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NHAI initiates DPRS for Logistic Efficiency Enhancement Programme (LEEP) under Bharatmala Pariyojna
Nov 15,2016

Under a programme entitled Logistic Efficiency Enhancement Programme (LEEP) aimed to enhance the freight transportation in India through improving cost, time, tracking and transferability of consignments through infrastructure, procedural and Information Technology (IT) interventions, Consultants are being tasked to carry out critical examination of existing logistic infrastructure and destination of freight movement in the country, and 44 freight corridors (Economic Corridors), Inter corridors and feeder routes to reduce cost and time of freight movement. These are proposed to be developed by taking an end-to-end corridor view, rather than stretch-by-stretch road construction view to ensure consistent infrastructure along the corridor, as per discussion between NHAI and Government.

As a first step towards this task, preparation of Detailed Project Reports is being undertaken by NHAI. In the first phase, DPRs of identified 15000 km is proposed to be prepared. In LOT1, NHAI has invited bids for preparation of DPRs for 15,000 km of length in the country. Bids have been invited in 45 packages of about 300 Km length each.

In order to drastically reduce the time taken for conducting surveys, it has been decided to use latest technologies such as LiDAR, Satellite mapping and Ground Penetration Radar (GPR) in preparation of DPRs. This will also help to make data collection comprehensive with accurate measure points and increase the safety for project personnel.

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WPI inflation declines to 3.39% in October 2016
Nov 15,2016

The Wholesale Price Index (WPI)-based inflation eased for the second straight month to 3.39% in October 2016 from 3.6% in September 2016 and 3.9% in August 2016. The decline in WPI inflation was mainly driven by dip in inflation for primary articles, while inflation for fuel & power and manufactured products group moved up in October 2016. Further, the unfavourable base effect restricted sharp decline in inflation in October 2016.

Inflation of primary articles dipped to 3.3% in October 2016 from 4.8% in September 2016. The inflation for manufactured products rose to 2.7% in October 2016. Further, the inflation for fuel items accelerated further to 6.2% in October 2016 from 5.6% in September 2016.

As per major commodity group-wise, inflation eased for foodgrains, fruits, fish, mutton, spices, fibres, oilseeds, raw rubber, flowers, grain mill products, sugar, oil cakes, edible oils, textiles, wood and products, and paper & products in October 2016. On the other hand, inflation rose for vegetables, milk, iron ore, copper ore, crude petroleum, mineral oils, dairy products, tea & coffee products, cashew kernel, leather products, rubber and plastic products, chemical products, non-metallic mineral products, and basic metals in October 2016.

Inflation of food items (food articles and food products) eased to 6.3% in October 2016 from 7.5% in September 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to 2.1% in October 2016 from 1.8% in September 2016.

Core inflation (manufactured products excluding foods products) rose to 1.1% in October 2016 from 0.6% in September 2016.

The contribution of primary articles to the overall inflation, at 3.39%, was 96 basis points (bps) in October 2016 compared with 137 bps in September 2016. The contribution of manufactured products was 151 bps compared with 140 bps, while that of fuel product group was 92 bps against 83 bps in September 2016.

The contribution of food items (food articles and food products) to inflation fell to 1.97 bps in 3.39% in October 2016 compared with 233 bps to 3.57% in September 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was 144 bps in October 2016 compared with 126 bps in September 2016.

As per the revised data, the inflation figure for August 2016 was revised up to 3.9% compared with 3.7% reported provisionally.

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Huge Import of RBD Palmolein says The Solvent Extractors Association of India
Nov 15,2016

Import of vegetable oils during Oil Year 2015-16 (November 2015 to October 2016) i.e. edible oil and non-edible oil reported at 147.4 lakh tons (14.74 MnT) compared to 146.1 lakh tons (14.61 MnT) for the same period of last year practically remained stagnant from the previous year, thanks to reduction in oil stock by 435,000 tons during the year.

Import of Vegetable Oils during October 2016 is reported very low at 1,173,254 tons compared to 1,670,891 tons for October 2015 and 13.99 lakh tons in September 2016 reducing overall incremental growth of 5% upto September 2016 to just 1% for the whole year 2015-16.

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n++Demonetisation a Masterstroken++, Give it time to play out - CII
Nov 15,2016

The recent move by the government to demonetise high denomination notes is likely to have far-reaching impact, striking a blow at the heart of the illegal economy. While it is not possible to have a firm estimate of unaccounted wealth, it is widely estimated at around a fifth of Indias GDP or around $450 billion. While some of this may be stored in cash, some may be in assets such as real estate and jewellery. This negatively affects the business environment, especially for those who comply with the law of the land and follow ethical practices, CII has said.

n++After a short period of some pain when the economy adjusts to the sudden withdrawal of cash, CII expects a much stronger economy. Indias cash-dependence is extremely high with a currency-GDP ratio of around 12 per cent compared to 4-5 per cent in other developing countries. High level of cash usage tends to slow down the flow of money through the economy. As we transition to a greater usage of fintech for payments, spending will rise leading to additional economic growth. This is an economic masterstroke by the Prime Minister and must be allowed time to play outn++ said Chandrajit Banerjee, Director General, CII.

The prevalence of cash use has also made India prone to high inflation. Corruption and excessive cash use tends to erode the purchasing power of money. Lower cash use will have a dampening impact on inflation and this will be a further positive for Indias macro-fundamentals. n++The Reserve Bank will now have more room to cut interest rates as inflation subsides. Already, the bond market has reacted to the news with a reduction in the bond yieldsn++ Mr Banerjee observed.

The CII release further elaborated, that this move will be positive for banks whose deposit mobilisation will be strengthened. The old currency notes will be deposited with banks and more households will find it imperative to open bank accounts and make use of card payments. Currency in the form of Rs 1000 and Rs 500 notes amounted to Rs 14.2 lakh crore as of March 2016, or about 85 per cent of total currency in circulation. If this is converted to current and savings deposits, there will be an increase in banks liquidity. This is also a great opportunity to transition to a n++plastic economyn++, where there is a prevalence of debit and credit cards for transactions, CII said in the release.

CII has stated that in all likelihood, a fair proportion of the Rs 14 lakh crore in high-denomination currency will not return to the banking system, for fear of accounts being scrutinized. If one assumes that about 20 per cent of the cash does not return to the system, this would amount to about Rs 3 lakh crore or $42 billion. This is a reduction in the RBIs liability to the public, allowing it to print a similar amount of fresh money or transfer the gain to the government.

n++The biggest gain from this move will be greater formalisation of the economy. Currently, the costs of informality are evident in low tax base which impacts government revenues, lack of economic control through monetary instruments, and lower economies of scale. Indias tax base is low and its tax to GDP ratio needs to increase from the current level of 16.6 per cent, which is much lower than about 21 per cent in other emerging economies. Less than 30 million Indians filed personal income tax with more than half of these paying no taxn++ said the CII Director General.

The demonetization of high denomination notes is ultimately a strong message that goes out to all those who used cash for illicit activities. A big blow has been dealt to those who engaged in corruption and took cash bribes. The message will have far-reaching implications for those who indulge in such illicit activities. This would greatly curb such transactions and will be a body blow to corruption, racketeering, human trafficking, gambling, and other such activities which vitiate the entire security system of the country, said the CII release.

For industry, this is indeed a historic and welcome move with very positive implications. The existence of a parallel economy provides unfair competition to organised industry which pays taxes and complies with standards. Such a decisive move will change the perception of India completely and bring about much-needed transparency. It will prevent people from violating the law with impunity even for daily business transactions, CII said.

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Elevated Global Yields, Benign Domestic Conditions to Keep Markets Choppy
Nov 15,2016

Rising global yields are posing challenges for markets at a time when domestic developments are anchoring investment interests, says India Ratings and Research (Ind-Ra). Domestically, currency and debt markets will take cues from global developments while considering domestic inflation data and interbank liquidity conditions. The 10-year G-sec yield could trade at 6.64%-6.74% (6.72% at close on 11 November 2016). The rupee is likely to trade at 67.25/USD-67.95/USD (67.25/USD at close on 11 November 2016).

Demand Boost for Bonds, Global Risks Continue: With a large cash component (INR14.1trn currency consists of INR500 and INR1000 notes at an aggregate level) entering the banking channel, the first impact will be a deposit boost. This durable increase in the deposit base will create more demand for government bonds and other high rated bonds in an environment of tepid credit demand. Additionally, benign retail inflation trajectory will keep aid investors appetite for bonds. Headwinds to bond market momentum will emerge from a surge in global bond yields - US 30-year and 10-year treasury yields surged over 50bp in less than a month to 2.96% and 2.25% respectively, following the alignment post the US election outcome.

Improvement in Liquidity Conditions: Interbank liquidity will increase as a large amount of cash in circulation moves in to the formal banking channel - translating to almost no scope for open market purchase operations. The sharp improvement in interbank liquidity and deposit will lead to a reduction in certificate of deposits issuances and a drop in deposit rates.

Rupee Weakening Bias to Intensify: As the dust settles following the US presidential elections and as investors ascertain implications of the outcome, risk aversion sentiment dominates globally. Additionally, the US Feds stance on rates is in focus, keeping the dollar firm. The rupee has emerged as a low beta asset among the major Asian currencies, exhibiting relative stability. This resilience is likely to continue, keeping it anchored on account of domestic fundamentals. However, vulnerability to global sentiments will keep the currency trading with a depreciation bias in the near term.

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IIP Continues to Disappoint, Divergence with Industrial GDP to Continue
Nov 15,2016

The continued dismal performance of factory output, particularly in manufacturing, in the run-up to the festival season in October 2016 is a clear pointer that a recovery is nowhere in sight, says India Ratings and Research (Ind-Ra). The Index of Industrial Production (IIP) grew at a marginal 0.7% yoy in September 2016 and negative 0.1% yoy for 1HFY17.

Although the broad trend shown by the IIP data reflects the state of affairs prevailing in the industrial sector in India, these numbers need to be taken with a pinch of salt. The old base of 2004-2005 for IIP broadly reflects the corporate mood; but it is somewhere missing the point by not capturing the output getting generated in the new industrial/ manufacturing segments. This was clearly reflected in the dichotomy witnessed in the IIP and the industrial gross valued added data for 1QFY17. So maybe it is also the time to not read too much into the IIP data with 2004-2005 base and wait for the IIP data with 2011-2012 base to make full sense of the industrial output trend.

The consumer durables sector has sustained positive growth rates since June 2015. This was to be reflected in improved performance in manufacturing prior to the start of the festival season. However, although consumer durables clocked robust growth of 14% yoy in September 2016 and 7.6% yoy in 1HFY17, this has not resulted in a boost in manufacturing output. Manufacturing output grew at 0.9% yoy in September 2016.

At the use-base level, capital goods output contracted 21.6% yoy in September 2016 against a contraction of 22.1% yoy in the previous month. Capital goods output contracted 21.4% during 1HFY17, which serves to reinforce the lack of investment demand in the economy already evident from monthly numbers. Cable, rubber insulated once again pulled down capital goods growth (negative 3% contribution to overall IIP); this sector has been very volatile and in the past also was responsible for a sharp contraction in capital goods output. The primary reason for this has been the small number for respondents/factories and the long turnaround time of production which are recognised as the output. Basic and intermediate goods growth came in at low single digit levels. Consumer non-durables growth, although positive after two consecutive months of negative growth, came in at a negligible 0.1% in September 2016.

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Moodys: Outlook for the global airline industry changed to stable from positive
Nov 15,2016

The outlook for the global airline industry has been changed to stable from positive, Moodys Investors Service says in a new report. Airlines operating margins and operating profits are expected to decline in the coming 12 to 18 months, as capacity continues to outstrip demand.

Capacity will continue to grow a bit more than passenger demand over the next year or so, said Moodys analyst, Jonathan Root. As a result, both the aggregate operating margin and operating profit of Moodys-rated airlines will drop to ranges that are within our range for a stable, rather than a positive, industry outlook.

Aggregate operating margin is expected to fall to 9.4% in 2017 from a projected 10.8% this year, while operating profit will contract by about 11% in 2017, against a projected 1.2% contraction this year, Root says in Global Airline Industry-Changing Outlook to Stable; Operating Margin to Decline Below 10%. Moodys estimates that global capacity will grow between 5.5% and 6.5% next year, against 6.1% growth during the first nine months of this year, spurred by the still-low cost of fuel and increased deliveries of new aircraft that need to be placed in service, primarily by airlines in developing markets.

Meanwhile, growth in passenger demand will slow modestly next year due to lackluster global economic expansion, as well as geopolitical uncertainties and the effect of the threat of terrorism on Asian demand for long-haul travel, particularly to Europe. The strong US dollar, excess capacity growth and competing business models will continue to pressure yields until more players reduce capacity or limit growth, Moodys says. Demand will expand between 5.2% and 6.2% over the next 12 to 18 months, against 5.9% in the first nine months of this year.

For US airlines, a combination of slightly higher fuel costs and higher labor costs at American Airlines, Delta Air Lines, Southwest Airlines and United Continental Holdings will contribute to a 20% contraction in operating profits over Moodys outlook horizon. Conversely, improving economic activity, along with significant capacity adjustments, will drive a recovery in operating profit for rated Latin American carriers, though volatility in local currencies remains a key risk.

Moodys is now basing its outlook for the global airline industry on its expectations for operating margins and changes in operating profits on a reported basis for rated airlines only, in order to better reflect changes in operating conditions for airlines. Previously, the outlook was based on the rating agencys forecasts for aggregate adjusted operating margin, changes in industry yields and revenue passenger kilometers for all carriers.

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There is a need to address deeper structural issues to ensure that growth revives and is sustainable
Nov 15,2016

Commenting on the September 2016 IIP data, Dr A Didar Singh, Secretary General, FICCI said growth and investments in manufacturing remain an area of concern. While a slew of measures have been taken by the government in the last few months however, there is a need to address deeper structural issues to ensure that growth revives and is sustainable.

The de- growth in key sectors like capital goods, mining, apparels, chemicals and electrical machinery is indeed a cause for concernn++ said Dr Singh, FICCI.

n++The situation demands that the Government should now provide relief to the industry by lowering the interest cost burden and taking sector specific measures to boost growthn++, Dr Singh added.

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Universities to be granted autonomy based on National Institutional Ranking Framework & NAAC: HRD Minister, Prakash Javadekar
Nov 15,2016

Prakash Javadekar, Union Minister for HRD, Government of India, has announced that universities will be granted an autonomous status based on the National Institutional Ranking Framework and National Assessment and Accreditation Council (NAAC). The institutions with good ranking will have 100% autonomy, average institutes will have 50% autonomy and bad performers would have only 10% autonomy in their working.

Javadekar said that for sustainable progress of a country it was essential to have really good research-driven and innovation-oriented universities. In view of this, the government was in the process of establishing 20 world-class universities, of which 10 will be in the public sector and 10 in the private sector with full autonomy. He added that the government will play the role of a facilitator and help in improving the quality of education.

Speaking on the National Education Policy, the Minister said that there have many misconceptions and the government was revisiting the policy to develop a relevant framework to bring about autonomy in the sector. He added that recently a meeting was held with 40 MPs of varied states to encourage research and innovation in the universities as that will add value to the system. Javadekar said that the government was thinking of reintroducing Class X board examination for CBSE schools. But he assured that any such decision will only be applied from the next academic year and would come into force in 2017-18.

To incentivize innovation, the Minister said that India Hackathon has been launched where students of all technology institutions in India are being challenged to offer innovative solutions to some of the daunting problems faced by our nation. He added that though India possesses best of brains in the world but due to lack of infrastructure, labs, scholarships, quality education and enabling policy framework, the students prefer to carry out research and innovations abroad. Hence, the government is determined to create a conducive research environment in the country.

Elaborating on the various programmes initiated by the government to enhance the quality of higher education and development of infrastructure for the sector, Mr. Javadekar said that Uchhatar Avishkar Yojana (UAY), IMPacting Research INnovation and Technology (IMPRINT), Higher Education Financing Agency (HEFA) and Global Initiative of Academic Networks (GIAN) and soon to be implemented Global Research Interaction Network (GRIN) are some of the schemes which will give a boost to the sector.

The Minister said that Indian universities do not fare well at the international rankings. He alluded to the fact that the perception of Indian institutes is not as expected in the global arena. The government was in the process of addressing the perception issues as well, he added.

Earlier while moderating the theme session, Mohandas Pai, Chair, FICCI Skills Committee & Chairman, Manipal Global Education Services, said that with automation and artificial intelligence, machines have started playing a critical role; therefore there was a need to educate and skill the youth of India according to the disruptive transformation taking place at the workplace.

Sunil Kant Munjal, Chairman, Hero Corporate Services, said that to address the gaps in the higher education system, there was a need to have a re-look at the education policy with a light touch, which gives full freedom to institutes to operate, experiment and innovate to enhance the quality of education. The Munjal University has been experimenting with varied ideas and the curriculum contains 45% experiential content. The best known organizations such as Shell, IBM and KPM have partnered with the institute and helping in imparting skills to the student that will make them industry-ready. He added that Siemens has set up its industry on the campus, which is enabling students to learn the functioning of machines.

Subhash Ghai, Filmmaker and Founder, Whistling Woods International, said that it was important to impart the right kind of education coupled with innovation and liberal arts and art of living to enhance a childs intelligence. India needs to grow into a country of innovators and thinkers. He added that knowledge and information are applied to derive at intelligent solutions; hence the education and skills imparted to students should be such that it encourages development of innovative skills.

Francisco Marmolejo, Higher Education Coordinator, The World Bank, said that India must not lose sight of its goal while internationalizing its higher education structure. It must remain locally relevant and meaningful as gaining higher education without context will leave students unemployable. Besides, higher education should be made accessible to all. He added that the sector should also focus on success and failures to learn and make higher education locally relevant.

Prof Ashish Nanda, Director, IIM Ahmedabad, said that tertiary education needs to be strengthened in India and must be designed so that it caters to the young, vibrant and education hungry demography. He added that the sector needs to be opened up and universities should have autonomy but with accountability. Prof Nanda said that institutes of excellence must be nurtured. The government should pick few institutes and invest time and energy on them as it takes time to build a university and its reputation and brand.

Dr. Jo Beall, Director Education and Society British Council (Exec Board), said that autonomy and strong industry academia linkages have played a critical role in the success of the universities in the UK. India can learn from these examples of the UK. She added that India is way ahead when it comes to private universities and the UK could imbibe some of the learnings. Speaking about the relevance of higher education in the era when information is widely available digitally, Dr. Beall said that the young people are today exposed to information which is more of opinions than facts. Hence, higher education helps them to recognize those facts.

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Hire retired bank staff; others on big scale to deal with demonetisation: ASSOCHAM
Nov 15,2016

Assuring the government of India Incs support against corruption and black money, the ASSOCHAM today impressed upon the government to mobilise all resources across different departments and hire retired bank staff on a massive scale to expedite the currency swapping and withdrawal of cash with minimum inconvenience to the public.

n++Just like general elections when staff across different departments is mobilised; different types of staff can be used for helping the over-stretched banks , grappling with the huge task of dealing with the demonitised currency notes of Rs 500 and Rs 1,000 and dispensing the new notes. The best option appears to be employing the retired bank staff on a mass scale on short-term contracts of three to six months, the ASSOCHAM said in an appeal to the Prime Minister Mr Narendra Modi.

It said while some banks like the State Bank of India and a few others have roped in retired staff, the exercise should be done on a massive scale to deal with the situation.

n++While preference can be given by the banks to re-employ their own retired personnel, even cross - bank staff would be helpful. After all, functioning of the public sector banks is generally the same, the chamber Secretary General Mr D S Rawat said.

It said, the options should be explored to divert staff of other financial services wings and PSUs in the insurance sector for the banking operations for the moment.

The options of outsourcing the house-keeping services to the private sector for the orderly conduct of business at the bank branches should be explored. Such services can include helping the senior citizens; guiding those not familiar with the banking, and the general security upkeep. The local traders associations and market bodies like Azadpur Mandi, should also be involved in the exercise.

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PM takes certain decisions to further activate the dispensing of cash through the networks of BCs, Post Offices, ATMs, Banks & E-payment systems
Nov 15,2016

The Prime Minister Shri Narendra Modi reviewed the supply and availability of currency notes till late evening on 13 November2016.

The Meeting took stock of the current status of supply of cash and took certain decisions to further activate the dispensing of cash through the networks of Banking Correspondents, Post Offices, ATMs, Banks and E-payment systems. Following decisions were also taken keeping in view the convenience of the public.

Banking Correspondents (BCs) Network :

1. Banks will increase the cash holding limit of BCs to at least Rs.50,000/- each. Banks will also allow higher limits in appropriate cases.

2. Banks will replenish the cash with BCs multiple times in a day as per requirement of the BCs.

BCs have wide presence in the rural areas. Totally there are 1.2 lakh BCs in the country. The above decisions will facilitate wider reach in the rural areas for exchange and withdrawal of cash from Bank Accounts.

Postal Network :

3. There are about 1.3 lakh Branch Post Offices in the country. It has been decided to enhance the supply of cash to Branch Post Offices to facilitate cash withdrawals from Postal Accounts.

It may be noted that with 1.2 lakh BCs and 1.3 lakh branch Post Offices getting further activated, a total number of 2.5 lakh points in rural areas will be available to disburse cash and facilitate cash withdrawals from Bank Accounts.

ATM Network :

4. To expedite the process of recalibration of ATMs, a Task Force is being set up under Deputy Governor, RBI consisting of representatives of Banks and Finance Ministry. This Task Force will draw up action plan and ensure implementation of this action plan for quick recalibration of the ATMs to enable them to dispense new Bank notes of Rs.500/- and Rs.2000/-.

5. In the meantime, Micro ATMs will be deployed to dispense cash against Debit/Credit cards up to the cash limits applicable for ATMs. The handheld Micro ATMs have the facility of mobility and deployment at the required places.

Network and Reach of the Banks :

6. The withdrawal limit of Rs.20,000/- per week has been enhanced to Rs.24,000/-. The withdrawal limit of Rs.10,000/- per day has been removed.

7. The limit of Rs.4000/- for over the counter exchange against old Rs.500/- and Rs.1000/- notes has been increased to Rs.4500/-. This will enable the Banks to give lower denomination notes for Rs.500/- while dispensing the remaining Rs.4000/- through Rs.2000/- notes.

8. The ATMs are progressively getting recalibrated. As and when they are recalibrated, the cash limit of such ATMs will stand enhanced to Rs.2500/- per withdrawal. This will enable dispensing of lower denomination currency notes for about Rs.500/- per withdrawal. Other ATMs which are yet to be recalibrated, will continue to dispense Rs.2000/- till they are recalibrated.

9. Business entities having Current Accounts which are operational for last three months or more will be allowed to draw Rs.50,000/-per week. This can be done in a single transaction or multiple transactions. This will enable the small business entities to pay wages to their workers and make sundry payments.

10. Adequate cash will be made available with District Central Cooperative Banks (DCCBs) to facilitate withdrawal from existing accounts. The cash withdrawal limits for Banks will apply in case of DCCBs also.

The above measures would substantially enhance the reach of the banking system to exchange notes and facilitate cash withdrawal from bank accounts.

E-Payments :

11. All Central Government Departments and Public Sector Enterprises are being instructed to use the method of e-payments to the maximum extent possible.

12. RBI has advised National Payments Corporation of India (NPCI) to waive its transaction charges on transactions settled through National Financial Switch(NFS) till 31st December, 2016.

13. Banks are also being advised to waive similar charges currently levied by them.

Arrangements for public convenience :

14. Banks have been advised to arrange separate queues in their branches for senior citizens and divyang persons; customers for transactions against accounts held with the Bank; and exchange of notes. There will, therefore be, three or more separate queues in every branch.

15. Pensioners are required to submit Annual Life Certificate during the month of November. This time limit has been extended up to 15th January, 2017.

16. The existing exemptions for acceptance of old Rs.500/- and Rs.1000/- notes for certain types of transactions are being extended beyond 14th November, 2016 midnight up to 24th November, 2016 mid night.

There is enough cash in the system to meet the requirement. Members of the public are, therefore, advised not to have any sense of panic.

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Global sovereign outlook is negative due to persistent low growth, fiscal concerns and political risks
Nov 14,2016

The outlook for sovereign ratings globally for the coming 12 to 18 months is negative, Moodys Investors Service said in its annual Global Sovereign Outlook. That outlook reflects Moodys assessment of the direction of fundamental credit conditions for sovereigns over the coming year.

The key drivers of the negative outlook are a combination of continued low growth, a shift towards fiscal stimulus that will increase already high public sector debt, and rising political and geopolitical risks. Many emerging markets remain exposed to the risk of a reversal in capital flows.

That broad outlook is reflected in Moodys ratings. 26% of Moodys 134 rated sovereigns currently carry a negative outlook, compared to 17% a year ago, the largest proportion since late 2012. The share of sovereigns with a stable outlook has fallen to 65% from 75% last year, while 9% have a positive outlook, similar to last year with 8%.

One of the key credit constraints for most rated sovereigns is the persistently low growth environment, said Alastair Wilson, Moodys Managing Director -- Sovereign Risk. Monetary policys ability to support growth in advanced economies is diminishing, and in many emerging markets it is constrained by above-target inflation and exchange-rate pressures. So we are seeing a gradual but broad-based shift in policy towards loosening fiscal policy in order to lift growth.

Fiscal stimulus, for example in the form of higher public investment funded by historically cheap debt, can support growth in the near-term and also have positive longer-term effects if investment raises productivity growth.

However, a shift towards looser fiscal policy carries risks for the creditworthiness of many sovereigns, given generally already elevated debt levels. Any increase in debt to finance current spending that has little lasting benefit to economic growth prospects would be negative.

Political dynamics complicate the outlook for many sovereigns. There are increasing risks of policy inertia and reversal, including of policies that have brought large benefits to the global economy, such as those that expanded global trade. Geopolitical risks are rising in many regions as well.

Country- and region-specific risks include the uncertain impact of the US (Aaa stable) election outcome on the USs medium-term fiscal strength, and of its future trade and security policies on the rest of the world.

In Europe, Moodys notes the lack of cohesion and risk of further fragmentation following, among other things, the vote of the UK (Aa1 negative) to leave the EU.

Many commodity-exporting countries have to adjust their growth expectations and public finances to less favourable external conditions.

A fourth risk factor is, as it was last year, the possibility of a significant and sustained reversal of global capital flows away from emerging market economies with a high dependence on foreign capital. Elevated volatility in financial markets and sharp movements in exchange rates could exacerbate already weak economic fundamentals and existing political risks, in particular in countries dependent on external capital inflows.

Some countries, including commodity exporters in Sub-Saharan Africa, already face significant liquidity pressures. The implications of the US election outcome for the direction of global capital flows are hard to predict at this stage.

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Moodys Liquidity-Stress Index hits 2-year high in September
Nov 14,2016

Moodys Liquidity-Stress Index (LSI) for EMEA speculative-grade companies worsened to 12.6% in September 2016, after rising 1.3% in Q3 2016, as refinancing and liquidity pressures continue to affect some companies despite debt capital markets being benign, says the rating agency.

Moodys Liquidity-Stress Index falls when corporate liquidity appears to improve and rises when it appears to weaken.

While the latest reading represents the largest move in the index since liquidity pressures in commodity sectors in Q3 2015, deterioration is unlikely to continue at the current pace into 2017, explains Tobias Wagner, a Moodys Vice President -- Senior Analyst. The trend nevertheless highlights ongoing liquidity pressures for some firms into 2017, despite solid liquidity profiles for most companies.

Negative changes in SGL scores in Q3 2016 outnumbered positive changes by a factor of four. Such a significant uptick in negative changes underlines that some companies across industries will continue to face issues with refinancing and liquidity despite currently benign debt capital markets.

Moodys expects that the LSI will be stable or increase in 2017 as a repeat influx of first-time issuers with adequate or good liquidity profiles, similar to the boom years of 2013-14, is unlikely.

However, there are other indicators suggesting a slight easing in credit pressures. Industry sector outlooks remain mostly stable globally, and there were more positive than negative changes in Q3 2016. In addition, upgrades exceeded downgrades in the third quarter of 2016 for the EMEA region.

While this is encouraging, prospects for widespread liquidity improvements appear limited. Macroeconomic growth remains low and high-yield bond markets remain exposed to external factors, including the impact of potential interest rate rises in the US and possible QE tapering in Europe.

Some companies, particularly with low credit qualities and possible uneven performance track records, may find it challenging to find their window of opportunity to refinance in the market in 2017.

The report also comments that commodity sector liquidity pressures in EMEA have been slower to ease than in North America, while the current trend towards weak covenant protection in the EMEA leveraged finance sector has led to improvements in covenant subscores as weaker covenants are less likely to restrict access to liquidity sources such as revolving credit facilities.

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Exemption of fee on National Highways extended
Nov 14,2016

In order to ensure smooth movement of traffic on national highways the government has decided to extend the suspension of fees on all toll plazas on National Highways across the country till the midnight of 18 November 2016. Earlier the exemption had been allowed till the midnight of 11 November 2016, and then extended till 14 November 2016.

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Moodys: Global growth to stabilize in 2017 as US, emerging market economies improve
Nov 14,2016

Global economic growth will be tepid compared with historical averages over the next two years and risks remain, according to a report by Moodys Investors Service. Nonetheless, growth will pick up from the very weak levels in 2016, as the outlook for the US and emerging economies improves slightly.

Moodys expects global growth to climb to about 3% next year and in 2018 from 2.6% in 2016. Among major advanced and emerging economies, India will log the fastest growth next year, while Italy, Japan and Brazil will have the weakest expansions.

The US economy is forecast to expand 2.2% in 2017 from around 1.6% this year, as consumer spending is supported by healthy job and wage prospects, even as business investment remains weak.

Following the election, the risks to the US growth forecasts depend on the incoming administrations policies, said Madhavi Bokil, a Vice President and Senior Analyst at Moodys.

While prolonged policy uncertainty could weigh on an already weak investment growth, there could be an upside to growth in the short term from increased fiscal expenditure, tax cuts or higher infrastructure spending, said Bokil. A restrictive stance on trade would be detrimental in the medium term.

In emerging markets, growth will be driven by improvements in both the political environment and the economic sentiment in countries including Brazil and Argentina, as well as by reform momentum in India and Indonesia. The Chinese economy has continued to grow at a solid pace, in part through fiscal and monetary policy support.

After five years of steady deceleration, emerging market economies are poised to return to faster growth in 2017, said Elena Duggar, an Associate Managing Director at Moodys. However, although growth is improving, we expect it to be considerably lower than what emerging markets experienced in the years leading up to the financial crisis.

Moodys expects G20 emerging market growth to average about 5% in 2017 and 2018, up from an estimated 4.4% in 2016.

Underlying Moodys belief that emerging market economies will experience a turnaround next year is the fact that many of these countries have already undergone considerable external adjustments in response to slower trade and a steady decline in commodity prices.

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