the central government, named as Pradhan Mantri Awas Yojana and launched by Prime Minister Narendra Modi on June 25 this year, two crore houses are targeted to be built for the poor in urban areas by year 2022, coinciding with 75 years of Independence.
  • Besides these nines states, six more states have signed Memorandum of Agreement (MoA) with the Ministry committing themselves to implement six mandatory reforms essential for making the housing mission in urban areas a success.
  • The states that have so far agreed to implement the mandatory reform measures are Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Jammu and Kashmir, Jharkhand, Kerala, Madhya Pradesh, Manipur, Mizoram, Nagaland, Odisha, Rajasthan, Telangana and Uttarakhand.
  • In total as many as 15 States have signed a memorandum of agreement (MoA) with the Ministry of Housing & Urban Poverty Alleviation for ‘housing for all’ mission in urban areas
  • Under the MoA, the States have agreed to do away with the requirement of separate Non-Agricultural Permission (NAP) in case land falls in the residential zone earmarked in the Master Plan of city or town; prepare or amend Master Plans earmarking land for affordable housing; put in place a single-window-time bound clearance system for layout approvals and building permissions.
  • States have also agreed to do away with approvals below certain built-up area/ plot size in respect of Economically Weaker Sections and Low Income Groups; legislate or amend existing rent laws on the lines of the Model Tenancy Act circulated by the Ministry of HUPA ; and provide additional Floor Area Ratio/Floor Space Index/Transferable Development Rights (TDR) and relax density norms for slum redevelopment and low-cost housing.
  
  
• Government decides to allow the Land acquisition ordinance to lapse tomorrow
  Indian Prime Minister Narendra Modi on 30th August said the government has decided to allow the land acquisition ordinance to lapse on 31st August. In his address on the eleventh edition of Mann Ki Baat on All India Radio, Mr Modi made it clear that his government will not promulgate land ordinance, but include 13 points to reform the land acquisition law.
  
  It will extend the compensation and resettlement benefits under the law to land acquired under 13 Central Acts which were not covered so far, including highways and railways laws. The law provides compensation upto four times the market value in rural areas and twice the market value of land in urban areas.
  
• GDP growth estimated to slow down in Q1 of current fiscal
  The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has released the estimates of Gross Domestic Product (GDP) for the first quarter of current financial year.
  
  GDP at constant prices for April to June this year rose by 7 percent compared to a growth rate of 7.1 percent for the same period in last fiscal. GDP at constant prices at the end of first quarter in june this year stood over 27 lakh crore rupees.
  
  The economic activities which registered growth of over 7 percent in first quarter of current financial year are manufacturing, trade, transport & communication and services related to broadcasting and financial, insurance, real estate and professional services.
  
  In the same period Agriculture, forestry and fishing’ sector grew by 1.9 percent as compared to growth of 2.6 percent in first quarter of last financial year.
  
  Mining and quarrying sector grew by 4.0 percent as compared to growth of 4.3 percent in first quarter of 2014-15 and manufacturing sector grew by 7.2 percent as compared to growth of 8.4 percent in first quarter of last fiscal.
  
• Swiss, European banks ask Indian clients to utilise 'compliance window'
  A number of Swiss and other European banks have begun asking their Indian clients to utilise the compliance window given by the Indian tax authorities for disclosure of all undeclared foreign assets till next month.
  
  Executives at some of these large financial institutions said that they are also asking their clients to give fresh undertakings to state that they are in compliance with all the laws in their home countries.
  
  The Swiss banks, thought to be safe havens for parking unaccounted funds, have also started asking for auditor certificates from high net worth individuals and corporate clients to vouch for the clean status of their money. India is aggressively making efforts to bring back illicit money parked by its citizens overseas and Switzerland has also agreed to co-operate on the issue.
  
• RBI designates State Bank, ICICI as ‘too big to fail’
  The Reserve Bank of India on 31st August designated State Bank of India and ICICI Bank as Domestic Systemically Important Banks (D-SIBs), which will put them under tougher monitoring to avoid any collapse. SIBs are perceived as banks that are ‘Too Big To Fail’
  
  The RBI said the two banks have been selected due to their size, cross-jurisdictional activities, complexity, lack of substitutability and interconnectedness. SBI alone accounts for a fifth of the banking business in India.
  
  The disorderly failure of these banks has the potential to cause significant disruption to the essential services they provide to the banking system, and in turn, to the overall economic activity. Therefore, the continued functioning of SIBs is critical for the uninterrupted availability of essential banking services to the real economy,” RBI said while announcing the framework for dealing with D-SIBs.
  
  Following their designation as D-SIBs, SBI and ICICI Bank must meet additional Common Equity Tier 1 (CET1) requirements from April 1, 2016, in a phased manner. The CET1 requirements will be fully effective from April 1, 2019. This means the banks will have to set aside more funds at a time when banks are battling a huge bad debt burden.
  
  The additional requirement as a percentage of Risk Weighted Assets (or loans) for SBI and ICICI Bank have been set at 0.60 per cent and 0.20 per cent, respectively. This will be in addition to the extra capital buffers already in place under Basel-III guidelines.
  
  If a foreign bank, having a presence in India has been notified as Global Systemically Important Bank (G-SIB), it has to maintain the additional capital surcharge in India, proportionate to its Risk Weighted Assets in India. HSBC, JP Morgan Chase, Barclays and BNP Paribas are among the G-SIBs in India as per the Financial Stability Board’s list of November 2014.
  
• Centre releases Rs 2,000 crore for Employees' Pension Scheme
  Centre has released 2,000 crore rupees to Employees' Pension Scheme (EPS) as its contribution for the year 2015-16. This contribution is in addition to the Rs 250 crore contributed by the government as grant-in-aid in the EPS, for providing minimum pension of Rs 1,000 to pensioners under the scheme. It said, the contribution of central government is calculated at a rate of 1.16 per cent of the monthly wages of the members contributing to the scheme.
  
  Last September, EPS pensioners have been assured of a guaranteed minimum pension of Rs 1,000 per month and it has been necessary to infuse additional amount as grants-in-aid by the Centre to sustain the continuance of the minimum pension.
  
• Govt accepts Shah panel report exempting FIIs from MAT before April 2015
  The government on 1st September accepted the Justice AP Shah committee report on the Minimum Alternative Tax, MAT on foreign institutional investors,FIIs. According to Finance Minister Finance Minister Arun Jaitley, government will not impose levy on FIIs prior to 1st April 2015.
  
  The report was considered at length by CBDT and revenue department. Mr jaitley said the report will be made public very soon.
  
  The Minister said the amendments to Sec 115 JB of IT Act would be required and expressed hope that the Act will be amended in the winter session of Parliament.
  
  The Finance Minister, however, said that the Shah panel's recommendations were applicable only for FIIs and FPIs and did not pertain to cases involving foreign direct investment (FDI).
  
  In May, the government set up a panel headed by Justice AP Shah to suggest ways to resolve the MAT dispute as well as some other tax issues. Tax authorities had issued MAT notices to foreign portfolio investors last year which claim of Rs 600 crore.
  
• Centre allocates Rs 410 crore for drought affected districts
  Centre has allocated 410 crores rupees during the current year under the Pradhan Mantri Krishi Sinchayee Yojana to minimize the impact of drought and improving the ground water recharge in the country. The decision has been taken in view of gravity of perennial problem of longer dry spells resulting in drought and rapid depletion of ground water table. Of Rs 410 crore, 69 crores have been allocated for Rajasthan, over 64 crores Tamil Nadu, over 46 crores Punjab and around 41 crores Karnataka. About Rs 21 crore will go to Maharashtra and over Rs 17 crore to Bihar.
  
  219 districts in the country have been frequently affected by drought in the recent past and witnessing regular agrarian crisis. In view of this, the government for the first time identified the most vulnerable areas that require immediate attention for water conservation, harvesting and ground water recharge.
  
  1071 blocks and talukas have been identified under over exploited categories which need immediate special attention and 150 blocks and talukas as most vulnerable areas requiring regulated and cautious use of ground water. The government has decided to give special treatment to improve the condition of underground water, soil moisture and create micro water storages in these areas under the Pradhan Mantri Krishi Sinchayee Yojana.
  
• 13 central acts included in land law
  Giving up the ordinance route, the government has issued an 'order' to include 13 central Acts like National Highway and Railways Acts to extend benefits to those whose land is acquired under land law. The order issued by the government under the removal of difficulties clause (Section 113) in the Land Act now extends the provisions relating to the determination of compensation, rehabilitation and resettlement to all cases of land acquisition under 13 central acts which were left out in the 2013 law.
  
  By using the clause, government has done away with the need to issue the controversial land ordinance for a record fourth time. The ordinance was lapsed on August 31.
  
  Since a Joint Committee of Parliament is examining the amended land bill brought by the NDA government, it did not touch upon the controversial clauses which were part of the ordinance.
  
  The Land Acquisition Act, 2013 had exempted 13 acts from its purview with the condition that they would be included under the purview of the act within one year. The NDA's ordinance brought these 13 acts under the new land law.
  
  The ordinance also made significant changes in the Land Acquisition Act including removal of consent clause for acquiring land for five areas industrial corridors, PPP projects, rural infrastructure, affordable housing and defence. These include,national security, defence, rural infrastructure including electrification, industrial corridors and building social infrastructure including Public Private Partnership (PPP) where ownership of land continues to be vested with the government.
  
• FMC will come under SEBI ambit from Sept 28
  The merger of commodity forward market regulator Forward Market Commission (FMC) with the capital market regulator, the Securities & Exchange Board of India (SEBI) will be effective from September 28. According to a Finance Ministry statement, the government issued a notification on August 28, as a result of which Forward Contracts Regulation Act (FCRA) 1952 gets repealed and Regulation of Commodity Derivatives Market will shift to Securities and Exchange Board of India (SEBI) under Securities Contracts Regulation Act (SCRA) 1956 with effect from September 28. This action has been taken in order to comply with the announcement made by Finance Minister Arun Jaitley during his Budget Speech of 2015-16.
  
• Centre to reimburse PSUs for losses incurred on pulses imports
  The Union Cabinet on 2nd September approved the Food and Consumer Affairs Ministry’s proposal to reimburse public sector undertakings (PSU) Rs. 113.4 crore for losses incurred on pulses imported between 2006 and 2011.
  
  Pulses were imported by the National Agricultural Cooperative Marketing Federation (Nafed), Project and Equipment Corporation (PEC), State Trading Corporation (STC) and Metals and Minerals Trading Corporation (MMTC) and these central PSUs will benefit from the move.
  
  The release added that it was decided earlier to import 5,000 tonnes each of arhar (tur) and urad pulses through tenders floated by the MMTC in order to help bring down domestic retail prices which have crossed and stayed above Rs. 100/kg in New Delhi over the last four months. The first consignment of these imported pulses will reach Mumbai by September 5.
  
• RBI to issue Rs 5 coin on golden jubilee of 1965 Indo-Pak war
  The Reserve Bank of India will shortly put into circulation Rs 5 coins to commemorate golden jubilee of Indo-Pak War 1965. According to RBI the coins will be legal tender as provided in the Coinage Act 2011. Existing coins in this denomination will also continue to be legal tender, it said. The new coin in the obverse will bear Lion Capital of Ashoka Pillar in the centre with Satyamev Jayate inscribed below it, the release said.
  
  On the reverse it will bear image of 'Amar Jawan' monument along with the design of olive leaves branch on its left and right sides at the center, with the inscription "veerata aur balidan" in Devnagri script on the left upper periphery and "VALOUR AND SACRIFICE" in English on the right upper periphery. The year "2015" is written below the image of the monument.
  
  The year "2015" is written below the image of the monument, it added. Also, "GOLDEN JUBILEE 1965 OPERATIONS" in English on the lower periphery will also be written on this face of the coin, RBI said further.
  
• Black money: Supreme Court-appointed SIT recommends several steps to curb money laundering
  The Supreme Court-appointed SIT on black money has come out with a slew of recommendations to curb various ways of money laundering, including misuse of exemption on long-term capital gains tax, Participatory Notes and creation of shell companies.
  
  The Special Investigating Team (SIT) has advocated action under anti-money laundering law for trade-based money laundering, putting a cap on huge cash transactions as these mostly take place in illegal activities like drug trade and betting deals.
  
  In its report submitted to the apex court, the SIT said there was a need to check the generation of black money in the education sector and through donations to religious institutions and charities.
  
  The SIT has emphasised the need for establishing additional courts to decide the pending cases under the Income Tax Act, establishment of Central KYC Registry and empowering the Directorate of Revenue Intelligence under the Special Economic Zone Act. A specific recommendation has been made to check generation of black money through cricket betting.
  
  While dealing with the misuse of exemption on Long Term Capital gains tax for money laundering, the SIT has recommended that SEBI needs to have an effective monitoring mechanism to study the unusual rise in stock prices of companies when such an increase takes place.
  
  While deliberating on the misuse of Participatory notes for money laundering, the panel said it is clear that obtaining information on "beneficial ownership" of P-notes is of crucial importance to prevent their misuse.
  
• Near-term growth prospects remain favourable in India: IMF
  Near-term growth prospects remain favourable in India but some macroeconomic imbalances still exist, International Monetary Fund said on 3rd September ahead of the meeting of finance ministers from G-20 countries in Turkey. With balance sheet strains in the corporate and banking sectors, financial sector regulation in India should be enhanced, provisioning increased, and debt recovery strengthened, it said.
  
  According to the report: 
  • Global growth in the first half of 2015 was lower than in the second half of 2014, reflecting a further slowdown in emerging economies and a weaker recovery in advanced economies.
  • IMF said emerging market currencies have generally depreciated, reflecting weakening commodity prices, concerns about the growth transition in China, an increase in risk aversion and expectations of a lift-off in policy rates in the US.
  • In contrast financial conditions in advanced economies continue to be easy.
  • On the back of weak demand, safe real interest rates remain low, despite some widening of spreads, even as the policy rate lift-off approaches in the US.
  • The growth in emerging economies has been slowing with marked differences across countries and regions, it said.
  • Noting that the outlook for emerging economies has weakened in 2015 relative to last year, the report said in China, growth is expected to decline as excesses in real estate, credit, and investment continue to unwind, with a further moderation in investment growth, especially residential real estate. According to the report, in many emerging economies policy space to support growth remains limited.
  
  
• Nearly 1.65 lakh a/c holders avail overdraft under PMJDY
   The government has said nearly 1.65 lakh Jan Dhan account holders, of the total 18 crore accounts opened under the scheme, have availed overdraft facility.
  
  More than Rs 22,000 crore have been mobilised under the Pradhan Mantri Jan Dhan Yojana (PMJDY) and 15.74 crore Rupay debit cards have been issued. Now, the focus of PMJDY has moved from account opening to the provision of cash-out facilities at an approachable distance to reap the real benefits of PMJDY. Banks have been directed to disburse overdraft facility up to Rs 5,000 under PMJDY and Aadhaar number is not mandatory for this.
  
  In this regard, Indian Banks Association (IBA) has been asked to issue revised guidelines to all banks. Overdraft facility has been availed by 1,64,962 account holders as on September 1, 2015. To facilitate cash-out facility, there are nearly 1.26 lakh branches of scheduled commercial banks as on March 2015, of which 48,557 (38.58 percent) are in rural areas.
  
  These banks have over 1.84 lakh ATMs as on June 2015. In the year 2014-15, 8,227 branches and 21,197 ATMs were added to the network. Also, limit for cash withdrawal at POS (for debit cards and open system prepaid cards issued by banks in India) has been doubled to Rs 2,000 per day in Tier III to Tier VI centres.
  
• ONGC buys 15% stake in Russia's 2nd-largest oil field from Rosneft
  State-owned Oil and Natural Gas Corp. (ONGC) has bought a 15 per cent stake in Russia's second-largest oil field from Rosneft for about USD 1.35 billion.
  
  ONGC Videsh Ltd, the overseas investment arm of the state explorer, signed agreements in Moscow to buy 15 per cent stake in the Vankor oil field in East Siberia. The 15 per cent stake will give OVL about 3.5 million metric tonnes of oil a year.
  
  They said that under the terms of the agreement, OVL will get two seats on the Board of Directors of Vankorneft - a Rosneft subsidiary that operates the Vankor field. Rosneft will retain full control of infrastructure of the Vankor cluster. Vankor, which started production in 2009, holds recoverable reserves of about 500 million tonnes.
  
  OVL already has a 20 per cent stake in the Sakhalin-1 oil and gas field off Russia's far eastern coast and owns Imperial Energy which has fields in Siberia.
  
• RBI crisis fund short of target
  Contingency funds with the Reserve Bank of India (RBI), used in case of unforeseen shocks, have fallen to 8.4 per cent of total assets, against a target of 12 per cent, as shown in its Annual Report for 2014-15 released on August 27.
  
  For the last two years, the RBI has made no transfers to its Contingency Fund or its Asset Development Fund. The balance in these funds, therefore, has barely changed since 2013, when they made up 10.1 per cent of total assets. While the total in these two funds stood at Rs.2,424 billion in 2012-13, it was Rs.2,434 billion in 2014-15.
  
  The capital requirements of a central bank can vary considerably depending on a number of factors, according to the annual report.
  
• Govt panel moots flexible exits for financial products
  The choice of withdrawal of all financial products, except those pertaining to pensions, should remain with the investor, according to a committee set up by the government to rationalise distribution incentives for financial products.
  
  A report by the committee, headed by former finance secretary Sumit Bose, said Indian markets should be guided to an advisory model, in which customers sought advisors and remunerated them directly for holistic portfolio advice.
  
  Currently, products such as unit-linked insurance plans (Ulips) have a lock-in period of at least five years. It was increased from three years following a spate of customer complaints prior to September 2010, when market volatility led to poor returns for policyholders, who exited early.
  
  For mutual funds, the committee recommended making cost caps under the total expense ratio not fungible. Other recommendations included abolishing up-fronting of commission, reducing trail fees, no advance payment of commission to distributors and lowering of cost caps with a rise in assets under management.
  
  While the Bose committee said the Securities and Exchange Board of India's norms for mutual funds and the Insurance Regulatory and Development Authority of India's rules pertaining to Ulips were robust, it added these principles should govern the surrender and lapse costs for traditional plans and form the basis for future products.
  
  The report said banks and other institutions tend to over-sell (and, as a result, often mis-sell) products belonging to their group companies. It asked regulators to consider putting additional disclosures requirements on banks.
  
• Punjab govt sets up special NREGA cell
  A special National Rural Employment Guarantee Act (NREGA) cell has been set up here in Punjab with an aim to effectively implement it. An outlay of Rs 233 crore has been provided under this project
  
  The centre has decided to fix the wage rate under the NREGA on the basis of Consumer Price Index which will be implemented on April 1 every year and will be applicable for the whole financial year. From the outlay of Rs 247.50 crore, an expenditure of Rs 210.54 crore was incurred during the last financial year
  
  All the districts of the state are being covered under NREGA with effect from April 1, 2008 and the recent wage rate has been revised from Rs 202 to Rs 210 with effect from April 1, 2015.