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Cabinet approves signing of the Definitive Agreement on Oil Storage and Management between ISPRL and ADNOC of UAE
Mar 07,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval for signing of the Definitive Agreement on Oil Storage and Management between Indian Strategic Petroleum Reserve (ISPRL) and Abu Dhabi National Oil Company (ADNOC) of UAE.

According to the Agreement, the ADNOC will fill up 0.81 MMT or 5,860,000 million barrels of crude oil at ISPRL storage facility at Mangalore, Karnataka.

Out of the crude stored, some part will be used for commercial purpose of ADNOC, while a major part will be purely for strategic purposes. The signing of the Agreement will augment Indias energy security.

India and UAE are strategic partners. The investment by ADNOC is a major investment from UAE under the High Level Task Force on Investment (HLTFI) and the first investment by UAE in India in the energy sector.  

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Cabinet approves Cadre Review of Central Engineering Service (Roads) Group n++ of the Ministry of Road Transport and Highways
Mar 07,2017

Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Cadre Review of Central Engineering Service(CES)(Roads) of the Ministry of Road Transport and Highways. The proposal will be implemented immediately.

CES(Roads) Cadre strength will be revised as under:-

(i) Increase the number of posts of CES(Roads) at:

a. HAG level- 02

b. SAG level- 05

c. JTS level- 36

(ii) Decrease in the number of posts at the STS level - 28

(iii) Recruitment against 86 posts as Special Reserve at entry level (JTS) for Deputation purpose only outside the cadre strength in addition to the normal vacancies arise in the JTS level in the cadre

The CES(Roads) Cadre was constituted in the year 1959. The first allocation of Group A Technical post was fixed at 189 in 1976. The last Cadre review of the service was carried out in the year 1987.

Vacant posts of Mechanical Cadre will be utilized for filling up the same by Civil Engineers thereby merging the Mechanical Cadre with the Civil Cadre in a phased manner so that this shall not have any adverse impact on the present incumbents.

There is an additional expenditure of Rs. 1.8 crores per annum approximately involved in the above Cadre Review proposal. As regards the special reserve for deputation, there will be no financial liability.

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Cabinet approves MoU between India and the United Nations Entity of Gender Equality and Empowerment of Women (UN-Women)
Mar 07,2017

Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the signing of Memorandum of Understanding (MoU) between India and the United Nations Entity of Gender Equality and the Empowerment of Women (UN-Women).

The proposal seeks to provide technical support to the Ministry of Panchayati Raj in strengthening capacities of governance institutions including Panchayati Raj Institutions(PRIs) to better leverage opportunities created for gender equality through legislation, policies and programmes.

Ministry of Panchayati Raj (MoPR) and UN-Women have worked in collaboration with each other to promote participation of women in Panchayati Raj Institutions (PRIs), to focus on building capacities of Elected Women Representatives to empower them and enhance their effectiveness. Given the past gains, the two parties will now work together towards participatory design of governance processes and effective implementation of laws, policies and programmes to promote gender responsive governance. The parties agree that engendering the initiatives of MoPR, including capacity development efforts, will be of mutual benefit, and will further their shared mission of good governance, gender equality and womens empowerment. In the long run, it will enable an improvement in the status of rural women in India, as well as contribute to meeting Indias commitment to the Convention to Eliminate All Forms of Discrimination Against Women (CEDAW), the Beijing Platform for Action and the Sustainable Development Goals.

The proposed MoU will facilitate the achievement of time-bound results in the implementation of specific activities identified jointly by MoPR and UN Women within the broader framework for cooperation under the United Nations Development Assistance Framework ((UNDAF). This MoU would thus facilitate operationalizing this important partnership.

Activities under this MoU will be implemented at the district and sub-district level in six States i.e. Andhra Pradesh, Telengana, Odisha, Karnataka, Rajasthan and Madhya Pradesh.

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Cabinet gives ex-post facto approval to the MoU between India and the United Arab Emirates in the field of providing Energy Efficiency Services
Mar 07,2017

Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval to the Memorandum of Understanding (MoU) between the National Productivity Council, an autonomous body under the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, and Al Etihad Energy Services UAE, to provide various services in the field of energy management and conservation.

Under the MoU, the NPC will provide the following services:

1. Energy Assessment Services

2. Training & Certification of Energy Auditors

3. Demand Side Management.

Meanwhile, Al Etihad ES will provide the following services to all the relevant projects on a case by case basis:

i) Customer Support with UAE Government and Private owned organizations in the United Arab Emirates

ii) All local support for Field Auditing Professionals in the UAE

iii) All local support for Training & Certification of Energy Auditors in UAE

iv) All support related to Demand Side Management of industries based in UAE

The MoU will enable NPC avail high value opportunities such as energy building and develop institutional mechanism in area of energy efficiency in Dubai and other Gulf Cooperation Council, (GCC) member countries. It will provide recognition and exposure to further build NPCs capacities and competencies in rapidly changing international business scenario. MoU will be a precedent for engagements with other International collaboration partners and will enhance NPCs visibility in arena. The MoU will help promote NPC in GCC member countries and will generate business for NPC in the area of energy.

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The Insolvency and Bankruptcy Board of India (IBBI) recognises two Insolvency Professional Entities (IPEs) under the Insolvency and Bankruptcy Code, 2
Mar 06,2017

The Insolvency and Bankruptcy Board of India (IBBI) has recently recognised two Insolvency Professional Entities (IPEs) as under: S. NoName of IPEConstitutionAddress

1

IRR Insolvency Professionals Private Limited

Limited Company

D-55, Defence Colony, New Delhi - 110024

2

AAA Insolvency Professionals LLP

Limited Liability Partnership

E-10A, Lower Ground Floor, Kailash Colony, New Delhi -110048

A limited liability partnership, a registered partnership firm or a company may be recognised by the IBBI as an IPE if (a) a majority of the partners of the limited liability partnership or registered partnership firm are registered as insolvency professionals (IPs); or (b) a majority of the whole-time directors of the company are registered as insolvency professionals, as the case may be. An IPE is jointly and severally liable for all acts or omissions of its partners or directors as IPs committed during such partnership or directorship.

The Insolvency Professionals (IPs) are registered and regulated by the IBBI. They have a critical role in transactions under the Insolvency and Bankruptcy Code, 2016 (Code). The Code and regulations made there under provide for strengthening their capacity on a continuous basis. For example, the Insolvency Professional Agencies (IPAs) are obliged to promote continuous professional development of professional members enrolled with them. Similarly, the IPs have been enabled to engage other professionals as may be necessary and to use organisational resources of an IPE of which he is a partner or whole time director, as the case may be, for servicing the transactions.

The Insolvency and Bankruptcy Code, 2016 is considered as the biggest economic reform next only to GST. It offers a market determined, time bound mechanism for orderly resolution of insolvency, wherever possible, and orderly exit, wherever required. The Code envisages an ecosystem comprising National Company Law Appellate Tribunal (NCLAT), National Company Law Tribunal (NCLT), Debt Recovery Appellate Tribunal (DRAT), Debt Recovery Tribunal (DRT), Insolvency and Bankruptcy Board of India (Board), Information Utilities (IUs), Insolvency Professionals (IPs), Insolvency Professional Agencies (IPAs) and Insolvency Professional Entities (IPEs) for implementation of the Code. With concerted efforts of all concerned, there has been considerable progress in terms of putting in place some of the key elements of the ecosystem and also operationalisation of provisions relating to corporate insolvency resolution and liquidation. The debtors and creditors alike have commenced transactions under the Code.

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Govt. & industry should work towards sustainable development of commodity futures market: C.R. Chaudhary
Mar 06,2017

The Government together with industry should work towards protecting the rights of all stakeholders viz., producer, consumer and traders operating in the commodity futures market, Union Minister of State for Consumer Affairs, Food and Public Distribution, Mr C.R. Chaudhary said at an ASSOCHAM event.

n++We need to strike a balance between producer, consumer and trader for sustainable growth and development of commodity futures market in the long run,n++ said Mr Chaudhary.

n++Traders will grow when they deal fairly with consumers and producers, while the producers will become self-sufficient and satisfied if they get their return together with cost of production and labour and the consumers want things to be made available at affordable prices,n++ said the Union Minister of State.

n++In future trading, sometimes speculators play a major role in fixing and jacking up prices by making promises to purchase small quantity at very high prices,n++ he lamented.

Recalling the crisis in futures trade of guargum, the Minister said, n++About 3-4 years ago, some party just increased the prices that reached Rs 30,000 per quintal thereby making it equivalent to gold, I could never imagine that guar could be sold at more than Rs 3,000 per quintal but it was due to gamble of certain speculators and today no one is buying guar at Rs 2,500 per quintal.n++

He said that though farmers often complaint to him about drastic decline in prices of commodities. n++I told them that you too are responsible for the same to some extent as if there is a jump in prices of a particular commodity owing to some reason or the other, you start producing only the same like in the case of onion.n++

The Minister also said that excess production also considerably reduces the prices of the produce and even traders are also not able to make much profits.

n++As such we have to make some arrangements, like the government has to think on setting up cold storages near production hubs of perishable commodities so they can be stored and sold at an apt price,n++ said Mr Chaudhary.

n++Besides, there is also a need to simultaneously develop processing centres for the producer and trader to realise the right cost,n++ he added.

He also said that the industry should chalk out all the rules, regulations, policies that are hindering the growth of commodity futures market and carry out discussions thereby also considering each from the perspective of producer, consumer and trader.

He assured that his ministry would take up the industrys specific suggestions and demands about how to make commodity futures market more sustainable with concerned government authorities.

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FY18 Fertiliser Outlook: Debt-Funded Capex to Offset Benefits of Working Capital Improvements
Mar 06,2017

India Ratings and Research (Ind-Ra) has maintained a stable outlook for the fertiliser industry for FY18. The agency expects lower dependence on government subsidies, due to lower international prices of raw materials and finished products, to be a positive driver for the sector in FY18. Additional debt to fund capacity upgrade and expansion projects would be a key negative driver. A combination of lower dependence on government subsidies, which will lead to lower working capital debt, and higher term debt for capex is likely to result in stable debt levels across the sector. Moreover, the agency expects EBITDA levels of fertiliser companies to sustain at the FY17 levels, driven by consumption growth. Thus, stable debt and EBITDA levels would lead to stable credit metrics across the sector in FY18.

Ind-Ra expects demand for fertilisers to increase by about 5% yoy in FY18. Demand for fertilisers is likely to remain strong in FY18 on account of an increase in purchasing power of farmers due to a rise in farm income and a rise in minimum support price (MSP) of key rabi crops in in FY17.

Low domestic gas production, gas supply limitations and low international prices of key fertlisers would continue to affect domestic production.

Ind-Ra expects urea and decontrolled fertiliser manufacturers EBITDA levels in FY18 to sustain at the levels recorded for FY17, as volume growth would neutralise the impact of lower subsidy revenue due to stricter efficiency norms and low international prices of both inputs and finished goods. The agency expects the prices of imported fertilisers to continue to remain low in view of low energy and raw material costs and subdued international demand due to a change in Chinas crop policy.

Low raw material prices, stable subsidy allocation and reduced subsidy backlog would lead to an improved subsidy disbursement and, hence, a lower working capital debt in FY18. However, lower working capital debt would be offset by additional debt-funded capex to comply with energy efficiency norms applicable by FY19, as well as to execute expansion projects.

Ind-Ra believes that sustained debt and EBITDA levels would result in stable credit profiles of fertliser companies in FY18.

OUTLOOK SENSITIVITIES

Impact of Policy Changes; Urea Price Decontrol: Structural reforms leading to a reduction in subsidy dependence and timely release of subsidies could lead to a positive sector outlook.

Weakening in GOI Support: The sector outlook could be revised to negative, if the government of Indias (GOI) subsidy support reduces or there is a large debt-funded capex by fertiliser companies.

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Gartner Says Worldwide Server Revenue Declined 1.9 Percent in the Fourth Quarter of 2016, While Shipments Fell 0.6 Percent
Mar 06,2017

In the fourth quarter of 2016, worldwide server revenue declined 1.9 percent year over year, while shipments fell 0.6 percent from the fourth quarter of 2015, according to Gartner, Inc. In all of 2016, worldwide server shipments grew 0.1 percent, but server revenue declined 2.7 percent.

There were some distinct factors that produced the results for 2016, said Jeffrey Hewitt, research vice president at Gartner. Hyperscale data centers (e.g., Facebook, Google) grew and, at the same time, drove some significant server replacements. Enterprises grew at a lower rate as they continued to leverage server applications through virtualization and in some cases, service providers in the cloud.

From a regional perspective, Asia/Pacific was the only region to exhibit positive growth in both shipments and revenue in the fourth quarter of 2016. All other regions declined, with Latin America experiencing the largest decline in shipments (12.2 percent, while the Middle East and Africa declined 14.7 percent in terms of revenue.

Hewlett Packard Enterprise (HPE) led the worldwide server market based on revenue in the fourth quarter of 2016. The company ended the year with $3.4 billion in revenue for the fourth quarter of 2016 for a total share of 22.9 percent worldwide. However, revenue was down 11 percent compared with the same quarter in 2015.

Of the top five global vendors, only Dell and Huawei exhibited growth for the quarter, increasing 1.8 percent and 88.4 percent, respectively.

Table 1. Worldwide: Server Vendor Revenue Estimates, 4Q16 (U.S. Dollars)

Company4Q16
Revenue
4Q16 Market Share (%)4Q15
Revenue
4Q15 Market Share (%)4Q16-4Q15 Growth (%)HPE3,392,601,01222.93,813,592,26925.2-11.0Dell2,578,181,85417.42,533,495,99316.71.8IBM1,732,474,86111.71,974,018,08413.0-12.2Huawei1,249,813,3717.7610,225,4374.088.4Lenovo946,283,1856.41,136,141,4947.5-16.7Others5,039,143,53334.05,064,301,08733.5-0.5Total14,838,497,815100.015,131,774,365100.0-1.9

Source: Gartner (March 2017)

Dell grew 6.5 percent and moved into the No. 1 position in worldwide server shipments in the fourth quarter of 2016, with 19.1 percent of the market. HPE experienced a decline of 19.4 percent and fell to the second spot with 17.2 percent market share. Huawei experienced the strongest shipment growth in the fourth quarter of 2016, increasing 64 percent over the same period last year.

Table 2. Worldwide: Server Vendor Shipments Estimates, 4Q16 (Units)

Company4Q16
Shipments
4Q16 Market Share (%)4Q15
Shipments
4Q15 Market Share (%)4Q16-4Q15 Growth (%)Dell562,02919.1527,73617.96.5HPE504,40717.2625,54321.2-19.4Huawei245,6118.4149,7425.164.0Lenovo220,2967.5256,5718.7-14.1Inspur Electronics141,1324.8140,1664.70.7Others1,265,16942.11,255,74742.50.8Total2,938,644100.02,955,505100.0-0.6

Source: Gartner (March 2017)

x86 server demand increased in revenue by 1.1 percent, however, shipments declined 0.3 percent in the fourth quarter of 2016.

Full Year 2016 Server Market Results

In 2016, worldwide server shipments increased 0.1 percent, while revenue declined 2.7 percent.

x86 servers continue to be the predominant platform used for large-scale data center build-outs across the globe, and the growth of integrated systems (including hyperconverged integrated systems), while still relatively small as an overall percentage of the hardware infrastructure market, also provided a boost to the x86 server space for the year, said Mr. Hewitt. The outlook for 2017 suggests that modest growth will occur being driven primarily by service provider build-outs while the enterprise will show a slight decline in unit purchases with only slight growth in revenue.

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Around 63% women absenteeism due to health problems in metro cities: PHD Chamber Survey
Mar 06,2017

According to a recent survey study by PHD Research Bureau of PHD Chamber of commerce & Industry, a majority of women (70%) work for 8-10 hours in a day travel as large as 30 kilometres and travel for more than an hour to reach their workplace.

In spite of the long hours spent at work and the long travel distance, a positive trend in work satisfaction was seen. About 64% of the women participants stated that they were either completely satisfied or somewhat satisfied with their work, said the survey study.

Around 5000 working and non-working women were surveyed from the metropolitan cities such as Delhi, Mumbai, Bengaluru, Kolkata and Chennai by the Research Bureau of PHD Chamber during January-February 2017 through a structured questionnaire.

Interestingly, the majority of women (84%) reported that they devote 2-4 hours in household work and 49% said that they have domestic help to do household work.

However, little support was seen coming from family members in running household errands with women, reflecting on the fact that the sole responsibility of home management has been always been on the lady of the house.

The survey study is an endeavour to explore and strike a balance between work, life and health status of women in India. It explores the efforts made by the employer to provide a healthy work environment for their female employees.

FACT SHEET

n++63% of women reported absenteeism from work due to health issues

n++41% women reported cold, cough and fever as the main reason for missing work

n++Around 27% women reported aches and pains as the main health concern.

n++52% of women spend less than 10% of their income on health

n++58% women trust private healthcare facilities more than government or local clinics

n++37% women reported a provision of 3-6 months maternity leave

n++Only 27% women reported having a dispensary with lady doctor in their workplace

n++83% of women reported having separate working toilets for then at workplace

n++69% women also had the provision of paid sick leaves at workplace

n++84% women devoted 2-4 hours for household work

n++49% reported having a domestic help for household work

n++Only 2% women reported that they had facility of crn++che in their offices

n++Only 7% working women have work from home facility

Source: PHD research Bureau, PHD Chamber of Commerce and Industry The results of the analysis have been divided into three basic categories; Work Life Balance, Health Concerns, and Workplace Health Provisions. The findings elucidate that a majority 63% women reported missing work (absenteeism) due to health issues. As many as 41% of women have reported cold, cough and fever as the main health reason for missing work. An equally interesting trend is the high percent of aches and pains (27%) especially back pain and headache which has also been reported widely in the survey. An analysis of the percentage of income spent on own health showed that 52% of women spent less than 10% of their income on health, while only 5% spent more than 40%. About 2% of the respondents said that they have crn++che facilities in their offices. This is a major grey area where the employers can work to provide a conducive environment to their female employees. 7% of the respondents said that they have work from home facilities in their offices. It was also found that work from home facility was availed more by women after marriage or child birth or in case of illness of a family member. It was found that 58% women trusted private healthcare facilities more than government or local clinics.

It was revealed from the analysis that 69% of the women had a provision of paid sick leaves at their respective work places.

About 37% of women reported 3-6 months maternity benefits being given to them.

The infrastructural provision showed that 83% of womens workplace had separate toilets for them. However, only 27% of working women reported having a dispensary with a lady doctor in their workplace.

Shuttling between the various tasks at hand, women often overlook their health and continue to unconditionally manage both home and work simultaneously.

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Moodys: Project finance bank loans continue to demonstrate resilience
Mar 06,2017

Moodys Investors Service has released its annual study on default and recovery rates for unrated project finance bank loans, which examines 6,389 global project finance transactions during a 33 year period from 1983 to 2015. The updated Study includes for the first time Moodys analysis on the impact of a projects location on its credit performance, based on the World Bank Groups country classification.

Consistent with last years study, Moodys found a 10-year cumulative default rate of 6.7% and an average recovery rate of 79.5%. Infrastructure projects and public-private partnership projects experienced an increase in their 10-year cumulative default rates compared to the previous study. However, their cumulative default rates remain materially below the study data average.

Moodys says marginal annual default rates for project finance bank loans exhibit certain characteristics that distinguish them from corporate finance bonds and loans. As a result, marginal default rates tend to fall over time and trend toward those consistent with the single-A rating category by the seventh year after financial close.

The decline in marginal annual default rates over time suggests that the default risk of a project declines as construction is completed and the project starts to build its operating track record, says Kathrin Heitmann, a Moodys AVP-Analyst and co-author of the report.

Consistent with this finding, project jurisdiction matters in the initial years of a project but jurisdiction tends to be a less critical driver once a project has started to build an operating track record.

Recovery rates for project finance bank loans are similar to recovery rates for senior secured corporate bank loans and show some variation by World Bank Group Country Classification and by industry, says Heitmann. The most likely recovery rate remains 100%, seen in nearly two-thirds of projects.

The study also found ultimate recovery rates for construction-phase defaults to be lower than those for operation-phase defaults. Project finance lenders typically seek higher loan margins during the construction phase than during early stage operations.

The study, which updates a previous report from March 2016, is 9% larger and accounts for some 62% of all project finance transactions originated globally between 1983 and 2015. The study is based on a data set from a consortium of project finance lenders and investors. Neither Moodys Investors Service nor Moodys Analytics verifies the data submitted for the study.

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Ind-Ra: Construction Sector on Road to Recovery
Mar 06,2017

India Ratings and Research (Ind-Ra) has maintained a stable outlook on the construction sector for FY18, driven by the expectation that the slow but steady increase in revenue and improvement in EBITDA margins seen during FY16 and 1HFY17 will continue in FY18. The sector is likely to witness a gradual improvement in credit metrics, although constrained by the companies under debt restructuring showing no signs of recovery.

The sector has seen improvement in liquidity position, with a significant improvement in cash flow from operations (CFO) in FY16, although it continued to remain negative. Liquidity is likely to improve further, with CFO improving over FY17-FY18 to reach near-zero levels. A positive CFO is imperative for the sector to fund its working capital, as bank credit growth to the sector plunged over FY16-FY17. However, maintaining improvement in cash flows over the medium term would depend on a prudent accumulation of orders.

Order inflow is likely to grow in FY18, primarily driven by increased public investment in transport and urban infrastructures, power transmission, and water and irrigation projects. The overall allocation for roads, housing and electrification increased 18% yoy in the Union Budget 2017-18. However, the allocation for the National Investment and Infrastructure Fund continues to be low. The fund was expected to leverage the initial funding multifold for investment and provide a stimulus to the infrastructure sector, which will not happen in FY18.

The sale of public private partnership projects in the roads sector has increased significantly during 2016, which is likely to continue in 2017. This may aid in deleveraging of balance sheets of construction companies. However, this will continue to remain a buyers market, given the significant demand and supply mismatch.

OUTLOOK SENSITIVITIES

Improvement in Cash Flows: The sector outlook could be revised to positive, if there is a continued improvement in cash flow margins, and thus improved credit metrics.

Increase in Debt Intensity: The sector outlook could be revised to negative, if the companies shift their focus back to public private partnership projects, leading to an increase in capital intensity without adequate equity infusions. Accumulation of large order books leading to a liquidity squeeze could also lead to the sector outlook being revised to negative.

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Organised Jewellery Retailers to Benefit from Regulatory Changes; Exporters Continue to Face Headwinds
Mar 06,2017

India Ratings and Research (Ind-Ra) has maintained a stable outlook on organised jewellery retailers and a negative outlook on cut and polished diamond (CPD) exporters for FY18.

As per World Gold Council, Indias gold jewellery demand fell sharply 22% yoy to reach a seven-year low in 2016 (522MT). The demand was impacted severely on account of various one-off events such as nationwide jewellers strikes in 1Q16 and severe liquidity crunch on account of the Government of Indias (GoI) demonetisation drive in 4Q16. Given the backdrop of four months of complete disruption on either the supply or demand side, Ind-Ra believes the fall in consumer demand was caused by idiosyncratic factors. However, the underlying jewellery demand still remains robust, given Indias strong macro-demographics and the consumers affinity towards gold. Hence, demand is likely to bounce back to above a five-year average of 600MT in 2017.

The GOI has been introducing regulatory changes over the last two years to control illicit trade practices prevalent in the jewellery industry, which is likely to benefit organised jewellers at the cost of unorganised retailers. Retailers face an overhang of the impending Goods and Services Tax Bill and a higher slab rate may turn out to be demand dampener particularly for the non-wedding segment.

Conversely, CPD exports increased 13% yoy to USD16.8 billion during 9MFY17, after declining for two consecutive years as per the Gems and Jewellery Export Promotion Council. This was because players across the value chain restocked following stock unloading and cautious inventory management in 2015 in response to a slowdown in the consumer demand for diamond jewellery in China and Hong Kong beginning 2H14. Although CPD exports have rebounded, the agency believes that midstream players continue to face headwinds for diamond jewellery demand owing to political and economic environment in key export markets. Additionally, the players continue to operate on thin margins and carry the inventory/price risk.

As expected by Ind-Ra, rough producers continued to lower rough prices by around 5% in 2016, while maintaining production close to 2015 levels (128 million carats) and extending additional flexible purchasing terms to CPD players. Ind-Ra expects rough prices to remain stable in 2017, unless CPD prices decline sharply due to muted demand and rough producers are forced to lower rough prices again.

Organised retailers are likely to have a limited impact of demonetisation in FY17 as reflected in revenue growth of around 8% yoy and improved EBITDA margins of 50bp to 10.2% in 9MFY17 based on Ind-Ras sample set. Favourable market dynamics and government regulations are likely to improve organised retailers revenue growth to double digits in FY18. EBITDA margins will improve with increasing share of diamond/studded jewellery in the sales mix On the other hand, Ind-Ra believes credit metrics for CPD exporters are likely to remain stretched in FY18 with EBITDA/interest coverage of 2.9x (FY17 Projected: 2.75x-3.0x), given muted revenue growth, low profitability margins, long working capital cycles and a high dependence on bank lines for inventory funding.

Outlook Sensitivities

Regulatory Actions by Government: Reintroduction of any measures to curb gold imports or reduce its physical consumption or higher-than-anticipated Goods and Services Tax rates is likely to have a negative impact on the organised retailers.

Recovery in Demand and Reduction in Divergence of Prices: Recovery in Chinese demand and buoyant US demand for diamond jewellery, and the relative improvement in CPD prices than rough prices are likely to positively impact the exporters.

Supply Shocks in the Short-term: Any severe fall in supply of mined gold globally can lead to higher gold prices and may dampen the gold consumption, leading Ind-Ra to change its outlook to negative for the organised retailers.

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Work on Shahpur Kandi Dam to Resume Soon Punjab and J&K sign agreement to this effect
Mar 06,2017

In a major step towards utilization of Indias rights on Eastern rivers of Indus basin, the mediation efforts of Ministry of Water Resources , RD&GR persuaded the States of J&K and Punjab to reach an agreement to resume works on Shahpur Kandi Dam project in Pujab/ J&K. The agreement to this effect was signed by Shri KS Pannu,Secretary (Irrigation),Punjab and Shri Saurabh Bhagat, Secretary ( Irrigation),J&K in the presence of Union Water Resources Secretary Dr.Amarjit singh in New Delhi last evening.

The project was being built with an estimated cost of Rs. 2285.81 crore (April, 2008 price level) and is included in the Scheme of National Projects by Government of India. Under the scheme, MoWR, RD&GR provides central assistance @ 90% of the balance cost of works component of irrigation and water supply.

The construction of Shahpur Kandi project was taken up in May 1999 but later halted in 2014 due to dispute between Punjab and J&K. The Ministry of WR,RD&GR had been making all out efforts to resolve the issues and resume construction which resulted in yesterdays agreement.

The design of the project shall be as already agreed by both the states while concurrently model studies will be done to ensure that the mandated share of 1150 cusecs of water is available to the State of J&K, which will be binding on both the States.

The project will continue to be implemented by the Government of Punjab. However, there will be a tripartite team headed by Member, CWC and consisting of Chief Engineers of two States to monitor the project as and when required but atleast once in three months to ensure that the construction is as per the agreement.

The balance costs on account of compensation for land acquisition in respect of Thein Dam, as per the agreement would be paid for by the Government of Punjab promptly. In addition, jobs to the oustees would be given by the State Government of Punjab as per the agreed R&R policy of both the State Governments.

The Government of Punjab would be making available to the Govt. of J&K 20% share in the total power generated at the Thein Dam at the mutually agreed rate of Rs. 3.50 per unit immediately, subject to the confirmation of the rates by the Central Electricity Regulatory Commission.

Both the States agreed that other issues will be referred to Arbitration mechanism provided in the agreement signed between two states of 1979 without affecting the progress of work. It was unanimously agreed that the work on the Shahpur Kandi Dam Project would resume as soon both the State Governments formally approve the agreed decisions.

The 55.5 high Shahpur Kandi dam, located in Gurdaspur district of Punjab, will help in providing irrigation facility to 5000 hectares of land in Punjab and 32173 hectares in J&K besides generation of 206 MW power.

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Goods and Services Tax Council approves the Central Goods and Services Tax (CGST) Bill and the Integrated Goods and Services Tax (IGST) Bill
Mar 06,2017

The Goods and Services Tax GST) Council, in its meeting held today in Vigyan Bhawan in New Delhi under the Chairmanship of the Union Minister for Finance & Corporate Affairs, Shri Arun Jaitley has approved the draft CGST Bill and the draft IGST Bill as vetted by the Union Law Ministry. This clears the deck for the Central Government to take these two Bills to the Parliament for their passage in the ongoing Budget Session.

Some of the main features of the two Bills, as finalized by the GST Council, are as follows:

i. A State-wise single registration for a taxpayer for filing returns, paying taxes, and to fulfil other compliance requirements. Most of the compliance requirements would be fulfilled online, thus leaving very little room for physical interface between the taxpayer and the tax official.

ii. A taxpayer has to file one single return state-wise to report all his supplies, whether made within or outside the State or exported out of the country and pay the applicable taxes on them. Such taxes can be Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST) and Integrated Goods and Services Tax (IGST).

iii. A business entity with an annual turnover of upto Rs. 20 lakhs would not be required to take registration in the GST regime, unless he voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is Rs. 10 lakhs.

iv. A business entity with turnover upto Rs. 50 lakhs can avail the benefit of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements. The Composition Scheme is available for all traders, select manufacturing sectors and for restaurants in the services sector.

v. In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law.

vi. In order to ensure that ITC can be used seamlessly for payment of taxes under the Central and the State Law, it has been provided that the ITC entitlement arising out of taxes paid under the Central Law can be cross-utilised for payment of taxes under the laws of the States or Union Territories. For example, a taxpayer can use the ITC accruing to him due to payment of IGST to discharge his tax liability of CGST / SGST / UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST / SGST / UTGST, for payment of IGST. Such payments are to be made in a pre-defined order.

vii. In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect of input services within a legal entity.

viii. To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis.

ix. In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the States to exercise the powers conferred under all Acts.

x. An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime.

xi. To provide certainty in tax matters, a provision has been made for an Advance Ruling Authority.

xii. Exhaustive provisions for Appellate mechansim have been made.

xiii. Detailed transitional provisions have been provided to ensure migration of existing taxpayers and seamless transfer of unutilised ITC in the GST regime.

xiv. An anti-profiteering provision has been incorporated to ensure that the reduction of tax incidence is passed on to the consumers.

xv. In order to mitigate any financial hardship being suffered by a taxpayer, Commissioner has been empowered to allow payment of taxes in instalments.

The remaining two Bills namely, State Goods and Services Tax (SGST) Bill and the Union territory Goods and Services Tax (UTGST) Bill, which would be almost a replica of the CGST Act, would be taken-up for approval after their legal vetting in the next meeting of GST Council scheduled on 16 March 2017.

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Owning a House Becomes Easier for Army Personnel
Mar 03,2017

Army personnel by virtue of deployment in remote areas find it extremely difficult to invest time in buying a good house, therefore, to fulfill this essential need and meet the aspirations, AWHO has come up with a pragmatic business model called the Private Industry Collaborative Business Model which will facilitate acquiring houses from reputed private builders at discounted prices for Army personnel & Veer Naris. A Pilot Project is being undertaken in Delhi/ NCR and based on its success, similar ventures will be executed in other locations.

Major advantages of this concept are detailed market research to identify the most suitable builder/ project, negotiations for price reduction, due diligence and buyer friendly terms & conditions. Prop Equity, a leading Real Estate Data & Analytics Consultant firm has been selected after a prolonged process to undertake the facilitation process forward.

This historical MoU was signed by Lt Gen Rakesh Sharma, UYSM, AVSM, VSM, Chairman (Ex-Officio) AWHO and Mr Samir Jasuja, MD, Prop Equity Analytics on 3 March 2017.

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