Backward Region Grant Fund Entitlement for Uttar Pradesh Hiked

The Union Government of India on 15 May 2013 announced increment in the Backward Region Grant Fund (BRGF), entitled to Uttar Pradesh. The fund has gone up to 818.17 crore rupees for 2013-14 from initial 667 crore rupees. To release the funds for Uttar Pradesh, the Union Ministry of Panchayati Raj has directed the state Government to submit its annual plan by 25 June 2013. 35 districts of Uttar Pradesh are entitled for the BRGF Scheme. In 2012-13, Uttar Pradesh failed to get its share of BRGF grants as the Government ordered a probe into the alleged irregularities that was committed during the Mayawati regime and it stopped the work which was being carried on in the BRGF beneficiary districts.

IMG approved 10% Equity Sale in Coal India Limited

An Inter-Ministerial Group (IMG) on 10 May 2013 approved 10 percent equity sale of Coal India Limited. This equity sale is likely to fetch, about 17000 crore rupees to the Union Government. Union Governments holds over 90 percent stake in Coal India at present. The Inter-Ministerial Group was headed by Ravi Mathur, the Disinvestment Secretary and it is guiding the process of disinvestment of Governments Equity in CIL. The CIL with a cash balance of 60000 crore rupees is the biggest disinvestment for the Government in the current fiscal year 2013-14 and Union Government is in the plan to generate 40000 crore rupees with sales of PSUs stakes in the current fiscal.

SEBI approved Kerala’s Start-up Village Angel Fund of 10 million Dollars

Market regulator SEBI in May 2013 had approved an angel fund of 10 million Dollars to address the problem of resource crisis for start-up companies across the country. The fund could go up to 20 million dollars with an over-allotment option that would focus on telecom and internet firms. The Fund is supposed to start investing once the initial close of 2 million Dollars is achieved. Consultancy KPMG is the advisor and ILFS is trustee of the fund based at Start-up Village which is the country’s first telecom incubator.

About Village Angel Fund

• The angel fund will be investing not only in the most promising start-ups located in Start-up Village but also in similar enterprises across the country.
• Infosys co-founder and Start-up Village chief mentor Kris Gopalakrishnan, MobME, the country’s first campus telecom start-up, Ravi Pillai, founder of the.16000-crore Rupees

Bahrain-based RP Group and other leading angel investors in India will be part of the fund.

• The Village angel fund will act like a shot in the arm for Start-up Village, which would become the first incubator in India to have its own in-house fund.
• The fund will help the internet-telecom incubator to get the most conducive ecosystem for product start-ups.

NSE Launched Debt Trading Platform

National Stock Exchange, the Leading bourse on 11 May 2013 launched the country’s first dedicated debt trading platform. The new Platform launched is awaiting the market regulator SEBI’s guidelines for allowing participation of mutual funds, insurance companies and pension funds. NSE had recently received approval from SEBI to launch the debt segment.

Function of the Debt Trading Platform

• The debt trading platform is supposed to provide retail investors an opportunity to invest in corporate bonds on a liquid and transparent exchange platform.
• Banks and primary dealers are the first to enter and they will provide enough liquidity in the debt segment.
• The mutual funds, insurance companies and pension funds are also expected to participate after guidelines for the same are issued.

The Debt Trading exchange platform is an innovation, which has been launched after intensive feedback from market participants. It is similar to RBI’s NDS-OM, where Government securities are traded on a transparent platform

India’s Services Growth hit 18-month low

As per the survey undertake by HSBC, in the month of May 2013, India’s services sector grew at its slowest pace in one and half years during the month of April 2013 as costs for raw materials, petrol and labour increased considerably. It is important here to note that the pace of hiring by private sector companies was also slowest in seven months, as per a monthly HSBC India survey of services sector managers.

Highlights of the Report

• The HSBC India Composite Output Index fell to 50.5 in April from 51.4 in March.
• The latest reading indicated that activity increased marginally and at the slowest pace since October 2011.
• The seasonally adjusted HSBC Business Activity Index declined to 50.7 in April from 51.4 in the previous month.
• Input prices saw further increase in April 2013— the trend continued for the 49th consecutive month — and cost of raw material, petrol and labour were higher, HSBC noted.
• The rates of increase in average selling prices were slower at both manufacturers and service providers.
• Despite the fact that new businesses placed at services and manufacturing firms in India increased last month, the rates of expansion eased.
• The manufacturers cited power cuts while service providers mentioned extreme weather and challenging market conditions for such a trend.