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Cabinet approves Rehabilitation Package for Displaced Families from Pakistan occupied Jammu &Kashmir and Chhamb
Dec 01,2016

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved Central Assistance of Rs. 2000 crore for 36,384 displaced families from Pakistan occupied areas of Jammu & Kashmir (POJK) and Chhamb following an announcement of Prime Ministers Development Package for Jammu & Kashmir-2015 in November, 2015

As per the package, Rs. 5.5 lakh cash benefit per family will be disbursed to the displaced families to enable them to earn an income and subsist their livelihood. The amount will be released to the State Government of J&K to be disbursed to eligible families through Direct Benefit Transfer (DBT).

In the aftermath of partition of the country in 1947, thousands of families from Pakistan occupied areas of Jammu & Kashmir migrated to the State of Jammu & Kashmir. Subsequently, during Indo-Pak Wars of 1965 and 1971, a large number of families were displaced from Chhamb Niabat area of Jammu & Kashmir. Series of relief and rehabilitation packages have been extended by the Government of India/State Government of J&K from time to time to mitigate the hardship of displaced persons from PoJK and Chhamb and to rehabilitate them.

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Nikkei India Manufacturing PMI eases to 52.3 in November 2016
Dec 01,2016

The withdrawal of high-value banknotes in India reportedly hampered manufacturing growth in November, with companies signalling softer increases in order books, buying levels and output. Concurrently, inflation rates for both output charges and purchase costs eased since October.

November data highlighted an eleventh consecutive monthly improvement in manufacturing conditions across India, with the headline seasonally adjusted Nikkei India Manufacturing Purchasing Managers IndexTM (PMITM) registering 52.3. However, down from Octobers 22-month high of 54.4, the latest reading pointed to a modest upturn overall.

One factor contributing to the downward movement in the PMI was a softer expansion in new business inflows. Order books rose at a moderate pace that was the slowest since July. Panellists reported higher demand from domestic as well as external clients, but indicated that growth was hampered by the money crisis. The upturn in new export orders also lost some momentum in November.

Manufacturing production growth slowed amid reports of cash shortages. Softer increases in output were noted in each of the three monitored sectors, with consumer goods producers recording a sharp slowdown in growth.

Although firms continued to step up their quantities of purchases, the rate of expansion eased from Octobers 14-month high. Money issues was the main reason listed by respondents for the softer growth in input buying. By sector, the weakest performer on this front was consumer goods.

As has been observed for around two-and-a-half years, manufacturing employment was broadly unchanged during November. Meanwhile, outstanding business increased for the sixth month running. The rate of backlog depletion was, however, modest and the weakest since June.

There were divergences with regards to stock levels as falling inventories of finished goods contrasted with higher holdings of raw materials and semi-finished items. The drop in post-production stocks was mainly linked by respondents to a slower expansion of output, while the accumulation in stocks of purchases was associated with buying activity growth.

Higher prices paid for a range of raw materials resulted in a further overall increase in input costs. Although solid, the rate of inflation eased since October. November data indicated that less than 3% of firms passed rising cost burdens through to their clients, with 96% of companies reporting unchanged selling prices. Subsequently, the rate of charge inflation softened and was marginal.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at IHS Markit and author of the report, said:

n++PMI data for November showed that the sudden withdrawal of high-value banknotes in India caused problems for manufacturers, as cash shortages hampered growth of new work, buying activity and production.

n++However, whereas some may have anticipated an outright downturn, the sector held its ground and remained in expansion mode. Furthermore, although many surveyed companies commented that further disruption is expected in the near-term, the demonetization of the rupee is anticipated to ignite growth in the long-run as unregulated companies leave the market.

n++Of respite to firms, cost inflationary pressures softened, which in turn encouraged the vast majority of businesses to keep their selling prices unchanged. If this trend is sustained we will likely see further cuts to the benchmark rate.n++

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Cabinet approves the negotiating position adopted by the Government at the Meeting of Parties to the Montreal Protocol of the Vienna Convention
Dec 01,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval to the negotiating position adopted by the Government of India at the recent Meeting of Parties (MoP) to the Montreal Protocol of the Vienna Convention for Protection of Ozone Layer that took place during 6-14 October, 2016, in Kigali, Rwanda.

The negotiations at Kigali were aimed at including Hydrofluoro Carbons (HFCs) in the list of chemicals under the Montreal Protocol with a view to regulate their production and consumption and phase them down over a period of time with financial assistance from the Multilateral Fund created under the Montreal Protocol. HFCs are not ozone depleting but global warming substance and if controlled, can contribute substantially to limiting the global temperature and advance actions for addressing climate change.

The Cabinet also approved the proposal of the Ministry of Environment, Forest and Climate Change to argue for adoption of an appropriate baseline years from out of 3 options within a range of 2024 to 2030 with freeze in a subsequent year. The Cabinet approved the flexibility of using any of the options within this range with a combination of the features of the proposed options in consultation with the Government. During negotiations held at Kigali India successfully negotiated the baseline years and freeze years which will allow sufficient room for the growth of the concerned sectors using refrigerants being manufactured domestically thus ensuring unhindered growth with least additional cost and maximum climate benefits.

It was agreed at Kigali that there would be two set of baselines or peak years for developing countries and India will have baseline years of 2024, 2025, 2026. This decision gives additional HCFC allowance of 65% that will be added to the Indian baseline consumption and production. The freeze year for India will be 2028, with a condition that there will be a technology review in 2024/2025 and, if the growth in the sectors using refrigerants is above certain agreed threshold, India can defer its freeze up to 2030. On the other hand, developed countries will reduce production and consumption of HFCs by 70% in 2029. As per the decisions taken in Kigali, India will complete its phase down in 4 steps from 2032 onwards with cumulative reduction of 10% in 2032, 20% in 2037, 30% in 2042 and 85% in 2047.

The Kigali amendments to the Montreal Protocol will also, for the first time, incentivise improvement in energy efficiency in case of use of new refrigerant and technology. Funding for R&D and servicing sector in developing countries has also been included in the agreed solutions on finance.

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Cabinet approves liberalization, simplification and rationalization of Visa regime in India
Dec 01,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for liberalization, simplification and rationalization of the existing visa regime in India, and incremental changes in the visa policy decided by the Ministry of Home Affairs in consultation with various stakeholders and with approval of the Home Minister.

The approval will facilitate entry of foreigners for tourism, business and medical purposes. This is expected to stimulate economic growth, increase earnings from export of services like tourism, medical value travel and travel on account of business and to make Skill India, Digital India, Make in India and other such flagship initiatives of the Government successful.

This will also considerably ease the travel of foreigners to India for the above-mentioned legitimate purposes.

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Cabinet approves closure of Kota Unit of Instrumentation and Transfer of its Palakkad Unit to Government of Kerala
Dec 01,2016

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved closure of Kota Unit of Instrumentation and transfer of Palakkad Unit of Instrumentation to Government of Kerala.

In this connection, the Cabinet has approved attractive VRS/VSS package at 2007 notional pay scales to employees of Kota Unit of Instrumentation Ltd. including the payment of pending salary, statutory dues etc., which amounts to approximately Rs.438 crore.

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Cabinet approves Mumbai Urban Transport Project (MUTP)- Phase III
Dec 01,2016

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved the Mumbai Urban Transport Project Phase-III.

The estimated cost of project is Rs.8,679 crore with completion cost of Rs.10,947 crore. The project is expected to be completed in the next 5 years during 13th Plan period.

Western Railway is running suburban services on the existing busy double line between Virar-Dahanu Road which is a part of main line Mumbai -Ahmedabad / Delhi route. Main line is already over saturated and there is no scope for supplementing suburban services on this line. Construction of additional double line between Virar-Dahanu Road will address the demand of commuters in this region. This will provide extension of suburban services from Churchgate to Dahanu Road. Panvel-Karjat double line suburban corridor will cater to the significant urbanization and population growth in recent years in this area. This will also provide alternate route from Karjat to CSTM via Panvel which will be shorter by 23 Km than the existing route via Kalyan and will reduce travel time between CSTM to Karjat by 35 to 40 minutes by slow trains.

Presently, passengers commuting from Kalyan to Vashi/ Panvel or in reverse direction, have to get down at Thane and take Trans Harbour link. This results in congestion at Thane which is already a busy station on Central Railway. Airoli-Kalwa corridor will reduce congestion at Thane station and will also save time as these passengers can travel bypassing Thane. Procurement of new coaches will enhance the quality of service and reduce congestion. The works proposed under trespass control at 22 locations shall significantly reduce trespass and will provide safer environment for the public.

The areas covered by this project are Thane, Palghar, Raigad and Mumbai districts of Maharashtra.


The Mumbai suburban railway network on Central and Western Railways has 376 route Kms. There are five corridors, two on Western Railway, two on Central Railway and one on Harbour Line of Central Railway. Everyday approximately 8 million people travel in suburban section in more than 2900 train services. There is severe overcrowding in the suburban trains specially during peak hours. Due to geographical constraints, spread of the population and location of business areas, the rail network will continue to be the principal mode of mass transport in Mumbai. To meet the demands of the ever growing commuter traffic, new suburban corridor between Panvel-Karjat (28 Route km), new elevated corridor between Airoli-Kalwa( 3 Route km ), quadrupling of Virar-Dahanu Road (63 Route km), procurement of 565 new coaches and trespass control measures in mid sections have been included in Mumbai Urban Transport Project (MUTP)- Phase III.

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Eight core infrastructure output growth inches up to 6.6% in October 2016
Nov 30,2016

The output of eight core infrastructure sector comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) has posted healthy 6.6% growth in October 2016 over October 2015. Its cumulative growth during April to October 2016-17 was 4.9%.

Coal production (weight: 4.38%) declined by 1.6% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 increased by 0.7% over corresponding period of previous year.

Crude Oil production (weight: 5.22%) declined by 3.2% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 declined by 3.3% over the corresponding period of previous year.

The Natural Gas production (weight: 1.71%) declined by 1.4% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 declined by 4.0% over the corresponding period of previous year.

Petroleum Refinery production (weight: 5.94%) increased by 15.1% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 increased by 8.9% over the corresponding period of previous year.

Fertilizer production (weight: 1.25%) increased by 0.8% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 increased by 4.8% over the corresponding period of previous year.

Steel production (weight: 6.68%) increased by 16.9% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 increased by 8.5% over the corresponding period of previous year.

Cement production (weight: 2.41%) increased by 6.2% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 increased by 4.8% over the corresponding period of previous year.

Electricity generation (weight: 10.32%) increased by 2.8% in October 2016 over October 2015. Its cumulative index during April to October 2016-17 increased by 4.7% over the corresponding period of previous year.

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Increase in Consumption of Petrol/Diesel
Nov 30,2016

(Million Metric Tonne)          Product2013-142014-152015-16Petrol17.119.121.8Growth in % (with respect to last year)8.8%11.4%14.5%Diesel68.469.474.6Growth in % (with respect to last year)-1.0%1.5%7.5%

Increase in consumption of petrol and diesel during the last few years is mainly due to increase in number of passenger vehicles and two-wheelers, increased commuting distances due to expanding urban areas, increased travel time due to congestion on urban roads, improved and growing highways, increased disposable incomes, enhanced economic activity and fall in prices.

Details of production and import of petrol and diesel during the last three years are given below :

(Million Metric Tonne)

ProductProduction/ Import2013-142014-15 2015-16PetrolProduction30.332.235.3Import0.20.41.0DieselProduction93.894.398.6Import0.10.10.2

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Use of Natural Gas Including LNG being Facilitated to Tackle The Menace of Air Pollution
Nov 30,2016

The Government is facilitating use of natural gas, including Liquefied Natural Gas (LNG) as a clean fuel to tackle the menace of air pollution in the country. In a way forward, Petronet LNG (PLL) alongwith M/s Tata Motors and Indian Oil Corporation Limited have carried out a test run of an LNG fueled bus on November 8, 2016 in Thiruvananthapuram (Kerala). The project is at pilot stage and its commercial operation based on LNG fuel depends upon success of pilot project and subsequent requisite clearances.

The Ministry of Petroleum & Natural Gas (MoP&NG) has taken an initiative to explore the possibility of usage of Liquefied Natural Gas (LNG) as a transportation fuel in Road Transport sector. MoP&NG has requested Petroleum and Explosives Safety Organization (PESO) to frame relevant safety guidelines for LNG usage for automobile. Accordingly, PESO, has constituted an expert committee, comprising of a Chairperson, a Member-Secretary and 10 Members to make recommendations in respect of the following -

(i) For amendment in Gas Cylinders Rules, 2004 regarding LNG container for automotive application.

(ii) For amendment in the Static and Mobile Pressure Vessels (Unfired) [SMPV (U)] Rules, 1981 for setting up of LNG dispensing stations.

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CCRI releases High Yielding Variety of Robusta and Arabica Coffee Plants
Nov 30,2016

The Central Coffee Research Institute (CCRI) of Coffee Board is releasing high yielding and disease resistant varieties of Arabica and Robusta from time to time. In Arabica, Chandragiri a semi-dwarf variety with high degree of field tolerance to leaf rust disease and high yield potential has been released for commercial cultivation during 2007-08 season. In addition, three genotypes of Arabica have been given for multi-location trials in growers field during 2014-15. In Robusta, the improved hybrid variety already developed by CCRI is most preferred among the growers because of its high yield potential and quality of beans. Further research for development of drought resistant variety of Robusta has been taken up by CCRI.

CCRI has developed and refined the clonal propagation techniques and has supplied around 1,62,000 rooted clones of hybrid variety to the growers from 2014-15 onwards. Training programmes are organized to build the capacity of growers in clonal production methods. Clonal nurseries have been set up in about 10 estates with the technical support of CCRI. Efforts are being made to involve the unemployed youth and self-help groups for clonal multiplication of Robusta coffee.

Coffee Board is also implementing Integrated Coffee Development Project under which various interventions such as research & development, technology transfer, capacity building, replacing the old unproductive varieties with improved high yielding/disease tolerant varieties, water augmentation and mechanization etc. are undertaken for the overall improvement of production, productivity and quality of coffee.

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Public-sector steel manufacturing industries affected by low demand and falling prices
Nov 30,2016

The public-sector steel manufacturing industries under Steel Authority of India Limited (SAIL) and RashtriyaIspat Nigam (RINL) are affected by factors like slow growth in steel demand, falling prices because global steel glut leading to import of steel at very low prices resulting in surge in steel imports during 2014-15 and 2015-16.

The Government of India took various steps to support the domestic steel sector, some of which are as given below:

i. Increase in peak rate of Custom Duty on steel to 15%.  Effective rate of import duty was increased in phases to 10% on Long products and 12.5% on Flat products from pre-revised level of 5% and 7.5% respectively.

ii. Against a petition by the domestic steel producers, Safeguard duty on HR Coils of 20% notified in September, 2015 provisionally and final notification issued for the same in March, 2016 extending 20% Safeguard duty up to September, 2016.  Thereafter, phased reduction to 18% (till March, 2017), 15% (till September, 2017) and 10% by March, 2018.

iii. The Government of India notified Minimum Import Price (MIP) on select steel products (5th February, 2016) and further extended it on certain steel products for two months with effect from 5th August, 2016 and again for two months with effect from 5th October, 2016.

iv. Provisional Anti-dumping duty notified on import of flat products (Hot Rolled & Cold Rolled) and on Wire Rods from China, Japan, Korea, Russia, Brazil, Indonesia & Ukraine vide notifications dated 8th August, 2016, 17th August, 2016 and 2nd November, 2016.

v. Government amended the Steel and Steel Products (Quality Control) Order, 2012 from time to time to ensure that only quality steel is imported into India.

The plant-wise Profit (+)/ Loss (-) of SAIL is given as under:-

(Rs. in crore)

Plant/ Unit2013-142014-152015-16Bhilai Steel Plant (BSP)20852232405Durgapur Steel Plant (DSP)416506-527Rourkela Steel Plant (RSP)212232-2524Bokaro Steel Plant (BSL)202451-2203IISCO Steel Plant (ISP)-653-1072-1939Alloy Steel Plant (ASP)-93-134-83Salem Steel Plant (SSP)-376-355-466Visvesvarya Iron Steel Plant (VISL)-123-97-116SAIL Refractory Unit (SRU)3721Chandrapur Ferro Plant (CFP)-78-45-78Raw Material Division (RMD)/ Central Units1628634310SAIL Profit (+)/ Loss (-) Before Tax32252359-7198Tax6082663061SAIL Profit (+)/ Loss (-) After Tax26162093-4137

RINL is a single unit steel producing CPSE. The Profit (+)/ Loss (-) of RINL is given as under:

( crore)

Particulars2013-142014-152015-16Profit After Tax (PAT)36662(-) 1421

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Emerging East Asian Bond Yields Rise Amid Uncertainties on US Economic Policy
Nov 30,2016

Bond yields in most emerging East Asian markets rose between 31 October and mid-November due to increased concerns over the direction of United States (US) economic policy, according to the Asian Development Banks (ADB) latest Asia Bond Monitor.

n++Strong fundamentals such as high levels of foreign reserves will help emerging East Asia withstand the short-term impacts of a likely US rate hike,n++ said Juzhong Zhuang, ADBs Deputy Chief Economist.

Local currency bond yields increased in nearly all markets in emerging East Asia which saw upticks in the 2-year and 10-year bond yields except for the Peoples Republic of Chinas (PRC) 2-year bond, which was unchanged.

All of the regions currencies depreciated against the US dollar in the wake of the US election. Equity markets weakened throughout the region except in the PRC and Singapore.

Emerging East Asias outstanding local currency bonds grew by 3.3% quarter-on-quarter and 19.2% year-on-year, reaching $10.4 trillion by end September. Local currency bond issuance, meanwhile, fell to $1.2 trillion in Q3 2016 from $1.3 trillion in Q2 2016 due to a contraction in bond sales in the PRC and the Republic of Korea. The PRC remains the regions largest bond market, accounting for 68.8% of total bond stock, valued at $7.2 trillion.

The report notes several risks for emerging East Asian bond markets. These include market reactions to the prospective rate hike by the US Federal Reserve and the uncertainty with respect to the economic policy of the new US administration. Further, continued global risk aversion toward emerging markets and the threat of rising protectionism could unsettle the regions markets. A n++hard Brexitn++ could also have repercussions for emerging East Asia due to the regions financial links with Europe.

The Asia Bond Monitor also reports findings from its annual bond market survey which provides an assessment of emerging East Asian bond market liquidity. The survey conducted in late September and early October noted that overall liquidity conditions improved in 2016 from a year earlier. Survey respondents said that diversifying investors in bond markets is the most important factor to help improve liquidity in the regions bond markets.

The report includes a special chapter that explores the determinants of infrastructure bond market development in Asia and derives policy implications for the region. The report finds that while meaningful progress has been made in the development of infrastructure bond markets, supported by the Association of Southeast Asian Nations Plus Three (ASEAN+3) regional financial cooperation initiatives, multilateral institutions can further help develop infrastructure bond markets in the region through credit guarantees.

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IWAI takes up construction of Navigational Lock at Farakka
Nov 30,2016

The Inland Waterways Authority of India (IWAI) has awarded the work for the construction of a new state of the art navigational lock at Farakka in West Bengal on 24th November, 2016 to a reputed company at a cost of Rs 359 crore, under Jal Marg Vikas Project (JMVP) which is being implemented in National Waterway-1 (River Ganga).

A navigational lock is a device used for raising and lowering ships/vessels between stretches of water of different levels on river and canal waterways. The existing lock gate at Farakka which has been operational since 1978, is old and inefficient. Since the modernisation of the existing lock will entail closing down the lock gate for to 8-10 months, it has been decided to first build a new navigational lock and subsequently the modernisation of the existing lock would be undertaken. With the existing lock it takes about 2 hours or more for a vessel to pass upstream or downstream of Farakka. With the new lock it will take only 38 minutes for a vessel to pass through. If movement of a vessel is followed by movement of another vessel in the reverse direction, the operating time will be 23 minutes only. The new lock is proposed with modern state of the art features like electro hydraulic operations of Mitre Gates and Radial Gates on filling culverts and remote control operations of all the gates from a central control room.

The Farakka navigational lock is the third major work on National Waterway-1 to be awarded in record time. The contract for construction of Multi-Modal Terminal (MMT) at Varanasi and Sahibganj were awarded in May and October 2016 respectively.

The Jal Marg Vikas Project is being implemented with technical and financial assistance of the World Bank at an estimated cost of Rs. 5369 crore for plying of vessels with capacity of 1500-2,000 tons. Phase-I of the project covers the Haldia-Varanasi stretch which includes development of fairway, Multi-Modal Terminals, strengthening of river navigation system, conservancy works, modern River Information System (RIS), Digital Global Positioning System (DGPS), night navigation facilities, modern methods of channel marking etc.

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INR 4000 crore Welding Industry Set to Grow to INR 5700 crore by 2021
Nov 30,2016

The two flagship programmes of the government - Make in India and Skill India got a big boost at the maiden CII Welding conference. Speaking during the session Y S Trivedi, Sr Vice President and Member of the Board - Heavy Engineering IC, Larsen & Toubro stressed, n++The amount of weld in a nuclear reactor and submarine is less than 2 and 8 percent respectively, yet these welds decide the fate of the INR 12,000 crore submarine as well as determines whether a nuclear power plant lasts 10 years or 60. If we have to transform India into a global manufacturing hub we need to pay attention to welding.n++ Further he commended that welding holds immense potential for employment and skill development initiative and has a major role to play in the nations growth.

Talking of the present welding industry, Chetan Ligade, Director, BDB India said that the sector today stands at INR 4,000 crore out of which INR 2,800 falls under consumables and INR 1,200 crore under welding equipment market. Driven by infrastructure, the welding industry is slated to pick up rapidly in the next few quarters and by 2021 the consumable market will grow to INR 4,200 crore and equipment market to INR 1,500 crore. On this occasion a special report on Indian welding industry was released.

Elaborating on the importance of R&D in manufacturing sector D G Padmanabham, Director, International Advanced Research Centre for Power Metallurgy and New Materials (ARCI), emphasized, n++In the west, 70% of R&D funding comes from the industry and 30% from the government whereas in India only 10% comes from the industry. This needs to change. When industry funds a project it drives R&D with purpose, focus, application and absorption. Hence, industry R&D interaction has to be strengthened.n++ Sharing his experience on industry government collaboration he averred that the success rate has been always very high when there is co-operation and collaboration.

A Shivkumar, Conference Chairman and Former Chief Executive, EWAC Alloys said, n++The stakeholders in the welding sector such as researchers who work on materials, manufacturers, people who execute it like welders and the final beneficiary the consumer - are not connected and aligned to a common agenda. At CII we aim to bring all stakeholders together to create a common agenda and goal to meet challenges and make opportunities available to them in the future.n++

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Fitch: Indian ABS Buffers Cover Near-Term Demonetisation Impact
Nov 30,2016

Fitch Ratings believes that demonetisation could lead to a short-term liquidity stress in Indian auto ABS transactions. The stress is likely to be limited to a few months, in which case it would not result in pressure on ratings.

India began to withdraw high-denomination bank notes - that account for 86% of the value of currency in circulation - earlier this month. The withdrawal has created a cash crunch that Fitch expects to hold back economic activity in the near term.

Fitch expects a liquidity squeeze in Indian auto ABS to result from a substantial drop in collections from small commercial vehicle (CV) operators - especially used-CV operators - in November and December. Cash collections typically account for 20%-50% of total collections by Indian CV loan originators within Fitch-rated ABS transactions. The cash-collection percentage is especially high on loans for used CVs, as well as for new small CVs, light CVs and tractors. Smaller CV operators usually receive their income and pay expenses in cash. We expect the cash crunch caused by demonetisation to affect both the income of these borrowers and their repayment capabilities in the short term, due to the delaying of non-critical economic activities by their customers.

Furthermore, the impact of demonetisation on economic activity could lead to a temporary drop in demand for services involving CVs, creating stress on the repayment capabilities of CV loan borrowers. We also see a moral-hazard risk of capable borrowers also defaulting on their monthly repayments, given the potential for a general increase in tolerance of delinquencies due to this disruption.

Delinquencies are likely to remain high for several months in 2017, as small borrowers are likely to take time to make up for missed payments. Fitch will continue to monitor closely the repayment behaviour of underlying borrowers in the next few months.

Average collection for Fitch-rated Indian ABS transactions was around 107% of scheduled investor payout obligations, as of the last reported collection month. In a scenario of a sharp decline of 30% in collections, all Fitch-rated Indian ABS transactions could manage timely payment of interest and principal for at least nine months, and on average for 24 months, with support from available external CE.

Nevertheless, there could be an impact on the ratings of recent, less-seasoned transactions if delinquencies continue to rise sharply for more than a few months.

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