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Government has added over 4000 medical PG seats for 2017-18: J P Nadda
Mar 03,2017

Shri J P Nadda, Union Minister of Health and Family Welfare today stated that n++an all-time record number of over 4,000 PG medical seats have been approved by Government of India in various medical colleges and hospitals for the academic session 2017-18 this year, taking the total number of PG seats available to 35,117.n++

Thanking Prime Minister Shri Narendra Modi for his visionary leadership and constant guidance, Shri Nadda said that this will further boost our resolve to strengthen tertiary care and improve the medical education in the country. The Health Minister added that of the total increase, 2,046 seats are in medical colleges. Looking at the need to increase PG seats in clinical subjects, the Government had decided to amend the teacher student ratio in clinical subjects in government medical colleges. This change alone has resulted in the creation of 1,137 extra seats in 71 colleges. Many others out of the total of 212 government colleges are sending their proposals and it is expected that at least 1000 more seats can be added during the month of March 2017, Shri Nadda stated.

This includes DNB seats, which are equivalent to MD/MS, have increased by 2,147 in the last one year. Shri Nadda said that there has been a total addition of 4,193 PG seats in the country so far, and a further addition of more than 1000 seats is likely during March 2017. The budget announcement of adding 5,000 PG medical seats in the country is thus likely to be achieved soon, the Union Health Minister said.

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NMCG Signs MoU with Rotary India for the Success of Namami Gange
Mar 02,2017

In its effort to make Namami Gange programme a mass movement with the involvement of more and more voluntary organisations, National Mission for Clean Ganga under Ministry of Water Resources, River Development and Ganga Rejuvenation signed an MoU with Rotary India.

Rotary India will support clean Ganga mission through their WASH in Schools program in various schools. The program includes the implementation of Water, Sanitation and Hygiene services in the targeted government schools and sensitizing all the stakeholders including school children, teachers, school management communities and communities etc. on practicing positive health behaviors for improving awareness on sanitation. This will be achieved through an integrated learning environment and enabling children to serve as agents of change for their siblings and communities at large. Rotary India has planned to undertake WASH in Schools programme in 20,000 Government Schools.

It may be recalled that Union Minister for Water Resources, River Development and Ganga Rejuvenation Sushri Uma Bharti has been advocating the involvement of voluntary organization and NGOs into the Namami Gange programme to make it a mass movement.

The MoU will pave the way for integrating the theme of Ganga Rejuvenation with Rotarys program of WASH which is to be undertaken in government schools and communities located along the river Ganga in the states of Bihar, Jharkhand and Nadia District of West Bengal and other states where Rotary has a strong presence. It will undertake activities and campaigns to create awareness in schools and communities about Ganga rejuvenation and thereby reducing the pollution flowing into the river. The emphasis will be on public outreach and community participation. The MoU shall remain in force for two years. The collaboration between NMCG and Rotary is a significant step in involving various stake holders and communities in Ganga Rejuvenation. The collaboration would initially focus on synergizing the strength of Rotary International for Ganga Rejuvenation without any additional financial commitment from NMCG.

The MoU was signed by Director General, National Mission for Clean Ganga Shri UP Singh and Vice Chairman of Rotary India Shri PT Prabhakar.

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Moodys: Performance of Indian auto ABS stabilizes in January following deterioration immediately post demonetization
Mar 02,2017

Moodys Investors Service says the performance of rated Indian auto asset backed securities (ABS) leveled off in January 2017 after worsening immediately after demonetization, and expects auto ABS performance to not deteriorate beyond March 2017, as the economy recovers, and oil prices remain range-bound and budget policy initiatives provide support.

Signs of stabilization appeared in January 2017, with collection efficiency rising half a percentage point to 93.0% from December 2016, but was still 1.9 percentage points lower than the average in the three months to October 2016.

The rate of increase in 30+ days delinquencies has recently stabilized, rising only to 11.1% in January 2017 from 10.9% in December 2016, compared to a 1.9 percentage point increase over November and December 2016.

For the 15 Indian auto ABS transactions that Moodys rates, collection efficiency -- the ratio of total collections to billings, excluding prepaid amounts -- between November 2016 and January 2017 declined to 93.4% from an average collection efficiency of 94.9% in the three months to October 2016, immediately before demonetization.

The 30+ days delinquency rate also increased to 11.1% in January 2017 from 9.0% in October 2016, marking a disruption in the recovery witnessed for the commercial vehicle segment over the pasts two years.

Over the same period, the rises in the 60+ days, 90+ days and 180+ days delinquency rates were more subdued at 0.6, 0.6 and 0.8 percentage point respectively.

The nine transactions that utilized their credit facilities in December 2016 have all started to replenish them in January 2017. As a result, the average outstanding credit facilities drawdowns declined to 0.4% at the end of January 2017 from 0.9% at the end of December 2016.

In January 2017, all transactions collected more funds than the amount they needed to pay interest and principal to investors. The transaction trustees used the excess to partially or fully replenish outstanding credit facilities. For transactions with no credit facility drawdowns in December 2016, the trustees passed the excess on to the originators.

The stabilization we have observed in January 2017 further supports Moodys view that deterioration in the performance of the 15 Indian auto ABS transactions that we rate will not extend beyond March 2017.

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Sustained Student Enrolments and Private Sector Participation to Support Education Sector Growth in FY18
Mar 02,2017

India Ratings and Research (Ind-Ra) has maintained a stable outlook on the education sector for FY18. Although enrolments increased marginally in the school segment (FY15: 0.43% yoy) and moderately in higher education (FY15: 5.88% yoy), Ind-Ra believes the sector has the potential to grow due to a huge demand-supply gap. Besides new educational institutions, the existing institutions are continuously churning themselves both in terms of physical infrastructure and course content/curricula to keep abreast with the needs of the economy.

In India, funding remains a key challenge for an education venture. Although 100% foreign direct investment in education is allowed, running an educational venture with the profit motive is still difficult. This is so because education in general is considered a public good and education up to the elementary level is considered a merit good. As a result, the predominant organisational structure of private educational institutions in India is not for profit and they are mostly managed by trusts and societies. The presence of multiple regulators in conjunction with the requirement of numerous approvals and regulatory compliances has further complicated the investment process in the Indian education sector.

Ind-Ra has maintained a Positive Outlook on its rated portfolio of educational entities for FY18 due to their robust credit profiles. Ind-Ra expects their profiles to remain healthy during the year, on account of growing enrolments and improving profit margins. This is attributed to the regionally sound market position of the rated entities, their quality infrastructure and high academic standards.

Ind-Ra has observed a continuous rise in enrolments across all segments of education such as schools, higher education, distance learning and vocational courses. Despite tuition fee being regulated, educational institutions across the board are able to generate reasonably healthy operating margins. Generally, technical and professional courses/programmes are in demand and their pricing is high. However, several educational institutions offering these courses are finding it difficult to absorb the additional cost pressure and are facing liquidity pressures. Also, the cyclical nature of business leads to liquidity mismatches because tuition fees (main source of revenue) are collected at designated intervals, but expenditure takes place on a regular basis.

The impact of demonetisation on the education sector has been mixed. Institutions where donation and capitation fees are collected in cash and have been a significant component of revenue such as in engineering, medical, nursery colleges have been negatively impacted due to demonetisation. However, the increasing number of cashless transactions has the potential to bring in more transparency in the education sector, leading to increased interest of private sector, especially private equity/venture capital players in the sector.

OUTLOOK SENSITIVITIES

Government policy support towards augmenting the quality of education across all the sub-groups along with creating an environment conducive to foreign and domestic investments, which would reduce the infrastructure deficit in the education sector, would be a positive.

Disproportionate debt-led capital expenditure plans along with increases in debtors, aggravating the liquidity profile, would be a negative for the sector.

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Furnishing of Aadhaar mandatory for final settlement of Pension claims
Mar 02,2017

The EPFO has clarified that obtaining of Aadhaar should be mandatory for the time being only for final settlement of Pension and not in withdrawl cases. The EPFO had extended the date of submission of Aadhaar Number authentication by the members of Employees Pension Scheme 1995 upto 31st March 2017.

However, news item appearing in few dailies suggested that Aadhaar is not required in settlement of pension claims. Accordingly, the EPFO reiterated that the requirement of submitting Aadhaar is not insisted for the time being only in withdrawal benefit cases under Employees Pension Scheme, 1995. Furnishing of Aadhaar is still mandatory for final settlement of pension and scheme certificate cases.

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15.5% Growth in Domestic Tourist visits to States/Uts during 2016 as compared to 2015
Mar 02,2017

Ministry of Tourism compiles data on tourist arrivals and visits to States/ Union Territories (UTs) on the basis of details received from various sources namely Bureau of Immigration and States /UTs.

While surpassing the growth rate of 6.8% in Foreign Tourist Arrivals (FTAs) observed in January 2016 over January 2015, a significantly higher double digit growth rate of 16.5% has been witnessed correspondingly in the month of January 2017 over January 2016. A similar higher growth rate is also observed in the Domestic Tourist Visits (DTVs) during 2016, recording a marvelous growth rate of 15.5% over 2015.

The data for DTVs, every year, is compiled by Ministry of Tourism based on the inputs received from all States/UTs. While complete data for each calendar year from all States/ UTs is received in the Ministry of Tourism sometime around in the months of April- May of the succeeding year, Ministry of Tourism has come out at present with provisional figures for DTVs on the basis of whatever information/ data is made available thus far by the concerned States/UTs coupled with estimation undertaken by the Ministry of Tourism for the missing/ incomplete data segments. The estimation process basically entails the Methods of prevailing growth rates and proportionate contributions.

Following are the salient features of the provisional figures for DTVs to States/ UTs during the year 2016:

n++ During 2016, the number of DTVs to the States/ UTs was 1653 million (provisional) as compared to 1432 million in 2015 registering a growth of 15.5 %.

n++ The contribution of the top ten States/ UTs during 2016 stands at about 84.2% to the total number of Domestic Tourist Visits as against 83.62% recorded in 2015.

n++ The top ten States in terms of number of DTVs (in millions), during 2016, were Tamil Nadu (344.3), Uttar Pradesh (229.6), Madhya Pradesh (184.7), Andhra Pradesh (158.5), Karnataka (129.8), Maharashtra (115.4), West Bengal (74.5), Telangana (71.5), Gujarat (42.8) and Rajasthan (41.5).

n++ Tamil Nadu and Uttar Pradesh have maintained the first and second rank respectively in terms of DTVs in 2016.

n++ Madhya Pradesh has gained several ranks to reach the third position leaving Andhra Pradesh, Karnataka and Maharashtra at the succeeding fourth, fifth and sixth positions.

n++ West Bengal surpassed Telangana to attain the seventh position rendering Telangana at the eighth, followed by Gujarat and Rajasthan.

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Moodys: China, Australia and Japan auto loan ABS markets stable; demonetization negative impacts Indian market
Mar 02,2017

Moodys Investors Service says that the performance of auto loans and auto loan asset backed securities (ABS) in China, Australia, and Japan is strong and stable, and should remain so, but to different degrees, with some sectors outperforming others, owing to diverging trends in economic growth.

However, demonetization had a negative impact on the performance of Indian auto ABS in December 2016 and the market will remain weaker than before the governments decision in November 2016 to remove all INR500 and INR1,000 notes from circulation.

The sectors performance should return to pre-demonetization levels over the course of 2017.

On issuance, for the Chinese market during Q4 2016, seven auto loan ABS transactions -- with a total aggregate portfolio of RMB24.5 billion -- were issued compared with only three in Q3 2016. Total issuance for 2016 was 20 transactions with an aggregate portfolio of RMB59.7 billion.

For the Australian market, three transactions were issued in Q4 2016, and a total of eight with an aggregate portfolio of approximately AUD6.1 billion for 2016.

In Japan, three transactions were issued in Q4 2016, with a total of 26 with an aggregate portfolio of JPY316 billion for 2016.

Moodys rated 10 auto ABS transactions across Asia Pacific in Q4 2016, which was the same as the number of deals we rated in Q4 2015. Moodys also upgraded the ratings of one Australian auto ABS and one Chinese auto ABS in Q4 2016.

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Moodys announces rating assignment of (P)B1 to State Bank of Indias Additional Tier 1 capital securities component of MTN programme
Mar 02,2017

Moodys Investors Service announced today that on September 6, 2016, it assigned a (P)B1 rating to the perpetual capital securities component of the existing USD10 billion Medium Term Note (MTN) program of State Bank of India (SBI, deposits Baa3 positive, BCA ba1).

Prior to September 2016, Moodys had assigned a (P)Baa3 rating to the senior unsecured component, a (P)Ba1 rating to the subordinated component, a (P)Ba2 rating to the junior subordinated component, and a (P)Prime-3 rating to the short-term component of the MTN programme.

The terms and conditions of the capital securities incorporate Basel III-compliant non-viability language in accordance with Reserve Bank of India (RBI) guidelines, and will qualify as regulatory Additional Tier 1 (AT1) capital securities.

The securities can be issued by SBI directly, or by any of its branches outside India.

RATINGS RATIONALE

The rating is positioned three notches below the banks adjusted baseline credit assessment (BCA) of ba1, in accordance with Moodys standard notching guidance for contractual non-viability preferred securities with an optional, non-cumulative distribution-skip mechanism.

The three-notch difference from the adjusted BCA reflects the probability of impairment associated with non-cumulative coupon suspension, as well as the likelihood of high loss severity when the bank reaches the point of non-viability.

Under the terms and conditions, the principal and any accrued but unpaid distributions on these capital securities would be written down, partially or in full, when SBIs group or solo common equity tier 1 (CET1) ratio is at or below the 5.5% prior to March 31, 2019, and 6.125% from and including March 31, 2019. In such a scenario, the write-off may be temporary and the amount written-off could be reinstated subject to RBIs conditions.

While the CET1 trigger event threshold is higher than the global standard, Moodys does not consider these securities to be high trigger contingent capital securities, as the broad principle of loss absorption is at the point of non-viability and not in advance of a bank failure. In this regard, the ratings of the AT1 securities are notched from SBIs adjusted BCA.

Loss absorption will also be triggered in the event that the RBI notifies the bank that without such write-off, the bank would become non-viable, or if the RBI decides to make a public sector capital injection without which the bank would become nonviable. Additionally, such loss absorption will be triggered if RBI or any other relevant authority decides to reconstitute or amalgamate the bank with another bank. In such scenarios, the write-down will be permanent.

Furthermore, SBI, as a going concern, may choose not to pay interest on these securities on a non-cumulative basis. As such, the distributions on these capital securities are fully discretionary. However, a common share dividend stopper applies if a distribution is missed.

These securities are senior to common shareholders and perpetual non-cumulative preference shareholders, but junior to all depositors, general creditors, and holders of subordinated debt of SBI, other than any subordinated debt that qualifies as Additional Tier 1 capital. These securities rank pari passu with any other debt instruments classified as Additional Tier 1 Capital under the RBI Guidelines and with any subordinated obligation that was eligible for inclusion in hybrid Tier 1 capital under the then prevailing Basel II guidelines.

While SBI is majority-owned by the Indian government (Baa3 Positive), we do not assume that AT1 securities will receive extraordinary government support, as these are designed to absorb losses at the point of non-viability.

What Could Change The Ratings Up/Down

The ratings of the AT1 securities are notched from SBIs adjusted BCA. As such, the ratings of the securities will be upgraded or downgraded if SBIs BCA is revised upwards or downwards.

SBIs BCA is unlikely to be revised upwards in the next 12-18 months, because asset quality deterioration in recent years has put pressure on its credit profile.

SBIs BCA could face downward pressure if: (1) its NPL ratio increases substantially from current levels; and/or (2) if its core earnings fall, impacting its ability to support an increase in credit costs.

SBIs deposit ratings and ratings of senior unsecured debt could be upgraded if Indias sovereign rating of Baa3 is upgraded.

Additionally, any indications that support from the Government of India (Baa3 positive) has diminished or that additional capital requirements may arise beyond the governments budgeted amount could put the banks ratings under pressure.

Any downward changes in the sovereigns ceilings could also affect the banks ratings.

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A Government Panel recommends legal framework for protection of interests of migrants in the country
Mar 02,2017

A Government appointed Panel has recommended necessary legal and policy framework to protect the interests of the migrants in the country, stating that the migrant populationmakes substantial contribution to economic growth and their Constitutional rights need to be secured.

The Working Group on Migration set by the Ministry of Housing & Urban Poverty Alleviationin 2015 who submitted their Report to the Government today held extensive discussions with Minister of HUPA Shri M.Venkaiah Naidu.

The Working Group has recommended that the Protocols of the Registrar General of India needs to be amended to enable caste based enumeration of migrants so that they can avail the attendant benefits in the States to which migration takes place. It also recommended that migrants should be enabled to avail benefits of Public Distribution System (PDS) in the destination State by providing for inter-State operability of PDS.

Referring to Constitutional Right of Freedom of Movement and residence in any part of the territory of the country, the Group suggested that States should be encouraged to proactively eliminate the requirement of domicile status to prevent any discrimination in work and employment. States are also to be asked to include migrant children in the Annual Work Plans under Sarva Siksha Abhiyan (SSA) to uphold their Right to Education.

Noting that money remittances of migrants was of the order of Rs.50,000 cr during 2007-08, the Working Group suggested that the vast network of post offices need to be made effective use of by reducing the cost of transfer of money to avoid informal remittences. It also suggested that migrants should be enabled to open bank accounts by asking banks to adhere to RBI guidelines regarding Know Your Customer (KYC) norms and not insist on documents that were not required.

The Group suggested that the hugely underutilized Construction Workers Welfare Cess Fund should be used to promote rental housing, working Women Hostels etc., for the benefit of migrants.

Quoting data of Census 2011 and National Sample Survey Organisation (NSSO), the Group stated that migrants constitute about 30% of the countrys population and also of the total working force.

The recent Economic Survey noted that annual migration in the country increased from 3.30 million in 2011 to 9.00 million in 2016.

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Rs. 16,097 Crore Foreign Exchange Earned Through Tourism in January 2017
Mar 01,2017

Foreign Exchange Earnings (FEEs) during the month of January 2017 were Rs.16,097 crore as compared to Rs.13,669 crore in January 2016 and Rs.12,100 crore in January 2015. The growth rate in FEEs in rupee terms during January 2017 over January 2016 was 17.8% as compared to the growth of 13.0% in January 2016 over January 2015.

Based on the credit data of Travel head as available from Balance of Payments of RBI for the previous year, Ministry of Tourism estimates and releases the data of Foreign Exchange Earnings (FEEs) through tourism in India, both in rupee and dollar terms, for the current month applying suitable inflation factor and current month Foreign Tourist Arrivals data.

The highlights of the estimates of FEEs from tourism in India for January 2017 are as below:-

Foreign Exchange Earnings (FEEs) through tourism (in Rs. terms)

n++ FEEs during the month of January 2017 were Rs.16,097 crore as compared to Rs.13,669 crore in January 2016 and Rs.12,100 crore in January 2015.

n++ The growth rate in FEEs in rupee terms during January 2017 over January 2016 was 17.8% as compared to the growth of 13.0% in January 2016 over January 2015.

Foreign Exchange Earnings (FEEs) through tourism (in US $ terms)

n++ FEEs in US$ terms during the month of January 2017 were US$ 2.364 billion as compared to FEEs of US$ 2.032 billion during the month of January 2016 and US$ 1.945 billion in January 2015.

n++ The growth rate in FEEs in US$ terms in January 2017 over January 2016 was 16.3% compared to a positive growth of 4.5% in January 2016 over January 2015.

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DMRL AND JSHL Sign Licensing Agreement for Transfer of Technology of High Nitrogen Steel
Mar 01,2017

Defence Metallurgical Research Laboratory (DMRL), Hyderabad, a premier research laboratory of Defence Research and Development Organization (DRDO) and Jindal Stainless (Hisar) (JSHL) signed the Licensing Agreement for Transfer of Technology of High Nitrogen Steel (HNS) for armour applications. Speaking on the occasion the Minister of State for Defence, Dr. Subhash Bhamre congratulated DMRL and DRDO for their outstanding achievement in developing a breakthrough technology for armour applications and complimented JSHL for partnering with DRDO. The Minister noted that HNS technology is a step forward towards Armys quest for lighter and high performance armouring material compared to the currently used materials. He said, it has also the potential for a number of civilian applications and for exports as well. Dr. Bhamre asserted that this is a major step towards achieving the Prime Minister Shri Narendra Modis vision of Make in India and wished the team a great success in future endeavours. The Minister called upon both public as well as private Industries and Ordnance Factories to use this material extensively in their products.

Chairman DRDO and Secretary DD (R&D) Dr. S Christopher complimented the scientists of DMRL for this achievement which comes as a giant leap forward, towards DRDOs quest for stronger and high performance defence material. He further said that the Transfer of Technology from defence R&D to industry is aligned with the Make in India policy to foster conducive environment for industrys potential growth in the strategic sectors.

Dr. Satish Chandra Sati, Director General (Naval Systems & Materials), while addressing the gathering applauded the DMRL scientists for developing many varieties of steel including HNS which would be of great importance to the industry. Dr. S. Guruprasad, CC R&D (PC &SI) in his welcome address stated that the HNS being a dream material for any researcher should find wide applications for the industry. DMRL has developed and established a number of frontline and path breaking technologies in the areas of metallurgy and material science. HNS is not only tough but also has good strength. In addition to being non magnetic as well as corrosion resistant, the HNS cost is about 40 percent less compared to Rolled Homogenous Armour Steel (RHA). Very few countries in the world have developed this technology of HNS. This material has potential for a number of defence and civil applications like armouring, mine trawls, oil industries etc.

JSHL is a stainless steel manufacturer, with state-of-the-art facility at Hisar (Haryana), backed with strong production facilities including the triplex refining route, which is used for production of HNS.

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Projects worth Rs 1050 Crore Awarded to arrest sewage pollution in Ganga from Patna
Mar 01,2017

In a major step taken to develop adequate sewage treatment infrastructure in Patna to keep Ganga clean, projects worth Rs 1,050 crore have been awarded under Namami Gange programme. The amount will be spent for setting up two two Sewage Treatment Plants (STPs), renovation of one existing STP , construction of two pumping stations and laying of new underground sewage network of about 400 kilometers.

Contracts to build STP of 60 MLD capacity and laying of new underground sewage network of 227 kilometers in Saidpur zone of the city have been awarded to UEM India and Jyoti Build Tech at a total cost of Rs 600 crore. Three other firms - Larsen & Turbo, Voltas and GAA Germany JV have been awarded separate projects in Beur zone of the city worth over Rs 450 crore to build one STP of 23 MLD, renovate existing STP of 20 MLD and lay down new underground sewage network of about 180 kilometers. The scope of work also includes creation of main pumping stations of 83 MLD and 50 MLD capacity in Saidpur and Beur zones respectively. The contracts also include the cost of operation and maintenance of STPs and sewage networks for a period of 10 years.

These projects not only aim to treat the current sewage generation in respective zones of Patna but also take into account the sewage estimates of next one decade, considering the expected rise of population in the city. As per a survey by the World Bank, Patna is also one of the fastest growing city in the world in terms of infrastructural development. After time-bound commissioning of these projects, no untreated water will go into the Ganga from these zones saving the holy waters of the river from contamination and deterioration. The progress of the construction will be monitored by National Mission for Clean Ganga (NMCG) to ensure that deadlines are met.

Patna city spread in an area of more than 100 square kilometer is sub-divided into six sewerage zones - Digha, Beur, Saidpur, Kankarbagh, Pahari and Karmali Chak. Contract for sewage related projects in Karmali Chak zone are expected to be awarded shortly.

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Cabinet Note On Cards To Facilitate India Becomes Signatory To TIR Agreement: JS, FT(CIS)
Mar 01,2017

A cabinet note is likely to be finalized within two months to enable India become a signatory for TIR Agreement (Convention on International Transport of Goods Under Cover of TIR Carnets) to further enhance and facilitate Indias trade and economic basket with CIS region including that of Russia, according to Joint Secretary, FT(CIS), Ministry of Commerce and Industry, Mr. Sunil Kumar.

Mr. Kumar explained that nearly 70 countries are signatory to TIR Agreement which makes transshipment of their goods through waters routes easier and unhindered as it leads to harmonization of system and such transshipment are not subjected to any scrutiny from their shipment until their destination.

n++India if succeeded signing in the TIR Agreement and becomes signatory to it, its containers carrying goods from its sea shores until CIS countries could not be halted for any inspection on their sea routes and move without any obstructions as it would save time and decrease the logistics cost of Indias exports to CISn++, said Mr. Kumar. The finalized cabinet note aims at on these directions, he indicated.

He also hinted that a comprehensive economic partnership agreement is also being worked out with CIS regions which according to it could be a free trade agreement so that the exports and imports between India and CIS regions travel with little difficulties.

The trade prospects of Indian businessmen in the CIS regions could be more flourishing in areas of agriculture, horticulture, textile, tea, tobacco, research, biotechnology, mining and hydro electric including renewable and oil and gas, pointed out Mr. Kumar.

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Classify Biscuits In Its Lowest GST Slabs Among Food Industries: FBMI
Mar 01,2017

Federation of Biscuit Manufacturers of India (FBMI) has urged the GST Council to keep biscuits in its lowest slab since biscuits are an item of mass consumption and higher taxation on it would adversely hit biscuit production as well as its consumption and hence employment in the industry

FBMI which is an affiliate association of PHD Chamber of Commerce and Industry is of the view that lower GST rates on biscuits will enable their availability and access within the reach of aam aadmi and that too at affordable prices.

In a representation sent on to GST Council by FBMI , it has been emphasized biscuits be taxed within the lowest slab of GST for Foods .

It has been pointed out that almost 93% of the food basket comprises basic food. The government proposes to tax basic food at a lower rate under GST. Taxing the remaining 7% food items at higher rates under GST will lead to increase in complexity, without substantial addition to the revenues. It will also not meet the goals of efficiency and equity.

Tax rates should apply uniformly across the entire supply chain, from one end, to another so as to encourage value added activities in the farm produce and food sector. GST provides the right opportunity to correct the current anomalies. Under GST, there should be no discrimination while taxing food products on the basis of their being branded or un-branded, or premium or non-premium products, as this will encourage value addition across the chain from farm to plate .

FBMI also emphasized that multiple rates within a sector will lead to classification disputes and complex record-keeping and compliance system. There is a predominance of the SMEs at the retail level and they will be ill-equipped to handle multiple rates. Thus, in the interest of simplicity, all food items including biscuits should be taxed at a uniform, low rate.

A higher rate of tax would impact demand in the entire value chain. It will cut down on procurement of raw materials by biscuit manufacturers that would adversely impact farmers across India. Lower demand will also negatively impact investments, exports and employment in the food industry.

Lower and uniform GST rate on Biscuits will also help India to be in line with international best practices, wherein countries such as New Zealand, Singapore, Denmark and Japan, have a single lower VAT rate for all goods including biscuits, though Biscuits are treated as non-taxable basic grocery in countries such as Canada and UK.

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Indian manufacturing production and new orders expand in February: Nikkei India Manufacturing PMI
Mar 01,2017

February data indicated that Indian manufacturing production continued to increase, as a rebound in export demand contributed to a stronger expansion of total new orders. There was evidence of an intensification of inflationary pressures, with input costs rising at the quickest pace since August 2014 and output charge inflation climbing to a 40-month peak. Greater output needs encouraged some firms to step up buying levels, but production requirements were insufficient to generate job creation.

At 50.7 in February, up from 50.4, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers IndexTM (PMITM) - a composite indicator designed to provide a single-figure snapshot of the performance of the manufacturing economy - was above the neutral 50.0 value for the second month running and indicated that the health of the sector improved to a greater extent than in January. That said, the latest reading was much weaker than the long-run series average (54.2), largely reflecting below-trend rates of growth for output and new business.

Higher levels of manufacturing production have now been recorded for two successive months, with the sector continuing to recover from Decembers downturn. The upturn in output reflected improved demand from both the domestic and external markets. The total volume of incoming new work increased for the second month in a row, whereas new export orders expanded for the first time since November 2016. Rates of growth for both production and order books picked up since January, but remained marginal.

Increased new order intakes contributed to a further rise in outstanding business. Furthermore, the rate of backlog accumulation was the fastest since last October.

Simultaneously, manufacturing employment declined, though the rate of job losses was marginal overall. Indeed, the vast majority of survey participants signalled unchanged payroll numbers. Evidence provided by panellists indicated that current staffing levels were sufficient to cope with existing production requirements.

Input price inflation quickened in February, with the rate of increase accelerating to the fastest in two-and-a-half years. Indian goods producers reported higher purchasing costs for metals, chemicals, energy and plastics.

Output price inflation also accelerated in February as businesses looked to protect margins in the face of rising cost burdens. The rate of charge inflation was solid and the strongest since October 2013.

Destocking continued in February, with holdings of inputs and post-production inventories both decreasing. The latter dipped for the twentieth successive month, and at the second-sharpest pace in this sequence. The contraction in stocks or purchases was only mild in comparison.

Confidence among Indian manufacturers was relatively subdued in February. Although sentiment towards the year-ahead outlook for output remained positive, the degree of optimism fell since January and was well below its near five-year historical average.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at IHS Markit and author of the report, said: n++Indian manufacturers benefited from recovering demand and raised production volumes in response to another expansion in inflows of new work. February is the second month in succession in which the health of the sector improved after the demonetisation-related contraction recorded at the end of 2016.

However, with growth rates well below-par, the sector still has many areas to develop before it can fire on all cylinders. Businesses dont yet seem convinced as to the sustainability of the rebound as highlighted by cuts to payroll numbers and destocking initiatives. In fact, confidence towards the year-ahead outlook for production dipped since January to the second-lowest since the end of 2015.

Of concern, higher commodity prices resulted in increased cost burdens facing manufacturers. The sharp rate of inflation seen in February was the most pronounced in two-and-a-half years and led factory charges to be raised at the quickest pace in 40 months. This is likely to cause demand from price-sensitive consumers to fall and could potentially jeopardise the economic recovery.

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