Special General Awareness for IBPS, Bank Exams (Economy) - 2015

:: Economy ::

Videocon launches world’s first LED hybrid TV cum PC priced at Rs 39,990

• Videocon, in partnership with Microsoft Corporation, today launched Windows 10 powered world’s first LED hybrid TV cum PC at a starting price of Rs 39,990. The TV, which can also work as a personal computer, will be available in the market next month.
• Dhoot said the company expects to have at least 5 per cent sales of H2 period coming from the Windows operated TV and three per cent from the Android operating sets.
• He added that the company would launch the larger screen sizes of 55 and 65 inches along with one small size of 24 inches by the end of this year after getting the response from the market.
• Videocon, which has a network of around 55,000 point of sales, would initially introduce it to around 60 stores located in the upmarket areas and to other places in a phase wise manner.
• The company has priced 40 inch and 32 inch Windows operated panels at Rs 52,990 and Rs 39,990, respectively.

IndiGo Launches India’s Biggest IPO in 3 Years

• InterGlobe Aviation, which operates the low-cost IndiGo airline, will hit the primary market on Tuesday with an aim to raise a little over Rs 3,000 crore.
• India’s biggest airline according to market share is aiming at a valuation of around $4 billion (Rs 26,000 crore) through the initial public offer (IPO), which is India’s biggest since 2012.
  Here are 10 things to know about IndiGo IPO:
• IndiGo shares, with a face value of Rs 10, can be bought in a price band of Rs 700 to Rs 765 starting today. Shares can be bought in multiples of 15. The IPO will close for subscription on October 29.
• The IndiGo IPO comprises fresh issue of shares worth Rs 1,270 crore. Promoters and non-promoters are selling shares worth about Rs 1,750 crore. Together, the share sale can rake in up to Rs 3,000 crore. Post issue, the promoter holding is expected to come down to 85 per cent from 93 per cent currently.
• Ahead of the IPO, investment arms of foreign firms including Goldman Sachs, Fidelity, BlackRock, etc. bought IndiGo shares reserved for cornerstone investors at Rs 765 each, the top end of the IPO indicative price range, helping the airline to raise Rs 830 crore and flagging strong investor appetite for the offering.
• IndiGo has a net debt of Rs 3,912 crore, all of which is related to aircraft purchases, according to President Aditya Ghosh. IndiGo plans to use the proceeds to retire Rs 1,166 crore of debt, while the remaining amount will be used to fuel expansion, the company said. IndiGo has 430 aircraft on order from Airbus.
• There was some controversy ahead of the IPO as InterGlobe’s net worth (total assets minus total liabilities of a company) slipped to a negative Rs 139 crore at the end of June 2015. The company, however, clarified that the airline’s net worth is back in positive in the September quarter.
• IndiGo has been the only consistently profitable airline in the country for the last seven years. Industry experts say the focus on cost by IndiGo’s management team has helped the airline to avoid the amount of debt that is weighing down the likes of Jet Airways and Air India.
• IndiGo, which started flying in 2006, has risen rapidly to command almost 40 per cent market share in the domestic market. It also has one of the country’s biggest fleets - 97 aircraft at present - allowing it to fly more frequently than other carriers. The average age of its fleet is around four years, which saves fuel costs.
• IndiGo keeps costs low by buying just one type of aircraft from one supplier — Airbus — as well as selling and leasing back planes, and keeping maintenance costs low, experts have said. It has also benefited from its track record on punctuality, while falls in fuel costs have helped to boost revenue.
• IndiGo was set up in 2006 by businessman Rahul Bhatia and Rakesh Gangwal, a former CEO for U.S. Airways Group.
• Shares in listed carriers have rallied sharply in the run-up to IndiGo’s IPO. In last one month, SpiceJet shares have rallied 55 per cent while Jet Airways shares have surged over 20 per cent as compared to 5 per cent gain in the broader Nifty.

Audit Bureau of
Circulation elects office-bearers

• Shashidhar Sinha CEO, IPG Mediabrands, was unanimously elected as Chairman of the Audit Bureau of Circulation (ABC) for 2015-16, according to an ABC press release.
• He was elected at the bureau’s 67th Annual General Meeting.
• I Venkat of Eenadu was unanimously elected as Deputy Chairman.
• The members on the ABC Council for 2015-2016 are: Advertising Agencies Representatives — Madhukar Kamath of Mudra Communications (as Honorary Treasurer), Srinivasan K Swamy of RK Swamy BBDO, and CVL Srinivas of Group M Media India Pvt Ltd; Publishers Representatives — Amit Mathew of Malayala Manorama, Shailesh Gupta of Jagran Prakashan, Hormusji N Cama of Bombay Samachar, Devendra V Darda of Lokmat Media, Sanjeev Vohra of Bennett, Coleman & Co Ltd, Benoy Roychowdhury of HT Media, and Chandan Majumdar of ABP Pvt Ltd; Advertisers Representatives — Hemant Malik of ITC (Honorary Secretary), Debabrata Mukherjee of Coca-Cola India, and Sandip Tarkas of Future Retail.

SEBI asks Raju
Family to pay more than Rs 1,800 crore

• The Securities and Exchange Board of India (SEBI) on Thursday asked ten entities connected to the Satyam scam case including the ex-chairman of the erstwhile Satyam Computer Services Ltd., B. Ramalinga Raju and other family members to disgorge over Rs.1,800 crore, which are ‘ill-gotten gains’ made by them.
• The SEBI order said that pursuant to the SEBI order on July 15, 2014, B. Ramalinga Raju and B. Rama Raju have to jointly and severally disgorge Rs.56,16,85,195 (Rs.26,62,50,000 and Rs.29,54,35,195) “which they had earned by sale/transfer of shares held by them in Satyam Computers.” Further SEBI asked SRSR Holdings Pvt. Ltd. (controlled by Raju brothers) to disgorge the wrongful gain of Rs.1, 258.88 crore jointly and severally with B. Ramalinga Raju and B. Rama Raju.
• The other family members include, Chintalapati Srinivasa Raju, Anjiraju Chintalapati (since deceased). Ms. B. Appalanarasamma, Ms. B. Jhansi Rani, B. Rama Raju Jr., B. Suryanarayana Raju, B. Teja Raju and IL&FS Engineering and Construction Company Ltd. (formerly known as Maytas Infra Ltd.) were also asked to disgorge the amounts]\
• SEBI ordered that these amounts would be paid, along with simple interest at 12 per cent per annum from January 7, 2009, till the date of payment, within 45 days from the date of this order, that is, September 10, 2015.
• Earlier, SEBI passed an order on July 15, 2014, wherein it had barred B. Ramalinga Raju, B. Rama Raju (then Managing Director of Satyam), Vadlamani Srinivas (ex-CFO), G. Ramakrishna ex-VP) and V.S. Prabhakara Gupta (Ex-Head of Internal Audit) from the markets for 14 years and also asked them to return Rs.1,849 crore worth of unlawful gains with interest.

Gold Monetization
scheme,Get Cabinet approval

• The government on Wednesday announced the launch of sovereign gold bonds and a separate gold monetization scheme in a bid to lure away Indians from buying physical gold.
• Both the gold schemes announced today were part of the annual Budget proposal.
  Here are 10 things to know about the two gold schemes:
• The sovereign gold bond will enable investors to buy gold certificates from the government, which can later be encashed for money or physical gold.
• Gold Bonds will be issued with a rate of interest to be decided by the government. Interest will be calculated on the value of gold deposited at the time of investment.
• Gold bonds will be issued in denominations of 5, 10, 50, 100 grams of gold. The cap per person per year has been set at 500 grams, the government said.
• Duration of such gold bonds will be for minimum of 5 to 7 years to protect investors from medium term volatility in gold prices, the government said.
• Gold bonds are expected to reduce the demand for physical gold bars by shifting a part of estimated 300 tons per annum for investment into gold bonds.
• The gold monetization scheme involves mobilization of tonnes of the yellow metal stored in households and temples. Ornaments will not be accepted under gold monetization scheme, Finance Minister Arun Jaitley said.
• The gold monetization scheme that will enable depositors to earn interest on their on their gold accounts.
• The gold monetization scheme will cut down on imports, thus reducing foreign exchange outflows. According to estimates, India paid $34.32 billion to import around 930 tonnes of gold in the year ending March 2015.
• Gold monetization scheme, in long term, will reduce country’s reliance on the import of gold & put it to productive use, the government said.
• Though stocks of gold in India are estimated to be over 20,000 tonnes, most of this gold is neither traded, nor monetized. Gold collected through the scheme will be made available to jewelers for manufacturing of new jewellery and other items.

Import of
Ammonium nitrate in loose form banned

• In a major relief to domestic manufacturers and security agencies, the Ministry of Home Affairs is learnt to have asked the Department of Industrial Policy & Promotion (DIPP) not to allow bulk import of ammonium nitrate (AN) in loose form because it poses a threat to the national security.
• As per the directive, the chemical has to be imported ‘in bagged form only,’ irrespective of the quantity in each bag, and the consignment has to be packed at the point of origin.
• With this, the August notification of the Ministry of Shipping that allowed a south Indian port to facilitate bulk import in any form has become null and void.
• The green signal for bulk import in any form was interpreted as import in a loose form. A possible indiscriminate import raised security concerns as ammonium nitrate is an extremely dangerous explosive substance.
• What had prompted the Shipping Ministry to grant the relaxation is not known.
• Domestic manufacturers such as Rashtriya Chemicals & Fertilizers Ltd., Gujarat State Fertilizers & Chemicals Ltd. and Deepak Fertilisers & Petrochemicals Corporation Ltd., which together have an installed capacity of 770,000 MT of ammonium nitrate, had raised objections as cheaper imports would have severely affected their business.
• Besides, they had invested in bar-coding of ammonium nitrate bags, IT infrastructure and tracking devices to comply with the guidelines for ensuring that even a small quantity does not fall into the wrong hands.
• The chemical is so dangerous that the Home Ministry, in its latest order, has made it mandatory for vehicles transporting it to have two armed guards with the GPS system.
• India consumes 700,000 MT of ammonium nitrate, a raw material for making civil explosives for mining and infrastructure.
• Since imports are 15-20 per cent cheaper, explosive manufacturers who supply to mining and infrastructure companies have been lobbying for bulk import, especially in loose form.

Centre,s u-turn now auction
69 state-owned oil, gas fields

• The 69 small and marginal fields holding 89 million tonne of oil and gas resources, worth Rs 70,000 crore at current rates, will be given to explorers offering the maximum revenue from hydrocarbon produced to the government.
• Bidders will be asked to quote the revenue they will share with the government at low and high end of price and production band to capture windfall of steep rise in prices as well as quantum jump in production.
• The government will allow companies to sell oil as well as natural gas produced from these fields at market price and with no restriction on whom they sell the produce to. While oil is priced at global benchmark currently, a complex international hub based formula determines gas price, which is roughly half of the rate at which India imports gas.
• This model was criticised by CAG which said it encouraged companies to keep raising cost so as to postpone higher share of profits to the government.

Government decided to waive
MAT to be waived for FIIs

• Union Finance Minister Arun Jaitley announced on Tuesday that the Narendra Modi government had decided to waive the controversial minimum alternate tax (MAT) on capital gains made by Foreign Institutional Investors (FIIs) prior to April 1, 2015.
• The decision, to be carried out through an amendment to the Income Tax Act, is likely to come as a big relief to FIIs that pulled out more than Rs. 17,555 crore ($2.65 billion) from India in August.
• “The Justice A.P. Shah Committee has said that there is no legal basis for levying 20 per cent MAT on past capital gains … it is not leviable,” Mr. Jaitley told reporters..
• Through the amendment, the government proposes to clarify that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/ permanent establishment in India for the period prior to 1.4.2015, said a release issued later.

Bombardier bullish on Indian market

• Canada-based Bombardier Inc.’s rail unit is bullish about the opportunities in India, buoyed by thrust given to the sector in the Railway budget and Prime Minister Narendra Modi’s pet projects such as high speed trains and smart cities.
• Railway Minister Suresh Prabhu had announced an investment outlay of Rs.8.5 lakh crore ($125 billion) to transform the Indian Railways in the next five years in the Railway budget.
• Bombardier Transportation is also evaluating to offer solutions such as light metro/monorails/light rail vehicles for smart cities, he added.
• The firm is already pursuing various metro projects such as Bengaluru Metro Phase-II, Nagpur Metro, Ahmedabad Metro and Mumbai Metro Phase-III along with metro projects for signalling systems only in Noida Metro and Greater Noida Metro.

Paradox of a dwindling
world economy and a growing India

• There are three major crisis faced by the Indian financial markets since the opening up of the Indian Economy in 1992 — The South-east Asian currency crisis in 1997; global financial crisis in 2007 with the fall of investment bank, Lehman Brothers: and the slump in the Chinese economy witnessed this week.
• While the intensity of the fall in financial markets was less in 1997 as the country was not exposed much to the global economy at that point of time, the impact was heavier in 2015.
• ”We were able to protect our markets because of our strong macro economic fundamentals,” says N. S. Venkatesh, Executive Director and Chief Executive Officer of IDBI Bank.
• The fears of China economy slump have made the market very nervous. “But I believe this (fear) has been overdone,” says Mr. Venkatesh.
• For Indian markets, as inflation has been climbing down, monsoon near normal and currency being one of the better currencies compared to Malaysian Ringgit, Indonesian Rupiah and South African Rand, the economy could withstand any financial onslaught.
• The markets would stabilise at current levels and will see an upward trajectory reflecting the growth potential for the country.
• The fall in commodity prices, particularly the crude oil will help us reducing the subsidy burden for the government and will in turn help better fiscal management and reduction in inflation expectations.
• In 1997, other economies, especially, the emerging market economies (EMEs) were over-heated with the foreign funds entering their real estate and stock markets. However, India’s premature stage of openness (of economy) helped the country from a wild attack of withdrawal of foreign funds as witnessed in other countries.
• When global financial crisis erupted in 2007, the country’s economy was well protected by the Reserve Bank of India (RBI) with Dr. Y.V. Reddy at the helm.
• The proactive regulatory regime perceived by higher capital as well as higher risk weight age for real estate loans, the central bank was able to keep the asset bubbles at bay. This legacy had been continued by Dr. D. Subbarao also.
• The RBI, as a regulator, has always been ensuring that short-term hot money flows are discouraged which has helped the country to withstand all financial turbulences from 1997. “Even when look at the preference of the country, we attract long term flows from real money investors such as pension funds, insurance funds and sovereign wealth funds,” says Mr. Venkatesh. This would enable the economy to withstand any financial turmoil, together with the built up of adequate foreign reserves.

Chinese crisis

• Devaluation of Yuan by People’s Bank of China (PBoC) on August 11 and 12 led to major volatility in global markets and competitive devaluation in currencies by a few emerging markets
• Even though on REER (Real Effective Exchange Rates) basis, Yuan doesn’t seem to be undervalued but the timing of devaluation (slowing growth in China and plunging stock market) exacerbated the market reaction as market participants took this as a signal that Chinese authority are going to use currency devaluation as a tool to spur growth,” says Vinod Garg, Director, QuantArt, a foreign exchange advisory firm.

Govt started search for new SEBI Chairman

• The Finance Ministry said in a notification that the new SEBI Chairman would be appointed for a five-year term or up to the age of 65 years, whichever is earlier.
• Besides, he would be eligible for re-appointment.The Government has begun the search for a new Chairman of the capital market regulator SEBI to succeed the current head UK Sinha, whose term ends on February 17, 2016.
• The Finance Ministry said in a notification that the new SEBI Chairman would be appointed for a five-year term or up to the age of 65 years, whichever is earlier. Besides, he would be eligible for re-appointment.
• The Chairman would have an option to receive pay “as admissible to a Secretary to the Government of India, or a consolidated salary of Rs. 4.5 lakh per month”.
• The salary remains unchanged from what is being paid currently. Before joining SEBI as its Chairman, UK Sinha was the head of the UTI Mutual Fund. Prior to that, he had served in the Finance Ministry among other positions as an IAS officer.

LIC buys 86% of Indian Oil shares on offer

• State-owned Life Insurance Corporation of India, bought 86 percent of shares on offer, in state-run Indian Oil Corp this week, salvaging a $1.4 billion government sale, as the Indian market took its biggest tumble in more than six years.
• LIC, India’s biggest investor, has in the past dug into its pockets to prop up government sales, buying up state banks and government mining firms. It heavily supported the sale of Coal India shares in January and the sale of shares in Steel Authority of India (SAIL) last year.
• The investments have sometimes proved fruitful for LIC, with stock in the State Bank of India, which was invested in January 2014, up more than 60 percent.

LG launched the world’s
first 4K OLED TV in India

• The 55-inch variant is priced at Rs 3, 84,900 while the 65-inch model at Rs 5, 79,900.
• The new LG OLED 4K TV features a transparent stand and the back cover are free of fasteners and holes. In addition, the TV also features 3D and Harmin Kardon sound technology. 3D glasses are bundled with the TV.
• The company’s curved TVs are based on LG’s proprietary WRGB technology that boasts 33 million colour sub-pixels (about 27 million more than a conventional full-HD TV) to offer better colours and contrast ratio along with deeper blacks. The display offers a 5.9mm thickness as well.
• The TV also has a maximum response time of 0.001ms (1000 times more than conventional LCD TVs) for blur free viewing, claims the company and the TV is also powered by webOS smart TV platform and LG’s magic motion remote that also supports voice recognition. In terms of connectivity, it supports Wi-Fi, Miracast, MHL and Intel WiDi.

Govt panel sees no basis for
MAT demand on FIIs

• In a big relief to FIIs, a government-appointed committee has recommended that there was no case for imposing the controversial minimum alternate tax (MAT) on FIIs retrospectively, a suggestion that the government is said to be “favourably” considering.
• The A P Shah Committee, which was appointed by the government to go into question of levy of MAT on capital gains made by foreign institutional investors (FIIs), submitted its report to Finance Minister Arun Jaitley on July 24.
• The panel, a top source said, has recommended that there was no basis for levy of MAT on FIIs for period prior to April 1, 2015.
• The Committee saw no legal basis for levy of 20% MAT on past capital gains; he said adding that the government is “favourably” considering the recommendation.
• While the issue had riled foreign portfolio investors, Finance Minister Arun Jaitley had in his Budget for 2015-16 exempted FIIs from the levy from April 1.
  Foreign investors have invested about $20 billion in Indian stocks in the past year and $28 billion in bonds.
• In its 66-page report, the Shah panel recommended relief for FIIs from paying Minimum Alternate Tax (MAT).

Centre accepted Bankers demand

• Bringing cheer to lakhs of bank employees, the government has accepted the long-pending demand of workers to declare second and fourth Saturday’s holidays, with effect from September 1.
• At present, all PSU and private sector banks work half-day on Saturdays. “This s a welcome move. This will be a big relief to employees and I hope that this will improve the productivity,” AIBEA general secretary C H Venkatachalam said.
• In case of a month having five Saturdays, banks will be closed only on second and fourth Saturdays.

SBI denied fresh loans to NPA accounts

• Country’s largest lender State Bank of India on Thursday expressed concerns about giving fresh loans to accounts which have become non performing assets (NPA) and said the banks do not have any incentive by doing so.
• Listing reasons, Bhattacharya said, “One, you will be actually bloating up your NPA numbers further by giving it more money. Second, if you look at the PSBs and the kind of questioning they have to go through — if it is NPA, why did you give it more money? What is the reason you have given money?”
• While speaking on bad loans at the same event, RBI Governor Raghuram Rajan said that NPAs are largely an accounting issue.

E-Commerce Generates $1.2 Million Revenue Every 30 Seconds: Study

• The global e-commerce industry generates over $1.2 million (around Rs 8 crore) every 30 seconds, with a major chunk of the sector’s revenue being cornered through social media, says a joint study by Assocham-Deloitte.
• Facebook, Pinterest and Twitter contribute $5,483 (Rs 3.57 lakh) $4,504 (Rs 2.94 lakh) and $4,308 (Rs 2.81 lakh) respectively every half-a-minute to the figure.
• The study report added that the maturity of social media and its reach across masses and classes makes it a suitable platform for online sales.
• Social media pages provide information regarding new products in the market, user reviews and ratings of the product, recommendations and IT products, it said.

Ashwani Lohani to Be New Air India Chief

• Engineer-turned-bureaucrat Ashwani Lohani has been appointed as the chairman and managing director of national carrier Air India. Mr Lohani will have a fixed tenure of three years as Air India boss.
• Mr Lohani replaces Rohit Nandan, whose extended tenure ends on Friday.
• A 1980 batch Indian Railway Service of Mechanical Engineers (IRSME) officer, Mr Lohani is currently posted as managing director of Madhya Pradesh Tourism Development Corporation.
• Air India, which controls close to a fifth of India’s domestic air travel market, has been losing money for years and has long been criticized for its high costs.
• Last month, the finance ministry said it will provide an additional funding of Rs. 800 crore for the ailing airline. Air India was allocated Rs. 2,500 crore in this year’s Budget.

Investors like Alibaba; Snapdeal is ready to take on biggies

• If you are in e-commerce, you just cannot ignore the power of Indian market. That’s the message investors are getting from the latest round of investment Snapdeal has obtained.
• Snapdeal has raised $500 million from Chinese e-retail giant Alibaba, Taiwanese iPhone maker Foxconn and Japanese major SoftBank.
• Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the funding round, Snapdeal said, without giving further details.
• In October 2014, the company had raised $627 million from SoftBank, which is learnt to be holding a significant stake in the online marketplace now.
• In the latest round, media reports say Alibaba and SoftBank are likely to have invested $100-125 million each.

BSE came up with New System

• To check money laundering through stock markets, top stock exchange BSE has asked its members to report on a monthly basis details of the STRs (Suspicious Transaction Reports) submitted to the government’s Financial Intelligence Unit (FIU).
• Asking the members to ensure compliance at the earliest, the exchange said in a circular that the trading members are required to submit the data through a specific FIU-STR module of the online gateway BSE Electronic Filing System (BEFS).
• The members have been asked to provide details of their registration with the FIU, as also the information about the principal officer and the designated directors for the PMLA (Prevention of Money Laundering Act) compliance.
• BSE has also asked members to report the cumulative number of STRs filed with the FIU as on March 31, 2015. Thereafter, the members would need to report the number of STRs filed with FIU on a monthly basis.
• The regulators and the financial intelligence agencies have enhanced their vigil in the recent months on entities trying to misuse the stock market platform for possible laundering of black money and to evade taxes.
• Nearly 950 entities have already been barred by Sebi for such attempts, while further action is underway against them.

SBI launches mobile wallet app ‘Buddy’

• Country’s largest lender State Bank of India on Tuesday launched a mobile wallet app, SBI Buddy, in collaboration with Accenture and Mastercard.
• The service will be available to existing as well as non-SBI customers.
• The app was launched by Finance Minister Arun Jaitley along with Jayant Sinha, Minister of State for Finance and Hasmukh Adhia, Secretary, Department of Financial Services.
• It also has features like reminders to settle dues, recharge and pay bills instantly.
• The app is available on Google Play Store, at present, and soon will be launched on Apple App Store.

SBI Foundation

• State Bank of India also launched SBI Foundation, which will be the implementing agency for corporate social responsibility (CSR) activities of the lende
• The Finance Minister unveiled the logo and website of SBI Foundation.
• The foundation will promote, encourage, develop causes related to education, environment, women empowerment, children welfare and manage all the CSR activities of the SBI Group.

RIL dethrone by IOC

• Within two quarters of losing its 23-year-old reign as the country’s most profitable company to TCS in the December quarter, Reliance Industries was again humbled in the June quarter, this time by IndianOil.
• The state-run firm booked Rs.118 crore more profit than the Mukesh Ambani-run firm net income of Rs.6, 318 crore.
• Better refining margins arising from lower oil prices and almost full payback of subsidies by the government helped the nation’s biggest oil company Indian Oil Corporation (IOC) to report a massive more than twofold jump in the June quarter net profit at Rs.6,436 crore.
• IOC’s refining margins soared to a seven-year high during the reporting quarter. For Reliance, losing the numero uno slot comes within two quarter as in the December 2014 earnings season as well it had lost out to TCS as it booked more profit than RIL with a net income of Rs.5,328 crore. The loss in the December 2014 quarter was the end of RIL’s 23-year run as the most profitable firm with a net profit in the country, overtaking the long-standing champion Reliance which saw its profit dip to Rs.5,256 crore as falling crude prices hurt its core business.

Will yuan devaluation hit India’s export

• India’s exports contracted for the eighth consecutive month in July. Exports were down 10.3% to $23.13 billion, owing to a worldwide slowdown, and six-and-a-half year low oil prices that have affected the price of petroleum products. The last time exports expanded was in November, when shipments were up 7.27%.
• Oil products form about 31% of the total exports, while petroleum products account for 18% of the total exports.
• In the first four months of FY16, exports have declined by 15.04% to $89.82 billion, so have imports (down by 12.01%), resulting in a trade deficit of $45 billion.
• Effects of the yuan devaluation were felt world wide, with the dollar firming, gold gaining some ground as safe-haven again, and Asian currencies tanking against the greenback.
• Post the currency devaluation, Indian manufacturers and exporters are concerns about two things:
• Their exports to China and the rest of the world declining
• dumping of cheaper imports from China
• Engineering and textile exports from India are expected to take a major hit with Chinese goods becoming more competitive, while steel firms fear that cheap imports from the neighbouring country could intensify further.

Centre eases foreign
investment rules, banks likely to gain most

• In a move that will attract more overseas inflows and improve the ease of doing business in India, the government on Thursday simplified foreign investment rules by bringing together different categories.
• The Cabinet Committee of Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, introduced a composite cap for all kinds of overseas inflows, including foreign direct investment (FDI), foreign portfolio investment (FPI) and investments by non-resident Indians (NRIs).
• The decision, which was first announced by finance minister Arun Jaitley in the Budget, boosted stocks of banks, which will now find it easier to attract foreign capital up to 74%. Banks are already reeling under the pressure of rising bad loans and need billions of dollars to meet capital requirements.
• Besides banks, credit information firms, commodity and power exchanges, and defence and other retail companies among others, will also benefit from the policy.

Bullet train project: costly affair for India

• India’s maiden bullet train corridor between Mumbai and Ahmedabad will cost nearly Rs one lakh crore and the first train can run in 2024 if work begins in 2017, according to a final feasibility report on the project prepared by the Japanese governmental agency.
• The Japan International Cooperation Agency (JICA) in its report submitted to the Railway Ministy today envisages a reduction in the travel time on the 505-km long corridor between the two western cities to two hours from the existing over seven hours.
• The report estimates that the project where the bullet train will run at a speed of over 300 km per hour will cost Rs 98,805 crore. It also suggested that the train fare could be higher than that charged for First AC of Rajdhani Express, a senior rail ministry official involved with the project said.
• Railways will examine the report and decide the future course of action, the official said.
• As a follow-up action, a Cabinet note seeking approval for the project with an outline of the project feasibility and timelines is likely to be prepared next month.
• If work begins in 2017, the line can be completed in 2023 and made operational in 2024, it is projected.
• After the study of the financial feasibility of the line, the final report suggests the fare of the bullet train between Mumbai and Ahmedabad may be somewhere around one and half times more than the fare of the first AC of Rajdhani Express and it would be around Rs 2,800.
• It is estimated that by 2023 around 40,000 passengers are expected to avail this service everyday and accordingly it would be a financially viable service.
• The Mumbai-Ahmedabad corridor is expected to enable trains to run at a top speed of 350kmph.
• From the initial estimated cost of Rs 65,000 crore, it has gone up after taking into account various factors like price escalation and interest.

Apple grows faster in India than China

• India is proving to be quite a strong growth engine for Apple, the world’s most valuable company that sells the iPhone smartphones, iPad devices and Mac line of computers.
• Growth rate in India has surpassed that witnessed in China.
• Sales in India were up 93% in April-June against 87% growth in China, according to numbers released by the company, while announcing quarterly results on Tuesday.
• However, it must be noted that China is many times bigger for Apple in terms of absolute volume and revenue, contributing almost 25% to the $49.6 billion revenue that the company clocked in April-June quarter.
• India, on the other hand, is still a billion-dollar market for Apple and that too on an annual basis. But, India is moving up fast, say distributors and sellers of Apple’s devices.

TRAI disclose firms
faulting on call drop service norms

• The Telecom Regulatory Authority of India (TRAI) has named Vodafone, Idea, Reliance and Airtel among the cell phone service providers failing to meet the quality of service norms in Delhi or Mumbai, especially on mobile call drops.
• The audit, done by an independent agency in the two metros, on behalf of the regulator, found that Tata (CDMA) in Delhi and Bharti Airtel in Mumbai are the only service providers meeting the benchmark of less than 2 per cent call drops.
• In Delhi, the highest call drop rate was that of Reliance (17.29 per cent), followed by Airtel (8.04 per cent), Aircel (5.18 per cent), Vodafone (4.28 per cent) and Idea (2.84 per cent). The call drop rate for Tata (CDMA) stood at 0.84 per cent.
• The situation is no better in Mumbai with Idea registering the highest call drop rate of 5.56 per cent, followed by Tata (GSM) (5.51 per cent), Vodafone (4.83 per cent), Aircel (3.19 per cent) and Reliance (2.29 per cent). For Airtel, this was 0.97 per cent.
• The TRAI said the drive was conducted in view of complaints on call drops and other network issues on June 23 and June 24 in Mumbai and July 9 to 11 in Delhi.
• As per the audit report, barring Tata (CDMA) in Delhi, none of the service providers in Delhi and Mumbai, meets the benchmark for Rx Quality, which measures voice quality during calls.
• The number of call drop complaints by mobile phone subscribers has been on the rise, especially in metros. However, operators, on their part, have cited lack of spectrum and delay in its allocation as one of the reasons for network-related issues along with hurdles in installing mobile towers due to radiation issues.
• The TRAI report points out that during the last six months around 801 sites in Mumbai and 523 sites in Delhi were shut down due to reasons such as sealing of sites by municipal authorities and radiation-related issues. The closure of each site impacts three to four neighbouring sites and this may lead to increased call drops.

Oil prices slip further on
concerns over supply glut

• Oil prices slipped, on Wednesday, after the American Petroleum Institute (API), the largest U.S trade association for gas and oil, published that oil inventories increased by 2.3 million barrels in Cushing, Oklahoma.
• Excess supply is expected to persist with the Iran nuclear deal, which will bring Iran’s oil onto the market in a few months.
• The Oil Producing and Exporting Countries (OPEC), the cartel of oil producing nations that includes Iran but is led by rival Saudi Arabia, announced that it would not cut back on output. The group said that the oil price dip was likely to be temporary and that demand was likely to pick up.
• OPEC’s oil output faces challenges and competition from other energy sources, including U.S shale, as well as internal differences in opinion, with Iran and other smaller oil producing members requesting a cut back in supply in light of falling prices.

Cabinet to take up gold
monetisation scheme in few weeks

• The Government is likely to consider and approve gold monetisation scheme in the next few weeks, which proposes to offer tax-free interest to individual on depositing the yellow metal with banks.
• “Cabinet note on this (gold monetisation scheme) has been circulated. It will take couple of weeks before approval comes,” sources said.
• Various proposals including interest rate are at the discussion stage, sources said. Sources said that nod on issuance of Sovereign Gold Bond could take a while.
  IDFC gets banking licence

IDFC gets banking licence
from RBI, to launch services by year-end

• The Infrastructure Development Finance Company (IDFC Ltd) on Friday declared on it’s website that theReserve Bank of India (RBI) had granted banking licence to the financial company making it the second lender after Bandhan Bank to enter the banking sector after more than a decade.
• IDFC and Bandhan Financial Services Pvt Ltd emerged successful out of 25 contenders for new bank licences issued by the RBI in April last year. Bandhan Financial got RBI’s approval last month.
• IDFC’s executive chairman, Rajiv Lall after receiving the final nof for the banking licence had said that the company plans to start operation from October 1 with an initial loan book of around Rs 55,000 crore with an estimated 20 branches. Of these 15 are expected to be in tier-VI cities with rest of the branches in New Delhi and Mumbai.
• YES Bank was the last bank to be se up in 2004. Bandhan said in June it would launch banking operations in Augus
• Millions of people in India do not have access to formal banking services. The move to grant new permits marked the start of a cautious experiment to create more competition in a sector dominated by state lenders many of which are reluctant to expand into rural areas or towns where banking penetration is low.

Now RBI’s independence, is in govt’s hand

• If indeed the second draft of the Indian Financial Code, released on Thursday for public comments, is implemented in its entirety, Reserve Bank of India (RBI) governor will have no veto power in the proposed seven-member Monetary Policy Committee (MPC) that will have a dominant say in setting interest rates and that is not good news for the economy.
• The matter of veto power is highly critical given the proposal is that four out of the seven members in the MPC should be from the government’s side.
• This means the full control to chart the course of monetary policy will be with the government and not the RBI. The monetary policy, as we know it today, will cease to exist.
• This will effectively undermine the independence of the central bank — an institution that has guarded the economy well from the pre-independent days, through multiple crisis-phases.
• The RBI is probably among the few public institutions India can be proud of with impeccable integrity and proven track record. The government shouldn’t do the blunder of killing the RBI’s power to have a final say on the monetary policy.Reuters
• This was clear when the finance ministry tried to cut the central bank down to size by mooting the idea to shift the power of debt management from the institution.
• The decision was, however, reversed later when RBI put up a stiff opposition. Compared with the separation of debt management, denying the RBI the veto in MPC is a much more serious issue. If the government sticks to the plan, it can run into a serious, direct face-off with the central bank this time around.
• At present, the monetary policy is framed by the central bank after factoring in the recommendations of an expert advisory committee, assessing multiple economic indicators in domestic and global markets and, finally, consulting with the finance minister on the broader policy direction. The final decision, however, rests with the governor.]
• But, under the proposed framework, RBI governor will be one of the several members of the committee and the government will dictate the policy.
• In effect, the power to decide the country’s monetary policy will be shifted from an independent, credible institution to the political interests of the government, for whom monetary policy will then be among the many tools under disposal to work operate in line with its political agenda.
• The difference is that the RBI undertakes the complex process of monetary policy formulation keeping in mind the long-term good of the economy, regardless of the immediate consequences, sometimes unpleasant to the ruling government.
• Previous RBI governors D Subbarao and Y V Reddy, who have preferred to describe the tensions with the governments on policy issues as ‘constructive tensions’, has batted for sufficient autonomy in its functions in the larger interest of the country.
• To safeguard the economy, it is highly critical that central bank enjoys dominance in policy decisions.

What is the Indian Financial Code?.

• The revised draft of Indian Financial Code, released on 23 July 2015, has already made to the headlines, as it proposes to dilute the RBI Governor’s power; he may no longer have the power to veto policy rates.
• The major change as of now is that there will be four members appointed by the central government and three from RBI, earlier the ratio was other way around.
• The IFC bill is expected to table in the winter session of the parliament. The Parliament will finalise the code, which will eventually find its way to the Union Cabinet for approval.

What is the Indian Financial Code? How does it work?

• The Financial Sector Legislative Reforms Commission (FSLRC) was set up on March 24, 2011, for re-writing the Code to regulate the financial sector and introduce principles for financial regulation and the constitution, objectives, powers and interaction of financial agencies.
• Its aim was also to bring about coherence and efficacy in the financial regulatory framework.
• In 2013, the commission, headed by Justice BN Srikrishna, submitted its report in two volumes, which included ‘Analysis and Recommedation’ and ‘Draft Law’.
• The revised draft in twenty parts will strive to regulate financial agencies.
• Under this Act, the Financial Sector Appellate Tribunal was established to exercise the jurisdiction, powers and authority conferred upon it.
• According to the Act, the general direction and management of the financial agencies will be vested in the respective boards — the Financial Authority Board for the Financial Authority, the Reserve Bank Board for the Reserve Bank, the Redress Agency Board, with respect to the Redress Agency, the Corporation Board for the Corporation; the Council Board for the Council and the Debt Agency Board, with respect to the Debt Agency.
• The Code deals with the establishment of financial agencies, establishment and structure of the tribunal, allocation and regulation of financial services.
• A part of it discusses the functioning of financial agencies, such as boards of financial agencies, strength and composition of boards; decision making, advisory councils, accountability mechanisms and funding for financial agencies.
• It also mentions the disposal of applications, information and inspections, investigations and offences as executive functions of financial agencies. These financial agencies also have quasi-judicial functions — administrative law, show cause notices and orders, enforcement actions, procedure for enforcement actions and penalties.
• Moreover, the Code also clarifies financial consumer protection, prudential regulation, contracts, trading and market abuse, capital controls, resolution of financial service providers, financial stability and development council, development (provisions for review), public debt management agency, offences, functions, powers and duties of tribunal, miscellaneous, and schedules.

U.S. calls Burundi election ‘deeply flawed’

• U.S. Secretary of State John Kerry on Friday called Burundi’s election “deeply flawed” and urged President Pierre Nkurunziza to hold a “meaningful, serious” dialogue with the central African country’s opposition, the State Department said in a statement.
• Nkurunziza won a third term in office on Friday after the opposition boycotted the vote, accusing him of violating the constitution by running for re-election.
• Nkurunziza’s decision to seek a third term plunged Burundi into its biggest crisis since an ethnically charged civil war ended in 2005.

Yellow Signals from gold prices

• The yellow metal dominated the world market scene all of last week. Gold slumped to a five-year low, slipping to an intra-day low-point of $1,072.30 by Friday. A late rally that day, however, pushed prices back to around $1,100 an ounce. At best, it helped pare losses from last Monday when the price slid to its lowest since March 2009, to $1,088.05 an ounce.
• The Comex gold futures for August still ended their fifth consecutive week in negative territory. Though the rally suggests that there could be an improvement in market sentiment, the bearish undertone persists among retail investors.
• At the moment, everyone in the international marketplace is wary of gold. Indeed, price movement is set for an uncertain phase, at least in the near-term. The reasons behind the slipping interest in gold are not difficult to fathom.
• A looming rise in the U.S. interest rate, for the first time in nearly a decade, is playing the villain. At the moment, a stronger dollar remains the topic that dominates discussions in the marketplace.
• An inadvertent release on a rate forecast on the website of the Federal Reserve, though it was subsequently withdrawn, only helped to confound the confusion. Understandably, all eyes are now on the Federal Reserve.
• Will it pull the trigger on rate hikes? Nevertheless, the dipping global oil prices hold hope for investors in gold.
• A protracted oversupply situation, weak demand, the Greek crisis and the Chinese market fall have all come together to pull oil prices down.
• The fall of oil could yet prove a rescuer for gold. If there is serious consequential fallout on U.S. domestic inflation, the oil price fall could slow the Fed’s tightening policy.
• A sustained recovery in gold prices, it appears, is inversely related to the growth prospects of the U.S. economy.

Rajesh Exports buys
world’s largest gold refining company

• Jewellery company Rajesh Exports Ltd on Monday said that it has bought Valcambi, the world’s largest gold refining company, in an all-cash deal worth $400 million ( Rs 2560 crore).Reuters
• The company was selected after a global search by Valcambi’s existing owners led by Newmont Mining Corp, the world’s largest gold jewellery maker said.
• The deal will help it secure raw material supplies and will add to earnings per share, the company said.
• India is the world’s biggest consumer of gold, with annual demand hovering around 900 tonnes per year.
• The company said that with Valcambi acquisition, REL will become an integrated player covering precious metal refining and gold jewellery making.
• Rajesh Exports said for the last three years on an average per year Valcambi generated revenues in excess of $38 billion (Rs 2,36,500 crore) by refining and selling 945 tons of gold and 325 tons of silver per year, which is more than India’s average annual gold demand.

Centre appoints
R S Sharma, new Trai chairman

• Ram Sewak Sharma is set to be the new chief of the Telecom Regulatory Authority of India (Trai), taking charge at a time when the regulator is deciding on crucial matters such as net neutrality and the way to deal with the fast-growing eco-system of over-the-top (OTT) operators, who are mushrooming over the mobile and internet world. He replaces Rahul Khullar, who retired from the job in the second week of May.
• Sharma, a 1978-batch IAS officer of Jharkhand cadre, is currently the secretary in the department of electronics and information technology(Deity), a job that makes him thorough with matters related to the IT sector and well-versed with crucial telecom issues.
• A formal notification is expected over the next few days, sources said. “He is seen as most experienced for the job.
• There were a number of applicants for the high-profile job that regulates the issues related to the telecom sector and the broadcasting industry.
• There were over 75 applicants for the position and apart from Sharma, others vying for the post included former defence secretary R K Mathur, information & broadcasting secretary Bimal Julka, former commerce secretary Rajeev Kher and steel secretary Rakesh Singh. Former RBI deputy governor Subir Gokarn was also in the fray.
• Sharma holds a Masters Degree in Mathematics from IIT, Kanpur, and a Masters in Computer Science from the University of California.

Mixed views on move to
dilute powers of RBI Governor

• The Reserve Bank of India’s (RBI) Governors always had the privilege of independent decision-making on issues related to monetary policies, which helped the Indian economy for a long time.
• Even at times of major financial crisis crippling the global economy, the RBI Governor’s decisions - sometimes in co-ordination with the Government and sometimes not in consonance with the government’s views - had helped the Nation.
• As per the new draft of the revised proposal for Indian Financial Code (IFC), which would replace the multiple laws – some of them framed even before the independent India - governing the Indian financial sector, the central bank Governor will not have the veto power over the interest rates.
• Moreover, the Government will have the power to appoint a majority of the members of the proposed monetary policy committee of the central bank.
• Though the government is trying to clarify that the RBI’s independent decisions on monetary policies would not be diluted, in short, the Government is proposing a bill to have greater say in RBI’s rate decision-making.The new financial code also proposes a frame-work for inflation-targeting under which the Government and the central bank together will set the target.
• However, another school of thought on markets believes differently. “While foreign investors are nervous about politicians preferring loose monetary policies instead of tight policies of independent RBI, I don’t see much problem with a good balance between Government and RBI,” says Samir Lodha, Managing Director, QuantArt, a foreign exchange advisory firm.
• According to him, the economy needs a good booster of rate cut to kick-start manufacturing, capex cycle, infrastructure investments, job creation etc and also to compete in an environment of slowing global demand.
• He believes that the Government is answerable for employment and inflation and hence “I do not see much problem if there is a balance between RBI and government in monetary policy decision making.”

Sebi cancels Sahara Mutual Fund licence

• In a fresh crackdown on Sahara, capital market regulator Sebi today cancelled the registration of Sahara Mutual Fund saying it was no longer ‘fit and proper’ to carry out this business and ordered transfer of its operations to another fund house.
• The Sahara group has been engaged in a long-running regulatory and legal battle with Sebi ever since the regulator ordered refund of a massive amount of over Rs 24,000 crore by twoahara entities. Recently, Sebi had also cancelled the portfolio management licence of a Sahara firm.
• In the latest order, Sebi directed cancellation of Sahara Mutual Fund’s certificate of registration on expiry of a six-month period from today.
• Sebi also directed Sahara Mutual Fund and Sahara Asset Management Company to stop accepting subscription from its existing or new investors with immediate effect.
• Besides, Sahara MF has been asked to “make efforts to transfer the activities of Sahara India Financial Corporation Limited (Sahara Sponsor) and Sahara Asset Management Company Private Limited (Sahara AMC) to a new Sponsor and a Sebi-approved Asset Management Company at the earliest.”
• If Sahara MF fails to complete the process of transition within five months, it would have to compulsorily redeem the units allotted to its investors and credit the respective funds to its investors, without any additional cost, within a period of 30 days thereafter and wind up the operations of the Mutual Fund.
• Further, Sebi said that it was the responsibility of the Board of Trustees to recognise that Sahara AMC did not fulfil the criteria of ‘fit and proper’ person and shift the responsibility of managing the assets of the Mutual Fund to another entity.
• Besides, non-reporting of the material change in the information and particulars furnished have also has resulted in violation of the MF Regulations.

FinMin working for a
reasonable GST rate: Revenue Sec

• A day after Cabinet approved incorporation of changes in the landmark Goods and Services Tax (GST) Bill as suggested aRajya Sabha Select panel, Finance Ministry today said it is working closely on a “reasonable” GST rate.
• The Union Cabinet last night approved amendments to the GST bill to compensate states for revenue loss for five years on introduction of the uniform nationwide indirect tax regime, as has been suggested by Rajya Sabha Select Committee.
• The GST Constitution Amendment Bill would now be taken up for discussion in the Rajya Sabha, where the ruling NDAdoes not enjoy a majority, for passage in the ongoing session of Parliament.
• The Government proposes to roll out the new indirect tax regime on April 1, 2016.
• After the bill is passed, the Centre will prepare GST laws and a GST Council would be set up to decide on the rates as well as to decide on exemptions and thresholds.
• The Rajya Sabha Select Committee has suggested that the Goods and Services Tax (GST) rate should not go beyond 20 per cent as higher rates could fuel inflation and erode the confidence of consumers.
• Internationally, the GST rate ranges from 16-20 per cent. However, there are some exceptions like Japan, Australia and Germany, where the rates are 8 per cent, 10 per cent and 23 per cent, respectively.
• A sub-committee of Empowered Committee of State Finance Ministers on GST had earlier suggested 27 per cent RNR.
• But the rate is being reworked by the sub-committee in view of taxation of petroleum products as also the 1 per cent additional tax which states can levy as part of the GST roll out.
• While liquor has been completely kept out of the GST, petroleum products like petrol and diesel will be part of the new regime from a date to be decided by the GST Council, which will have two-thirds of its members from states.

Nokia surprise market analyst with profit

• Nokia on Thursday posted a surprise rise in second-quarter profits, helped by high-margin software sales and fewer low-priced contracts.
• The Finnish network gear maker is set to buy the Franco-American telecom equipment maker Alcatel-Lucent which posted second-quarter sales slightly lower than expectations.
• Nokia will buy Alcatel-Lucent for €15.6bn in a deal set to close by mid-2016. The latter improved its margins to deliver better-than-expected operating profit, thanks to cost cuts, and generated more cash than it consumed in the quarter for the first time in a second quarter since 2006.
• Getting to free cash flow positive remains the key goal of Alcatel-Lucent in the turnaround plan launched by chief executive Michel Combes in April 2013.
• He will step aside on September 1 to be replaced by chairman Philippe Camus until the Nokia deal closes.
• Alcatel’s second-quarter revenue rose 5% to €3.45bn euros helped by double-digit growth in so-called IP products that help telecom operators handle heavy video data traffic and direct Internet.
• Adjusted operating profit rose 28% to €175mn for a better-than-expected margin of 5.1%. The company posted a net loss of €54mn, narrower than the €298mn loss of a year earlier.
• Analysts had been expecting second-quarter sales of €3.47bn and net income of €52.4mn, according to Thomson Reuters I/B/E/S data. The gross margin was 34.8%, compared with expectations of 3
• Announced in mid-April, Nokia’s acquisition of Alcatel-Lucent aims to position the company to better compete with market leader Ericsson of Sweden and low-cost Chinese powerhouse Huawei by forging a strong number two in mobile with a more complete product line.
• The companies have secured antitrust approvals in Europe Union, Brazil, Russia and the United States, but are still waiting on a decision from the Chinese authorities.

RBI plans to issue 10 rupee coin

• The Reserve Bank on Thursday announced plans to put into circulation 10 rupee coins to commemorate the International Day of Yoga.
• The coin bears the logo of the International Day of Yoga, with the inscription Saamanjasya evam shanthi ke liye yog “in Devnagri script and “yoga for harmony and peace” around the logo.
• At the bottom of the logo the date June 21 is inscribed, according to an official statement.
• The inscription Anthar rashtriya yoga divas in Devnagri script is on the left periphery and “international day of yoga” in English on the right periphery is written on this side of the coin.
• The obverse of the coin bears the Lion Capitol of Ashoka Pillar in the centre with the legend Sathyamev Jayate inscribed below, the statement said.
• This is flanked on the left periphery with the word Bharat in Devnagri script and on the right periphery flanked with the word “INDIA” in English.
• The coins have been minted by the Central government and are legal tender as provided in The Coinage Act 2011. They will be put into circulation shortly, according to the statement.

Govt names Addl Secretary to
RBI board in place of Fin Secy

• In an unusual move, the finance ministry has nominated Ajay Taygi, additional secretary in the Department of Economic Affairs to the RBI board in place of economic affairs secretary Rajiv Mehrishi.
• As per the convention, eonomic affairs secretary besides the financial services secretary is part of Central Board Directors of RBI.
• “In exercise of the power conferred by clause (d) of sub-section (1) of Section 8 of the RBI ACT 1934, the central government hereby nominates Ajay Tyagi, additional secretary (Investment) Department of Economic Affairs Ministry of Finance, to be director on the Central Board of Directors of RBI with immediate effect until further order vice Rajiv Mehrishi,” a finance ministry notification said.
• Mehrishi also holds finance secretary position in the ministry.
• Following this notification in June 22, RBI had a board meeting which would not have been attended by the incumbent finance secretary.
• As per the RBI website, there are 17 board members including RBI Governor and four Deputy Governors. Rajiv Mehrishi name is still part of the central board of directors as reflected on the website.

Even Hallmarked is not pure

• Even the Hallmarked gold jewellery varies in purity in India, the World Gold Council (WGC) aid on Thursday adding that urgent measures were required for quality control in the country, which is the largest gold consuming nation in the world.
• The improvements to the hallmarking system in the country are not only essential to a successful gold monetisation scheme but also help to boost its gold jewellery exports from the existing $8 billion to $40 billion in the next five years, it said.
• The hallmarking of gold, which is voluntary in nature at present, is a purity certification of the precious metal. The Bureau of Indian Standards (BIS), under the Consumer Affairs Ministry, is the administrative authority of hallmarking.
• “Even though, 30 per cent of jewellery is now hallmarked, there are concerns about the quality and credibility of some hallmarking centres. This means the percentage of jewellery hallmarked accurately is expected to be even lower than 30 per cent,” WGC said in a report.
• Even hallmarked items vary widely in purity because of weak quality control and lack of resources on the part of BIS to enforce its policies, it said.
• Though under-caratage in gold has reduced to 10-15 per cent from 40 per cent since the introduction of BIS hallmarking in 2000, but challenges still remain, it added.
• According to the WGC report, the BIS does not have dedicated laboratories for gold hallmarking so there is little capacity for testing jewellery. There are relatively few BIS branches too, so activity varies widely across India.
• India has approximately 220 BIS recognised assaying and hallmarking centres and maximum of them are located in Tamil Nadu (57), followed by Kerala (39). The distribution of these centres is uneven as south has 153 centres, the North has 111 and the West has 65, the report said.

Uber’s $1 bn India investment

• If your competitors are spending, you must spend too- This seems to be the driving mantra in the start-up space these days.
• Just days after news of taxi-haling app Ola raising another $500 million made headlines, US-based rival Uber has announced plans of pumping in $1 billion (Rs 6,400 crore) into India, thus signalling an escalation of the war between the two companies in a cut-throat market.
• This basically implies more cash burning and chasing of market share rather than profitability by both companies.
• While Ola is rumored to soon be valued at $4.5 billion, Uber’s worth is $40 billion. But such cash-intensive startups are at risk of flopping as they maybe unable to survive in an adverse environment. Will these companies ever make enough money to justify the sky-high valuations?
• But it appears Uber’s massive expansion in over 300 cities globally is at the cost of heavy losses. Investors have given a lot of money to Uber, and Uber is burning this cash to buy market share all over the world. An Uber driver, on condition of anonymity told Firstpost that each Uber driver in India gets an additional Rs 150 per ride as well as more incentive for ferrying passengers during the day and in the evening. Ola too pays extra cash to drivers for doing more rides, but doesn’t pay drivers to keep its app open and nor do they get paid additional money on every ride they undertake.

LIC chief Roy elected
chairman of apex body of insurers

• Life Insurance Corporation (LIC) chief S K Roy was today elected Chairman of the Life Insurance Council, the apex industry body of insurers in the country.
• Roy was elected in a poll conducted among the 24 members of the Council here. He will head the three-member Executive Committee (EC), a key body of the Council, for a period of three years.
• The three members of the EC elected today were Tarun Chugh (PNB Met Life), Anup Rau (Reliance Life) and Sandeep Ghosh (Bharti AXA).
• Other contestants in the fray for EC posts were Rajesh Sud (Max NY), Arijit Basu (SBI Life) and Deepak Mittal (Edelweiss Tokio).
• Talking to PTI after his election, Rau of Reliance Life said “EC is now a well represented body. It has got representation from both bancassurance and non-bancassurance partners. The Council is now ready to take a call on behalf of its various stakeholders.”
• Life Insurance Council is a forum that connects the various stakeholders of the sector. It develops and coordinates all discussions between the Government, regulatory body and the public.
• It has representatives from the 24 insurance companies currently operating in India.

Sebi warns to Investors

• Ready to regulate commodity trading, Sebi has cautioned small investors against coming for quick gains through speculation in this market, which is “risky” and requires a lot of technical expertise.
• “People will come and tell you that with a small margin, you can make a lot of money. Do not fall into the trap,” Sebi Chairman U K Sinha said, even as he asserted that the capital markets watchdog was fully prepared to begin regulating commodities trading and all necessary safeguards would be put in place to keep the scamsters and manipulators at bay.
• Sebi, which expects the merger of commodities market regulator FMC with it to be completed by next month, will soon put in place a new set of regulations for this segment and the restrictions, including for trading lot sizes, would also be implemented to ensure safety of the small investors.
• Announced by Finance Minister Arun Jaitley in his Budget for 2015-16, FMC’s merger with Sebi will help streamline regulations and curb wild speculations in commodities market, while facilitating participation of domestic and foreign institutional investors and launch of new products.
• Besides, the high-profile NSEL scam has rocked this market in the recent past and the subsequent regulatory and government interventions in this case eventually led to the government announcing FMC’s merger with Sebi.
• At present, there are three national and six regional bourses for commodity futures in the country. Together, all the exchanges clocked a turnover of nearly Rs 60 lakh crore in 2014-15, from over Rs 101 lakh crore in the previous fiscal.

India’s should worried about CAD

• India’s current account deficit (CAD) is likely to widen in the June quarter to 1.8-2.0% of GDP while for the current financial year, it is likely to remain under control, says a DBS report.
• According to the global financial services major, though the widening of CAD is likely to raise concerns “briefly” over wider trade imbalances, the full-year CAD is likely to remain within control. “India’s current account deficit is likely to widen anew in the June 2015 quarter, but will not emerge as a flash-point for the full-year FY15/16 (April 2015 to March 2016),” DBS said in a research note.
• As per official figures, the CAD, which is the difference between the inflow and outflow of foreign exchange shrank to 1.3% of GDP ($27.5 billion) in 2014-15 from 1.7% ($32.4 billion) in 2013-14.
• The Reserve Bank of India and the government have been maintaining that the CAD level is comfortable.
• The DBS report said that on quarter-on-quarter basis imports rose 2.8% in the June quarter while exports fell 5%.

E-commerce boosting
Chinese farmer’s incomes

• Internet aided by e-commerce is boosting income ofChinese farmers and helping in turning the backwardagricultural sector into a lucrative modern industry.
• For Zhang Guoqin, growing crops sometimes simply needs a few clicks of the mouse.
• In northeast China’s Heilongjiang Province, he monitors his rice fields on computer screens.
• He uses a system of sensors and automatisation which takes a lot of the toil and inefficiency out of his business.
• Such innovation is a new trend in Chinese farming, a welcome change of direction for a rural economy that has long been seeking modernisation.
• Along with manufacturing, agriculture was on the top of the list.
• Farming in China has been booming for over three decades.
• The summer grain output reached a record high of 141.07 million tonnes in 2015 after 11 consecutive years of increases.
• Though harvests were good, inefficient sales channels, a shrinking labour population and lack of access to loans have been squeezing farmers’ earnings and dragging down the rural economy, the report said.
• In 2014, the per capita disposable income of rural residents rose 9.2 per cent year on year to USD 1,720 less than half of that of urbanites, and 70.17 million rural Chinese earned an annual sum less than USD 385, the official poverty line.
• By the end of 2014, nearly 30 per cent of China’s rural population was online.
• Taobao.com, China’s largest online shopping platform has launched an agricultural channel.
• Its internet conglomerate, Alibaba, also ambitiously plans to invest 10 billion yuan (USD 1 billion) into 100,000 new service centres in Chinese villages in the next three to five years to help train farmers in internet use.

India to produce at least dozen billionaires among start-ups by 2020, says Assocham

• India is expected to produce at least a score of billionaires and many times millionaires among the start-ups in the next five years with e-commerce, financial services and other technology driven fields generating the maximum interest, an Assocham study on start-ups has pointed out.
• It said the maximum of value creation is expected in the fledgling e-commerce, music-entertainment, payment gate-ways and city transport aggregators such as radio taxis.
• The travel arena, especially in the ticketing and booking has already gained some level of maturity.
• The untapped areas for online business include e-coaching, medical consultations (with fool-proof safety features) and social networking in the cities, while in the rural landscape; the initiative is going to be led by the State sector.
• According to the study, even though the Securities and Exchange Board of India (SEBI) is putting a friendly regime for the start-ups to raise finance from the bourses, it would take some time before funds are raised through this channel.

NBFCs prefer raising
funds through debt route

• Credit off take by non-banking finance companies from the banking system registered a rise of only 1.6 per cent on a year-on-year basis in June 2015, as compared to a rise of as much as 16.7 per cent in the same period in the previous year, according to a statement from the Reserve Bank of India.
• The outstanding credit as on June 26, 2015, stood at Rs. 3,11,800 crore against Rs, 3,06,900 crore as on June 27, 2014.
• Sequentially also, the growth was less compared to 5.6 per cent in the previous month. Analysts say NBFCs prefer to raise money through debt route rather than relying on banks as the cost of raising funds through debt route is cheaper.
• There was, of course, a modest rise in personal loans by 16.5 per cent in June 2015 as compared to 15.2 per cent a year ago.
• Non-food credit growth of scheduled commercial banks registered a year-on-year growth of 7.7 per cent in June 2015, against 13 per cent in June 2014.

Finance ministry moves
cabinet note on gold monetisation scheme

• The finance ministry has moved a cabinet note on the proposed gold monetisation scheme that will enable depositors to earn interest on their on their gold accounts. The gold monetisation scheme, which is proposed to be initially introduced only in selected cities, was announced in the Budget this year by Finance Minister Arun Jaitley.
• Under the proposed scheme, a person or entity would be allowed to deposit a minimum quantity of 30 grams of gold in any form, bullion or jewellery, for one year in a gold saving account. The banks will decide the interest rate.
• To make the scheme attractive to households, the interest earned on it will likely be exempt from income tax, wealth tax and capital gains tax.
• Before depositing gold into a metal account, customers will have to get its purity checked from the testing and collection centres certified by the Bureau of Indian Standards (BIS).
• They will be given a certificate by the collection centre certifying the amount and purity of the deposited gold.
• When the customer produces the certificate of gold deposited at the Purity Testing Centre, the bank will open a ‘Gold Savings Account’ for the customer.
• Under the scheme, both principal and interest to be paid to the depositors of gold will be ‘valued’ in gold.
• For example if a customer deposits 100 gm of gold and gets 1 percent interest, then, on maturity he has a credit of 101 gm.
• Customer will have the choice to take cash or gold on redemption, but the preference has to be stated at the time of deposit.
• The proposed scheme also seeks to benefit jewellers who can obtain loans in their metal account. Banks and other dealers would also be able to benefit from the scheme.
• The scheme aims at reducing dependence on import of gold to meet the domestic demand and provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks.
• India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes of the metal each year.
• The stock of gold in India that is neither traded nor monetised is estimated to be over 20,000 tonnes.

Commerce Ministry Moves
Cabinet Note on Interest Subvention Scheme

• To give a fillip to exports, the Commerce Ministry has moved a Cabinet note on a proposal to provide cheaper credit access to exporters from various sectors under the interest subvention scheme.
• Under the interest subvention scheme, exporters are provided credit at subsidised rates by banks which are later compensated by the government.
• Loans at subsidised rates will help exporters boost shipments as the country’s exports stayed in the negative zone in the past seven months.
• Last week, Commerce Minister Nirmala Sitharaman had told Parliament that the interest subvention scheme for various sectors was under consideration of the government.
• The previous interest subvention scheme was available up to March 31, 2014.
• For the seventh month in a row, India’s exports fell 15.82 per cent in June to $22.28 billion.

India on top in exporting beef

• India retains its top spot as the world’s largest exporter of beef, according to data released by the U.S. Department of Agriculture, and has extended its lead over the next highest exporter, Brazil. It must be noted, however, that the U.S. government classifies even buffalo meat as beef.
• According to the data, India exported 2.4 million tonnes of beef and veal in FY2015, compared to 2 million tonnes by Brazil and 1.5 million by Australia. These three countries account for 58.7 per cent of all the beef exports in the world. India itself accounts for 23.5 per cent of global beef exports. This is up from a 20.8 per cent share last year.
• Data from the Centre for Monitoring Indian Economy (CMIE) shows that most of India’s buffalo meat exports go to Asian countries — Asia receives more than 80 per cent, while Africa takes around 15 per cent. Within Asia, Vietnam is the largest recipient, at 45 per cent.
• India’s buffalo meat exports have been growing at an average of nearly 14 per cent each year since 2011, and fetching India as much as $4.8 billion in 2014. Last year, India for the first time earned more from the export of buffalo meat than it did from Basmati rice
• Several databases, including the United Nations Food and Agricultural Outlook, show that meat consumption in India is increasing. However, the data also shows that beef consumption has been falling over the years, down -44.5 per cent in 2014 from the level it was in 2000. This fall in consumption has been taking place regardless of the political party in power. Chicken consumption, however, was up 31 per cent in that period.

Cabinet cleared spectrum sharing by telcos

• The Cabinet cleared a proposal on Wednesday that had suggested allowing telcos to share spectrum in the same band in order to reduce call drops.
• Telcos will now be able to share their unused spectrum thereby enhancing network quality and reducing operational costs.
• There was no decision on spectrum trading norms, which is expected to lead to greater consolidation in the sector.
• Spectrum sharing would be allowed only where both the licensees have spectrum in the same band and leasing of spectrum will not be permitted, the statement added.
• Besides, sharing may be permitted where both entities possess spectrum for which market price has been paid. Spectrum usage charge (SUC) will be levied on the entire spectrum holding in a particular band and all access spectrums, including traded spectrum, will be sharable.
• According to the release, SUC rate of each of the licensees post-sharing shall increase by 0.5 per cent of aggregate gross revenue.
• However, in respect of spectrum in 800 MHz (CDMA) acquired in the auction held in March 2013, sharing of spectrum shall be permitted only if differential of latest auction price and March 2013 auction price on prorata basis on the balance period of right to use the spectrum is paid.
• The shortfall of natural gas in the country is set to widen over the next couple of years and then stabilise by 2017-18, according to data presented by the Minister of Petroleum and

Natural Gas Dharmendra Pradhan to Parliament during the ongoing session

• According to the Minister, India’s natural gas production would touch 46.3 billion cubic metres (BCM) in 2017-18, up from the 33.6 BCM achieved in 2014-15.
• However, the improvement over this year is to be minimal, with the Ministry projecting only 33.86 BCM to be produced in 2015-16, a 0.6 per cent improvement over the previous year.
• The data presented in Parliament shows that the supply of natural gas in India was projected to grow far faster than demand, although the shortfall would still remain significant for some time to come.

Supply Data

• The supply data shows that natural gas production in the country was to grow 37.5 per cent by 2017-18 over the levels achieved in 2014-15.
• The demand data, presented in a separate answer, shows a growth of a much slower 22 per cent in that period.

CCEA approves proposal to tighten drug regulatory system

• To facilitate domestic manufacture of quality medical products, the Cabinet Committee on Economic Affairs (CCEA) has approved a proposal for strengthening and upgrading the drug regulatory system both at the Central and state level.
• The upgradation and strengthening of the system will also include setting up of new laboratories and training academy for regulatory and drug testing officials.
• The CCEA chaired by Prime MinisterNarendra Modi approved the proposal for strengthening the drug regulatory system at a total cost of Rs 1750 crore which will be spread over a period of three years.
• The upgradation will include provision of additional equipment and manpower in existing drug testing laboratories, setting up of new laboratories for testing drugs, medical devices and cosmetics and making mobile drug testing laboratories available amongst others.
• India is one of the largest manufacturers of drugs and exports pharmaceutical products to over 200 countries and economies.

RBI paid Rs 66,000 crore in dividend

• The Reserve Bank of India on Thursday paid a dividend of nearly Rs 66,000 crore to the government, the highest ever from the central bank in its 80-year history, and 22% more than it paid last year.
• On a point to point basis, RBI’s dividend payment to the government is up more than four times in as many years.
• This payment can help ease the government’s finances, help meet its fiscal deficit targets, provide liquidity to the system so that the rate of interest remains low and also make available funds for the government’s capital expenditure, economists and bond dealers said.
• The central government’s move is also seen as another proof of its active support to the government’s initiatives to kick starts the slowing economy, they said.
• As banker to the central and state governments and the banks in the country, the RBI has several sources of income.
• The three main sources of income are the coupon payments it gets on its holding of government securities, the interest it receives from banks which borrow money from it (repo operations) and also interest incomes on its holdings of sovereign bonds like US treasury bills etc.
• Every year, after meeting its expenses and keeping aside part of its total profits, the central bank transfer a substantial amount to the central government exchequer.
• This year’s dividend payment by RBI is also more than the Rs 64,500 crore that the finance
• Minister had budgeted under ‘Dividend/Surplus of RBI, nationalized banks & financial institutions’, Budget papers showed. Since the nationalized banks are in the process of paying dividend to the government, the central exchequer’s receipts under this head is sure to exceed the Budget estimates by a substantial margin, economists said.
• Rajiv Gandhi International Airport in Hyderabad became the first in the country to receive approval to implement end-to-end e-boarding for domestic passengers in what will make air travel easier and paperless.
• The Bureau of Civil Aviation Security, an agency of the ministry of civil aviation, gave its approval after assessing a pilot project conducted at the airport during April-June.
• GMR Hyderabad International Airport Ltd, the operator of Hyderabad’s airport, successfully implemented a three-month e-boarding project in collaboration with Jet Airways.
• About 7,000 fliers travelling via Hyderabad airport availed the e-boarding facility during the pilot.
• Mumbai, Delhi and Bengaluru airports are also implementing pilot projects using scanners and e-gates.
• Implementation of full scale e-boarding will be initiated “soon” for domestic passengers, GHIAL said in a statement.
• It would come at no additional cost.
• A passenger needs a mobile e-boarding card and an Aadhaar number to complete the e-boarding process.
• Passengers can check-in online and use the QR code received on their registered mobile phones to access common use self service (CUSS) machine at the departure area of the airport. They validate their credentials by keying in their Aadhaar number and doing a fingerprint scan.

Coachin airport to be first
airport operating on solar power

• Cochin International airport limited (CIAL) is all set to become the first airport in the country which would be operating on solar power, CIAL official said today.
• Kerala Chief Minister Oommen Chandy will inaugurate CIAL’s green initiative—a 12MWp solar power project set up on the premises of the airport on August 18, Airport Managing Director V J Kurien told reporters here.
• When the photovoltaics (PV) panels laid across 45 acres near cargo complex become functional, Cochin airport will have 50,000 to 60,000 units of electricity per day to be consumed for all its operational functions, which will technically make the airport “absolutely power neutral”.
• CIAL, which has adorned many firsts in its cap, like being the pioneer in PPP model in building an airport to introducing a path-breaking rehabilitation package for evictees, has ventured into the Solar PV sector during March 2013, by installing a 100 kWp solar PV Plant on the roof top of the Arrival Terminal Block?

Ex-BJP official named to Sebi board

• The government has appointed Arun P Sathe, a senior advocate dealing in tax matters and a former BJP national executive member, as a part-time member on the board of the Securities and Exchange Board of India, raising fresh concerns over political interference on the boards of regulatory and financial institutions.
• Sathe’s appointment was made late last month although he’s yet to attend a Sebi board meeting.
• Under the law the government can appoint two part-time members on the Sebi board with the second slot lying vacant currently.
• The lawyer, who is Lok Sabha speaker Sumitra Mahajan’s brother, had contested against Sunil Dutt from the Mumbai-North constituency in the 1989 general elections and was the party in-charge for Madhya Pradesh and Assam. The Atal Bihari Vajpayee government had appointed him a member of the JNPT board.

Home Ministry may not give licence to Sun TV firms

• The Home Ministry may not grant licence to Kalanithi Maran-promoted Sun TV Network’s group companies citing the alleged involvement of its owners in 2G spectrum scam and Aircel Maxis cases before various courts and investigating agencies. The stand is likely to be communicated to the Information and Broadcasting Ministry as Union Information and Broadcasting Minister Arun Jaitley had written to Home Minister Rajnath Singh on the issue, according to official sources here.
• The company operates 45 radio channels under the brand name Suryan FM in Tamil Nadu and Red FM in rest of the country.
• The Home Ministry said the company and its owners were allegedly involved in 2G scam, alleged bungling in Aircel-Maxis deal as well as running an “illegal” connections of telephones used for uploading their content, the sources said.
• The company of Kalanithi, who is the brother of former union minister Dayanidhi Maran, had sought renewal of licence of its radio channels from one phase to another.

HDFC Bank, Apollo Hospitals join hands

• HDFC Bank, in association with Apollo Hospitals, has launched a co-branded pre-paid card called HDFC Bank Apollo Medical Benefits Card, which will enable corporates to easily disburse medical allowance to their employees without waste of time and incurring any cost.
• “The Medical Benefit card is a win-win for employees, who benefit from cashless transactions for healthcare with unmatched savings, and the employer in terms of transparency, compliance and transaction cost saving. All companies and their employees will benefit and shift to this card in the future,” Shobana Kamineni, Executive Vice-Chairperson, Apollo Hospitals Enterprise Ltd., said in a statement.
• This first-of-its kind card offers employees access to additional benefits such as discounts and facilities, including free ambulance services. The card comes with a free accidental death insurance and accident hospitalisation insurance, and discount at Apollo Network (Apollo Hospitals, Apollo Pharmacies, Apollo Clinics and Apollo White Dental) across India.

Emerson Process buys Ameya Transmissions

• Emerson Process Management India, a part of American multi-national Emerson, has announced the acquisition of the Pune-based manufacturer of gear operators and gearboxes Ameya Transmissions for an unspecified amount.
• This acquisition would support Emerson’s final control technology used primarily in the oil and gas and power industries both domestically and globally, the company said.
• Ameya Transmissionsdevelops and manufactures a wide range of gear operators, including quarter-turn and multi-turn manual gearboxes, which are supplied to the manual valve industry.
• Gear operators and gearboxes are a critical component of automated valve packages to serve as a fail-safe in the event of a power failure. Ameya has supplied over a million gear boxes so far.
• “Ameya’s reputation as a quality manufacturer is a great strategic fit for Emerson and strongly complements our actuator business,” said Amit Paithankar, Managing Director, Emerson Process Management India.
• Apart from catering to the Indian market, Ameya also has been exporting its products to many countries including the U.K., the U.S., Germany, Spain, Italy, Austria, Turkey, China and Middle East. The company has two manufacturing units.
• “This deal makes great sense for both companies,” said Rohan Pai, co-founder of Ameya Transmissions. “Our businesses complement each other and we have the opportunity to grow even further because of Emerson’s global reach and commitment to excellence,” he added.

Tata launches GenX Nano

• QUOTE: “There is a huge opportunity in the entry level hatchback segment in India as entry level compact cars account for 15 per cent of India’s automobile market’’ Mayank Pareek, President, Passenger Vehicle Business, Tata Motors
• In a move clearly aimed at reviving the fortunes of its mini hatchback, ‘Nano’, Tata Motors on Tuesday launched the product in a new refurbished avatar, the GenX Nano, in a move clearly aimed at reviving the fortunes of its mini hatchback. The GenX Nano will replace existing models of the Nano.
• The new product, positioned as a ‘smart city’ car, comes with a range of new technological features. The car will be sold in five variants, starting with the base variant, the XE priced at Rs.1.99 lakh (ex-showroom Delhi) and the higher end XT priced at Rs.2.49 lakh.
• The company also launched two new variants — XMA and XTA with ‘Easy Shift’ Automated Manual Transmission (AMT). While the XMA will be made-to-order and available from August 2015, the top-end XTA will be available post-national launch.
• Mayank Pareek, President, Passenger Vehicle Business, Tata Motors, said, “There is a huge opportunity in the entry level hatchback segment in India. The last three years were an aberration for the Indian car industry and it is expected to double in the next five years to become the third largest after China and the U.S.” The new variants offer enhanced acceleration and ‘creep’ feature for heavy traffic manoeuvrability and ease of parking.
• The GenX Nano continues to have the Electric Power Assisted Steering (ePAS) designed for light steering feel and easy parking. The GenX Nano offers fuel efficiency of 23.6 kmpl and 21.9 kmpl for the manual and AMT variants.
• On the new AMT variants, Mr. Pareek said, “there is a huge propensity for AMT vehicles and 30-35 per cent customers are opting for it.’’

Govt may do away with
mandatory RBI approval for FDI

• In a bid to attract more foreign investment, the government is looking at doing away with the mandatory approval of the Reserve Bank of India (RBI) which currently is needed after an investment proposal has been approved by the FIPB.
• Till now, the government and RBI shared oversight over direct and indirect foreign investments.
• Sources said the Section 6 of the Foreign Exchange Management Act (FEMA) has been amended in the Finance Bill 2015 approved by Parliament earlier this month to delete the requirement of RBI consent for cross-border transactions and acquisition or transfer of immovable property to foreigners.
• Under the proposed mechanism, all foreign investment proposals requiring government approval will only need FIPB (Foreign Investment Promotion Board) nod.
• The regulation under FEMA that required foreign direct investment (FDI) proposals to be examined by RBI, is being done away with, they said.
• Currently, foreign investment is permitted either through the automatic route or the government approval route. The proposals under the approval route envisaging investment up to Rs 3,000 crore are cleared by FIPB and beyond that require Cabinet nod. The foreign investment is also subject to sectoral caps which are specified in the FDI policy.The move is aimed at making it easier for doing business in India. India currently ranks 142 out of the 189 countries on Ease of Doing Business list.

SEBI notifies norms for
MFs managing offshore money

• Simplifying norms for domestic funds to manage offshore pooled assets, the Securities and Exchange Board of India (SEBI) has dropped ‘20-25 rule’, which required a minimum of 20 investors and a cap of 25 per cent on investment by an individual, for funds from low-risk foreign investors.
• As per the existing norms, a fund manager who is managing a domestic scheme, is allowed to manage an offshore fund, subject to three specific conditions.
• The first requires the investment objective and asset allocation of the domestic scheme and of the offshore fund to be the same.
• The second condition requires at least 70 per cent of the portfolio to be replicated across both the domestic scheme and the offshore fund.
• The third condition, which was being considered as the most stringent by the industry, requires that the offshore fund should be broad-based with at least 20 investors with no single investor holding more than 25 per cent of the fund corpus. Otherwise, a separate fund manager is required to be appointed for managing an offshore fund.
• In a notification uploaded on SEBI’s website, the regulator said these restrictions would not apply “if the funds managed are of Category I foreign portfolio investors (FPIs) and/or Category II foreign portfolio investors which are appropriately regulated broad based funds.”

Bachchans invest in Ziddu.com

• Actor Amitabh Bachchan and his son Abhishek Bachchan have invested $125,000 each in Ziddu.com, a Singapore based website owned by Meridian Tech Pte Ltd.
• The $250,000 investment will fetch them a small, minority stake in the company whose valuation is around US $ 71 million.
• A free cloud storage and e-distribution and micro payment platform founded by Venkata Srinivas Meenavalli, it has a development centre in Hyderabad.
• “We employ about 25 people in Hyderabad,” he told, adding that the Bachchans were keen on investing more. One of the leading families of Bollywood, the Bachchans made use of the Liberalised Remittance Scheme of the Reserve Bank of India to invest in the company, he said.
• Although the apex bank has doubled the limit under LRS to $250,000 per person per year, the Finance Ministry is yet to issue a circular giving effect to the hike. This made the Bachchans limit their investment to $125,000 each.

Norms eased for
investments by NRIs, PIOs, OCIs

• In a bid to increase capital flows into the country, the Union Cabinet, announced a major shift in foreign direct investment policy by categorising non-repatriable investments by non-resident Indians (NRIs), overseas citizens of India (OCIs) and persons of Indian origin (PIOs) as domestic investment.
• “The Cabinet approved amendments to FDI policy on investments by NRIs, PIOs & OCIs. This will give PIOs & OCIs parity with NRIs in economy and education,” an official spokesperson said.
• An official release from the government added that the measure is expected to result in increased investments across sectors and greater inflow of foreign exchange remittance leading to economic growth of the country.
• The proposal was floated by the Department of Industrial Policy and Promotion and the government had formed a committee to deliberate on this matter last year. The Narendra Modi-led government, which has liberalised the FDI policy for sectors such as defence, railways, construction development, medical devices and insurance, is keen to tap NRIs, OCIs and PIOs.
• During the April-February period of the previous fiscal, FDI rose by 39 per cent to $28.81 billion against $20.76 billion in the same period last fiscal.
• In another decision the Cabinet also approved the revival of closed urea plant in Sindri, Jharkhand, and setting up of a new fertilizer plant in Namrup in Assam at a total investment of Rs.10,500 crore. The government also extended the timeline for completing the National Automotive Testing and R&D Infra Project (NATRIP) by three years.
• The extension of timeline will help the project to be completed as per the objectives, and ensure that state-of-the-art automotive testing; homologation and R&D facilities are made available in India, an official release said.

Suresh Prabhu keen on
putting PPP model on track

• Highlighting the achievements of his Ministry in the past one year, Union Railway Minister Suresh Prabhu said that he was keen on putting the public-private partnership model back on track and having a regulator in place.
• “The Ministry of Railways has implemented 39 announcements made in the Railway Budget for 2015-16 in just 36 days of the current financial year,” he said in a statement. “The same tempo of implementation is being continuously maintained.”
• He highlighted some of the key customer-oriented initiatives, including a security helpline, 182, and a new passenger helpline, 138, to resolve complaints in real-time, paperless ticketing in some sections and e-catering.
• Mr. Prabhu said the focus had been on capacity enhancement. “We are aiming at commissioning 500 km of new lines, 800 km of gauge conversion and 1,200 km of doubling in 2015-16. A plan is being drawn to utilise the project-execution capabilities of our railway public sector units to expedite the works we have proposed to undertake in the next five years,” he said.
• The Minister said doubling or tripling of 94,000 km of lines on choked routes had been sanctioned and various finance options were being looked into. “To overcome the vicious cycle of chronic under-investment, we are approaching the markets for financing our revenue-generating projects and assuring fund availability to them. These projects, in turn, will generate revenues not only for servicing debt but also financing investments,” he said.
• The Life Insurance Corporation has committed Rs. 1.5 lakh crore over the next five years, while the World Bank and the Asian Development Bank are assisting in setting up a facility for attracting low-cost funds from long-term international pension and insurance funds, Mr. Prabhu said.

RBI plans to introduce
PPI for mass transport system

• The Reserve Bank of India (RBI) on Thursday proposed to introduce a separate category of semi-closed Prepaid Payment Instruments (PPI) for Mass Transit System (PPI-MTS).
• The PPI-MTS can be used within the mass transit systems and will have a minimum validity of six months from date of issue.
• Such PPIs will be re-loadable instruments subject to an outstanding limit of Rs.2, 000 at any point of time, RBI suggested in a draft circular for public comments.
• PPI for mass transit systems, which handle a large number of small value cash payments, will facilitate the migration to electronic payments in line with the country’s vision of moving to a less-cash society, the RBI added.
• Comments and suggestions should reach the RBI on or before June 15, 2015.
• The RBI said that it has been receiving requests from various segments, including providers of mass transit services, such as, metro train and road transport services, indicating the need for PPIs catering to the requirements of this segment to enhance commuter convenience.
• The Reserve Bank of India also proposed to make Net Stable Funding Ratio (NSFR) applicable to banks in India from January 1, 2018.
• RBI released on its website draft guidelines on NSFR under Basel III Framework on liquidity standards for banks.
• It has requested for comments on these guidelines by email at the earliest, but not later than June 26, 2015.
• The objective of NSFR is to ensure that banks maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities.
• The NSFR limits over-reliance on short-term wholesale funding, encourages better assessment of funding risk across all on- and off-balance sheet items, and promotes funding stability.

BusinessLine l
aunches website for B-schoolers

• The Hindu BusinessLine has launched a new website, the first of its kind, which is specifically tailored for B-schoolers and B-school aspirants.
• The site — www.bloncampus.com or BLoC — is designed to complement the curriculum and broaden a student knowledge base with information that is conveyed in a simple, cogent and interesting manner. Apart from adding value to academic pursuits, BLoC seeks to prepare students for the workplace by keeping them up to date with events and trends that are shaping India’s corporate, entrepreneurial and academic environment.
• The website features columns and analyses by corporate leaders, educators, and academics as well as short educational videos. It will host a platform for B-schoolers to interact with the corporate world through chats and Q&As.
• The entire website can be accessed for free for a trial period of a month. The special invitation subscription offers, which can be paid for online, are Rs.49 for a month, Rs.249 for six months and Rs.499 for a year.

Bharat Electronics
develops phones for Army use

• Secure, custom-made CDMA phone sets developed by Bharat Electronics Ltd. (BEL), are undergoing trials with the Army. The phones, without camera, have in-built safety features and may be deployed in a year or two across the Army’s various units, BEL’s Chairman and Managing Director S.K. Sharma told.
• With work initiated more than a year ago, the handsets are said to replace imported ones that are not encrypted and are vulnerable to eavesdropping by unauthorised people. The Army’s request for information mentions base transmission stations to be set up in three north-eastern stations. The Navy is also said to be a potential customer.
• The indigenous version enables high data transmission and its evaluation is in an advanced stage, said Ajit T. Kalghatagi, Director (R&D), adding BEL was geared up to manufacturing them in large numbers.
• The phone sets are made at the Ghaziabad unit of BEL.
• On the defence front, Mr. Sharma said the focus was on indigenisation in radars, electronic warfare devices, avionics, network communication or C4i. Telecommunication was also an important initiative in non-defence business. BEL was pursuing civil sector business areas such as solar energy, e-governance and smart cards besides inland security that falls outside the purview Ministry of Defence.
• It planned to generate 50 MW of solar power along with other PSUs under the national solar scheme over three-to-five years and would invest Rs.300 crore in the projects, Mr. Sharma said.
• The defence electronics major makes electronics, communication, radars and imaging hardware for the three Armed Forces.
• It has declared an audited 2014-15 net profit of Rs.1, 167 crore and a turnover of Rs.6,695 crore. For the fourth quarter, the net profit and the turnover were Rs.722 crore and Rs.3,067 crore respectively.

Adani, Reliance sign deals for power generation in Bangladesh

• In yet another development in private sector cooperation, Bangladesh signed two memoranda of understanding (MoUs) with two major Indian companies to set up 4,600 MW power plants in the country.
• The MoUs were signed on the first day of Indian Prime Minister Narendra Modi’s visit to Bangladesh.
• The deals, worth $5.5 billion, were inked between the Power Development Board of Bangladesh (BPDB) and Indian companies Adani Power Ltd. and Reliance Power.
• Under the deal, Adani will invest $2.5 billion to set up a coal-based power plant with a capacity of 1,600 MW.
• The Reliance Power will set up an imported liquefied natural gas-based power plant in Bangladesh with a capacity of 3,000 MW with an investment of $3 billion.
• The two Indian companies said they would take 13 months to complete construction of the plants after final agreements had been reached.\
• The government of Prime Minister Sheikh Hasina has recently unveiled a 2.95 trillion taka ($38 billion) budget for fiscal 2014-15, stepping up spending on key sectors to tackle power shortages that are crimping economic growth and deterring investment.
• The country produces 7,000 MW of electricity but demand far exceeds supply, with a daily shortage up to 1,500 MW.

TCS, Infosys to face probe on visa violation

• India’s largest and the second largest IT services companies, TCS and Infosys, have come under the scanner of a U.S. investigation team.
• According to media reports, the U.S. Department of Labor has opened a probe against the two companies for alleged H1-B visa rule violations.
• According to industry experts, the U.S. investigation is an indication of stricter and more stringent rules for onsite workers in the U.S.
• According to the New York Times (NYT) on June 11, “The Department of Labor has opened an investigation into two India-based outsourcing companies for possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility, Southern California Edison.”
• Of late, Indian IT services companies have been facing the heat in the U.S. for alleged H1-B visa violations. This particular visa is a non-immigrant one that allows American companies to employ foreign workers in highly skilled jobs. Indian outsourcing companies are the largest recipients of this kind of visa, and for Infosys and TCS, more than 60 per cent of their revenue comes from the U.S. market.
• The NYT report further said that Southern California Edison had recently laid off more than 500 technology workers, many of whom claimed they were made to train their replacements who were immigrants on the temporary work visas brought in by the Indian firms.
• When contacted Infosys said, “Infosys is committed to complying with U.S. immigration laws. The U.S. Department of Labor (DOL) regularly selects a percentage of visa and labor condition applications for extra scrutiny in this industry, and we work closely with the DOL to assist them in this activity in the ordinary course of our business. We have received no indication of any broader investigation of Infosys visa practices.”
• The investigation from the Labor Department comes as a blow to Infosys, after a U.S. district court dismissed the company’s plea to dismiss a case filed against the company.
• Last month, the U.S. court accepted a case filed by four American IT workers alleging Infosys of showing discrimination in hiring.
• In October 2013, the Bengaluru-based company had paid around $34 million as settlement amount for settling a visa-related issue with the U.S. government.
• Meanwhile, TCS which is also facing the investigation said in an email, “TCS maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related to US immigration laws including those related to H-1B visas.”
• The new investigation comes at a time when Steven Heldt, a former TCS employee has filed a suit in San Francisco Federal Court accusing TCS of favoritism towards Asian workers.
• On the backdrop of the U.S. investigation on IT majors, the shares of all major IT companies witnessed a drop in Friday’s trade.
• On BSE, TCS closed at Rs.2, 512.05 down 2.29 per cent, while Infosys closed at Rs.1, 976.65 down 1.26 per cent.

Yahoo to host developer meet in India

• Mobile developers in India will get a first-hand experience of the Yahoo Mobile Developer Suite this month, as internet major Yahoo is bringing its Mobile Developer Meetup for the first time to India. The company will organise two developer meets, one in New Delhi on June 24 followed by one in Bengaluru on June 26.
• “As a mobile-first company, we understand the need for app developers to have a strong mobile analytics and monetisation engine. India has a vibrant, rapidly growing app developer community, which we are planning to explore,” said Jarah Euston, VP of Analytics and Marketing, Flurry.
• Yahoo Mobile Developer Suite is a powerful combination of technology and data from Yahoo, Flurry and BrightRoll. The Suite is built on five offerings — Flurry Analytics with Explorer, Flurry Pulse, Yahoo App Publishing, Yahoo Search in Apps, and Yahoo App Marketing.
• The Yahoo Mobile Developer Suite helps developers build their app businesses, monetise and create better experiences for their users, to stand out in today’s crowded app market. At the event, mobile app developers will also get the opportunity to network with various mobile start-ups and developer community. “India’s mobile Internet sector — growing at almost 40 per cent a year — has spawned an exciting app developer ecosystem, creating a community that is riding the wave of innovating not only for users in India, but across the world,” said Yahoo in a statement.
• Last year, Yahoo had acquired mobile app analytics and advertising startup Flurry and video advertising platform BrightRoll to strengthen its mobile strategy.

SBI chief anticipates repo rate cut

• There is the possibility of a decrease in the repo rate cut in the near future owing to multiple factors, State Bank of India (SBI) Chairman Arundhati Bhattacharya has said.
• “Our in-house research indicates that there will be space for another rate cut. However, the Reserve Bank of India (RBI) could have a different view of the matter,” she told mediapersons on the eve of the 55{+t}{+h}Annual General Meeting (AGM) of the State Bank of Travancore (SBT).
• The regulator had raised concerns over a deficient monsoon forecast and inflation. But, pre-monsoon rain had been better compared to the previous year, she said.
• “In the wake of worrying predictions, we can only hope for a good monsoon. The timeliness and spread of rain will also be crucial.”
• The chances of a rate cut were higher if the inflation did not go up as was being feared, she said.
• To a question, she said banks under the State Bank group, which had Stressed Assets Management Group, had been tackling non-performing assets (NPAs) ‘fairly well.’ “With the downturn in the economy, we have seen a large amount of loans getting stressed. Hopefully, as the economy picks up, these loans will also start performing better. All necessary action in handling NPAs will be duly taken by the respective banks,” she said.

Cairn India set to merge into Vedanta in $2.3 billion deal

• In move to cut debts, India’s largest private miner Vedanta Ltd., headed by billionaire Anil Agarwal, will absorb oil firm Cairn India in a $2.3-billion all-share deal to create India’s largest diversified natural resources company
• Shareholders in Cairn India, the country’s top private oil producer, will get one ordinary share and 7.5 per cent redeemable preference share of Vedanta Ltd with a face value of Rs. 10. That implies a premium of 7.3 per cent to Cairn’s Friday closing price.
• Vedanta will use Rs 16,867 crore cash lying with Cairn to pay off part of its Rs 77,752 crore debt.
• Post-merger, London-listed parent Vedanta Resources Plc’s holding in Vedanta Ltd will drop to 50.1 per cent from 62.9 per cent.
• “The merger is the second step in the series that started in 2013 towards simplification of the corporate structure,” Vedanta Ltd chief executive Tom Albanese told PTI in an interview.
• Vedanta, previously known as Sesa Sterlite Ltd, in 2013 consolidated its iron ore mining business by merging Sesa Goa Ltd with Sterlite Industries (India) Ltd, which ran copper and aluminium businesses.
• “This merger is about creating long-term value that is not only good for Vedanta shareholders but also good, attractive and compelling for Cairn shareholders,” he said.
• The merger will help Cairn spread its risk from volatile oil business to other metals and commodities.

BHEL & INTMA Ink
MoU to set Up Power Plant in Kazakhstan

• State-owned power equipment maker Bharat Heavy Electricals Limited (BHEL) has signed a Memorandum of Understanding (MoU) with a Russian company INTMA, to set up a gas-based power project in Kazakhstan.
• The MoU aims set combined path to execute projects of mutual interest in Russia and Kazakhstan. In this regard, BHEL’s competence in design and manufacturing of power plants will play important role and INTMA’s strength in handling engineering procurement and construction contractors (EPC) contracts will implement the projects.
• The MoU will further help BHEL in consolidating its presence in the Commonwealth Independent States countries.
• INTMA is one of the leading general Engineering Procurement and Construction contractors (EPC) in Russia and Kazakhstan, with wide experience in industrial construction, renovation of facilities, automation and other energy related sectors.

Nokia to Acquire Alcate-Lucent

• Finland based telecom equipment manufacturer Nokia has announced that they will acquire French based and Alcatel-Lucent with the intention to create an innovation leader in next generation technology and services for an IP connected world.
• The two companies have entered into a memorandum of understanding under which Nokia will make an offer for all of the equity securities issued by Alcatel-Lucent, through a public exchange offer in France and in the United States, on the basis of 0.55 of a new Nokia share for every Alcatel-Lucent share.
• This merger will create the world’s largest supplier of telecom equipment’s that powers mobilephone networks by surpassing Ericsson and Huawei.

MUDRA Bank Scheme

• Prime Minister Narendra Modi launched Micro Units Development Refinance Agency (MUDRA) Bank with a corpus of Rs. 20,000 crore and credit guarantee of Rs. 3,000 crore. The Bank will provide credit of up to Rs 10 lakh to small entrepreneurs and act as a regulator for ‘Micro-Finance Institutions’ (MFIs).
• The bank will be responsible for refinancing micro-finance institutions in the business of lending to small entities. MUDRA will be set up through a statutory enactment. The Pradhan Mantri MUDRA Yojana will be the main support system for the bank and will be the part of Small Industries Development Bank of India (SIDBI).
• The MUDRA bank was proposed in Budget 2015-16 by Union Government with an initial corpus of 20,000 crore rupees. Apart from this, 3,000 crore rupees also has been earmarked as credit guarantee corpus.

The roles envisaged for MUDRA include:

• Laying down policy guidelines for micro enterprise financing business
• Registration of MFI entities
• Accreditation /rating of MFI entities
• Laying down responsible financing practices to ward off over indebtedness and ensure proper client protection principles and methods of recovery
• Development of standardised set of covenants governing last mile lending to micro enterprises
• Promoting right technology solutions for the last mile
• Formulating and running a Credit Guarantee scheme for providing guarantees to the loans/portfolios which are being extended to micro enterprises
• Support development & promotional activities in the sector
• Creating a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of Pradhan Mantri MUDRA Yojana

MUDRA Bank will provide financing on three stages- Shishu, Kishore and Tarun

• Shishu: This will be the first step when the business is just starting up. The loan cover in this stage will be upto Rs 50,000.
• Kishor: In this stage, the entreprenuer will be eligible for a loan ranging from Rs 50,000 to Rs 5 lakh.
• Tarun: This last and final category will provide loans for upto Rs 10 lakh.

Dena Bank & LIC sign MoU to Provide Insurance Cover

• State-run lender Dena Bank has signed an agreement with LIC to provide insurance cover to its savings account holders under the Prime Minister’s Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJBY) scheme.

Key Facts of Mau

• Under the Memorandum of Understanding, LIC will give a life cover of Rs 2 lakh in case of death of the insured person at a nominal premium of Rs 330 per annum.
• Account holders in the age group of 18 to 50 years can avail of the product.
• People who join the scheme before completing 50 years can continue to have the risk of life cover up to the age of 55 years subject to payment of premium.
  The scheme will come into effect from June 1, 2015. The bank customers can join the scheme from June 1, 2015 to May 31, 2016.

RBI Lowers Ceiling Rate

• Concerned over the rising NPAs (non-performing assets) in the banking sector, the Reserve Bank of India (RBI) has proposed to lower the ceiling on how much a bank can lend to a single corporate group.
• Under the proposal, banks can lend up to 25 per cent of their core capital to a single corporate group.
• Currently, they have been given flexibility, with riders though, to lend up to 55 per cent of their core capital to a single corporate group.
• The apex bank has proposed that the revised lower ceiling could come into effect from January 1, 2019.
• The proposal is came with the announcement made by the RBI in its fourth bi-monthly Monetary Policy Statement 2014-15 on September 20 to come out with a discussion paper on the subject.

RBI Tightens Takeover
Norms for Shadow Banking

• The Reserve Bank of India (RBI) plans tougher rules for takeovers involving non-banking financial companies (NBFCs), according to draft guidelines published on Monday, outlining a demand that all substantial deals seek its prior approval.
• In its latest effort to boost transparency and strengthen its grip on the alternative lenders that account for a large part of the domestic shadow-banking sector, the RBI said any purchase of a stake of 26 per cent or more in a company, or a change in more than 30 per cent of its directors, would need the central bank’s permission.
• “The RBI has been continuously trying to strengthen this sector so that this should not be a back yard for people we don’t know,’’ said Sanjay Agarwal, Managing Director of Au Financiers (India), an NBFC from Rajasthan.
• There are some 12,000 NBFCs registered with the RBI, and they largely offer loans. Some, like traditional banks, also take deposits.
• The RBI also said in its circular that the source of funds behind new investors in any NBFC will have to be disclosed. It also asked for an undertaking that the new proposed investors are not associated with any existing but unregistered body that accepts public deposits.
• NBFCs play a critical role in extending credit to areas where traditional finance cannot reach in a country where only just over half of the population has access to the mainstream banking system. However, controlling these NBFCs has been made a key priority for the RBI, given their size and reach.

India to Surpass China’s
Economic Growth in 2015-16: IMF

• The International Monetary Fund forecast India’s growth to strengthen from 7.2 per cent in 2014 to 7.5 per cent in both 2015 and 2016, overtaking China’s growth — for the first time since 1999 — that it projected will slow down to 6.8 per cent.
• The World Bank too projected India’s growth to accelerate to 7.5 per cent in 2015, but added that on the back of significant acceleration of investment, growth could even reach 8 per cent in 2017-18. The country is attempting to shift from consumption to investment-led growth, at a time when China is undergoing the opposite transition, the Bank said in its bi-annual South Asia Economic Focus report.

NCTI inks MoU with
Paytm to Promote MSME

• National Centre for Trade Information (NCTI) has tied up with Mobile commerce platform Paytm to promote MSMEs scale faster. The two organisations have signed a memorandum of understanding to offer a virtual marketplace platform for NCTI members and will extend its services and to enable them to sell online.
• In this regard, Paytm will set up payment gateways platform for online ticketing and membership fees for NCTI. This tie-up will play a pivotal role in the growth of MSMEs by providing them with value-added trade information generally for the trading community. It will also provide platform to NCTI members that will serve as an opportunity to trade online and scale faster.

Snapdeal Acquires FreeCharge

• India’s largest online marketplace, Snapdeal has acquired FreeCharge, India’s fastest growing mobile transactions platform. This is one of the biggest acquisitions in the history of the internet industry in India and sets up Snapdeal to build the most impactful digital commerce ecosystem in India.
• FreeCharge is India’s leading mobile commerce platform where users can pay their mobile, DTH and utility payments across most major operators. Every day 75 million mobile recharges are done in India by a section of India’s 800 million mobile phone subscribers, out of which currently only 3 million recharges are done online. FreeCharge offers a convenient and efficient solution applicable to hundreds of millions of consumers for paying utility bills, and especially doing mobile recharges, which often ends up being the first e-commerce transaction that a consumer does online given the ticket size, convenience and instant gratification.
• With this acquisition, Snapdeal becomes the largest mobile commerce company in India offering the widest range of products and services, including financial services, mobile recharge and utility payments with an exponentially growing user base of over 40 million.

Union Government
Approves Ten FDI Approval

Union Government has approved 10 Foreign Direct Investment (FDI) proposals worth 2857.83 crore rupees. These FDI proposals were approved by the Foreign Investment Promotion Board (FIPB).
Some of proposals approved are

• Air Works India (Engineering) Private Limited’s proposal to increase foreign equity investment at Rs 40 crore.
• Ostro Energy’s proposal to invest Rs. 1,400 crore over next four-five years in wind energy assets in India via downstream investment.
• IPCA Laboratories’ proposal for FII investment up to 35 per cent i.e. Rs 900 crore.
• Reckitt Benckiser (India) proposal to acquire 24.88 per cent stake in Reckitt Benckiser Healthcare India from its foreign investor. This deal will result in a foreign fund outflow of Rs 750 crore.
• Syngene International’s proposal to inject 380 crore rupees through 10 per cent foreign equity participation into the company.
• Ambuja Cements proposal for acquisition of 24 per cent shares in its holding company Holcim (India) for a share swap worth Rs 3,500 crore has been referred to the Cabinet Committee on Economic Affairs (CCEA). FIPB approves the FDI proposals under approval route. However, those proposals worth above Rs 1,200 crore are given final approval to the CCEA.

About FIP

The Foreign Investment Promotion Board (FIPB), housed in the Department of Economic Affairs, Ministry of Finance, is an inter-ministerial body, responsible for processing of FDI proposals and making recommendations for Government approval. The extant FDI Policy, Press Notes and other related notified guidelines formulated by Department of Industrial Policy and Promotion (DIPP) in the Ministry of Commerce and Industry are the bases of the FIPB decisions. In the process of making recommendations, the FIPB provides significant inputs for FDI policy-making. Approvals under PMO: The FIPB was initially constituted under the Prime Minister’s Office (PMO) in the wake of the economic liberalization drive of the early 1990s. The recommendations of the FIPB were approved through a 3-tier approval mechanism, viz. FIPB as a committee of senior officials to examine and make recommendations; Empowered Committee on Foreign Investment (ECFI) chaired by the Finance Minister for deciding on the recommendations of the FIPB for projects in which the total investment in the project was up to Rs. 300 crore; and the Cabinet Committee on Foreign Investment (CCFI) for deciding on the recommendations of the FIPB for projects in which the total investment was more than Rs. 300 crore. Transfer to DIPP in 1996: The Board was reconstituted in 1996 with transfer of the FIPB to DIPP and approval levels were as under:

• Recommendations of FIPB in respect of the project proposals each involving a total investment of Rs. 600 Crore or less would be considered and approved by the Industry Minister.
• The recommendations in respect of the projects each with a total investment of above Rs. 600 Crore would be submitted to the Cabinet Committee on Foreign Investment (CCFI) for decision.
• The CCFI would also consider the proposals which may be referred to it or which had been rejected by the Industry Minister.According to Press Note 7 of 1999, there would be no need for obtaining prior approval of FIPB / Government for increase in the amount of foreign equity within the percentage of foreign equity already approved in all cases in which the original project cost was up to Rs. 600 crore. Any company could infuse additional funds by way of foreign equity as a result of financial restructuring (provided there is no change in the percentage of foreign equity) and notify the same to the Secretariat of Industrial Assistance (SIA) within thirty days of receipt of funds as also allotment of shares to non resident shareholders. This procedure, however, did not apply in cases of increase in the percentage of foreign equity as also where initial approval was granted by CCFI. Such cases required prior approval of the FIPB / Government as per the existing procedure.
  The FIPB was transferred to the Department of Economic Affairs; Ministry of Finance in terms of the Presidential Order dated 30.01.2003. The levels of approval, notified vide Order dated 11.07.1996 were essentially retained, except to the extent that recommendations of FIPB for project-proposals involving a total investment of less than Rs. 600 Crore would be considered and approved by the Finance and Company Affairs Minister and those with a total investment beyond Rs. 600 Crore would be submitted to the Cabinet Committee on Economic Affairs for decision.

RuPay Card Holders ofa
ll PSBs Enable on eComm

• RuPay card holders of all public sector banks are now eCommerce enabled. They can now conveniently purchase rail, road and air tickets by logging into the websites (IRCTC, Cleartrip, Make My Trip, KSRTC etc.) of travel companies or buy goods and services from retail chains like Amazon, Flipkart, Snapdeal, Jabong etc.
• RuPay eCommerce is comparatively easy. For the first time user, registration happens as the transaction gets done. The only additional step for first time user is to choose a picture password which the customer has to identify in subsequent transaction. This gives an additional layer of security. Since One Time Password (OTP) is a part of the security process, it is necessary that a RuPay eCommerce customer is also registered as a Mobile banking user of the bank. “NPCI aims at making every Indian with a RuPay card and a mobile phone eCommerce enabled.
• The goal is make railway and bus ticket booking also as much electronic as air ticket booking” said Mr. A.P.Hota, MD & CEO, NPCI. “Payments system in India is maturing faster than in rest of the world” added Mr Hota. Over 30,000 online merchants in the country now accept RuPay cards as on date including Flipkart, IRCTC, Jet airways, Snapdeal, LIC, bookmyshow, Homeshop18 and others. Some of the major issuing PSBs are - SBI, BoI, BoB, UBI, PNB, Andhra, Dena, Indian, Allahabad, Syndicate, Canara, Oriental Bank of Commerce, among others live on RuPay e-comm.

Union Government
Fetched Rs. 1.10 Lakh crores

• The Union government has fetched about 1.10 lakh crore rupees after the auctioning of a telecom spectrum. The spectrum auction concluded on 25 March 2015 after 19 days and 115 rounds of rigorous bidding. However the 11 percent airwaves were not sold in this auction. The process of auction was conducted for 800 MHz, 900 MHz, 1800 MHz and 2100 MHz spectrum covering both mobile telephony and broadband, including 4th Generation (4G).
• A total of 380.75 MHz of spectrum was put on sale in the premium 900 MHz, 1,800 MHz and 800 MHz bands and 5 MHz of spectrum was put for bidding in the 2,100 MHz band which is used for 3G mobile services across 17 out of total 22 telecom circles.
• The spectrum auction included airwaves held by 9 licences of Idea Cellular, 6 permits of Bharti Airtel and 7 each of Reliance Telecom and Vodafone that were expiring in 2015-16. These auctioned airwaves mostly included frequencies in 900 MHz band and 1800 MHz band.
• The government also auctioned airwaves in 1800 MHz band that remained unsold in 2014, and 800 MHz i.e. CDMA band frequencies that were left after sale in 2013. The Department of Telecommunication (DoT) later will disclose details of the result and names of successful bidders after the Supreme Court’s permission as a case is pending in the court.

RBI Signs $400 m Currency Swap Deal with Sri Lanka

• RBI signed a $400 million currency swap agreement with the Central Bank of Sri Lanka for three years that will allow the island nation to draw the amount in dollars or euros in multiple tranches.
• The swap arrangement is intended to provide a backstop line of funding for the SAARC member countries to meet any balance of payments and liquidity crises till long-term arrangements are made.

Background

• In May 2012, Reserve Bank of India had announced in the SAARCFINANCE Governor’s meeting, held in Nepal, that it would offer swap facilities aggregating $2 billion, both in foreign currency and rupee to SAARC member countries.
• The facility is available to all South Asian Association for Regional Cooperation (SAARC) member countries. Besides India, other members of SAARC are: Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.

All 56 Regional Rural Bank (RRBs) on RuPay Card & NACH System

• National Payments Corporation of India (NPCI), the umbrella organization for all retail payments system in the country, has enabled all 56 regional rural banks (RRBs) in the country under its central payment systems network with RuPay cards and access to NACH (National Automated Clearing House) service. With this engagement, 120 million customers at 19,000 bank branches of all 56 Regional Rural Banks are now part of the national network of electronic payment systems.

Highlights

• All 56 Regional Rural Banks are now enabled
• Comprises 19000 branches, 642 Districts and 120 Million customers
• Under PMJDY RRBs opened 21.7 million A/Cs churning Rs 1600 crore in banks
• More than 20 Million RuPay cards issued
• RRBs (Regional Rural Banks) customer spends Rs 3500 on an average on PoS terminals
• Providing modern banking facilities in rural areas RRBs have played a vital role in making the ambitious Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme a huge success with opening of 21.7 million accounts and augmented deposits of Rs 1,600 crore in banks. More than 20 million customers have been issued RuPay debit cards by various RRBs (mostly under PMJDY scheme) and are performing successful transactions at ATMs and PoS. As per NPCI research, every second records one transaction from any RRBs customer on central payment or NFS platform. However, the average spend on PoS is estimated at Rs 3,500.

About NPCI

• National Payments Corporation of India (NPCI), which has been set up in 2009 as the central infrastructure for various retail payment systems in India, was envisaged by the Reserve Bank of India as the payment utility for all banks in the country. During the last five years, the organization has grown multi-fold from 2 million transactions a day to 15 million transactions now. From a single service of switching of inter-bank ATM transactions, the range of services have grown to Cheque Clearing, Immediate Payments Service money transfer (24x7), Automated Clearing House, Electronic Benefit Transfer and a domestic card payment network named ‘RuPay’ to provide an alternative to international card schemes.

IRCTC launches
RuPay Prepaid Debit Card Service

• Indian Railway has launched RuPay prepaid Debit Card service for its customer. The service was launched by the IRCTC in collaboration with Union Bank of India and the National Payment Corporation of India.
• RuPay is India’s own card payment gateway network like Visa and Master Card, and provides an alternative system for banks to provide a debit card service. Cards can be made available from UBI offices or through IRCTC online. Initially the service will be available for booking tickets and later on shopping and bill payments will be added.

Key Facts

• One can have the card with a loading limit of Rs.10, 000 with partial KYC detail or Rs.50,000 loading limit with full KYC.
• The first five transactions per card every month done on IRCTC for purchase of train tickets would be free and no transaction charges would be levied to customers for six months only. For every subsequent transaction post the free usage, customer would be charged Rs.10 per transaction. The transaction charge would be Rs.10 per ticket for booking a ticket through the card on the portal.

SEBI Set Norms to Govern International Financial Market

• The Securities and Exchange Board of India (SEBI) approved guidelines to govern international financial services centres (IFSC). These guidelines were approved by SEBI board meeting on 22 March 2015.
• The news guidelines relax the norms for Stock exchanges and clearing corporations to set up IFSC. It also relaxes norms and allows existing exchanges to set up their subsidiaries in the IFSC
• Stock exchanges will be set up with Rs. 25 crore capitals. This capital is against the previous normal requirement of 100 crore rupees. However, this initial capital should be raised to 100 crore rupees within next 3 years
• The initial capital requirement will be 50 crore rupees for a clearing corporation, against the previous norm of Rs. 300 crore. But it will have to be achieved within 3 years period. IFSC will be established under the Special Economic Zone (SEZ) Act of 2005 and the issue of depository receipts and other securities by foreign issuers under the Foreign Currency Depository Receipts Scheme, 2014, will also be allowed.

Union Government
Approves 17 Mega Food Park

• 17 new Mega Food Parks (MFPs) has been sanctioned by the Government with investment of around Rs. 2330 crores. This will include grant-in-aid for an amount of Rs.850 crores. The announcement made by the Food Processing Minister Smt. Harsimrat kaur Badal. She said that these 17 new MFPs spread across 11 States would attract a total investment of around Rs.4, 000 crores and the annual turnover of the Food Processing units in these MFPs would be more than Rs.8, 000 crores.

About Mega Food Park scheme

• To give a major boost to the food processing sector by adding value and reducing food wastage and loss at each stage of the supply chain with particular focus on perishables, Ministry of Food Processing Industries is implementing Food Mega Food Parks Scheme in the country since the year 2008. Financial Assistance upto Rs. 50.00 Crore is provided for setting up Mega Food Parks for creation of modern infrastructure facilities for food processing along the value chain from farm to market. A Mega Food Park located in the area of a minimum of 50 acres work in a cluster based approach based on a hub and spokes model. Infrastructure is created for primary processing and storage near the farm in the form of Primary Processing Centres (PPCs), Collection Centres (CCs) located in production areas. Common facilities and enabling infrastructure at Central Processing Centre like modern warehousing, cold storage, IQF, sorting, grading, packaging, pulping, ripening chambers and tetra packaging units roads, electricity, water, ETP facilities etc. This helps in reducing the cost of individual units significantly and makes them more viable. Induction of latest technology, quality assurance of processed food products through better process control and meeting of environmental and safety standards are other major benefits of Mega Food Parks.
• Total 42 Mega Food Parks have been sanctioned by the Government for setting-up in the country. Currently, 25 projects are under implementation, Expression of Interest (EoI) was invited on all India bases on 10.02.2014 with the last date of 31.07.2014 to fill up vacancies. Ministry received 72 proposals and after going through a stringent and transparent process of scrutiny, 17 suitable proposals from 11 States of the country have been selected and approved for implementation.
• This step of the Government will create huge modern infrastructure for food processing sector and provide impetus to the growth of the sector. These 17 newly selected Mega Food Parks are likely to attract investment of around Rs. 2000 crore in modern infrastructure, additional collective investment of around Rs. 4000 crore in 500 food processing units in the Parks and an annual turn-overof Rs. 8000 crore.These Parks, when fully functional, will create employment for about 80000 persons and benefit about 5 lakh farmers directly and indirectly.
• The timely completion of these Mega Food Park will provide a big boost to the growth of the food processing sector in the concerned state, help in providing better price to farmers, reduce wastage of perishables, add value to the agricultural produce and create huge employment opportunities especially in rural areas. These will also help in stabilizing prices of food products and contain inflation in the country.

Good response for
residential properties at SBI’s e-auction

• State Bank of India (SBI), successfully completed the e-auction of around Rs.1,200-crore worth of stressed assets with a good number of bids for residential properties, said a senior official.\\
• The bank had put on auction a mix of offices/shops/apartments/factory buildings and others numbering 300 properties.
• Mr. Malhotra said the number of hits was large on the two websites where the properties were auctioned and the speed got slowed down.
• “We had extended the auction time to compensate for the slow speed,” he said.
• According to him, the bank had saved sizable outgo in terms of advertisement spend for auctioning the stressed assets.
• As per the norms, advertisements should be given in two newspapers for every property auction but this time, the bank had consolidated all the properties to be auctioned and hence saved good sum, he said.
• Agreeing that not all the 300 properties got sold, he said based on the feedback and the data collated, the bank would decide on going for next round of e-auction.
• He said the banking major had taken a first step in this arena and could be the trend setter for others.

Facebook buys the Find

• Facebook has waded further into e-commerce with the acquisition of shopping search engine TheFind.com. Terms of the deal were not disclosed.
• Members of TheFind team are joining Facebook, where they plan to put their technology to work making ads at the leading social network ‘more relevant’, according to the post.
• The acquisition will result in TheFind.com shutting down in the next few weeks.
• Facebook has been playing catch-up regarding searching for information at the social network and becoming a middle-man of sorts for online commerce. “Together, we believe we can make the Facebook ads experience even more relevant and better for consumers,’’ the social network said in statement.
• TheFind — “Everything you need when shopping to quickly decide what to buy and where to buy it’’ — will shutter the Silicon Valley base it has operated from since launching in 2006 and move team members to Facebook’s campus in Menlo Park, California.

Britain applies to
join Chinese-led Asian bank

• Britain has applied to join a proposed Chinese-led Asian regional bank that Washington worries will undercut institutions such as the World Bank.
• The British Treasury said it will join talks this month on the Asian Infrastructure Investment Bank’s structure and governance arrangements.
• China proposed the bank in 2013 and has pledged to put up most of its initial $50 billion in capital. Twenty-one other governments including the Philippines, Thailand, New Zealand and Vietnam have said they want to join.
• The United States has expressed concern the bank will allow looser lending standards for the environment, labour rights and financial transparency, undercutting the World Bank and International Monetary Fund.
• The British Treasury said it would try to ensure the Asian bank “embodies the best standards.”

Work on GST
Rollout on track, says Shaktikanta Das

• The Narendra Modi government is working on full throttle to implement the Goods and Services Tax (GST), a key indirect tax reform, from April 1, 2016, said Union Revenue Secretary Shaktikanta Das.
• He also pointed out that several committees and sub-committees, comprising Centre and State finance and taxation officers were working on aspects such as business processes and reporting systems. A special purpose vehicle was working on the IT backbone for the rollout, he added.
• “Doubts have been raised about the implementation timeline. I want to confirm that work related to implementation is very much on,” Mr. Das said at an interactive session, organised by the Confederation of Indian Industry (CII).
• Mr. Das said all States and political formations were on board. He was hopeful that the bill on GST would go through in the current session of Parliament.
• Mr. Das also said that there would not be much revenue loss due to transition to GST.
• Mr. Das said the government had agreed to compensate States for GST loss for the first five years on a differing basis. He also pointed out that the manufacturing States would lose more than the consumption States. That was why a one per cent origin-based tax had been included with a sunset clause of two years, he pointed out.
• He also said that GST would be tax buoyant while terming the 42 per cent devolution of Centre’s net taxes to the States as a big bang reform.
• Mr. Das also said the plan to reduce corporate tax rates was done to make India competitive with other ASEAN countries as an investment destination.

LIC to invest Rs.1.50 lakh crore in Railways

• The Life Insurance Corporation of India (LIC) will provide Rs.1.50 lakh crore in the next five years to the Railways for funding projects.
• The move is in line with Railway Minister Suresh Prabhu’s plan to look for funds outside of budgetary support and tap low-cost long-term funds. The Railways will need Rs.8.50 lakh crore in the next five years for various projects.
• “There would be a five-year moratorium on interest and loan repayment, and the rest of the terms would be negotiated while signing the finance assistance agreement,” a press statement said.
• As per the memorandum of understanding signed between the two parties, the LIC will make available the funds to the Railways and its entities from 2015-16.
• According to the latest Railway budget, its total Plan budget is Rs.1 lakh crore for 2015-16.

RBI issues new norms for sale of bad loans

• In a boost to banks, which are facing rising asset quality issues, the Reserve Bank of India, allowed such lenders to reverse the excess provision on sale of bad loans to their profit and loss account, provided the transaction took place before February 26, 2014.
• The central bank had on the February 3 monetary policy day had said that it would issue the final guidelines on this front after banks requested it to include the provision to those sales took place before February 26, 2014, as well.
• The move is aimed at incentivising banks to recover appropriate value in respect of NPAs (non-performing assets).
• Almost all banks, including private sector players, have been reporting higher NPAs and lower profits as they have to make more provisions for bad loans, which crossed 5.5 per cent as at the end of December. Together with restructured loans, the total pain on the system is close to 12 per cent.
• The new guidelines extending the sale period prior to February, 2014, will help banks report better numbers and, thus, take a little pain off their back. From April 1, banks will have to make full provision — 5 per cent of the bad asset — if they have restructured the loan, and the entire amount if the asset in corporate debt restructuring (CDR) turns bad.
• The apex bank said the new guidelines will be applicable if only the excess is for a value higher than the bank’s net book value (NBV).
• Further, the notification said, “The quantum of excess provision reversed to profit and loss account will be limited to the extent to which cash received exceeds the NBV of the NPAs sold.”
• It also made it mandatory for banks to report the quantum of such excess provision reversed to the profit and loss account in the financial statements of the bank under ‘notes to accounts.’ Bad loans in public sector banks more than tripled to about Rs.2.17 lakh crore in three years to March, 2014.
• The move is aimed at incentivizing banks to recover appropriate value in respect of NPAs.

IMF raises India
growth forecast to 7.2 % this fiscal

• The International Monetary Fund (IMF) has forecast India will grow 7.5 per cent in 2015-16, up from 7.2 per cent in the current year, a projection less optimistic than that of the Modi government.
• In the Union budget 2015, the government estimated growth of up to 8.5 per cent in 2015-16.
• The Indian economy is the bright spot in the global landscape, becoming one of the fastest-growing big emerging market economies in the world, the IMF said in an official statement.
• The report stressed the urgency of certain key reforms, including the bottlenecks in the energy, mining and power sectors; infrastructure gaps, land acquisition processes and environmental clearances.
• In its annual assessment of the Indian economy in the mandatory Article IV annual report, the IMF said that India’s vulnerabilities have receded more than those of most emerging markets and sentiment has been revived.
• “The Indian economy is reviving, helped by positive policy actions that have improved confidence and lower global oil prices…To continue on this trend, India needs to revitalise the investment cycle and accelerate structural reforms,” according to the statement.
• “New investment project announcements have started to pick up, particularly in the power and transport sectors,” said IMF Mission Chief for India Paul Cashin. He also noted that bolstering financial sector health and further financial inclusion would support growth going forward.
• Mr. Cashin said that while India is well placed to cope with external shocks, there are possible risks on the horizon, both external and domestic.
• These include spillovers from weak global growth and potential global financial market volatility that could be disruptive, including from any unexpected developments as the United States begins to raise its interest rates.
• On the domestic front, the weaknesses in corporate balance sheets, especially in light of the increase in corporate leverage of the past few years, and worsening bank asset quality bear watching, as they could weigh on growth.
• The IMF report also said that India’s economic profile recently got a lift as the country improved the way it measures economic output.
• “The revised national accounts series incorporates numerous conceptual and methodological improvements that make them more consistent with international best practices,” it said adding that the report itself was prepared before the revisions were released by the Central Statistics Office.
• Mr. Cashin also gave thumbs up to the Modi government’s recent move to introduce a flexible inflation-targeting framework. “It will help deliver low and stable inflation, and diminish the prospect of renewed bouts of high inflation,” he said.
• Among the reforms the report recommended are steps in the agriculture sector for efficient procurement, distribution, and storage of food in the public system. Greater flexibility in labour markets and improvements in education for meeting the rising shortages of skilled labour were among the key reforms suggested.

RIL heads the list of top 10 asset firms

• At the end of 2014, India has 68 billionaires and occupies the seventh slot in that club globally.
• The Ministry of Corporate Affairs has come out with the names of top ten corporates having assets ranging from Rs.89, 000 crore to Rs.3.68 lakh crore, based on the balance sheets filed for March 2014.
• Finance Minister Arun Jaitley, released the list containing eight public sector firms and two private sector firms (Reliance Industries and Housing Development Finance Corp).
• RIL occupies the first slot among the corporates, in terms of assets, with over Rs.3.68 lakh crore for the year ended March 2014.
• The second slot is taken by Indian Oil Corp with assets of Rs.2.52 lakh crore.
• The latest list contains asset details of 4.16 lakh firms valued at Rs.117.08 lakh crore.
• The share of top 10 firms, at Rs.17.89 lakh crore, accounts for 15.3 per cent of the overall value.
• HDFC was in the third slot, followed by Power Finance Corp, NTPC, Rural Electrification Corp, Power Grid Corp, LIC Housing Finance, Steel Authority of India and Bharat Sanchar Nigam Ltd. PFC’s assets stand at Rs.1.94 lakh crore, NTPC at Rs.1.80 lakh crore, REC at Rs.1.53 lakh crore, Power Grid at Rs.1.40 lakh crore LIC Housing Finance at Rs.95, 777 crore, SAIL at Rs.91,962 crore and BSNL at Rs.89,333 crore.
• The list contains eight public sector firms and two private sector firms.

Black money taxable at highest rates

• Under the new law on black money, the offence will be made non-compoundable and offenders will not be permitted to approach the Settlement Commission. Undisclosed incomes or returns from foreign assets will be taxable at the maximum marginal rate and exemptions or deductions which may otherwise be applicable in such cases, shall not be allowed.
• The offence of concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money- laundering Act, 2002. This provision would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution against persons indulging in laundering of black money, Revenue Secretary Shaktikanta Das told.
• Union Finance Minister Arun Jaitley had said in his budget speech that he would introduce the law in Parliament during the current session. Under it, he had said, it would be mandatory to disclose all overseas bank accounts and assets to the tax authorities and concealment of income or assets held overseas could attract a jail term of up to 10 years.
• The government has also said that ahead of the law’s enforcement, it would provide a one-time compliance window of a few months.
• Das said the penalty during the compliance window could be lower than 300 per cent — the rate Mr. Jaitley had said in his budget speech would apply to the concealment of income and assets overseas under the new law.

Govt working to wrest
Khadi trademark from German firm

• Government is working in tandem with the Khadi and Village Industries Commission (KVIC) to expedite the process of de-registering ‘Khadi’ trademark in the European Union by a German company, Parliament was informed.
• KVIC has also initiated the process to register ‘Khadi’ trademark in India and internationally.
• The German company, named Khadi Natureprodukte GbR, has registered ‘Khadi’ as a trademark with the European agency, OHIM (Office for Harmonisation in the Internal Market).
• Spain-based OHIM is the nodal agency for Trademarks and Design Registration in the European Union.
• “Indian Embassies abroad have been in touch with the authorities of European Union for cancellation of the registration of Khadi as a trademark,” Micro Small and Medium Enterprises Minister of State Giriraj Singh informed the Lok Sabha in a written reply.
• The government, KVIC and the Indian Embassies are working in tandem to expedite the process of de-registering the trademark of Khadi, he added.
• Singh said the process to register for international trademarks for ‘Khadi’ is being done in two stages — first at national level and second at international level.
• He added that KVIC has filed an application to register ’Khadi’ as a word mark under IPR Authority in Mumbai.
• “This mark has been filed for 27 classes under IPR Act covering various products relevant to KVIC comprising of Khadi fabrics and village industries,” Singh said.
• Online registration for ‘Khadi’ as a “Word mark” has already been done and application for International IPR under Madrid Protocol has been filed for the US, European Union and Russia and China, he added.
• KVIC is a statutory body engaged in promoting and developing khadi and village industries.

Shiv Nadar Foundation
sells shares in HCL Technologies

• The Shiv Nadar Foundation, a philanthropic arm of Shiv Nadar, Founder and Chairman of HCL, sold its entire stake in HCL Technologies for Rs.1,109 crore in the open market.
• The proceeds are expected to be used for various objectives and initiatives of the foundation.
• Established in 1994, the Shiv Nadar Foundation supports education and art. It runs institutions such as Shiv Nadar University, Shiv Nadar School and Kiran Nadar Museum of Art, among others.
• Mr. Nadar has so far committed around Rs.6, 000 crore from his wealth to philanthropy. The foundation has already spent around Rs.3, 000 crore on philanthropic initiatives until March 31, 2014. Under the initiative, Mr. Nadar wants to build prestigious educational institutions and improve the lot of the underprivileged by tackling critical parameters. He is also looking for a ‘one-size-fits-all’ model to solve India’s basic problems of water, education, employability, health and infrastructure.
• According to bulk deal data on Bombay Stock Exchange, 56 lakh shares (0.8 per cent stake) were sold at Rs.1, 980.18 a share, at a discount to the firm’s closing price of Rs. 2,064.75 on Thursday last.
• “This transaction has been concluded at one go at a discount to the last closing price of HCL Technologies share to avoid any overhang in the market for shareholders of HCL Technologies,” Shiv Nadar Foundation said in a statement.
• The Foundation said the sale was done to fulfil the governance, tax and legal regulations that required it to the sell the shares before March 31, 2015. It had previously sold HCL Technologies shares in February 2012.
• After the transaction was announced, HCL Technologies shares declined to day’s low of Rs. 1,975. However, it recovered and closed flat at Rs. 2067.35 on the BSE.

News Corp acquires VCCircle Network

• The Rupert Murdoch-led firm has signed a definitive agreement to acquire media firm VCCircle Network for an undisclosed sum.
• Rupert Murdoch-led News Corp has signed a definitive agreement to acquire media firm VCCircle Network for an undisclosed sum.
• This is the third investment by News Corp in India.
• Previously, it had invested in financial advisory start-up firm BigDecisions.com and realty portal PropTiger.com.
• In a statement, News Corp said it has signed “a definitive agreement to acquire VCCircle Network, which includes VCCircle.com, Techcircle.in, VCCEdge, VCCircle Training, in addition to a premium-content driven conference business.”
• Terms of the acquisition, which is expected to close by March, were not disclosed.
• Commenting on the announcement, News Corp Chief Executive Robert Thomson said: “India is an increasingly meaningful part of our portfolio, which is itself increasingly digital and global.”
• VCCircle Network is owned by Mosaic Media Ventures and has about 100 employees across India, with its headquarters in Noida.
• VCCircle Network Founder and CEO P V Sahad and the management group will become part of News Corp’s India team.
• Sahad will report to News Corp Senior Vice President (Strategy) Raju Narisetti, the statement said.
• In November 2014, News Corp had acquired 25 per cent stake in Indian realty portal PropTiger.com for USD 30 million (Rs 185 crore) as part of its strategy to expand presence in digital media
• It had picked up stake in Singapore-based Elara Technologies Pte Ltd, the parent firm of PropTiger.com.
• In the following month, News Corp announced acquisition of BigDecisions.com for an undisclosed sum. The portal was set up by Manish Shah and Gaurav Roy in early 2013.

Walmart India appoints Ashwin Mittal as CFO

• Walmart India announced Ashwin Mittal as the new Chief Financial Officer and Javier Rojo as Head of Real Estate and Business Development. Mr. Mittal will replace Jill Anderson, the present CFO, and the company statement said.

Apple to join Dow blue-chip index

• U.S. tech giant Apple will join the blue-chip Dow Jones Industrial Index later this month, replacing telecom company AT&T, S&P Dow Jones Indices announced.
• The inclusion of the iPhone and iPad maker in the elite list of 30 top companies comes long after Apple had become the biggest U.S. Company by market capitalisation, now with a value of more than $730 billion.
• The change will take effect March 19, S&P Dow Jones said.

No tax on premature
withdrawal of private PF below Rs. 30,000

• Members of private provident fund trusts need not have to pay tax on premature withdrawals if the amount is either less than Rs. 30,000 or their tax liability is nil even after including the withdrawn sum to their income.
• A proposal to this effect is contained the Budget 2015-16. As per existing provisions in respect of such premature withdrawal, the trustees of the recognised provident funds (trusts) shall deduct tax as computed at the time of payment.
• Under the existing EPF & MP Act (Employees’ Provident Funds and Miscellaneous Provisions Act), withdrawal shall be taxable if the employee makes withdrawal before continuous service of five years (other than the cases of termination due to ill health, closure of business, etc) and does not opt for transfer of balance to new employer.
• It is proposed to insert a new provision in the Act for deduction of tax at the rate of 10 per cent on premature withdrawal from Employees Provident Fund Scheme (EPFS).

NPCI links 15 cr bank accounts with Aadhaar

• National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments system in India, said that it reached a major milestone of successfully linking 15 crore bank accounts with Aadhaar number.
• Beneficiaries of all types of government subsidies /benefit transfers are expected to be brought under the linkage programme very soon.
• “The current focus is on linking the bank accounts of 17 crore DBTL (direct benefit transfer for LPG) beneficiaries with Aadhaar numbers, latest by June 30, 2015,” NPCI stated in a release.

TRAI asks Vodafone to
stop using 111 service

• The Telecom Regulatory Authority of India (TRAI) directed Vodafone to stop using ‘111’ for offering customer care services, as it violates the national numbering plan, and submit a compliance report by March 10.
• In a direction to Vodafone, TRAI said that the Department of Telecom had issued the national numbering plan 2003, wherein the number 111 to 115 have not been allocated for any type of services and have been kept as ‘spare’
• However, the authority said it observed from the advertisement on the website of Vodafone that customers were being urged to call ‘111’ to get Internet settings on their handset for pre-paid data offers, post-paid 3G data packs, self help for data services, Blackberry Internet offers and to find out the balance.
• “Now therefore, in exercise of the powers conferred upon it... the authority hereby directs Vodafone India to discontinue use of level ‘111’ and submit compliance report latest by March 10,” TRAI said.

Financial sector set on a path towards innovation

• The budget outlines several much-needed measures for development of the financial sector.
• The three notable aspects are the focus on innovation, steps towards structural strengthening, and move to develop various segments of the financial sector.
• Other key highlights include steps to channelise savings from physical assets to financial ones, enhance financial inclusion, and remove constraints for foreign investors.
• Some more, though, was expected for debt markets and public sector banks.
• Budget laid a clear emphasis on enhancing innovation in the financial sector. Proposal to set-up Micro Units Development and Refinance Agency (MUDRA Bank) will enable microfinance institutions to lend to individual-run micro-enterprises.
• Clarity and rationalisation of taxation rules for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) will pave the way for these new vehicles to be introduced during the year. This will benefit real estate players having lease-generating commercial assets and infrastructure developers with operating projects.
• The plan to set-up the National Investment and Infrastructure Fund (NIIF) for taking equity in infrastructure projects will catalyse the infrastructure investments.
• With the approval for Gujarat International Finance Tec-City (GIFT), India will take baby steps towards developing as a global financial centre.
• Finally, the planned Trade Receivables Discounting System (TReDS) will help SMEs to reduce their working capital cycle. Once implemented, these innovations have a potential to significantly develop the Indian financial sector to support multiple stakeholders and industries.
• On the structural side, to strengthen the sector, the Finance Minister has announced reforms in the bankruptcy law, which will effectively address the non-performing assets challenge for banks in the long term. Allowing large non-banking finance companies (NBFCs) to use the SARFAESI Act will significantly augment their recovery efforts.
• The proposed merger of Securities and Exchange board of India (SEBI) and Forward Markets Commission (FMC) will ensure better regulatory supervision of financial markets that are becoming increasingly complex.
• The establishment of a Bank Boards Bureau to select heads of government-owned PSU banks and drive their capital management strategies will also strengthen the sector.\
• Finally, path towards a bank holding company over the medium term will enhance governance practices and allow better visibility of capital for public sector banks.
• Another notable push has been given to the alternate asset management, insurance, pension, and asset management sectors.
• Alternate Investment Funds have been made pass-through from an income tax perspective and foreign investment has also been allowed.
• This has the potential to significantly increase the flow of funds to real estate, start-ups and early stage companies and infrastructure projects through professionally managed specialised structure.
• Given the large investment needs, the bond markets and banking sector are expected to play a critical role in providing the necessary debt funding. In this context, greater attention on steps to develop the bond markets would have complemented the investments push of the budget.
• Similarly, a higher capital allocation for public sector banks would have prepared them well for growth, as well as to meet their current challenges.

Full electrification by 2022

• Giving a major boost to the government’s plans to make India energy surplus by 2019 and to provide electricity to each household by 2022, the government proposed five new Ultra Mega Power Projects (UMPPs), each of 4,000 MW which will come up in the plug-and-play mode enabling investors to start these plants without much delay.
• Out of the 4 UMPPs announced earlier, two (Mundra and Sasan) are operational now.
• Presenting the Union budget, Finance Minister Arun Jaitley said all clearances and linkages would be in place for these five new UMPPs before the projects are awarded through a transparent auction system.
• He also said the second unit of Kudankulam Nuclear Power Station would be commissioned in 2015-2016. Apart from this the budget has also made several provisions for the growth of Renewable Energy sector in the country.
• By 2022, the government announced plans to have 1, 75,000 MW of renewable energy generation (100000 MW solar, 60,000 wind and 15,000 MW other technology). Solar energy will get the biggest in capacity from 3,500 MW now to 1, 00,000 in 7 years.
• According to experts the government’s intention to drive new investment in power generation is a welcome and necessary move, but to continue to attract investors, the government must revive the distribution sector.
• The government has decided to increase clean energy cess on coal from Rs 100/tonnes to Rs 200/tonnes which will help mobilise funds for clean energy initiates.

Changes in corporate tax regime to reduce disputes: Jaitley

• The proposal to correct the corporate tax regime by lowering the tax rate and removing the exemptions will lead to higher level of investment, higher growth and more jobs, Union Finance Minister Arun Jaitley said in his budget speech in Parliament.
• The proposed changes, he said, would come into effect from the next financial year.
• At 30 per cent, the basic rate of corporate tax in India is higher, he argued, than the rates prevalent in the other major Asian economies, making the domestic industry uncompetitive. Still, the effective collection is just about 23 per cent, the Finance Minister said.
• Further, the regime of exemptions has led to pressure groups, litigation and loss of revenue and it also gives room for avoidable discretion, he said.
• In the Budget, the Finance Ministry has estimates that the revenue collected under corporate tax will go up marginally during 2015-16 to Rs. 4,70,628 crore against Rs. 4,26,079 crore during the current year.

Nirbhaya fund Gets Rs. 1,000 crore

• The 2015-16 budget pledged a ‘top-up’ of Rs.1,000 crore to the already existing Nirbhaya Fund for ensuring safety of women, while slashing the allocation to the women and child ministry by over half.
• The Women and Child Development Ministry received Rs. 21,193 crore in last year’s budget, an improvement over the RS. 18,584 crore in 2013-14.
• This year however, in his second outing, Mr. Jaitley slashed it to Rs.10, 351 crore, while earmarking Rs.79, 258 crore for ongoing schemes related to welfare of women.
• The Nirbhaya fund, set up by the UPA government in the aftermath of the December 16 Delhi gangrape, has made more news for being alarmingly underutilised than for making any significant improvement to women’s safety.
• Besides monetary allocations, Mr. Jaitley spelled out a moderate push for small savings for educating the girl child under the Sukanya Samriddhi initiative.
• The government had adopted gender budgeting (or gender-responsive budgeting) in 2005 to help advance gender equality through comprehensive and integrated planning by several government departments.

4-D solution for banking industry

• The Economic Survey 2014-15 has proposed a 4-D prescription to the Indian banking sector, which is hobbled by policy constraints, which create double financial repression, and, by structural factors, impede competition.

The four Ds include:

• De-regulation (addressing the statutory liquidity ratio (SLR) and priority sector lending (PSL)),
• Differentiation (within the public sector banks in relation to recapitalisation, shrinking balance sheets, and ownership),
• Diversification (of source of funding within and outside banking), and Disinterring (by improving exit mechanisms).

Highlights of Union Budget 2015

• FM’s Budget speech dwelt on agriculture, public investments in infrastructure, manufacturing and social sector spending.
• States to be equal partners in economic growth; move to making India cashless society; social sector programmes to continue.
• Some of the challenges mentioned by the Finance Minister are: poor agricultural income, decline in manufacturing; and the need for fiscal discipline.

Here are sector-wise highlights: TAXATION

1. Abolition of Wealth Tax.
2. Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
3. Rate of corporate tax to be reduced to 25% over next four years.
4. Total exemption of up to Rs. 4, 44,200 can be achieved.
5. 100% exemption for contribution to Swachch Bharat, apart from CSR.
6. Service tax increased to14 per cent.

AGRICULTURE

1. Rs. 25,000 crore for Rural Infrastructure Development Bank.
2. Rs. 5,300 crore to support Micro Irrigation Programme.
3. Farmers credit - target of 8.5 lakh crore.

INFRASTRUCTURE

1. Rs. 70,000 crores to Infrastructure sector.
2. Tax-free bonds for projects in rail road and irrigation
3. PPP model for infrastructure development to be revitalised and govt. to bear majority of the risk.
4. Rs. 150 crore allocated for Research & Development
5. NITI to be established and involvement of entrepreneurs, researchers to foster scientific innovations.
6. Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.

EDUCATION

1. AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
2. IIT in Karnataka; Indian Institute of Mines in Dhanbad to be upgraded to IIT.
3. PG institute of Horticulture in Armtisar.
4. Kerala to have University of Disability Studies
5. Centre of film production, animation and gaming to come up in Arunachal Pradesh.
6. IIM for Jammu and Kashmir and Andhra Pradesh.

DEFENCE

1. Rs. 2, 46,726 crore for Defence.
2. Focus on Make in India for quick manufacturing of Defence equipment.

WELFARE SCHEMES

1. 50,000 toilets constructed under Swachh Bharath Abhiyan.
2. Two other programmes to be introduced- GST & JAM Trinity. GST will be implemented by April 2016.
3. MUDRA bank will refinance micro finance orgs. To encourage first generation SC/ST entrepreneurs.
4. Housing for all by 2020.
5. Upgradation 80,000 secondary schools.
6. DBT will be further be expanded from 1 crore to 10.3 crore.
7. For the Atal Pension Yojna, govt. will contribute 50% of the premium limited to Rs. 1000 a year.
8. New scheme for physical aids and assisted living devices for people aged over 80.
9. Govt to use Rs. 9000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
10. Rs. 5,000 crore additional allocation for MGNREGA.
11. Govt. to create universal social security system for all Indians.

RENEWABLE ENERGY

1. Rs. 75 crore for electric cars production.
2. Renewable energy target for 2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro

TOURISM

1. Develpoment schemes for churches and convents in old Goa; Hampi, Elephanta caves, Forests of Rajasthan, Leh palace, Varanasi, Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be under the new toursim scheme.
2. Visa on Arrival for 150 countries.
   Budget 2015: Glossary of terms used in Budget
   Here is a ready reckoner for some of these terms.
   Disinvestment Receipts
   The term refers to the money raised by the Government through disinvestment, or the sale of its equity stake in companies it owns.

Fiscal Responsibility and Budget Management Act

The Act is an attempt to make the Government adhere to a phased plan to reduce fiscal deficit, which denotes an excess of expenditure over revenue.

Dividend Distribution Tax

This is a tax levied on companies that pay out dividends to its shareholders, i.e. share a portion of earnings with them.

Venture Capital Funds

These are funds that invest in startups, a financially riskier proposition than investing in established companies.

Securities Transaction Tax

It is a tax on all transactions done over the stock exchanges involving securities such as shares, derivatives, and equity-linked mutual funds.

Wholesale Price Index (WPI)

It is a measure of inflation, or price change, arrived at after regularly measuring the prices of a slew of wholesale goods.

Consumer Price Index (CPI)

It is a measure of inflation, or price change, arrived at after regularly measuring the prices of a slew of household goods and services.

Capital Gains Tax

It is a tax on the gains that ensue when an asset is sold for a price higher than what it was bought for.

Value-Added Tax (VAT)

It is a tax on the value added to a product at each stage of distribution, so that inputs that go into making the product aren’t taxed more than once.

Ad Valorem Tax

This is charged as a percentage of the value of a good or service, not at a specific rate per unit.

Advance Pricing Agreement (APA)

It is an agreement between a taxpaying entity and the taxman that indicates how the former will price transactions with its associates.

Fiscal Policy

It is what a Government does to influence the course of an economy through decisions on taxes and spending.

Monetary Policy

It is what a central bank does to influence the course of an economy through decisions on money supply and interest rate.

Direct Tax

A tax such as the income-tax, which has to be borne by the person it or entity it is imposed on.

Indirect Tax

A tax on goods and services, typically, levied on an entity but paid by another.

Direct Taxes Code (DTC)

India’s likely replacement to the long-standing Income Tax Act, the Direct Taxes Code is meant to make direct tax laws simpler and more efficient.

Goods and Services Tax (GST)

Proposed to be rolled out in India from April 1, 2016, the GST seeks to make the indirect tax structure simpler and efficient by replacing a slew of levies such as octroi, central sales tax, State sales tax, entry tax and so on.

External Commercial Borrowing (ECB)

ECBs refer to commercial loans with a minimum three-year maturity that can be raised from lenders from overseas where interest rates are lower than in India.

Fiscal Consolidation

The term refers to the things a Government does to maintain good fiscal health — cut debt and wasteful expenditure and improves revenue opportunities.

Current Account Deficit

It is a trade measure that shows the value of a country’s imports of goods and services to be higher than the value of its exports.

White Paper outlines challenges of Railways

• Railway Minister Suresh Prabhu tabled a white paper before presenting the budget.
• The paper delineates the challenges before the Railways — how it is “perched on a precipice but is capable of flying off and attaining great heights.”
• A plan for the ‘railways of tomorrow’ has been outlined.
• The organisation has suffered from considerable under-investment during the last several years, said Railway Minister Mr. Prabhu in the paper. As a consequence, capacity augmentation has suffered and so has the quality of service.
• Resources have been insufficient for improving customer satisfaction and introducing technological improvements. Investments in safety have also been insufficient.
• The status paper is the first in a series of three documents.
• The budget, being the second, lays down a five-year action plan of the Ministry in bringing about a turnaround.
• Finally, during the course of the current year, Indian Railways will bring out a Vision 2030 document which will contain a blueprint of the long-term development.
• Prabhu proposed a paradigm change with faster trains, swanky stations and skilled staff and flagged areas in need of ‘urgent attention’ such as cleanliness, punctuality of services, safety, terminal quality, capacity of trains, food quality, passenger security and ease of booking tickets.
• The five-year plan is to undertake measures to ensure delivering safe and punctual services, increasing average speed by 50 per cent and increasing loading to 1.5 billion tonnes.

Highlights of Railway Budget 2015

• The key themes of the Budget were in line with Prime Minister Narendra Modi’s initiatives - Swachch Bharat Mission, Make in India and Digital India.
• The most-expected part about this year’s Railway Budget - there is no increase in passsenger rail fares.
• Rs.8.5 lakh crore will be invested in Railways in next 5 years.
• ‘Operation 5 mins’, wherein passengers travellling unreserved can purchase a ticket in 5 minutes.
• Bio toilets and airplane-type vaccum toilets in trains.
• Surveillance cameras in select coaches and ladies compartments for women’s safety without compromising on privacy.
• Rail tickets can now be booked 120 days in advance.
• Speed on nine railway corridors to go up to 200 km per hour.
• Wi-Fi in more stations, mobile phone charging facilities in all train compartments.
• Facility of online booking of wheelchair for senior citizens.
• Satellite railway terminals in major cities.
• Centrally managed Rail Display Network is expected to be introduced in over 2K stations over the next 2 years.
• All India 24/7 helpline - 138 from March 2015; Toll free No.182 for security.
• 917 road under-bridges and over-bridges to be constructed to replace 3,438 railway crossings; at a cost of Rs. 6,581 crore.
• Four Railway Research Centres to start in four universities.
• Details about new trains and increased frequency will be announced later in this session of Parliament after review.

What is the investment plan?

• The Railway Budget envisages an investment of Rs. 8.5 lakh crore in next five years.

How is it going to be mobilized?

• The Minister suggested that the money could be raised from multiple sources - from multilateral development banks to pension funds.

What is the action plan in the sphere fund rising?

• Go in for partnership with key stakeholders - States, PSUs, partner with multilateral and bi-lateral organizations other governments to gain access to long-term financing. Also, get technology from overseas. The private sector could be roped in to improve last-mile connectivity, expand fleet of rolling stock and modernize station infrastructure.

What is the thrust?

• The thrust will be on revamping management practices, systems, processes, and re-tooling of human resources.

What is the proposal on capacity augmentation?

• De-congesting networks with basket of traffic-generating projects will be the priority
• Priority to last-mile connectivity projects
• Fast-track sanctioned works on 7,000 kms of double/third/fourth lines
• Commissioning 1200 km in 2015-16 at an investment of Rs. 8,686 crore, 84% higher Y-O-Y.
• Commissioning 800 km of gauge conversion targeted in current fiscal.
• 77 projects covering 9,400 km of doubling/tripling/quadrupling works along with electrification, covering almost all States, at a cost of Rs. 96,182 crore, which is over 2700% higher in terms of amount sanctioned.
• Traffic facility work is a top priority with an outlay of Rs. 2374 crore.
• Award of 750 km of civil contracts and 1300 km of system contracts in 2015-16 on Dedicated
• Freight Corridor (DFC); 55 km section of Eastern DFC to be completed in the current year.
• Preliminary engineering-cum-traffic survey (PETS) for four other DFCs in progress.
• Acceleration of pace of Railway electrification: 6,608 route kilometers sanctioned for 2015-16, an increase of 1330% over the previous year.

SEBI slaps Rs.86 cr penalty on DLF

• The Securities and Exchange Board of India (SEBI), penalised the real estate major, DLF, and other connected entities by levying a penalty of Rs.86 crore for violating capital market regulations by engaging in fraudulent and unfair trade practices. SEBI penalised DLF Rs.26 crore and other top officials including, K.P. Singh, Rajiv Singh and Pia Singh, another Rs.26 crore. Further, SEBI fined another related 35 entities, including individuals, Rs.34 crore.
• The case is pertaining to the irregularities and non-disclosure violations related to its 2007 initial public offering (IPO).
• DLF said it did not violate any law and it will challenge the SEBI order. DLF further said that the company and its board were guided by and acted on the advise of “eminent legal advisors, merchant bankers and audit firms” while formulating its IPO documents. “We are presently reviewing the said orders and after taking appropriate legal advice, we will challenge the said Orders in appeal,” DLF said in a statement.

Cabinet approves
agreement on BRICS development bank

• The Union Cabinet, chaired by Prime Minister Narendra Modi, gave approval for establishing the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement (CRA).
• Heads of the five nation BRICS group — Brazil, Russia, India, China and South Africa — decided at their sixth summit in Fortaleza in July last year to create a development bank as well as a reserve fund to finance infrastructure projects and other sustainable development projects.
• The $100 billion BRICS CRA would help countries deal with short-term liquidity pressures provide mutual support and further strengthen financial stability.
• The agreement will enter into force and the Bank begins operations only after all member-countries deposit their instruments of ratification with Brazil.
• The release added that signing of the agreement for the establishment of the New Development Bank was expected to allow India to raise and obtain more resources for the much-needed infrastructure development, the lack of which was coming in the way of inclusiveness and growth.
• Besides, the governance structure and decision-making in the Bank would be equitable unlike the existing multilateral development banks, it added.
• India will hold the Presidency of the New Development Bank for the first six years. The Bank will be based in Shanghai, China’s financial hub.

CommonFloor launches new solution

• Online real estate platform CommonFloor launched its virtual reality application CommonFloor Retina.
• The application, available for customers using Android platforms, will allows buyers to view and assess builder properties.
• According to a press release, the solution offers ‘real’ property experience for the seekers allowing them to view or review and assess multiple properties from anywhere at any point of time.
• At present, the feature is only available on Android phones like Nexus 4, MotoG 2nd Gen, Samsung Galaxy 4, MotoX, One Plus and Xiaomi Mi3.

Industrialist
Bhadrashyam Kothari passes away

• Mr. Bhadrashyam Kothari, prominent industrialist and Chairman and Managing Director, Kothari Sugars and Chemicals, died at Houston, in the U.S., after a brief illness. His passing was peaceful, surrounded by his family members. He was 53.
• As an industrialist, he brought to bear a visionary leadership to his group and displayed a pioneering spirit in venturing into new areas opened up by the economic reforms. He was also deeply involved in philanthropy and the promotion of education.

Rajan warns against ‘Appellate Raj’

• In a veiled attack on suggestions made by the government-appointed Financial Sector Legislative Reforms Commission (FSLRC) panel for overhaul of financial sector laws, Reserve Bank of India Governor Raghuram Rajan, said the country should not end up in ‘Appellate Raj’ after escaping the ‘License Permit Raj.’
• The comments assume significance in the wake of the high-profile FSLRC having suggested creating a single appellate authority for all financial sector watchdogs, including the RBI.
• The proposal, which was aimed at providing checks and balances for decisions made by the regulators, has been hanging fire for a long time due to opposition from various quarters, including the RBI.

New accounting standard rules notified

• Moving closer to the implementation of new accounting norms, the government has notified the rules for the Indian Accounting Standards (Ind AS), which will be mandatory for companies from April 1, 2016.
• Ind AS norms, which are converged with global standards IFRS, can be followed by corporates on a voluntary basis from April 1, this year.
• For companies having net worth of Rs.500 crore or more, the new norms would be mandatory from April 1, 2016. In a notification, the Corporate Affairs Ministry said the ‘Companies (Ind AS) Rules 2015’ would come into force with effect from April 1. Last month, the ministry had announced the Ind AS roadmap.

Videocon launches Wi-Fi enabled ACs

• Consumer electronics major Videocon Industries, unveiled a range of Wi-Fi enabled ACs to expand its presence in the highly competitive domestic air-conditioner (AC) market.
• The new Wi-Fi AC can be controlled from anywhere in the world through an app on a smartphone.
• It uses the Wi-Fi network at the consumer’s home to connect with a smartphone and receives signals on any 2G, 3G and 4G devices.
• The company launched four new split ACs from 1-1.5 tonnes belonging to the Wi-Fi series. These are priced between Rs.35, 990 and Rs.41, 990.
• The focus markets for the range are Tamil Nadu, Maharashtra, Gujarat, Kerala and Delhi. The range is to be launched nation-wide in the next few days.

Godrej Properties joins hands with Snapdeal

• Realty firm Godrej Properties said it has tied up with Snapdeal to offer online booking of its real estate projects.
• Godrej Properties already offers online booking through its website and has added this additional sales channel to further enhance customer access, the company said.
• The tie-up with Snapdeal will offer customers increased flexibility and unique offers at the time of booking, it added.

Snapdeal buys fashion portal Exclusively.com

• Expanding its presence in the high-end fashion segment, online marketplace Snapdeal has acquired luxury fashion portal Exclusively.com for an undisclosed amount.
• With this acquisition, the city-based firm that gets a little over $1 billion in gross merchandise value (GMV) from its fashion business expects this figure to touch $2 billion by the end of the current calendar year.

Hyundai launches new Verna

• Hyundai Motor India, launched the updated version of its mid-size sedan Verna, priced between Rs.7.74 lakh and Rs.12.19 lakh (ex-showroom Delhi).
• The new Verna that will compete with Honda City and Maruti Ciaz will be available in both petrol and diesel options and has ten variants.
• For the April 2014-January 2015 period this fiscal, Honda City sold 61,102 units, while Maruti Ciaz, which was launched in October last year, sold 23,490 units till January.

Aero India 2015 to focus on ‘Make in India

• ‘Aero India 2015’ will be inaugurated by Prime Minister Narendra Modi at Bengaluru on February 18, with the theme squarely focused on ‘Make in India’ in aerospace, defence, civil aviation and airport infrastructure in line with the government’s mantra.
• “We want to set ‘Make in India’ as the major theme of the exhibition and see it progress in the defence sector also,” Defence Production Secretary G. Mohan Kumar said.
• A global CEOs conference will be chaired by Defence Minister Manohar Parrikar. Around 300 CEOs from Indian and foreign companies are expected to attend the conference.

SEBI plans profiling of major investors to boost surveillance

• To strengthen its surveillance activities, capital markets watchdog Securities and Exchange Board of India (SEBI) is planning to conduct ‘profiling’ of major investors in different segments of the market to understand their trading patterns and the impact on the market.
• This follows SEBI having put in place mechanisms for risk profiling of the brokers and listed companies so as to understand the associated risk.
• This has become more important in cases of algorithmic or high-frequency trades, as the impact of the trading activities of major investors or traders could be quite big and really fast, requiring a very robust surveillance system, he added.
• To help it better regulate the marketplace and strengthen its surveillance system, SEBI has adopted a supervision model based on risk levels for various market entities including brokers and mutual funds.
• Under the new model, various market entities are being divided into four groups — very low risk, low risk, medium risk and high risk — and the quantum of surveillance and number of inspections increase as per the risk level.
• This new supervision regime has been put in place as per recommendations of an independent global consultant and the subsequent suggestions made by an internal task force at SEBI, while taking into account practices followed by many overseas regulators.
• The move would help the existing surveillance system take care of most of the smaller offences, so that the investigation resources are utilised more effectively to tackle serious violations in the market place.

Mallya resigns from
Mangalore Chemicals Board (MCFL)

• In a surprise move the UB Group Chairman Vijay Mallya has resigned from the Board of Directors of Mangalore Chemicals and Fertilizers Ltd (MCFL) with immediate effect.
• What prompted this move is still not known. The company has intimated this development to the stock exchanges. Soon after the announcement MCFL stock prices rose sharply on the stock markets.
• The prices moved from Rs. 80 range to around Rs. 92. The volume was as high as nine lakh shares in early morning trade.
• MCFL is amidst a takeover battle between Deepak Petrochemicals and Fertilizers and Zuari Agro Chemicals and Fertilizers. Mr. Mallya had sided with Zuari to ward off the takeover bid of Deepak Fertilizers.
• Recently, Deepak’s bid to acquire 26 per cent addition stake had failed and Dr Mallya had retained control over the company. Currently Deepak holds 32 per cent stake in the company, Zuari 16 per cent, UB Group 22 per cent and the rest by public shareholders.

Nifty touches record high

• A benchmark index of Indian equities markets was trading 208.40 points or 0.73 percent up as fast moving consumer goods (FMCG) stocks surged. All the sectors were trading in green and good buying was observed in FMCG, banking and healthcare sectors.
• The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 28,616.93 points, was trading at 28,651.11 points (at 09.27 a.m.) in the early session, up 208.40 points or 0.73 percent from the previous day’s close at 28,442.71 points.
• The Sensex has touched a high of 28,808.78 points and a low of 28,587.75 points in the trade so far.
• The S&P FMCG index gained by 200.87 points, bankex went up by 105.17 points and healthcare index moved up by 67.73 points.

Reliance Industries signs agreement with Mexican company for oil and gas

Reliance Industries has signed an agreement with Mexican state-owned company, Petroleos Mexicanos (PEMEX) for cooperation in upstream oil and gas production as well as in refining business.
• As per the Memorandum of Understanding (MoU) “RIL will cooperate with PEMEX for assessment of potential upstream oil and gas business opportunities in Mexico and jointly evaluate value added opportunities in international markets,” a company statement said.
• RIL and PEMEX will also share expertise and skills in the relevant areas of oil and gas industry, including for deep—water oil and gas exploration and production.
• “The MoU envisages sharing of RIL’s pioneering expertise in deep-water development and best practices in East Coast of India and RIL’s experience in shale gas in United States,” it said.
• RIL will also provide technical support and share experience with PEMEX for refining value maximisation and other technical optimisation strategies.
• “RIL’s cooperation with PEMEX is in line with its growth strategy to explore opportunities to expand its international asset base in regimes having internationally attractive competitive terms.
• “The company hopes to leverage its organisational capabilities and expertise to create long-term value for Exploration and Production Business and for RIL on the whole,” it added.

Govt. relaxed FDI policy for investors in construction sector

• To help attract foreign funds in construction of townships, hospitals and hotels, the government relaxed the FDI policy for this sector by easing exit norms and reducing built-up area and capital needs.
• The revised norms relating to construction development sector has been notified by the Department of Industrial Policy and Promotion (DIPP). India allows 100 per cent FDI in the sector through the automatic route.
• The new policy has done away with the three-year lock-in period for repatriation of investment.
• “The investor will be permitted to exit on completion of the project or after development of trunk infrastructure, that is, roads, water supply, street lighting, drainage and sewerage,” a DIPP circular said.
• It is to be noted here, the official statement issued after the October 29 Cabinet meeting had mentioned that the investor can exit on completion of the project or “after three years from the date of final investment,” subject to development of trunk infrastructure.
• Under the new policy, the minimum floor area requirement has been reduced to 20,000 square metres from 50,000 square metres earlier.
• It also brought down the minimum capital requirement to $5 million from $10 million. In case of development of serviced plots, the condition of minimum land of 10 hectares has been completely removed.

RBI comfortable on Current Account Deficit: Khan

• The Reserve Bank of India (RBI) Deputy Governor H.R. Khan said that the central bank is reasonably comfortable with the present Current Account Deficit (CAD) position of the country.
• The central bank is “reasonably comfortable from the current account point of view because of prices of oil,” which is hovering at five-year lows, said Mr. Khan while talking to reporters on the sidelines of ‘National Payments Excellence Awards 2014’ function here.
• The Government recently scrapped the 80:20 rule on gold imports, mandating traders to export 20 per cent of all gold imported into the country. He said that a view has been taken in this regard after considering the CAD position into account.
• Mr. Khan also said that the RBI is having concerns on e-commerce transactions and would issue guidelines to regulate these transactions.
• National Payments Corporation of India (NPCI), the umbrella organization for all retail payments system in the country, has institutionalized ‘National Payments Excellence Awards 2014’ to recognize outstanding achievements in operating various payment systems.

RBI keeps policy rates unchanged

• As is widely expected, the Reserve Bank of India (RBI) has kept the key policy rates unchanged.
• On the basis of an assessment of the current and evolving macro-economic situation, the RBI has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent.
• It has also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL). And, it has said that it will continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate, and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions. Also, it has decided to continue with daily one-day term repos and reverse repos to smooth liquidity.
• As a result of these decisions, the reverse repo rate under the LAF will remain unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the bank rate at 9.0 per cent
• “The headline inflation has been receding steadily, and current readings are below the January 2015 target of 8 per cent as well as the January 2016 target of 6 per cent,’’ the RBI said. “The inflation reading for November, which will become available by mid-December, is expected to show a further softening.

Shome panel: Tax cash
withdrawal beyond limit in a day

• A high-level official panel proposed levying of banking transaction tax on withdrawal of cash beyond a specified limit in a day to check black money, and was not in favour of the tax amnesty scheme.
• A report by the Parthasarathi Shome Committee, appointed by the previous UPA government, suggested taxing farmers with large land holdings in addition to a host of measures to widen the net.
• “Taxpayers keep waiting for amnesty schemes to be announced and take advantage of these schemes to build their capital.
• “Amnesty schemes also cause inequity among taxpayers, and there is no proof that they improve taxpayer behaviour among evaders.
• They, therefore, should not be encouraged through amnesties,” said the report of the Tax Administration and Reform Commission (TARC). It was the third report in the series.
• Highlighting that there is no instrument at present that captures details of cash withdrawals from bank accounts, it said such information would help the Income Tax department widen its information base on the use of black money.
• Making a case for banking cash transaction tax (BCTT), it said: “...IT Act should be suitably revised to include in its ambit cash withdrawals exceeding specified amounts in a day from bank accounts other than savings accounts.

Lower oil prices will boost
global economy: Christine Lagarde

• The recent decline in oil prices will help boost global economy, IMF chief Christine Lagarde has said, as global oil prices have tumbled to multi-year low.
• “It is good news for the global economy,” Ms. Lagarde said at The Wall Street Journal CEO Council annual meeting.
• For the United States, low energy prices would help accelerate the economic growth to a 3.5 per cent next year from the October forecast of 3. 1 per cent, she said, adding that Europe is also expected to benefit from lower oil prices.
• Ms. Lagarde, however, noted that the Eurozone also faces a risk of the “new mediocre,” and described it as an economy marked by slow growth, low inflation and high unemployment.
• But at the same time, she asserted that reluctant political leaders need to adopt more job-friendly labour market reforms, aggressive and innovative monetary policy and other structural reforms.
• “Where they are at the moment they need to use all available tools. They have to get on with it and do it,” Ms. Lagarde said.
• During the meeting, the International Monetary Fund Managing Director was highly critical of Japan for being slow on implementation of fiscal and labour market reforms.
• On Russia, Ms. Lagarde said lower prices are adding to their fragility and their vulnerability.

53% of Indians connected to internet every hour, beat global average

• Fifty-three per cent of Indians are connected to the internet every waking hour, which is higher than the global average of 51 per cent, a new international study has found.
• “The continuous online connectivity is becoming a phenomenon in India with 53 per cent of respondents in the country saying they are connected to the internet every waking hour,” said the study conducted by the London-based AT Kearney Global Research.
• “That is higher than 51 per cent global average, 36 per cent in China and 39 per cent in Japan,” said the study titled “Connected Consumers Are Not Created Equal: A Global Perspective.”
• The study covered 10 countries involving 10,000 respondents in July 2014.
• The results of the study found that continuous connectivity is having a big impact on online retail in the country with social networks becoming a major influencing factor.
• “97 per cent of the respondents from India said they have a Facebook account with 77 per cent saying they logged in to the social network daily,” said the study.
• According to the study, there are three key motivations for Indian people to be continuously connected to internet.

OnePlus expects India will
be its biggest market in next few months

• Bullish on the multi-billion dollar opportunity in the Indian smartphone segment, Chinese handset maker OnePlus said it expects India to become its biggest market in the next few months.
• At present, China is the biggest market for OnePlus, which announced its foray into India with the launch of its ‘One’ smartphone at Rs 21,999.
• “In the next few months, we expect India to be our biggest market, it will overtake China,” OnePlus India General Manager Vikas Agarwal said.
• In line with its global practice, users in India will receive India-specific invites through OnePlus and Amazon.in.
• The two platforms have been integrated so that invites can be used to purchase the device exclusively on eCommerce major, Amazon.in.
• “We will bring in as many devices as possible in sync with our production capacity. Cumulatively, till mid-October, we have already sold 500,000 devices (globally),” he added.
• This is the first time that OnePlus has entered a new market with local presence and collaboration with a local partner.
• It has set up a local team in India, led by Mr. Agarwal, for marketing and sales. The Chinese startup is also putting together an engineering team in Bangalore in the next few months.

More steps to rationalise subsidies: Jaitley

• Assuring India Inc. of the National Democratic Alliance’s commitment to economic reforms, Union Finance Minister Arun Jaitley said that the government would announce more steps to rationalise subsidies.
• “I had a series of meetings with the Expenditure Management Commission. In the next few months ... maybe earlier than that, they will come out with some interim recommendations so that we can proceed with rationalisation,” Mr. Jaitley said.
• Recalling the government’s decision to link the diesel price with the market price, the Minister told the India Economic Conclave, organised by the television channel ET Now, it would help reduce the subsidy burden.
• The Centre had set up a commission to suggest steps to rationalise subsidies and bring down the fiscal deficit. Mr. Jaitley expressed confidence that the government would be able to push the Insurance and the Goods and Service Tax (GST) Bills in this session of Parliament.
• Mr. Jaitley ruled out the NDA government “tinkering” with the country’s federal structure to help push economic reforms faster.
• The democratic process “has its own dynamics” and that should go on, the Minister said when asked why the government could not straightaway convene a joint session of both Houses of Parliament to help pass key laws (in the backdrop of the BJP not having a majority in the Rajya Sabha).
• Mr. Jaitley said that even in the past, legislation had been passed in the Rajya Sabha on the basis of a consensus among the parties.

India’s manufacturing & services growth outpaced China in November: HSBC survey

• Manufacturing and services sectors in India expanded at a faster pace than China in November, even as emerging market output slipped for the second consecutive month to a six-month low, a HSBC survey said.
• The HSBC Emerging Markets Index (EMI), a monthly indicator derived from PMI surveys, slipped for the second month running to 51.2, signalling the weakest rate of expansion since May.
• The EMI remained well below its long-run trend level of 53.7 as both manufacturers and service providers in emerging markets registered slower and identical rates of output expansion in November, HSBC said.
• “2014 looks set to record the lowest annual average for the Index since its inception in November 2005,” the HSBC report added.
• Data for the four largest emerging economies showed contrasting activity trends in November. China registered growth for the seventh month running, while India posted the fastest growth since June.
• Russia and Brazil, however, registered sharper rates of decline during November.
• During November, the HSBC composite index for India that maps both manufacturing and services, stood at 53.6, whereas for China it was 51.1, Brazil (48.1) and Russia (47.6).
• An index measure of above 50 indicates expansion.
• “Downturns in Russia and Brazil are intensifying to worrying extents, and China’s economic growth rate continues to slow. Only India saw an improvement in November,” Markit Chief Economist Chris Williamson said.

RBI has retained growth
estimate at 5.5% for 2014-15

• The Reserve Bank of India (RBI) has retained its growth estimate for 2014-15 at 5.5 per cent.
• The reiteration of growth estimate is based on its expectation of a normal monsoon. Also, the apex bank is hopeful that there will not be any adverse supply or financial shocks.
• While keeping the policy rates unchanged in its fifth bi-monthly policy, the RBI said conditions for a turnaround “are gathering.” Nevertheless, it did concede that “activity appears to have lost some momentum in Q2, probably extending into Q3.”
• The RBI pointed to the softening of inflation, easing of commodity prices/ input costs, comfortable liquidity conditions, and rising business confidence as well as purchasing activity.
• “These conditions could enable a pick-up in Q4 if co-ordinated policy efforts fructify in dispelling the drag on the economy emanating from structural constraints,’’ it said.
• “A durable revival of investment demand continues to be held back by infrastructural constraints and lack of assured supply of key inputs, in particular coal, power, land and minerals,’’ it said.
• The success of ongoing government actions in these areas wouldl be key to reviving growth and offsetting downside risks emanating from agriculture – in view of weaker-than-expected Rabi sowing – and exports – given the sluggishness in external demand, it added.
• The apex bank said some easing of monetary conditions had already taken place. The weighted average call rates as well as long-term yields for government and high-quality corporate issuances had moderated substantially since end-August, it said.

IBM signs multi-billion
deal with ABN Amro

• IBM has signed a ten-year, multi-billion dollar deal to provide computer infrastructure services to Dutch bank ABN Amro running on its cloud systems, the U.S. information technology firm said.
• The deal comes as IBM is trying to gain momentum in the market for Internet-delivered computing services, known as cloud computing.
• IBM will provide fully managed services for mainframe computers, servers, storage and end-user computing as well as a help desk and other technical support.

SEBI (research analysts)
norms to be effective from Dec. 1

• The Securities and Exchange Board of India (SEBI) said the SEBI (Research Analysts) Regulations, 2014 (RA Regulations), would come into effect from December 1.
• This was notified on September 1. “No person shall act as research analyst or research entity or hold itself out as research analyst unless he has obtained a certificate of registration from SEBI under these regulations unless an exemption specifically applies,” SEBI said in a release.

Kisan Vikas Patra,
re-launch with very few justifications

• Despite some criticism and misgivings in certain quarters, the government has decided to re-introduce the Kisan Vikas Patra (KVP), a savings instrument that was discontinued three years ago.
• ]Positioned as a savings instrument in line with other continuing ‘small savings schemes’ such as the Public Provident Fund (PPF) and the National Savings Certificates (NSCs), the new KVP, like its predecessor, has certain advantages as well as disadvantages over these. Most ordinary investors will compare the new KVP with bank deposits and other debt instruments.

Broad features of the new KVP

• Interest: 8.7 per cent.
• Tenure: eight years and four months (100 months).
• Investment doubles in 100 months.
• Minimum lock-in period two years and six months.

Liquidity

• Can be encashed in eight equal monthly instalments after the lock-in period
• Can be transferred to another person by endorsement and delivery
• Can also be given as collateral for loans by banks
• Minimum investment Rs.1,000. Thereafter, in denominations of Rs.5,000, Rs.10,000 and Rs.50,000. There is no maximum limit
• Taxability: fully taxable
• Mode of investment: cash or cheque
• Know your customer (KYC) norms: PAN not required but identity/address proof required
• Will be sold initially through post offices across the country, but later through some government-owned banks also.
• Taking three other relevant traits — liquidity, convenience and tax advantage — the new KVP is reasonably liquid. Investors can come out after the minimum lock-in period in eight equal instalments. The KVP can also be given as collateral. Unlike PPF and NSCs, the KVP does not have a tax advantage. Interest on it is fully taxable.
• Bank deposits are superior to KVP in terms of returns — three year fixed deposits offer 9 per cent and some banks even more. The argument that deposit rates are set to fall over the medium-term is no doubt valid, but one expects the banks to safeguard their depositors’ concerns by floating innovative schemes.
• It is also certain that the corporate bond market will revive and be a conduit for infrastructure finance. This will matter to senior citizens and others who want a fixed, steady return in the form of investment in infrastructure bonds.
• Bank deposits are liquid, absolutely secure and highly accessible to most middle-class investors. They have a minimum tax advantage — practically restricted to interest on savings accounts.

Petroleum product prices
headed for further correction

• Petroleum product prices are headed for further correction after the Organiztion of the Petroleum Exporting Countries (OPEC) decided not to resort to output cut to revive falling Brent crude prices.
• According to experts, petrol and diesel prices may come down by Rs.2 a litre as the Indian basket price is different and is higher than spot prices.
• A sharp division among the oil cartel members augurs well for emerging countries like India for at least the next 6 months when OPEC would meet again to take a call on restricting production.
• After the proposal to cut production by 1 million barrels a day was rejected, Brent crude prices plunged to four-year low of around $71 a barrel.
• The impact could be much more in the coming days and in the December-January period when fund houses would reduce their exposure to underperforming commodity assets and allocate funds to high yielding equities, said analysts.
• “Most OPEC members decided against production cut to protect their market share. They have deep pockets to afford a price as low.

 

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