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Karnataka asked to Release 3000 Cusecs of Water Per Day from 21st to 30th September 2016
Sep 20,2016

The Cauvery Supervisory Committee in its seventh meeting held under the Chairmanship of Union Water Resources Secretary Shri Shashi Shekhar directed Karnataka to release 3000 cusecs of water per day to Tamil Nadu from 21st to 30th September 2016. The supervisory committee took into consideration the interest of all the participating states, the inflow position, rain fall picture, daily inflow of water in the reservoirs of Karnataka, the drinking water of needs Karnataka and the need of samba crop in Tamil Nadu.

The committee took a detailed presentation from the Chief Secretaries of Tamil Nadu, Karnataka, Puducherry and the representative from Kerala. The committee tried to reach to a conclusion but Tamil Nadu and Karnataka did not agree to a particular figure of release of water which was based on scientific facts.

It has also been decided that Central Water Commission will draw up a new protocol of online collection of data related to rainfall and flow of water on real time basis which may be shared simultaneously with all the concerned states. The cost of developing this protocol will be shared by the three states and UT of Puducherry.

The supervisory committee will meet frequently to access the situation and needs in the future. The next meeting will be held in sometimes in October. The committee will meet once in every month from February 2017 onwards.

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States should execute Central Schemes on a faster mode- Tomar
Sep 19,2016

The Centre today urged the States to speed up the execution of Central Schemes to achieve the goal of developed India. Addressing an All India Conclave of Rural Development and Panchayati Raj Ministers at Guwahati, Assam, the Minister for Rural Development, Panchayati Raj and Drinking Water & Sanitation Shri Narendra Singh Tomar said that development of India is intrinsically linked to development of villages. He lamented that despite 70 years of Independence, India is still lagging on several developmental parameters.

Shri Tomar said that first time since Independence, the NDA Government led by Shri Narendra Modi has fixed the target years for completion of several major Central scemes, otherwise these were being executed in routine fashion. Giving the example of a housing programme called Pradhan Mantri Aawas Yojana (PMAY) to be launched shortly, he said by 2019, one crore houses will be provided to the eligible beneficiaries after taking into consideration of SECC census, 2011 and 40 lakh incomplete houses will be completed under the old scheme of Indira Aawas Yojana. He added that by 2022, all the deprived sections of society will be given pucca houses under PMAY.

Similarly, speaking on the issue of Pradhan Mantri Gram Sadak Yojana, Shri Tomar said that that between the year 2011-2014, only 73 Kilometers of rural roads were built daily , while between 2014 to 2016, it has increased to 100 kilometers per day and this year up to 140 kilometers of roads are being built each day. He said that 15 percent of rural roads built under PMGSY are using Green technologies like cold mix, fly ash, geo-textiles, plastic and other waste materials and urged the States to use this technology on a larger scale. He urged the States to complete the road projects in timely fashion to avail the Central funds and incentives as budget is no constraint for PMGSY.

Shri Tomar said that apart from development of rural infrastructure, the programmes like Aajevika and skill development can transform the lives of rural poors, besides augmenting their income. He informed that there are 27 lakh Self Help Groups in the country with 3 crore women as members and they have availed about Rs 30,000 crore of bank loans to make local profitable products. Shri Tomar Said, about 15 crore family members are roughly covered under Aajevika Mission and he urged the State governments to help them find suitable markets to sell their products at profitable margins.

Speaking on the Swachh Bharat Mission, the Minister urged the State Governments to undertake campaigns on a large scale for behavioral change. He said, the Swachh mission should not remain a government programme, rather it should become a peoples movement. He informed that Sikkim is the first State which has become ODF( Open Defecation Free) and there are 19 Districts, 249 Blocks and more than 80,000 Villages which have become ODF. Shri Tomar reiterated that Shri Narendra Modi has set the target of making India clean by 2nd October, 2019, which is the 150th birth anniversary of Mahatma Gandhi and added that though the target is very tough, but still achievable, provided there is strong will to achieve the same.

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Availability and affordability of power is a key enabler to meet SDGs: Minister Piyush Goyal
Sep 19,2016

n++Electricity is key to achieving the Sustainable Development Goals (SDGs). India is a power surplus country and can generate 50 percent more power in relation to current production. Government of India is working on addressing last mile connectivity,n++ stated Mr Piyush Goyal, Minister of State (I/C) for Power, Coal, New & Renewable Energy and Mines, Government of India.

Mr Goyal stressed Indias commitment to its Intended Nationally Determined Contributions (INDCs) and to sustainable development and SDGs. He announced that the Government would shortly come up with a mandate for thermal power plants to utilize processed wastewater from a radius of 50 km and replace the fresh water utilization by treated wastewater.

He added that India is the only country which taxes carbon. Clean coal cess has been substantially increasing over past few years. Now it is time for the world to start looking at the consumption in terms of carbon footprint rather just exporting the pollution to other parts of the world. India is only contributing to 4 percent of the global GHG emissions while supporting 17 percent of world population, he noted, adding that the world must recognize the principle of polluter pays.

Mr. Yuri Afanasiev, UN Resident Coordinator & UNDP Resident Representative in India, said that given the size and complexity of social problems in India, the solutions to global challenges would be developed here over the next 10-15 years. India has come out with innovative solutions for developmental challenges like creation of 175 GW of renewable energy capacities, fulfilling Swachh Bharat targets etc. He stressed that the financial gap for meeting developmental goals can only be fulfilled by the private sector through sustainable and moderately profitable business models.

n++In the last few years, there have been great efforts, both at the global level as well as in India, to encourage industries to move towards sustainable business models,n++ said Mr. Ajay S Shriram, Past President, CII and Chairman & Senior Managing Director, DCM Shriram Limited. Mr Shriram lauded the governments efforts in increasing the share of renewable energy and mentioned that Indian industry has given green energy commitments of over 200,000 MW. He added that hydropower which has been an important source of energy in total energy portfolio should have faster environmental clearances particularly for small and micro hydropower projects.

Mr. Sanjiv Puri, Chief Operating Officer, ITC Limited, said that Indias INDCs have targeted lowering the carbon emission intensity to 33 to 35 percent by 2030 and proactive steps are required for energy security. Mr Puri mentioned the efforts of ITC to become water positive, carbon positive and positive on waste recycling.

Mr. S. Raghupathy, Deputy Director General, CII, said that CII through Indian Green Building Council has been able to achieve 3.9 billion sq feet of green building. Payback period of adoption of energy efficient technologies has come down to 4-5 years.

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Provision of Yatri Mitra Sewa for booking of wheelchair services cum porter services at Railway Stations
Sep 19,2016

With a view to provide support to old and differently abled passengers requiring assistance at the stations, Ministry of Railways has decided to introduce Yatri Mitras Sewa for enabling passengers to book wheelchair services cum porter services. The salient features of the Yatri Mitra Seva are as under:

1. Yatri Mitra

A Yatri Mitra can either be a Sahayak or any other person provided by IRCTC or the service provider appointed by IRCTC for this purpose.

2. Services to be provided by Yatri Mitra

Yatri Mitra shall provide Wheel chair cum porter services to differently abled, ailing and old persons.

3. Provision of Yatri Mitra Sewa

n++ The responsibility of providing Yatri Mitra Sewa has been entrusted with IRCTC. IRCTC may provide this service Free of cost through some NGO, charitable trust, PSUs etc under CSR. However, if this service cant be provided Free of Cost due to lack of response from NGOs, Charitable trust, PSUs etc, IRCTC may arrange this service on payment basis through a service provider or on its own.

n++ IRCTC may also arrange these services through existing Battery Operated Car (BOC) Operator, wherever, an agency is providing the service.

4. Booking of Yatri Mitra

The booking of Yatri Mitra can be done as under:

n++ The Yatri Mitra service can be booked on IRCTC e-ticketing website and 139 (IVRS and SMS) or through a mobile.

n++ A Mobile Application developed by CRIS would also be made available for booking of Yatri Mitra as and when it is developed and released by CRIS.

n++ A dedicated Mobile number for each station, where this service is available, shall be made available by the Service provider/IRCTC which would be displayed on IRCTC e-ticketing website and zonal websites of Indian Railways to facilitate booking of Yatri Mitra.

n++ Based on the station at which the facility is booked by the passenger, the booking details (Train Name and Number, date and time of arrival/departure, PNR number, Name of the passenger, Coach and berth number) will be sent by SMS both to the passenger and service provider/IRCTC along with the amount chargeable, if applicable, for the service.

n++ The mobile number of the Yatri Mitra shall also be sent to the passenger through SMS before the expected time of the arrival of the passenger so that the passenger can contact the Yatri Mitra.

n++ The Mobile Application developed by CRIS would have the facility for the service provider to update the status after providing the service. The passenger would also have the option to give feedback regarding compliance for his booking.

5. Operation of Yatri Mitra Seva

The Yatri Mitra Sewa shall be operated on following lines for arriving, transferring and departing passengers:

n++ Arriving/Transferring Passengers

o The IRCTC/service provider on receipt of SMS will ensure that the Yatri Mitra is arranged/positioned at the platform near the coach of the arriving passenger.

o The mobile number of the Yatri Mitra shall also be sent to the passenger through SMS in advance.

o On arrival of the train, the Yatri Mitra shall approach the passenger near his coach, greet him, show his mobile message which will be similar as sent to the passenger himself. On instructions of passenger, he will pick up his/her luggage and help him/her in sitting in wheelchair and take him to desired exit gate or any other platform in case of transfer passenger.

o In case of late running of train, the service provider shall contact the passenger on the mobile number given by the passenger at the time of booking and arrange the service as per expected arrival of the train at the station.

n++ Departing Passengers

o The IRCTC/service provider on receipt of SMS will ensure that the Yatri Mitra is arranged/positioned at the nominated entrance of the station building from where the passenger will be boarding the train.

o Yatri Mitra shall contact the passenger on the mobile number given by the passenger at the time of booking and confirm the expected time of arrival of the passenger and entrance gate of station.

o On arrival of the passenger at entrance gate of station, the Yatri Mitra shall approach the passenger, greet him, and show his mobile message which will be similar as sent to the passenger himself. On instructions of passenger, he will pick up his luggage and help him/her in sitting in wheelchair and take him to the platform where train has to arrive.

6. Storage/Parking of wheelchairs

The Railway shall provide space for storage/parking of wheel chairs as per requirement of number of wheelchairs and charging point if wheelchairs are battery operated. In case service is provided Free of cost, electricity for charging battery of wheelchairs shall be provided free. In case of paid service, the cost of electricity on consumption basis and connection shall be charged to the service provider as per extant practice.

7. Service Charges

The service charges, if applicable, shall be kept reasonable and affordable keeping in mind the objective of providing services to the needy.The service charges should be collected by the Service provider directly from the passenger.

8. IRCTC shall provide adequate number of wheelchairs at the station as per the requirement to be decided in consultation with SrDCM/DCM of concerned division. Preference should be given to battery operated wheelchairs.

9. The Yatri Mitra appointed by service provider shall be issued an ID card and permit to provide these services at the station by SrDCM/DCM of the concerned Division.

10. The service will be available at major stations.

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Central Banks Policies to Keep Markets Volatile
Sep 19,2016

The US Federal Reserve is unlikely to hike rates in this weeks policy, but may signal imminent rate normalisation in the near term, says India Ratings and Research. The rupee will stay volatile and could trade between 66.75/USD-67.40/USD (66.99/USD on 16 September 2016) through the week, while old 10-year G-sec yield trading could range between 7%-7.12% (7.05% on 16 September).

US and Japan Monetary Policy Reviews: Both the Bank of Japan (BoJ) and US Federal Reserve are scheduled to review their monetary policies this week (Wednesday). The Fed may choose to keep the rates unchanged. However, it may signal confidence in the underlying recovery with explicit communication to prepare financial markets for a potential rate action before the end of 2016. On the other hand, the BoJs policy decision will come against the background of ongoing negative rates and quantitative easing programme conundrum.

Open Market Operations and Domestic Macro Support Bond Dynamics: Net G-sec borrowing (adjusted for the Reserve Bank of Indias G-sec purchases and redemption) stands at around INR1.2trn - enabling favourable demand-supply dynamics. Additionally, the near 100bp monthly fall in retail inflation has stoked the rate cut expectation - supporting bond prices. The agency believes scope for a further rate action is skewed towards December than October as the regulator will await confirmation of inflation softness in the upcoming readings.

Bonds Set to Consolidate: The bond market movement in the near term will be a function of the outcomes of the Fed and BoJs policies, as risk appetite will remain a major determinant of yields.

Rupee to Face Headwinds: The pressure that has built up in global markets will have a trickle down impact on the rupee. While domestically, the currency has been anchored strongly on the back of healthy investment flows and a narrow current account deficit, sentiment in currency markets is likely to be cautious following jittery global sentiments.

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Emerging East Asian Bond Yields Decline Amid Subdued Global Growth
Sep 19,2016

Yields on bonds in emerging East Asian markets declined as inflationary pressures remained largely muted and persistently low global growth increased the attractiveness of East Asian bonds, the Asian Development Banks (ADBs) latest Asia Bond Monitor said.

While the Brexit vote created uncertainty and volatility, especially in the developed markets in the immediate aftermath of the vote, the markets in East Asia have largely regained calm,n++ said Shang-Jin Wei, ADBs Chief Economist. ADB research suggests that countries with capital flow management measures or a flexible nominal exchange rate regime are likely to be better prepared to n++deal with the risk associated with a future US interest rate increase, especially if they have adequate foreign exchange reserve as a cushion, which characterizes most countries in the region.

The report notes that yields for 2-year and 10-year local currency government bonds in emerging East Asia were mostly lower between 1 June and 15 August and stock markets in the region recorded gains as well, giving investor sentiment a lift. Over the same period, most East Asian currencies also appreciated against the US dollar, with the Korean won recording the biggest gain of 7.7%. The exception was the Chinese renminbi, which fell 0.9% during the period.

Emerging East Asias outstanding local currency bonds were up 6% quarter-on-quarter and nearly 22% year-on-year, reaching $10 trillion. Local currency bond issuance in the second quarter totaled $1.3 trillion, recording double-digit growth both on a quarterly and year-on-year basis. Bond issuance was led by the Peoples Republic of China which remains the largest local currency bond market in the region with outstanding bonds of $6.9 trillion at the end of June.

Moving forward, the report notes that while markets are calm, there are rising risks to East Asian bond markets. A hike of the interest rate by the US Federal Reserve could prompt foreign investors to cut their holdings of East Asian local currency bonds. Negative interest rates in markets such as the European Union and Japan, could increase capital inflows to emerging markets, jeopardizing financial stability in Asian markets. The report cautions that increased capital inflows could lead to currency appreciation, which would undercut economies heavily reliant on exports and contribute to deflationary pressures.

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Inflation in Manufactured Products May Intensify
Sep 19,2016

Manufacturing inflation may inch up further as consumption demand gets a fillip from a higher rural demand, 7th Pay Commission payout and the festival season round the corner, says India Ratings and Research (Ind-Ra). With consumption demand showing signs of improvement and commodity price cycle bottoming out, it appears that manufacturers are now raising prices, albeit gently, to test the water. The Wholesale Price Index (WPI) inflation increased to 3.74% in August 2016 from 3.55% in the previous month, because of an increase in manufactured product inflation and to a lesser extent fuel inflation. This is at variance with the moderation in retail price inflation for the same month.

Crop sowing data suggest while pulse prices are likely to soften further, sugarcane and cotton prices may remain firm with an upward bias. However, a third consecutive month of cereal price inflation in excess of 7% after a gap of 24 months, is an early warning that the fight against food inflation is far from over.

Fuel price inflation, which has a weight of 14.9% in WPI, came in at 1.6%, after 13 months of consecutive negative growth. Wholesale food prices, which had been the key driver of WPI, moderated to 8.23% in August from 11.82% in July 2016. Prices of fruits and vegetables declined to 7.0% in August 2016 from 22.3% in the previous month. This, however, was offset by an increase in manufacturing inflation to 2.42% in August from 1.82% in July 2016. Manufacturing inflation has clocked a modest but steady rise since April 2016, led by a price increase in manufactured food products. This suggests manufacturing inflation which had remained down and out due to (i) tepid demand and (ii) lower manufacturing input cost is finally inching up as manufacturers especially in the food products category are gradually passing on cost increases in input costs and/or have begun to exercise the pricing power. Prices of manufactured food products increased to 11.4% in August from 10.2% in July 2016.

Since manufactured products have nearly 65% weight in WPI compared to 14.3% for food articles, an accentuation of the price increase trend witnessed in the manufacturing inflation, since the beginning of this fiscal, is likely to push WPI inflation further. However, sustainability of this gradual increase in the prices of manufactured items would depend on the future consumption demand.

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Interest Rate Cycle Reaching the Bottom; LT Bond Issuance May Pick Up
Sep 19,2016

Inflation has bottomed out leaving the Reserve Bank of India (RBI) with less room to undertake further rate cuts, says India Ratings and Research (Ind-Ra). Ind-Ra believes that in such a scenario companies may lock in their long term funding at the current rates, before the cycle turns.

The shift in RBIs stance with respect to liquidity to neutral from deficit mode has had a significant impact on the yields of Government Securities (G-sec). Liquidity is no longer in the deficit mode, in fact in the last two months there has been net liquidity surplus in the system. The yield on the benchmark 10 year G-sec is presently hovering around 7% as against 7.5% in April 2016. Ind-Ra believes that the possibility for a further liquidity driven drop in the G-sec yield is limited. However, due to negative yields prevailing globally, demand from foreign participants can push yields down further.

One of the unstated objective of the outgoing RBI governor Raghuram Rajan was to maintain real interest rates (difference between risk free interest rate and Consumer Price Index) positive and in the range of 1.5% to 2%. Ind-Ra expects the new RBI governor Urjit Patel to also follow this approach. Real interest rate has remained positive since January 2014. It peaked at 4.91% in November 2014 and has declined since then to 2.06% in August 2016. It may be noted that the period when the real rate of interest was significantly in excess of 2% was also the period when RBI cut the policy rates. As the real rate of interest fell close to/lower than 2% from April 2016 onwards, RBI has maintained a status quo on policy rates.

Inflation appears to have bottomed out, however inflationary expectations have once again shown an up-tick. The RBI carries out a quarterly survey of about 5,000 households across 16 cities in India to assess inflationary expectations of households three months ahead and one year ahead. As per data released by the central bank, mean household inflationary expectations for three months ahead in June 2016 rose by 110bp to 9.2% from the March 2016 survey. The one-year ahead mean inflation expectation is even higher at 9.6% than the three-month ahead expectations, implying households expect the inflation trajectory to move further up.

Though global factors particularly low interest rates and fund inflows into emerging markets have remained favourable for a fairly extended period of time, the likelihood of interest rates moving up from hereon has strengthened - notwithstanding the fact that the US Federal Reserve may still take some time to resume hiking rates. With the backdrop of rising global yields, where global sovereign-bond yields have risen to the highest in almost three months, the Indian currency may come under pressure and push the RBI to turn hawkish.

Corporate India will keenly monitor the nominal GDP growth rate, since the soft trend over the last three years has significantly impacted earnings and debt repayment capacity. Ind-Ra highlighted in the report INR1.4trn Refinancing Requirement Could Put INR11.8trn Debt at Risk in FY17 that the total refinancing required by the top 500 Corporates in FY17 aggregates to INR2.1trn, with potential candidates which will be able to access the bond market being INR0.7trn. While it is early to signal a shift in the revenue trend line, corporates are likely to benefit from the current refinancing opportunities at low rates and will possibly lock-in long term funds since the downside to interest rates are limited/negligible.

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R-Com- Aircel Merger Spurs Telecom Consolidation, Steps Up Competition
Sep 19,2016

The merger of the wireless business of Reliance Communications (RCom) with Aircel (Aircel), is a key milestone in the ongoing consolidation in the telecom sector, says India Ratings and Research (Ind-Ra). Ind-Ra believes that the merger will enable the new entity RCom-Aircel to give strong competition to its peers in the backdrop of the disruption that the launch of operations by Reliance Jio Infocomm (RJio) has caused. The combined entity RCom- Aircel will now be the third largest telecom entity in India by subscriber base, thus moving ahead of Idea Cellular Limited (Idea). This development coupled with RJios penetration strategy will spur competition and in turn push tariffs lower.

Ind-Ra believes that the spectrum acquisition strategy, particularly around 4G, is an important driver for the consolidation in the telecom sector. This deal provides RCom access to the superior 800MHz band in eight circles with extended validity till 2033, as its own spectrum is scheduled to expire in 2021-2022. The merged entity will have 448MHz spectrum, which is about 17% of the total spectrum held,is the third largest spectrum holding, following 770MHz of Bharti and 596MHz of RJio.

The merged entity will offer strong competition to both Vodafone India (Vodafone) and Idea which are weaker placed, as far as 4G operations are concerned. Ind-Ra believes that the sector will now have five meaningful players namely, Bharti Airtel (Bharti), Vodafone, RJio, Idea and the merged RCom -Aircel- Sistema (with a new brand) as the industry moves towards data driven revenues.

The top five circles of Aircel are Assam, J&K, UP East, Bihar and Gujarat, while those of RCom are Bihar, Tamil Nadu and Chennai, Delhi, and Mumbai. The merged entity will be positioned as the second largest in the Bihar circle, after Bharti, and overtaking Vodafone and Idea, which were number two and number three respectively. In the Tamil Nadu and Chennai circle, the merged entity will vie for the second spot with Vodafone, which is ranked the second largest after Bharti. RCom has a wireless active subscriber base of 92.2m as on March 2016 (market share 9.8%), whereas Aircel has 63.3m subscribers (market share 6.8%), leading to a combined subscriber market share of 16.1% with 155.5m subscribers; which will rank forth after Idea with 19.6% subscriber share and Vodafone with 20.4% subscriber market share as of March 31, 2016. The merged entity could potentially have a revenue market share of 14%, given RComs existing revenue market share at around 11% in FY16 and Aircels 3% revenue market share.

Aircel reported revenues of INR55bn, with EBIDTA of INR8.06bn, and an EBIDTA margin of 14.5%, and net loss of INR14.5bn and cash loss of INR6bn in FY15. Aircel had a total debt of INR209bn in FY15. RCOM reported consolidated revenue of INR221bn, EBITDA of INR74bn and EBITDA margin of 33.6% in FY16 and debt of INR41bn. The combined entitys revenues are estimated at around INR250bn (for full year of operations), with EBITDA of around INR65-70bn.

However, both RCom and Aircel have significant debt and their ARPUs are below industry average, as evident from their low standalone revenue market share and Aircels presence in low ARPU generating circles. Aircel on a standalone basis is a highly leveraged entity (FY15 debt to EBIDTA 26x), whereas RCom had net leverage of 5.6x in FY16. Therefore Ind-Ra believes the merged entity will continue to depend upon the parents support for fund infusion for growth capex. Post the deal the merged entity will hold INR280bn of debt from its parents to start with.

The merger transaction is subject to regulatory and shareholder approvals.

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Lack of Awareness and High Incidence of frauds Impacting Indian Insurance Sector: PHD Chamber
Sep 19,2016

According to a survey conducted by PHD Research Bureau, around 49% of the population is not well aware and familiar with insurance products in India due to lack of information and awareness about insurance products.

According to the survey, life insurance has been used more for investment and tax saving purposes in peoples overall financial planning. Despite this, 56% of the survey population has not availed any kind of insurance policy/products due to poor advice, wrong information and lack of understanding of the product, said the survey study.

In India, Insurance companies are most affected by misspelling due to premeditated fabrication and fraudulent misrepresentation of material information. Also, insurance continues to be missold with senior citizens being the softest targets as they do not understand new products, said the survey.

In non-life insurance in India, the Motor insurance continues to be the largest segment with a share of 44.14 per cent, the share of health segment being 26.73 percent and the remaining share contributes to Fire and Marine segments respectively.

Further, the survey has revealed that 50.50% of people consider the premium offered by the company as an important factor while purchasing insurance policy, 24.60% considered companys credibility, 15.26 % considered past records and 5.86% considered consumer base of the company as an important decision factor.

According to survey findings, 33% of the people find insurance products too complicated and technical while 24.68% find it difficult to understand the product. Hence, 74% respondents believe personal interaction is very important before buying insurance products.

The survey also revealed that 34% of respondents have chosen family, friends or word of mouth as the information sources for buying insurance products, 3% opted for direct contact with bank or company people, 20.22% opted for newspapers and magazines, 8.07% for television, 7.30% as internet and 19% said advice from intermediary agent as information sources for buying insurance products.

The survey revealed that 20.32% of respondents considered increase in income, 46.02% considered better features of the product, 21.30% said discount in appreciation for their continued business and 11.16% considered more personal contact with their provider as the factor that would persuade customers to stay.

Overall, roughly, 16.72 % of respondents are satisfied with the services being provided to them, 30.66% wants to improved administrative issues, 33.42% of respondents said response time and correspondence needs to be improved and 19.20% mentioned about delays in settlement and under payments.

Indias insurance sector is the biggest in the world with about 1,442 lakh policies and the insurance market is expected to quadruple in size over the next 10 years from its current size of US$ 70 billion, said the PHD Chamber survey.

In Insurance business, India is ranked 11 among the 88 countries with a market share of around 2 percent in global life insurance market.

India stands 15th globally with respect to premium income. In terms of insurance density in India, it increased from $11.5 in 2001 to $55 in the recent years.

The major challenges facing Insurance sector in India today are low insurance awareness among the masses and increased incidence of frauds in the Insurance business. Recent trend, including heightened consumer expectations, new market entrants and significant demographic shifts have created an important window of opportunity for Insurance Companies to act now, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry.

Also, the insurance industry is a major component of the economy by virtue of the amount of premiums it collects, the scale of its investment, its contribution to employment generation, infrastructure development and, the essential social and economic role it plays by covering personal and business risks, said Dr. Gupta.

keeping into consideration Indias demographic factors such as growing middle class and young population, it is the need of the hour to propagate awareness generation through mass media and on-ground interventions to tap the vast potential of the Indian Insurance sector, said Dr. Mahesh Gupta.

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PHD Chamber hails guidelines to regulate Indian Direct Selling Industry
Sep 19,2016

PHD Chamber of Commerce and Industry wholeheartedly welcomes the new guidelines to regulate Indian direct selling companies, issued by the Ministry of Consumer Affairs to safeguard the interests of consumers, as well as help protect ethical direct selling companies, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry.

According to our projections, the annual revenue size of the Direct Selling Industry is estimated to reach upto INR 15,000 crore by 2019-20 on account of conducive policy framework and regulatory clarity by the government, he said.

The annual revenue size of the direct selling industry in 2014-15 was estimated at around Rs.7900 crore during the annual survey conducted by the PHD Research Bureau of PHD chamber

The guidelines related to grievance redressal mechanism for consumers, remuneration system for the person engaged by direct selling firms and direct sellers mandatory compliance with some rules will safeguard the interests of consumers as well as companies alike, added Dr. Gupta.

The guidelines will help to give boost to the industry which gives employment opportunities to large number of youth and women, contributes to skill development and women empowerment, gives push to MSME sector and has contributed to Governments ambitious Make in India campaign by giving boost to manufacturing sector in India, he said.

PHD Chamber of Commerce and Industry has been conducting the Annual Survey of the Indian Direct Selling Industry for the last 5 years to study the growth dynamics of the Industry, he said.

Going forward, we look forward to a clear set of standard central guidelines across the country in order to build an environment of confidence and to bring Indias Direct Selling industry at par with global levels, said Dr. Mahesh Gupta.

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Indo-Belarus Mutual Trade Growing At 10-15% Per Annum: Ambassador, Belarus
Sep 19,2016

Ambassador of Belarus to India, Mr. Vitaly Prima on Thursday hoped that both India and Belarus would further cement their trade and economic ties as in the last few years the mutual trade turnover between the two countries is growing between 10-15% per year.

n++With the elimination of all barriers in the bilateral trade between India and Belarus, when India recognized the latter as a full market economy country and removed anti-dumping duties on Belarusian goods, the prospects of two nations coming closer have brightenedn++, emphasized the Ambassador.

Addressing an Interactive Session on Doing Business with Belarus under aegis of PHD Chamber of Commerce and Industry, Mr. Prima recalled that the visit of the Prime Minister of Republic of Belarus in November 2012 and the first in the history of the Belarus-India relations visit of President of India to Belarus in June 2015 gave strong impetus to bilateral collaboration.

The Ambassador also emphasized that Belarus and India could become a strong partners for development and welfare in programmes such as Make-in-India, Digital India, Smart Cities and Skill India as also cooperate in the field of chemicals, petro-chemicals, agriculture, mechanical engineering, light industry and food production including information and communication technologies.

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Up to 6 new players may enter reinsurance market in India by January 2017: IRDA chief
Sep 19,2016

Up to six new players in the reinsurance market are likely to enter India by January 2017, the Insurance Regulatory and Development Authority of India (IRDA) chief Mr T.S. Vijayan, said at an ASSOCHAM event.

n++About five-six (companies) have come and I think by January 2017, there should be some players in this market, we will be taking a decision in October in the next authority meeting, then they have to bring capital and start working at it,n++ said Mr Vijayan while inaugurating an ASSOCHAM Global Insurance Summit.

He also said that IRDA would finalise the regulations pertaining to payment of commission or remuneration to insurance agents and intermediaries in October. n++I believe in next board/authority meeting, which will be in October, we will be able to finalise.n++

Talking about the whole process, he said, n++We discuss with everyone, we bring the draft, people give their feedback on it and we again discuss that thing. Then it is taken to Insurance Advisory Committee, looking at suggestions, they suggest it and then it goes to the authority.n++

On the listing of insurance companies, Mr Vijayan said, n++In the previous Act itself there was a provision for listing, this was changed, we wanted to have a discussion on this subject, so we brought out a paper and companies have expressed that thing, so let us see how it goes forward.n++

He said also that IRDA has not fixed any time-frame for the final regulations. n++I believe that discussions are going on how to list general insurance companies, all 5-6 of them.n++

He added that considering about five months are still left in this financial year, listing of more PSU insurance companies was possible. n++It is possible but I am not too sure, we have not got any official paper, it is in the discussion stage but nobody has approached us.n++

On the issue of insurance marketing firms, he said n++We have allowed to them sell up to three companies product, these are evolving processes.n++

He said that though insurance industry in India has grown in terms of premium collections from Rs 45,000 crore in 2000 to Rs 4,63,000 crore in 2015-16, insurance penetration against world average and other Asian countries highlight much more ground to be covered.

n++We need to focus on number of lives or risks covered, spread across geographies, gender and level of insurance coverage, as clearly indicated by around 0.7 per cent only insurance penetration observed for Indian general insurance industry against world average of 2.77 per cent,n++ said Mr Vijayan.

He said there are healthy growth prospects for insurance business in general and particularly in property, health and pension lines of business.

The IRDA chief said that home insurance penetration being very low in India, it is one of the most needed insurance cover.

n++Imparting financial literacy, incentivising Indian households to transfer savings from physical assets to financial assets and effective distribution among rural areas are expected to bring more and more individuals within insurance ambit,n++ he said.

Mr Vijayan also said that multiple models and approaches are vital to ensure last mile connectivity and reach of insurance services to address diverse social, cultural, geographical features of rural India.

He said that innovation in products, their distribution should be made in a manner that people are encouraged to buy insurance cover by realising benefits, requirement and necessity. n++An environment must be created to facilitate the same by expanding distribution reach and improving accessibility options to consumers by optimal usage of technology.n++

In his address at the ASSOCHAM conference, Mr S.K. Roy, chairman, Life Insurance Corporation (LIC) said, n++For the life insurance industry these are the best times, as the current financial year has seen fantastic growth, August 2016 has seen stupendous growth as LICs new business premium grew by more than 92 per cent for August.n++

n++We have yearned for long for this type of growth but seen very rarely, so definitely this is the very good time to be in the life insurance industry,n++ said Mr Roy.

n++Going forward, industry will be working on a more stable platform of regulations than it was in last 12-18 months, that is also a very positive feature,n++ added the LIC chief.

Mr C.V. Rao, Governor of Maharashtra while addressing the ASSOCHAM conference, said that with new insurance policies and various other steps being initiated by the government coupled with Indias demographic dividend, it will further push the countrys economy on growth trajectory.

n++As a country with more elderly population and growing middle class, there are plenty of business and opportunities for growth of insurance sector in India,n++ said the Governor of Maharashtra.

Mr Sunil Kanoria, president of ASSOCHAM, in his address at the global insurance summit said, n++The going for most of the general insurance players has been tough as they operate in a highly competitive environment. Going forward, the route to profitability should be chartered by addressing issues of distribution channels, products, customer acquisition through greater product awareness, pricing, risk management and leveraging of technology.n++

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Loss in exports lead to job losses: ASSOCHAM study
Sep 19,2016

Sharp drop in merchandise exports mainly contributed to a loss of 70,000 jobs during the second quarter of 2015 reinforcing a crucial point that the employment generation has to be led by the domestic demand in the wake of subdued global demand, an ASSOCHAM -Thought Arbitrage study noted.

It said around 70,000 workers were retrenched in the second quarter of 2015. Livelihood opportunities in export units particularly shrank during this period. While slowdown in global demand compelled some of the units to retrench people from pay roll, the reduction was facilitated by the increasing contractualisation of jobs.

n++n++.there is a concern because most of the export-oriented units in the economy are dependent on contractual workers. So, massive reduction in contractual jobs in these sectors might as well imply deteriorating conditions in the export units,n++ the paper said.

Second quarter of 2015 particularly had been bad. While contractual jobs were lost, not adequate regular jobs were added to compensate that loss. Textile has been most affected - with some new addition in regular jobs but massive drop in contractual jobs. Apart from marginal addition in jobs in leather sector, as many as seven sectors saw drastic retrenchment in both regular and contractual employment.

For the first two quarters of the fiscal 2015-16, the countrys merchandise exports had dropped by over 17 per cent. The fall in exports continues even this year despite advantage of a low base. Cumulative value of exports for the period April-August 2016-17 was US$ 108519.94 million as against US$ 111853.88 million registering a negative growth of 2.98 per cent

Given the subdued global economic scenario, rejuvenating the economy by exporting or utilising external trade remains a difficult proposition, if not immediately impossible. n++Therefore, Indian economy has to look internally at the domestic economy to restart the Indian growth story. That is only possible if there is extra demand generation within the economy. Employment generation is the most important factor to generate such extra demand. More employment means extra purchasing power in the hands of the people, and subsequently more demand generated for all kinds of commodities and servicesn++, ASSOCHAM Secretary General Mr D S Rawat said.

The negative impact on employment generation was more visible on sectors like gems and jewellery, textiles and apparels etc.

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New Import policy for Marble and Travertine Blocks
Sep 19,2016

The Department of Commerce, Ministry of Commerce and Industry, Government of India has notified the new import policy for Marble & Travertine Blocks, and Marble and Granite Slabs, to come into effect from 1st October 2016.

Marble and Travertine Blocks: The Quantitative Restriction on the import of Marble & Travertine Blocks, and the associated administratively cumbersome and restrictive import licensing system has been brought to an end under the new policy coming into effect from 1st October 2016. The Minimum Import Price (MIP) for import of Marble Blocks has been reduced to US Dollars 200 per Metric Ton to address the distortions associated with an MIP. To address the interest of domestic producers, the Basic Customs Duty on import of Marble & Travertine Blocks will go up four times from the present 10% to 40% w.e.f. 1st October 2016.

Marble Slabs: With effect from 1st October 2016, the MIP on the import of marble slabs is being reduced to US Dollars 40 per Sq. Metre to address the distortion associated with an MIP. In order to address the interest of domestic producers the basic customs duty on import of marble slabs is being doubled from 10% to 20% w.e.f. 1st October 2016

Granite Slabs: With effect from 1st October 2016, the MIP on the import of granite slabs is being reduced to US Dollars 50 per Sq. Metre to address the distortion associated with MIP. In order to address the interest of domestic producers the basic customs duty on import of granite slabs is being doubled from 10% to 20% w.e.f. 1st October 2016.

The new policy balances the interests of domestic consumers, producers and processors, and ends the cumbersome licensing system for import of Marble & Travertine blocks.

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