ECONOMY AFFAIRS SEPTEMBER 2017

ECONOMY AFFAIRS SEPTEMBER 2017

• PM Modi launches Pradhan Mantri Sahaj Bijli Har Ghar Yojna
  Prime Minister Narendra Modi on 25th September launched the 'Pradhan Mantri Sahaj Bijli Har Ghar Yojana to provide electricity to un-electrified households. The scheme is named 'Saubhagya’ and will provide subsidy on equipment like transformers, meters and wires.
  
  The Prime Minister also inaugurated the new corporate building of ONGC in New Delhi, that was renamed Pandit Deendayal Upadhyaya Urja Bhawan.
  
  The green-building has been built at a cost of 600 crore rupees. Mr Modi also unveiled a statue of Pandit Deendayal Upadhyaya to mark his birth anniversary.
  
  According to the Prime Minister:
  • Four crore people of the country are yet to get electricity and are dependent upon lanterns to light their homes.
  • At present India is a power surplus state
  • Over 16 thousand crore rupees will be spent on providing electricity to un-electrified households
  • The installed power capacity has increased by 12 per cent during last three years and 60 thousand Mega Watt power has been added.
  • Financial condition of power distribution companies has improved and distribution system has been strengthened in the country
  • In the 2015 Independence day speech, Prime Minister Narendra Modi had announced that the government will electrify the remaining 18,452 unelectrified villages in 1,000 days
  • According to GARV portal, out of the 18,452 villages, 14,483 villages have been electrified so far
  • The electrification work is in progress for 2,981 villages, while 988 villages are uninhabited.
  
  
• Govt sets up Dairy Processing and Infrastructure Development Fund
  The government has set up the Dairy Processing and Infrastructure Development Fund, DPIDF, worth Rs 10,881 crore to boost the dairy sector. According to Union Agriculture Minister Radha Mohan Singh, 95 lakh farmers from about 50,000 villages will be benefited through DPIDF.
  
  The minister presented National Dairy Development Board (NDDB) dairy excellence awards to the best dairy cooperatives on the occasion.
  
  He said more employment opportunities will be generated, as the milk procurement operations have registered a growth.
  
  The minister said Narendra Modi government accords a "top priority" to the agriculture sector and aims to "ensure that farmers get the best remunerative price for their produce".
  
• Ram Vilas Paswan launches “Electronic Negotiable Warehouse Receipt (e-NWR) System”
  Consumer Affairs and Food Minister Ram Vilas Paswan, on 26th September launched the Web Portal of Warehousing Development and Regulatory Authority (WDRA) and Electronic Negotiable Warehouse Receipt (e-NWR) System in New Delhi.
  
  The Minister informed the e-NWRs will have no chances of any tempering, mutilation, fudging, loss or damage. He said , these NWRs will not only facilitate an easy pledge financing by banks and other financial institutions but also smooth trading on various trading centres like commodity exchanges, electronic National Agriculture Markets (e-NAM).
  
• ADB cuts 2017-18 growth forecast to 7%
  The Asian Development Bank has lowered India’s growth forecast to 7 per cent for 2017-18 from its earlier estimate of 7.4 per cent owing to weak private consumption and business investment and muted manufacturing output. It has also scaled down its outlook for 2018-19 at 7.4 per cent from the previous projection of 7.6 per cent.
  
  The projections, which are part of the update to the Asian Development Outlook (ADO) 2017 that was released in April, also factor in the first quarter GDP growth that was at a three-year low of 5.7 per cent.
  
  With the impact of demonetisation and roll out of the Goods and Services Tax yet to recede, the second volume of the Economic Survey had also highlighted downside risks to its earlier growth forecast of 6.75 per cent to 7.5 per cent for the fiscal. However, the Update to the ADO is more optimistic about the long-term growth prospects.
  
  With low inflation and expected wage hikes, the ADB is also bullish about improvement in private consumption in the second half of the fiscal. It also expects manufacturing sector to rebound though investment growth is likely to remain muted this fiscal as budgetary constraints limit government expenditure.
  
  Inflation, on the other hand, is expected to average 4 per cent this fiscal and 4.6 per cent next fiscal, significantly lower than the previous estimates of 5.2 per cent and 5.4 per cent, respectively.
  
  The ADB is also confident of the government’s plans to meet the fiscal deficit target of 3.2 per cent of the GDP and said that improved tax collections from GST from next year will further strengthen the efforts.
  
• India at 40 in WEF Global Competitiveness Index
  India’s rank is down by a single position in the World Economic Forum's annual Global Competitiveness Index. Issued on 26th September, it places India at 40th among 137 economies for the 2017-18 report, down from 39th position in 2016-17. However, this is the country's highest score, under a new methodology. In 2016-17, India had jumped 16 positions, from 55th rank a year before.
  
  The index this year measures national competitiveness. Of the three sub-indexes, India has progressed the most in the efficiency enhancers category, up four positions to 42nd rank
  
  However, in the other two sub-indexes, basic requirements and innovation & sophistication, India stands at 63rd and 42nd positions, respectively.
  
  The report says this country still has to straddle a large gap between its innovative strength (29th position) and its technological readiness, which still lags most comparable economies at a lowly 107th position. In the latter category, the latest report saw only a progression of three places for India.
  
  This is also pointed out as true for regional giant China, which also needs to increase its technological readiness and promote innovation. China’s ranking improved by a single position to 27th in 2017.
  
  The report mentions that India remains the most competitive country in South Asia. And, most countries in the region broadly continue to be among the most improved economies globally.
  
  In 2017, both Pakistan and Bangladesh managed to better their ranking by seven positions each. Pakistan is now at 115th position; Bangladesh at 99th.
  
  With Switzerland, the Netherlands and Germany stable on first, fourth and fifth spots, respectively, the only changes in the top five apply to the United States and Singapore, which swap second and third positions.
  
• Prime Minister Narendra Modi forms Economic Advisory Council
  Prime Minister Narendra Modi reconstituted the Economic Advisory Council (EAC) to guide him on economic issues and appointed economist Bibek Debroy as its chairman. Debroy is a member of government think tank Niti Aayog. The four other part-time EAC members are Surjit Bhalla, Rathin Roy, Ashima Goyal and Ratan Watal.
  
• Nod for pacts by Exim Bank under BRICS mechanism
  Exim Bank can now enter into bilateral agreement for co-financing with large developmental institutions to ensure lending in single currency.
  
  This follows a decision by the Union Cabinet giving its approval to the signing of the Interbank Local Currency Credit Line Agreement and Cooperation Memorandum Relating to Credit Ratings by Exim Bank with participating member banks under BRICS Interbank Cooperation Mechanism.
  
  The move follows expiry of an initial Master Agreement in March. The agreement was on extending credit facility in local currency under the BRICS Interbank Cooperation Mechanism.
  
  It is understood that some of the member banks (like CDB and VEB; CDB and BNDES) have entered into bilateral agreements for local currency financing under the Master Agreement signed in 2012. Although the current conditions are not conducive to usage, it was useful to keep the same alive as an enabling feature in case a suitable opportunity materialises in future.
  
  As both the agreement and the MoU are umbrella pacts, and are non-binding in nature, the Board of Directors of Exim Bank have been authorised to negotiate and conclude any individual contracts and commitments within their framework, it added.
  
  The agreements will promote multilateral interaction within the area of mutual interest which will deepen political and economic relations with BRICS nations.
  
• IDBI Bank Launches ‘Project Nishchay’ for Turnaround
  IDBI Bank launched ‘Project Nishchay’ in partnership with the Boston Consulting Group (BCG) to accelerate its turnaround program and improve financial performance. The project will be led by senior management at IDBI Bank along with BCG. BCG will assist the bank to identify areas for cost containment and revenue maximization leading to sustainable growth and profitability of the Bank.
  
• PENCIL Portal launched for effective implementation of National Child Labour Project
  The Union Ministry of Labour and Employment launched Platform for Effective Enforcement for No Child Labour (PENCIL) Portal at National Conference. The portal is an electronic platform that aims at involving Centre, State, District, Governments, civil society and the general public in achieving the target of child labor free society. They launched Standing Operating Procedures (SOPs) for enforcement of legal framework against child labor.
  
• RBI raises foreign investor limits
  The Reserve Bank of India has increased foreign portfolio investors’ investment limits in central and state government securities by an aggregate Rs 14,200 crore for the October-December period.
  
  The RBI also increased limits for investment by FPIs for the December quarter by Rs 8,000 crore in Central government securities and by Rs 6,200 crore in state development loans, the central bank said.
  
  Accordingly, the aggregate FPI limits have gone up to Rs 289,300 crore from the earlier Rs 275,100 crore. After the expansion the total investments permissible in G-secs will now stand at Rs 250,000 crore, while the same for state governments will be Rs 39,300 crore, it said.
  
  The G-secs limits include a cap of Rs 189,700 crore in general securities, up from Rs 187,700 crore earlier, and Rs 60,300 crore in long term securities, up from the earlier Rs 54,300 crore.
  
  For the state development loans, the general limits are Rs 30,000 crore and Rs 9,300 crore in long term securities, which is up from the earlier Rs 28,500 crore and Rs 4,600 crore, respectively, the apex bank said. The revised limits will be effective October 3, the RBI notification said.
  
  Last week, the RBI increased the corporate bond investment limit for foreign investors by taking out rupee denominated bonds from the ambit of total debt investment limit. Currently, the limit for investment by foreign portfolio investors (FPIs) in corporate bonds is Rs 244,323 crore.
  
• Panel approves extension of time period for spectrum payment to 16 years
  The Telecom Commission (TC) has approved an increase in the timeframe for deferred spectrum payments to 16 years, as well as a change in calculation of interest for delayed payments.
  
  However, telecom companies will not get any relief on spectrum charge or licence fee. The industry says the TC's measures will give some relief to operators in the long run but the current problem of financial stress remains.
  
  The government had formed an inter-ministerial group (IMG), to address the financial stress in the sector and it had recommended all these measures. The TC in its earlier meeting had sought clarifications on some points.
  
  After getting these, 29th September decisions were taken. The Cabinet will now take a final call. A source said there would be no further relief for telecom operators from the IMG.
  
  According to sources, the TC approved an increase in the tenure for deferred spectrum payment to 16 years from the current 10 years. The TC had asked IMG if it should be 12 or 14 but after discussion, it was decided to make it 16 years.
  
  Also, using the marginal cost of funds-based lending rate (MCLR) for calculating the interest on delayed payment, instead of the prime lending rate (PLR), was approved.
  
  The spectrum holding cap issue had already been referred back to the Telecom Regulatory Authority of India (Trai). The department oftTelecommunications (DOT) has already sought legal opinion on the Adjusted Gross Revenue (AGR) applicable in the case of receipts from spectrum trading. The TC is likely to take up both issues in its next meeting, by when it expects the replies.
  
  The longer duration of deferred spectrum payment could increase the cash flow of telecom operators by Rs 55,000 crore. Due to the change of PLR to MCLR, cash flow benefits of Rs 20,000 could accrue.
  
  The industry's debt dues are estimated at Rs 4.5 lakh crore, incurred mainly on account of payment for spectrum, beside other levies. With the entry of Reliance Jio last year, the industry has been locked in a rate war. Incumbent operators have been contending there is pressure on revenue and profitability, blaming the rock-bottom data rates and free offerings of Jio.
  
  Other decisions
  • The TC also approved some guiding principles and a road map for the New Telecom Policy (NTP) to be announced by March.
  • DoT plans draft approval of the road map by the TC by November 30 and issue of the draft policy for consultation with stakeholders by December. By January, a Cabinet note will be sent.
  • The guiding principle of NTP would be a focus on the Digital India vision and on telecom as an enabler of economic growth. Second, there should be connectivity for all.
  • Also, the protection of consumer interests -- these would cover affordability and quality of services, privacy, data protection and cyber security.
  • Also, it should be technology-agnostic and innovation-friendly, promoting and ensuring competition, and in conformity with the ease of doing business.
  • The NTP should ensure financial stability and sustainable growth of the sector, so that adequate investment comes in. And, promoting design, development and promotion of manufacturing of telecom equipment in India.
  • The work on NTP will involve a two-tier process. One working group will have all stakeholders, including industry and financial institutions, and an expert advisory group which will have domain experts.
  • Karnataka to get new solar park soon
  • Pavagada, one of the most backward and parched taluks in Karnataka, has been declared drought-hit more than 50 times in the last seven decades. The people residing in barren hilly lands are deprived of potable water. With no irrigation facility, farmers barely earn a few hundred rupees from groundnut crop, and worse, the crop often withers away every year.
  • Located 180 km from Bengaluru and bordering Andhra Pradesh, the taluk is blessed with good sunshine for most part of the year. capitalising on this, it is now finding a place in the global green energy map, with the State government commencing the process of setting up a solar park, claimed to be the world’s largest, with an investment of Rs. 14,425 crore, including Central aid.
  • The solar park, spread over 13,000 acres across five villages of the taluk, will generate 2,000 MW of power by September 2018. In the first phase, to be ready by December, it would generate 600 MW.
  • With this and other solar projects, the State would become the number one State in solar power, with a generation of 3,000 MW by the end of December
  • The Pavagada park is financed and co-developed by the Union Ministry of New and Renewable Energy (MNRE), the State government, and developers who pay upfront charges.
  • Six developers — Adani Power and Tata Solar Power ( (150 MW each), Arrow Solar and ReNewer Power (50 MW each), ACME Solar and Fortum Solar (100 MW each), have set up solar panels to generate 600 MW in the first phase. National Thermal Power Corporation Ltd, which bagged the bid, will purchase power from these six developers at Rs. 4.80 per unit and supply to the State electricity supply companies at a bundled tariff of Rs. 3.30 per unit. For the balance 1,400 MW, tariff is yet to be fixed through competitive bidding.
  
  
• Central govt exempts import duty on sports items
  Central government has exempted import duty on sports items and a wide range of goods for the upcoming Under-17 football World Cup to be held in India from October 6 to 28.
  
  The first FIFA event to be held in India will have have 52 matches spread over six cities. The final will be played at Kolkata's Salt Lake Stadium match on October 28.
  
  A Central Board of Excise and Customs notification said that all sports goods, sports equipment and sports requisites, fitness equipments, team uniform/clothing, spares, accessories and consumables will be exempted from the customs duty.
  
  However, the importers will have to furnish undertakings that all the goods, excluding gift items, souvenirs and mementos, will be re-exported within three months of conclusion of the World Cup.
  
  Doping control equipment, first aid kits, satellite phones/GPS, dining/kitchen items and office consumables are also among the goods that have been exempted from import duty.
  
  Broadcast equipment and supplies used in organising and during the event imported by FIFA Host Broadcasters have also been exempted. These goods will also be exempted from the integrated tax levied under GST.
  
  A total of 24 countries, including hosts India, will compete in the tournament which will be played in six cities--New Delhi, Margao, Kochi, Guwahati, Kolkata and Navi Mumbai.
  
• Centre releases new Metro policy to expand Metro network
  Housing and Urban Affairs Minister Hardeep Singh Puri has released the new Metro Policy for expanding the metro network across various cities in the country.
  
  The policy was approved by the Union Cabinet in August. Mr Puri unveiled this new policy at a workshop on New Metro Rail Policy in New Delhi on 16th September.
  
  The States to set up Unified Metropolitan Transport Authorities in all the 53 cities with over 10 lakh population each to ensure integration among all modes of transport on a regional basis.
  
  The new Metro Policy empowers States to make rules and regulations and set up permanent Fare Fixation Authority for timely revision of fares. It also makes Public Private Partnership component mandatory for availing central assistance for new metro projects.
  
  Currently 370 kilometer metro network is under operation in seven cities while 537 kilometer network is under construction in 12 cities.
  
• Income Tax Dept proposes voluntary reporting of estimated current Income, advance tax liability
  Income Tax Department has proposed a mechanism for self-reporting of estimates of current income, tax payments and advance tax liability by certain taxpayers on voluntary compliance basis.
  
  It is being done to address the concerns of income tax payers who have to bear additional burden of interest for default of advance tax, in case total advance tax paid for the year falls short of the assessed tax by ten percent or more.
  
  According to an official release, the proposed reporting mechanism is sought to be created by way of inserting a new Rule 39A and Form No. 28AA in the Income-tax Rules, 1962.
  
  The proposed draft notification has been posted on the website of Income Tax Department for comments from stakeholders and general public.
  
• World trade likely to grow at 3.6% in 2017
  World trade in goods is estimated to grow 3.6 per cent in 2017 compared with the 1.6 per cent increase in 2016, according to the revised estimates circulated by the World Trade Organisation (WTO) on 21st September.
  
  Growth in global trade for 2017 was earlier projected at 2.4 per cent by WTO, which has now attributed the improved outlook to a resurgence of Asian trade flows. This was mainly due to intra-regional shipments picking up and a recovery in import demand in North America.
  
  However, the rapid pace of trade growth in 2017 is unlikely to be sustained next year for a number of reasons and the increase could be at a more moderate 3.2 per cent, the forecast cautioned.
  
  The improved outlook for trade is welcome news, but substantial risks that threaten the world economy remain in place and could easily undermine any trade recovery.
  
  These risks include the possibility that protectionist rhetoric translates into trade restrictive actions, a worrying rise in global geopolitical tensions and a rising economic toll from natural disasters.
  
  The reasons for a likely moderation of growth in trade in 2018 are manifold. First, trade growth in 2018 will not be measured against a weak base year, as is the case this year. Second, monetary policy is expected to tighten in developed countries as the Federal Reserve gradually raises interest rates in the US and the European Central Bank looks to phase out quantitative easing in the Euro area, the forecast report pointed out.
  
  Another reason for a likely slowing down of growth next year is that the fiscal expansion and easy credit in China are likely to be reined in to prevent the economy from overheating.
  
  The new estimate for world trade growth in 2017 is at the high end of the range of estimates provided in WTO economists’ most recent trade forecast of April 12, 2017 (1.8 per cent - 3.6 per cent). The strength of the revision is partly due to a modest improvement in the consensus forecast for world GDP growth (2.8 per cent in 2017 at market exchange rates, up from 2.3 per cent in 2016) and partly due to the composition of that growth.
  
• Swachh Bharat Abhiyan meeting targets: Govt
  The government has cited a UNICEF survey carried out in 10,000 households across the country to claim that the Swachh Bharat Mission is meeting its targets, three years after its launch. The survey, conducted across 12 states, says that 85 per cent members of the households studied were using toilets, a government release said.
  
  Nicolas Osbert, who heads the UNICEF's drinking water and sanitation section, said, "India has been able to catalyse and mobilise the efforts of millions of citizens and the Swachh Bharat Mission is a once-in-a generation opportunity".
  
  Quoting a World Bank report published in 2008, he said the total economic impact of inadequate sanitation in India amounted to $53.8 billion per year, equivalent of 6.4 per cent of the country's then GDP. In a fully open defecation-free community, considering medical costs averted, the value of time savings, and the value of mortality averted, the financial saving for each household is Rs 50,000 per year, Osbert said. He also appreciated the move of the government in creating sanitation volunteers with the support of UNICEF for doing a commendable service.
  
• SBI launches Indian bond index series in London
  State Bank of India (SBI) has launched the FTSE SBI Bond Index series in partnership with global index provider FTSE 100, which it is hoped will give tools to investors from India, the UK and globally to analyse India’s government bond market, and drive growth in this market.
  
• India replaces China as top retail destination in 2017: Study
  India has replaced China as the numero uno retail destination in 2017 as part of the global retail development index, according to industry experts. The change in ranking was an outcome of four factors including increased consumer spending, beyond essentials, rising mobile and internet penetration, favourable foreign investment climate and bold action on cashless transaction and GST
  
  According to India Retail Report 2017, over the past 12-15 months, 100 per cent cash and carry operations are gaining significance in India with Thailand’s Siam Makro being the latest entrant in this space following Metro, Walmart and Booker.
  
  Food as well as retail Brands such as Korres, Migato, Evisu, Wallstreet English, Pasta Mania, Lush Addiction, Melting Pot, Yogurt Lab and Monnalisa and many others from across the world, are expected to invest about USD 300-500 million cumulatively to open roughly 2,500-3,000 stores, the study said.
  
• Govt launches Pradhan Mantri LPG Panchayat in Gujarat
  Union Minister for Petroleum and Natural Gas Dharmendra Pradhan on 23rd September launched Pradhan Mantri LPG Panchayat at Mota Ishanpur village in Gandhinagar district of Gujarat.
  
  According to Dharmendra Pradhan….
  In total one lakh Pradhan Mantri LPG Panchayats would be organized across the country in next one and half year to provide an interactive platform to the rural LPG users
  
  Participants of this Pradhan Mantri LPG Panchayat are the beneficiaries of Pradhan Mantri Ujjawala Yojana (PMUY)
  
  They have been educated on service related grievances, removing fears and misgivings about the use of LPG and quality of food prepared through it in the rural areas and tribal areas
  
  About 100 such beneficiaries- most of them women have been participated in this LPG Panchayat.
  
• No machines used for counting scrapped notes: RBI
   The Reserve Bank of India (RBI) is not using ‘counting machines’ for tallying the total number of demonetised notes of Rs 500 and Rs 1,000 in any of its offices, the central bank has said in a Right to Information (RTI) reply.
  
  Rather, it is using “sophisticated Currency Verification and Processing (CVPS) machines for checking the numerical accuracy and genuiness of the currency notes, including SBNs (Specified Bank Notes that have been scrapped)”, the RBI clarified later
  
  “These machines are way superior to the note counting machines. With a view to augmenting processing capacity, the RBI is using the available machines in two shifts and has been using some machines temporarily drawn from commercial banks after suitable modifications. The RBI is also exploring other options to augment processing capacity even further
  
  The clarification followed an RTI reply by the central bank itself wherein it had said ‘counting machines’ were “not being used” in RBI offices for the old scrapped notes.
  
  An official also clarified that the counting machines are typically very small and are mostly used in branches of commercial banks for smaller number of notes.
  
  In reply to the RTI application, the central bank had also refused to give the total number of personnel deployed for counting of the scrapped notes, saying compiling the information would “disproportionately divert” its resources.
  
  In its annual report for 2016-17 released on August 30, the RBI had said Rs 15.28 lakh crore, or 99 per cent of the demonetised Rs 500 and Rs 1,000 notes, have returned to the banking system.
  
  The central bank, in the annual report, which was for the year ended June 30, 2017, said only Rs 16,050 crore out of the Rs 15.44 lakh crore in the old high denomination notes have not returned.
  
• SEBI to reduce mutual fund schemes by half
  The Securities and Exchange Board of India’s (SEBI) mutual fund advisory panel has recommended strict definitions on how mutual funds are categorized, a move that might halve the number of schemes offered by asset managers currently.
  
  The capital markets regulator aims to ensure that an asset management company has only one product offering in each category, said two people with direct knowledge.
  
  The move will help investors cut through the clutter of 2,000 investment schemes and aid decision making, said these people. At the end of August, 42 fund houses in Indian managed Rs20.6 trillion.
  
  The mutual fund advisory panel has recommended that funds be broadly segregated into equity, debt, hybrid and thematic. In categories such as equity and debt, there would be further sub-categories such as large cap and small cap, said one of the two people.
  
  Currently, SEBI nomenclature rules for mutual funds loosely define just two aspects—whether a fund is open-ended or close-ended and whether it invests in equity or debt.
  
• Direct tax receipts increase 17.5% in April-August
  Direct taxes fetched 17.5 per cent higher receipts to the exchequer for the first five months (April-August) of the current financial year (FY18), more than what was projected for the entire financial year. However, the growth rate slowed in August.
  
  Direct tax collections, net of refunds, stood at Rs 2.24 lakh crore during the April-August period of FY18. The receipts had grown 19.1 per cent in the first four months of FY18.
  
  The government had projected 9.8 lakh crore from the direct taxes — corporation tax and personal income tax — in 2017-18, which would be 15.7 per cent higher than Rs 8.47 lakh crore in FY17. Till August, 22.9 per cent of the target has been achieved.
  
  After adjusting for refunds, the growth in corporation collections was at 18.1 per cent during the period, while personal income tax collections rose 16.5 per cent.
  
  Before refunds, corporation tax collections were up five per cent, while personal income tax receipts went up 16 per cent, highlighting corporates are still struggling to recover, even as net collections are robust due to refunds. A total of Rs 74,089 crore refunds were given by the government in this period.
  
  The direct tax kitty is crucial to the government since the goods and services tax (GST) collections net of refunds dwindled in July, the first month of its roll-out. For close to Rs 95,000-crore revenue collected so far for July, around Rs 62,000 crore has been claimed as input tax credit for taxes paid for the period before July 1. The remaining amount will be distributed between the Centre and the states.
  
• AP to allocate Rs. 100 crore for innovation
  The Andhra Pradesh government will encourage innovation, as it is the key to achieving economic growth in future and the State will allocate Rs. 100 crore for the purpose, according to Chief Minister N. Chandrababu Naidu.
  
• GoM to monitor, resolve IT challenges faced in implementation of GST
  Union Finance Minister Arun Jaitley has constituted a Group of Ministers to monitor and resolve the IT challenges faced in the implementation of Goods and Services Tax (GST). The GoM will be headed by Bihar Deputy Chief Minister Sushil Kumar Modi and assisted by the Chairman and ceo of GST Network.
  
  Besides, a Committee on Exports has also been constituted under the convenorship of Revenue Secretary Hasmukh Adhia. The committee will look into the issues of exports and recommend the GST Council a suitable strategy for helping the sector in the post-GST scenario.
  
  The committees have been set up in pursuance of the decision taken in the 21st meeting of the GST Council held on 9th September in Hyderabad.
  
• India up 2 spots on WEF Human Capital Index
  India has moved up two spots on the World Economic Forum’s (WEF) Human Capital Index 2017. The country ranks 103rd of 130 countries up from 105th the year before. Norway leads the latest rankings, followed by Finland, Switzerland, the US and Denmark.
  
  India’s poor performance on the index places it behind most other emerging economies such as Brazil (77th), Indonesia (65th) and other South Asian countries such as Sri Lanka (70th) and Nepal (98th). The country ranks even lower than Kenya (78th), Myanmar (89th) and Ghana (72nd).
  
  The WEF index measures a country’s performance on four key areas of human capital development: capacity, which is a function of past investments in education; deployment, which measures the application and accumulation of skills through work; development, which takes into account the education of the next generation of the workforce and the continued skilling of labour force, and know-how, which measures the breadth and depth of specialised skills use at work.
  
  Of the four areas, India scores the highest in development, followed by know-how. The country’s comparatively better performance on development is large because of a higher score on secondary enrollment gender gap and surprisingly on the quality of the education system.
  
  The country’s performance on the latter is based on an executive opinion survey carried out by the WEF in 2016-17, which asks participants how well does the education system in their country meets the needs of a competitive economy.
  
  On the know-how sub-index, the country fares better largely due to higher scores on economic complexity and availability of skilled employees.
  
  While the former is a measure of the degree of sophistication of a country’s “productive knowledge” that can be empirically observed in the quality of its export products, performance on the latter is based on an executive opinion survey carried out by the WEF in 2016-17.
  
• Cabinet clears bill to double tax-free gratuity to Rs 20 lakh
  In a move that will bring a cheer to private and public sector employees in the country, the government has decided to double the upper limit of tax-free gratuity payable to an employee to Rs 20 lakh. The Cabinet on 12th September approved the introduction of the Payment of Gratuity (Amendment) Bill, 2017, in Parliament.
  
  It also increased dearness allowance and dearness relief by one percentage point to 5 per cent, benefiting 5 million employees and 6.1 million pensioners.
  
  Apart from private sector employees, the amendment to the Gratuity Act, 1972, is also expected to increase the limit of gratuity of employees in public sector undertakings and autonomous government organisations not covered under CCS (Pension) Rules, and bring it at par with central government employees.
  
  Under the Gratuity Act, payment is mandatory and gratuity will be payable to an employee on termination of employment after he or she has rendered continuous service for not less than five years. It may be paid earlier in cases of death or disablement.
  
• Zero Balance Accounts come down: Finance Minister Arun Jaitley
  Finance Minister Arun Jaitley on 13th September said zero balance accounts under the Jan Dhan Yojana have come down to 20 per cent from 77 per cent previously. Mr Jaitley said 300 million accounts were opened under Prime Minister Jan Dhan Yojana (PMJDY).
  
  Launched in 2014 by Prime Minister Narendra Modi, the Pradhan Mantri Jan Dhan Yojana is aimed at providing universal access to banking facilities starting. Mr Jaitley said these Basic Banking Accounts could get overdraft facility of 5,000 rupees.
  
• Economic growth at 6.5% growth says SBI research
  The research team of State Bank of India (SBI) has pegged economic growth at 6.5 per cent for 2017-18 with a downward bias. According to research group Q2 growth numbers are likely to be muted, almost like the Q1 numbers (below 6 per cent), and the reasons are many.
  
  After growth fell to a three-year low of 5.7 per cent in the first quarter of 2017-18, the second quarter would also not maintain good growth.
  
• RBI introduce Rs 100 Coin
  The Reserve Bank of India will introduce 100 rupees coin to mark the birth centenary (hundredth anniversary) of AIADMK founder Late Dr. M G Ramachandran. On the obverse, the face of the coin will bear Lion Capitol of Ashoka Pillar in the center with Satyamev Jayate inscribed below on it in Devanagari script. On the reverse side, the portrait of Dr. MG Ramachandran will be in the center. The standard weight of the coin will be 35 grams.
  
• India, China unlikely to be ‘growth poles’ for global economy: UNCTAD report
  Effects of demonetisation and rollout of the Goods and Services Tax regime on the informal sector and reduction in pace of credit creation may affect India’s growth prospects and the country unlikely to serve as the “growth pole’’ for the global economy in the near future, a United Nations report has said.
  
  “Growth in the world’s two most populous economies - China and India - remains relatively buoyant, but the pace is slower than before the crisis and face some serious downside risks,” according to the UNCTAD’s Trade & Development report 2017 released on 14th September.
  
  The report titled ‘Beyond austerity — towards a global new deal’, further pointed out that it was absence of a robust recovery in developed countries and renewed volatility of global capital flows that have constrained economic growth in developing countries.
  
  It noted that the world economy in 2017 was picking up but not lifting off. “Growth is expected to reach 2.6 per cent, slightly higher than in 2016 but well below the pre-financial crisis average of 3.2 per cent,” it said.
  
  A combination of too much debt and too little demand at the global level has hampered sustained expansion of the world economy, the reported stated. Giving a prescription for makeover of the world economy, the report made a case for ending austerity, clamping down on corporate rent seeking and harnessing finance to support job creation and infrastructure investment.
  
  India’s growth performance depends to a large extent on reforms to its banking sector, which is burdened with large volumes of stressed and non-performing assets, and there are already signs of a reduction in the pace of credit creation, the report said.
  
  In addition, the informal sector, which still accounts for at least one third of the country’s GDP and more than four fifths of employment, was badly affected by the government’s “demonetisation” move in November 2016, and it may be further affected by the rollout of the GST from July 2017, the report added.
  
• NEFMS in place to ensure MGNREGA workers receive their wages on time
  Government has said that National Electronic Fund Management System has been put in place to ensure that MGNREGA workers receive their wages on time. Rural Development Ministry said, almost 96 per cent of wages are being paid directly to the beneficiaries’ bank accounts.
  
  It said, intense monitoring and fixing accountability for delays in payments has shown significant result in the current financial year. The Ministry said, around 85 per cent of the wages are being paid to the workers in time and it is almost double the percentage in comparison with last financial year.
  
  Apart from electronic fund management system, Aadhaar seeding, Geo tagging of assets and strengthening of Social Audit System are some steps that have been taken towards bringing in more transparency and accountability in the programme implementation.
  
• Corporate Affairs Ministry signed agreement with CBDT
  Corporate Affairs Ministry and Central Board of Direct Taxes (CBDT) signed a Memorandum of understanding (MoU) for automatic and regular exchange of information to curb the menace of shell companies, money laundering and black money in the country.
  
  The MoU enables sharing of specific information such as PAN number data in respect of corporates, Income Tax returns of corporates, financial statements filed with the Registrar by corporates, audit reports, and statements of financial transactions received from banks relating to corporates.
  
• Current account deficit increases to 2.4% of GDP in first quarter: RBI
  Current account deficit (CAD) of the first quarter of this fiscal widened to 2 point 4 per cent of gross domestic product, or 14.3 billion dollars, as imports pushed the trade deficit. It was 0.1 per cent or 401 million dollars in the same period last year.
  
  On a sequential basis, the CAD also widened from 3.4 billion dollars or 0.6 per cent of GDP in the fourth quarter of last fiscal. It is now at its highest level since the June quarter of 2013.
  
  RBI said in its release that widening of the year-on-year deficit was primarily on account of a higher trade deficit, which was at 41.2 billion dollars, brought about by a larger increase in merchandise imports relative to exports.
  
  However, Balance of payments for the April-June quarter increased to 11.40 billion dollars from 6.969 billion dollars in the year ago period and net foreign direct investment in the reporting quarter almost doubled from its level at 7.2 billion dollars in the same period last year.
  
  In April-June quarter, there was growth of 11.4 billion dollars to the foreign exchange reserves as compared to 7 billion dollars in the year-ago quarter and 7.3 billion dollars in the fourth quarter of fiscal 2017.
  
• No information on black money removed by note ban: RBI to Parliament panel
  The RBI has told a parliamentary panel that it has "no information" on how much black money has been extinguished as a result of demonetization of Rs 500/1,000 notes or about unaccounted cash legitimised through exchange of currency post note ban.
  
  Stating that an estimated Rs 15,280 crore in junked notes has come back "subject to future corrections based on verification process", the Reserve Bank also said it has "no information" whether demonetization is being planned to be implemented at regular intervals.
  
  The RBI has been facing flak from the opposition parties for demonetization and delay in disclosing figures on the junked notes, even as the government has maintained that the November 8, 2016 decision to ban Rs 500/1,000 notes in circulation at that time has helped in curbing black money, among other benefits.
  
  Last week in its annual report, the RBI finally made public the details of the junked notes that have come back into the system putting the figure at Rs 15,280 crore. The same figure has now been shared with the Parliamentary Standing Committee on Finance.
  
  Replying to queries from the panel, the RBI said the verification for authenticity and numerical accuracy are still on, while some of the specified bank notes (old Rs 500/1,000 notes) which were accepted by banks and post offices are still lying in currency chests.
  
  The central bank also informed the panel that the completion of the process of verification will take time in view of the large volume involved.
  
  The process is "going on in full swing" with most RBI offices working in double shifts and with the help of high-end verification machines, the central bank said.
  
  To a query on how much amount of black money has been extinguished as a result of demonetization, the central bank said, "The RBI has no information in this regard."
  
  The RBI gave similar reply to another question on how much unaccounted money has been legitimized through exchange of junked currency.
  
  The central bank did not give any direct reply on adverse impact on the informal and unorganized sector, as also about the GDP loss. The RBI said the deceleration in overall economic growth figures for 2016-17 had begun "much before demonetization" due to weakness in industrial and services sector.
  
  In its annual report for 2016-17, the RBI had disclosed that all but about 1 per cent of the scrapped currency notes have come back into the system.
  
  The government had on November 8, banned old Rs 500 and Rs 1,000 notes in an attempt to weed out black money in the country. The old notes were allowed to be deposited in banks, with unusual deposits coming under income tax scrutiny.
  
  The government replaced old Rs 500 notes with new ones, but no replacement for Rs 1,000 notes has been made. Instead, a new Rs 2,000 note was introduced post note ban.
  
• Finance ministry writes to heads of PSU banks on consolidation
  The finance ministry has written letters to all heads of PSU lenders informing them the government's decision to set up a ministerial panel to facilitate consolidation in the public banking space. A formal communication to CEOs of the banks from the Department of Financial Services last week has set in motion the consolidation process
  
  The government has been nudging the state-owned lenders to go for merger so that there can be fewer and stronger banks.
  
  The ministry wants banks to undertake an internal exercise for the best match and come up with the merger idea for the alternative mechanism (AM) set up for the purpose.
  
  The banks should analyse regional balance, geographical reach, IT compatibility, financial burden and human resource transition while firming up the merger proposal for the ministerial panel.
  
  Last month, the Union Cabinet decided to set up the alternative mechanism to oversee proposals for expeditious consolidation of public sector banks (PSBs) so as to create larger and stronger lenders.
  
  The proposals received from banks for in-principle approval to formulate schemes of amalgamation will be placed before the panel. To fast-track consolidation, the government has exempted mergers of nationalised banks from seeking fair trade watchdog CCI's approval.
  
  This exemption will be applicable for ten years and comes at a time when several experts and even policymakers have been talking about the need for consolidation in the banking sector, especially among state-owned banks.
  
  The merger of associate banks with SBI was slightly easy because they were subsidiary of the largest lender, the official added.
  
  Earlier this year, the government had approved the merger of SBI's five associate banks with the parent. In March, the Cabinet also approved the merger of Bharatiya Mahila Bank (BMB) with SBI. Following this, the number of public sector banks declined to 21 from 27.
  
• NITI Aayog launched National Nutrition Strategy launched
  NITI Aayog has launched National Nutrition Strategy on 5th September. It lays the roadmap for targeted action to address India's nutritional needs. NITI's national nutrition strategy calls for convergence between four proximate determinants of nutrition - food, health services, income and water.
  
  Currently, there is also a lack of real time measurement of these determinants, which reduces the capacity for targeted action among the most vulnerable mothers and children.
  
  The strategy will bring nutrition to the centre-stage of the National Development Agenda. The Nutrition Strategy framework envisages a Kuposhan Mukt Bharat - linked to Swachh Bharat and Swasth Bharat.
  
  The strategy enables states to make strategic choices, through decentralized planning and local innovation, with accountability for nutrition outcomes. NITI Aayog said supply side challenges often overshadow the need to address behavioural change efforts to generate demand for nutrition services.
  
  This strategy, therefore, gives prominence to demand and community mobilisation as a key determinant to address India's nutritional needs.
  
• ICAR to undertake major research works on agriculture with World Bank fund
  The Indian Council for Agricultural Research ICAR will be undertaking major research works on agriculture this year with the World Bank fund of 1100 crore rupees.
  
  Deputy Director General of the national apex agricultural research body Narendra Singh Rathore informed this in the convocation function at the Tamil Nadu Veterinary and Animal Sciences University in Chennai on 6th September.
  
  He said the funds will be allocated to ten each of the premier agricultural and veterinary universities in the country. Mr Rathore said, though India ranks first in milk production in the world, the milk yield per animal is very low as compared to international standards.
  
  He called for research in making available enough fodder for cattle as it remains an area of concern now and also to address the climate change challenges.
  
• Amazon opens country's largest fulfillment centre in Hyderabad
  American e-commerce company Amazon on 7th September opened its largest fulfillment centre (FC) in the country at the GMR-led Rajiv Gandhi International Airport in Hyderabad, even as the country prepares for the upcoming festive season.
  
  The new facility has a carpet area of around 4 lakh square feet, along with a storage space of close to 2.1 million cubic feet. This is Amazon's fifth fulfilment centre in Telangana, thereby increasing the firm's overall storage capacity to 3.3 million square feet in the state. The retail major plans to facilitate faster deliveries in the region.
  
  In May, the company said it would double its storage capacity in India, from its existing figure of 13 million cubic feet, in the next few months. At present, Amazon owns around 41 FCs across the country.
  
  Retail major is also looking to expand its grocery sales initiative to over 20 cities across the country this year, besides making improvement in its regular business of selling consumer durables, electronic products and mobile phones, among others through its online platform. It had recently opened an FC in Haryana with a 1.3 million cubic feet of storage capacity.
  
• Pradhan Mantri Mudra Yojana generates 5.5 crore jobs, says report
  The Pradhan Mantri MUDRA Yojana (PMMY), which provides access to institutional finance to small business units, has helped in creating 5.5 crore jobs.
  
  According to a report, industrialised states like Karnataka, Tamil Nadu and Maharashtra have been the biggest beneficiaries of the PMMY.
  
  The report by a think tank SKOCH said in New Delhi that ,so far, Rs 3.42 lakh crore loan has been disbursed to over 8 crore people under the scheme, mostly small entrepreneurs.
  
  The MUDRA scheme was launched by Prime Minister Narendra Modi on April 8, 2015 with an objective to fund the unfunded. MUDRA loan is available for non-agricultural activities for up to Rs 10 lakh. Activities allied to agriculture, such as dairy, poultry, bee-keeping etc, are also covered.
  
• Union Government announces Rs 3,700 crore plan to provide Wi-Fi to gram panchayats
  The Union Government planned to Rs 3,700-crore plan in an attempt to cover nearly 5.5 lakh villages with Wi-Fi facility by March 2019. The government expects to start broadband services with about 1,000 megabits per second (1 Gbps) across 1 lakh gram panchayats by the end of this year. Earlier, the plan was to provide 100 megabits per second connectivity to village panchayats, but under the new BharatNet, the broadband speed has been enhanced 10 times to 1 gigabit per second at every panchayat level.
  
• GST Council reduces tax rate on about 30 items
  The Goods and Services tax (GST) Council on 9th September extended the deadline for filing the first set of returns by a month to October 10.
  According to the Union Finance Minister Arun Jaitley:
  • GST rate on about 30 items like roasted gram, idli/dosa batter, oilcakes, raincoats, rubber bands have also been reduced.
  • Handicraft artisans with annual earnings of upto 20 lakh rupees will not require GST registration.
  • 5 per cent GST will have to be paid by firms having registered trademark as on May 15, 2017 for commodities.
  • Small petrol, diesel and hybrid cars will see no cess hike while mid-segment cars will attract 2 per cent additional cess, large size cars 5 percent and SUV 7 per cent.
  • Khadi sold through KVIC stores will be exempted from GST.
  • Overall GST collection has been robust with over 70 per cent of eligible taxpayers filing returns of about 95,000 crore rupees.
  • 21 lakh new traders and dealers have been added to the tax payer