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February 2017 Economic Affairs

  • RBI allows multilateral FIs to invest in Masala Bonds 
    The Reserve Bank of India (RBI) has permitted multilateral and regional financial institutions (FIs) to invest in ‘masala bonds’, rupee denominated bonds issued by Indian entities. This decision will allow multilateral agencies like Asian Development Bank (ADB) and BRICS led New Development Bank (NDB) to invest in these bonds. 

    The Masala bonds refer to rupee-denominated bonds through which Indian entities can raise money from foreign markets in rupee, and not in foreign currency. Basically, they are debt instruments that are typically used by corporate entities to raise money from investors. 


  • India becomes 12th largest holder of US govt. securities
    India became the 12th largest holder of US government securities at the end of 2016, with exposure worth $118.2 billion. However, it is slightly lower than the number in November which was at $118.7 billion. With holdings worth $1.09 trillion, Japan remained the largest holder of these securities followed by China with exposure to $1.06 trillion. 


  • TCS announces Rs. 16,000 crore share buyback, India’s biggest
    In a move that is bound to put pressure on its peers Infosys and Wipro, Tata Consultancy Services on 20th February announced a plan to buy back up to 5.61 crore equity shares for an aggregate price not exceeding Rs. 16,000 crore. 

    This is biggest buyback in the history of India’s capital markets, surpassing Reliance Industries’ share repurchase of Rs. 10,400 crore in 2012. 


  • Government notifies protocol amending tax treaty with Israel
    Government has notified the protocol amending the India-Israel tax treaty to provide for exchange of information on tax matters including bank details to check flow of black money. The amended treaty provides that information received from Israel in respect of an Indian resident can be shared with other law enforcement agencies like the Enforcement Directorate and CBI. 

    According to a Revenue Department notification, the amended treaty provides for levy of capital gains tax in India on sale of shares or interest in a partnership, trust or other entity. It also provides for 'Limitation of Benefits' Article as an anti-abuse provision to enable enforcement of domestic law in case of misuse of the treaty. 


  • Savings due to Direct Benefit Transfer touches Rs 50,000 cr
    Savings due to Direct Benefit Transfer over the last three years have touched Rs 50,000 crore as on December 31, 2016. This amount is equivalent to the subsidy paid out under DBT in this financial year, implying nearly a year's subsidy was saved. Savings figure is expected to significantly rise further in the next financial year. 


  • Cabinet approves capacity hike for solar parks & projects 
    The Union Cabinet decided to enhance solar power capacity from 20,000 Mega Watt to 40,000 Mega Watt for development of solar parks and ultra mega solar power projects. According to the Power Minister Piyush Goyal, the enhanced capacity will ensure setting up of at least 50 solar parks each with a capacity of 500 Mega Watt and above in various parts of country. 

    Solar parks and ultra mega solar power projects will be set up by 2019-20 with government's support of 8,100 crore rupees. This will lead to abatement of around 55 million tonnes of CO2 per year over its life cycle. The Cabinet Committee on Economic Affairs (CCEA) approved investment proposal for generation component of Arun-3 Hydro Electric Project in Nepal by SJVN Limited. 


  • IMF: Indian economy remains a bright spot in global landscape
    The International Monetary Fund has said the Indian economy is growing strongly and remains a bright spot in the global landscape. It said growth is expected at 6.6 percent in this fiscal year and at 7.2 percent in the following year. 

    In addition, continued fiscal consolidation, by reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability. Noting that the government has made significant progress on important economic reforms like GST which will enhance the efficiency of production and movement of goods and services across Indian states. 


  • Govt reduces number of registers under labour laws to 5
    The government has reduced the number of registers to be maintained under labour laws to five from 56 for promoting ease of doing business. These registers are related to details of employees, their salaries, loans, attendance and others. 

    According to the Ministry of Labour, the government has simplified the maintenance of Labour registers of about 5.85 crore establishments in agriculture and non-agriculture sectors. Out of this, 4.54 Crore establishments are in non-agricultural sector. 

    The Ministry has also simultaneously undertaken to develop a software for these 5 common Registers. After its development, the same will be put on the Shram Suvidha Portal of the Ministry for free download with an aim to facilitate maintenance of those registers in a digitized form. 


  • AP govt signs MoU with Visa, Thomson Reuters
    The Andhra Pradesh government has signed MoUs with VISA and Thomson Reuters to bring them to Andhra Pradesh. The MoUs were signed in Mumbai on 22nd February in the presence of Chief Minister N Chandrababu Naidu. 

    The two companies will set up establishments in the Fintech Valley at Rushikonda. In addition to VISA and Thomson Reuters, Fitech Valley here has so far signed 13 MoUs with various fintech firms. Thomson Reuters will build fintech initiatives using government-provided infrastructure and university resources. 


  • FDI inflow zooms 18 per cent to $46 billion in 2016: DIPP
    Foreign direct investment in the country grew 18 per cent in 2016, to 46 billion dollars, according to data released by the Department of Industrial Policy and Promotion. 

    The sectors which attracted the highest foreign inflows include services, telecom, trading, computer hardware and software, and automobiles. The bulk of FDI came in from Singapore, Mauritius, the Netherlands and Japan. 


  • India, ADB ink pact for industrial corridor
    India and Asian Development Bank have signed a $375 million pact for loans and grants to develop 800-km Visakhapatnam-Chennai Industrial Corridor, which is the first phase of a planned 2,500-km East Coast Economic Corridor. 

    ADB had last September approved $631 million in loans and grants for the corridor. The ADB said in a statement that it approved loans comprising a $500 million multitranche facility. 


  • SEBI to amend norms governing stock exchanges
    Capital market regulator Sebi on 11th February said the norms governing stock exchanges and other market infrastructure institutions would be reviewed and amended after a public consultation process. Sebi's board discussed the review of regulations and relevant circulars pertaining to market infrastructure institutions (MIIs) — stock exchanges, depositories and clearing corporations. 

    The Jalan committee had come out with extensive recommendations on how MIIs such as stock exchanges should be owned, governed and run, based on which Sebi had overhauled its regulations five years ago, including by way of allowing stock exchanges to get listed but only on another exchange's platform. 


  • Retail inflation slows to 3.17% in January
    Retail inflation eased in January to 3.17% on the back of a sharp slowdown in food price inflation. Growth in the consumer price index (CPI) slowed from the 3.4% seen in December 2016, extending the streak of easing retail inflation to six months. 

    The food and beverages category registered an inflation rate of 1.3% in January, down from the 2% witnessed in December 2016. Food price gains have also been easing for six consecutive months. 

    Inflation in the fuel and light segment slowed to 3.4% in January from 3.7%, while the housing segment saw inflation quicken marginally to 5.02% from 4.98% over the same period. According to Care Ratings, CPI inflation is expected to accelerate 3.5-3.6% in the next couple of months. 


  • India remains attractive investment destination
    Foreign direct investment into the country surged by 60% to USD 4.68 billion in November 2016. The FDI stood at USD 2.93 billion in November 2015. India received maximum FDI from Singapore, Mauritius, the UK, the US, the Netherlands and Japan. 

    Cumulatively, India attracted USD 32.49 billion foreign inflows in April-November period of the current fiscal as against USD 24.81 billion in the same period previous year. 

    The main sectors which have attracted foreign inflows during the eight months period of 2016-17 include services, telecom, computer hardware and software, electrical equipment and information & broadcasting. Foreign Direct investments are crucial for the infrastructure development in the country. 


  • Cabinet approves merger of five subsidiary banks with SBI
    Cabinet on 15th February approved merger of five subsidiary banks with State Bank of India. According to the Finance Minister Arun Jaitley, the merger is likely to result in recurring saving, which is estimated at more than one thousand crore rupees in first year. 


  • Food grain production to reach record 272 million tonnes in 2016-17
    The total food grain production in the country has been pegged at record 272 million tonne. It is higher by 6.94 million tonnes than the previous record production of 265 million tonnes in 2013-14. Agriculture Ministry in its 2nd advance estimates of production of major crops for 2016-17 said that the record is going to be made due to good rainfall and various policy initiatives taken by the government. 

    Total production of rice is estimated at record 108.86 million tonnes which is also a new record. This year’s rice production is higher by 2.21 million tonnes than previous record production. 

    Wheat production, estimated at 96.64 million tonnes. As a result of significant increase in the area coverage and productivity of all major pulses, total production of pulses is estimated to be 22.14 million tonnes which is higher by 2.89 million tonnes than the previous production. 

    With an increase of 8.35 million tonnes over the previous year, total oilseeds production in the country is estimated at record level of 33.60 million tonnes. However the production of sugarcane is estimated to be around 310 million tonnes, lower by 38 million tonnes in last year. 


  • IMF opens technical centre 
    The International Monetary Fund (IMF) has opened a first-of-its-kind South Asia Training and Technical Assistance Centre (SARTTAC) in New Delhi for economic capacity building in South Asia. SARTTAC is financed mainly by its six member South Asia countries (mentioned above) with additional support from Australia, South Korea, European Union and United Kingdom. 

    It will work to support local member countries of South Asia viz. India, Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka to build human and institutional capacity and implement policies for growth and poverty reduction. 


  • Government launches TAMRA App
    The government has launched TAMRA mobile application and portal to ensure transparent award of statutory clearances for mining operations. 

    The government has prepared an ambitious plan to put 280 mines with mineral reserves worth over Rs 10 lakh crore for bidding to increase the share of mining in Indian economy. TAMRA was simultaneously launched across 12 mineral rich states, through video-conferencing. 


  • RRBs can now lend up to Rs. 2 lakh against gold
    The Reserve Bank of India on 16th February doubled the quantum of loan that Regional Rural Banks (RRBs) can give against security of gold/ gold ornaments to Rs. 2 lakh with bullet repayment option. 

    Such loans will be subject to the conditions that the period of the loan cannot exceed 12 months from the date of sanction; interest will be charged on the amount at monthly rests but will become due for payment along with principal only at the end of 12 months from the date of sanction. 

    Further, RRBs are required to maintain a Loan to Value (LTV) ratio of 75 per cent (that is, if the value of gold ornaments pledged with a bank is Rs. 1 lakh, then it will give a loan of Rs. 75,000) on the outstanding amount of loan, including the interest on ongoing basis, failing which the loan will be treated as a non-performing asset. 

    If the gold is of less than 22 carat purity, the bank has to translate the collateral into 22 carat and value the exact grams of the collateral. In other words, jewellery of lower purity of gold will be valued proportionately. 


  • 209 MoU signed between in ‘Momentum Jharkhand’
    On 17th February 209 MoU were signed between different companies at the closing day of the Two-day Global Investors Submit - branded as "Momentum Jharkhand" at the Khelgaon venue in Ranchi. 

    Due to these MoUs, investment worth three lakhs, 39 thousands and 87 crores rupees will come in the state. Direct job for two lakhs nine thousands and 176 people will be created, while indirectly about four lakhs (392150) employment opportunities will be created. 

    The maximum number of MoU , out of total 209, were signed in mining sector -which is 121. Next was in the IT and e-governance, with 30 MoU while Urban development and housing was at third with 17 MoU. 


  • UDAN scheme to increase number of airports by 50
    The implementation of the regional air-connectivity scheme, UDAN, will see the number of operational airports in the country shoot up by over 50. 

    There are 75 small operational airports in the country, and this number will increase to over 125 with the successful implementation of UDAN (Ude Desh ka Aam Nagrik) the new scheme through which the government hopes to make flying viable to Tier II and III cities. 


  • AP signs MoUs for 12 textile units
    During the recent CII partnership summit in AP 12 MoUs were signed by the State Government with different companies for setting up 12 apparel units in the State entailing investment of Rs. 963 crores in all and generating 46,000 jobs. 

    These 12 projects will come up in the next one to one-and-a-half years. Four of the units will come up in the Brandix apparel park, including two by Chinese companies, five units in Anantapur district and the remaining in Chittoor district. 


  • GST Governing council clears law for compensating states for loss of revenue
    Goods and Services Tax Governing Council has cleared the law for compensating states for loss of revenue after GST is implemented. The Council met in Udaipur on 18th February to give approval to the GST Draft Law under the chairmanship of Union Finance Minister Arun Jaitley. 

    The council members discussed all the aspects of the compensation bill and approved it unanimously. The bill will be put before the cabinet for approval. Finally, it will be tabled in the current Budget Session of Parliament for passing. 

    The Council also discussed the final drafts of legislations on the central GST, state GST and integrated GST. All the states have agreed over the most of the points of the model GST law. 


  • Telangana launches country’s first social innovation hub
    The Telangana government launched India's first social innovation centre, the Kakatiya Hub for Social Innovation, in Nizamabad on 5th February. Telangana IT Secretary Jayesh Ranjan made the announcement at the one-day Development Dialogue, an international social entrepreneurship ecosystem conference hosted by Kakatiya Sandbox. 

    The Kakatiya Hub for Social Innovation, funded by the state government and implemented through Kakatiya Sandbox, will function like a rural incubator to encourage entrepreneurship at the grassroots level. 

    Indian-American entrepreneur Raju Reddy, co-founder of Kakatiya Sandbox, ‘Desh’ Deshpande, founder of Deshpande Foundation, Redbus founder Phanindra Sama, who is also the co-founder of Kakatiya Sandbox. The move is expected to create a model for promoting entrepreneurs in rural and semi-urban areas. The objective of the Sandbox is to encourage problem-solvers. 


  • Supreme Court orders seizure of Sahara’s Rs. 39,000cr Aamby Valley property
    Unhappy with Sahara’s “road map” to repay duped investors by July 2019, the Supreme Court attached the group’s crown jewel Aamby Valley property in Maharashtra as a foolproof measure to ensure recovery of the money the conglomerate owes investors. 

    Earlier, the Special Bench of Justices Dipak Misra, Ranjan Gogoi and AK Sikri had ordered Sahara to place on record a list of unencumbered properties, which will be put up for public auction to recover over Rs. 14,000 crore that the group owes as the principal sum towards its debt. A lawyer for capital market regulator SEBI submitted that Sahara’s total liability stood at Rs. 36,326 crore. 


  • Telangana gets investment commitment for Rs. 3,382 cr. 
    A memorandum of understanding to work towards setting up of a first of its kind Rs. 1,000-crore Life Sciences Infrastructure Fund of the country in Telangana as well as a slew of strategic partnerships and investments, together valued at Rs. 3,382 crore, was announced at the 14th edition of Bio Asia, a premier biotechnology and life sciences forum, that got underway on 6th February in Hyderabad. 

    The MoU, between the State Government and PE firm Cerestra, will explore the creation of a Life Sciences Infrastructure Fund that will be used to provide sophisticated modular plug-and-play infrastructure for pharma/biotech/medical devices industry. 


  • Lok Sabha passes bill to ensure wage payments through e-transfer and Cheque
    The Lok Sabha on 7th February passed the Payment of Wages (Amendment) Bill, 2017 which seeks to enable employers to pay wages to workers through cheque or directly crediting to their accounts. The bill, moved by Labour and Employment Minister Bandaru Dattatreya in the House, will replace the Ordinance promulgated by the President on 28th December 2016. 

    The amendment enables the Centre as well as the state governments to notify industries where employers will pay wages either through cheque or crediting that into workers' bank accounts. 


  • Lok Sabha passes Specified Bank Notes Bill
    The Lok Sabha on 7th February passed the Specified Bank Notes (Cessation of Liabilities) Bill, 2017 which provides for holding, transfer and receiving of old 500 and 1000 rupee notes a criminal offence which bill seeks to end the liability of RBI and the government on the currency notes demonetised in November 2016. 

    The bill states that the government took the demonetisation decision on the recommendations of the RBI's central board to eliminate unaccounted money and fake currency notes from the financial system. 


  • RBI keeps kept policy rate unchanged
    The Reserve Bank of India on 8th February maintained status quo on its key rates in its monetary policy review. Repo rate, and reverse repo rates are stands unchanged at 6.25 per cent, and 5.75 per cent. But the Reserve Bank shifted its monetary policy stance from 'accommodative' to 'neutral.' 

    The RBI said it is committed to bringing headline inflation closer to 4 per cent on a durable basis. The RBI also revised down its GDP growth forecast to 6.9 per cent for the current fiscal, from 7.4 per cent earlier. 

    But it added that growth will pick up sharply to 7.4 per cent in the next fiscal. The central bank also decided to form a separate enforcement department for stricter enforcement of its regulatory and supervisory actions. 


  • RBI to set up panel to strengthen security
    In a bid to strengthen cyber security system, the Reserve Bank of India (RBI) on 8th February decided to set up an inter-disciplinary panel on cyber security to examine various threats and suggest measures to deal with it. 

    The panel will review the threats inherent in the existing or emerging technology on an ongoing basis, it said. It will also study adoption of various security standards/protocols and also act as the interface with stakeholders. The decision was taken in the wake of biggest-ever breach of debit card data, as many as 3.2 million cards were compromised 2016. 


  • Aadhar made mandatory for PDS shops
    The government has made Aadhaar card mandatory for receiving subsidised food grains from all PDS shops. Department of food and public distribution has issued a notification this regard which requires individual beneficiaries having PDS cards to furnishing Aadhaar number or undergo Aadhaar authentication to receive subsidies under national food security Act. 

    This condition will also applicable for all new beneficiaries. Those who do not have Aadhaar number or not enrolled for Aadhaar can make application Aadhaar enrollment by 30th of June this year. 


  • Rural areas have relatively higher poverty ratio, says Govt
    The government on 9th February said rural areas of the country have relatively higher poverty ratio and unemployment rate and lower literacy level. In a written reply in the Lok Sabha, the Minister of State for Rural Development Ram Kripal Yadav said in terms of health indicators like, Infant Mortality Rate also rural areas are lagging. 

    According to Yadav, the Ministry of Rural Development is implementing several schemes including Mahatma Gandhi National Rural Employment Guarantee Act, Deendayal Antyodaya Yojana - National Rural Livelihood Mission, Deen Dayal Upadhyay - Gramin Kaushalya Yojana to bring about overall improvement in the quality of life of the people in the rural areas. 


  • Rs. 1,000-cr bonds planned to fund Amaravati capital development
    The Amaravati Capital Development Authority, headed by Andhra Pradesh Chief Minister N Chandrababu Naidu, has decided to float bonds to the tune of Rs. 1,000 crore for development of infrastructure in the capital city along the Krishna river banks. 


  • Govt sets up task force to monitor action taken against deviant shell companies
    Government on 10th February set up a task force to monitor action taken against deviant shell companies by various agencies. Shell companies are those companies which do not conduct any operations and indulge in money laundering in India. 

    The task force has been set-up under co-chairmanship of Revenue Secretary and Corporate Affairs Secretaries with members from various regulatory Ministries. A decision in this regard was taken at a meeting held in Prime Minister’s Office along with senior officers of various departments to review functioning of shell companies. 


  • Central Board of Direct Taxes signed 4 Unilateral Advance Pricing Agreements
    The Central Board of Direct Taxes (CBDT) on 6th February 2017 signed four Unilateral Advance Pricing Agreements (UAPAs) as part of the Advance Pricing Agreement Scheme. The four UAPAs signed pertain to the manufacturing, financial and information technology sectors of the economy. 

    The international transactions covered in these agreements include contract manufacturing, information technology enabled services and software development services. With the signing of these four APAs, the total number of APAs entered into by the CBDT has reached 130. This includes 8 bilateral APAs and 122 Unilateral APAs. 

    An APA is an agreement between a taxpayer and the tax authority determining the transfer pricing methodology for pricing the tax payer’s international transactions for future years. An APA provides certainty with respect to the tax outcome of the tax payer’s international transactions. An APA can be one of the three types - unilateral, bilateral and multilateral. 

    A Unilateral APA is an APA that involves only the taxpayer and the tax authority of the country where the taxpayer is located. 


  • AP Singh is interim head of Postal Bank
    India Post Payments Bank (IPPB), floated by the postal department, has received Reserve Bank of India’s final nod to commence commercial operations. The Centre has appointed AP Singh, who was earlier Joint Secretary in the Department of Investment and Public Asset Management, as the interim Managing Director and CEO of IPPB. Singh was also in the founding team of the Unique Identification Authority of India. 

    As a differentiated bank, IPPB will confine its activities to acceptance of demand deposits, remittance services and other specified services. It can accept deposits up to Rs 1 lakh per account from individuals. India Posts Payments Bank has been set up as a company, wholly-owned by the government. 

    In 2015, the RBI had granted ‘in-principle’ approval to 11 entities, including the Department of Posts, to set up payments bank. Since then, three companies/consortia had backed out and dropped their plans. Of the remaining eight, Airtel has been first off the block to launch its payments bank with the promoters committing to an initial investment of 3,000 crore. 


  • HPCL, GAIL ink pact with Andhra Pradesh govt for Rs 40k-crore project
    Hindustan Petroleum Corp (HPCL) and GAIL India have signed an agreement with the Andhra Pradesh government for setting up a Rs 40,000-crore petrochemical plant in the state. The 50:50 joint venture will set up a 1.5-million tonnes ethylene derivatives plant, which will produce a wide range of petrochemical raw materials for the manufacture of detergents, paints and coatings, and adhesives. 

    The plant will be set up at the Petroleum, Chemical and Petrochemicals Investment Region (PCPIR) sites identified by the state government at Kakinada. 

    Further, in another MoU, Aditya Birla group plans to invest `7,000 crore in the next two years in Andhra Pradesh on expanding existing businesses, said Kumar Mangalam Birla, chairman. The company already has investments worth Rs 10,000 crore in the state across sectors like telecom, retail and cement. 


  • RBI lifts cash withdrawal limits from current accounts, ATMs
    Reserve Bank of India has lifted the per day cash withdrawal limits from current accounts, cash credit accounts and overdraft accounts with immediate effect on 30th January. In the same order, the RBI said that the limits placed on cash withdrawals from ATMs would be lifted from February 1. 

    This means the saving accounts holders would be able to withdraw Rs. 24,000 at one go using ATMs on a single day. But the weekly withdrawal limit from savings accounts remains Rs. 24,000. 


  • Idea Cellular-Vodafone confirm merger talks
    Idea Cellular and Vodafone confirmed on 30th January that the two companies are exploring a merger of business operations which would create the country's biggest telecom company, ahead of Bharti Airtel. Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India. 


  • Economic Survey pegs India's growth at 6.75-7.5% in next fiscal
    The Government expects that the GDP growth to be in the range of 6.75 percent to 7.5 per cent during 2017-18 financial year. The Economic Survey 2016-17 which was tabled in Parliament by Finance Minister Arun Jaitley also said, India would remain fastest growing major economy in the world. 

    The survey pegs GDP growth rate at constant market prices for the current year 2016-17 at 7.1 per cent. It also said, Agriculture sector is projected to grow at 4.1 per cent in the current year which is up from 1.2 per cent in 2015-16. 

    The survey asked the government to remain vigilant to prevent spike in prices of items like pulses, sugar, milk, potatoes and onion. The survey sees fiscal windfall from Pradhan Manttri Garib Kaalyan Yojan and low oil prices. 

    The Survey admits that demonetisation has had short-term costs but holds the potential for long-term benefits. Early evidence suggests that digitalization has increased since demonetisation. Additionally, remonetisation will ensure that the cash crunch is eliminated by April 2017. 

    According to the survey, growth in the industrial sector is estimated to moderate to 5.2 per cent in 2016-17 from 7.4 per cent the previous year. It also called for cut not just in individual income tax rates and a timetable for reducing the corporate taxes but also for widening the net to progressively encompass all high incomes. 


  • Eight core industries grow by 5.6% in December
    Eight core industries register a growth of 5.6% in December 2016 on the back of healthy output recorded by refinery products and steel. Eight infrastructure sectors are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. 

    The core sectors, which contribute 38% to the total industrial production, expanded 5% in April - December 2016 compared to 2.6% growth in the same period last financial year, according to data released by the commerce and industry ministry. 


  • India ranks fourth globally in wind power installation: Economic Survey
    India has attained the fourth position globally in installed wind power capacity after China, US and Germany as a result of various steps in the "right" direction, according to the Economic Survey. 

    With the legal framework in place for the International Solar Alliance (ISA), the brainchild of Prime Minister Narendra Modi and launched during the UN climate summit in Paris, ISA will be a "major" international body headquartered in India, it added. It said that currently, India's renewable energy sector is undergoing transformation with a target of 175 GW of renewable energy capacity to be reached by 2022 

    As on October 31, 2016, India achieved 46.3 GW grid-interactive power capacity, 7.5 GW of grid-connected power generation capacity in renewable energy, and small hydro power capacity of 4.3 GW. In addition, 92,305 solar pumps were installed and Rs 38,000 crore worth of Green Energy Corridor is being set up to ensure evacuation of renewable energy. 


  • Try biometric attendance to tackle teacher absenteeism: Survey
    The Economic Survey has cited teacher absenteeism and shortage of professionally qualified teachers as some of the key reasons for low quality primary education. It has suggested biometric attendance system that would be monitored by local communities and parents. 

    The Survey said, despite increase in spending on Sarva Shiksha Abhiyan budget over the years from 35 per cent in 2011-12 to 59 per cent in 2014-15, teacher absenteeism and the shortage of professionally qualified teachers remain an issue to be addressed


  • Fiscal deficit reaches 94% of the budget estimate
    Fiscal deficit in the first nine months of 2016-17 touched 93.9 per cent of the Budget estimate. The fiscal deficit had stood at 87.9 per cent in the corresponding nine months a year ago. The fiscal deficit is the gap between expenditure and revenue. 

    According to data released by the Controller General of Accounts, tax revenue was 71.4 per cent of the full-year budget estimate. Total expenditure, Plan and Non-Plan, was 74(point)3 per cent of the government's full-year estimate. The revenue deficit during April-December 2016 stood at 100(point)1 per cent of the budget estimate. 


  • Arun Jaitley presented union budget
    Union Finance Minister Arun Jaitley introduced budget on 1st February, for the financial year 2017-18. The highlights of budget are; reduction of tax rates to 5% for income of Rs 2.5-5 lakh, 10% surcharge on people earning between Rs 50 lakh-1 cr, 15% surcharge on annual income above Rs 1 cr to continue, ban on cash transactions above Rs 3 lakh, ban on accepting cash donation beyond Rs 2,000 per individual by political parties. 

    It also proposed to abolish FIPB, creation of Payment regulatory Board under aegis of RBI, listing of railway companies, waiving of service charge on IRCTC ticketing booking, implementation of GST and Aadhaar based payment methods, creation of rail security fund, further reduction of fiscal deficit to 3.2%, consolidation of all public sector oil majors, reduction of corporate tax on SMEs. 

    Sector and scheme wise allocation are as follows, Rs. 48, 000 cr for MNREGA, 10 lakh crore farm credit target, infrastructure investment of 3.96 lakh crore, 1.84 lakh crore for women and child development, 2.74 lakh crore for defence, 2.80 lakh crore on social sector, 1.87 lakh crore for rural, agri and allied sectors, 29, 000 crore for PMAY scheme, 2.44 lakh crore for MUDRA scheme and 2.41 lakh crore for infrastructure development. 


  • 12% increase in social sector schemes
    In all, the total spend of the government on 28 core social sector schemes that impact the rural and social sector went up by 12.14 % from Rs 2.46 lakh crore in FY16-17 to Rs 2.80 lakh crore budgeted for FY17-18. The health-related schemes enjoyed one of the highest increases in terms of allocations on the social front and the housing programme did on the rural front. 

    The Pradhan Mantri Gram Sadak Yojna for rural roads which has done relatively well (average per day construction was 114 kilometres against target of 133 kilometres) in the current year got the same allocation for next year pegged at Rs 19,000 crore. The rural and urban housing scheme saw a collective increase of Rs 8,026 crore even as the government scaled down expectations of the number of houses to be built owing to the extremely slow take off in FY16-17. 

    The finance minister announced a Mission Antyodaya to bring 1 crore households out of poverty and make 50,000 gram Panchayat poverty free by 2019. But, he claimed it would be done by efficient use implementation of existing schemes. 


  • India to be Guest Country at St. Petersburg International Economic Forum
    India has been invited as a Guest Country at the St. Petersburg International Economic Forum to be held from 1st to 3rd June in Russia. Prime Minister Narendra Modi will attend the Forum as a Guest of Honour. 


  • Note ban impact: Finance Ministry lowers CSO’s estimates of GDP growth for 2016-17
    The Finance Ministry has in the Union Budget finally given an estimate of the impact of demonetisation on growth for 2016-17. Nominal GDP growth for the current fiscal year will be 11 per cent, about 90 basis points lower than the first advance estimate of GDP made by the Central Statistics Office (CSO), the Ministry has stated in the Budget documents. 

    The Finance Ministry has estimated that the nominal GDP for 2016-17 would be Rs. 150.75 lakh crore, against CSO’s estimate of Rs. 151.93 lakh crore. The CSO’s estimate released on January 6 had not calculated the impact of demonetisation in the advance estimates of growth. 

    Usually, the Finance Ministry uses advance GDP estimates made by the CSO for Budget preparation. By moderating the numbers estimated by the CSO, the Finance Ministry has made a departure from that standard practice. 


  • Arun Jaitley introduces demonetisation bill in Lok Sabha
    Finance Minister Arun Jaitley moved the Specified Bank Notes (Cessation of Liabilities) Bill, 2017 in the Lok Sabha which provides for holding, transfer and receiving of old 500 and 1000 rupee notes a criminal offence, also end the liability of RBI and the government on the currency notes demonetised in November 2016. 

    Once passed by Parliament, the bill will replace an ordinance promulgated on December 30 last year which provides for a fine of 10 thousand rupees or five times the cash held, whichever is higher, on holding of more than 10 banned notes. 


  • Rabi acreage 6% more than last year
    Rabi, or winter crops have been planted on around 64.5 million hectares of land till February 3, according to the Centre's final sowing report released on 3rd February. This is almost 21 per cent more than the normal area, 6 per cent more than in 2015-16. 

    This year, according to the report, wheat has been sown on around 31.78 million hectares — 2.1 million hectares more than 2015-16. In pulses, the total area covered till 3rd February was around 15.97 million hectares, which was 1.60 million hectares more than last year and 1.20 million hectares more than the average area covered under the same period in last five years. 

    The rabi rice acreage was estimated at 3.39 per cent less this year than the same period last year. However, rabi is not the main season for rice cultivation and sowing for this crop continues for a longer time. The agriculture ministry data showed that coarse cereals have been planted on around 5.76 million hectares, which was 3.44 per cent less than the same period 2016. 


  • Tata slips from top 100 global brands list
    According to the latest Brand Finance Global 500 report, Tata group’s position has slipped to 103 from last year’s 82. It, however, continues to be one of the most valuable brands from India. In the past, The Tata group has been the only Indian brand that has found a place in the top 100 global brands of Brand Finance. 

    The 2017 ranking also shows that other Indian brands have all managed to improve their positions. For instance, Airtel, at 242 in 2016, climbed up to 190 in 2017. LIC improved its position to 222 from 283 in 2016. Infosys climbed 50 positions to reach 251. Other than the Tata group, two other brands that saw their valuations erode are State Bank of India and Larsen & Toubro. 

    Globally, Google dethroned Apple to become the most valuable global brand. Google’s brand value rose 24 per cent during 2016 (from $88.2 billion to $109.4 billion) whilst Apple’s declined from $145.9 billion to $107.1 billion. 


  • IGI airport first in India to cross 5 crore flyer mark
    In a first for any Indian airport, IGI Airport crossed the 5-crore passenger mark last year. The airport with three runways and as many terminals handled 5.5 crore passengers: 4 crore domestic and 1.5 crore international flyers. Mumbai was a distant second at 4.4 crore. 

    This was 21% higher than 4.6 crore passengers IGI had handled in 2015, according to figures furnished by the Delhi International Airport Pvt Ltd (DIAL). 

    Almost 10 crore domestic passengers flew in India in 2016, up 23% from 2015's figure of 8.1 crore. The number of international flyers last year is likely to be over 5.2 crore, up almost 9% from the previous year's 4.8 crore. India's international flyers generally grow at 10% year-on-year while domestic travellers, dependent on oil prices that determine airfares, has grown at over 20% in the recent past.

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