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I&B Ministry revises timeline for Phase III & Phase IV of Cable TV Digitization
Dec 26,2016

The Ministry of Information & Broadcasting is extending the cut-off date for Phase IV of Cable TV Digitization to 31 March, 2017 in lieu of uncertainty in the market due to pending court cases and unsatisfactory progress of installation of Set Top Boxes (STBs) in Phase IV areas. Digitization in rural areas was targeted to be achieved by 31st December, 2016 under Phase IV. A notification in this regard will be issued shortly.

Ministry is also providing additional time for the remaining subscribers in Phase III areas to switch over to digital mode of transmission by 31st January, 2017 on account of ongoing court proceedings.

In Phase III areas, digitization in remaining urban areas in the country was to be completed by 31st December, 2015. However, some MSO Associations/individuals had moved various High Courts and obtained either extension of cut-off date / stay on the operationalization of the Notifications of the Ministry dated 11 November 2011 and 11 November 2014. The matter when raised before the Honble Supreme Court by the Ministry, transferred all the cases to the Delhi High Court for hearing and disposal vide its order dated 01 April 2016. Honble High Court of Delhi has disposed-off most of the cases and it is very likely that the remaining cases would also be finally disposed-off in very near future.

The Ministry will be issuing instructions to all the Broadcasters, Multi System Operators (MSOs), Local Cable Operators (LCOs) and the Authorised Officers to ensure that no analog signals would be transmitted over the cable networks in Phase III areas after 31st January, 2017. It is also made clear that no further extension of time would be allowed.

The Cable Television Networks (Regulation) Amendment Act, 2011 has made it mandatory for switch-over of the existing analogue Cable TV networks to Digital Addressable System (DAS) in four phases. Digital switch-over has already taken place in Phase-I and II areas.

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Government directs GCMMF/Amul to ensure 100% milk producers accounts to be opened by 30th December 2016
Dec 26,2016

Consequent upon the Governments decisions of demonetization, certain unintended impacts have been observed especially in the sectors thriving upon sheer cash transactions. In this regards, non-availability of funds to the co-operative banks for making payments to Milk producers/farmers by dairy co-operative against the milk supplied by then came to the notice of the government. GCMMF/Amul has been specifically directed to ensure 100% milk producers accounts to be opened by 30th December, 2016. Similarly, other co-operatives have been directed to ensure the opening of 100% accounts of milk producers/farmers by 30th January, 2017.

Specific instructions have been issued to all the agencies such as National Dairy Development Board, Mother Dairy, Delhi Milk Scheme and all state Dairy co-operative federations for ensuring direct payment to milk producers bank account at the earliest. Low penetration of nationalized banks and co-operative bank accounts in rural areas need adequate financial support with appropriate safe guards.

Responding promptly to the prevailing situation of reported payment problems, Shri Radha Mohan Singh has regularly reviewed and directed to take appropriate action to aliviate the problems. Meeting with Mother Dairy, Gujarat Cooperative Milk Marketing Fed (GCMMF) /Amul, Delhi Milk Scheme and like co-operative is taken at regular intervals.

In order to take stock of the prevailing situation, Secretary , Animal Husbandry Dairying and Fisheries, Shri Devendra Chaudhry has accordingly convened a series of meetings and initiated actions for streamlining the payment system to Milk producers and even sale of milk to consumers through cashless transactions primarily.

It is to be noted that there are 1.70 lakh Dairy Co-operative Societies (DCS) at village level having 1.6 crore milk producers affiliated with 218 milk unions. About 850 lakh litres per day Milk is procured including from private dairies. However, the value of milk procured from DCS is to the tune of rupees 120 crore per day. For weekly and 10 days payment cycle the substantive amount is to be disbursed to lakhs of milk producers spread over varied geographical areas.

Using the window of opportunity opened by the demonetization decision, it is high time to accelerate the opening of bank accounts of all those unbanked milk producers to make it cashless and digital sooner than later. Eventually, transparency saving habits, financial enclosure etc. would be benefiting milk producer in multiple ways.

The situation of easing the payment to milk producers is being reviewed and monitored periodically by the Government.

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Tea Board Takes Up the West Bengal Tea Garden Workers Payment with RBI
Dec 26,2016

After the notification of demonetization by Government of India on 08 November 2016, the Tea Board has taken several initiatives for ensuring smooth payment of wages to the tea garden workers and opening of bank accounts and enabling the workers to migrate to the digital payment system.

For ensuring smooth payment of wages to the tea garden workers in West Bengal, the Chairman, Tea Board has written to the Chief Secretary, Government of West Bengal, on 23 November 2016 for implementation of the Notification No. 5881-F(Y) dated 16 November 16 of the State Government for payment to tea garden owners through the bank accounts of the District Administration. Letters were also issued by the Chairman, Tea Board, to the Chief Secretaries, Government of Kerala and Tamil Nadu, on 17 November 16, for issuing directives to the District Administration for accepting deposit of money from tea garden owners in any bank account of the District Administration and withdrawal of cash by the Administration for handing over to the owners for making payment to garden workers.

For follow up with the Bankers and tea producers associations, meetings were held by the Tea Board at Kolkata and Siliguri on 24 November 2016.

On 06 December 2016, a letter was written to the Labour Commissioner, Government of West Bengal to advise the operating Trade Unions to cooperate for opening the individual accounts in tea gardens, so that wages to the tea garden workers can be paid smoothly. The Board on 09 December 2016, requested all the State Governments of tea growing States for facilitating opening of accounts for the individual workers of tea gardens. The Zonal and Regional offices of the Tea Board are vigorously pursuing with the garden managements for opening of bank accounts for their workers and employees. Tea Producers Associations were also advised by the Board for facilitating the opening of individual bank accounts for the workers for smooth payment of wages.

Shri. Santosh Sarangi, Chairman, Tea Board, has discussed the issue of payment of wages to tea garden workers with the CGM, Reserve Bank of India and requested for taking effective steps by RBI for ensuring prompt payment of wages to the tea garden workers. This was followed up with a meeting of Tea Board Officials Shri A. K. Das, F. A. & C.A.O. and Shri S. Soundararajan, DTD, with the Regional Director and Chief General Manager of Reserve Bank of India, Kolkata on 21 December 2016. The officials of the Board requested the RBI officials on the following:

For issuing suitable directives to the concerned Banks catering to the tea gardens in North Bengal for taking special initiatives for smooth payment of wages to the tea garden workers.

Measures for improvement in the currency flow to the tea growing Districts in the state of West Bengal i.e. Jalpaiguri, Darjeeling , Alipurduar and Coochbehar as per the requirement so that outstanding wages can be paid immediately and also ensuring timely payment of wages in coming days.

Expeditious opening of Bank Accounts under Pradhan Mantri Jan Dhan Yojana (PMJDY), for individual workers so that wages can be transferred by the garden owners directly to the workers accounts.

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INR382 Billion Potential Treasury Gains Could be Unlocked by Banks
Dec 24,2016

The softening of yields due to surplus liquidity could help Indian banks in registering INR 382 billion of potential treasury gains for FY17, says India Ratings and Research (Ind-Ra). The INR 382 billion worth of potential treasury gains are significantly large, considering the banking sector reported an INR 236 billion profit for FY16 (public sector banks (PSBs) reported INR 177 billion in loss). The development comes at a time when the banking sector is facing challenging conditions. The profitability levels of Indian banks remain weak owing to continued pressure on asset quality and weak loan expansion. It would be imperative for banks starved for capital to strengthen their capital adequacy ratios.

Meanwhile, even better placed banks can use this likely opportunity to improve their provision coverage ratios, which recently witnessed a downtrend. However, large profit booking, followed by a spike in yields, could have a double whammy effect on the profitability levels of banks in subsequent years.

Treasury Gains to Partially Ease Capital Requirement for PSBs: Treasury gains in FY17 would enable PSBs to contribute towards reducing their capital requirements, in accordance with the Basel III requirement. Domestic additional Tier 1 (AT1) issuances worth INR154 billion have been made so far in FY17, with increased participation from mutual funds. Ind-Ra believes the softening of yields could prove to be an additional impetus in the development of AT1 markets.

Demonetisation to Drive Yields Lower: A surge in deposits, due to demonetisation, will increase demand for government and high-rated corporate bonds, and is likely to put downward pressure on yields under the current tepid credit demand scenario. Banks are poised to benefit from the softening of yields, considering they are the largest holders of government bonds (about INR29 trillion as on 11 November 2016).

UDAY Bonds to Add to Treasury Gains: In addition to statutory liquidity requirement (SLR) bonds, banks hold bonds issued by states under Ujwal Discom Assurance Yojana (UDAY). UDAY bonds have been converted to bonds from standard restructured loans given to state distribution companies (discoms). In FY16, the value of loans converted to state government bonds under UDAY was about INR0.75 trillion. Ind-Ra estimates the value of loans converted to state government bonds at end-September 2016 at about INR1 trillion, a significant proportion of which continues to be a part of banks investment portfolio. Under UDAY, discom bonds with different maturity periods, ranging from 4-15 years, were issued. The yields at the time of the issuance were in the range of 8.10%-8.75%. At present, UDAY bonds are trading at close to 7.25%. This could result in a potential gain of 100bp-150bp.

Mid-Sized PSBs Likely to Register Larger Treasury Gains: Some mid-sized PSBs would continue to report stressed profitability figures for FY17 on account of rising credit costs due to the ageing impact of a large proportion of assets classified non-performing in FY16. Treasury gains would provide some relief to the overall profitability levels of PSBs. Some mid-sized PSBs witnessed an increase in their investment portfolios in recent quarters on account of challenges with regard to the deployment of incremental deposits. The compression of yields has proved to be a boon for them. A weak profitability forecast, along with challenging capital conditions, would result in mid-sized PSBs registering high treasury gains to protect themselves from potential capital erosion.

Daily Average LCR Reporting to Increase SLR Holdings of Banks: Ind-Ra expects an increase in the structural volatility in the liquidity coverage ratios (LCRs) of banks, given the proposed switch from monthly to daily average LCR calculations by January 2018.

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Defence procurement related exercise to yield results in 2017: Manohar Parrikar
Dec 24,2016

The exercise undertaken by the government in terms of defence procurement will start yielding results from next year onwards, Union Defence Minister, Mr Manohar Parrikar said at an ASSOCHAM event.

n++In defence procurement we have planted some grafts, which I expect to produce result, but even there you have to wait for 2-3 years, now two years are over, probably next year 2017 is a year where whatever exercise has been carried out will start yielding results,n++ said Mr Parrikar.

He said that most of the issues pertaining to defence procurement procedure are being gradually sorted out.

n++I am still clearing the mess of the earlier government, I do not intend to point finger, this is not for blame game, but till now there were so many errors, mistakes, casualness, things have gone in cycles and cycles,n++ said Mr Parrikar.

n++Slowly but surely these issues are getting sorted out and I am very sure that we will make it as the road ahead is very clear,n++ he added.

Highlighting that government has initiated various policy initiatives, the Union Defence Minister said, n++If we properly assess the requirement of defence forces, we can make many of the changes happen.n++

He also said that industry should come out with clear recommendations. n++We expect that while we will also change DPMs (Defence Procurement Manuals) and OFB (Ordinance Factory Board) very soon into IDDM (Indigenously Designed Developed and Manufactured) concept, slightly differently put up, but at the same time we will expect that the biggies in the private sector also spread requirement to the small and medium.n++

n++There is a definite improvement, the percentage of small and medium, legally required is 20, it was around between 9 per cent in OFBs and to about 14-15 in PSUs, today it has crossed 20 and is at an average of about 29 per cent in MSME (micro, small and medium enterprises) sector,n++ he added.

Talking about the need for Indias defence public sector undertakings (DPSUs) to remain competitive, he said that if good material can be got at a cheaper price why should advance be paid, except where development and small scale industry is involved.

n++Why should he restrict himself, he should ask for best quality at cheapest rates. I am not going to give advance if I can get good material at credit why should I pay advance to another company,n++ said Mr Parrikar.

He said that in case of high-technology item, the policy has to be different.

n++If it is developed, manufactured and supplied by small industry, the policy has to be different, we are working on it, that is why some time is being taken, but when it comes out it will be much better manuals,n++ said the Union Defence Minister.

n++Both these manuals are being worked because now lot of things have been eliminated, they are gone, so now there are very few things, but critical issues are remaining,n++ he said.

He said that there are more issues in offset like skill development, if it should be outsourced to a competent agency, and if it can be used for venture capital. n++These are questions we are answering and will be replying to them very soon but I think all these aspects are now limited to 4-5 pointed issues, give us those.n++

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Demonetisation a short term challenge; Dr. Arvind Subramanian, CEA
Dec 24,2016

Asserting that the Indian economy is n++very stablen++ at macro level, the Chief Economic Advisor Dr. Arvind Subramanian today said, managing demonetisation is a short term challenge for the next few weeks and months.

Dr. Subramanian said one of the challenges for the Indian economy in the short term is to manage the demonetisation fall-out n++How do we manage demonetisation in the next few weeks and monthsn++, he said, adding however, that this would be a short term phenomenon.

Referring to some important global developments like the latest hike in the US Federal Reserve rates and firming up of crude oil prices, he said the Indian economy is well- cushioned to cope up with these events.

On the hike in US interest rates, the CEA in the Finance Ministry said n++This was anticipated and expected. My own view is that on this the Indian economy is very well cushioned to absorb the impact of this. The RBI policy also took account of this in a very sensible way. There may be some short term things. This is not something we need to worry aboutn++.

Asked about the outflows from the emerging markets, he said after the US elections there were already big fund flows from the emerging markets. n++But given that India is in bright spot, the impact on us would be much smallern++, said Dr. Subramanian.

As for the rising crude oil prices, he said there would be some ups and down. n++If it persists there would be some implications but I dont think oil prices are going to surge to a level which is difficult to handle for Indian++.

On the demand from the ASSOCHAM for lower rates in the goods and services tax (GST) Dr. Subramanian said the lower and simple taxes are always preferable but there was a strong case for inclusion of real estate and electricity into the GST value chain. He echoed the views express by ASSOCHAM president Mr. Sunil Kanoria and several others senior members of its managing committee who shared their perspective about state of Indian economy particularly after the demonetisation of high value currency notes.

Listing the global challenges to be dealt with by the Indian economy, Dr. Subramanian said while the strengthening of US dollar would be of less concern, the main headwind can be felt in the form of weakening of Chinese currency and those of other competing economies.

He said it is not only the Chinese currency but also from Vietnam, Philippines and Bangladesh which would become more competitive. This could affect Indias competiveness in the export markets. He said if the Indian economy has to grow by 8%, then exports must expand by 15%.

But key factor to watch, in the unfolding global scenario, would be whether the developed countries would be able to handle more exports especially that of services from developing countries like India.

Dr. Subramanian also pointed out several key economic reforms undertaken by Indian economy in the recent past. This included passage of GST Constitutional Amendment Bill which he described as the n++mother of all achievementsn++.

The other reforms included the passage of the bankruptcy law allowing easy exit, Adhaar bill making the direct benefit transfer schemes functional and institutionalizing of the monetary policy committee in the Reserve Bank of India (RBI).

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Sustained Recovery Challenge for Commercial Vehicle Industry
Dec 24,2016

Despite a drop in sales over the recent quarters, a spike in incremental capacity additions of medium and heavy commercial vehicles (MHCVs) since July 2016 is expected to increase the System Capacity (SC) and elevate deployment risk in the medium term, says India Ratings and Research (Ind-Ra). If an aggressive selling strategy is adopted by the financiers through attractive financing options, it may create inorganic demand resulting in overcapacity in the system and eventually leading to higher delinquencies.

Ind-Ra calculated SC multiple of 1.6x as on August 2016 is unlikely to return to its ideal level of 1.4x in the near term, despite witnessing correction over the months from 1.85x in June 2013. Ind-Ra believes that a structural shift towards higher tonnage MHCVs will continue, especially after the roll-out of GST.

Ind-Ra developed an index known as the SC multiplier to study the sensitivity of system capacity and Index of Industrial Production (IIP) on delinquencies. The SC multiplier estimates an expected movement of delinquencies based on the movement in the system capacity and IIP growth. Higher the multiple, higher would be the delinquencies. Delinquencies of less than 2% in August 2016 corresponds to the SC multiple of 1.6x. Ind-Ra believes the multiple is expected to move upwards in the medium term, resulting in an expected rise in delinquencies.

A steep reduction in MHCV sales and higher replacement demand in FY14 and FY15 has led to limited new additions, thus correcting excess capacity and improving CV capacity utilisation. This has corrected delinquencies to less than 2% in August 2016 from 4% in October 2015. However, a relatively lower replacement demand in 2HFY16 and FY17 has resulted in an increase in new additions, despite lower sales in the recent quarters. However, if the incremental capacity build-up is not supported by the corresponding growth in the industrial activity, it may result in higher delinquencies.

Ind-Ra believes the structural shift towards higher tonnage MHCVs will continue. Sales data indicates that the proportion of MHCVs over 25 tonne has increased manifold (56% in 1HFY17 from 19% in FY10). Furthermore, roll-out of GST is expected to further boost the demand for high tonnage vehicles, as large scale intrastate good transport will become cost effective and hassle-free. This, however, exposes the industry to elevated deployment risk, if industrial activity registers disappointing growth. Moreover, deployment of heavy tonnage MHCVs will also be a constraint due to high fixed cost associated with it.

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Rabi crops sowing crosses 554 lakh hectares
Dec 23,2016

As per preliminary reports received from the States, the total area sown under Rabi crops as on 23 December 2016 stands at 554.91 lakh hectares as compared to 523.40 lakh hectare this time in 2015.

Wheat has been sown/transplanted in 278.62 lakh hectares as on 23 December, showing increase from 259.37 lakh hectares last year. The area under rice crop has shown decline to 9.33 lakh hectares from 13.27 lakh hectares last year.

The pulses crop area was higher at 138.25 lakh hectares compared with 125.73 lakh hectares same time last year.

The area under coarse cereals crop was lower at 50.63 lakh hectares compared with 54.91 lakh hectares last year, while area sown under oilseeds moved up to 78.08 lakh hectares from 70.12 lakh hectares last year.

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RBI All-India House Price Index (HPI) up 8.1% yoy in Q2FY17
Dec 23,2016

The Reserve Bank of India today released the quarterly House Price Index (HPI) for Q2FY17 for All-India and 10 major cities (Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Lucknow, Ahmedabad, Jaipur, Kanpur and Kochi).

All-India HPI (base 2010-11=100) has sequentially increased by 2.0% to 235.8 in Q2FY17 from 231.1 in Q1FY17.

Annual increase in All-India HPI stood at 8.1% in Q2FY17 which remained lower than 13.0% growth recorded a year ago. However, it recorded a slightly higher growth compared to Q1FY17.

On an annual basis, Chennai witnessed maximum increase of 18.0% in Q2FY17; whereas Jaipur witnessed maximum contraction (-6.3%).

On a sequential basis (i.e., Q2FY17 over Q1FY17), Delhi recorded highest HPI increase of 4.5%; whereas Kanpur recorded the maximum contraction of -4.6%.

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Foundation stone laying ceremony for first Second Generation Ethanol Bio-refinery on 25 Dec 2016
Dec 23,2016

The Foundation Stone laying ceremony for setting up the first Second Generation (2G) Ethanol Bio-refinery in India is being held on 25 December 2016 at village Tarkhanwala, Bathinda (Punjab), with an approximate investment of Rs 600 crore. Hindustan Petroleum Corporation (HPCL), a Central Government Public Sector Undertaking, is setting up the project.Minister of Food Processing Industries, Harsimarat Kaur Badal, Minister of State (I/C) Petroleum & Natural Gas, Dharmendra Pradhan, and Deputy Chief Minister of Punjab, Sukhbir Singh Badal shall jointly lay the Foundation Stone.The Government of India is encouraging production of Second Generation (2G) Ethanol from agricultural residues to provide additional sources of remuneration to farmers, address the growing environmental concerns and support the Ethanol Blended Petrol (EBP) programme for achieving 10% Ethanol Blending in Petrol.The Bathinda Bio-refinery will be utilizing agriculture residues for production of 100 KL per day or 3.20 crore litres per annum of ethanol which may be sufficient to meet the 26% of the ethanol blending requirement of the State. The proposed Bio-refinery will generate employment for about 1200 -1300 persons in the Biomass supply chain and generate an additional income of approximately Rs 20 crore per annum for the farmers through purchase of their agriculture residues. The project shall also help in reducing CO2 emissions from the paddy straw which currently is being burnt after harvesting.One of the major outputs of this Bio-refinery shall be Bio-fertilizer approximating 30,000 tonnes per annum which shall be incorporated into the soil for improving soil fertility and overall productivity of farms in Punjab. The Bio-refinery shall also produce more than 1.00 lakh Kg of Bio-CNG per annum which can cater to transport and clean cooking requirements.Oil PSUs, in line with vision laid down by Government of India, are planning to set up twelve (12) 2G Ethanol Bio-refineries across 11 States viz. Punjab, Haryana, U.P., M.P, Bihar, Assam, Odisha, Gujarat, Maharashtra, Karnataka and A.P. The estimated investment for the 12 Bio-refineries is Rs 10,000 crore. These Bio-refineries shall produce around 35- 40 crore litres of Ethanol annually, thus contributing significantly towards the EBP programme.Recently, in Petrotech-2016 on 07.12.2016, Oil PSUs also entered into 6 MoUs with Technology licensors and State Governments for setting up Bio-refineries in Dahej (Gujarat), Panipat (Haryana), Bina (MP), Bargarh (Odisha) and Bathinda (Punjab).The Bio-refinery at Bathinda is the first step towards achieving 10% blending of Ethanol in petrol. Similar 2G Bio-refineries at other places are expected to be started soon.

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World crude steel production up 5% to 132.4 million tonnes in November 2016
Dec 23,2016

World crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was 132.4 million tonnes (mt) in November 2016, 5.0% up on November 2015.

Chinas crude steel production for November 2016 was 66.3 mt, an increase of 5.0% compared to November 2015. Elsewhere in Asia, Japan produced 8.6 mt of crude steel in November 2016, a decrease of -1.4% compared to November 2015.

In the EU, Germany produced 3.3 mt of crude steel in November 2016, a decrease of -4.2% compared to November 2015. Italy produced 2.1 mt of crude steel, up by 11.2% on November 2015. France produced 1.3 mt of crude steel in November 2016, up by 11.8% year-on-year.

Turkeys crude steel production for November 2016 was 2.9 mt, up by 10.4% on November 2015.

In November 2016, Russia produced 6.0 mt of crude steel, up by 5.0% on November 2015. Ukraine produced 2.0 mt of crude steel, up by 3.1% compared to the same month in 2015.

The United States produced 6.2 mt of crude steel in November 2016, an increase of 6.8% compared to November 2015.

Brazils crude steel production for November 2016 was 2.4 mt, down by 4.8% on November 2015.

The crude steel capacity utilisation ratio of the 66 countries in November 2016 was 69.6%. It was 67.1% in November 2015. The November 2016 capacity utilisation ratio is 0.1 percentage point lower than the October 2016 ratio.

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Income tax department identifies 67.54 lakh potential non-filers for FY 2014-15
Dec 23,2016

The Non-filers Monitoring System (NMS) was rolled out for identification of non-filers with potential tax liabilities. Data analytics carried out by the Systems Directorate of Central Board of Direct Taxes (CBDT) identifies non-filers about whom specific information is available in the AIR, CIB and TDS/TCS databases.

The Income Tax Department has conducted the fifth cycle of data matching which has identified an additional 67.54 lakh potential non-filers who have carried out high value transactions in the financial year 2014-15 but did not file return of income for the relevant assessment year (AY) 2015-16. The information relating to the identified non-filers has been made available in the Compliance Module on the e-filing portal of the Income Tax Department.

The information will be visible only to the specific PAN holder when they log into the e-filing portal at https://incometaxindiaefiling.gov.in. The PAN holder will be able to respond electronically and retain a copy of the submitted response for record purpose.

While the Government urges all tax payers to disclose their true income and pay taxes accordingly, the Department would continue to pursue the non-filers vigorously till all the high potential non-filers are covered.

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UNCTAD sees cause for concern in sluggish trade growth
Dec 23,2016

Unusual trends in international trade statistics, such as the falling value of world trade in goods and services even as the global economy grew in 2015, give cause for concern, said an UNCTAD report released on 22 December 2016. Last year, 2015, was the first time since 2001 that the value of trade has fallen during a period of economic expansion, according to the report - Key Indicators and Trends in International Trade 2016 - which noted that the volume of trade still grew about 1.5%.

In other words, while many exporters had to cope with lower prices, they saw no decline in export volumes, the report said. Although positive growth is consistent with the overall economic trends, there are still reasons to be concerned.

To start with, the growth of trade volume has been below the overall growth of the world economy, something that has seldom happened in the last few decades and only during economic downturns as in 2001 and 2009, the report said.

Second, trade volumes have been rather unstable, showing substantial volatility during 2015 across quarters and across countries. Trade volumes have increased for the world as a whole, but for many countries trade volumes have in fact decreased.

Finally, it is arguable whether the physical growth in international trade can continue in a deflationary economic environment, the report said. The concern is that many exporters may not be able to maintain their position in the markets for long when facing reduced financial returns.

The sharp decline in international trade results from several factors, both nominal and structural.

Falling commodity prices and the appreciating US Dollar contributed most to the nominal fall in world trade, with oil prices going from an average of more than $100 per barrel in 2014 to about $50 per barrel in 2015. The trade weighted US dollar index appreciated by almost 15% between 2014 and 2015.

But deflationary factors can explain only some of the trade collapse in 2015. In fact, falling commodity prices explain only half of the 2015 decline in world trade.

The sluggish growth of 2012-2014 and the magnitude of the decline in trade of goods and services in 2015 suggest a change in the dynamics behind the international integration process, the report said.

Indeed, the most commonly used index to gauge globalization trends - the ratio of the value of world trade over global GDP - indicate a decline in economic interdependence, it added.

Part of the reason for this is that global value chains are shortening. Many countries, including those in East Asia, are reshoring and consolidating manufacturing production processes.

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Better access to G20 markets could boost exports from poorest countries by 15%: UNCTAD
Dec 23,2016

The worlds poorest countries are barely engaging in the global economy, but fully liberalising trade for these countries into G20 markets could boost their exports by about 15%, according to an UNCTAD report released on 22 December 2016. While least developed countries (LDCs) account for about 12% of the worlds population, their share in global exports stands at about 1%, the report - Key Indicators and Trends in Trade Policy 2016 - says.

Boosting exports from LDCs could help accelerate economic growth, generate jobs, and provide financial resources for sustainable and inclusive development. Recognising the importance of trade for LDCs, the sustainable development goals (SDGs) include Target 17.11 to Increase significantly the exports of developing countries, in particular with a view to doubling the least developing countries share of global exports by 2020.

Weve seen some progress in the last decade, but the participation of least developing countries in the global economy remains marginal, says Guillermo Valles, Director of UNCTADs Division on International Trade in goods and services and Commodities.

To double the LDC share of global exports - and achieve the SDG target - the trick will be not just to fix the issue of tariffs but to do the non-tariff measures too, he said.

The report finds that LDCs generally trade much less than the size of their economies would suggest. The export-to-GDP ratios of the 48 LDCs are on average about 25%, substantially less than the average for other developing countries of about 35%.

This indicator has been on a clear downward trend since 2011 and it shows the LDC struggle to integrate into the global economy, Valles said.

Generally speaking, G20 countries support LDCs through a range of mechanisms to facilitate trade, such as duty-free and quota-free access. But removing all tariffs could boost LDC exports to G20 countries by about $10 billion per year.

Similarly, reducing the distortionary effects of non-tariff measures (NTMs) could boost LDC exports by about $23 billion per year. But this requires a more complex approach. NTMs such as quality standards serve public policy objectives and cannot be removed without disrupting these objectives.

Therefore, the report says, reducing the distortionary effects of NTMs comes not from removing them, but from helping LDCs to comply.

Taken together, fully liberalising market access for LDCs and eliminating the negative trade effect of NTMs on LDCs would increase their exports by about 15%, the report says.

The textile and apparel sectors - as well as some agricultural categories - would benefit most, it says.

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Indias natural gas production declines 1.7% in November 2016
Dec 22,2016

Indias natural gas production declined -1.7% to 2.67 billion cubic meters (bcm) in November 2016 over a year ago. Natural gas output of ONGC rose 5.1% to 1.87 bcm, but that of private and JV companies dipped -18.4% to 0.56 bcm. Meanwhile, the natural gas production of Oil India also fell -4.2% to 0.24 bcm in November 2016.

Natural gas output declined -3.7% to 21.15 bcm in April-November 2016 over April-November 2015.

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