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Fitch: Agency Less Optimistic than Market on Top Indian Companies
Jan 19,2017

Fitch Ratings and India Ratings & Research (collectively Fitch) are less optimistic in their projections for the 27 Indian corporates they publicly rate compared with Bloomberg consensus estimates (BEst), the agency says in its credit change zone report for the countrys listed corporates.

BEst expect 87 of Indias top-100 listed non-financial corporates by market capitalisation to be in the credit-positive change zones of cash flow growth exceeding net debt growth over the financial years ending-March 2016 (FY16) to FY18, while 13 are expected to be in the credit-negative change zones of net debt growth exceeding cash flow growth. This represents a more optimistic position compared to FY14-FY16, where 64 corporates were in credit-positive change zones.

Fitch projects 17 of the 27 Fitch-rated corporates in the top-100 portfolio to be in credit-positive change zones, where leverage is forecast to fall, and 10 companies in the credit-negative change zones, where leverage is forecast to rise. For this same set of corporates, BEst forecast a higher 20 in credit-positive change zones and only seven in credit-negative change zones.

Four of the 27 Fitch-rated companies are positioned in opposite credit change zones when comparing Fitch and BEst estimates. Fitch forecasts Wockhardt (AA-(ind)/Negative), NHPC (BBB-/Stable), and Reliance Industries Ltd (BBB-/Stable) to be in credit-negative change zones, whereas BEst forecasts these companies in credit-positive change zones. Conversely, Fitch forecasts Bharti Airtel Limited (BBB-/Stable) in the credit-positive change zone, whereas BEst forecasts this company in the credit-negative change zone.

We believe market expectations of improving corporate credit profiles is driven more by projected higher EBITDA generation than lower debt and capex. BEst forecasts aggregate net debt/EBITDA leverage for the top-100 portfolio to fall to 1.3x by FY18, from 1.7x in FY16. Leverage is forecast to fall most for corporates in the construction and engineering sector, followed by metals and mining, then the retail, leisure and consumer products sector.

The report includes Venn diagrams illustrating overlapping areas of our top-10 lists based on BEst projections. Vedanta (AA(ind)/Negative) stands out as being in the Blue Joy Zone of BEst-projected higher EBITDA and debt paydown over FY17f and FY18f. Conversely, Idea Cellular Ltd is in the Top-10 Red Pain Zone of BEst-projected EBITDA decline and rising net debt over the projected period. The report also contains scatter charts illustrating the credit zone of each company in both projected and historical periods as well as explanatory notes and rating sensitivities for the 27 Fitch-rated listed Indian corporates.

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Digital payment promotion gets a boost
Jan 19,2017

The Governments efforts to give a boost to the digital payment systems and the cashless economy, post-demonetization have generated enthusiastic response from the people. People from different age groups, occupations and different walks of life have taken part in a big way in the Lucky Grahak Yojana and Digi-dhan Vyapar Yojana giving a fillip to digital transactions.

More than 3.81 lakh consumers and 21,000 merchants have been declared the winners of prize money worth Rs.60.90 crore at 24 Digi-Dhan Melas across the country. Giving the details, the Union Minister Law & Justice, Electronics and Information Technology Shri Ravi Shankar Prasad said that the Common Service Centres under the Deptt. of Electronics and Information Technology have trained 1.94 crore citizens and 5.93 lakh merchants so far for carrying out transactions through digital payment systems.

The prize money worth Rs. 60.90 crore to over 3.81 lakh winners of NITI Aayogss lucky draw schemes Lucky Grahak Yojana, LGY for consumers and Digi-Dhan Vyapar Yojana, DVY for merchants has been declared at 24 Digi-Dhan Melas across the country - daily as well as weekly. The list includes winners from different walks of life including the small farmers, Anganwadi workers, housewives, labourers, etc.

Data analytics provided by the National Payments Corporation of India (NPCI) has highlighted a positive response among the people to adopt digital payments. Maharashtra, Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Karnataka have emerged as the top 5 states with maximum number of winners. Active participation has been seen among men and women while most of the winners were in the age group of 21-30 years.

The two schemes were launched on December 25, 2016 and shall remain open till April 14, 2017. The schemes are aimed at incentivizing the consumers and the merchants to promote digital payments. 15,000 daily winners vie for total prize money of Rs. 1.5 crore at the rate of Rs.1000 per person. Besides, over 14,000 winners qualify for weekly draws with the total prize money of over Rs. 8.3 crore per week.

Customers and merchants using RuPay Card, BHIM, UPI (Bharat Interface for Money/Unified Payment Interface) USSD based *99# service and Aadhaar enabled Payment Service (AePS) are eligible for participating in the daily and weekly lucky draws.

These lucky draws are being held at Digi-Dhan Melas across the country. Over 100 Digi-Dhan Melas will be held across the country to inculcate digital payment among the people. Till date, 24 Digi-Dhan Melas have been held across the country since 25th December, 2016. These include New Delhi, Gurugram, Ludhiana, Panaji, Dehradun, Lucknow, Ranchi, Raipur, Mumbai, Meerut, Haldwani, Amritsar, Pune, Patna, Vijayawada, Chandigarh, Guwahati, Kochi, Bilaspur, Bokaro, Dadra & Nagar Haveli, Bengaluru, Jammu and Hyderabad. The exercise has covered so far 12 states and 3 Union territories. By 1st February, the exercise will have covered the cities from 21 States and 4 UTs.


Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana awards were launched in New Delhi on December 25, 2016 by Union Minister of Finance and Corporate Affairs, Arun Jaitley and Union Minister of Electronics & Information Technology and Law & Justice, Ravi Shankar Prasad to incentivize digital payments. The lucky draws have been planned at over 100 Digidhan Melas spread across the country in 100 different cities till April 14, 2017. The highlights of the Schemes are as follows-

n++ All transactions done by consumers and merchants from November 9, 2016 till April 14, 2017 will be eligible for winning prize under the scheme.

n++ All such transactions irrespective of the fact whether it has won daily / weekly prize, will be eligible for Mega Draw to be conducted on April 14, 2017.

n++ Three Mega prizes for consumers worth Rs. 1 crore, Rs 50 lakh and Rs 25 lakh.

n++ For merchants too, there would be three mega prizes worth Rs. 50 lakh, Rs. 25 lakh and Rs. 12 lakh.

n++ The draw of winners are presented at different centres on each day by the senior officials of NPCI in the presence of senior minister from GoI, representatives of NITI Aayog and general public.

n++ Schemes have total outlay of Rs. 340 crore of which - Rs. 300 crores would be spent on consumers and merchants while the remaining Rs. 40 crore on awareness and publicity.

n++ Total winners under the scheme are expected to be over 18.75 lakh.

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India sees large rise in cybercrime: ASSOCHAM-PwC study
Jan 19,2017

Cyber security incidents are seeing a rise in India, with a total of 39,730 incidents reported in the first 10 months of 2016, as against 44,679 and 49,455 observed during the years 2014 and 2015 respectively, a recent ASSOCHAM-PwC joint study said.

The Indian Computer Emergency Response Team (CERT-In) has reported a surge in the number of incidents till October 2016 with close to 39,730 security incidents, noted the study titled Securing the cashless economy, conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with PwC released at the ASSOCHAM Workshop on n++Securing the Cashless Economyn++.

With more time to detect and time to respond to these attacks, the return on investments for cyberattacks is greater in emerging markets like India as compared to developed markets like the US, noted the study.

Demonetisation has given an impetus to e-wallet services. Mobile wallets have witnessed a massive rise in app downloads. With programmes for financial inclusion, digitisation of the economy and increased use of smartphones, online transactions are already quite popular among the urban Indian population. The result has been that leading mobile wallets have witnessed growth of upwards of 100% in app download numbers and have similarly seen an increase of upwards of 400% increase in wallet recharges, pointed out the joint study.

This smartphone revolution has led to the emergence of e-commerce, m-commerce and other services, including app-based cab aggregators, who encourage digital payments for use of various services. The value added services such as cash back, bill payment facilities, loyalty points, rewards and ease of use have promoted increased usage of such digital platforms.

As the country is experiencing a digital revolution, the impact of this transformation makes it imperative for financial service players to revisit their cyber security resilience. The number of incidents occurring in banking systems has increased in the last five years. In the month of October 2016, an ATM card hack hit Indian banks, affecting around 3.2 million debit cards. Hence, efforts are needed to enhance cyber security as businesses and citizens embrace this new digital wave, noted the study.

Addressing ASSOCHAM Masterclass Workshop n++Securing the Cashless Economyn++, Mr Sanjay Sahay, ADGP, Police Computer Wing, Bangalore, Karnataka said we should have our own standards & protocol and operating system. The types of cyber security incidents such as phishing, scanning, website intrusions and defacements, virus code and denial of service attacks will continue to grow, highlighted the study.

Dr. Ajeet Bajpai, Director General, National Critical Information Infrastructure Protection Centre, NTRO said that post demonetisation banking and financial sector has become the most critical. He also said that earlier (cyber) threats were of nuisance value, now they are disruptive and may become destructive.

While addressing the workshop organised by ASSOCHAM, Dr. Ajeet Bajpai said why should a banking app want to access your camera and audio of your phone? He further said that the biometric solutions may actually be more compromising. Dr. Bajpai said, we need to create transactional literacy.

More intelligent transaction monitoring will have to be carried out as part of continuous surveillance. Crisis response and recovery strategies will have to step up along with the increased digital footprint. Security awareness of all the stakeholders will be a vital pillar of a secure cashless society, adds the study.

Security assessment and testing will need to be embedded into the agile development life cycle. Agile security testing methods based on automation will have to be adopted. In many ways driving, a paradigm shift is needed in the way security testing is undertaken today.

The new era will call for hyper-interoperability across different value chain players. In order to enable this, each ecosystem player will need to create multiple application programing interfaces (APIs). While this will deliver a seamless experience to customer, there is also a risk of malware injection through such APIs. With faster proliferation of interfaces, protecting APIs will become critical to ensure malware and persistent threats do not propagate through such untrusted/ untested APIs.

In the new cashless world, frauds will be driven mainly by impersonation and will become a daily affair. Accordingly, the need for stronger authentication of transactions will gain significance. The current techniques of authentication based on location and timing will no longer be adequate. Adaptive authentication will need to be embedded into the heart of transaction processing.

Protecting context-rich personally dentifiable information (PII); Both regulators and organisations will be obligated to invest in strong processes and technology to prevent the misuse of context-driven rich PII. While traditional controls such as data masking and encryption will need to be enhanced, capabilities to hunt down any misuse of PII will have to be built by organisations.

In the new digital/ cashless economy, mobility-based solutions will continue to gain prominence and, hence, security concerns will no longer be limited to the organisation architecture boundaries. In order to ensure endpoint security containerised apps with built-in advanced persistent threat (APT) capabilities will have to be developed. Controls for in memory data and additional controls like device certification will be considered. To ensure security of data in endpoints, there may be a requirement for guidelines to define the kind of sensitive data that end devices retain. Hence, the next generation financial infrastructure may involve the adoption of advanced end-user device management solutions.

As the ecosystem continues to be interconnected and overlapping, cybercriminals will try to exploit possible lapses and, hence, strategies need to be built to deal with such eventualities. Given this interdependence on the all the players of the financial ecosystem, it becomes crucial to identify any anomaly at a pace which mirrors real time or near real time.

The security boundaries of the various players will be extended to end users, third parties and other ecosystem partners. Security controls will no longer be defined in contracts limited to uptime and resolution of vulnerabilities, but will actually be embedded in the partner ecosystem. The process for monitoring of parameters will also have to be integrated with the companys incident response framework.

The awareness theme for tomorrow will thus be multichannel, multilingual and multicultural, and hence go beyond the scope of traditional programmes. Regulators may have to start thinking across industries and develop an awareness programme that addresses this need.

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PMAY(Urban) housing approvals cross 15 lakh mark with an investment of Rs.82,708 cr
Jan 19,2017

Ministry of Housing & Urban Poverty Alleviation has asked all the States and Union Territories to submit proposals for construction of affordable houses for urban poor at the earliest so that the Housing For All target in urban areas could be met by 2022 as envisaged. This was conveyed by Dr. Nandita Chatterjee, Secretary(HUPA) during a meeting of the Central Screening and Monitoring Committee (CSMC). She urged the States and UTs to expedite submission of proposals as per the latest demand assessment undertaken by them.

During the CSMC meeting, the Ministry of HUPA has approved construction of 78,703 affordable houses for the benefit of Economically Weaker Sections in the States of Tamil Nadu, Kerala and West Bengal with an investment of Rs.2,956.32 cr. Central assistance of Rs.1,180.54 cr has been approved for construction of these houses.

With yesterdays approvals, the total number of houses approved for the benefit of urban poor under Pradhan Mantri Awas Yojana (Urban), launched in June last year reached 15,48,846. Total investment approved for construction of these houses is Rs.82,708 cr with central assistance of Rs.21,125.36 cr.

The Ministry approved 52,336 more houses for EWS in Tamil Nadu with an investment of Rs.1,942.24 cr and central assistance of Rs.785.04 cr. With this, the total number of houses approved for Tamil Nadu under PMAY(Urban) has gone up to Rs.2,26,572 with an investment of Rs.8,144 cr and central assistance of Rs.3,461 cr.

The approvals include 2,992 more houses for Chennai, 1,384 for Tiruppur, 1,088 for Madurai, 1,025 for Edanganasalai, 965 for Marakkanam, 931 for Kottakuppam, 905 for Coimbattore, 700 for Thanjavur, 450 for Namagiripettai and 437 for Vadalur.

West Bengal today got 21,285 more houses with an investment of Rs.861.62 cr and central assistance of Rs.319.27 cr. with this, total number of affordable houses approved for the State under PMAY (Urban) has increased to 1,44,016 with an investment of Rs.5,835 cr and central assistance of Rs.2,168 cr.

The approvals include, Bidhannagar-6,067 houses, Uluberia-5,899, Siliguri-2,000, Jalpaiguri-1,945, Jangipur-1,415, New Barrackpore-797, Dinhata-715, Ranaghat-594. Coochbehar-517 and Mathabhanga-439.

The Ministry of HUPA approved 5,082 houses for the benefit of urban poor in Kerala with an investment of Rs.152.46 cr and central assistance of Rs.76.23 cr. Total number of houses approved for the State so far has gone up to 22,467 with an investment of Rs.755 cr and central assistance of Rs.363 cr.

The approvals include; Kochi-1,528 houses, Nedumangadu-850, Manjeri-530, Chavakkad-355, Thiruvalla-361, Kayamkulam-305, Vatakara-270, Tripunithura-240, Mallapuram-229, Thalassery-210 and Thrissur-204.

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AAI receives 45 initial proposals from 11 bidders covering more than 200 RCS routes under UDAN
Jan 19,2017

Airports Authority of India (AAI), the implementing agency for the Regional Connectivity Scheme (UDAN) has received 45 initial proposals from 11 bidders covering more than 200 RCS routes as the deadline for submitting initial proposals came to an end on 16th Jan 2017. These initial proposals cover as many as 65 airports, of which there are 52 un-served and 13 under-served airports as per the provisions of the scheme. Counter-bids have now been invited against these initial proposals, the last date of submission for which is 1st Feb. 2017. The routes or networks will be awarded to the bidders who quote the lowest requirement of Viability Gap Funding (VGF) against such routes. To ensure that operations on ground start with minimum time-gap after the bidding is completed, parallel action has also been initiated by the Ministry of Civil Aviation with AAI, State Governments, DGCA and Bureau of Civil Aviation Security.

It may be recalled that with the twin objectives of promoting balanced regional growth and making flying affordable for masses, the Ministry of Civil Aviation had launched the Regional Connectivity Scheme (UDAN) on 21st Oct. 2016. RCS was a key component of the National Civil Aviation Policy which was released by the Ministry on 15th June 2016. The scheme, which would be in operation for a period of 10 years, envisages providing connectivity to un-served and under-served regions of the country through revival of existing air-strips and airports. This would be achieved through a financial stimulus in the form of Central and State government concessions, as well as Viability Gap Funding to the interested airlines to kick-off operations from such airports, so that the passenger fares are kept affordable. The fare for a one hour journey of approximately 500 km on a fixed wing aircraft or for a 30 minute journey on a helicopter would be capped at Rs. 2,500 under the scheme, with proportionate pricing for routes of different lengths / duration.

The Union Minister of Civil Aviation Sh. P. Ashok Gajapathi Raju, while expressing satisfaction with the response received under the scheme, conveyed that this is a significant step ahead in realizing our Honble Prime Ministers vision of connecting the un-connected and serving the un-served. The scheme is likely to give a major boost to tourism activities and employment generation in hinterland and Tier-II and Tier-III cities, he added.

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Cabinet approves MoU between India and the United Arab Emirates on Institutional Cooperation in Maritime Transport
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Memorandum of Understanding (MoU) between India and the United Arab Emirates on Institutional Cooperation in Maritime Transport.

The proposed MoU will pave way for facilitation and promotion of maritime transport, simplification of customs and other formalities, wherever possible, observed in Ports and facilitation of the use of existing installations for the disposal of waste.

The MoU will enable Shipping Companies in both countries to enter into bilateral and multi-lateral arrangements for sustainable trading activities.

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Cabinet approves Alternative Mechanism to decide on the quantum of disinvestment in case of minority stake sale in CPSEs
Jan 18,2017

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has given its approval to Alternative Mechanism, who would decide on the quantum of disinvestment in a particular Central Public Sector Undertaking (CPSE) on a case by case basis subject to Government retaining 51 percent equity and management control. This is in addition to the present functions performed by Alternative Mechanism as has been approved by CCEA in August, 2014.

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Cabinet approves amendment in Modified Special Incentive Package Scheme
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for amendment in the Modified Special Incentive Package Scheme (M-SIPS) to further incentivize investments in Electronic Sector and moving towards the goal of Net Zero imports in electronics by 2020.

Besides expediting investments into the Electronics System Design and Manufacturing (ESDM) sector in India, the amendments in M-SIPS are expected to create employment opportunities and reduce dependence on imports. The projects already received under the scheme have the potential to generate employment to the extent of upto one million persons (direct and indirect).

The Policy covers all States and Districts and provides them an opportunity to attract investments in electronics manufacturing. So far, 243 applications have been received under the scheme, out of which 75 applications have been approved involving investment proposals of Rs. 17,997 crore.

The salient features of the amendment are:

a) The applications will be received under the scheme upto 31st December 2018 or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier. In case the incentive commitment of Rs 10,000 crore is reached, a review will be held to decide further financial commitments.

b) For new approvals, the incentive under the scheme will be available from the date of approval of a project and not from the date of receipt of application.

c) The incentives will be available for investments made within 5 years from the date of approval of the project.

d) Approvals will normally be accorded to eligible applications within 120 days of submission of the complete application.

e) A unit receiving incentives under the scheme, will provide an undertaking to remain in commercial production for a period of at least 3 years.

f) The Appraisal Committee recommending approval of project will be chaired by Secretary, Ministry of Electronics and IT.

g) A separate Committee headed by Cabinet Secretary and comprising of CEO, NITI Aayog, Secretary Expenditure and Secretary, MeitY will be set up in respect of mega projects, envisaging more than Rs. 6850 crore (approx. USD 1 Billion) investments.


The Cabinet had, in July, 2012 approved the M-SIPS to provide a special incentive package to promote large scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector. The scheme provides subsidy for capital expenditure - 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs. The Scheme was amended in August, 2015 for scope enhancement and simplification of procedure. The Scheme has attracted investments in the ESDM sector to the tune of Rs. 1,26,838 crore, of which investments of around Rs. 17,997 crore have been approved by the MeitY. The M-SIPS has been able to create positive impact on investment in electronics sector.

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Cabinet approves MOU between India and United Arab Emirates for cooperation in the field of Small and Medium Enterprises and Innovation
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for signing the Memorandum of Understanding between India and United Arab Emirates for cooperation in the field of Small and Medium Enterprises and Innovation.

The MoU would benefit Indian SMEs and lead to equitables and inclusive development. The exposure to best practices in SME sector abroad would provide an opportunity to Indian SMEs to improve upon them and innovate further. It would also provide to Indian SME sector an opportunity to have a mutually beneficial relation with SME sector of the United Arab Emirates and to explore their markets.

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Cabinet gives approval to the package for supporting MSEs - Augmentation of Corpus of CGTMSE
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given ex-post facto approval to the package for supporting Micro and Small Enterprises (MSEs) - Augmentation of the Corpus of Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE).

The proposal entails the following:

(i) Augmentation of the corpus of the Trust from Rs. 2,500 crore to Rs. 7,500 crore, to be fully funded by the GoI;

(ii) To increase coverage of the loans covered under the credit guarantee scheme from Rs. 1 crore to Rs. 2 crore;

(iii) To increase coverage of the credit guarantee scheme for loans being extended to micro and small enterprises by NBFCs also. This would enable the Trust to enhance the quantum

The measures would result in the following benefits:

a. Lowering the level of leverage;

b. Improving sustainability of the Fund;

c. Enable the Trust to enhance the quantum of credit guarantee to larger number of MSEs;

d. Improving financial management; and

e. Limit the unfunded contingent liabilities.

Augmentation of the corpus would facilitate larger flow of credit to MSEs. This in turn, would lead to increased output and employment and thereby promote equity and inclusiveness.

As the scheme provides credit without collateral and third-party guarantee, the start-ups would be encouraged to set up enterprises based on innovation and new ideas.

Every operation is online and therefore, the system ensures public accountability.

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Cabinet approves the repealing of the obsolete and redundant laws
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of the Repealing and Amending Bill, 2017 to repeal 105 Acts.


The two Member Committee constituted by the PMO, the Law Commission of India and the Legislative Department identified 1824 redundant and obsolete Central Acts for repeal. After careful examination and consultation with various Ministries/Departments in the Government of India, four Acts have been enacted to repeal 1175 Central Acts (during the period May, 2014 to August, 2016) by Parliament which are -

i) The Repealing and Amending Act, 2015 (17 of 2015) repealing 35 Acts; The Repealing and Amending (Second) Act, 2015 (19 of 2015) repealing 90 Acts;

ii) The Appropriation Acts (Repeal) Act, 2016 (22 of 2016) repealing 756;

iii) Appropriation Acts including Appropriation (Railways) Acts;

iv) The Repealing and Amending Act, 2016 (23 of 2016) repealing 294 Acts.

Out of the aforesaid 1824 Acts, 227 Acts (including Appropriation Acts enacted by Parliament for the States under Presidents Rule) are identified to be repealed by State Governments have been requested to take necessary action to repeal them.

A list of remaining 422 Central Acts was circulated among all the Ministries/ Departments for their comments on repeal of Acts pertaining to their respective Ministries/Departments. Till date, 73 Ministries/Departments including Legislative Department have given their comments whereby they have agreed to repeal 105 Acts and disagreed to repeal about 139 Acts. On the basis of the comments/concurrence received from the Ministries/Departments, 105 Acts have been identified for repeal by this Department.

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Cabinet approves the exclusion of States from the investments of National Small Savings Fund from 1 April 2016
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to exclude State Governments States/UTs (with Legislature) except Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh from National Small Savings Fund (NSSF) investments from 01.04.2016. It also approved providing a one-time loan of Rs. 45,000 crore from NSSF to Food Corporation of India (FCI) to meet its food subsidy requirements.

The details are as under:-

a) Exclusion of States/UTs (with Legislature) excepting Arunachal Pradesh, Kerala, Madhya Pradesh and Delhi from NSSF Investments. Arunachal Pradesh shall be given loans to the tune of 100% of NSSF collections within its territory, whereas Delhi, Kerala and Madhya Pradesh shall be provided 50% of collections.

b) Servicing of interest and principal of debt extended to FCI through the budget line of Department of Food and Public Distribution. The repayment obligation of the FCI in respect of NSSF Loans would be treated as the first charge on the food subsidy released to the Food Corporation of India. In addition, FCI shall reduce the amount of its current Cash Credit Limit with the banking consortium to the extent of the NSSF loan amount.

c) NSSF in the future shall, with the approval of Finance Minister, invest on items the expenditure of which is ultimately borne by Government of India and the repayment of principal and interest thereto would be borne from the Union budget.

The States except Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh shall be excluded from NSSF investments from 01.04.2016. A legally binding agreement will be signed between FCI, Department of Food and Public Distribution and Ministry of Finance on behalf of NSSF on the modalities for repayment of interest rate and principal and the restructuring of FCI debt will be made possible within 2-5 years.

Once states are excluded from NSSF investments, the investible funds of NSSF with Gol will increase. Increased availability of the NSSF loan to Gol may reduce the Gols market borrowings. The States will however, see an increase in market borrowings. Any increase in yields due to an increased demand for loanable funds in the market from Centre and States combined would be marginal. The reduction of FCIs borrowing cost equivalent to the extent of the interest differential will be reflected in the Gols savings on the Food Subsidy Bill.

Implementing the decision to exclude states from NSSF investments and extending the loan will entail no additional cost. Instead a reduction in the food subsidy bill of the Gol is anticipated.

Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh will continue availing of NSSF loans, 26 other States and Puducherry who are eligible to borrow from the market have preferred to stop taking loans from the NSSF.


The Fourteenth Finance Commission (FFC) recommended that State Governments be excluded from the investment operations of the NSSF. The NSSF loans come at an extra cost to the State Government as the market rates are considerably lower. The Union Cabinet in its meeting held on 22nd February, 2015, accepted that this recommendation will be examined in due course in consultation with various stake holders. Barring Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh, the other State Governments/UTs expressed a desire to be excluded from NSSF investments. The involvement of States which are excluded from operations of National Small Savings Fund with effect from 1.4.2016 would be limited solely to discharging the outstanding NSSF debt obligations as on 31.3.2016 (FFC Recommendation). The loan contracted by States till 31.3.2016, from the National Small Savings Fund will stand completely repaid by the Financial Year 2038-39.

NSSF shall extend a part of its collections to Food Corporation of India (FCI) to meet its food subsidy requirement. This will help the FCI reduce its interest cost. FCI presently takes working capital loans through Cash Credit Limit (CCL) at an interest rate of 10.01% and Short Term Loan (STL) at a weighted average interest rate of 9.40%, whereas the NSSF currently charges 8.8% p.a interest on its loans. This savings on interest rate outgo will reduce the food subsidy burden of the Government of India.

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Cabinet approves MoU between India and Vietnam In the field of cyber security
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given ex-post facto approval to the Memorandum of Understanding (MoU) between India and Vietnam in the field of Cyber Security. It was signed between Indian Computer Emergency Response Team (CERT-In), India and the Cyber Security Department, Ministry of Public Security, Vietnam on 3rd September 2016 at Hanoi.

The MoU intends to promote closer cooperation for exchange of knowledge and experience in detection, resolution and prevention of cyber security-related incidents between India and Vietnam.

Implementation of the MoU will result in significant mutual benefits in the cyber security sector, through institutional and capacity-building in the field of cyber security in the Socialist Republic of Vietnam.

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Cabinet approves the Establishment of Indian Agricultural Research Institute, Jharkhand
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for the 12th Plan Proposal of the DARE/ICAR Plan Scheme of the Establishment of Indian Agricultural Research Institute (lARI)-Jharkhand. It will have an estimated outlay of Rs. 200.78 crores (100% ICAR share) on 1,000 acre land provided by the Government of Jharkhand at the Gauria Karma Village in Barhi Block of Hazaribag.

lARI-Jharkhand would be a unique Institution, which would possess all the hallmark identities as that of IARI at New Delhi including all sectors of agriculture like field crops, horticultural crops, agro-forestry, animal husbandry, fisheries, poultry, piggery, silk and lac rearing, honey production etc.

IARI-Jharkhand would work on the agrarian challenges and complexities of eastern India with all existing Central and State Government R&D institutions and Private sector enterprises. It will undertake research, education, extension programmes in its mission towards developing quality human resource, generation of farmer friendly technologies to enhance productivity, quality and profitability. It will also promote agro-based industries and generate employment opportunities for holistic and sustainable development of the agriculture sector in the eastern region. It will be an off-campus of IARI, New Delhi and integrated multi-disciplinary research would be undertaken in School mode, i.e. Schools of Crop Sciences, Natural Resource Management, and Animal Sciences.

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Cabinet approves MoU between India and the United Arab Emirates on Bilateral Cooperation in the Road Transport and Highways sector
Jan 18,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Memorandum of Understanding (MoU) between India and the United Arab Emirates on Bilateral Cooperation in the Road Transport and Highways Sector to be signed between the Ministry of Road Transport and Highways, India and the Federal Transport Authority - Land and Maritime, U.A.E.

The proposed MoU envisages increased cooperation, exchange and collaboration between India and the UAE, and will contribute to increased investment in infrastructure development and enhance logistics efficiency. This will help in promoting safe, economical, efficient and environmentally sound road transport in the country and will further help both the countries in creating an institutional mechanism for cooperation in the field. Salient features of the MoU are:

a. Exchange and sharing of knowledge and cooperation in the area of transportation technologies and transport policies, for passenger and freight movement by roads;

b. Planning, administration and management of road infrastructure, technology and standards for roads/highways construction and maintenance;

c. Sharing of information and best practices for developing road safety plans and road safety intervention strategies, and outreach activities aimed at reducing deaths and injuries resulting from road accidents through:

d. Sharing of knowledge and best practices in user-free (toll)-related issues; including modern systems, technologies and methods of levying of user-free and collection including Electronic Toll Collection System;

e. Sharing of information areas of improved technologies and materials in road and bridge construction, including joint research; and

f. Sharing of information and cooperation for mobilizing investments for setting up of Logistics Parks, freight logistics, transportation warehousing and value added services (VAS) as an enabler and as a catalyst of economic growth and seamless freight movement.

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