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Foreign Exchange Earnings (In Rupee and US $ Terms) Through Tourism in India in March 2017
Apr 20,2017

Ministry of Tourism estimates monthly Foreign Exchange Earnings (FEEs) through Tourism in India, both in rupee and dollar terms. Based on the credit data of Travel Head from Balance of Payments of RBI.

The highlights of the estimates of FEEs from Tourism in India for March 2017 are as below:

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

n++ FEEs during the month of March 2017 were Rs.14, 953 crore as compared to Rs. 13,115 crore in March 2016 and `11,133 crore in March 2015.

n++ The growth rate in FEEs in rupee terms in March 2017 over March 2016 was 14.0% compared to positive growth of 17.8% in March 2016 over March 2015.

n++ FEEs during the period January- March 2017 were Rs. 46,310 crore with a growth of 14.6%, as compared to the FEE of Rs. 40,411 crore with a growth of 15.9% in January- March 2016 over January- March 2015.

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

n++ FEEs in US$ terms during the month of March 2017 were US$ 2.268 billion as compared to FEEs of US$ 1.958 billion during the month of March 2016 and US$ 1.783 billion in March 2015.

n++ The growth rate in FEEs in US$ terms in March 2017 over March 2016 was 15.8% compared to a positive growth of 9.8% in March 2016 over March 2015.

n++ FEEs during the period January-March 2017 were US$ 6.907 billion with a growth of 15.4% as compared to the FEE of US$ 5.986 billion with a growth of 6.8% in January- March 2016 over January- March 2015.

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Strong Rupee and Weak Global Trade to Dent Margins of Textile and Apparel Exporters
Apr 20,2017

Textile & Apparel (T&A) exporters earnings and EBITDA margins will be impacted in the near term due to the Indian rupees (INR) 5% appreciation against the dollar in 2017 ytd and weak apparel imports from traditional markets such as US and UK, says India Ratings and Research (Ind-Ra). The on-going strength of the INR vs USD as reflected in the 3-month USDINR futures trading at around 65.19, constrains the price competitiveness of the Indian textile exporters. However Ind-Ra believes that apparel exporters value-added garments mix, partially hedged forex exposure, debt-light structure and reasonable liquidity to support the overall business and financial risk profile. Furthermore strong domestic foothold of large spinners and weavers will mitigate any major impact on their business and credit risk profile.

Unabated strengthening of INR vis a vis USD in the current calendar year has added to the challenges of the T&A industry. Ind-Ra had highlighted in the report Stable Input Prices, Fiscal Incentives to Support Textile and Cotton in FY18 the muted performance in 3QFY17 due to high cotton prices (17% higher prices yoy), demonetization and slow global trade. The easing of liquidity over February - March 2017 propelled a recovery in production output and export volumes; however Ind-Ra believes export realisations will get dented due to the strong rupee.

More than 70% of Indian T&A exports are dollar denominated. Strong INR vs USD is likely to have an adverse impact on the export trade volumes and earnings, since fresh export orders will have reduced competitiveness. As on date, INR has strengthened by more than 5% in 2017, while there has been negligible or a favourable movement of 1%, 0.5% and -1% for major competing nations namely China, Bangladesh and Vietnam respectively. Ind-Ra estimates that INR realisations will shrink by 3%-5% in the near term and hence would impact the profitability of the companies across the textile value chain. Ind-Ra believes that this may offset some of the gains which will accrue from the government of Indias export stimulus package, GST implementation and USAs exit from the Trans Pacific Partnership.

Ind-Ra believes that export-oriented apparel manufacturers with unhedged receivable positions will be the hurt the most, due to their geographically concentrated (US and Europe) earnings profile, low market share and restricted bargaining power with their global clients. Ind-Ra expects EBITDA margin erosion of around 150bp yoy in 4QFY17.

Earnings and EBITDA margins of Ind-Ra rated large spinners and weavers will be relatively less impacted due to their diverse earnings profile, coupled with cost and quality leadership of their products. While domestic demand has recovered from the negative impact of demonetisation, however strong cotton prices coupled with increased price competitiveness of imported yarn and fabric will pressurise margins. Thus balance sheet deleveraging over FY17-FY18 may not be met fully, due to the likely shortfall in operating profits.

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Ind-Ra:Softened Interest Rates Likely to Brighten Solar Sector
Apr 20,2017

India Ratings and Research (Ind-Ra) estimates that INR560 billion out of total debt of INR1,730 billion could be refinanced at a lower borrowing cost across various infrastructure sub-sectors in its portfolio till FY19. Also, there could be a shift in the type of instruments issued for the purpose of raising capital in the sector largely to the capital market instruments, namely bonds, from the conventional term loans.

Ind-Ra estimates that for each 1% reduction in interest rate, the incremental surplus as a % of cash flow available for debt service would be highest in toll roads, followed by solar and wind energy. This could mainly be because the interest burden on these sectors is high as most of these projects are in the ramp-up stage.

Solar energy projects owing to their stable revenue profiles and better counterparties and toll road projects with reasonable track records and stronger sponsors and longer tail period, than other sub-sectors, appear to be the ideal candidates for refinancing. Though Ind-Ra expects a replacement of banks loans by bonds, traction will be witnessed through infrastructure investment trusts.

Also, Ind-Ra observes that the benefit of interest rate reduction will be the least for the annuity sector, followed by the thermal power sector, because refinancing risk has already been factored in at the time of initial funding for the former and due to minimal improvement in persistent issues in the latter.

An estimated INR45 million/project/year is projected to be the surplus for FY18, based on the average interest rate reduction of around 65bp witnessed for Ind-Ra rated entities across various infra sectors. The debt service coverage ratio is likely to improve 0.04x in FY18 across infra sectors.

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Moodys: Global green bond issuance robust in first quarter; second largest quarterly volume ever
Apr 20,2017

Global green bond first quarter 2017 volume increased strongly compared to the corresponding period a year ago after France (Aa2 stable) tapped the market with a EUR 7 billion ($7.5 billion) offering in January, Moodys Investors Service says in a new report. The countrys green bond was the largest to date and bodes well for additional sovereign issuance.

Green bond issuance remained healthy in the first quarter of 2017, reaching $29.5 billion, up 75% from the first quarter of 2016, according to Henry Shilling, the author of the report and a Moodys Senior Vice President. Volume in the first quarter was the second largest ever for a quarter, trailing only the $30.2 billion in the fourth quarter of 2016.

The report Green Bonds -- Global: Frances Sovereign Offering Propels Strong First-Quarter 2017 Issuance, says if the current trend continues, green bond issuance will total nearly $120 billion for the year and eclipse the record of $93.4 billion in 2016.

Renewable energy and energy efficiency projects were in the fore during the period to comprise the bulk of project types with the two accounting for 42% of total dollar issuance. As well, clean transportation was the third most popular category.

French issuers dominated the mix during the first quarter with roughly 40%, or $118 billion in deals. Likewise, corporate and investment grade issuers were prominent in the period, although financial institutions declined significantly with $5.4 billion in deals, or 18% of global volume.

The drop in financial institution issuance is primarily due to the significantly lower level of green bond issuance from Chinese banks. On the flip side, municipal issuers accounted for $5.1 billion of issuance in the first quarter, or 17%, up slightly from 12% for 2016, Shilling says. Issuance by Chinese entities fell 67% to $2.6 billion compared to Q1 2016.

During the first quarter, the average transaction size increased to $360 million on the basis of 82 transactions while the percentage of Aaa-rated transactions, based on Moodys ratings, continued to drop, reaching 14% from 25% share for all of 2016.

The report goes on to note that the green bond market is continuing to evolve. The number of sovereign issuers will likely increase, momentum from the Paris Agreement will expand the markets geographic reach and new security structures will continue to emerge.

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Amended Mega Power Policy Potentially Unlocks Around INR40 Billion Funding to the Power Sector
Apr 20,2017

The extension by five years for complying with the Mega Power Policy 2009 norms will reduce contingent liabilities and free up banking limits to 25 mega power projects, thus granting them a fresh lease of life, says India Ratings and Research (Ind-Ra). Ind-Ra believes this will also in turn free up banks potential exposure to the power sector by around 3.50% or INR40 billion, providing them additional headroom to lend to the power sector. This is applicable to 25 mega power projects of around 32,330MW of coal and gas based power plants which have provisional certificates, but are awaiting the final mega power status. The projects would have needed additional debt or the sponsors may have had to inject additional equity to settle the bank guarantee obligations, which would have devolved in the absence of an extension in timeline as per Mega Power Policy. While the extension is likely to provide some comfort in terms of lower finance costs, the lack of long term Power Purchase Agreements (PPA) may prohibit these plants from availing the full benefits under the policy. For many projects it is kicking the can down the road until long term PPAs become a norm again, which Ind-Ra believes is unlikely in the near term.

The Cabinet Committee on Economic Affairs has extended the timeline available for furnishing the final mega certificates (from the date of receiving provisional mega certificates) to 120 months from the earlier 60 months from the date of import to avail all the benefits under the policy. Tax concession under the amended policy will be in the proportion of the long term PPA tied up, instead of requiring 85% or more long-term tie up (65% long term PPA by competitive bidding and 35% under regulated tariff as per specific host state policy for 15 out of 25 projects which have provisional mega status as per the earlier amendment). The proceeds out of the release of bank guarantees (submitted by the generators till the final mega status is received) have to necessarily be utilised towards reduction in project debt by the developer.

Most states have become averse to buying power on a long-term basis, since short-term tariffs are more economical. Ind-Ra expects long-term PPAs to be scarce, given the weak industry demand. Ten major power consuming states (contributing 65% to power demand of all distribution companies) have signed contracts for higher than the current annual demand, Ind-Ra estimates this will lead to a consolidated power surplus of 18%. Extension of the timeline to tie-up long term PPAs in the current challenging market is a breather for all the power plants which have a provisional mega power status but are awaiting the final conformation.

Ind-Ra estimates that the total reduction in potential banking exposure across these 25 power projects due to this amendment will be around INR40 billion. As per Ind-Ras sample set, bank guarantees submitted by these generators contingent on receiving the final mega status are on an average about 5.5% of the total project cost. Also, almost one third of project capacity of these 25 projects is tied up under long term PPAs and will be eligible for release of bank guarantees as per the terms and conditions of this amended Mega Power Policy. This amendment will reduce the contingent liabilities sitting on the balance sheets of these projects against the potential tax liability in the future. Freeing up of banking limits will also help these power plants to competitively bid for PPAs in the future.

Clarity however is still awaited in operationalising the policy, including aspects of reimbursements for taxes paid, treatment of PPAs (signed with home states for selling 35% power) which are not operationalised, among other details.

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Layoffs in IT not ruled out; sector reeling under visa curbs, rising rupee: ASSOCHAM
Apr 20,2017

With the US tightening the norms for H-1B visas under the President Donald Trumps Buy American, Hire American campaign, the Indian IT companies are bound to face disruptions by way of higher costs and even some laying off work force back home, as the rising rupee is aggravating the situation further for the technology export firms, an ASSOCHAM paper has cautioned.

Nearly 86% of the H-1B visas issued for workers in the computer space go to Indians and this figure is now sure to be scaled down to about 60 % or even less.

Remittances from US would decline hurting the balance of payment. World Bank data showed the U.S was the second largest source of remittance for India in 2015, behind Saudi Arabia, and about $10.96 billion-nearly 16 percent of the total inflows were sent to India. ASSOCHAM expects it to disturb the balance by 8-10%.

As the cost pressure would increase, aggravated by rising rupee leading to lower realizations, the Indian IT firms may be forced to displace work force. n++In that case, the chances of layoffs are real,n++ the ASSOCHAM Secretary General Mr D S Rawat cautioned, while impressing upon the IT industry apex bodies and the government to work out a joint strategy to deal with the unfolding situation. In the last three months, the Indian currency has gained by at least five per cent against US dollar, reducing net realizations for software exporters, among other export -oriented sectors.

n++After all, our stakes are quite high. It is a question of USD 100 billion software export industry that employs over four million people and reservations for H1B visa for start-ups with less than 50 employee will decrease the number of visa available for Indian firms.

According to the ASSOCHAM paper, the reverses resulting from the tightening of the H1B visas would force IT giants to create fundamental changes in their strategies in terms of hiring, salaries, jobs, impacting employees in India too.

The move would also have an adverse macro impact for the Indian external sector economy. Remittances from US would decline hurting the balance of payment. World Bank data showed the U.S. was the second largest source of remittance for India in 2015 with USD 11 billion - nearly 16 percent of the total inflows. n++We expect disturbances in remittances by 8-10%n++, the paper said, adding there would be fewer opportunities for individuals to work on offshore location.

With the UK already hiking the minimum wage requirement to n++35,000 for tier-2 visa immigrants, this latest move by the US will act as a definitive dampener to the Indian outsourcing industry.

The alternate solutions for the Indian outsourcing industry are: investing in n++near shore centresn++ - facilities close to the US, focus on local hiring in America and to work virtually, which is becoming easier with the wider adoption of cloud services and greater digitization.

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Central Government amends Pradhan Mantri Garib Kalyan Deposit Scheme through a Notification
Apr 20,2017

. In exercise of the powers conferred by clause (c) of Section 199B of the Finance Act, 2016 (28 of 2016), the Central Government has amended through a Notification the conditions specified in clause 5 of the Pradhan Mantri Garib Kalyan Deposit Scheme.

Following is the amended Clause 5:

Now the effective date of opening of the Bonds Ledger Account shall be the date of receipt of deposits by the Reserve Bank of India (RBI) from the authorized banks; wherein the due tax, surcharge and penalty has been received till 31st March, 2017; Provided further that the date of deposit shall in no case be extended beyond 30th April, 2017.

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The Government decides to do away with beacons for all categories of vehicles
Apr 19,2017

With a view to strengthening healthy democratic values in the country, the Central Government took another historic step today. The Union Cabinet, in its meeting chaired by Prime Minister Shri Narendra Modi today decided to do away with beacons of all kinds atop all categories of vehicles in the country. The government is of the considered opinion that beacons on vehicles are perceived symbols of VIP Culture, and have no place in a democratic country. They have no relevance whatsoever. Beacons, however, will be allowed on vehicles concerned with emergency and relief services, ambulance, fire service etc. In the light of this decision the Ministry of Road Transport & Highways will make necessary provisions in the law.

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Permission to avail external assistance by State Government entities from bilateral agencies for implementation of vital infrastructure projects
Apr 19,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the policy guidelines to allow financially sound State Government entities to borrow directly from bilateral ODA (Official development Assistance) partners for implementation of vital infrastructure projects. The Mumbai Metropolitan Region Development Authority (MMRDA), a State Government entity, has also been allowed to borrow directly from Japan International Cooperation Agency (JICA) Official Development Assistance (ODA) loan for implementation of Mumbai Trans Harbour Link (MTHL) project. The estimated project cost for Mumbai Trans-Harbour Link (MTHL) is Rs.17,854 crore, out of which JICA loan portion is expected to be Rs.15,109 crore.

The guidelines will facilitate the State Government entities to directly borrow from the external bilateral funding agencies subject to fulfilment of certain conditions and all repayments of loans and interests to the funding agencies will be directly remitted by the concerned borrower. The concerned State Government will furnish guarantee for the Loan. The Government of India will provide counter guarantee for the loan.

External assistance today plays a supportive role in financing major infrastructure projects, social sector projects and in building up institutional capacity. The role of external assistance has gained further significance in view of the large gap in funding requirements for major infrastructure projects implemented by the State Governments in order to acquire competitive strength under the globalized economic framework. Presently, external development assistance from bilateral and multilateral sources is received by the Government of India (i) for projects/programmes in the Central sector; (ii) for projects executed by Central Public Sector Undertakings; and (ii) on behalf of the State Governments for State sector projects/programmes to be implemented by the State Governments and/or local bodies and public sector undertakings. The existing guidelines do not allow direct borrowings by the State Government entities from external agencies.

Several State agencies are implementing major infrastructure projects of national importance. These projects, even if viable and sound, have huge funding requirements and borrowing by the State Governments for such projects may exhaust their respective borrowing limits. Therefore, in order to accelerate the pace of investment in major infrastructure projects in the country without compromising the need for external assistance for other sectors, an enabling provision in the existing guidelines was considered necessary to facilitate direct borrowing by the State Government entities from bilateral external agencies. This dispensation will allow the financially sound State entities to directly borrow and repay the loan required for major infrastructure projects without burdening the State exchequer. The approval of these guidelines reiterates Governments commitment to promote inclusive growth and strengthen the economy.

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Cabinet approves procurement of Voter Verifiable Paper Audit Trail Units for use in the General Elections, 2019
Apr 19,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for procurement of Voter Verifiable Paper Audit Trail (VVPAT) Units for use in the General Elections, 2019 for

a) purchase of 16,15,000 Voter Verifiable Paper Audit Trail (VVPAT) Units at a tentative unit cost of Rs.19,650, and at a total estimated cost of Rs. 3173.47 crore (excluding taxes and freight as applicable) during the years 2017-18 and 2018-19 from M/s Bharat Electronics Ltd., Bangalore and M/s Electronics Corporation of India Ltd., Hyderabad;

b) directing the Price Negotiation Committee to negotiate with M/s Bharat Electronics Ltd and M/s Electronics Corporation of India Ltd to rationalise the final unit price expeditiously;

c) allocation of additional funds to the tune of Rs. 1600 crore in the current financial year in the supplementaries/Revised Estimates for meeting the cash outgo envisaged for purchase of EVMs (Control Units & Ballot Units) and VVPAT Units during the year 2017-18, payment of 40% of the said amount as advance to the manufacturers and for provision of balance amount as may be required in the BE 2018-19; and

d) placement of Order by the Election Commission to the two manufacturers depending upon their production capacity so that all the VVPAT Units can be procured by September, 2018.

The decision of the Government would enable the Election Commission of India to deploy VVPAT Units in all pooling booths in the General Elections, 2019, which will act as an additional layer of transparency for the satisfaction of voters, allaying any apprehension in the minds of the voters as to the fidelity and integrity of the EVMs. This would also result in compliance of the directions of the Honble Supreme Court vide its Order dated 8thOctober, 2013.


The idea of an additional layer of transparency for the satisfaction of voters in the form of a voter verifiable paper trail was suggested by the political parties in a meeting taken by the ECI on 4th October, 2010. Accordingly, introduction of the VVPAT was facilitated by amending the Conduct of Election Rules, 1961 vide Notification dated 14th August, 2013. Thereafter, 20,300 VVPAT Units were purchased by the ECI in 2013. Since then, these units are being deployed in elections in select Assembly and Parliamentary Constituencies. Subsequently, order for 67,000 additional Units was placed in 2015, out of which 33,500 Units have been supplied by the manufacturers. Requisite funds for purchase of the aforesaid number of VVPAT Units were provided by the Government as and when requested by the Election Commission.

VVPAT device functions like a printer to be attached to the ballot unit and kept inside the voting compartment. When the voter presses the button against the name of the candidate of his choice on the Ballot Unit, the VVPAT unit generates a paper slip, called Ballot Slip. This paper slip contains the name, serial number and symbol of the chosen candidate. The voter can see this slip through a screened window where it stays for seven seconds, and then it automatically gets cut and falls down into a sealed drop box. In this process, the slip will not go into the hands of the voter nor will others be able to see it.

Civil Appeal No.9093/2013 was filed by Dr. Subramanian Swamy pleading for directions to the Election Commission to use VVPAT Units in all polling booths. It was alleged in the said Petition, that the Electronic Voting Machines are not reliable and that there should be some device by which the voter should get a confirmation that the vote cast by him has been recorded in favour of the candidate of his choice. In deference to the plea of the petitioner in the aforesaid CA, the Election Commission submitted that it has no objection to the introduction of VVPAT Units for conduct of free, fair and transparent elections. The Supreme Court in its Order dated 8th October, 2013 directed that for implementation of such a system of VVPAT in phased manner Government of India may provide required financial assistance for procurement of requisite number of VVPAT Units.

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Approval granted for retention of posts and office premises for the proposed new National Commission for Backward Classes
Apr 19,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given (I) Ex-post facto approval for introduction of (i) Constitution (One Hundred and Twenty-third Amendment) Bill 2017 and (ii) National Commission for Backward Classes (Repeal) Bill, 2017 in the Parliament; and (II) Approval for retention of posts/incumbents and office premises held by the existing National Commission for Backward Classes by the proposed new National Commission for Backward Classes

The approval is for the proposal to bring about a Constitutional Amendment namely the Constitution (One Hundred Twenty-third Amendment) Bill, 2017 by:

1. a. Constitution of a Commission under Article 338B for socially and educationally backward classes by name of National Commission for Backward Classes; and

b. (b) insertion of Clause (26C) under Article 366 with modified definition viz. n++socially and educationally backward classesn++ means such backward classes as are so deemed under Article 342A for the purpose, this Constitution and

2. Introduce a Bill for:

a. Repeal of the National Commission for Backward Classes Act, 1993 along with Savings Clause for namely the National Commission for Backward Classes (Repeal) Bill, 2017; and

b. Dissolution of the National Commission for Backward Classes with effect from such date as the Central Government may appoint in this behalf and the National Commission for Backward Classes constituted under sub-section (1) of Section 3 of the said Act shall stand dissolved.

3. (a) Appropriation of the sanctioned 52 posts, along with incumbents wherever filled of the existing National Commission for Backward Classes in the proposed National Commission for Backward Classes to be constituted under Article 338B; and (b) Retention of the office premises of the existing National Commission for Backward Classes at Trikut-1, Bhikaiji Cama Place, New Delhi-110066, by the National Commission for Backward Classes to be constituted under Article 338B.

The above decisions will lead to overall welfare of socially and educationally backward classes.

The proposed Act of repeal is necessary in view of setting up of the National Commission for Backward Classes by insertion of Article 338B of the Constitution.

The decision will also enable effecting continuity in the functioning of the National Commission for Backward Classes under Article 338B.

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Cabinet approves extension of the validity of Central Order in respect of sugar for six months
Apr 19,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for extending the validity of the existing Central Order dated 27.10.2016 in respect of sugar for a further period of six months from 29.04.2017 to 28.10.2017.

The main objective of the decision is to enable the State Governments to issue control order with the prior concurrence of Central Government, for fixing stock limits/licensing requirements in respect of sugar, whenever need is felt by them. This is expected to help in the efforts being taken to improve the availability of these commodities to general public at reasonable rates, and control the tendencies of hoarding and profiteering.

The current decision will be notified by the Government and communicated to all the States/UTs for further action at their end.


The Cabinet in its meeting held on 27.10.2016, decided to enable the States to regulate supply, distribution, sale, production, stock, storage, purchase and movement etc, in respect of sugar for a period up to six months. Accordingly, S.O. 3341(E) dated 27.10.2016 was issued, for enabling administrative department, States & UTs to decide stock limits etc. on sugar upto 28.04.2017, by amending the Removal of Licensing Requirements, Stock limits and Movement restrictions on Specified Foodstuffs Order, 2016 dated 29.09.2016 notified as G.S.R. 929(E).

The prices of sugar are being monitored by the Department of Food & Public Distribution regularly at factory gate as well as in the domestic market. In September, 2016 it was noticed that the retail prices had shown a sudden spurt. The price rise appeared to be more on sentiment than actual shortage. In order to regulate supply of sugar and address issue of speculative prices, fixing of appropriate stock limit on need basis was essential. In addition, despite adequate availability of stocks for consumption in the current season, hoarding and consequent profiteering is anticipated due to drop in production over previous year and hence further extension of stock limit would be needed.

To support the sugar sector, the Government had recently extended soft loan assistance of Rs.4305 crore to the industry which has been directly credited to farmers account on behalf of sugar mills through banks benefitting about 32 lakh farmers. Also a performance based production subsidy has been extended @Rs.4.50 per quintal of cane crushed which was directly credited to the farmers account on behalf of sugar mills.

In order to maintain domestic prices at reasonable levels, the Government has allowed import of a restricted quantity of 5 lakh MT of raw sugar at zero duty by millers/refiners having their own refining capacity. This restricted quantity will help the sugar industry to augment their liquidity and enable them to pay cane dues of farmers.

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Cabinet approves encashment of accumulated leave to certain Defence Services Personnel
Apr 19,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved leave encashment up to 180 days in respect of those Defence personnel who died or were invalidated out of service between 30.12.1991 to 29.11.1999 with less than 15 years of service.

The decision will benefit the families of 9777 Officers and other personnel of Defence Services who died or were invalidated out of service during this period. This period is very significant as a large number of casualities took place during the Kargil conflict (n++Operation Vijayn++) and in counter insurgency operation in J&K and North East during the period.

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Cabinet approves signing of the Protocol amending the Convention between India and Portugal for avoidance of Double Taxation
Apr 19,2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for signing of a Protocol amending the Convention between India and Portugal for avoidance of double taxation. The Protocol will also ensure prevention of fiscal evasion with respect to taxes on income.

Once the Protocol enters into force, both India and Portugal would be able to exchange tax related information, which will help tax authorities of both countries to curb tax evasion.

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Fitch: US Tightening, Trade Risks Weigh on APAC Growth Outlook
Apr 19,2017

Most APAC economies have started 2017 with good momentum, and regional growth is likely to remain relatively healthy by global standards during the rest of the year, says Fitch Ratings. APAC sovereign rating trends are mostly stable. However, several rising challenges are likely to weigh on growth as the year wears on. Tighter global financial conditions and another round of US dollar appreciation could create strains. Chinas economy is likely to ease, which would dampen external demand around the rest of the region. A potential increase in global protectionism might also undermine export performance, while geopolitical risks - such as those centering on North Korea - could dampen business sentiment.

Asian exports and business surveys have fared better than we had expected, reflecting surprisingly strong growth in the US and Europe as well as policy-driven stabilisation of growth in China. Expansionary fiscal policy and infrastructure spending have supported domestic demand around much of the region, and some economies are making progress on reforms, most notably India and Indonesia.

However, tighter global financial conditions could see growth decelerate over the next few quarters. We forecast two more US rate hikes in 2017, and another four in 2018. Eventually, we expect the Fed Funds rate to normalise at 3.5%-4.0% by 2020, far higher than current market expectations. Higher US rates are likely to drive renewed appreciation of the US dollar.

Higher debt-servicing costs in Asia might create pressures in countries where debt has built up rapidly during the period of very low interest rates. Some sovereigns are made vulnerable in this respect by high private foreign-currency debt, such as in Malaysia, or a dependence on foreign inflows - such as in Indonesia. Asset prices could also suffer.

A stronger dollar could have benefits for Asian exporters, but this is offset by the prospect of a slowdown in China and the risk of increased protectionism. The Chinese authorities have recently started to shift their focus toward curbing leverage and containing financial risks. Macro-prudential controls on banks shadow-funding activities have been tightened in recent months, and the Peoples Bank of China has increased key money-market interest rates. These measures are likely to slow growth in 2H17 and into 2018.

The main protectionism threat stems from the US. A recent meeting between US President Trump and Chinese President Xi appears to have lowered the risk of an imminent trade war between their countries, but a lot could still change. The Trump administration has already withdrawn from the Trans-Pacific Partnership, and has consistently used tough rhetoric on trade, with the emphasis on unfair competition from countries that run large bilateral trade surpluses with the US, including China. The US vice-president has also said this week that the trade pact with South Korea will be reformed.

Overall, we expect APAC aggregate GDP growth to remain relatively flat in 2017. Slowdowns are likely in some of the most trade-dependent economies with significant exposure to China, such as Hong Kong, Korea, and Singapore. However, we expect marked pick-ups in the next few years in the domestically driven economies of India and Indonesia, which should continue to benefit from recent reforms.

Most APAC sovereigns are on Stable Outlook, with some exceptions. Indonesia and the Philippines are on Positive Outlook, reflecting strong GDP growth and - in Indonesias case - positive reforms and growing resilience to external pressures. Japans A rating was placed on Negative Outlook last June on deteriorating public finances, although recent indicators point to a brighter growth outlook than we had previously expected.

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