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Indias external debt declines to US$ 471.9 billion end March 2017
Jun 30,2017

Indias external debt has declined 2.7% US$ 471.9 billion end March 2017 over its level at end March 2016, primarily on account of a decline in Non-resident Indian (NRI) deposits and commercial borrowings. The external debt to GDP ratio stood at 20.2% as at end-March 2017, lower than its level of 23.5% at end-March 2016.

Valuation loss due to depreciation of the US dollar against the Indian rupee was placed at US$ 1.5 billion. Excluding the valuation effect, the decline in external debt would have been US$ 14.6 billion instead of US$ 13.1 billion as at end-March 2017 over the level at end-March 2016.

Commercial borrowings continued to be the largest component of external debt with a share of 36.7%, followed by NRI deposits (24.8%) and short-term trade credit (18.3%).

At end-March 2017, long-term debt was placed at US$ 383.9 billion, recording a decline of US$ 17.7 billion over its level at end-March 2016.

The share of long-term debt in total external debt as at end-March 2017 was 81.4%, lower than 82.8% at end-March 2016.

The share of short-term debt (original maturity) in total external debt increased to 18.6% at end-March 2017 from 17.2% at end-March 2016. The ratio of short-term debt (original maturity) to foreign exchange reserves increased to 23.8% as at end-March 2017 (23.1% at end-March 2016).

On a residual maturity basis, short-term debt constituted 41.5% of total external debt at end-March 2017 (42.7% at end-March 2016) and stood at 52.9% of total foreign exchange reserves (57.4% at end-March 2016).

US dollar denominated debt continued to be the largest component of Indias external debt with a share of 52.1% as at end-March 2017, followed by the Indian rupee (33.6%), SDR (5.8%), Japanese yen (4.6%) and Euro (2.9%).

The borrower classification shows that the outstanding debt of the Government increased; however, non-Government debt declined at end-March 2017.

Debt service payments declined to 8.3% of current receipts as at end-March 2017 as compared with 8.9% at end-March 2016.

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Eight core infrastructure output rises 3.6% May 2017
Jun 30,2017

The output of eight core infrastructure industries, comprising 40.27% of the weight of items included in the Index of Industrial Production (IIP), improved 3.6% in May 2017. The cumulative output of eight core infrastructure industries moved up 3.2% in April-May 2017-18.

Coal production (weight: 10.33%) declined by 3.3% in May 2017 over May 2016. Its cumulative index declined by 3.3% during April to May 2017-18 over corresponding period of the previous year.

Crude Oil production (weight: 8.98%) increased by 0.7% in May 2017 over May 2016. Its cumulative index increased by 0.1% during April to May 2017-18 over the corresponding period of previous year.

The Natural Gas production (weight: 6.88%) increased by 4.5% in May 2017 over May 2016. Its cumulative index increased by 3.3% during April to May 2017-18 over the corresponding period of previous year.

Petroleum Refinery production (weight: 28.04%) increased by 5.4% in May 2017 over May 2016. Its cumulative index increased by 2.8% during April to May 2017-18 over the corresponding period of previous year.

Fertilizer production (weight: 2.63%) declined by 6.5% in May 2017 over May 2016. Its cumulative index declined by 0.8% during April to May 2017-18 over the corresponding period of previous year.

Steel production (weight: 17.92%) increased by 3.7% in May 2017 over May 2016. Its cumulative index increased by 6.3% during April to May 2017-18 over the corresponding period of previous year.

Cement production (weight: 5.37%) increased by 1.8% in May 2017 over May 2016. Its cumulative index declined by 0.3% during April to May 2017-18 over the corresponding period of previous year.

Electricity generation (weight: 19.85%) increased by 6.4% in May 2017 over May 2016. Its cumulative index increased by 5.9% during April to May 2017-18 over the corresponding period of previous year.

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Cabinet gives in principle approval for disinvestment of Air India and five of its subsidiaries
Jun 29,2017

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval to fourth tranche recommendations of NITI Aayog on strategic disinvestment of CPSE (strategic disinvestment of Air India and five of its subsidiaries) based on the recommendations of Core Group of Secretaries on Disinvestment (CGD).

(i) In principle approval for considering strategic disinvestment of Air India and five of its subsidiaries.

(ii) Constitution of an Air India-specific Alternative Mechanism headed by Minister of Finance including Minister for Civil Aviation and such other Minister(s) to guide the process on strategic disinvestment from time to time and decide the following:

a. Treatment of unsustainable debt of Air India;

b. Hiving off of certain assets to a shell company;

c. Demerger and strategic disinvestment of three profit-making subsidiaries;

d. The quantum of disinvestment; and

e. The universe of bidders.

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Cabinet approves recommendations of the Seventh CPC on allowances
Jun 29,2017

The Union Cabinet chaired by the Prime Minister Narendra Modi approved the recommendations of the 7th CPC on allowances with some modifications. The revised rates of the allowances shall come into effect from 1st July, 2017 and shall affect more than 48 lakh central government employees.

While approving the recommendations of the 7th CPC on 29th June, 2016, the Cabinet had decided to set up the Committee on Allowances (CoA) in view of substantial changes in the existing provisions and a number of representations received. The modifications are based on suggestions made by the CoA in its Report submitted to Finance Minister on 27th April, 2017 and the Empowered Committee of Secretaries set up to screen the recommendations of 7th CPC.

7th CPC recommendations on Allowances

The 7th CPC had adopted a three-pronged approach in examining a total of 197 allowances which involved an assessment of the need for continuation of each allowance, appropriateness of the set of people covered by the allowance and rationalisation which involved clubbing of allowances with similar objectives. Based on the examination on these lines, the 7th CPC recommended that 53 allowances be abolished and 37 be subsumed in an existing or a newly proposed allowance.

For most of the allowances that were retained, the 7th CPC recommended a raise commensurate with inflation as reflected in the rates of Dearness Allowance (DA). Accordingly, fully DA-indexed allowances such as Transport Allowance were not given any raise. Allowances not indexed to DA were raised by a factor of 2.25 and the partially indexed ones by a factor of 1.5. The quantum of allowances paid as a percentage of pay was rationalised by a factor of 0.8.

A new paradigm has been evolved to administer the allowances linked to risk and hardship. The myriad allowances, their categories and sub-categories pertaining to civilians employees, CAPF and defence personnel have been fitted into a table called the Risk and Hardship Matrix (R&H Matrix). The Matrix has nine cells denoting varying degrees of risk and hardship with one extra cell at the top named as RH - Max to include Siachen Allowance. Multiple rates applicable to individual allowances will be replaced by two slab rates for every cell of the R&H Matrix.

Modifications approved by the Cabinet

The modifications approved today were finalised by the E-CoS based on the recommendations of the CoA. The CoA had undertaken extensive stakeholder consultations before finalising its recommendations. It had interacted with Joint Consultative Machinery (Staff side) and representatives from various staff associations. Most of the modifications are on account of continuing requirement of some of the existing arrangements, administrative exigencies and to further the rationalization of the allowances structure.

Financial Implications

The modifications approved by the Government in the recommendations of the 7th CPC on allowances will lead to a modest increase of Rs 1448.23 crore per annum over the projections made by the 7th CPC. The 7th CPC, in its Report, had projected the additional financial implication on allowances at Rs 29,300 crore per annum. The combined additional financial implication on account of the 7th CPC recommendations along with the modifications approved by the Cabinet is estimated at Rs 30748.23 crore per annum.

Highlights of Cabinet approval on Allowances

1. Number of allowances recommended to be abolished and subsumed: Government has decided not to abolish 12 of the 53 allowances which were recommended to be abolished by the 7th CPC. The decision to retain these allowances has been taken keeping in view the specific functional requirements of Railways, Posts and Scientific Departments such as Space and Atomic Energy. It has also been decided that 3 of the 37 allowances recommended to be subsumed by the 7th CPC will continue as separate identities. This has been done on account of the unique nature of these allowances. The rates of these allowances have also been enhanced as per the formula adopted by the 7th CPC. This will benefit over one lakh employees belonging to specific categories in Railways, Posts, Defence and Scientific Departments.

2. House Rent Allowance: HRA is currently paid @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities. As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA shall not be less than Rs 5400, Rs 3600 and Rs 1800 for X, Y and Z category of cities respectively. This floor rate has been calculated @ 30%, 20% and 10% of the minimum pay of Rs 18000. This will benefit more than 7.5 lakh employees belonging to Levels 1 to 3.

7th CPC had also recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA.

3. Siachen Allowance: 7th CPC had placed Siachen Allowance in the RH-Max cell of the R&H Matrix with two slabs of Rs 21,000 and Rs 31,500. Recognizing the extreme nature of risk and hardship faced by officers / PBORs on continuous basis in Siachen, the Government has decided to further enhance the rates of Siachen Allowance which will now go up from the existing rate from Rs 14,000 to Rs 30,000 per month for Jawans & JCOs (Level 8 and below) and from Rs 21,000 to Rs 42,500 per month for Officers (Level 9 and above). With this enhancement, Siachen Allowance will become more than twice the existing rates. It will benefit all the soldiers and officers of Indian Army who are posted in Siachen.

4. Dress Allowance: At present, various types of allowances are paid for provisioning and maintenance of uniforms/outfits such as Washing Allowance, Uniform Allowance, Kit Maintenance Allowance, Outfit Allowance etc. These have been rationalised and subsumed in newly proposed Dress Allowance to be paid annually in four slabs @ Rs 5000, Rs 10,000, Rs 15,000 and Rs 20,000 per annum for various category of employees. This allowance will continue to be paid to Nurses on a monthly basis in view of high maintenance and hygiene requirements. Government has decided to pay higher rate of Dress Allowance to SPG personnel keeping in view the existing rates of Uniform Allowance paid to them (which is higher than the rates recommended by the 7th CPC) as also their specific requirements. The rates for specific clothing for different categories of employees will be governed separately.

5. Tough Location Allowance: Some allowances based on geographical location such as Special Compensatory (Remote Locality) Allowance (SCRLA), Sunderban Allowance & Tribal Area Allowance have been subsumed in Tough Location Allowance. The areas under TLA have been classified into three categories and the rates will be governed as per different cells of R&H Matrix and will be in the range of Rs 1000 - Rs 5300 per month. The 7th CPC had recommended that TLA will not be admissible with Special Duty Allowance (SDA) payable in North-East, Ladakh and the Islands. Government has decided that employees will be given the option to avail of the benefit of SCRLA at pre-revised rates along with SDA at revised rates.

6. Recommendations in respect of some important allowances paid to all employees:

(i) Rate of Children Education Allowance (CEA) has been increased from Rs 1500 per month / child (max. 2) to Rs 2250 per month / child (max.2). Hostel Subsidy will also go up from Rs 4500 per month to Rs 6750 per month.

(ii) Existing rates of Special Allowance for Child Care for Women with Disa

Cabinet approves six laning of Chakeri-Allahabad section of NH-2 in Uttar Pradesh
Jun 29,2017

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval for development of six laning of Chakeri-Allahabad section of National Highway (NH) - 2 in Uttar Pradesh.

The cost is estimated to be Rs.3691.09 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road to be developed is approximately 145 kms.

This work will be done under National Highways Development Project (NHDP) Phase V on Hybrid Annuity Mode.

The project will help in expediting the improvement of infrastructure in Uttar Pradesh and in reducing the time and cost of travel for traffic, particularly heavy traffic, plying between Chakeri and Allahabad. The development of this stretch will also help the socio-economic condition of this region in the State.

This project on NH-2 is a part of Golden Quadrilateral between Delhi and Kolkata. The project road will have direct influence on the South-Western part of Uttar Pradesh. Important towns and urban settlements enroute are Kanpur Nagar, Ruma, Chaudagra, Malwa, Fatehpur and Kaushambi. Kanpur is one of the oldest famous industrial townships of North India. It is also included in the Counter-Magnets of National Capital Region. Allahabad is a famous pilgrimage centre, with ancient historical monuments and buildings as well as many educational institutions.

In the project, there is a provision of 11 Truck Lay-bye where trucks stop mainly for loading and unloading. There is also provision of Bus lay-bye at 18 locations. Nine flyovers are also proposed in addition to 14 Vehicular Under Pass and 25 Pedestrian Under Pass.

The project would also increase employment potential for local labourers for project activities. It has been estimated that a total number of 4,076 mandays are required for construction of one kilometer of highway. As such, employment potential of 5,91,000 (approx.) mandays will be generated locally during the construction period of this stretch.

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Indias natural gas production up 4.2% in May 2017
Jun 23,2017

Indias natural gas production increased 4.2% to 2.77 billion cubic meters (bcm) in May 2017 over a year ago. Natural gas output of ONGC jumped 9.5% to 1.96 bcm, but that of private and JV companies dipped -10.5% to 0.56 bcm. Meanwhile, the natural gas production of Oil India rose 2.4% to 0.24 bcm in May 2017.

Natural gas output moved up 3.0% to 5.30 bcm in April-May 2017 over April-May 2016.

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Indias crude oil refinery output up 5.6% in May 2017
Jun 23,2017

Indias crude oil refinery output increased 5.6% to 20.90 million tonnes (mt) in May 2017 over May 2016. The output of public sector refineries improved 8.0% to 11.77 mt, while the output of private refineries jumped 15.1% to 8.54 mt. However, the refinery output of public-private JV refiners dipped 60.3% to 0.59 mt in May 2017.

Among public refineries, the output of Indian Oil Corporation increased 12.1% to 5.95 mt, while the output of Numaligarh Refineries moved up 8.7% to 0.26 mt, Chennai Petroleum Corporation 6.9% to 0.85 mt, and Mangalore Refineries 6.7% to 1.16 mt in May 2017 over May 2016. Further, the output of Hindustan Petroleum Corporation also increased 3.6% to 1.46 mt and Bharat Petroleum Corporation 1.7% to 2.08 mt in May 2017.

Among private refiners, the output of Reliance Petroleum surged 20.9% to 6.86 mt, while that of Essar Oil declined 3.6% to 1.69 mt in May 2017 over May 2016. Among JV refineries, the output of Bharat Oman increased 3.2% to 0.59 mt, while the output of HPCL Mittal dipped to nil in May 2016.

The cumulative refinery output increased 2.8% to 40.20 mt in April-May 2017. The output of public refineries increased 4.3% to 22.15 mt, while that of private refineries moved up 7.6% to 16.20 mt. The refinery output of JV refineries fell 34.3% to 1.85 mt in April-May 2017. Among public refineries, the output of Indian Oil Corporation improved 8.9%, Numaligarh Refineries 8.7% and Mangalore Refineries 6.2%, but that of Hindustan Petroleum Corporation declined 0.4%, Bharat Petroleum Corporation 0.7% and Chennai Petroleum Corporation 8.0%.

The overall capacity utilization was higher at 104.8% in May 2017 compared with 102.4% in May 2016, while it was nearly flat at 104.4% in April-May 2017 compared with 104.6% in April-May 2016.

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Indias crude oil production rises 0.7% in May 2017
Jun 23,2017

Indias crude oil production rose 0.7% to 3.10 million tonnes (mt) in May 2017 over May 2016. Crude oil output of ONGC increased 2.5% to 1.93 mt, while that of Oil India also improved 6.1% to 0.29 mt. ONGCs offshore output moved up 2.1% to 1.42 mt, while onshore production increased 3.6% to 0.51 mt. However, the crude oil production of private and joint venture (JV) companies dipped 4.5% to 0.88 mt in May 2017.

Crude oil output rose 0.1% to 6.04 mt in April-May period of the fiscal year ending March 2018 (April-May 2017), snapping 2.8% fall recorded in the corresponding period of last year. Output of ONGC rose 2.5% to 3.78 mt, while that of Oil India moved up 5.3% to 0.56 mt. However, the crude oil production of private companies fell 6.5% to 1.70 mt in April-May 2017 over April-May 2016.

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India signs loan agreement with World Bank and AIIB for electrification projects in Andhra Pradesh
Jun 22,2017

A Loan Agreement for part funding of US$ 240 million from the World Bank (IBRD) and US$ 160 Million from AIIB (60:40 ratio) for 24X7 Power for All in Andhra Pradesh Project was signed here today by Raj Kumar, Joint Secretary (MI), Department of Economic Affairs,Ministry of Finance on behalf of the Government of India, Hisham Abdo, Operations Manager and Acting Country Director, World Bank (India) on behalf of the World Bank and D.J. Pandian Vice-President & Chief Investment Officer, AIIB. The Program Implementing Entity Agreement was signed by K. Ranganatham, Adviser (Energy), Department of Energy, Government of Andhra Pradesh on behalf of Government of AP, the Country Director (India) on behalf of the World Bank and the Vice President and Chief Investment Officer, AIIB on behalf of the AIIB.

Total Cost of the project is US$ 570 million, out of which US$ 240 million is from World Bank (IBRD) and US$ 160 million from AIIB. The rest will be counterpart funding from GoAP.

The objective of the project is to increase the delivery of electricity to customers and to improve the operational efficiency and system reliability in distribution of electricity in selected areas in Andhra Pradesh.

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Government of India and the ADB Sign $275 Million Loan for Upgrading Urban Services in 64 Small Towns in Madhya Pradesh
Jun 20,2017

The Asian Development Bank (ADB) and the Government of India signed a $275 million loan on 19th June, 2017 for improving urban services in 64 small towns in the State of Madhya Pradesh.

n++Madhya Pradesh needs substantial investments to keep pace with rapid urbanization. Availability of continuous piped water supply is vital for improving the urban infrastructure, and it will facilitate improved access to safe drinking water for residents in the project arean++, said Mr. Raj Kumar.

n++ADBs continued support to the States urban development, through this project, will improve further the quality, coverage, efficiency, and sustainability of urban service delivery, stabilize and deepen institutional capacity, and improve long term water service management,n++ said Mr. Sondjaja. n++A key element of the project is the use of design-build-operate contracts including 10-years operation and maintenance to ensure better sustainability of the water service operation and financial viability.n++

The project will develop sustainable, inclusive, and climate-resilient water supply in 64 small and medium-sized towns, and integrated storm water and sewerage infrastructure in two heritage towns of Khajuraho and Rajnagar. The project supports the State Governments priority to develop urban infrastructure. Previous ADB urban investments in the state have improved access to safe drinking water for more than 5 million residents in 4 major cities.

Along with ADBs loan, the Government of Madhya Pradesh will provide counterpart support of $124 million. The project will run for almost five years with an expected completion date of June 2022.

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India and Portugal Sign A Historical agreement to promote Cooperation in The Field of Archives
Jun 20,2017

A Protocol of Cooperation was signed between the National Archives of India and the Minister of Culture of the Portuguese Republic in the field of archives on 17th May, 2017 in Lisbon, Portugal. As a first step under this agreement, the Torre do Tombo (National Archives of Portugal) handed over to the National Archives of India digital copies of 62 volumes of the collection known as Moncoes do Reino (Monsoon correspondence).

These volumes were originally part of over 456 volumes that cover the period from 1568 to 1914 and form the largest of all record collections in the Goa State Archives. The collection consists of direct correspondence from Lisbon to Goa and is important primary source for the study of the Portuguese expansion in Asia, their trade rivalries with the Arabs and European powers and their relations with neighbourings Kings in South Asia and East Asia.

In 1777, these 62 volumes, consisting of over 12,000 documents, pertaining to the period from 1605 to 1651 were shifted from Goa to Lisbon where these were subsequently printed in under the title Documentos Remetidos da India(Documents sent from India) by the Academy of Science at Lisbon between 1880 and 1893. The original volumes had remained in Lisbon ever since.

After 240 years, this gap in the record series in the collection of the Goa State Archives was filled when on 17 May 2017, in a ceremony attended amongst others, by HE K. Nandini Single, Ambassador of the Republic of India to Portugal, and Ms. Teresa Artilheiro Ferreira, Chief of Division, Cultural Agreements and Cooperation Programmes Unit, Camoes, Dr Silvestre de Almeida Lacerda, Director General of Books, Archives and Libraries, handed over a set of digital images of the missing volumes of the Moncoes do Reino series to his counterpart Mr. Raghvendra Singh, Secretary to the Government of India and Director General of Archives, who led a two-member delegation to Portugal from 15-17 May 2017.

Speaking on this occasion Mr. Singh expressed his desire to work in close cooperation with the archival fraternity in Portugal and in India to make the centuries old relations between the two countries, more vibrant and meaningful. The Indian Ambassador added that ever since the very successful visit of the Portuguese Prime Minister to India in January this year, there is a lot of synergy between the two countries in diverse fields ranging from technology to education and from civil aviation to football - to name a few. Cultural being an important part of the lives of our people, is an important area where cooperation in the areas of shared heritage and legacy is greatly cherished by one and all.

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Punjab CM announces total waiver of entire crop loans of 8.75 lac small and marginal farmers
Jun 20,2017

Punjab Chief Minister Captain Amarinder Singh on Monday announced total waiver of entire crop loans up to Rs. 2 lakh for small and marginal farmers (up to 5 acres), and a flat Rs. 2 lakh relief for all other marginal farmers, irrespective of their loan amount, thus paving the way for eventual total waiver of agricultural debts to implement another major poll promise of the ruling party.

Making the announcements during his speech in the Vidhan Sabha, the Chief Minister said the move would benefit a total of 10.25 lakh farmers, including 8.75 lakh farmers up to 5 acres. The initiative would provide double the relief announced by the states of Uttar Pradesh and Maharashtra, he pointed out.

The decision is based on the interim report of the Expert Group, headed by eminent economist Dr. T. Haque, and tasked with suggesting ways and means to help the states distressed farming community.

Making it clear that his government stood by its commitment to waive off the crop loans of the farmers, Captain Amarinder said his government had also additionally decided to take over the outstanding crop loan from institutional sources of all the families of farmers who committed suicides in the state. It has also decided to raise the ex-gratia for suicide affected families to Rs.5.00 lakh from the existing Rs.3.00 lakh.

For debt relief to farmers for loans raised from non-institutional resources, the government has decided to review the Punjab Settlement of Agriculture Indebtedness Act to provide the desired relief to the farmers through mutually acceptable debt reconciliation and settlement, which shall be statutorily binding on both the parties, the lender and the borrower. The government has already constituted a Cabinet Sub Committee to review this Act, he added.

The Chief Minister proposed that the Speaker may constitute a 5-Member Committee of Vidhan Sabha to visit the families of the suicide victims, ascertain the reasons for suicides and suggest further steps to be taken to check this menace forever.

Captain Amarinder informed the House that his government had already decided to repeal Section 67 A of the Punjab Cooperative Societies Act, 1961, which provides for auction/ kurki of farmers land.

The Chief Minister also reiterated his governments commitment to provide free power to farmers but appealed to all big and well-to-do farmers of the state to give up power subsidy voluntarily. He announced his decision to immediately give up the subsidy at his own farms to set a personal example, and appealed to his colleagues to do the same.

Lambasting the previous Akali government for ruining the states agriculture and farmers, the Chief Minister said the Badal regime accepted a loan of Rs.31,000 crore to cover the shortfall in the cash credit limit for procurement of foodgrains, for which his government has to pay Rs.270 crore every month and Rs.3240 crore annually. Had this not been done, his government would have utilized the additional Rs. 31,000 crore amount also to benefit the farmers, he added.

Citing studies, the Chief Minister said there are about 18.5 lakh farming families in the state, and about 65% of them are small and marginal farmers, out of which about 70% have access to institutional finance.

Lamenting the problems faced by the farmers, the Chief Minister said his governments priority would be to continuously increase income of all those who are dependent on agriculture while preserving the ecological balance, and announced that a State Agriculture Policy focusing on increase in farmers income on a sustainable basis would be formulated soon.

The Chief Minister also announced a series of other measures to bring the agriculture sector back on track. These include an agriculture sustainability programme with focus on various initiatives to boost cultivation, growth and quality of crops, backed by attractive remuneration and greater incentives on alternative crops. Other measures include revamp of Farm Extension Services and a new legislation to regulate agriculture education.

Announcing the establishment of a Paddy Straw Challenge Fund to stop the practice of crop residue burning by the farmers, the Chief Minister informed the House that he had already written to the Prime Minister to allow a bonus of Rs.100 per quintal to all those farmers who incorporate the paddy straw in the soil instead of burning it, as the farmers need to be incentivized in this regard.

Reiterating his governments commitment not to allow Government of India to tinker with the MSP system, he urged the Centre to implement the recommendations of the Swaminathan Commission and provide price support by way of deficiency pricing for Maize and other crops for which MSP is fixed by them.

Referring to the smooth and corruption-free procurement process ensured by his government, the Chief Minister said not only was every grain of the 120 Lakh MT wheat that arrived in the mandis in April this year smoothly procured but farmers were also given timely payment. The farmers would continue to get fair deal in the coming paddy and cotton season as well, he added.

Captain Amarinder also announced the governments decision to computerize all the operations in the State under the End to End Computerization of Targeted Public Distribution System (TPDS) operations Scheme to ensure leakage/diversion free distribution of subsidized food grains to the eligible beneficiaries. The identified beneficiaries will be issued Smart Ration cards. and ration will be distributed through PoS devices using bio-metric authentication.

The Chief Minister further reiterated his commitment to the promotion of horticulture to help in crop diversification and boost farmers income. and announced a slew of initiatives for the same. It has also been decided to establish a Price Stabilization Fund to save the farmers from vagaries of market, particularly in the case of perishable commodities such as fruits and vegetables, he revealed.

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Road and Railway to be exempted under the GST regime: ASSOCHAM plea to Govt.
Jun 20,2017

In view of the long gestation period and showing negative returns, industry body ASSOCHAM has suggested that infrastructure and transportation such as road and railway sectors should continue to be exempted under Goods and Services Tax (GST) regime.

In a note submitted to the Finance Ministry, ASSOCHAM has suggested that to avoid accumulation of input tax credit with the contractors, a similar exemption should be granted in GST on direct procurements made by the contractors for use in such projects. Further withdrawal of exemption on existing projects will have a negative impact on business revenues.

The Chamber says, alternative options should be provided in GST, such as Zero rating the Contract Value chain, in the event the current Exemptions are withdrawn, so as to protect the Infrastructure Projects from any additional tax burden.

The chamber spokesperson says, presently, highway toll collected from passengers and annuity amounts received from NHAI for construction and maintenance of highways is exempt from Service tax. While service by way of access to a road or a bridge on payment of toll charges has been specifically exempted in GST regime, exemption to similar income received in form of annuity from NHAI has not been provided. Essentially in case of annuity based project NHAI collects Toll charges and share Toll income in form of annuity.

Levy of GST on existing contracts with non-recoverable taxes from NHAI will have significant impact on revenue and therefore exemption should be accorded to annuity income as well.

As per contract with NHAI, concessionaire is required to a share a pre-defined percentage of income from toll collection with NHAI and there is no clarification whether sharing of such exempted income would be subject to GST. Since Toll income is exempt from GST, sharing of such income also should not attract GST.

It may be mentioned that currently the services provided to infrastructure project are exempted from service tax and wherever service tax is levied, works contract abatement is available and in VAT also abatement is available and the combined effective tax rate comes to 10% to 12% while the rate schedule released by GST council provides for 18% GST rate for Works contract services.

ASSOCHAM has strongly recommended that rate of GST should be retained at the current levels on the Goods and Services, on the existing projects in progress as any increase in existing tax cost will adversely impact the project financials, cash flow and margins, due to inability to pass on or recover such increased cost in the entire Contract value chain and GST rate on works contract services should be provided as 12% instead of 18%.

Similar rate structure has been provided by GST council for Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly.

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Gartner Says the Banking and Securities Industry in India To Grow 8.6 Percent in 2017
Jun 20,2017

The Forecast/ Current Scenario: IT spending by banking and securities firms in India will grow 8.6 percent in 2017 to reach $8.9 billion, according to Gartner, Inc.

Analyst Take: n++The Indian banking sector has undergone a transformation. Banks are gradually lowering the number of branches and increasing capability in terms of their existing infrastructure,n++ said Moutusi Sau, principal research analyst at Gartner. n++Despite effects of demonetization in the banking sector, banks will continue with digital transformation projects.n++

Analysis: Demonetization is the primary reason for the slowdown in the banking and securities market in India. But the effects will be short-lived. The slowing manufacturing sector is also having an indirect effect on the banking and securities sector.

IT services will grow the fastest at 13.8 percent in 2017 followed by software at 13.4 percent. Firms in the banking and securities industry are investing more in enterprise resource planning (ERP)/ supply chain management (SCM)/ customer relationship management (CRM) to upgrade their existing infrastructure.

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Fitch: Strongest World Growth Expected Since 2010
Jun 20,2017

The recovery in global growth is strengthening and is expected to pick up to 2.9% this year and peak at 3.1% in 2018, the highest rate since 2010, says Fitch Ratings in its latest Global Economic Outlook (GEO).

Faster growth this year reflects a synchronised improvement across both advanced and emerging market economies. Macro policies and tightening labour markets are supporting demand growth in advanced countries, while the turnaround in Chinas housing market since 2015 and the recovery in commodity prices from early 2016 has fuelled a rebound in emerging market demand, said Brian Coulton, Fitchs Chief Economist.

The biggest positive forecast revision since Fitchs March GEO is to the eurozone. Here, stronger incoming data, improving external demand and greater confidence that ECB QE is gaining traction on activity have resulted in an upward revision of 0.3pps to the 2017 eurozone growth forecast, taking it to 2%. The recent pick-up in world trade growth has also been striking.

However, this improving global picture implies an evolving monetary policy outlook. China has recently seen a tightening in credit conditions, which will start to have an impact on growth later this year and the Fed looks set to pursue a normalisation course at a rate of three or four hikes per year through 2019. Low core inflation allows the ECB to carry on with QE for the time being, but the reduction in deflation risks will see the programme phased out by mid-2018.

With the Fed now signalling that QE will start to be unwound later this year, these monetary policy adjustments could spark some volatility in global financial markets attuned to persistent monetary accommodation, added Coulton.

The changing impact of fiscal policy on growth in the advanced economies also remains an important factor behind the improved near-term outlook. Fiscal policy began to shift to a mild easing stance from 2016 in the US and the eurozone after several years of substantial fiscal tightening over 2011 to 2015. Fitchs analysis of multipliers suggests this shift has had a significant impact on growth dynamics in the advanced economies and seems likely to provide a further boost to growth over the next couple of years.

Demand growth in the larger emerging market economies is recovering strongly in 2017. Both Brazil and Russia have recently seen a return to positive real GDP growth rates and the latest data suggest consumption and investment is starting to pick up in Russia. Following very large declines in aggregate demand in the aftermath of sharp falls in commodity prices in 2014, there is now room for demand to recover in large emerging market commodity producers.

The two key downside risks identified last quarter - eurozone fragmentation risk and aggressive US-led protectionism - have not gone away but have certainly diminished somewhat in recent months, noted Coulton.

Emmanuel Macrons decisive victory in the French Presidential election, as well as his partys success in National Assembly elections, have eased concerns about anti-European and anti-euro sentiments gaining additional traction. Furthermore, despite tough rhetoric on trade in the election campaign, the US policy approach to reforming trade relations has not, so far, translated into aggressive unilateral measures. However, the lack of much visible progress to date on agreeing specific tax reform measures raises the risk that US fiscal policy may not be eased as much as anticipated in our baseline forecast.

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