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Cabinet approves MoU between India and Vietnam on Cooperation In the field of Information Technology (IT)
Dec 08,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval to the MoU between India and Vietnam on Cooperation in the field of IT.

The MoU aims to develop a long-term and sustainable cooperation on the basis of equality and mutual interest in the areas of IT in line with each countrys laws and regulations. Implementation of the MoU will result in significant mutual benefits in the IT sector, through institutional and capacity-building in the field of IT and Human Resource Development.

The MoU will remain in force for a period of five years and will be renewable by mutual written consent between India and Vietnam. It will be implemented by establishing a Joint Working Group on IT with representatives from both the countries.

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Cabinet approves MoU between India and Afghanistan on Cooperation in the Peaceful Uses of Outer Space
Dec 08,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval to the MoU between India and Afghanistan on cooperation in the peaceful uses of outer space.

The MoU envisages cooperation between the two countries for application of space technologies in education, agriculture, weather forecasting, telecommunications, rural health, sanitation, urban development, resource mapping navigation, remote sensing and any other areas mutually agreed upon.

The MoU will benefit both countries in the following manner:

1.Development of space sector in Afghanistan;

2.Burnish Indias credentials as a nation with advanced space technology, one that can also assist other countries;

3.Afghanistan will move towards self-reliance in the space sector;

4.Help deepen bilateral ties and mutual understanding and trust between India and Afghanistan;

5.Provide India with a foothold in Afghanistans strategic space and communication sector.

Further, the MoU will boost high-tech jobs in the two countries in both core Science & Technology and R&D fields, and also the field of implementation. With ushering in of the era of mobile and internet-based applications and commerce, better communication and internet connectivity will boost creation of jobs in diverse fields.

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Cabinet approves the proposal of Election Commission for procurement of Control Units and Ballot Units during 2017-18 and 2018-19
Dec 08,2016

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved the proposal of Election Commission for purchase of 4,10,000 Ballot Units (BUs) and 3,14,000 Control Units (CUs) during 2017-18 and 4,35,306 Ballot Units and 71,716 control units during 2018-19 at a tentative unit cost of Rs.7,700/- and Rs.9,300 respectively. The total estimated cost will be Rs.1,009.6 crore. The purchases will be made through Bharat Electronic (BEL), Bangalore and Electronics Corporation of India (ECIL), Hyderabad.

The Cabinet has also authorised the Election Commission to vary the quantity to be ordered on M/s. BEL and M/s. ECIL based on their production capacity and past performance in supply of machines.

This would facilitate phasing out of obsolete electronic voting machines procured during 2000-2005. It will enable the Election Commission to replenish the stock with a view to meeting the requirement of conducting General Elections to Lok Sabha and some of the State Assemblies due in 2019. Authorising the Election Commission to vary to the quantity would ensure better management of the procurement process and timely delivery of the units.

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Cabinet approves Pune Metro Rail Project Phase - 1
Dec 08,2016

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved the development of Pune Metro Rail Project Phase - 1. The Pune Metro Rail Corridor will be covering a length of 31.254 km comprising with two corridors i.e. Corridor-1 {Pimpri Chinchwad Municipal Corporation (PCMC) to Swargate} covering length of 16.589 km (11.57 km elevated and 5.019 km underground) and Corriodor-2 (Vanaz to Ramwadi) covering 14.665 km (fully elevated).

The total completion cost of the metro rail corridor will be Rs.11,420 crore. The population of approximately 50 lakh of Pune Metropolitan Area will be benefitted through this metro corridor.

The project is scheduled to be completed in five years from the date of start of work as per the Detailed Project Report (DPR).

The approved alignments are expected to provide the much needed connectivity to the commuters and would traverse through some of the densest and traffic congested routes in the Pune Metropolitan Area. It will considerably reduce the traffic congestion and will bring in fast, comfortable, safe, pollution-free and affordable mass transportation system in the city, which in turn will contribute to further development and prosperity of the area. Development and prosperity of Pune Metropolitan Area will also contribute to the prosperity and development of the nation.

The Project will be implemented by Maharashtra Metro Rail Corporation (MAHA-METRO), which will be a 50:50 jointly owned company of Government of India and Government of Maharashtra. Project will be covered under the legal framework of the Metro Railways (Construction of Works) Act, 1978; the Metro Railways (Operation and Maintenance) Act, 2002; and the Railways Act, 1989, as amended from time to time.

The existing Nagpur Metro Rail Corporation Limited (NMRCL) which is a joint Special Purpose Vehicle (SPV) of Government of India (GoI) and Government of Maharashtra (GoM), would be reconstituted into Maharashtra Metro Rail Corporation Limited (MAHA-METRO) for implementation of all metro projects including Pune Metro Rail Project Phase-1 in the State of Maharashtra outside Mumbai Metropolitan Region. The project will benefit from experience and learnings from other Metro Rail projects in Delhi, Bengaluru, Chennai, Kochi, Nagpur etc.


Pune Metropolitan Area includes Pune Municipal Corporation (PMC), Pimpri Chinchwad Municipal Corporation (PCMC). Both the cantonment areas namely Pune and Khadki have witnessed rapid growth of population. The population of Pune Urban Agglomeration was 4.99 million as per 2011 census compared to 3.57 million in 2001 census. This is further projected to increase to 6.90 million in 2021 and 7.73 million in 2031.

Rapid industrialization and intense commercial developments in the past decades have resulted in steep rise in travel demand, putting Punes transport infrastructure to stress. With the projected increase in the areas population, strengthening and augmenting the existing transport infrastructure has assumed urgency. With the growing economy and inadequate public transport services, the passengers will shift to private modes, which is already evident from the high vehicle ownership trend in the region. This would not only aggravate the congestion on streets but also increase the air pollution. Hence, Metro Rail System has become essential.

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Global air freight demand up 8.2% in October 2016
Dec 07,2016

The International Air Transport Association (IATA) released data for global air freight markets in October 2016 showing that demand, measured in freight tonne kilometers (FTKs), rose 8.2% year-on-year in October. This was the fastest pace of growth seen in 18 months. Freight capacity, measured in available freight tonne kilometers (AFTKs), increased 3.6% over the same period.

Global air freight markets look set to end 2016 on a high note. Demand is growing at its fastest pace in 18 months. It remains to be seen how long this growth trend will endure after the year-end peak period and we still face headwinds from weak global trade. But there are some encouraging signs. The peak has been stronger than expected. And purchasing managers are reporting a pick-up in new export orders. So we will enter 2017 propelled by some much-needed positive momentum, said Alexandre de Juniac, IATAs Director General and CEO.

Some one-off factors are likely impacting Octobers positive results: (1) there is potential modal shift to air cargo following the collapse of the Hanjin Shipping Company in August and (2) there could be some last minute reliance on air transport as companies exercised caution in ordering as a result of weak market conditions earlier in the year.

Structural market shifts are also likely underpinning a portion of the stronger performance. This includes strong growth in cross-border e-commerce and pharmaceutical flows. Preparation for the increasing popularity of sales events such as Black Friday and Cyber Monday may also have contributed to the increased demand peak.

The drivers of stronger growth are sending a major signal for change to the air cargo industry. Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to e-freight is more critical than ever, said de Juniac

Regional Performance

Airlines in all regions except Latin America reported an increase in year-on-year demand in October. However results continued to vary considerably.

Asia-Pacific airlines saw demand in freight volumes both from the Within Asia air cargo market as well as on routes to and from the region increase in October 2016 compared to the same period last year. Regional demand increased 7.8% and capacity grew by 3.9%. International freight volumes expanded 8.0% in October, contributing to an annualized increase, in seasonally adjusted terms, of 15% since March 2016.

North American carriers freight volumes expanded 3.7% in October 2016 compared to the same period last year, and capacity increased by just 0.1%. International freight volumes increased by 7.2% in October - their fastest pace since the disruption at US seaports in February last year. Seasonally-adjusted freight volumes are back to the levels reached since the post-global financial crisis bounce-back in 2010. US exports continue to suffer from the strength of the US dollar which has kept the US export market under pressure.

European airlines posted the largest increase in freight demand of all regions in October, 13.4% year on year. Capacity increased 5.9%. Octobers positive performance corresponds with the sustained increase in export orders in Germany over the last few months and the ongoing weakness in the Euro. International freight demand grew by 13.2% year-on-year in October - the fastest pace since April 2011 - and the upward trend in seasonally-adjusted traffic was very strong.

Middle Eastern carriers saw air freight demand increase by 9.2% in October 2016 year-on-year, marking an improvement over the last few months performance. However seasonally-adjusted growth has slowed, predominantly due to weak freight volumes between the Middle East and Asia, and the Middle East and North America. Capacity in the region increased by 4.2%.

Latin American airlines experienced a demand contraction of 0.1% in October 2016, compared to the same period last year, while capacity decreased by 1.8%. International freight volumes grew by 0.2%. In seasonally-adjusted terms this is an improvement over the last few months. The region continues to be blighted by weak economic and political conditions, particularly in the regions largest economy, Brazil.

African carriers freight demand increased by 7.4% in October 2016 compared to the same month last year. However, capacity surged by 24.7% on the back of long-haul expansion, in particular by Ethiopian Airlines. International freight demand for African airlines slowed in October, but still remained robust at 7.7% year-on-year.

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October global passenger demand moderates: IATA
Dec 07,2016

The International Air Transport Association (IATA) announced global passenger traffic results for October showing that demand (measured in revenue passenger kilometers, or RPKs) rose 5.8% compared to the same month last year. Capacity grew 6.3% and load factor slid 0.4 percentage points to 80.1%.

Octobers performance was a slow-down on the 7.1% year-on-year growth rate recorded in September but still was broadly in line with 10-year averages. Domestic and international travel growth largely was in balance.

Passenger demand growth in October was consistent with long-term trends but represented deterioration compared to September. While the negative traffic impact from terror attacks and political instability in parts of the world has receded, the long downward trend in yield - which helped to stimulate travel - has leveled off. Furthermore, the recent OPEC agreement to restrict oil production suggests fuel prices have ended their slide, said Alexandre de Juniac, IATAs Director General and CEO.

International Passenger Markets

October international passenger demand rose 5.9% compared to October 2015. Airlines in all regions recorded growth. Total capacity rose faster, up 6.6%, causing load factor to slide 0.6% percentage points to 78.6%.

Asia-Pacific airlines traffic rose 7% in October compared to the year-ago period. Capacity rose 7.1% and load factor dipped 0.1 percentage point to 76.9%. The strong upward trend in seasonally-adjusted traffic has slowed in recent months, although it is too soon to determine whether this is an actual weakening or just a brief pause. On the other hand the Asia-to-Europe market, which is highly sensitive to shock events, is continuing to recover.

European carriers saw October demand climb 5.7% over October 2015. Capacity increased 6.2% and load factor slipped 0.4 percentage points to 83.2%. International demand for European carriers appears to be returning to normal after the disruption caused by terrorism and political instability earlier this year.

Middle East carriers experienced a 7% rise in demand in October, the slowest pace for the region in 18 months, although perhaps the timing of regional celebrations could have affected the results. Capacity increased 10%, however, with the result that load factor dropped 2.0 percentage points to 70.1%, its lowest level for the month of October since 2006.

North American airlines traffic climbed 2.4% in October compared to the year-ago period. While this was the lowest among the regions, on a seasonally-adjusted basis, passenger volumes have still risen at an annualized rate of around 5% since March. Capacity rose 4.9% and load factor dropped 1.9 percentage points to 80.1%.

Latin American airlines had a 7.1% increase in traffic in October, supported by robust demand for international traffic within the region. Capacity climbed at a much slower rate of 2.1%, causing load factor to surge 4 percentage points to 84.3%, highest among the regions.

African airlines traffic growth slowed to 5.8% year-on-year in October, from 9.1% in September. Economic conditions in parts of the continent remain challenging. Capacity rose 4.3%, and load factor strengthened to 68.8%, up 1 percentage point.

Domestic Passenger Markets

Domestic demand climbed 5.6% in October compared to October 2015, which was matched by a similar increase in capacity. There was continued wide variation in individual country results, with India and China enjoying double-digit growth rates while other markets experienced much slower growth and Brazil remained in decline.

Indias domestic market soared 22.7% year-on-year in October, supported by significant growth in real consumer spending and increases in the number of airport pairs served.

Chinas traffic jump of 14.1% in October was attributable to similar factors - although flight frequencies actually have fallen year-to-year.

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RBI maintains status quo-Fifth Bi-monthly Monetary Policy Statement, 2016-17
Dec 07,2016

The Monetary Policy Committee (MPC), Reserve Bank of India in its Fifth Bi-Monthly Monetary Policy Statement, 2016-17 kept the key policy rates unchanged after reducing the rates by 25 basis points (bps) in previous policy statements. The policy repo rate, at which it lends to the scheduled banks borrowing for the short liquidity gaps, under the liquidity adjustement facility (LAF) thus stands unchanged at 6.25%. The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5% by Q4 of 2016-17 and the medium-term target of 4% within a band of +/- 2%, while supporting growth. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

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Ind-Ra: RBIs Policy to Set Tone for Markets
Dec 07,2016

The debt and currency markets are focussing on the Reserve Bank of Indias (RBI) policy action, as well was the economic assessment coming up this week. India Ratings and Research (Ind-Ra) expects the 10-year G-sec yield to trade at 6.12%-6.35% (6.24% at close on 2 December 2016) through the week. The rupee is likely to trade at 67.75/USD-68.75/USD (68.23/USD at close on 2 December 2016).

Mixed Cues Pose Challenges for Policy Review: Ind-Ra believes, RBI will hold interest rates, with an accommodative stance continuing, amid the uncertain global environment. Markets are however pricing in a rate reduction and an accommodative stance by the RBI.

Bond Markets Pricing in Easing of Rates: In Ind-Ras assessment, the bond market is factoring in a rate action by RBI, due to low inflation data and expectation of a further strengthen in deflationary forces. While Ind-Ra believes that a status quo policy will lead to realignment between market expectations and RBIs outlook. Additionally, weak global cues - uptick in crude oil prices, surge in global bond yields adds to the caution in the bond market environment. Ind-Ra, therefore, believes the bond markets could undergo some correction hereon, in the event that the RBI maintains a status quo on rates. That could also open up the possibility of widening of corporate bond spreads.

Global Developments Pose Headwinds to Rupee: The rupee will take cues from RBIs monetary policy - as may lead to erosion in risk appetite. Following the outcome of the Italy referendum, consequent financial and political instability is likely to keep investors preference strong for dollar assets. Additionally, there is a near consensus among market participants of a rate hike in the next weeks US Fed policy review. The gains in the rupee, therefore, will be limited and reined in by the evolving risk preference.

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De-legalisation of Currency Erases INR1.5trn from FY17 GDP, Growth to Fall to 3-Year Low
Dec 07,2016

India Ratings and Research (Ind-Ra) has revised its gross domestic product (GDP) growth forecast for FY17 to 6.8%, 100bp lower than its earlier projection of 7.8% (FY16: 7.6%, FY15: 7.2%). The downward revision is a fallout of the disruption caused at various levels in the economy due to the de-legalisation of banknotes of INR500 and INR1,000 denominations from midnight of 8 November 2016. Ind-Ras analysis shows that the economic cost of the de-legalisation will be INR1.5trn for FY17.

While there are no two opinions about the need to root out black income, Ind-Ras analysis shows that at best the current measures are likely to destroy INR4.004trn worth of cash held in black money and fake currency. This constitutes a mere 12% of the black economy in India, leaving 88% of the black money to remain in the system. Global experience, including that of India in the past has shown that the impact of such measures have been fairly short-lived (India followed the de-legalisation route twice in the past, firstly in 1946 and then 1978) as it does not attack/plug the mechanism that gives rise to black income.

On the demand side, the GDP component that would be the worst hit is investment. Investment, particularly private investment, which is already down and out due to various reasons, will face the brunt of the de-legalisation. Ind-Ra now expects gross fixed capital formation (GFCF) for FY17 to grow at 2.0%, down 306bp from our earlier projection. With the decline in cash holdings in the hands of the people and severe restriction in the flow of new cash, consumption demand has also fallen impacting both wholesale and retail sales. Anecdotal evidence suggests that the cash squeeze has reduced sales in the informal sector by 30%-40% during the first fortnight following the de-legalisation. Therefore, Ind-Ra expects private final consumption expenditure (PFCE) to grow at 7.5% in FY17, 89bp lower than our earlier projection.

However, Ind-Ra believes, despite disruptions, there are positive spin-offs for the economy from the de-legalisation of the high value currency. Ind-Ra believes de-legalisation, coupled with the governments resolve to promote the digital platform for transactions will gradually increase the share of the formal sector and expand the tax base of the economy in the medium-to long-term. Also, as transactions through the digital platform increase, it will create financial and transactional history of the informal/cash dependent segment, making them bankable over the medium-to long-term.

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Credit linked Capital Subsidy Scheme under Ministry of MSME
Dec 07,2016

The objective of Credit Linked Capital Subsidy Scheme (CLCSS) is to facilitate technology upgradation in Micro and Small Enterprises (MSEs) by providing capital subsidy of 15 per cent (limited to maximum of Rs.15.00 lakhs) on institutional finance availed by them for induction of well-established and improved technology in the specified 51 sub-sectors/products approved under the scheme. Maximum limit of eligible loan for calculation of subsidy under the Scheme is Rs.100.00 lakhs.

Presently, there are 12 Nodal Banks/Agencies under CLCSS :

1. Small Industries Development Bank of India

2. National Bank for Agriculture and Rural Development

3. Bank of Baroda

4. State Bank of Bikaner and Jaipur

5. Bank of India

6. Indian Bank

7. Corporation Bank

8. Canara Bank

9. State Bank of India

10. Punjab National Bank

11. Tamilnadu Industrial Investment Corporation

12. Andhra Bank

List of approved sectors / sub-sectors under Credit Linked Capital Subsidy Scheme

i. Bio-tech Industry

ii. Common Effluent Treatment Plant

iii. Corrugated Boxes

iv. Drugs and Pharmaceuticals

v. Dyes and Intermediates

vi. Industry based on Medicinal and Aromatic plants

vii. Plastic Moulded/ Extruded Products and Parts/ Components

viii. Rubber Processing including Cycle/ Rickshaw Tyres

ix. Food Processing (including Ice Cream manufacturing)

x. Poultry Hatchery & Cattle Feed Industry

xi. Dimensional Stone Industry (excluding Quarrying and Mining)

xii. Glass and Ceramic Items including Tiles

xiii. Leather and Leather Products including Footwear and Garments

xiv. Electronic equipment viz test, measuring and assembly/ manufacturing, Industrial process control; Analytical, Medical, Electronic Consumer & Communication equipment etc.

xv. Fans & Motors Industry

xvi. General Light Service(GLS) lamps

xvii. Information Technology (Hardware)

xviii. Mineral Filled Sheathed Heating Elements

xix. Transformer/ Electrical Stampings/ Laminations /Coils/Chokes including Solenoid coils

xx. Wires & Cable Industry

xxi. Auto Parts and Components

xxii. Bicycle Parts

xxiii. Combustion Devices/ Appliances

xxiv. Forging & Hand Tools

xxv. Foundries - Steel and Cast Iron

xxvi. General Engineering Works

xxvii. Gold Plating and Jewellery

xxviii. Locks

xxix. Steel Furniture

xxx. Toys

xxxi. Non-Ferrous Foundry

xxxii. Sport Goods

xxxiii. Cosmetics

xxxiv. Readymade Garments

xxxv. Wooden Furniture

xxxvi. Mineral Water Bottle

xxxvii. Paints, Varnishes, Alkyds and Alkyd products

xxxviii. Agricultural Implements and Post Harvest Equipment

xxxix. Beneficiation of Graphite and Phosphate

xl. Khadi and Village Industries

xli. Coir and Coir Products

xlii. Steel Re-rolling and /or Pencil Ingot making Industries

xliii. Zinc Sulphate

xliv. Welding Electrodes

xlv. Sewing Machine Industry

xlvi. Industrial Gases

xlvii. Printing Industry

xlviii. Machines Tools

xlix. Copper Strip Industry:

l. Ferric and Non-Ferric Alum

ll. Pesticides Formulation

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Indias Internet population likely to touch 600 million by 2020: study
Dec 07,2016

With increased 4G and 3G penetration, the Internet user base in India is rapidly expanding and has reached a penetration of over 27% versus 50.3% penetration in China and expected to double to 600 million users by 2020 from 343 million users currently, according to an ASSOCHAM- Deloitte joint study.

India internet user is expected to almost double to 600 million users by 2020 from approximately 343 million users currently. Going forward, rural adoption of data-enabled devices is expected to increase with the BharatNet initiative under Digital India, reveals ASSOCHAM-Deloitte joint study.

India is the second largest mobile phone market globally with over 1 billion mobile subscriptions. Of this, smartphone users account for approximately 240 million subscriptions which is expected to grow to 520 million by 2020, adds the study.

Spectrum availability in Indian metros is about a tenth of the same in cities in developed countries. This has put a major roadblock in providing high speed data services. Public Wi-Fi penetration remains low. Globally, there is one Wi-Fi hotspot for every 150 citizens. For India to reach that level of penetration, over 8 million hotspots are required of which only about 31,000 hotspots are currently available, reveals the study.

Currently, over 55,000 villages remain deprived of mobile connectivity. This is largely due to the fact that providing mobile connectivity in such locations is not commercially viable for service providers, adds the study.

Challenges in policy, such as taxation, right of way, restrictive regulations etc. are major roadblocks in realizing the vision of Digital India. Some of the common policy hurdles include the following lack of clarity in FDI policies, for instance, have impacted the growth of e-commerce.

Implementation of the Digital India program has been hampered by contracting challenges such as the projects assigned to PSUs are delayed given challenges related to skills, experience and technical capabilities.

Several RFPs issued by the government are not picked up by competent private sector organizations since they are not commercially feasible. Reports suggest that, as recently as 2014, nearly 70% of Indian consumers indicated that lack of awareness was the main reason for not using internet services. Non availability of digital services in local languages is also a major concern, adds the joint study.

With the proliferation of cloud-based services like DigiLocker, data security has emerged as a major challenge. The recent data breach in August 2016, in which debit card data for more than 3.2 million subscribers was stolen highlights the importance of implementing foolproof security systems.

A uniform RoW policy across all states with a reasonable cost structure is required along with a single window mechanism for granting RoW permissions. PPP models need to be explored for sustainable development of digital infrastructure, as has been the case for civic infrastructure projects like roads and metro project. In addition, the government should make efforts to make additional spectrum available to telecom service providers for deployment of high speed data networks, noted the study.

Effective collaboration with the private sector is critical to the development of the digital infrastructure. Innovative engagement models that ensure commercial viability needs to developed jointly through consultation with industry bodies. This will encourage private sector participation and ensure a better response to infrastructure RFPs. In addition, startups need to be incentivized for the development of the last mile infrastructure and localized services and applications.

In rural and remote areas, private sector players should be incentivized to provide last mile connectivity. USOF can be effectively used to incentivise and create a viable business model. The deployment of funds so far has been erratic and not been used to effectively to fund the cost of infrastructure creation in rural areas.

Satellite communication solutions could be used to speed up broadband access in rural and remote areas. For instance, banks can use VSAT technology to connect remote ATMs, remote branches that need instant access to customer data. It could be used as a last mile connectivity solution in rural areas which lack telecom networks, highlighted the study.

For the success of the Digital India program, capacity building is crucial. In addition to infrastructure development, Digital Literacy, skill building and higher adoption of digital solutions is key to program success, said the study.

Despite rising smartphone penetration and internet user base, digital literacy in India has been low. In order for the benefits of the Digital India programme to reach all sections of the population, improving digital literacy is imperative. A strong skill base is required to support the initiatives and services that are envisaged under the Digital India umbrella.

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Jack up Govt expenditure to make up for loss in private consumption due to demonetisation: ASSOCHAM
Dec 07,2016

As the private consumption would be taking a significant hit on account of cash crunch in the economy at least in the next two quarters, the government should make all efforts to at least partly limit the impact of demonetization on the GDP by sharply jacking up its own expenditure during the fiscal 2016-17, the ASSOCHAM has said.

Measured in terms of expenditure, the Private Final Consumption Expenditure (PFCE) or popularly known as the India consumption story accounts for close to 60 per cent of the countrys Gross Domestic Product (GDP) at current prices and 55 per cent at constant prices (base 2011-12).

n++With 86 per cent of the cash out of circulation and replenishment facing difficulties, the PFCE in the third quarter is expected to see a sizeable reduction to the extent of at least 35-40 per cent and slightly lower in the fourth quarter. Surely, when an important component accounting for 60 per cent of the GDP takes a hit to this extent, the overall impact is bound to be significant,n++ the ASSOCHAM said.

In terms of numbers, the PFCE, at current prices, was estimated at Rs 21.78 lakh crore in Q2 of 2016-17 with a growth of 12.4 per cent over the similar period last year. At constant prices, it was estimated at Rs 16.26 lakh crore for the July-September quarter of the current fiscal with the growth of 7.6 per cent.

Different ministries which have been earmarked the annual budget, should exceed their expenditure aggressively in case the damage control has to be effected from the demonetisation in the short to medium term. The government expenditure itself accounts for a good part of the GDP to the extent of 14 per cent.

n++As against Rs 5.15 lakh crore in the second quarter of the current fiscal, the government expenditure , at market prices, should be jacked up to Rs 7 lakh crore for each of the third and fourth quarter, even if some fiscal imbalances take place for the sake of growth,n++ ASSOCHAM said.

The chamber also said focus should be on sectors like roads and highways, ports, railways, telecom infrastructure, irrigation, flood control and rural uplift programmes. n++Somehow, the government should devise ways to ensure that the construction of the projects do not suffer on account of shortages of cashn++.

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Promote separate hill farming policy: ASSOCHAM plea to Ukhand govt.
Dec 07,2016

Uttarakhand needs to promote a separate hill farming policy as the state has a meagre 14 per cent net sown area, more so as 3/5th of the states total working population is engaged in agriculture, noted a recent ASSOCHAM-RNCOS joint study.

n++The performance of Uttarakhand in agriculture and allied activities has not been up to the mark as its share in the gross state domestic product (GSDP) had declined sharply from over 22 per cent in 2004-05 to just over nine per cent in 2014-15,n++ highlighted the study titled Agri business outlook in Uttarakhand, conducted by ASSOCHAM jointly with research firm RNCOS.

In terms of issues being faced by farm sector in Uttarakhand, the ASSOCHAM-RNCOS study highlighted that low level of land holdings is a key challenge as over 70 per cent of states farmers hold less than one hectare of land.

Considering that topography of Uttarakhand is characterised by sandy soils that do not retain water and due to unavailability of moisture in the soil, state has recorded poor crop productivity has so much so that agriculture sector clocked just about three per cent CAGR between 2004-05 and 2014-15.

In terms of year-on-year growth rate, Uttarakhands agriculture and allied sector has registered over five per cent growth in 2014-15 which is better than negative growth of 2.5 per cent recorded in the previous year.

n++Priority must be given to further developing irrigation infrastructure in Uttarakhand including the canal network and also lift canals, tube-well, pump sets and others,n++ said Mr Rawat.

n++Together with promotion of local and traditional hill crops, farmers must also be given adequate cover in terms of welfare schemes, besides adequate technical and financial support for water conservation should also be extended by the state administration,n++ he added.

n++Apart from this, steps should be taken to encourage improved agronomic practices for higher farm productivity, improved soil treatment, increased water holding capacity, judicious use of chemicals and enhanced soil carbon storage,n++ further said Mr Rawat.

Uttarakhand food and agro based sector has attracted investments worth over Rs 1,600 crore as of financial year (FY) 2015-16 increasing from about Rs 450 crore as of FY 2010-11 thereby clocking a CAGR of over 29 per cent, according to analysis of ASSOCHAM Economic Research Bureau (AERB).

The share of food and agro based industries has also increased from 0.4 per cent in total investments worth over Rs 98,960 crore attracted by Uttarakhand in FY 2010-11 to 1.1 per cent in total investments worth Rs 1.4 lakh crore attracted by the state in FY 2015-16, noted the chambers analysis.

The ASSOCHAM-RNCOS study has suggested the state to focus on strengthening rural economy by focusing more on dairy sector by imparting technical assistance for dairy development in Uttarakhand, more so as milk production in the state grew by just about one per cent between 2013-14 and 2014-15.

Strengthening of dairy farms, genetic up-gradation of cattle through induction of genetic variability in female germ plasma and establishment of goat units are some of the key initiatives that can help boost dairy production in the state, it suggested.

The state should promote poultry, fisheries, food processing, horticulture, agro-based, medicinal and aromatic herbs as thrust industries by offering a wide range of incentives and subsidies.

Besides, the state government in tandem with private sector should set up strong infrastructure backed by efficient supply chains in food and agro processing sector to increase farmers income and promote employment opportunities in rural areas.

Holistic development to achieve the goal of reducing yield gaps in important crops through focussed interventions and good productive practices is imperative for the state to improve its performance in agriculture and allied activities sector.

The state should aim to make agriculture more productive, sustainable, remunerative and climate resilient by promoting location specific, integrated/composite farming systems.

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Several policy initiatives as well as administrative measures taken to enhance production of oil and gas for meeting domestic demand
Dec 06,2016

Ministry of Petroleum & Natural Gas for each financial year, sign MoU (Memorandum of Understanding) with the Oil & Gas CPSEs (Central Public Sector Enterprises). Under this agreement, the CPSEs undertake to achieve the targets set in the agreement at the beginning of the year.

Government of India has taken several policy initiatives as well as administrative measures to enhance production of oil and gas in the country for meeting domestic demand. The policy initiatives can be mentioned as:

i. Policy for Relaxations, Extensions and clarifications under Production Sharing Contract (PSC) regime for early monetization of hydrocarbon Discoveries.

ii. Policy on Testing Requirements.

iii. Discovered Small Field Policy.

iv. Policy for marketing freedom for gas production from difficult areas.

v. Policy for exploration in Mining Lease Area.

vi. Hydrocarbon Exploration and Licensing Policy.

vii. Policy for Extension of Production Sharing Contracts.

viii. Shale Gas Policy etc.

Some of the administrative steps taken by the Government are:

i. Setting up of National Data Repository.

ii. Appraisal of Unappraised area in Sedimentary Basin.

iii. Streamlining of functioning of Management Committee for timely approval of Work Program and Budget in PSC regime.

iv. Re-assessment of Hydrocarbon Resources.

The Government has decided that Oil PSUs may formulate policies for import of crude oil in their best commercial interest and in accordance with the extant guidelines of the Central Vigilance Commission etc. Therefore Public Sector Oil Marketing Companies (OMCs) procure crude oil as per Crude Import Policy. Crude Oil is procured on term and spot basis from NOCs and other registered parties with OMCs. There is no restriction on import of Liquefied Natural Gas (LNG).

Under Pre-New Exploration Licensing Policy (Pre-NELP)/NELP, exploration blocks were awarded through Competitive Bidding Process for carrying out Exploration & Production activities. In various rounds of biddings held under Pre-NELP/NELP, Private/JV companies had also participated alongwith the National Oil Companies (NOCs).

Based on the experiences of implementation of NELP and to simplify contractual regimes, Government has recently announced Hydrocarbon Exploration Licensing Policy (HELP) with the objective to enhance domestic oil and gas production.

In addition to above, to enhance oil & gas production in the country and inviting private investment, a policy named as Discovered Small Field Policy has been approved by the government, envisaging auctioning of 67 small/marginal fields of ONGC and OIL through International Competitive Bidding.

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Payment above Rs 5000 to Suppliers, contractors, grantee/loanee institutions etc by Government Departments to be now made through e-Payment
Dec 06,2016

In order to attain the goal of complete digitization of Government payments, the Ministry of Finance, Government of India has again reviewed the existing limit of Rs. 10,000/-(Rs. Ten Thousand only) prescribed regarding e-payment to Suppliers etc. It has now been decided to lower this threshold limit from Rs. 10,000 to Rs. 5,000 (Rupees Five Thousand only).The last review in this regard was made only in August, 2016.

Accordingly, all the Ministries/Departments of the Government of India have been now directed by the Ministry of Finance to ensure with immediate effect that all payments above Rs. 5000 (Rupees Five Thousand only) to suppliers, contractors, grantee/loanee institutions etc. are made by issue of payment advises only.

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