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Fitch: FinTech to Bring Big Opportunities, Risks for Asia BanksFin
May 16,2016

Technology firms will play an increasingly important role in Asia-Pacifics financial services industry, says Fitch Ratings. Large unbanked populations in countries such as India, and the emergence of tech-savvy middle classes in countries such as China, Indonesia and the Philippines, will offer significant growth opportunities for FinTech companies.

The size of these markets will provide FinTech firms the opportunity to gain substantial scale and potentially change the banking status quo. This disruption to the financial sector will come with risks, especially where banks and regulators have limited experience in managing new technologies. How regulators balance the need to allow for the use of new technology to provide better services while controlling new operational risks and preventing the aggressive growth of unregulated financial services, will be a key challenge in the next few years.

FinTech remains a nascent sector despite rapid growth in large markets like China and India. Peer-to-peer (P2P) lending, online payment systems and digital wallets focused on retail consumers and SMEs represent by far the largest markets.

We expect regulation to play a key role in determining how the sector evolves. Clear and transparent policies will be important for successful development. There is likely to be a fine line between the development of regulation to ensure orderly growth and the establishment of significant barriers to entry to protect the incumbents.

India has been proactive, and recently unveiled a consultation paper for P2P lending which seems to favour continued growth and development of the sector under a regulatory framework. The Reserve Bank of India noted the potential positive contribution that P2P lenders could have, especially in bringing formal financial services to the almost-50% of the population that is unbanked.

However, there are major challenges for new entrants. The lack of credit history for some new markets makes it difficult to assess creditworthiness to ensure appropriate credit-underwriting standards.

Importantly, the rise of FinTech could raise risks to traditional banks which fail to transform over the long term. The rapid adoption of disruptive tech could raise security and operational vulnerabilities for banks if systems and resources to manage the new technologies are not enhanced. New technologies could also alter banks business and operating models in the long term by eroding a previously lucrative business line or reliable funding source, and thus indirectly affect credit profiles as well.

Fitch believes the barriers to entry for FinTech firms are greatest where banking markets are more concentrated. For emerging markets, financial systems with fragmented banking systems that have seen limited innovation will be the most exposed.

Relatively high banking penetration - by emerging market standards - means there is an opportunity for digital FinTech firms in China to tap into the increasing levels of wealth being generated by a substantial middle class. Chinas large tech companies have already built viable payment systems outside the banking sector that compete for deposits and transaction fees. These companies could leverage these systems to market loans and investments to retail customers. Banks have under-served the household sector, given their focus on other parts of the economy, and traditional banks are playing catch-up. But this is not likely to represent a serious credit threat to banks at this stage, even with rapid growth.

In China, regulatory and policy uncertainty will be important. Growth, at least in the P2P lending space, may be checked by the authorities to protect incumbents and to ensure they are able to get up to speed with market developments. This is especially as there have been several high-profile reports of fraud in the still-unregulated P2P sector - a sector that has grown rapidly in recent years.

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Ind-Ra: Cable Companies Lure Local Operators with Higher Revenue Share
May 16,2016

Cable companies have started investing significantly in technology to enable efficient billing and collections from local cable operators (LCOs) and are incentivising the LCOs to adopt this shift, by offering them a higher revenue share, says India Ratings and Research (Ind-Ra. Ind-Ra notes that most multiple-system operators (MSOs) with pan-India presence have commenced a shift in their business model to the fixed billing B2B model as an attempt to improve collections.

Ind-Ra had highlighted that Fixed B2B Billing the Way Forward for Cable Companies on 04 March 2016 indicating that the a way forward for MSOs will be to agree on a certain fixed amount with the LCO (B2B billing) so that cash collections are delinked from actual collections by LCOs from their respective subscribers. Further, this also enables billing on a pre-paid basis as the revenue share is pre-decided.

One of the large cable companies, has invested in an online portal for the LCOs, which improves transparency levels and also helps in the activation and managing of packages. The way the collection mechanism works, is that the customer pays the gross amount to the LCO and the LCO maintains a pre-paid balance in his account with the MSO. Once the package is activated/ renewed in the system; the MSOs share would be directly debited from the pre-paid balance of the LCO. This online platform follows an automated dunning process, where each pack has an expiry date and if not recharged before the due date the system will automatically disconnect the signal. In case LCOs want to provide credit to certain customers, the LCO will need to make the payment on behalf of them before the expiry date and collect the same from the subscriber later.

The above concept is well formulated in-principal; however the acceptance from the LCOs may need incentives, namely higher revenue share and some basic level of training on day-to-day operations.

Ind-Ra notes that the acceptance by LCOs will vary, based on the local dynamics, given the different degrees of resistance to change, and transparency. In the long run Ind-Ra believes the business profile of MSOs will benefit from a transparent and more effective collection system.

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Rising outbound Indian tourists heading towards Malaysia, Singapore, Thailand, Dubai: ASSOCHAM paper
May 16,2016

Aggressive tour operators offering packages for as low as Rs 25,000-Rs 30,000 combined with rising aspirations of the upper middle class families to travel abroad has led to a robust increase of 29 per cent in outbound Indian tourists this summer with Thailand, Malaysia, Singapore, Dubai and Maldives emerging as the top and affordable destinations for the better-offs, an ASSOCHAM study has pointed out.

Excessive heat in most parts of the country, particularly in the North, coupled with attractive packages for nearby countries like Dubai, Singapore, Thailand ,Malaysia, Europe etc are wooing the well-off middle class to opt for such destinations, highlights the ASSOCHAM Tourism Development Council (ATDC) paper.

Despite the economic slowdown and currency fluctuations, Indias outbound tourism market has increased by 29% this year as compared to last season (20%), reveals the associated chamber of commerce and industry of India (ASSOCHAM) findings.

The ease of travelling has also gone up- right from hotel booking, airlines booking and transfers from and to hotels are all available on a click of a button, said Mr D S Rawat ASSOCHAM Secretary General.

The tour packages are available as low as Rs 25,000-30,000 for outbound trips. In fact some of the overseas destinations like Thailand are working out cheaper than the domestic destinations like Kerala for Delhiites, tempting the families to go abroad for holidays, adds the paper.

The sectors like aviation and tour operators are doing brisk business this summer season. According to the paper, international tourist destinations like Thailand, Malaysia, Singapore, Dubai, Maldives, China and South Africa will be Indian travellers favorites this summer.

European countries, which for long remained favourite for tourists from India are being replaced by cheaper destinations like Thailand, Malaysia, Singapore etc. interest in cruise packages too has increased. Honeymooners enquire about Morocco, Spain, Portugal and prefer Kenya for wildlife etc, adds the paper.

The growth in the Indian travel and tourism industry is driven by a combination of rising income levels and changing lifestyles, development of diverse tourism offerings, and policy and regulatory support by the government authorities, said Mr. Rawat.

India is one of the fastest-growing outbound travel markets in the world, said Mr. Rawat. India offers enormous potential for future growth in outbound travel. Whether to meet a relative settled abroad, a shopping trip, a global sport event or just for leisure, Indians are increasingly travelling abroad. Personal and Official Travel for holiday/ leisure, business are the most significant contributors for growing outbound travel.

As per the prior estimates, India will account for 50 million outbound tourists by 2020. While business travel and holiday dominates outbound volumes, people are also opting for niche products like sports tourism, luxury travels, honeymoon packages and cruises.

Countries like Indonesia, Philippines, Mauritius and Egypt are also seeing an increase in influx of Indian tourists. Increased promotional activities by travel agents will further drive outbound departures to many new destinations in the years to come.

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112 villages electrified last week ; 7,766 villages electrified till date under DDUGJY
May 16,2016

112 villages have been electrified across the country during last week (from 9 th to 15th May 2016) under Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY). Out of these electrified villages, 2 villages belong to Arunachal Pradesh , 42 in Assam, 24 in Jharkhand, 3 in Rajasthan, 16 in Madhya Pradesh ,11 in Bihar, 6 in Chhattisgarh, 2 in Odisha , 1 in Manipur , 2 in Uttar Pradesh and 3 in Himachal Pradesh .

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India Meteorological Department forecasts slightly delayed Southwest monsoon - 2016 over Kerala
May 16,2016

India Meteorological Department forecast suggests that the onset of Southwest monsoon this year over Kerala is likely to be slightly delayed. The statistical model used by IMD, for predicting the onset of monsoon, indicates that the southwest monsoon is likely to set over Kerala on 7th June with a model error of n++ 4 days.

Background

The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent and represents beginning of rainy season over the region. The normal monsoon onset over Kerala is 01 June.  Since 2005, India Meteorological Department (IMD) has been issuing operational forecasts for the date of monsoon onset over Kerala using an indigenously developed statistical modelwith a model error of n++ 4 days. The model uses the following six predictors:

i) Minimum Temperatures over North-west India, ii)  Pre-monsoon rainfall peak over south Peninsula, iii) Outgoing Long wave Radiation (OLR) over south China Sea, (iv) Lower tropospheric zonal wind over southeast Indian ocean, (v) upper tropospheric zonal wind over the east equatorial Indian Ocean, and (vi) Outgoing Long wave Radiation (OLR) over the south-west Pacific region.

The forecasts of the monsoon onset issued during the past 11 years (2005-2015) except 2015 were proved to be correct.  The verification of the forecast for the last 5 years is given below.

Year

Actual Onset Date

Forecast Onset Date

201129th May31st May20125th June1st June20131st June3rd June20146th June5th June20155th June30th May

Some issues relating to advance of monsoon over the Andaman Sea

The southwest monsoon advances over the Andaman Sea normally around 20th May with a standard deviation of about one week.  Strong convective activity has been observed over the equatorial Indian Ocean for the last several days.  A well marked  low pressure area has formed over the Indian Ocean which will concentrate into a depression and move north-westwards.  As a result, conditions are becoming favorable for the onset of southwest monsoon over Nicobar Islands, south Andaman Sea and parts of south Bay of Bengal around 17th May and advancement over the entire Andaman Sea close to its normal date. Past data suggest that there is no association of the date of monsoon advance over the Andaman Sea either with the date of monsoon onset over Kerala or with the seasonal monsoon rainfall over the country.

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India and WHO sign a landmark agreement for Global promotion of Traditional Systems of Medicine
May 16,2016

Ministry of AYUSH, Government of India and the World Health Organization (WHO) have signed an historic Project Collaboration Agreement (PCA) for cooperation on promoting the quality, safety and effectiveness of service provision in traditional and complementary medicine. The PCA was signed by Secretary, Ministry of AYUSH, Shri Ajit M Sharan and Assistant Director General, Health Systems and Innovations, WHO, Dr. Marie Kieny, in Geneva on 13th May, 2016.

Minister of State (Independent Charge) of AYUSH Mr. Shripad Yesso Naik and the Director-General, World Health Organization, Dr. Margaret Chan witnessed the signing of this landmark agreement at the WHO headquarters.

The PCA is titled as Co-operation on promoting the quality, safety and effectiveness of service provision in traditional and complementary medicine between WHO and AYUSH, India, 2016-2020. It aims to support WHO in the development and implementation of the WHO Traditional and Complementary Medicine Strategy: 2014-2023 and will contribute to the global promotion of traditional Indian Systems of Medicine.

The PCA for the period 2016-2020 will deliver for the first time WHO benchmark document for training in Yoga, and WHO benchmarks for practice in Ayurveda, Unani and Panchakarma. These will contribute significantly to the strengthening of national capacities in ensuring the quality, safety and effectiveness of traditional medicine including in establishing regulatory frameworks for traditional medicine products and practice and promote their integration in national healthcare systems.

Speaking at a Reception hosted by India on this occasion, the AYUSH Minister recalled the long history and rich heritage of traditional medicine in India and its growing relevance in providing holistic and comprehensive health care. He reiterated the high priority attached by the Government of India for the promotion of traditional medicine both in India and abroad and highlighted the numerous initiatives undertaken to functionally integrate AYUSH in Indias national health programmes and for achieving Universal Health Coverage.

The Minister also mentioned that the initiatives and activities undertaken by India within the country align with the WHO Traditional Medicine Strategy 2014-2023. He added that India, in fact, sets a unique example for adopting a pluralistic health care delivery system that allows every recognized medical system to develop and be practiced with a view to provide integrated and holistic healthcare services.

The PCA with WHO is a further recognition of Indias rich experience in the development and governance of traditional medicine. It will pave the way for Indias long-term collaboration with the WHO in fostering the global promotion and integration of AYUSH systems of medicine including through the inclusion of Ayurveda and Unani in the International Classification of diseases and the International Classification of Health interventions.

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The Income Declaration Scheme 2016 to open from 1st June 2016
May 16,2016

The Income Declaration Scheme, 2016 incorporated as Chapter IX of the Finance Act 2016 provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income(s).

Under the scheme, such income as declared by the eligible persons, would be taxed at the rate of 30% plus a Krishi Kalyan Cess of 25% on the taxes payable and a penalty at the rate of 25% of the taxes payable, thereby totalling to 45% of the income declared under the scheme.

The scheme shall remain in force for a period of 4 months from 1st June, 2016 to 30th September, 2016 for filing of declarations and payments towards taxes, surcharge & penalty must be made latest by 30th November, 2016. Declarations can be filed online or with the jurisdictional Pr. Commissioners of Income-tax across the country.

n++ The scheme shall apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.

n++ Where the declaration is in the form of investment in assets, the Fair Market Value of such asset as on 1st June 2016 shall be deemed to be the undisclosed income under the Scheme. However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.

n++ Assets specified in the declaration shall be exempt from Wealth tax.

n++ No Scrutiny and enquiry under the Income-tax Act or the Wealth tax Act shall be undertaken in respect of such declarations.

n++ Immunity from prosecution under the Income-tax Act and Wealth Tax Act is also provided along with immunity from the Benami Transactions (Prohibition) Act, 1988 subject to transfer of asset to actual owner within the period specified in the Rules.

n++ Non-payment of total taxes, surcharge & penalty in time or declaration by misrepresentation or suppression of facts shall render the declaration void.

n++ The circumstances in which the Scheme shall not apply or where a person is held to be ineligible are specified in section 196 (Chapter IX) of the Finance Act, 2016.

n++ Non declaration of undisclosed income under the Scheme, will render such undisclosed income liable to tax in the previous year in which it is detected by the Income tax Department. Other penal consequences will also follow accordingly.

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Ministry Of Water Resources Shortly Expecting A Final Draft On National Water Framework Law From Mihir Shah Committee
May 14,2016

Ministry of Water Resources, River Development and Ganga Rejuvenation is shortly expecting a final draft for the proposed National Water Framework Law from former Planning Commission member Mr. Mihir Shah, who in December 2015 was assigned with the task to suggest modifications in its earlier draft of 2013 on water governance in every state of the Indian union.

The aforesaid disclosure was made by Additional Secretary and Mission Director, Ministry of Water Resources, River Development and Ganga Rejuvenation, Mr. Nikhilesh Jha here on Tuesday while inaugurating a Conference on Water Security in India under aegis of PHD Chamber of Commerce and Industry in which Chairman, Central Water Commission (CWC), Mr. G S Jha was also present too.

The proposed draft, which according to Mr. Nikhilesh Jha would soon be submitted to the government is likely to equip the CWC with sufficient teeth so that its recommendations become mandatory on centre and even states to certain extent to judiciously manage the scarce water resources of the country but also honour its suggestions on pricing mechanism for use of water in agriculture sector.

The latest provisions of draft national water framework law as suggested by the Mihir Shah Committee, would enable afresh the Ministry of Water Resources, River Development and Ganga Rejuvenation to prepare the framework bill in consultation with all concerned stakeholders to introduce water framework bill on governing principles for protection, conservation of waters and for matters corrected therewith and incident there too, hinted Mr. Jha.

He hoped that with the water framework law in place in near future, the government of the day would be able to revisit many issues, governing its water sector so that its judicious and prudent administration.

Speaking on the occasion Chairman, CWC, Mr. G S Jha said that the Commission in consultation with State and UT governments including water usages associations has been devising a mechanism for water agriculture pricing to ensure that prudent use of water is administered for irrigation with sufficient local intervention as well as investments as these two elements would fill in a sense of belonging among the farmers.

He also added that the CWC with necessary legal backing has also been working out with technical details in consultation with necessary stakeholders so that henceforth inter-state water disputes are resolved out of courts among and between the disputing states.

Chairman, Water & Solid Waste Management Committee, PHD Chamber, Mr. Gopal K Agarwal in his opening remarks sought that enactment of laws be effected to make sure that the owners of the land and landscapes should be debarred from exploiting the ground water resources. The Additional Secretary and Mission Director, Ministry of Water Resources, River Development and Ganga Rejuvenation, however, responded that in the wake of stiff opposition from various states on this issue, the government has not been able to progress on this front.

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Digital India Should Promote Investments In Solutions Software: Phd Chamber
May 14,2016

Education Solutions Technology Framework Conclave organized by PHD Chamber of Commerce and Industry demanded that digital India should have sufficient policy initiatives so that investments are encouraged in finding solutions through software development by various governments in partnership with industry.

The conclave was unanimous in its opinion that investments in making available the hardware such as laptops and PCs for students at secondary level by governments such as UP and Tamil Nadu was a good initiative but in its second phase the policymakers at various level should also ensure softwares with solutions for various problems.

This would integrate technology with education for equipping students with sufficient skills and make them employable as technology would remain a tool and it should be used and applied for seeking solutions for which public investments are essential, held the conclave.

Inaugurating the Technology Framework conclave, the Joint Secretary, Department of School Education & Literacy, Ministry of HRD, Mr. Maneesh Garg said that digital India which would ensure availability of internet to Indian masses in their interior landscape is a programme that would achieve the intended objective by 2019.

According to him, one of the objectives of the digital India programme is to impart skills to students for making them employable as the futuristic goal of the modern education at secondary level is one such in the absence of which 80% of the traditional jobs would disappear in times to come.

Vice President, PHD Chamber, Mr. Anil Khaitan in his welcome remarks emphasized the need of technology application by one and all through a tool method so that initial education is amalgamated with emerging technologies for attaining the desired objectives.

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Indias GDP Growth Will be 8% in 2016-17
May 14,2016

n++India is expected to remain the fastest growing large economy of the world. It is likely to register a GDP growth of around 8% in 2016-17, thanks to the expected normal monsoons, positive global investor sentiments, high FDI inflows, and low interest rates,n++ said Dr Naushad Forbes, President of Confederation of Indian Industry (CII).

Addressing a press conference here today, Dr Forbes said that the agriculture sector is expected to grow at 3%, while the industry and services are expected to grow at the rate of 8.2% and 9.8% respectively.

Talking about CIIs new initiatives for 2016-17, Dr Forbes said CII has taken initiatives to establish PPP Start-up Centers in the States - a new model institution for end-to-end incubation of potential entrepreneurs to build future business houses generating large scale employments. This incubation program will promote non-IT and rural entrepreneurship.

Unveiling CIIs theme for 2016-17 of Building National Competitiveness, Dr Forbes said that to build national competitiveness, CII has laid emphasis on six key areas: human development, corporate integrity & good citizenship, ease of doing business, innovation & technical capability, sustainability and global integration.

CII has also identified six manufacturing sectors & 26 sub-sectors in which India can be number one or two in the world. They are: automotives, aerospace & defence, engineering, cement & steel, chemicals & pharma and ICTE. CII will soon release a strategic roadmap for these sectors.

CII is launching 10 pilot projects to scientifically manage municipal solid waste on a People-Public-Private-Partnership mode. CII member-companies will invest in designing, developing, implementing and managing comprehensive, sustainable, scalable end-to-end waste management solutions. This project will be scaled-up to 500 towns after the successful implementation of the 10 city-pilot projects.

CII will launch WATSCAN, an advanced tool for water resources evaluation and management at the watershed level. This tool has been developed by CII to identify water generation, accumulation and losses in geographical areas. CII will apply WATSCAN in 50 districts in 10 drought-prone states over the next five years. CII will take up and apply WATSCAN in 4 districts of Telangana.

CII is launching Groundwater-Energy-Farmer Income programme to stabilise farmer incomes and resource, by incentivizing farmers to save water through energy savings. The programme envisages the adoption of various water-energy saving measures by farmers, through which they can save energy (compared to the baseline usage) and sell back to the utility and in turn get compensated through direct transfers.

CII is also working on Waste to Worth, a solid waste management project in ten cities, under the Swachh Bharat initiative. Under Standup India, CII will escalate work on Affirmative Action with Dalit Chamber of Commerce and Industry on education and vendor opportunities.

Talking about the legislative reforms, Dr Forbes said that there is a need to bring in a political consensus to ensure early passage of Constitution Amendment Bill for the implementation of GST.

He urged the states to amend labour laws following the model set by Rajasthan, Madhya Pradesh, Andhra Pradesh, and Gujarat. He also emphasized the need for other Indian states to emulate Tamil Nadu and Rajasthan in introducing land reforms.

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CII to Launch WATSCAN for Water Evaluation in 50 Districts: Naushad Forbes
May 14,2016

CII will launch WATSCAN, an advanced tool for Water Resources Evaluation and Management at watershed level, said the new CII President, Dr Naushad Forbes. He explained that this tool has been developed by CII to identify water generation, accumulation and losses in geographical areas. CII will apply WATSCAN in 50 districts in 10 drought-prone states over the next five years, he announced.

Mr Chandrajit Banerjee, Director General, CII added that CII is currently in talks with Maharashtra Government for applying WATSCAN in 10 districts of the state. A study for Pune district has been already completed. He also shared that the Honble Chief Minister of Maharashtra has requested for synchronised efforts from industry to support the government on drought solutions.

Dr Forbes, who belongs to the Western Region, added that with expectations of a normal monsoon, GDP growth rate for 2016-17 could touch 8%, higher than the governments projection. This is based on expected higher agricultural growth on a low base after two successive years of drought.

The CII President stressed that legislative reforms for introducing Goods and Services (GST) and Bankruptcy law must be quickly passed. He called for strong political consensus on GST. He also urged states to action laws on labour as in Rajasthan and Madhya Pradesh, and land reforms as in Tamil Nadu.

Regarding unfinished non-legislative reforms, Dr Forbes welcomed the grandfathering clause and sunset clause for government schemes and hoped this would be implemented speedily. Public investment in industrial parks, roads and highways and railways as well as activation of National Investment and Infrastructure Fund (NIIF) can be fast-tracked, he added.

Dr Forbes said that for medium to long term growth, productivity in Industry, Services and Agriculture needs to be boosted; hence, CIIs theme for 2016-17 is Building National Competitiveness. This covers the areas of human development, ease of doing business, corporate integrity and good citizenship, innovation and technical capability, sustainability, and global integration. CII has launched the CII Model Code of Conduct and Code of Good Corporate Citizenship to guide members on ethical business for improving Corporate Integrity and Good Citizenship, he announced.

Speaking about new CII initiatives in the six areas, Dr Forbes said that CIIs new Startup Center of Excellence is being set up with partnership from Tel Aviv University, Harvard University and TiE Silicon Valley. CII is also working on Waste to Worth under the Swachh Bharat initiative for solid waste management in ten cities. Under Standup India, CII will escalate work on Affirmative Action with Dalit Chamber of Commerce and Industry on education and vendor opportunities.

In Manufacturing, CII has recently launched a pioneering and innovative website with a diagnostic tool for manufacturing firms to benchmark their productivity to best global practices. This will help them identify gaps and strengthen their competitiveness.

Mr Banerjee added that CII has identified 6 core manufacturing sectors in which India can be number one or number two in the world. CII will bring out specific roadmaps for their rapid progress.

CII has partnered with three cities under the Smart City campaign for setting up pilot smart cities, including Pune.

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Indian vessel under UN sanction for carrying disputed Libyan oil freed
May 14,2016

United Nations has formally lifted the sanction put on Indian flag tanker MT Distya Ameya owned by M/s Arya Shipping, Mumbai. The oil tanker was blacklisted by the United Nations on April 26, 2016 after it had sailed from Al-Herega port in Libya picking up the consignment of over 6.5 lakh barrels of oil to discharge at Malta.

Subsequently, it had emerged on April 25, that this was in breach of the sanctions of the United Nations in as much as the said interim Government of Libya is not recognised by the United Nations. n++The vessel Distya Ameya was listed pursuant to the resolution as transporting crude oil illicitly exported from Libya, based on information received from the government of Libya,n++ said the United Nations Sanctions Committee in its order of April 26.

Being an Indian flagged ship, the Director General of Shipping, Government of India, took up the matter with the Permanent Mission of India to the United Nations. Upon the instructions of the DG Shipping, the vessel sailed back to Libya and discharged its entire oil consignment at the designated port Zawiya in Libya, under the supervision of the National Oil Corporation. This port is under the control of the Government of National Accord of Libya, which is recognised by the United Nations. This cargo evacuation was completed on May 6, 2016. It was also found out that the foreign charterers or the Indian owners and managers of the ship were unaware of the UN sanction.

Upon this the Permanent Mission of India to the United Nations in New York issued a Note Verbale to the UN Security Council apprising it of the positive developments in the compliance of order. The UN on May 12, 2016 formally lifted the sanction on the Indian vessel 16 days after it was held for carrying disputed Libyan oil. The ship is now completely free to resume its normal sailing and carry on its commercial operations.

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Clarification By The Ministry Of Railways Regarding The Ongoing Water Transportation Exercise In Latur, Maharashtra
May 13,2016

Under the direction of the Honble Prime Minister to help the State of Maharashtra in facing the challenge of its worst ever drought conditions, Minister of Railways Shri Suresh Prabhakar Prabhu took initiative and ordered the Railway Administration to immediately make necessary arrangements for transportation of water in the drought affected areas of Maharashtra. Towards this end, Railway Board immediately arranged 100 tank wagons through its Kota Workshop and dispatched them to Maharashtra. Mumbai based Central Railway Zone geared up its machinery and directed its two Divisions namely Solapur and Pune to make arrangements for water transportation.

For the first ten days when the local state administration at Miraj and Latur were to lay pipelines and to create suitable infrastructure etc., Pune Division of Central Railways on its own, started transporting water through a 10 tank wagon goods train using its limited resources and man power. Later, after the laying down of pipelines etc. by the local administration, efforts were strengthened and goods train consisting of 50 wagons was pressed into service. Till now more than 6 crore litre water has been transported by the Railways from Miraj to Latur. Railway named these trains as n++Jaldootn++ to emphasize importance of this crucial endeavour. Railway Administration in Solapur and Pune Divisions is working day and night to accomplish this mega task of transporting water from Miraj to Latur.

In the hour of crisis, Railway Administration rose to the occasion to meet the water needs in the drought affected areas of Maharashtra and together with the local State Administration carried out this ongoing exercise in the most effective manner. The entire exercise has been done involving huge logistic arrangements and mobilization of resources.

Recently the Latur District Administration requested Central Railway Administration to indicate the cost of water transportation by railways. In response to this request, Central Railway shared the information on cost of operation in transporting the water. The settlement of expenditure is not relevant at this point of time as the most important matter is to continue uninterruptedly with the transportation of water to the people in their hour of need.

Minister of Railways Shri Suresh Prabhakar Prabhu who is personally monitoring the entire operation has directed that the Indian Railways will continue to run the trains till the time there is a need of water and the settlement of the operational expenses will never be a constraint in this regard. The Minister has further ordered that the estimate of expenditure which was sent to the Latur Administration, on their request, will be withdrawn immediately. The issue of settlement of dues is being considered separately by the Railway Ministry.

Indian Railways has always been committed to meet the social obligations and will continue to be in the forefront in offering assistance to the people of the country as and when needed.

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Storage Status of 91 Major Reservoirs of the Country was 29.455 BCM as on May 12, 2016
May 13,2016

The water storage available in 91 major reservoirs of the country for the week ending on May 12, 2016 was 29.455 BCM which is 19% of total storage capacity of these reservoirs. This was 61% of the storage of corresponding period of last year and 79% of storage of average of last ten years.

The total storage capacity of these 91 reservoirs is 157.799 BCM which is about 62% of the total storage capacity of 253.388 BCM which is estimated to have been created in the country. 37 Reservoirs out of these 91 have hydropower benefit with installed capacity of more than 60 MW.

REGION WISE STORAGE STATUS:-

NORTHERN REGION

The Northern region includes States of Himachal Pradesh, Punjab and Rajasthan. There are six reservoirs under Central Water Commission (CWC) monitoring having total live storage capacity of 18.01 BCM. The total live storage available in these reservoirs is 3.66 BCM which is 20% of total live storage capacity of these reservoirs. The storage during corresponding period of last year was 42% and average storage of last ten years during corresponding period was 30% of live storage capacity of these reservoirs. Thus, storage during current year is less than the corresponding period of last year and is also less than the average storage of last ten years during the corresponding period.

EASTERN REGION

The Eastern region includes States of Jharkhand, Odisha, West Bengal and Tripura. There are 15 reservoirs under CWC monitoring having total live storage capacity of 18.83 BCM. The total live storage available in these reservoirs is 4.99 BCM which is 27% of total live storage capacity of these reservoirs. The storage during corresponding period of last year was 38% and average storage of last ten years during corresponding period was 24% of live storage capacity of these reservoirs. Thus, storage during current year is less than the corresponding period of last year and is better than the average storage of last ten years during the corresponding period.

WESTERN REGION

The Western region includes States of Gujarat and Maharashtra. There are 27 reservoirs under CWC monitoring having total live storage capacity of 27.07 BCM. The total live storage available in these reservoirs is 4.41 BCM which is 16% of total live storage capacity of these reservoirs. The storage during corresponding period of last year was 28% and average storage of last ten years during corresponding period was 30% of live storage capacity of these reservoirs. Thus, storage during current year is less than the storage of last year and is also less than the average storage of last ten years during the corresponding period.

CENTRAL REGION

The Central region includes States of Uttar Pradesh, Uttarakhand, Madhya Pradesh and Chhattisgarh. There are 12 reservoirs under CWC monitoring having total live storage capacity of 42.30 BCM. The total live storage available in these reservoirs is 10.61 BCM which is 25% of total live storage capacity of these reservoirs. The storage during corresponding period of last year was 36% and average storage of last ten years during corresponding period was 21% of live storage capacity of these reservoirs. Thus, storage during current year is less than the storage of last year but is better than the average storage of last ten years during the corresponding period.

SOUTHERN REGION

The Southern region includes States of Andhra Pradesh, Telangana, AP&TG (Two combined projects in both states) Karnataka, Kerala and Tamil Nadu. There are 31 reservoirs under CWC monitoring having total live storage capacity of 51.59 BCM. The total live storage available in these reservoirs is 5.79 BCM which is 11% of total live storage capacity of these reservoirs. The storage during corresponding period of last year was 21% and average storage of last ten years during corresponding period was 20% of live storage capacity of these reservoirs. Thus, storage during current year is less than the corresponding period of last year and is also less than the average storage of last ten years during the corresponding period.

States having better storage than last year for corresponding period are Andhra Pradesh, Tripura and Rajasthan. States having lesser storage than last year for corresponding period are Himachal Pradesh, AP&TG (Two combined projects in both states), Punjab, West Bengal, Jharkhand, Odisha, West Bengal, Gujarat, Maharashtra, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Chhattisgarh, Telangana, Tamil Nadu, Karnataka and Kerala.

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FCNR (B) Redemption Risk Manageable, External Volatility May Create Tail End Risks
May 13,2016

The foreign currency non-resident bank account FCNR (B) deposit redemption which begins in September 2016 is unlikely to be disruptive for the bond and currency markets, says India Ratings and Research (Ind-Ra). Ind-Ra expects the impact of this large redemption to be absorbed by the system with support from the Reserve Bank of India (RBI), since the maturity, timing and quantum of these deposits are certain and palpable. However, Ind-Ra believes external factors can create tail end risks. Indian banks had raised USD26bn FCNR (B) deposits between September -November 2013 and that is scheduled to start maturing from September 2016 onwards.

OMOs Will be Positive for Bond Markets: RBI is likely to step up its open market operations (OMOs) to manage the likely liquidity shortfall on account of the FCNR (B) redemption. With the possibility of regular foreign assets (net foreign assets) accretion getting impacted due to a combination of usage of USD from exports and/or depletion of forex, these are likely to be replenished by accumulating domestic assets (net domestic assets) in sync with the requirement of domestic money supply. Ind-Ra has highlighted the need for OMOs in Overhang in Bond Supply; Expect INR1trn OMO Purchases in FY17, however, the quantum could vary based on the Balance of Payment position and thus may necessitate additional OMOs.

RBI to Use Multiple Tools to Manage Rupee Liquidity: In Ind-Ras view, RBI will keep systemic liquidity at ease and additionally can consider a combination of the following options, 1) arrange for a sizable amount of higher tenor term Repo, 2) followed by OMO purchases and 3) reduction in daily cash reserve ratio maintenance from 90% to 70% of the net demand and time liabilities for the stipulated period. Further, FCNR (B) redemptions will not have an impact on Statutory Liquidity Ratio and Cash reserve Ratio requirements, but can cause a dip in bank deposits. Any uptick in money market rates is likely to be transient and limited.

RBIs Options for Redemption Payments: Besides the swap arrangements and forex flows from exports, RBI can utilise the foreign exchange reserve, which stands at USD363bn as of 29 April 2016. Additionally, RBI can also use the line of credit arrangement with other central banks. RBI signed an agreement with Bank of Japan in September 2013, for the swap amount of USD50bn to address the possible short-term liquidity mismatches. Ind-Ra believes that, India can also add another USD10bn to its forex reserve by September, contingent upon stable global conditions.

Tail End Risks from Global Markets: Challenges however may arise in an event where exporters are not in a position to deliver the requisite USD to banks which have entered into a swap agreement with RBI or if there are timing mismatches between various SWAP transactions with different sets of counterparties. The maximum redemption is limited to USD26bn plus interest, while most of which will mature between October and November 2016, the rest will mature thereafter but before 2018. Tail end risks however cannot be undermined, due to the worsening global environment caused by the China slowdown and/or unexpected FED tightening, resulting in a flight to safety. In such a case the impact will be more severe on the USD/INR and a spillover of which can impact both debt and equity markets.

The Transaction: During 2013, The RBI introduced a new FCNR (B) deposits scheme to accumulate foreign currency due to the worsening Balance of Payment conditions. The RBI offered a special window to the banks to swap the fresh FCNR (B) dollar funds, mobilised for a tenor of three years to five years at a fixed rate of 3.5% annually for the tenor of the deposit. The total amount raised through FCNR (B) window was USD25.97bn, additionally USD8.35bn raised through banking capital. Due to the nature of such a planned scheme with a known maturity the RBI has hedged the entire transaction so as to create a smooth transition.

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