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May 2017 Economic Affairs

  • Centre clears the decks for Rs. 20,000-cr warship project
    The government has cleared the decks for the biggest-ever naval defence deal worth over Rs. 20,000 crore to acquire four Landing Platform Docks (LPDs) or warfare amphibious ships for the Indian Navy under the ‘Make in India’ programme. 

    This was cleared by Defence Minister Arun Jaitley during a meeting of the Defence Acquisition Council (DAC). 

    The four LPDs will be built by a private sector yard. The Ministry has asked Reliance Defence and Engineering Ltd (RDEL) and Larsen and Toubro (L&T) to submit fresh commercial bids for the four LPDs in the next couple of weeks

    To bag the contract, the biggest ever for the private sector, L&T has tied up with Navantia of Spain and Reliance Defence has signed an agreement with French naval defence giant DCNS to build the 20,000-tonne platforms. 

    Earlier, the proposal floated in 2013 was to build two ships in the private sector and two on nomination basis at state-run Hindustan Shipyard Ltd (HSL). Originally, ABG, RDEL and L&T were in the race to qualify. 

    Eventually, ABG was disqualified due to the poor financial health. Later, the government decided to change the contract terms and only the private sector was allowed to bid. RDEL and L&T had secured technical and financial approvals from the Indian Navy in 2016. 

    These LPDs are expected to be inducted into the Indian Navy in the next decade and will have a capacity to transport nearly six battle tanks with hundreds of Indian Army troops. These ships do not need a berthing dock. Each of these costs Rs. 6,500 crore. 

    The company that will finally bag the order will build two LPDs and will assist HSL in constructing the remaining two. 

  • RBI to revamp oversight panel to tackle bad loans
    The Reserve Bank of India on 22nd May said it will reconstitute and expand the oversight committee to deal with rising bad loans. The central bank is also planning to expand the scope of cases to be referred to the committee beyond those under the Scheme for Sustainable Structuring of Stressed Assets (S4A). 

    This is part of the central bank’s action plan to implement the recently passed ordinance that amended the Banking Regulation Act. 

    Currently, the Oversight Committee (OC) consists of two members. The RBI had recently changed the norms for decision-making in the Joint Lending Forum (JLF) whereby consent required for approval of a proposal was changed to 60 per cent by value from 75 per cent earlier. 

    Participating banks have been mandated to implement the JLF’s decision without any additional conditionality. The Boards of banks were advised to empower their executives to implement JLF decisions without further reference to them, and it was made clear to the banks that non-adherence would invite enforcement actions. 

    Going forward, the RBI is working on a framework to facilitate an “objective and consistent decision-making process” with regard to cases that are referred for resolution under the Insolvency and Bankruptcy code (IBC). 

    With a view to prevent rating-shopping or any conflict of interest, the RBI is exploring the feasibility of rating assignments being determined by the Reserve Bank itself and paid for from a fund to be created out of contribution from the banks and the central bank

  • Tech upgradation: SC/ST enterprises to get 25% credit-linked subsidy
    To help micro and small enterprises belonging to Scheduled Castes & Tribes upgrade technology, the government has approved a scheme to provide 25 per cent capital subsidy up to Rs.25 lakh via banks for purchase of plant and machinery. 

    The scheme -Special Credit Linked Capital Subsidy Scheme (SCLCSS) under National SC/ST Hub Scheme will be applicable to existing as well as new SC/ST-owned micro and small enterprises and will be monitored by the Micro, Small and Medium Enterprises (MSME) Ministry, as per the guidelines of the scheme posted on the Ministry’s website. 

    The beneficiary unit shall remain in commercial production for a period of at least three years after installation of eligible plant and machinery on which subsidy under this scheme has been availed,” said the guidelines. 

    The scheme would cover purchase of all plants and machinery without any restriction on the technologies but subject to consent/NOC from the Pollution Control Board. 

    The implementing agency of the scheme would be the Office of Development Commissioner, MSME, and the nodal agencies will be the same as approved for CLCSS, such as the Small Industries Development Bank of India, National Bank for Agriculture and Rural Development, State Bank of India, Canara Bank, Bank of Baroda, Punjab National Bank, Bank of India, Andhra Bank, Tamil Nadu Industrial Investment Corporation. 

  • Kandla Port development: PM lays foundation stone for projects worth Rs 993 crores
    Indian Prime Minister Narendra Modi laid the foundation stone for half a dozen projects worth Rs 993 crore related to development of Kandla port and said good ports are essential for India's progress. 

    Sound infrastructure and efficiency are vital pillars of economic growth, he said. If the country has to progress, it must have good ports, Modi said. The projects for which foundation was laid include a convention centre named after Babasaheb Bhimrao Ambedkar. 

  • Nod to largest ever naval project costing over Rs 20,000 crore
    In a major move to ramp up naval strength, the defence ministry has given an in-principle approval for the construction of four amphibious assault ships, also called the Landing Platform Docks (LPD), in the private sector at a cost of over Rs 20,000 crore. 

    It will be the largest ever naval project involving the private sector and the ships will be the biggest to be built in India after the under-construction aircraft carrier INS Vikrant. 

    The long-pending project was given the green signal by the Defence Acquisition Council, the top decision-making body of the ministry

    Earlier, the ministry had indicated that two LPDs will be built by state-run Hindustan Shipyard Limited, Visakhapatnam, while select private firms will be awarded the contract to construct two others. 

    Three private sector companies — Reliance Defence and Engineering Limited (RDEL), Larsen & Toubro (L&T) and ABG Shipyard — were in race initially for the mega project but ABG was disqualified on account of poor financial health. 

  • India registers 102% growth in steel exports in 2016-17
    Steel Minister Birender Singh said India has registered 102 percent growth in steel exports in 2016-17. According to the Minister country has become net exporter of steel, with 8.2 million tonnes of exports in 2016-2017. India is now the second largest stainless steel producer in the world. 

  • NITI Aayog nod for track doubling works
    Ending uncertainties over the funding, the National Institution for Transforming India has given the nod for doubling of three crucial railway corridors in Tamil Nadu and Kerala at an estimated cost of Rs. 3,616.90 crore. 

    The 86.56-km Thiruvananthapuram Central-Kanniyakumari railway line, estimated to cost Rs. 1,431.90 crore; the 160-km stretch from Madurai Junction to Thoothukudi (Rs. 1,182 crore) and the 102-km line from Vanchi Maniyachi to Nagercoil Junction (Rs. 1,003 crore) are the stretches to be doubled. 

    The cash-strapped Railways had been putting pressure on the Kerala and Tamil Nadu governments to share 50% of the cost of doubling of the tracks in the three corridors and the nod from NITI Aayog has come as a big relief to the States. 

    The next step is to get the approval from the Railway Board for the detailed estimate submitted through the zonal railways for track doubling. Once the nod is received from the board, the State government is to be approached with the alignment for getting the land. Simultaneously, the bids will also be floated by Railways to award the works. 

    In the Thiruvananthapuram Central-Kanniyakumari stretch coming under Thiruvananthapuram railway division, the estimate had gone up from Rs. 950 crore to Rs. 1,431.90 crore. The final location survey was on the stretch. 

    The proposed doubling work will be under the supervision of the Chief Administrative Officer (Construction), Ernakulam. 

    Already, trains hauled by electric locomotives are running from the State to Chennai, via Thiruvananthapuram Central, Nagercoil, Tirunelveli, Madurai, and Dindigul. The doubling of Thiruvananthapuram Central-Kanniyakumari will help Railways to operate more mail, express and goods trains via Nagercoil Junction and Madurai Junction. 

    The doubling is also needed for rail connectivity to the upcoming Vizhinjam International Multi-purpose Deepwater Seaport. 

  • Cabinet approves abolition of Foreign Investment Promotion Board
    Union Cabinet on 24th May approved abolition of Foreign Investment Promotion Board (FIPB) which currently vets FDI proposals requiring the government approval. 

    Currently, FDI in 11 sectors including defence and retail trading requires FIPB approval. Now, the processing and approval of FDI proposals in these sectors will be handled by concerned Ministries and Departments. 

    The decision will improve attractiveness of India as an investment destination and result in more FDI inflow. It will also improve ease of doing business and promote minimum government and maximum governance. In his Budget speech the Finance Minister had announced scrapping of the FIPB. 

    Union Cabinet also approved 255 rupees per quintal Fair and Remunerative Price (FRP) of sugar cane payable by sugar mills for 2017-18 season. The rate will be for a basic recovery rate of 9.5 percent. The decision will help sugar cane growers guaranteed price. 

  • Cabinet opens gates for private players in defence
    The ‘strategic partnership’ policy in the defence sector received a nod from the Cabinet on on 24th May, opening the gates for Indian private sector players to start manufacturing high-end defence equipment and weapons in partnership with foreign original equipment manufacturers (OEMs). 

    The decision has made way for private players to enter four key segments — fighter aircraft, helicopters, submarines and armoured vehicles such as tanks. 

    Currently, five public sector units are manufacturing defence equipment in the country, besides the Defence Research and Development Organisation, Ordnance Factory Board (which has over 40 factories) and others. Despite these, however, India remains the world’s biggest importer of weapons, accounting for over 13 per cent of total sales worldwide. 

    The Cabinet also decided on a 10.6 per cent increase in the fair and remunerative price (FRP) for sugar at Rs 255 per quintal. Additionally, it also approved an All India Institute of Medical Sciences (AIIMS) in Kamrup, Assam, at an expenditure of Rs 1,123 crore. 

    Another proposal — to develop a Noida-Greater Noida metro rail corridor — was also cleared by the Cabinet. The corridor, which is aimed to cover 29.707 km and will be fully elevated, is expected to cost ?5,503 crore, Jaitley announced. 

    In another decision, the government has approved a proposal to allocate 2.5 per cent of the Central Road Fund for the development and maintenance of national waterways. 

    The move is estimated to result in over Rs 2,000 crore being allocated for the development of waterways. The idea is to ensure diversion of cargo from roads to inland waterways. The activities in which funds will be used include jetties, equipment and dredging. 

  • Telangana posts 17.82% growth in income via main taxes
    The Telangana State has achieved the highest tax revenue growth in the country during the 2016-17 financial year. The State posted 17.82% growth in 2016-17 tax revenue compared to the previous fiscal. According to officials, the statistics of States’ financial performance during 2016-17 were released by the Comptroller and Auditor General (CAG) on 25th May which showed that only five States, including Telangana, achieved double-digit growth in the collection of tax revenue. 

    The State has netted a tax revenue of Rs 39,183 crore in 2016-17 against Rs 33,257 crore in the previous year with a highest growth rate of 17.82%. Jharkhand (16.86%), Chhattisgarh (11.41%), Maharashtra (11.15%), Haryana (10.12%), West Bengal (9.23%) and Andhra Pradesh (9.01%) have the next highest growth rates. 

    While the growth rate was 17.82% in the collection of main taxes – sales tax, excise and stamps & registration – the growth rate including other taxes such as transport and other ways and means was almost similar at 17.81%. Against the total State’s revenue of Rs 36,130 crore in 2015-16, it has achieved Rs 42,564 crore during 2016-17

  • PM launches the agro-marine processing scheme SAMPADA
    Prime Minister Narendra Modi on 26th May launched the agro-marine processing scheme SAMPADA to promote food processing and promised to make the North-East the economic hub of “new India”. According to Modi, There are immense possibilities for agro-product valuation and the Rs 6,000-crore SAMPADA (Scheme for Agro- Marine Processing and Development of Agro-Processing) will go a long way in developing the food processing industry and creating employment opportunities for the youth In the last three years, more than 9,000 soil health card labs were set up across the country and there are plans to set up more as these have helped farmers understand the strength, weaknesses and fertiliser requirement of the soil. 

  • Rural jobs rise as 8.13 bn person-days of work created
    Data furnished by the rural development ministry show that around 8.13 billion person-days of work have been created in the rural sector under its various flagship programmes, including the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) during the period. 

    The ministry generated 8.13 billion person-days of work in the past three years through various flagship schemes. A person day is the amount of work done by one person in a working day. 

    The maximum 6.36 billion person-days of work was generated under MGNREGA, followed by 0.98 billion under the Pradhan Mantri Awaas Yojana and 0.78 billion under the Pradhan Mantri Gram Sadak Yojana (PMGSY) 

    For MGNREGA, the rural development ministry was also planning to tweak the method of wage calculation and could consider linking it to Consumer Price Index–Rural to ensure a greater increase. 

    At present, wages are linked to CPI-Agriculture Labour (AL), which gives higher weightage to food items. Due to this, the annual wage hike has been marginal in 2017-18 as food prices have remained stable or flat due to the Food Security Act. 

    Centre’s total expenditure on rural development increased from Rs 58,630 crore in 2013-14 to Rs 95,099 crore in 2016-17, a 62 per cent rise. The Union minister added the government enhanced the expenditure to make gram panchayats poverty free. 

  • India’s first electric mass transport project launched in Nagpur
    Union surface transport minister Nitin Gadkari flagged off taxi aggregator Ola's electronic vehicle (EV) services in the city. Nagpur will be the first in the country to have such a service. A battery charging station for the vehicles was also inaugurated at the airport. 

  • Financial leaders of G-7 pledges cooperation against cybercrime
    Financial leaders of seven leading world economies pledged stronger cooperation against cyber crime and not to use foreign exchange to gain competitive advantage. 

    Finance ministers and central bank governors from the United States, Canada, Japan, France, Germany, Italy and Britain met in the Italian city of Bari on 13th May to discuss the world economy, combating terrorist funding, cyber security and taxes. 

    The final communique of the meeting said the seven countries would use all policy tools - fiscal, structural and monetary - to boost economic growth. It also said the G7 financial leaders would strengthen cooperation to counter cyber threats such as a global online attack which infected tens of thousands of computers in nearly 100 countries 

    But unlike a G7 leaders' communique of 2016, the Bari meeting did not endorse free trade and reject protectionism, reflecting pressure from the United States where President Donald Trump has signaled his scepticism about free trade deals. 

  • Moneylenders cater to 50% of credit needs in Telangana
    Despite the focus on financial inclusion, over 50 per cent of the credit requirement is catered to by money lenders in Telangana, according to Telangana Social Development Report (TSDR) 2017. The report, first of its kind among the States, was released by Etela Rajender, Minister for Finance, on 13th May. 

    Referring to the findings of the report, Rajender said that the State might have overall higher per capita income, but there were also severe disparities and inequalities. 

    The share of commercial banks and cooperative societies in providing institutional credit is still low as their reach is limited only to 16 per cent and 9.3 per cent respectively, according to the report. 

    Disadvantaged sections of society still depend on borrowing to meet their day-to-day expenditure. 

    On the basis of data pertaining to a decade from 2001 to 2011, the TSDR points to increased pressure on the State capital, Hyderabad, as its accounts for 30 per cent of the State’s total urban population. However, the State still has predominant rural tilt with 61 per cent of its population in villages. 

    There is huge scope for digitisation. Less than 10 per cent of households in all districts, except Hyderabad, has computers while in Hyderabad it is higher at 26 per cent. 

    The sex ratio was declining in the zero to six age group. It fell to 933 from 957 during the decade under study. 

    The report was prepared by the Southern Regional Centre, Council for Social Development. 

  • AP to ink MoU with Singapore govt 
    In a move that can speed up the construction of its new capital, Amaravati, the Andhra Pradesh government will enter into a Memorandum of Understanding with Singapore on 15th May. 

    This is a first-of-its-kind MoU between a State government and a foreign country, according to Sreedhar Cherukuri, Commissioner, Andhra Pradesh Capital Region Development Authority. 

    The MoU will enhance cooperation between the Singapore government and Andhra Pradesh in the development of Amaravati masterplan. A joint implementation working committee comprising senior officials from both the governments will report to the JSIC. 

    The MoU is also intended to create opportunities for Singapore entities to invest in the new capital and Andhra Pradesh, and contribute their expertise to the economic development of the State. 

    The State government had earlier accepted the Singapore Consortium’s proposal through a ‘Swiss Challenge’ method, for the master development of Amaravati. 

    Singapore-based Ascendas-Singbridge and Sembcorp Development had formed the consortium for the capital construction. 

    The new capital city’s infrastructure will be developed in 7-8 years in phases, at an estimated cost of Rs.33,000 crore. 

  • Govt plans multimodal logistic parks for Rs 33000 cr investment
    The government has planned to build multimodal logistic parks at 15 places across the country with an investment of 33 thousand crore rupees in a bid to bring down costs incurred on logistics. 

    The National Highways Authority of India (NHAI) on 15th May inked a pact with the Tamil Nadu Industrial Development Corporation Limited in New Delhi, for the development of a multimodal logistics park in the Ponneri Industrial Node area near Kamarajar Port in Tamil Nadu. 

  • Master developers chosen for Amaravati start-up area
    A consortium of Ascendas-Singbridge and Sembcorp Development, a subsidiary of Sembcorp Industries of Singapore, have received master development rights for the start-up area of the capital city of Amaravati in Andhra Pradesh. 

    The state awarded the contract in the presence of Chief Minister N Chandrababu Naidu and S Iswaran, Singapore’s Minister for Trade and Industry. The foundation ceremony of the ‘start-up’ area was held at Mandadam Village in the Amaravati capital area. 

    The start-up area is located within the 20-square kilometre Seed Development Area of Amaravati City, along the River Krishna waterfront. 

    Spread over 684 hectares, the area is to be developed in phases over 15 to 20 years and create centres for business, commercial and residential use. 

    The Chief Minister promised to develop Amaravati as most livable city where the focus would be on people-centric development. He said Amaravati would be developed to serve as an economic hub. The governments of AP and Singapore also signed another MoU for economic development for enhancing capacities of departments and agencies and promotion of bilateral trade and investment. 

    Amaravati aims to be an aspirational modern city and a compelling destination for global investments and talent. Ascendas-Singbridge and Sembcorp had submitted a joint bid for the development under a Swiss Challenge approach. 

  • Govt launches 'Operation Clean Money' website to bring illegal wealth on books
    Finance Minister Arun Jailtey on 16th May said number of filing income tax return and tax collection have gone up post- demonetisation. 

    Launching the Operation Clean Money Portal of Income Tax Department in New Delhi, Mr Jaitley said, detection of tax evasion has become easy and it will no longer be safe for the people indulging in tax evasion. 

    He said, the Department has identified 18 lakh tax payers whose cash transaction made from 8th of November to 30th of December, 2016 during demonetisation period did not appear in line with their income profile. 

    He said, about 91 lakh more income tax returns have been filed and the number of persons whose income profile do not match will increase further. 

    Mr Jaitley said, the Clean Money portal will provide information about user guides, frequently asked questions and training toolkits related to verification process. He said, the portal will provide more facility to the tax compliant. The operation clean money was launched by the Income Tax Department In January this year for e- verification of large cash deposits made during demonetisation period. 

    There has been encouraging response to the online verification process and large number of tax payers submitted their responses without visiting the Income Tax office. In addition to 18 lakh cases, 5.68 lakh new cases have also been identified for e- verification. 

  • For job creation, new taskforce to look at employment info from multiple sources
    Hoping to address the problem of employment generation, the government hopes to get real-time data on the country’s job market by next year. A new high-level panel has been constituted to tap into information with employers and establishments. 

    The labour market also needs other forms of data, particularly, those from employing establishments such as administrative data relating to payrolls, social security systems and provident fund. The panel is looking at all of these data sources

    The panel is chaired by Arvind Panagriya, Vice-Chairman, NITI Aayog, with Anant, Labour Secretary Sathiyavathy, NITI Aayog’s Pulak Ghosh and RBI Board Member Manish Sabharwal as members. 

    The proposed periodic labour force survey, which is expected to start later in the year, will be a separate exercise. The long planned PLFS will measure employment and unemployment trends across the country in both quarterly and annual surveys. At present, there are only two official data sources on employment generation in the country. 

    One is the the quinquennial survey of employment and unemployment by the National Sample Survey Organisation, which was last done in 2011-12. 

    The second is the Labour Bureau quarterly surveys on job losses in specific sectors, which is being conducted since 2009, and also an annual all India employment survey since 2010-11. 

    But, for policy makers and analysts the lack of regular and recent employment data is a handicap in trying to work out measures for job creation and economic growth. 

  • Telangana budget to be aligned with calendar year
    Telangana Chief Minister K Chandrashekhar Rao has said it is proposed to align the State budget with the calendar year, January 1 to December 31. 

    This is in tune with the Centre’s thought process and in accordance with its proposal, the State government has decided to introduce the budget which will be implemented during the calendar year, January 1 to December 31, according to a statement from the Chief Minister’s Office. 

    Earlier, budgets at the Centre and various States were introduced towards the end of the financial year in February at the Centre and in March in the States, for implementation during a financial year April 1 to March 31. The Centre had come up with the move to change the budget presentation and implementation schedule as this is seen to enable better planning and disbursement of funds. 

  • Telangana’s Yadadri ultra mega power project gets green nod from Ministry
    The Expert Appraisal Committee of the Union Ministry of Environment and Forests and Climate Change has accorded environmental clearance for the 4,000 MW Yadadri ultra mega power project (UMPP) of the Telangana Genco at Dameracherla in Nalgonda district. 

    This will be the first UMPP taken up by any State for which the financial closure of Rs. 24,000 crore has already been achieved with PFC and REC funding it and the project contract of about Rs.18,000 crore awarded to BHEL. 

    Following certain observations, a revised impact assessment report was submitted and the final nod was accorded. The implementation of the project was delayed due to mandatory environmental approvals. 

    The Environment Assessment Committee had sought details on the source of water for the mega project, coal linkage and whether the coal transportation would be made through the railway network. 

    While the State-owned Singareni Collieries Company Limited will supply coal for the project, the rest would be met through imports. 

    Carved out in 2014 after the bifurcation of Andhra Pradesh in June 2014, Telangana started its journey with a power deficit of 2,000 MW. To ensure that the State has adequate power supply, Chief Minister K Chandrasekhar Rao has been monitoring the progress and implementation of the new projects. The foundation for the Yadadri greenfield plant was laid by Rao in June 2015 and the necessary land acquisition for the project is under way. 

  • Bhadradri thermal project
    Yadadri is one of the two new projects taken up by Telangana Genco, the other being the 1,080 MW Bhadradri thermal power project. 

    Yet another coal-fired thermal power project of TS Genco, the 1,080 MW Bhadradri thermal power project in Bhadradri-Kothagudem, had secured various mandatory clearances and work on the project started in March this year. 

  • GST Council decided to exempt the daily-use commodities from tax
    Foodgrains will cost less from July 1 when the nation-wide Goods and Service Tax (GST) is rolled out as the GST Council on 18th July decided to exempt the daily-use commodities from the levy. 

    The GST rates for all 1,211 items but six were finalised at the first day of the two-day meeting in Srinagar of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives. 

    Milk and curd will continue to be exempt from taxation when the Goods and Service Tax (GST) replaced current indirect taxes. 'Mithai' or sweets will attract 5 per cent levy. 

    Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from GST. Currently, some states levy Value Added Tax (VAT) on them. 

    Common use products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 per cent instead of present 22-24 per cent tax incidence through a combination of central and state government levies. 

    Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5 per cent, almost the same as current incidence. Also, the GST for packaged food items is to be finalised. 

    Seven per cent of the items fall under the exempt list while 14 per cent have been put in the lowest tax bracket of 5 per cent. Another 17 per cent items are in 12 per cent tax bracket, 43 per cent in 18 per cent tax slab and only 19 per cent of goods fall in the top tax bracket of 28 per cent. 

    Aerated drinks and cars will be in 28 per cent bracket. On top of the peak rate, small cars will attract a 1 per cent cess, mid-sized cars will attract 3 per cent and luxury cars 15 per cent. 

  • General Motors to quit India
    With its domestic sales having hit the skids, General Motors decided on 18th May to exit the Indian market by the end of 2017, and focus instead on manufacturing vehicles for export. 

    For the US automaker, which has been in India for over two decades, the dramatic decision follows a comprehensive review of future product plans for GM India and is part of a series of actions taken by the US headquarters to address the performance of its operations worldwide

    Through the review, which began in June last year, the company felt that it made more business sense to export its products from India rather than sell. 

    General Motors started in India in a joint venture with Hindustan Motors in 1995, using the latter’s plant at Halol in Gujarat. It started selling cars under the Opel brand, and later switched to the Chevrolet badge. 

  • Andhra Pradesh to float tenders for two solar parks
    With rapid growth in the solar power capacity and changes in the battery back-up technologies, the Andhra Pradesh government plans to float tenders for two solar parks to be taken up on a pilot basis. 

    According to Ajay Jain, Principal Secretary Energy, two pilot projects of five MW capacity of solar along with storage systems would be taken up on a pilot mode and the power generated will be utilised for agricultural requirements. 

    The State is also thinking of operationalising local grids where the power generated is locally consumed. The use of storage technology is expected to facilitate power supply during night as well unlike standalone solar units where power supply is possible during the day. 

    With general expectation that the battery storage technologies set to get much more accessible and possibly much cheaper with mass adoption in the next 3-4 years, and the cost and size of the batteries also expected to come down, even supplies at the grid level are likely to become viable. 

    Factoring these changes and huge potential for capacity addition in the renewable energy, the State has decided to take up the storage backed solar projects, which will enable supply of power during both day and night time. 

    However, these two pilot projects to be taken up as a part of the larger solar parks would be dedicated to local requirements in the agriculture sector. 

    The State is also considering taking up second generation reforms in the power sector by factoring the huge impact the renewable energy sector capacity would bring about in the system. 

    The State is keen to pursue this as uninterrupted power supply at low cost of about Rs. 4 per unit over a longer time frame of 20-25 years could help attract huge investments. 

  • GST rates: 83 services exempt, 13 in 5 % slab
    Thirteen services including travelling by road and by air in the economy class or to any airport covered under the government’s regional connectivity scheme will attract a concessional 5% goods and service tax (GST) rate, while seven services including rail freight, business class air travel and construction services will be taxed at 12%, as per the full GST schedule on services released by the federal indirect tax body the GST Council on 19th May

    The Council decided to continue tax exemption on services including health, education, select government services, budget hotels charging less than Rs1,000 a day and services given to international bodies like the UN. 

    It also added a new item to the exemption list —services provided by the Goods and Services Tax Network (GSTN) , the company that provides the IT infrastructure to union and state governments and union territories for the new indirect tax regime. That takes the total number of services out of GST to 83. 

    The bulk of the services including seven specified services such as work contracts, hotels charging Rs2,500-5,000 rent a day and outdoor catering of food and drinks as well as all other services not specified in the schedule will be taxed at 18%.

    The government has over the last several years widened the service tax base through a negative list-based approach as per which all services other than those that are specifically excluded from taxation are taxed. In 2016-17, service tax collection jumped to Rs2.54 trillion from Rs2.11 trillion a year ago. 

    Services of five star hotels, race clubs and cinema as well as betting and gambling, regarded as ‘sin services’ will attract 28% slab. 

  • DAC to engage indian private sector in manufacture of high-tech defence equipment
    Defence Acquisition Council has finalised broad contours of policy to engage Indian private sector in manufacture of high tech defence equipment in India. An official release said the Council under the chairmanship of Defence Minister Arun Jaitley finalised the broad contours of the policy on 20th May. 

    The policy is aimed at developing the defence industrial eco-system in the country through the involvement of both the major Indian corporates as well as the MSME sector. The policy envisages the establishment of long-term strategic partnerships with qualified Indian industry majors through a transparent and competitive process. 

    The Indian industry partners would tie up with global Original Equipment Manufacturer, OEMs to seek technology transfers and manufacturing know-how to set up domestic manufacturing infrastructure and supply chains. 

    The policy will give a boost to the ‘Make in India’ policy in the Defence sector and set Indian industry on the path to acquiring cutting-edge capabilities which will contribute to the building of self-reliance in the vital sector of national security requirements. 

    The policy is expected to be implemented in a few selected segments to begin with. These segments are fighter aircraft, submarines and armoured vehicles. In future, additional segments may be added. 

    Defence Acquisition Council, headed by the Defence Minister, is a decision making body for new planning process of Capital Acquisitions in the long term perspective plan and according ‘in principle’ approval for each Capital Acquisition programme in defence sector. 

  • CM Chandrababu Naidu wants Apple to set up manufacturing unit in state
    The Andhra Pradesh government has signed agreements with three firms which are expected to create over 12,000 jobs in the state in the next few years. Memoranda of understanding were signed with EVX Solutions Ltd, Innova Solutions and I-Bridge INC. 

    The MoUs were entered into on the second day of chief minister N Chandrababu Naidu-led a high-level delegation's visit in San Francisco. While EVX Solutions Ltd is expected to create 10,000 jobs, Innova Solutions is planning to offer jobs to 2,000 people. 

    The delegation later met chief operating officer (COO) of Apple Jeff Williams and invited the firm to invest in Andhra Pradesh. Naidu urged Apple to establish a manufacturing facility in the state. 

    The chief minister visited Google's X facility that developed Google's driver-less cars and glasses projects besides using balloons for spreading internet. 

    He interacted with firm's CEO Astro Teller and discussed the latest technological and innovative advancements. 

    On the occasion, Google X has agreed to collaborate with the state to enhance Internet penetration in AP. Google X gave a demonstration of driver-less car and use of drones to deliver various products to homes to the delegation. 

    Naidu also met with vice-president of Qualcomm Technologies Inc Gopi Sirineni who expressed keenness to work within AP on the fibre grid project. The CM asked Gopi Sirineni to study the current status of the project and identify where his firm can contribute. 

  • More measures needed to fight black money: UNESCAP
    While noting that demonetisation of high-value currency last year will help bring more people into the tax net, the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) has said that more measures will be required to fight black money in the future. 

    The measure did not, by itself, impede future black money flows in new denominations. … Broader structural reforms which could also contribute to enhanced transparency include: the implementation of a goods and services tax; voluntary disclosure of income scheme; and tracking of high-value transactions through taxpayer identification numbers

    UNESCAP released Economic and Social Survey of Asia and the Pacific 2017 on 8th news. The UN agency also expects the Indian economy to continue growing at a “stable” 7.1 per cent in 2017, and 7.5 per cent in 2018, led by higher private and public consumption and infrastructure spending. 

  • India to grow 7.1% in 2017
    The report also said there is more awareness about alternatives to cash transactions post demonetisation but said moving towards a cashless economy will also require addressing household determinants of cash dependence beyond technology adoption, including low financial inclusion, high informality and low financial literacy. 

    It also expects the Indian economy to continue growing at a “stable” 7.1 per cent in 2017, edging up to 7.5 per cent in 2018, led by higher private and public consumption and increased infrastructure spending. Meanwhile, the report said that inflation is projected to reach 5.3 per cent to 5.5 per cent in 2017 and 2018. 

  • Andhra Pradesh signs pact with Iowa State
    The Andhra Pradesh government has signed a memorandum of cooperation with the Iowa Department of Agriculture and Land Stewardship, State of Iowa, US to promote research and development in the fields of science, agriculture and life sciences. 

    The Chief Minister N Chandrababu Naidu and his delegation on the fourth day of their US trip will visit some farms in Des Moines in Iowa State to understand best practises. 

    Referring to the MoC, Naidu said that it would help in increasing the seed production and research, leading to increase in crop output. 

    Bill Northey, Secretary of Agriculture of Iowa, said, “Iowa and Andhra Pradesh share a lot of similarities, of which agriculture is one.” 

  • Record food grain production of 273.38 million tonnes in 2016-17
    Country is poised to achieve a record foodgrain production of 273.38 million tonnes in 2016-17 crop year. The current year’s foodgrain production is significantly higher by 21.81 million tonnes than last year. Agriculture Ministry on 9th May came out with the third advance estimates of production of major crops revising upwards the output figures for 2016-17. 

    The production of rice is estimated at 109.15 million tonnes and wheat 97.44 million tonnes, both a new records. Coarse cereals production is also estimated to be a record 44.39 million tonnes in 2016-17 as against 38.52 million tonnes last year. 

    Pulses output has gone up substantially to 22.40 million tonnes from 16.35 million tonnes last year. The government had encouraged farmers to grow pulses in a big way by announcing higher support price and procurement. Previous record in pulses was 19.25 million tonnes in 2013-14. Oilseeds production is pegged at 32.52 million tonnes which is also higher by 3.27 million tonnes. 

    Among cash crops, cotton output is estimated to increase to 32.58 million bales of 170 kg each from 30.01 million bales in the last year. Sugarcane output is pegged at 306.03 million tonnes, which is lower by 42.42 million tonnes than the last year. 

    Production of Jute and Mesta is estimated at 10.27 million bales of 180 kg each, which is marginally lower by 10.52 million bales during the last year. 

  • Over 13,000 villages now has electricity under rural electrification programme
    The rural electrification programme is proceeding swiftly, with over 13,000 villages electrified out of a total of 18,452 and is on track for completion within the targeted 1000 days, according to NITI Aayog. 

    The total renewable generation capacity has crossed 57 Giga Watts, with an increase of 24.5 per cent being registered in the last fiscal year. 

    The figures were presented when the PM Modi reviewed progress of key infrastructure sectors including petroleum and natural gas, power, renewable energy and housing. 

    The meeting, which came soon after the review of connectivity-related infrastructure sectors in the last week of April, lasted for about three hours, and was attended by top officials from PMO, NITI Aayog and all infrastructure Ministries of the Government of India, said a PMO statement. 

    The Pradhan Mantri Ujjwala Yojana has benefited 1.98 crore below poverty line (BPL) households so far and the contribution of gas to the primary energy mix has risen to 8 per cent. 

    Eighty-one cities are being covered under City Gas Distribution networks. PM Modi called for greater emphasis on ethanol blending, and evolution of mechanisms so that farmers can benefit the most from this process, the statement said. He said that setting up of second generation bio-ethanol refineries should be expedited. 

    Regarding electrification, the meeting was told that over 22 lakh rural BPL households were electrified in 2016-17, and over 40 crore LED bulbs were distributed in the same period. 

    The total inter-regional transmission capacity has been significantly enhanced, with 41 Giga Watts transmission capacity being added from May 2014 to April 2017. 

    The capacity addition in solar energy in financial year- 17 was the highest-ever, at 81 per cent, the statement said. Solar and wind tariffs have now achieved grid parity, with rates now well below Rs. 4 per Kilowatt-Hour. 

  • India to grow at 7.7 per cent in 2018-19: IMF
    The International Monetary Fund says India's growth is expected to rebound to 7. 2 per cent in the 2017-18 fiscal and 7. 7 per cent in 2018-19 after disruptions caused by demonetization. 

    IMF has also recommended the removal of long-standing structural bottlenecks to enhance market efficiency. 

    It said temporary disruptions caused by cash shortages accompanying the currency exchange initiative are expected to gradually dissipate in 2017 as cash shortages ease. 

    Such disruptions would also be offset by tailwinds from a favorable monsoon season and continued progress in resolving supply-side bottlenecks, the IMF said. 

  • Task force on employment data under the chairmanship of the Vice Chairman, NITI Aayog Dr. Arvind Panagriya created
    Prime Minister Narendra Modi has directed the PMO and concerned Ministries to come up with a solution to give timely and reliable data on employment. 

    Accordingly a task force has been created under the chairmanship of the Vice Chairman, NITI Aayog Dr. Arvind Panagriya with Labour Secretary Sathiyavathy, Secretary Statistics Dr. T.C.A. Ananth, Prof. Pulak Ghosh of NITI Aayog and Manish Sabharwal (Member RBI Board) as members. 

    The Task Force will recommend solutions which can be implemented in a time bound manner. 

    Prime Minister Modi has also directed that this task be expedited so that policies on employment can be formulated with a proper appreciation of impacts, based on credible data. 

  • International Financial Services Centre signs pact with Gujarat law varsity
    India’s first International Financial Services Centre (IFSC) at Gujarat International Finance-Tec City (GIFT) on 10th May entered into an agreement with Gujarat National Law University (GNLU) to collaborate on skill development in the field of international financial services and regulations. 

    GNLU will introduce a course on International Financial Services Centre in its June 2017 semester. 

    It will also organise a programme for lawyers covering IFSC, international arbitration and related fields. 

    GIFT IFSC and GNLU will work together on courses, training and certificate programmes. 

    The MOU will also look into developing and conducting programs in financial markets along with GIFT and other institutions based out of GIFT IFSC. 

  • CBDT issues draft accounting rules for real estate projects
    The Finance Ministry on 11th May issued a fresh draft of the Income Computation and Disclosure Standard (ICDS) for such transactions. 

    With the Real Estate (Regulation and Development) Act, 2016 (RERA) coming into effect from May 1, the draft norms propose to do away with the condition of obtaining all ‘critical approvals’ for revenue recognition. The proposed norms also do not provide for capping the recognition of revenue based on the stage of completion determined with reference to the project cost incurred

    The fresh draft is based on the guidance note issued on real estate transactions by the Institute of Chartered Accountants of India last year that was reviewed by a government committee. 

    In all, it has proposed changes in five areas, including the definition of project and project cost, revenue recognition, application of percentage of completion method (POCM) for real estate projects and transferable development rights. 

    The Central Board of Direct Taxes (CBDT) has now sought comments from stakeholders by May 26, after which the norms will be finalised. 

    In a nutshell, ICDS are accounting standards that are used to calculate the income tax liability. The draft has also proposed to define the “project” as a set of units which are connected by basic facilities and not the earlier proposed common amenities. 

  • India to invest Rs 10,000 crore in Deep Sea Mission
    India planned to invest Rs 10,000-crore Deep Sea Mission, likely to commence by the year end to explore mineral wealth beneath the ocean floor. Seawater desalination project of Rs 2,000 crore at the Chennai coast will also be taken up under the mission. The oceans that surround the Indian peninsula have over 1,300 islands. They give seven and a half thousand kilometres of coastline and 2.4 million square km of Exclusive Economic Zone. China is also working on deep sea mission for mining mineral deposits in the Indian and Pacific oceans. 

  • I-T dept launches new facility to link Aadhaar with PAN
    The Income Tax department has launched a new e-facility to link a person's Aadhaar with the Permanent Account Number (PAN). The department's e-filing website has created a new link on its homepage making it easy to link the two unique identities of an individual. 

    In case of any minor mismatch in Aadhaar name as compared to the actual data in Aadhaar, a One Time Password will be sent to the mobile registered with Aadhaar. It said taxpayers should ensure that the date of birth and gender in PAN and Aadhaar are exactly the same. 

  • Retail inflation in April drops to new record low of 2.99%
    India’s retail price inflation dropped to a new record low at 2.99% in April from a nearly five-month high of 3.89% in March on a lower base effect and lower food prices. 

    Updated wholesale price index (WPI)-based inflation for the same month under a new series with a 2011-12 base year also eased to 3.85% in April from 5.29% in the previous month. 

    The Department of Industrial Policy and Promotion updated the WPI by assigning revised weights and the list of items it tracks to better reflects the current reality. It also excluded excise duty while computing WPI to insulate it from fiscal policy changes. The department also set up a technical review committee to periodically update WPI to make the series relevant during its life cycle. 

    Economists believe that the lower CPI and WPI numbers will not provide room for any monetary policy rate cut any time soon due to upside risks to core inflation, which excludes food and fuel. 

    The Reserve Bank of India’s monetary policy committee, with a mid-term target retail inflation target of 4%, has maintained a hawkish stance on inflation. 

    Inflation in the next couple of months is contingent upon the monsoon. The India Meteorological Department forecast that the country will receive higher monsoon rainfall than previously predicted, as concerns have eased over El Nino, a weather phenomenon associated with drought-like conditions in the subcontinent. 

    A poor monsoon could lead food prices to rise and force the central bank to raise interest rates for the first time in more than three years. 

    Even the third advance estimates of the food grain production 2016-17, released by the ministry of agriculture signalled a record harvest of 273.38 million tonnes, beating a previous forecast of 271.98 million. 

  • Govt revised base year of WPI, IIP to 2011-2012 from 2004-05
    The government has revised the base year of Wholesale Price Index, WPI and Index of Industrial Production, IIP to 2011-2012 from 2004-05. As per the new series, April WPI inflation stood at 3.85 percent and March IIP at 2.7 percent. The Consumer Price Index-based inflation in April stood at 2.99 percent. 

    According to the Secretary, Department of Industrial Policy and Promotion Ramesh Abhishek the new series of WPI will provide a more accurate picture. In the new series, prices used for compilation do not include indirect taxes and will remove impact of fiscal policy. 

    The seasonality of fruits and vegetables has been updated. A new WPI Food Index will be compiled to capture the rate of food inflation. 173 new items has been added under manufacturing goods. New item basket in manufactured products reflects changed structure of the economy. 

    According to the Chief Statistician T C A Anant the IIP base year has also been changed to ensure that it remains more relevant. The new Index of Industrial Production, IIP series captures work in progress for capital goods to avoid volatility. 

    It has 407 item groups, as against 399 in old series. The series would be less volatile, as compared to current series. Inclusion of electricity generation from renewable sources have also been included in the new IIP series. 

  • Real estate Act will come into force on 1st May
    The Real Estate Regulatory Act, which promises to protect the rights of homebuyers and bring in transparency to the sector, comes into force on 1st May. Though only 13 States and Union Territories have notified the rules so far, the Centre believes that within the next two months, others too will follow suit. 

    All Sections of the Act will come into force from May 1 and become operational. The clock now begins to tick for registration of ongoing and new housing projects with regulatory authorities within three months. 

    Real estate developers shall get all the ongoing projects that have not received completion certificate and the new projects registered with regulatory authorities by July-end. This enables the buyers to enforce their rights and seek redress, a Ministry spokesperson said. 

    Under these regulations, developers are required to display sanctioned plans and layout plans of at least 3X2 feet size at all marketing offices, other offices where properties are sold, all branch offices and head office of the promoters in addition to the site of project. 

    As per the new act, 70% of the funds would have to be deposited in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects. 

    Projects with plot size of minimum 500 sq.m or at least eight apartments shall be registered. Both developers and buyers will pay penalty for delays. The liability is on developers for structural defects for five years. 

  • NITI Aayog for abolishing 2% duty on mobile phone circuits
    Mobile phones could become cheaper if the government accepts a proposal by the NITI Aayog to drop the 2% import duty imposed on a critical component for handsets in the Union Budget for 2017-18. 

    The Aayog, in its draft three-year action plan, has said the duty will hurt mobile phone makers in the country and the government must ensure that industries are not built behind ‘a wall of protection.’ 

    The Budget had imposed a 2% special additional duty on imports of populated printed circuit boards (PCBs) used for mobile phones, to push the Make in India campaign. The duty is aimed at providing ‘adequate protection to domestic industry,’ the government had said, so that local manufacturers of PCBs get an incentive of sorts. Handset prices were expected to rise by over 1% owing to the duty. 

    Calling for a ‘low or no duty regime’ for key inputs of electronic products, the Aayog has said that the 2% customs duty on PCBs would provide modest protection to domestic manufacturers, but hurt the mobile phone manufacturers. 

  • Madhya Pradesh Cabinet decides to shift financial year to Jan-Dec cycle
    In Madhya Pradesh, the state cabinet has decided to shift the financial year format from April-March cycle to January-December. The budget session of the state assembly will be held in December-January. The state government will try to finish the current budget proceedings by December this year. 

    Madhya Pradesh is the first state to announce shifting of its financial year format to January-December. The state cabinet’s decision comes close on the heels of Prime Minister Narendra Modi making a pitch for shifting the fiscal year to January-December period during NITI Aayog's governing council meet in New Delhi recently. 

  • UN report says India expected to achieve 7.1% growth this year
    A UN report has said, India is expected to achieve 7 point 1 per cent growth this year as re-monetisation restores consumption, and infrastructure spending increases. 

    The UN Economic and Social Commission for Asia and the Pacific or ESCAP launched its annual flagship report 'The Economic and Social Survey of Asia and the Pacific 2017' 

    The report said, India's growth would edge up to 7.5 per cent next year. It however, warned that the country faces heightened risks related to the concentration of bad loans in the public sector banks. 

  • $21 billion in black money in India in 2014: Global Watchdog
    Over $2 1 billion worth of black money was illegally taken out of India in 2014, according to the latest report by the international watchdog Global Financial Integrity (GFI), released on 1st May. This illicit outflow was nearly 19% more than that recorded the previous year. 

    GFI has, for the first time, given information on the equally damaging inflow of illegal funds in this report, with India being the destination of a staggering $101 billion in 2014, up nearly 11% over the previous year. 

    Globally, the report estimates that between $620 and $970 billion was drained out of the developing world, primarily through trade fraud. Illicit inflows are estimated at a mind boggling $1.4-2.5 trillion. Combined, illicit outflows and inflows accounted for 14-24% of total developing country trade over 2005-2014. 

    This year's GFI report stands out from its previous reports for adopting a much more rigorous method of collecting and analysing information on international trade and balance of payments. Besides using IMF global data on direction of trade, the report has included information from other sources to plug gaps. 

    Inclusion of Swiss data on gold exports, that was earlier omitted, has led to a drastic revision of India's outflow and inflow figures. 

  • Maharashtra becomes first state to use Automated Weather Stations for farmers
    Maharashtra chief minister Devendra Fadnavis inaugurated the first Automatic Weather Station (AWS) at Dongargaon in Nagpur. The Automated Weather Stations (AWS) will be helpful in measuring the wind direction, wind speed, air temperature, relative humidity, and record the amount of rainfall. 

    The gathered information will be shared among the farmers by making them available on 'Mahavedh portal' (Maharashtra agriculture weather information network) as well as on the Skymet mobile application. 

  • Cabinet approves 6,000-cr mega agro-processing scheme
    The Cabinet approved a Rs 6,000 crore mega agro-processing scheme to streamline the ongoing initiatives by the government in the food processing sector. It also decided to restore the subsidy for states to ensure sale of 1 kg of sugar at a cheaper rate to the poorest of the poor, under the public distribution system (PDS). 

    These include the Mega Food Parks and Integrated Cold Chain schemes along with the those dealing with Value Addition, Infrastructure building, Food Safety and Quality Assurance, among others. 

    It is expected to leverage investment of Rs 31,400 crore and ensure the handling of 334 lakh million tonnes agro-produce valuing Rs 1,04,125 crore, a press release said. 

    It is also expected to benefit 20 lakh farmers and generate 5,30,500 direct and indirect employment in the country by the year 2019-20. 

    The government has so far sanctioned 42 mega food parks and 234 cold chain projects with 139 lakh tonnes of preserving and processing capacity of agro-produce worth Rs 35,000 crore. 

    It has also set up a Special Fund of Rs. 2000 crore under NABARD to make available affordable credit at concessional rate of interest to designated food parks and agro processing units in the designated food parks. During 2015-16, the food processing sector constituted as much as 9.1 per cent of national GVA in manufacturing and 8.6 per cent agriculture sectors respectively. 

    On the other hand, while the government had discontinued the sugar subsidy from March 2017, the cabinet approved a proposal to bring back the subsidy of Rs 18.50 per kg to state governments for selling 1 kg of sugar to the poorest families via ration shops. 

    The food ministry as well as some states had been keen on its continuance for at least families covered under the Antyodaya Anna Yojana (AAY). The subsidy burden on the Centre will be around Rs 550 crore for supplying about 3 lakh tonnes of the sweetener. 

    In the 2017 Budget, the government withdrew the sugar subsidy and earmarked only Rs 200 crore to clear past claims. For the last fiscal year, Rs 4,500 crore was allocated for the scheme that covered Below Poverty Line families too. 

    Under the scheme, states were buying sugar from the open market at wholesale rates and selling at a subsidised rate of Rs 13.50 per kg through the PDS. 

    Other Cabinet decisions: 
    • MoU with Bangladesh on third line of credit worth $ $ 4.5 billion for implementation of developmental projects
    • Approval of Foreign Investment proposal by Mauritus based Twin Star Technologies for downstream investments in Indian companies
    • MoU with Malaysia on setting up of urea manufacturing plant
    • MoU with Japan on Railway Safety
    • MoU with Spain on cooperation in the sphere of Civil Aviation
    • MoU between Defence Services Staff College, Wellington and Defence Services Command and Staff College, Mirpur, Dhaka for Cooperation in Military Education

  • RBI makes substantial changes in norms for dealing with stressed loans
    RBI has made substantial changes in the norms for dealing with stressed loans and warned banks they will be penalised for missing Non-Performing Assets (NPA) resolution timelines. 

    RBI, through a notification, eased the decision making process in the Joint Lenders' Forum and Corrective Action Plan under the 'Framework for Revitalising Distressed Assets in the Economy'. The apex bank also warned that any non-adherence to these instructions and timelines specified under the Framework shall attract monetary penalties on the concerned banks. 

    The government notified an ordinance empowering the Reserve Bank to issue directions to banks to initiate insolvency resolution process in case of a default under the Insolvency and Bankruptcy Code, 2016. 

  • President gives assent to ordinance 
    Indian President Pranab Mukherjee on 5th May gave his assent to an ordinance to amend the Banking Regulation Act for resolution of the non-performing asset (NPA) crisis in banking system. 

    This ordinance will give greater powers to the Reserve Bank to tackle mounting bad loans. The amendments to the Act will help in effectively resolving the bad loans problem. Bad loans have ballooned in the system over the past few years, with gross NPAs for state-owned banks at 6.07 lakh crore rupees at the end of December 2016. 

    The government has enacted insolvency and Bankruptcy Code to consolidate and amend the laws relating to reorganization and insolvency resolution of companies, partnerships firms and individual. 

  • AIIB grants USD 160 million for Andhra Pradesh power project 
    China-sponsored Asian Infrastructure Investment Bank approved USD 160 million loan for a power project in Andhra Pradesh, the first credit from the bank for an Indian project. 

    The Asian Infrastructure Investment Bank (AIIB), in which India is the second largest shareholder after China, has approved the project with the objective to strengthen the power transmission and distribution system in Andhra Pradesh

    The '24x7 Power for All' project is part of Government of India's 'Power for All programme' that was launched in 2014 to provide an efficient, reliable and affordable electricity to all consumers across selected states within five years from the start of implementation. 

    The project is co-financed by the World Bank. Andhra Pradesh is one of the first states selected for the roll out of the programme. 

    The project aims to support the State of Andhra Pradesh by strengthening the transmission and distribution network, increasing network capacity, improving system reliability and supporting operational reforms to improve the commercial performance of the state's distribution companies

    It will directly contribute to the economic development of the State of Andhra Pradesh and India by increasing delivery of reliable, grid-based electricity to households, business and the agricultural sector, it said. The AIIB opened for business last year with 57 founding members and authorised capital of USD 100 billion. China is the largest shareholder with 26.06 per cent voting shares. India is the second largest shareholder with 7.5 per cent followed by Russia with 5.93 per cent and Germany 4.5 per cent. 

  • 34 MoUs worth Rs 2 lakh crores signed at India Integrated Transport & Logistics Summit
    Thirty-four MoUs, amounting to about 2 lakh crores rupees, were signed at the India Integrated Transport and Logistics Summit that concluded in New Delhi. According to the Union Minister for Road Transport and Highways Nitin Gadkari, of the total 34 investment pacts committed, more than 15 pertain to setting up multi-modal logistics parks by state governments. Agreements for port connectivity and land ports were also inked. 

  • India is now world’s biggest 2-wheeler market
    India has overtaken China to emerge as the world's biggest market for two-wheelers. A total of 17.7 million two-wheelers were sold here last year, that's over 48,000 units every day. 

    Neighbouring China trailed with 16.8 million units sold, according to officials from industry body Society of Indian Automobile Manufacturers (Siam) as well as data from China Association of Automobile Manufacturers. 

    Besides rising incomes and growing infrastructure in rural areas, one big reason for the spurt in sales has been women commuters who like the ease of zipping in and out of chaotic city traffic on their gearless scooters. For Honda, which leads the scooter market, the share of women is at 35%.

    The market in China has been on a decline over the past few years, perhaps due to the fast-paced growth in car sales there as well as the curbs on petrol two-wheelers in top cities. 

    Indonesia is holding steady as the third-largest two-wheeler market with annual sales estimated at 6 million units. Here too, volumes have slipped from 6.5 million units sold in 2015. 

    So, what clicks for India when it comes to the two-wheeler market? "The need for mobility is very large in India, and we are one of the fastest developing economies in the world," says YS Guleria, Senior VP (Sales & Marketing) at Honda Motorcycle and Scooter India (HMSI), the country's second-biggest two-wheeler company. 

  • Cabinet approves National Steel Policy 2017
    The Union Cabinet has approved the National Steel Policy 2017, a new policy that envisages investment of Rs. 10 lakh crore to create more capacity in the steel sector. 

    The policy looks at increasing per capita steel consumption from 60 kg to 160 kg by 2030-31 and increasing steel production capacity to 300 metric tonne by 2030. 

    The Cabinet also decided to give preference to domestically manufactured iron and steel products in procurement by the government and its agencies. The development is significant as it is likely to raise domestic steel consumption as the country's per capita steel usage at 60 kg is much lower than the global average of 208 kg. 

    The Cabinet also approved policy for providing preference to domestically manufactured iron and steel products on Government procurement. The policy seeks to accomplish the Prime Minister's vision of 'Make in India' with objective of nation building and encourage domestic manufacturing. It will be applicable on all government tenders where price bid is yet to be opened. 

    Among other decisions: 
    • The Cabinet gave its nod to an ordinance to amend Banking Regulations Act to deal with NPAs or stressed assets.
    • It also approved a new Central sector scheme SAMPADA that stands for Scheme for Agro Marine Processing and Development of Agro Processing Clusters.
    • Among other Cabinet decisions are international status to Vijayawada airport and initiation of disinvestment of 3 ITDC properties.
    • The Cabinet also gave its nod to modifications in the 7th Pay Commission recommendations on pay and pensionary benefits.
    • Among them key decisions relate to revision of pension of pre-2016 pensioners and family pensioners and disability pension for defence pensioners.
    • It also gave ex-post facto approval to the Memorandum of Understanding on Third Line of Credit of 4.5 billion dollars to Bangladesh for implementation of developmental projects.
    • The Cabinet Committee on Economic Affairs approved the initiation of the process of disinvestment of hotels and properties of the India Tourism Development Corporation Limited.

  • ADB predicts 7.4 percent growth for Indian economy this fiscal
    Asian Development Bank (ADB) has said that Indian economy will grow 7.4 per cent this fiscal, and 7(point)6 per cent in the next fiscal. India had grown 7.1 per cent in the previous fiscal. According to ADB Chief Economist Yasuyuki Sawada: 
    • Reforms like the Goods and Services Tax and the new bankruptcy law will make it easier to do business in India
    • On the impact of rupee appreciation on exports, the appreciation cannot be considered in isolation, and the overall export performance of India so far seems quite positive.
    • The rupee has appreciated by over 5 per cent against the US dollar since January.


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