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Government of India in consultation with RBI decides to issue Sovereign Gold Bond Scheme 2017-18 Series II
Jul 07,2017

Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds 2017-18 Series II. Applications for the bond will be accepted from July 10, 2017 to July 14, 2017. The Bonds will be issued on 28 July 2017. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange. The features of the Bond are given below:

Sl. No.ItemDetails1

Product name

Sovereign Gold Bond 2017-18 Gô Series II



To be issued by Reserve Bank India on behalf of the Government of India.



The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions.



The Bonds will ben++denominated in multiples of gram(s) of gold with a basic unit of 1 gram.



The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.


Minimum size

Minimum permissible investment will be 1 gram of gold.


Maximum limit

The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). A self-declaration to this effect will be obtained.


Joint holder

In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only.


Issue price

Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the week (Monday to Friday) preceding the subscription period.The issue price of the Gold Bonds will be ` 50 per gram less than the nominal value.


Payment option

Payment for the Bonds will be through cash payment (upto a maximum of Rs. 20,000) or demand draft or cheque or electronic banking.


Issuance form

The Gold Bonds will be issued as Government of India Stocks under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.


Redemption price

The redemption price will be in Indian Rupees based on previous weeks (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.


Sales channel

Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.


Interest rate

The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.



Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.


KYC Documentation

Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such asn++Voter ID, Aadhaar card/PAN or TAN /Passport will be required.


Tax treatment

The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond



Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.


SLR eligibility

The Bonds will be eligible for Statutory Liquidity Ratio purposes.



Commission for distribution of the bond shall be paid at the rate of 1% of the total subscription receivedn++ byn++ then++ receiving offices and receiving offices shall share at least 50% of the commission so received with the agents or sub agents for the business procured through them.

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Labour ministry likely to amalgamate and simplify 4 labour course : Bandaru Dattatreya
Jul 07,2017

Union Labour and Employment Minister Mr. Bandaru Dattatreya today said, out of 44 labour laws, we are going to amalgamate, simplify and rationalise into four labour course at an ASSOCHAM event.

The government plans to create 65 million jobs by 2026, said Mr. Bandaru Dattatreya, Minister for Labour and Employment. He further said, the government recognises the importance of skilling the workforce, has allocated Rs. 16,000 crore for skilling.

Mr. Dattatreya further said that Industry should focus more on social security of employees to increase productivity.

Mr Girish Shankar, Secretary, Ministry of Heavy Industries & Public Enterprises said, there is a huge gap, which the auto industry must address to ensure Make in India is really creating and developing in India. The Original Equipment Manufacturer (OEM) need to make substantial investments in engineering R&D for designing and developing in India, so that India graduates to a truly Auto Engineering hub rather than continue to be a place to manufacture to prints only.

We request the auto majors to consider this seriously and fast enough. Also, suggest to us as to how to support this through an appropriate policy framework. We are already working towards this direction, said Mr. Shankar.

Secretary, Ministry of Heavy Industries & Public Enterprises said, Department of heavy industries being the administrative ministry for the automotive industry has onus of leading and steering the policy alignment for the industry to meet the expectations towards Green Mobility in India.

We have finalised the net automotive mission plan (AMP) 2016-2026. AMP 2026 is, as was the case for the previous one, a combined effort of the government of India and the industry to chart a growth path that we jointly seek to achieve. It also seeks to define the trajectory of evolution of the automotive ecosystem in India including the glide path of specific regulations and policies that govern a wide range of parameters that affect the industry.

As an outcome of the AMP 2026 we are planning that the Indian Automotive industry will grow 3.5-4 times in value from its current output of around Rs. 4,64,000 crore in 2015 to about Rs. 16,16,000- 18,89,500 crore by 2026 considering an average GDP growth ranging between 5.8% to 7.5% during the period.

The Auto industry generates demand for the rest of the manufacturing sector. Being the leading sector for overall economic growth, this sector is the driving engine for the Make in India programme, targeting an annual production of RS. 16 to 19 lakh crore in terms of its size and establish itself firmly on the global stage. By 2026 India could stand first in the world in production and sale of small cars two wheelers, three wheelers and buses, third in passenger vehicle and heavy trucks all adding up to 12% of GDP.

Exports of the automotive vehicles which was at the level of Rs 62,500 crores in 2015, is targeted to go up to between Rs. 2,23,300 crores by 2026. Besides it would also be a key player in skill India programme targeting an additional 65 million jobs said Mr. Shankar.

The government of India plans to introduce a new Green Urban Transport Scheme with a central assistance of about Rs. 25,000 crores aimed at boosting the growth of urban transport along low carbon path for substantial reduction in pollution and providing a framework for funding urban mobility projects at National , State and City level with minimum recourse to budgetary allocation support by encouraging innovative financing projects.

Mr R S Kalsi, Chairman, Auto Council ASSOCHAM, thanked the government for being considerate to the needs of industry and cited n++path breaking efforts in highway development, progressive regulations and tax reformsn++ as major positives.

Mr Kalsi assured that the industry was fully committed to n++Greening Indian++ and that the increase in taxation on hybrid cars under GST has n++surprised automobile manufacturers as well as the component industryn++. He drew attention to the National Electric Mobility Mission Plan 2020, and said in response to the governments call, industry had invested in hybrid technologies and was now planning to n++step up investment and bring newer productsn++.

Emphasising the close connection between electric and hybrid technology, Mr Kalsi said key components such as electric motor and lithium ion battery are common to both these clean technologies. Encouraging hybrid technology now, which is relatively less expensive and does not require charging infrastructure, will lead to localization of parts and reduction in cost, thus helping build the eco system for electric mobility in India.

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Direct Tax Collections up to June, 2017 for F.Y. 2017-2018 stood at Rs 1.42 Lakh crore registering a Growth of 14.8%
Jul 07,2017

The provisional figures for Direct Tax collections up to June, 2017 show that net collections are at Rs 1.42 lakh crore which is 14.8% higher than the net collections for the corresponding period of last year. Net direct tax collections represent 14.5% of the total Budget Estimates of direct taxes for FY 2017-18 (Rs 9.8 lakh crore).

While the gross collection under Corporate Income Tax (CIT) grew at 4.8%, the growth under Personal Income Tax (PIT) including Securities Transaction Tax (STT) is 12.9%. However, after adjusting for refunds, the net growth in CIT collections is 22.4% while that in PIT is 8.5%. Refunds amounting to Rs.55,520 crore have been issued during April to June, 2017, which is 5.2% lower than the refunds issued during corresponding period of F.Y. 2016-17.

An amount of Rs. 58,783 crore has been received as Advance Tax up to 30th June, 2017 reflecting a growth of 11.9% over the Advance Tax payments of the corresponding period of last year. The growth in Corporate Advance Tax is at 8.1% and that in Personal Advance Tax is at 40.3%.

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PFRDA is observing NPS Service Fortnight from 27 June to 11 July 2017
Jul 06,2017

With a view to promote and create awareness about the National Pension System (NPS) and improve the quality of services provided to the subscribers, Pension Fund Regulatory and Development Authority (PFRDA) is observing NPS Service Fortnight from 27th June, 2017 to 11th July 2017. During this period all the nodal offices, Pay and Account Offices and DDOs under the Central and State Governments, Points of Presence/ banks/ aggregators/ banking correspondents etc. involved with the acquisition and servicing of NPS subscribers across the country are required to provide all necessary assistance to the subscribers/ prospective subscribers, create awareness about the National Pension System, attend to their services requests, etc in a proactive manner.

It has been observed that the subscribers/employees in the Central Government and State Government are not fully aware of various functionalities/facilities available under the NPS. A large number of the queries/grievances received from these subscribers, pertain to elementary issues like non-receipt of Statement of Transaction, I-PIN,T-PIN etc. However, it is seen that majority of these information gaps are on account of non-availability of the latest contact details of the subscribers in the respective documents/PRANs etc.

In order to promote awareness regarding importance of updation of latest contact details in PRANs and to provide basic facilities on the spot, the NPS Service fortnight is being organised. On this occasion, besides sharing information on the range of functionalities and services now available under the NPS, the subscribers need to be apprised about the need for constant updation of data/information under various fields to enable the system to operate at its optimum service level and enable the subscribers to make the best use of the functionalities available under NPS.

The following activities need to be given focused attention during the NPS Service fortnight:

n++ Distribution of the NPS brochure to the subscribers

n++ Updation of subscriber details like email, mobile number, address, etc through S-2 form

n++ Conversion of non IRA to IRA compliant status by submission of physical subscriber registration forms

n++ Advising subscribers regarding benefits associated with PRAN being IRA compliant and updation of contact details

n++ Printing of Transaction Statement for the subscribers and distributing the same on the specific request of the subscriber

n++ Updation of nomination details

n++ Resolving pending grievances and exit cases

PFRDA has also advised separately the Central Recordkeeping Agency (CRA/NSDL) and all the nodal offices/ PAOs/ DDOs/PoPs/ Banks etc in this matter for actively assisting the subscribers during this campaign.

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Indian service sector ends Q1 with strong expansion: Nikkei India Services PMI
Jul 05,2017

Business conditions in Indias service sector continued to improve in June as a solid and accelerated upturn in new work resulted in a faster increase in activity. Moreover, job creation was maintained at Mays 47-month record pace. Meanwhile, inflationary pressures gathered speed, with both input costs and output charges rising at quicker rates.

Up from 52.2 in May to an eight-month high of 53.1 in June, the seasonally adjusted Nikkei India Services PMI Business Activity Index signalled a solid and accelerated upturn in output across the sector. Additionally, the headline measure averaged 51.8 for the first quarter of the 2017 financial year, the highest quarterly figure since Q2 (FY) 2016.

In contrast to the trend for services, manufacturing lost growth momentum in June, with the upturn in production moderating for the third month in a row to the weakest since February. Across the private sector as a whole, however, the upward trend in the rate of expansion for activity was sustained. The seasonally adjusted Nikkei India Composite PMI Output Index rose from 52.5 in May to an eight-month high of 52.7.

Boosting growth of services activity in June was a solid and stronger upswing in inflows of new business. According to survey participants, improved demand conditions and marketing efforts enabled them to secure new work. Factory orders also rose, but to the least extent in four months.

Greater workplace activity encouraged some services companies to recruit more staff. Employment across the sector as whole rose modestly, but at a rate that equalled Mays near four-year peak. By comparison, manufacturing jobs increased fractionally.

Amid reports of higher prices paid for food and fuel, average cost burdens at services firms increased further in June. The rate of inflation picked up to a three-month high, but remained below its long-run average and was only slight. Concurrently, purchase costs faced by manufacturers rose at the slowest rate since last August.

Service providers signalled higher selling prices (on average) in June. The rate of charge inflation was the joint-quickest in one year, on par with that seen in February, though marginal overall. In many cases, survey members reported the pass through of greater cost burdens to clients. Factory gate charges were also raised at a quicker, though marginal, pace.

Reflecting difficulties in obtaining payments from clients, outstanding business at service providers continued to rise. Nevertheless, the rate of backlog accumulation softened to the slowest in the current 13-month sequence of expansion. A weaker increase in work-in-progress was similarly noted at goods producers.

Output is expected by services firms to remain on an upward trajectory in the coming 12 months. Optimism was attributed by panellists to better market conditions, the introduction of the goods & services tax and promotional activities. However, the level of positive sentiment fell to a four-month low. Likewise, confidence among manufacturers dipped in the current reporting period.

Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at IHS Markit, and author of the report said, Junes results for services sounded a more upbeat tone than those from its sister PMI survey, which showed a slowdown in manufacturing. Growth of service sector activity and inflows of new business picked up as better demand conditions and marketing efforts bore fruit.

With services being the prevalent sector in India, the fainter rise in manufacturing was more than offset and growth of private sector output climbed to an eight-month peak. Whats more, Junes figure contributed to the highest quarterly average for the composite PMI (52.2) since Q2 (FY) 2016. This suggests that GDP growth is likely to rebound from the sharp slowdown noted in the first three months of 2017.

Nonetheless, the falls in confidence levels highlight no easy walk to stronger economic prosperity. Optimism weakened at goods producers and service providers alike, hampered by concerns among some firms that the goods & services tax could harm consumer demand, with competitive pressures also seen as a threat to the outlook.

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India spends miniscule amount on cyber security: ASSOCHAM-PwC study
Jul 05,2017

Despite the growing threat, Indias budgetary allocation towards cyber security was about Rs 42.2 crore in 2012-13, up 19 per cent from Rs 35.45 crore in 2010-11 whereas US spend $658 million through department of homeland security and $93 million through US-CERT in 2013, according to the joint study brought out by ASSOCHAM and PwC.

A joint study undertaken by PwC and ASSOCHAM reveals that the attacks on Indian websites have increased nearly five times in the past four years. With the rise of technology in the financial infrastructure ecosystem came a greater flow of funds.

In coming years, private companies will matter greatly in Indias critical infrastructure as they control more and more assets in telecom, transport, energy, and banking and finance.

Demonetisation has given an impetus to e-wallet services. Mobile wallets have witnessed a massive rise in app downloads. The result has been that leading mobile wallets have witnessed growth of upwards of 100% in app download numbers and have similarly seen an increase of upwards of 400% increase in wallet recharges, noted the joint study.

Globally, most countries are facing a shortage of professionals with the expertise, training and motivation needed to deal with cybercriminals, and India is no exception. What we urgently need is serious effort in capacity building and setting up high-end cyber labs that are capable of critically inspecting every IT component before these are deployed in critical infrastructure across industry sectors. There is an ever-growing threat to the economy, financial sector, key government departments and infrastructure set-up, which in turn leaves internal security at risk, said Mr. D S Rawat, Secretary General ASSOCHAM.

Moreover, cyberthreats will only rise as India is seeing a shift towards a cashless economy. The types of cyber security incidents such as phishing, scanning, website intrusions and defacements, virus code and denial of service attacks will continue to grow, adds the study.

The number of incidents occurring in banking systems has increased in the last five years. In the month of October 2016, an ATM card hack hit Indian banks, affecting around 3.2 million debit cards. Hence, efforts are needed to enhance cyber security as businesses and citizens embrace this new digital wave.

Securing the hyper-interfaced environment, each ecosystem player will need to create multiple application programing interfaces (APIs). While this will deliver a seamless experience to customer, there is also a risk of malware injection through such APIs. With faster proliferation of interfaces, protecting APIs will become critical to ensure malware and persistent threats do not propagate through such untrusted/ untested APIs.

Any threat that impacts such a user can potentially proliferate and bring the entire financial services ecosystem to a standstill. As the ecosystem continues to be interconnected and overlapping, cybercriminals will try to exploit possible lapses and, hence, strategies need to be built to deal with such eventualities. Given this interdependence on the all the players of the financial ecosystem, it becomes crucial to identify any anomaly at a pace which mirrors real time or near real time. Once an anomaly is identified, containing it is of paramount importance before it spreads and crosses a point where the damages have transcended organisational boundaries and services.

Stakeholders, including third-party vendors, who are responsible for managing the networks and infrastructure have limited understanding with respect to security risks and vulnerabilities associated with OT and CT systems.

While IT systems are monitored heavily for security purposes, monitoring of OT and CT systems is limited to process efficiency and performance. Hence, logs and events are not collected and correlated.

Specific crisis management or incident response for OT and CT systems is different from that for traditional It system. Security plans specific to OT and CT are missing, thus increasing the potential impact of the incident.

ASSOCHAM paper said that by identifying cyber security flaws and issues, decision makers will be better placed to implement appropriate security controls, design additional secure architectures, monitor targeted attacks and maintain effective cyber resilience for their IT, OT and CT networks.

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PMGSY registers significant success in the first quarter of 2016-17
Jul 05,2017

Pradhan Mantri Gram Sadak Yojana (PMGSY) is being implemented across the country, particularly, in States having historical deficit of rural roads (Assam, West Bengal, Odisha, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Rajasthan, Himachal Pradesh, J&K and Utttrakhand ) as never before. The pace of construction of PMGSY roads reached a 7 year high of 130 kms per day in 2016-17 as against an average of 73 kms during the period 2011 to 2014. In the present financial year 2017-18, the target is to construct 57,000 kms of PMGSY roads, at an average per day rate of 156 kms and to provide connectivity to 16,600 eligible habitations.

In the first quarter of the present financial year 2017-18 (April-June, 2017), a total of 10,556 kms of PMGSY roads have been constructed, clocking an average of 117.28 kms per day. This compares very favorably to the first quarter of 2016-17 (April-June, 2016), when a total length of 8,756 kms was constructed at an average of 97.29 kms per day. The progress in terms of length constructed in the present financial year is 18.51% of the total annual target. The present rate of construction would further accelerate from October, 2017 to March, 2018. Hence, there is every reason to believe that the annual targets will be met with a strong probability of achievement exceeding the targets.

Against an annual target of providing connectivity to 16,600 eligible habitations, in the first quarter of the financial year 2017-18, 2,543 habitations have been provided connectivity, which is 15.31% of the annual target.

PMGSY aims to connect 1,78,184 eligible habitations across the country out of which projects relating to 1,61,576 habitations have already been sanctioned (90.67% of the eligible habitations) and 1,29,004 habitations have been connected till June, 2017 (72.39% of eligible habitations and 79.84% of sanctioned habitations), by constructing a total of 5,12,031 kms of roads.

PMGSY has also focused on use of non-conventional construction materials (waste plastic, cold mix, fly ash, jute and coir geo-textiles, iron and copper slag, cell filled concrete, paneled cement concrete etc.) and n++Green Technologiesn++ in PMGSY roads. The target for use of such materials and technologies during 2017-18 is 10,082 kms. Against this target, in the first quarter of the financial year till June, 2018, 1,235.22 kms have been constructed. The States which are doing particularly well in this field are Rajasthan (381 kms), Punjab (181 kms), Odisha (131.38 kms), Madhya Pradesh (116.07 kms) and Tamil Nadu (102 kms).

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All cities of MP, Maharashtra, Chattisgarh, Jharkhand, Kerala, Telangana to become ODF by October
Jul 05,2017

All the 1,137 statutory cities and towns in six States of Madhya Pradesh, Maharashtra, Chattisgarh, Jharkhand, Kerala and Telangana are set to be declared Open Defecation Free (ODF) by October 2 this year marking the completion of three years of Swachh Bharat Mission (Urban). This is based on the regular reports being received from States/UTs.

With Andhra Pradesh, Gujarat and Chandigarh having already declared all the 281 cities and towns under their jurisdiction ODF, a total of 1,418 cities and towns would become ODF by this October, two years ahead of the mission deadline of October 2, 2019. These nine States account for 39% of the total 4,041 mission cities.

This was revealed during the review of progress of Swachh Bharat Mission (Urban) by Shri D.S.Mishra, Secretary(Urban Development).

The number of mission cities in Maharashtra are 384, followed by Madhya Pradesh -378, Chattisgarh-168, Kerala-93, Telangana -73 and Jharkhand-41.

Gujarat had already declared all 170 cities and towns ODF while Andhra Pradesh had done so in respect of 110. Chandigarh is the only UT to have become ODF.

The six states set to become in urban areas have a total target of construction of 22,44,003 Individual Household Targets while Gujarat, Andhra Pradesh and Chandigarh have constructed 9,51,177 such toilets. These nine States/UT account for a total of 31,95,180 toilets which comes to 49% of the total mission target of construction of 65,82,451 toilets.

In Madhya Pradesh, Jharkhand and Sikkim, the toilets constructed so far and under construction comes to 100% of mission target, followed by Uttarakhand-92%, Maharashtra-91%, Puducherry, Chattisgarh-89%, Tamil Nadu-85%, Telangana-81%, Kerala-77%, Karnataka-74%, Punjab-68%, Andaman & Nicobar Islands-67%, Bihar-63%, Rajasthan-61%, Uttar Pradesh-49% and Haryana-46%.

Shri Mishra asked the concerned officials to pursue with the States/UTs lagging behind which include Goa, West Bengal, Himachal Pradesh, Odisha, Jammu & Kashmir and North-Eastern States and UTs for speeding up construction of toilets which are necessary for becoming ODF. He also stressed on the need to focus attention on Solid Waste Management projects to ensure total processing of municipal solid waste by October, 2019.

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GST to bring cheer for domestic electronic components manufacturers: Study
Jul 05,2017

Implementation of goods and services tax (GST) will bring innumerable benefits for domestic manufacturers of electronic components as cost of manufacturing will be significantly brought down, noted a recent ASSOCHAM-NEC joint study.

n++The local manufacturers will be able to pass on the tax benefit to consumers in the form of price reduction,n++ said the report titled, Electricals & Electronics Manufacturing in India, jointly conducted by ASSOCHAM and NEC Technologies.

The study also observed that with the implementation of GST, multiple taxes and cascading effects of taxes will be eliminated.

Along with these benefits, firms will also be saving expenses incurred in warehousing and logistics which stood at approximately 5-8 per cent.

n++The lower taxes, simplified tax structure and technology empowered tax compliance system will provide an ideal ecosystem to improve the current situation of electronics manufacturing in India,n++ said the study.

It also added that, GST will give a major boost to the Indian electronics industry thereby, leading to subsequent increase in demand of locally manufactured electronics.

n++With the implementation of GST, the electronics manufacturers will reap in significant cost savings in warehousing and logistics,n++ said the ASSOCHAM-NEC study.

Further, the report noted that even the demonetisation move of the government gave a boost to electronic payment devices with value of transactions getting almost doubled.

Besides, it is also certain to bring about innovations in electronic payment industry thereby leading to increase in number of point of sale (PoS) and mPoS (mobile point of sale) devices.

n++Post demonetization, government has been promoting digital payments by introducing e-payments platforms such as BHIM, Bharat QR. All of these platforms will generate more demand for mobile phone,n++ the report said.

The ASSOCHAM-NEC study recommended that for India to become a robust manufacturing hub, it should focus on building capabilities across the value chain by reducing component imports and increasing local value addition.

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Record inflation augurs perfectly well for GST launch: ASSOCHAM
Jul 04,2017

With retail prices growing by the slowest pace in the last four years by mere 2.18 per cent, it is the perfect time for the launch of the Goods and Services Tax (GST), from inflation point of view, as this particular macro fundamental is placed at an ideal position for the roll out of the countrys most ambitious tax reform, the ASSOCHAM has said.

n++The retail inflation, measured by the Consumer Price Index (CPI) was at a four year low of 2.18 per cent in May, 2017. Likewise, the Whole Price Index measured inflation was mere 2.17 per cent for the latest month, providing an ideal platform for the GST. With Monsoon showing a good spell in its initial phase, the prices should further ease for a large number of items. While the weighted average of net tax incidence would be lower post-GST, consumer prices in any case have seen a drastic fall in the last one year from 5.76 per cent in May 2016 to the 2.18 per cent in May this year. For consumer food prices, the drop in inflation on CPI scale has been even sharper from 7.47 per cent to 1.05 per year -on-yearn++, ASSOCHAM Secretary General Mr D S Rawat said.

Thus, ASSOCHAM said while the GST may face some initial hiccups, the broad and the most important macro matrix is n++perfectly placedn++. n++So, even if there is some increase in some of the items because of shuffling of tax incidence, abundant supply side would ensure prices ruling easyn++.

There are several consumer related items which are witnessing a subdued inflation between 1-3 per cent and the situation is not going to change in any significant way in the months to come. n++So, it all boils down to implementation. If we can make it smooth, hand holding the traders and increasing awareness at the consumer end, the dramatic shift in Indias taxation should be a happy experience for the industry, trade and consumern++.

Even the global crude oil prices are trading below USD 50 per barrel and the outlook does not seem to be that of an upturn, thus helping Indias macro picture , that should aid the GST roll out without any price pressure on the consumers.

n++Besides, in the backdrop of subdued consumer demand, there is no reason for the industry not to pass on any benefit accruing from the GST. The top priority for the industry today is to step up its capacity utilization by increasing production, helped by consumer demand. The current situation, in any case, does not support any extra gains to the producers, who would like to see the volume increase. Any incidence of tax cut should only help the demand and volume growthn++, the chamber said.

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Ministry of Railways sanctioned New BG line between Jeypore & Navarangpur in Odisha
Jul 04,2017

As per the announcement of Budget 2016-17, Ministry of Railways sanctioned New BG line between Jeypore & Navarangpur  in Odisha. The length of the new BG line is 38 Kms. The cost of the project is 747.91 Crores. The project will be completed in 3 years. The project shall be implemented on Cost-sharing basis (50% by Ministry of Railways under GBS and 50% by State Govt. of Odisha)

The Project is important for connecting Navarangpur District of Western Odisha, with Jeypore, an existing Station on Kottavalasa- Kirandul line. This line will provide connectivity to important towns viz. Koraput, Jeypore, Jagdalpur, Dantewada. Further, the line is useful for connecting Navarangpur to Junagarh/Kalahandi District and result in short lead to many other places of Odisha, Chhattisgarh & Andhra Pradesh.

Further,  State Govt. of Odisha will be bearing entire cost of land and 50%   of the construction cost of the project.

The salient features of new BG line is as under:

Construction of New Broad Gauge Railway Line between Jeypore & Navarangpur (38 Km)

Name of the Project

New B.G. Railway Line between Jeypore & Navarangpur.


38 Km


Rs 747.91 Crores.

Completion Cost

Rs 791.47 crore

Completion Period

3 years

Mode of funding

Cost-sharing basis (50% by Ministry of Railways under GBS and 50% by State Govt. of Odisha)

States/Districts served

Odisha / Koraput and Navarangpur


The Project is important for connecting Navarangpur District of Western Odisha, with Jeypore, an existing Station on Kottavalasa- Kirandul line. This line will provide connectivity to important towns viz. Koraput, Jeypore, Jagdalpur, Dantewada. Further, the line is useful for connecting Navarangpur to Junagarh/Kalahanidi District and result in short lead to many other places of Odisha, Chhattisgarh & Andhra Pradesh.

Further,  State Govt. of Odisha will be bearing entire cost of land and 50%  of the construction cost of the project.


Once implemented, this important rail line will connect Navarangpur District of Western Odisha, not connected with railway line, with Jeypore, the existing station on Kottavalasa- Kirandul line, thus connecting other important towns viz. Koraput, Jeypore, Jagdalpur, Dantewada.  This line will also connect Navarangpur with Junagarh/Kalahandi District and result in short lead to many other places of Odisha, Chhattisgarh & Andhra Pradesh.  Besides freight  traffic viz. Maize, Rice, fertilizer, cement, wheat, POL etc. is expected from various villages en-route.

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Assistive devices and rehabilitation aids for physically challenged persons have been kept at the concessional 5% GST rate
Jul 04,2017

Assistive devices and rehabilitation aids for physically challenged persons, listed below, have been kept at the concessional 5% GST rate:

1) Braille writers and braille writing instruments;

2) Handwriting equipment like Braille Frames, Slates, Writing Guides, Script Writing Guides, Styli, Braille Erasers

3) Canes, Electronic aids like the Sonic Guide;

4) Optical, Environmental Sensors;

5) Arithmetic aids like the Taylor Frame (arithmetic and algebra types), Cubarythm, Speaking or Braille calculator;

6) Geometrical aids like Combined Graph and Mathematical Demonstration Board, Braille Protractors, Scales, Compasses and Spar Wheels;

7) Electronic measuring equipment such as Calipers, Micrometers, Comparators, Gauges, Gauge Block Levels, Rules, Rulers and Yardsticks

8) Drafting, Drawing Aids, Tactile Displays;

9) Specially adapted Clocks and Watches;

10) Orthopaedic appliances falling under heading No.90.21 of the First Schedule;

11) Wheel Chairs falling under heading No.87.13 of the First Schedule;

12) Artificial electronic larynx and spares thereof;

13) Artificial electronic ear (Cochlear implant);

14) Talking books (in the form of cassettes, discs or other sound reproductions) and large-print books, braille embossers, talking calculators, talking thermometers;

15) Equipment for the mechanical or the computerized production of braille and recorded material such as braille computer terminals and displays, electronic braille, transfer and pressing machines and stereo typing machines;

16) Braille Paper;

17) All tangible appliances including articles, instruments, apparatus, specially designed for use by the blind;

18) Aids for improving mobility of the blind such as electronic orientation and obstacle detecting appliance and white canes;

19) Technical aids for education, rehabilitation, vocational training and employment of the blind such as Braille typewriters, braille watches, teaching and learning aids, games and other instruments and vocational aids specifically adapted for use of the blind;

20) Assistive listening devices, audiometers;

21) External catheters, special jelly cushions to prevent bed sores, stair lift, urine collection bags;

22) Instruments and implants for severely physically handicapped patients and joints replacement and spinal instruments and implants including bone cement.

Most of the inputs and raw materials for manufacture of these assistive devices/equipments attract 18% GST. The concessional 5% GST rate on these devices/equipments would enable their domestic manufacturers to avail Input Tax Credit of GST paid on their inputs and raw materials. Further, the GST law provides for refund of accumulated Input Tax Credit, in cases, where the GST rate of output supply is lower than the GST rate on inputs used for their manufacture. Therefore, 5% GST rate on these devices/equipments would enable their domestic manufacturers to claim refund of any accumulated Input Tax Credit. That being so, the 5% concessional GST rate on these devices/equipment would result in reduction of the cost of domestically manufactured goods, as compared to the pre-GST regime.

As against that, if these devices/equipments are exempted from GST, then while imports of such devices/equipments would be zero rated, domestically manufactured such devices/equipments will continue to bear the burden of input taxes, increasing their cost and resulting in negative protection for the domestic value addition.

In fact, the 5% concessional GST rate on such devices/equipments will result in a win-win situation for both the users of such devices, the disabled persons, as well as the domestic manufacturers of such goods. It is for this reason that the Council has kept these items in 5% rate slab.

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Moodys revises outlook for banks in Asia Pacific to stable from negative
Jul 04,2017

Moodys Investors Service has revised to stable from negative its outlook for banks in Asia Pacific as banking risks in the region are stabilizing due to stable or improved operating conditions.

Asset quality is stabilizing in most banking systems, as the negative credit cycle in many of these systems has proven to be shallow with a moderate economic upturn now evident in APAC, while commodities prices are relatively stable, says Stephen Long, Moodys Managing Director for Financial Institutions in the region.

The industry outlook indicates the rating agencys forward-looking assessment of fundamental credit conditions that will affect the creditworthiness of the banking industry over the next 12-18 months.

A total of 77% of bank rating outlooks in APAC are now stable, up from 64% at end-2016, while banks in China, Hong Kong, Singapore, Australia, New Zealand and Mongolia are mostly behind the increase in stable outlooks, following rating downgrades in some cases, adds Long.

Moodys further believes that commodity-related problem loans have mostly peaked and the rating agencys expectation of relatively stable energy and other commodity prices in 2017 should support bank asset quality in this segment.

Moreover, capitalization and profitability show good levels against risk, while capital buffers are generally higher due to moderating growth in risk weighted assets and more stringent regulatory requirements. Profitability will recover in many markets because of lower credit costs and stable to higher net interest margins.

Funding and liquidity will also remain a credit strength, and most APAC banks are mostly deposit funded with a moderate reliance on wholesale sources -- with the exception of Australia, New Zealand and Mongolia -- and liquid balance sheets.

Foreign capital flows are also returning to emerging Asia, although the risk of reversal remains due to market uncertainty around US interest rates and US dollar strengthening, Chinas re-balancing, potential policy changes in key economies, and global/regional political issues.

In terms of long-term risks, corporate and household leverage remain elevated in parts of APAC, but the build-up has slowed, supporting the banks asset quality. Furthermore, property prices are rising in many economies, amplifying bank credit risks in the case of a major market correction.

Latent property-related risks are more pronounced in Australia, China, Hong Kong, New Zealand, Malaysia and India, based on property price appreciation, the banks exposure level, or both.

Moodys expects that the trend for government support will be stable for the majority of APAC banking systems. This is because regulators are not keen to embrace wider bail-in measures and early public support remains the preferred way to prevent banking stress in most systems. The exception rather than the rule is Hong Kong, which is moving closer to an operational resolution regime and will likely implement one in 2017, and this situation could lead to a lower level of government support uplift for some banks.

The banking systems where Moodys has coverage in Asia Pacific include, with the advanced economies, Australia, Hong Kong, Singapore, Japan, New Zealand, Korea and Taiwan. In the case of the emerging and developing economies, they include China, Bangladesh, India, Indonesia, Malaysia, Mongolia, Thailand, the Philippines, Sri Lanka and Vietnam.

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Mine Developer & Operator Appointments - A Large Growth Opportunity for EPC Players
Jul 04,2017

The mine developer and operator (MDO) route presents a large growth opportunity for domestic engineering, procurement and construction (EPC) players with a demonstrated relevant track record, subject to attractive mine economics, says India Ratings and Research (Ind-Ra).

The credit profile of the appointed MDOs during the mine development phase is perceived to be risky, owing to high capex and negative free cash flow. The credit profile is likely to improve gradually over the mine operating period as the cash flows are negative to low till the annual production reaches the peak production capacity, and thereafter turn positive. Given the high capex during the development phase, it becomes extremely important for the operator to achieve the envisaged strip ratio and/or operational efficiencies to recover the capex along with a reasonable return.

As of May 2017, one out of the four MDOs appointed by central and state power utilities in the last 21 months has commenced mining operations and another two are likely to commence operations in FY18. The remaining MDO will commence mine development in FY19. The slow pace of appointment is attributed to the delay in securing requisite clearances and collection of techno-commercial data by the awarding authority for inviting prospective bids. Nevertheless, 14 captive coal mines owned by central and state power utilities with geological reserves of 6.8 billion metric tonnes are under various stages of bid invitation and evaluation while techno-commercial bids for 19 mines with geological reserves of 9.3 billion metric tonnes are in the pipeline.

MDO is a specialised operating leverage play and attracts limited competition, given the risks and reward involved. MDO projects offer multi-year revenue visibility which strengthens the overall order book and imparts diversification benefits to the appointed EPC players. Successful operations require robust mine designing and engineering capabilities as well as the financial strength to sustain viable operations over the long haul.

MDOs need to make significant upfront capex in equipment and infrastructure during the mine development phase, followed by recurring replacement capex for machinery every five years during the mine operation phase based on asset usage. The overall investment outlay is in the range of 8%-10% of project revenues over the MDO tenure. After the commencement of mining operations, it generally takes two to five years for the mine to achieve peak production capacity and EBITDA margins of 25%-30%. Return ratios are likely to be moderate in the range of 11%-14% over the operating period, owing to high capital intensity. The ability of an MDO to maintain the scheduled production timelines; maintain, or operate below, the stipulated strip ratio; and keep asset utilisation at the optimum level are key monitorables.

Ind-Ra expects EPC contractors with an experience of excavating more than three million metric tonne per annum of mineral or overburden in mining belts, moderate free cash flow, low leverage translating into high financial flexibility to be the strong contenders for MDO appointment. However, given the amount of investment and length of the gestation period involved in mine development, most moderately leveraged private contractors can only operate two mines under development phase at the most to maintain their credit profile in a comfortable range.

Despite the promising benefits, MDO projects are fraught with operational challenges with respect to delay or inability to achieve the peak production capacity, risk of an increase in strip ratio, variability in off-take, challenges in incremental land acquisition and conflicts from inhabitants. These impediments can spiral costs and weaken the financial metrics of appointed contractors.

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Ind-Ra: Affordable Housing Finance- INR6 Trillion Opportunity
Jul 04,2017

Affordable housing finance (largely for loan ticket size up to INR1.5 million) will become a large segment for housing finance companies (HFCs) in the next five years, with the estimated share to increase to around 37% in FY22 (FY17: 26%) says India Ratings and Research (Ind-Ra). The accelerated urbanisation on account of fast economic growth over the last decade and a half has created massive need for affordable housing.

Multiple tailwinds underpinning growth of the sector: The agency anticipates a demand for 25 million homes (4x of the entire current housing finance stock) over FY17-FY22 in the Medium Income Group (MIG) and Lower Income Group (LIG) categories. A combination of factors such as: 1) government financial and policy thrust, 2) regulatory support, 3) rising urbanisation, 4) increasing nuclearisation of families, and 5) increasing affordability is converting latent demand into a commercially lucrative business opportunity. Ind-Ra expects the sector to attract over INR200 billion of equity inflows over FY17-FY22 which would support growth.

Built-for-scale models required to compete with entrenched incumbents: Ind-Ras analysis reveals that on operating cost metrics, the new entrants with their pan-India ambitions would need to build scale quickly to compete with the incumbents whose regional-focussed models have helped maintain tight opex ratios in addition to their funding cost advantage. This entails building up the book at a rapid pace and hence will lead to high proportion of unseasoned portfolio at any point in time. To offset this it would necessitate having the right people with adequate skill-set (who have seen various cycles and scale) and the right processes (building a scalable credit funnel and robust underwriting platform) while getting the pricing (risk and opex adjusted spreads) right. These would be the key differentiators for the new age HFCs. Informal credit assessment remains the crux for the segment, and hence reasonable assessment of instalment paying ability while keeping sufficient margin for income volatality over lifecycle would be of prime importance.

Key risks and possible mitigants: Aggressive expansion without ensuring appropriate credit assessment could be a risk for the segment especially in view of limited financial data available and possibly less financial savvy customer segment. Also, the segment requires high customer connect, therefore, attracting and retaining people with on ground connect would be of prime importance. HFCs would need to build a sense of ownership, as well as develop a right incentive structure to manage this risk. Operationally, managing liquidity, mainly in view of long tenure nature of assets would be key consideration. Ind-Ra expects a prudent asset liability tenure management by HFCs.

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