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Government reiterates that information contained in a valid declaration under the Income Declaration Scheme, 2016 is confidential
Sep 15,2016

The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. The Scheme is open for declarations up to 30.9.2016.

As regards, concerns regarding confidentiality of the information filed under the Scheme, it is reiterated that information contained in a valid declaration is confidential and shall not be shared. In respect of declarations filed with the Commissioner of Income-tax, Centralised Processing Centre, Bengaluru [CIT (CPC)], the declaration shall not be shared even with the jurisdictional Principal Commissioner / Commissioner and payments made under the Scheme shall not be visible to the jurisdictional officers. Form-2 and Form-4 required to be issued in such cases shall be system generated by the CPC.

Similarly, the declaration filed with jurisdictional Principal Commissioner/Commissioner shall not be shared with any authority within or outside the department including the jurisdictional Assessing Officer. Further, the payments under the Scheme shall neither be reflected in 26AS statement nor can be viewed by the Assessing Officer in the Online Tax Accounting System (OLTAS) of the Department in the interest of confidentiality.

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Urgent need to infuse confidence in investor community: ASSOCHAM plea to Goa government
Sep 15,2016

Apex industry body ASSOCHAM today suggested the Government of Goa to urgently take corrective measures and facilitate ease of doing business in the state to infuse confidence in investor community in wake of falling investments.

n++Goa has virtually failed to attract investments as year-on-year growth rate for inflow of new investments dipped to about nine per cent in 2015-16 from a level of over 91 per cent in 2014-15, probably due to a fluid economic situation prevailing in the state,n++ highlighted a just-concluded ASSOCHAM study titled Goa: Economic & investment scenario.

n++Predictability and stability is an important condition for continuous flow of investments and looking at this trend, it seems both are seriously lacking in Goa,n++ said the study prepared by the ASSOCHAM Economic Research Bureau (AERB).

n++A region with better economic growth and more policy initiatives with effective implementation can encourage more investors,n++ it added.

As of FY16, Goa had attracted outstanding investments worth about Rs 26,000 crore, which includes all projects under various stages of announcement or implementation; however the growth in outstanding investments has not been able to pick up.

During the period between 2011-12 and 2015-16, barring 2014-15, there is no other year wherein the outstanding investments growth has been able to touch double digits.

n++Outstanding investment growth rate had fallen to 7.5 per cent in 2015-16 from over 23 per cent in 2014-15,n++ highlighted the ASSOCHAM study.

Though outstanding investments attracted by Goa have grown at a compounded annual growth rate (CAGR) of nine per cent during 2011-12 and 2015-16, only services, construction and real estate sectors have recorded positive growth rate of about 12 and 11 per cent respectively.

However, CAGR of important sectors of manufacturing and electricity have recorded negative growth of about eight per cent and 32 per cent respectively.

n++Declining investments into power sector can dampen the spirits of investor community as energy consumption is positively linked to economic growth, especially manufacturing constituents like cement and steel,n++ noted the study.

Besides, importance of power can be judged by the fact that it is required by agriculture, industrial and domestic household sectors for their functioning.

Implementation of investment projects is also a worrying factor in Goa, as projects with over 58 per cent of investments are under different stages of implementation.

Goa needs to adopt a better strategy for growth and fiscal management. The state must pay special importance to identifying factors that would stimulate private investments as it is one of the principal drivers of growth.

State economy: Issues and solutions

Share of agriculture and allied activities had declined to 3.6 per cent in 2013-14 from over five per cent in 2009-10 and recorded a CAGR of a meagre 2.9 per cent during this period.

In terms of industrial sector performance, the share of industry in Goas gross state domestic product (GSDP) has declined from about 46 per cent in 2009-10 to over 33 per cent in 2013-14 and the sector clocked a CAGR of 3.3 per cent during this period.

n++Poor performance of industry sector is owing to very low growth in manufacturing sector, more so as annual growth rate for manufacturing has declined from 8.6 per cent in 2009-10 to 3.4 per cent 2013-14,n++ highlighted the ASSOCHAM study.

It is suggested that state should identify bottlenecks, roadblocks and take speedy measures to rectify the same. The immediate challenge for Goa is to cultivate a vibrant entrepreneurial ecosystem in the state.

Though services sector share in Goas GSDP has increased from 49 per cent in 2009-10 to over 63 per cent in 2013-14, the sectors growth rate has decreased from 11 per cent in 2009-10 to 8.6 per cent in 2013-14.

Considering that tourism is the mainstay of Goas economy, ASSOCHAM has suggested the state to come up with more inclusive tourism policies and programs to take the momentum forward and derive better synergy of tourism and development.

It has also suggested that Goa should focus on aquaculture production through research for increasing production, profitability, area under aquaculture, intensification and diversification of species.

Cashew being a crop of high economy, commercial value and has immense potential for income and employment generation in rural areas, ASSOCHAM has suggested that policy initiatives towards promotion of cashew growers cooperatives will definitely widen their perspective.

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Import of Vegetable Oil down by 8% in August 2016 from August 2015
Sep 15,2016

Import of vegetable oils during August, 2016 is slow down due to high stock and reported at 1,261,827 tons compared to 1,374,049 tons in August, 2015, consisting of 1,248,951 tons of edible oils and 12,876 tons of non-edible oils i.e. down by 8%. The Solvent Extractors Association of India has compiled the Import data of Vegetable Oils (edible & non-edible) for the month of August 2016. The overall import of vegetable oils during first ten months of the current oil year 2015-16, Nov.15 - Aug.16 is reported at 12,165,555 tons compared to 11,725,065 tons i.e. up by 4%.

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Huge central assistance of Rs.1.13 lakh cr committed to improve basic urban infrastructure till 2019 to enable urban revival
Sep 15,2016

Minister of Urban Development and Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu today said that the political class of the country is now more sensitised than ever before to the challenges in urban sector and the need to fix them at the earliest in the interest of rapid economic growth besides enabling a decent quality of life. He said so while inaugurating the three day conference on Urban Transition in BRICS at Visakhapatnam, Andhra Pradesh. Shri Naidu stated that this much desired awareness is a result of the initiatives taken by the central government to enable urban revival during the last two years. He said that after detailed consultations with all stakeholders including citizens, urban local bodies, State Governments and others, the central government has set in motion a 10-point strategy for urban renaissance and this paradigm shift has begun to yield results.

Stating that resources are key to addressing huge infrastructure deficit in urban areas, Shri Naidu said that the central government is taking measures to enable increased flow of resources to urban local bodies and States which includes enhanced central assistance. He informed that under Smart City Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Swachh Bharat Mission (Urban), central government has committed to provide an assistance of Rs.1.13 lakh crores to improve basic urban infrastructure, till 2018-19. n++This is a quantum jump from central assistance of Rs.33,902 cr committed during 2004-14 under JNNURM for basic infrastructuren++ said Shri Naidu.

The Minister further said n++The pace and scale of project and investment approvals have increased manifold since 2015 with the central government approving an assistance of Rs.1.84 lakh crore. This includes Rs.78,292 cr under smart city plans of 33 mission cities, Rs.45,293 cr under Atal Mission and another Rs.56,231 cr for building affordable houses for urban poor. These are the early gains of urban renaissance in the countryn++.

Shri Naidu stated that the central government led by Shri Narendra Modi has ended the ambiguity in governments approach to urban development since Independence as planned and well guided urbanisation is central to economic growth. He said that urban revival is being sought to be realised based on citizens participation, autonomy to urban local bodies and States in project formulation and their appraisal and approval, promotion of a healthy spirit of competition among urban local bodies, area based development, capacity building and enhanced resource flows to urban local bodies and States.

Giving an illustration of increased investments and scale of central assistance, Shri Venkaiah Naidu informed that an investment of Rs.15,827 cr has been approved over the last one year with central assistance of Rs.4,571 cr for Andhra Pradesh. This includes Rs.10,579 cr for constructing affordable houses for urban poor, Rs.3,595 cr for developing Visakhapatnam and Kakinada as smart cities and another Rs.1,540 cr for improving water supply and sewerage systems in AMRUT cities.

Stating that Brazil, Russia, India, China and South Africa (BRICS), with a population of over 3 billion account for over 53% of worlds population and about one fourth of global GDP, Shri Naidu urged them to step up cooperation in addressing the challenges associated with urban transition based on sharing of experiences and knowledge. He further said that given the size of the economies of BRICS countries and the potential still to be realised, member countries need to collectively address urban challenges so that they could drive global economic recovery.

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196.6% Growth in Tourists Arrival on e-Tourist Visa in August 2016 over the Same Period in 2015
Sep 15,2016

A total of 66,097 tourists arrived in August 2016 on e-Tourist Visa as compared to 22, 286 during the month of August 2015 registering a growth of 196.6%

Commencing from 27th November 2014 e-Tourist Visa facility was available until 25th February 2016 for citizens of 113 countries arriving at 16 Airports in India. The Government of India has extended this scheme for citizens of 37 more countries w.e.f 26th February 2016 taking the tally to 150 countries. Status of achievements in respect of e-Tourist Visa availed by International tourists visiting India last year in 2015 has been surpassed in the first 06 months of the current calendar year 2016.

The following are the important highlights of e-Tourist Visa during August, 2016:-

(i) During the month of August, 2016 a total of 66,097 tourist arrived on e-Tourist Visa as compared to 22,286 during the month of August, 2015 registering a growth of 196.6%.

(ii) During January- August 2016, a total of 6,06,493 tourist arrived on e-Tourist Visa as compared to 1,69,976 during January-August 2015, registering a growth of 256.8% .

(iii) This high growth may be attributed to introduction of e-Tourist Visa for 150 countries as against the earlier coverage of 113 countries.

(iv) The percentage shares of top 10 source countries availing e-Tourist Visa facilities during August, 2016 were as follows:

UK (19.4%), USA (13.2%), China (6.7%), France (6.4%), Spain (6.1%), UAE (5.5%), Germany (4.6%), Australia (3.7%), Canada (3.5%) and Korea Republic of (2.4%).

(v) The percentage shares of top 10 ports in tourist arrivals on e-Tourist Visa during August, 2016 were as follows:

New Delhi Airport (45.30%), Mumbai Airport (21.53%), Chennai Airport (8.82%), Bengaluru Airport (7.58%), Kochi Airport (4.60%), Hyderabad Airport (3.52%), Kolkata Airport (2.07%), Amritsar Airport (2.01%), Ahmadabad Airport (1.44%) and Trivandrum Airport (1.36%).

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FM launches the Web Responsive Pensioners Service portal to provide better services to the pensioners
Sep 15,2016

The Union Minister for Finance & Corporate Affairs Shri Arun Jaitley commended the new initiatives undertaken by the Office of the Controller General of Accounts (CGA) to serve the pensioners better through the newly launched Web Responsive Pensioners Service portal among others. The Finance Minister Shri Arun Jaitley was addressing the gathering after inaugurating the new office premises of the Office of the CGA in the national capital here today. The Finance Minister lauded the role of CGA in handling the growing volume of Government revenue and expenditure through IT initiatives like the PFMS (Public Financial management System) and NTRP (Non Tax Receipt Portal). He also highlighted the importance of data analytics in assessing the quality of Government expenditure and revenue. Further Shri Jaitley appreciated the role of PFMS in ensuring that the funds reach the intended beneficiaries and are essentially used for the purpose they were intended for. The function was co-presided by the Minister of State for Expenditure, Shri Arjun Ram Meghwal and was attended among others the by several Secretaries of different Ministries/Departments and other senior functionaries of the Government of India.

On the occasion, the Finance Minister Shri Arun Jaitley launched a new Digital India initiative taken up by the O/o the Controller General of Accounts, namely, a Web Responsive Pensioners Service. This portal developed by the Central Pension Accounting Office (CPAO) provides a one-stop solution for pensioners to access information relating to status of pension cases, and pension payments processed by Central Ministries/Departments and Banks. This service will also help in speedy redressal of pensioners grievances.

Later, a Memorandum of Understanding (MOU) was also signed between the O/o Controller General of Accounts (CGA) and the Institute of Internal Auditors (IIA), India aimed at strengthening the Internal Audit function in line Ministries and Departments of the Government of India.

The new building is designed and constructed by the Central Public Works Department (CPWD) and conforms to new norms of a Green building and for energy conservation. A grid integrated solar panel system is also planned to be installed for harnessing solar energy.

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DoNER released over Rs 100 cr for Manipur in about 5 months
Sep 15,2016

Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER) & MoS PMO, Dr Jitendra Singh has said that an amount of over Rs. 100 crore has been released by the DoNER Ministry in the first five months of the current financial year for various development projects in Manipur. He said that an amount of Rs.28.47 crore was released for different projects under NLCPR (Non Lapsable Central Pool of Resources) and approximately Rs. 75 crore was released for the NEC (North Eastern Council) projects. This is in addition to the various other fundings and budget releases coming to the State from other Ministries in the Government of India, he added.

Presiding over a meeting of the Ministry of DoNER here today, Dr Jitendra Singh said that among the North-Eastern States, Manipur is the major beneficiary of liberal funding and assistance from various Central Ministries. In this context, he also referred to the Jiribam-Silchar rail link and the broadgauge rail track project from Jiribam to Tupul.

Similarly, Dr Jitendra Singh said that four-laning of the road from Imphal to Moreh and Senapati to Imphal has also been undertaken. In the Power sector, he said, with the active support from the Ministry of DoNER, the State Government and other related agencies have succeeded in providing uninterrupted power supply in the capital city of Imphal. Elaborating on the other new innovative plans for various North Eastern States, Dr Jitendra Singh said, all the 103 district headquarters in the Northeast are planned to be connected to the nearest highway through a minimum two-lane road. At the same time, four-laning of several of the roads is in progress at a fast track, he added.

Dr Jitendra Singh said that considering the exclusive athletic talent among the youth of Northeast, a Sports University for Manipur has been announced by the Central Government, but because of certain issues related to land acquisition, the project has been delayed. The DoNER Ministry is, however, actively pursuing it with the State Government in Imphal, he said.

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India Declares itself Free from Avian Influenza (H5N1)
Sep 14,2016

The Department of Animal Husbandry, Dairying and Fisheries in the Ministry of Agriculture and Farmers welfare has declared India free from Avian Influenza (H5N1) from 5th September, 2016.

India had notified outbreak of Avian Influenza (H5N1) on 09 May 2016 at Humnabad, Bidar district, Karnataka. There has been no further outbreak reported in the country thereafter.

The control measures adopted in the radius of one Km around outbreak location included following:

1- Stamping out of entire poultry population including destruction of eggs, feed, litter and other infected materials, restriction on movement of poultry and poultry products to and from the area of outbreak, disinfection and cleaning up of infected premises and the Post Operation Surveillance Plan (POSP) from 6th June, 2016

2- Surveillance was carried out throughout the country. Surveillance around the areas of the outbreaks since completion of the operation (including culling, disinfection and clean -up)

Post the surveillance the state has shown no evidence of presence of Avian Influenza. India has declared itself free from Avian Influenza (H5N1) from 5th September, 2016 and notified the same to OIE.

In a letter to the State Chief Secretaries the Center has emphasized the need for continued surveillance especially in the vulnerable areas bordering infected countries and in areas visited by migratory birds.

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Fitch: Indias First Offshore Basel III AT1 Issue A Positive
Sep 14,2016

A successful cross-border Additional Tier 1 (AT1) issue by State Bank of India (SBI, BBB-/Stable), Indias largest bank by assets, would be a positive development for Indias banking system, Fitch Ratings says.

The first cross-border deal in the dollar AT1 market from an Indian bank would open up a new source of much-needed regulatory capital and provide a pricing benchmark for other banks keen to access the dollar AT1 market. AT1 issuance by Indian banks has thus far been limited to the domestic market, where both market depth and investor appetite has been lacking.

Fitch estimates that Indian banks will require around USD90bn in new capital by the end of the fiscal year to March 2019 (FYE19) to meet Basel III standards, of which around 30% will be required in AT1. Indian banks have struggled to raise AT1 capital from the local market with issuances since January 2016 raising just USD1.5bn in new AT1 capital.

Fitch would apply its consistent approach of using the banks Viability Ratings (VRs) as the anchor for notching purposes when assigning ratings to Indian AT1 instruments. Under Fitchs current criteria, these instruments would be rated five notches from the VR. The five notches factor in the risks of both non-performance and loss severity while the use of the VR as the anchor rating confirms that Fitch does not factor in extraordinary state support into the ratings of instruments with going-concern loss-absorption features. This is consistent with the Reserve Bank of Indias framework, which requires the permanent write-off of AT1 securities before any extraordinary public-sector injection of funds takes place. (For more details, see Indian Banks: Applying Fitchs Criteria on Basel III Capital Instruments), dated 23 August 2013).

Basel III AT1 instruments are loss-absorbing in nature and will be either converted or written-down once AT1 capital triggers are breached. These are hard triggers requiring banks to maintain minimum Common Equity Tier 1 (CET1) ratio of 5.5% until FYE19 and 6.125% thereafter. These instruments feature fully discretionary coupons and an issuers total capital adequacy ratio, CET1 ratio and Tier 1 ratio need to be above regulatory minimums for it to continue servicing the coupon on its Basel III AT1 instruments.

Fitch believes that the risk of non-performance is highest under fully discretionary coupons as it is the most easily activated form of loss absorption.

Deteriorating financial profiles over the last few years have raised the standalone credit risks of Indian banks adding to capital pressures at a time when progressively higher minimum Basel III capital requirements are being phased in. This was recently highlighted by the coupon skip of Dhanlaxmi Banks legacy Upper Tier 2 capital instrument.

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Negative Growth of IIP worrying: PHD Chamber
Sep 14,2016

The negative growth of IIP at (-) 2.4 for the month of July 2016 is a major cause of concern as growth of Capital goods has decelerated significantly by (-) 29% which is indicative of subdued pace of investments in the economy, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry.

However, the growth of consumer durables at 5.9% is encouraging in anticipation of bumper kharif crops vis-n++-vis good monsoon scenario. We believe there is a need to push domestic demand particularly the rural demand in the economy, said Dr. Gupta.

We look forward to calibrated policy measures from the RBI in terms of reduction in the policy rates.

We also look forward to increase in public investments by the Government to help domestic demand to revive in the coming times, said Dr. Gupta.

The revival in the domestic demand would be crucial for the steady growth trajectory going forward as world economic environment is still in its lacklustre growth trajectory, said Dr. Mahesh Gupta.

These measures would go a long way to boost consumer demand and growth of manufacturing sector in the economy, said Dr. Gupta.

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Increases in wage rates significantly higher than Inflation rate: PHD Chamber
Sep 14,2016

Minimum wage for unskilled workforce has witnessed a significantly increasing trend as compared to increase in inflation rate (CPI Inflation) in majority of the states in India, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry.

At the all India level, the minimum wage rate increase for unskilled workforce during the years 2013-14, 2014-15 and 2015-16 was at an average of 11.17%, while the average CPI Inflation rate was at 6.13% during the same period. Thereby the increase in wage rate was of 5.04 percentage points higher as compared to increase in CPI inflation.

The states of Kerala, Assam, Odisha and Maharashtra witnessed more than 20% higher increase in minimum wage rate for unskilled workforce as compared with CPI inflation.

In the state of Kerala the minimum wage rate increased from Rs. 85.20 per day in 2012-13 to Rs. 150 per day for the years 2013-14 and 2014-15 and further reaching to Rs. 275.46 per day for 2015-16, thus the average increase in wage rate for the three consecutive years was 53.23%. While the CPI inflation for the same period (2013-14, 2014-15 and 2015-16) was 9.01%, 5.98% and 3.84% with an average inflation rate of 6.28%. Thereby, the increase in wage rate was of 46.95 percentage points higher than the increase in CPI inflation.

Certain states like Tamil Nadu, Punjab, Karnataka, Uttar Pradesh, Jharkhand and Gujarat witnessed a moderate increase in wage rate, varying in the range of 10.77 to 18 percentage points as compared to CPI inflation.

The state of Tamil Nadu had minimum wages for unskilled workforce constant at Rs. 85 per day for the years 2012-13, 2013-14 and 2014-15 while for the 2015-16 the minimum wages increased to Rs. 146 per day, the average wage rate for the three years stands at 23.92%. The CPI inflation rate in the state was 6.40% in 2013-14, 6.15% in 2014-15 and 5.22% in 2015-16 and the average for the three years stands at 5.92%. Thus, the increase in wage rate was of 18 percentage points higher as compared to increase in CPI inflation.

On the other hand states like West Bengal, Chhattisgarh, Himachal Pradesh, Jammu and Kashmir, Madhya Pradesh, Bihar and Haryana witnessed a marginal increase in wage rate with a more or less consistent increase CPI inflation rate ranging from 1.1 to 8.98 percentage points.

The state of West Bengal had minimum wages fixed at Rs. 112.50 per day for 2012-13, Rs. 131.40 per day for 2013-14, Rs. 150.24 per day in 2014-15 and Rs. 171 per day in 2015-16. The average wage rate increase for the three years stands at 14.99%. The CPI inflation rate in the state for the same years was 10.10% in 2013-14, 2.75% in 2014-15 and 5.19% in 2015-16 and the average for the three years stands at 6.01%. Thus the increase in wage rate was of 8.98 percentage points higher than the increase in CPI inflation.

In the state of Delhi the wage rate for 2012-13 was Rs. 279 per day, further being constant at Rs. 311 per day for the years 2013-14 and 2014-15, while for 2015-16 the minimum wages increased to Rs. 316 per day. The average increase in wage rate stands at 4.36% for the three years. The CPI inflation rate in the state for the same years was 8.28% in 2013-14, 4.91% in 2014-15 and 4.09% in 2015-16 and the average CPI inflation for the three years was 5.76%. Thus, the increase in wage rate was of (-) 1.40 percentage points lesser than the increase in CPI inflation.

The state of Rajasthan had a wage rate of Rs. 147 per day in 2012-13 reaching to a constant rate of Rs. 166 per day for 2013-14, 2014-15 and 2015-16, the average wage rate increase for the three years was at 4.31%. The CPI inflation rate in the state for the same years was 7.92% in 2013-14, 6.85% in 2014-15 and 4.61% in 2015-16 and the average for the three years stands at 6.46%. Thus, the increase in wage rate was of (-) 2.15 percentage points lesser than the increase in CPI inflation.

With the advent of Make in India policy we suggest a calibrated approach to be followed in order to set the wage rates for the workforce and to create an efficient and conducive economic environment to expand production possibility frontiers and to generate employment opportunities.

We believe a greater synchronisation of the policy environment would go a long way to provide fruitful outcomes of various dynamic reforms announced by the Government during the recent years.

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Moderating Retail Inflation Raises Monetary Easing Hopes; Poor IIP Reflects Sluggish Investment
Sep 14,2016

The sharp fall in retail inflation in August 2016 has accentuated the rate cut proposition in the next quarter itself. However, it should be taken with a pinch of salt as a large part of food inflation is structural in nature, says India Ratings and Research (Ind-Ra). The retail inflation for August 2016 at 5.05%, came in lower than Ind-Ras expectation of 5.30%, primarily driven by a sharp decline in food prices.

This has made the central banks target of bringing retail price inflation down to 5.0% by March 2017 achievable; however, it may be early to rejoice given the baffling behaviour of retail inflation in the past. The cyclical components either aggravate or soften it as is evident from the movement in wholesale prices. Wholesale food price inflation was 5.3% during FY96-FY05 but increased to 9.2% during FY06-FY16. Clearly, the fight on the inflation front, particularly food inflation, is far from over.

Ind-Ra further opines the industrial growth will not return to a sustained and high growth path so long as excess capacity in the manufacturing sector remains and private sector investment cycle does not revive. The Index of Industrial Production (IIP) contracted 2.4% in July 2016 as against the growth of 2.0%yoy in June and was much lower than Ind-Ras expectation of 1.2%.

The agency believes scope for the Reserve Bank of Indias (RBI) action on rate front appears skewed towards December policy review than October 2016, although the sharp fall in inflation from 6.1% in July 2016 is likely to accentuate the expectation of rate cut in the October policy review itself. The maturity of large FCNR B (foreign currency non-resident) deposits worth USD26bn, which is coming due in the next two months, is likely to be the litmus test for the currency as well as for the RBI. Moreover, the RBI would have better clarity on the retail inflation trajectory for the last quarter of the fiscal, US electoral outcomes and Federal Reserve rate trajectory by December 2016.

The IIP data for July has further reinforced the volatility in factory output. The IIP growth had turned positive in February and March 2016 but turned negative in April 2016. IIP witnessed a broad-based weakness in July 2016 with sharp growth moderation in mining and electricity, while manufacturing output (75.5% weight in IIP) contracted 3.4% in July 2016 (June: 0.7% yoy). The disconnect between IIP and industrial gross value added (GVA) data is making it increasingly difficult to discern the sectoral as well as overall industrial and manufacturing output growth trend.

Manufacturing growth according to IIP data was negative 0.8% while GVA in manufacturing was 9.1% in 1QFY17. It is true that the two are strictly not comparable as the former measures output while the latter measures value added. Nevertheless, such a divergence is inexplicable and, increasingly, IIP is failing to measure the manufacturing or industrial growth in the economy. The base year used for IIP calculation is 2004-05, while industrial GVA is based on 2011-12 prices. The use of 2004-05 means a lot of data relating to industrial/manufacturing output is not captured by the IIP.

At the use-base level, capital goods output continued its negative trend. Capital goods output contracted 29.6% yoy in July 2016 against a contraction of 16.3% yoy in June 2016. This reinforces the lacklustre investment demand in the economy. Basic and intermediate goods continued with the positive trend but growth rates moderated to 2.0% (June: 5.8%) and 3.4% (June: 5.7%) in July 2016. Consumer durables maintained the positive growth trend. Consumer non-durables contracted 1.7% yoy in July 2016 after the modest growth of 0.9% in the previous month. The positive growth in June 2016 was a deviation from the seven months of consecutive negative growth in consumer non-durables. This is reflective of the volatility evident in the overall IIP.

Retail food price inflation moderated to 5.9% in August 2016 from 8.4% in July 2016 led by a sharp-to-moderate fall in the prices of vegetables and pulses. Food prices in the previous months (April-July 2016) had remained above 6% primarily due to high inflation in fruits, vegetables and pulses. Vegetable prices moderated to 1.0% in August from 14.0% in July 2016. Prices of pulses moderated to 22.0% in August 2016 from 27.5% in the previous month. Sugar and fruits prices, however, increased to 24.8% (July: 21.9%) and 4.5% (July: 3.5%). Services inflation showed a slight uptick to 4.2% from 4.0% in July 2016 led by higher inflation in the personal care category (August: 8.3%; July: 7.3%).

The agency believes that last weeks unidirectional rally appears to have priced in benign inflation data, thus limiting scope for an incremental rally. Moreover, the spread between policy rate and overall yield curves have narrowed down sharply to 25bp-75bp from 75bp-125bp, owing to the INR1trn open market operation purchase, thus limiting scope for a sharp fall in yield. On the other hand, an uptick in global bond yields will likely keep the domestic market more submissive.

Amid global volatility in capital markets, the domestic currency has been anchored strongly on the back of a surge in investment flows in recent months and a benign current account balance. The low inflation would further solidify the fundamental state of the rupee. So, on a fundamental basis, the rupee is poised to benefit from the improved macroeconomic condition, but transitory volatility will emanate from a potential action by central banks in the developed economies.

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Bengaluru image among Fortune 500 firms sullied by Cauvery related agitation; losses up to Rs 25,000 cr-ASSOCHAM
Sep 14,2016

With widespread damage to the vital urban infrastructure, interruption in the transport including, roads, rail and air and inability of the workforce to safely move to and from offices and factories, Karnataka , particularly Bengaluru city, is estimated to have suffered a loss between Rs 22,000-25,000 crore due to Cauvery dispute related violence, apex industry body ASSOCHAM said today.

n++Violence in the state capital and other parts of Karnataka has severely dented the image of Bengaluru as Silicon Valley of India, home to almost all the Fortune 500 companies,n++ said ASSOCHAM while making a fervent appeal for peace in both Karnataka and Tamil Nadu.

n++The way the violent incidents had spread is demoralizing the business and industrial community, particularly in the capital city of Karnataka. The image that India built around Bengaluru as its Silicon Valley is being sullied,n++ said ASSOCHAM secretary general, Mr D S Rawat.

n++The authorities in Karnataka and Tamil Nadu should not allow under any circumstances the law and order to be compromised. While the water is a basic requirement and an emotional issue, the situation is being exploited by miscreants, scaring away the peace loving workforce which has settled in both Bengaluru and Chennai from all over the country and even abroad,n++ said Mr Rawat.

According to ASSOCHAM, widespread loss would accrue to IT and ITES facilities due to poor attendance for the last several days. Besides, the inter-state tourism, particularly involving pilgrims, domestic travellers, has been affected. Cancellation of air tickets have also been reported to and from Bengaluru.

Likewise, industrial production, movement of cargo and retail trade including malls, cinema halls, restaurants, have been halted. n++All these losses would run between Rs 22,000 crore and Rs 25,000 crore, besides of course immense damage to the goodwill of the state as an attractive investment destination.n++

ASSOCHAM has also urged the Centre to effectively monitor the situation and ensure that peace is restored in the two states. n++A lot of damage has already been done to the trade and factory output with movement of the vehicles hit by the agitation which is taking violent shape. There is a huge stake for the countrys showpiece information technology in both Bengaluru and Chennai.n++

The strikes and bandhs should not be allowed to take violent shape and the law and order machinery should be geared up well in advance, with good amount of intelligence gathering, it said.

n++While we are selling ourselves to be the fastest growing economy of the world, we cannot afford the incidents which are taking place in the metropolitan cities. After all, the two states had built with a lot of hard work image of progressive areas, which should not be compromised at any cost.n++

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Dental doctors seek enhancement in the age of superannuation
Sep 14,2016

Senior Dental Doctors and Specialists working in Government of India approached the Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh and sought his intervention against alleged discrimination towards them in the matter of age of superannuation.

A delegation led by Dr H. P. Singh, President, Central Government Dental Doctors Association handed over a memorandum to Dr Jitendra Singh in which it has been pointed out that whereas the Central Government, vide its order dated 31.05.2016, raised the superannuation age of Non-teaching Specialists sub-cadre, public health sub-cadre, GDMO sub-cadre of CHS to 65 years, the same rule somehow, did not become applicable to Dental Doctors working in Central Government. This has led to feeling of discrimination and grievance among the Central Government Dental Doctors, they said.

The memorandum also sought to note that out of 34 sanctioned posts of Dental Doctors all over India under the Union Ministry of Health and Family Welfare, at present only 24 posts are filled and occupied. In other words, this means that the grievance pertaining to the enhancement of retirement age to 65 years in order to make at par with the other doctors of Central Health Services is confined only to 24 doctors who happen to be from Dental Specialty working under the Central Government.

The delegation underlined that they had represented their grievance to the Ministry of Health and Family Welfare and were now approaching Dr Jitendra Singh.

Dr Jitendra Singh gave a patient hearing to the members of delegation and said that he would take up their grievance with the Union Ministry of Health & Family Welfare.

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CWC to draw up a new protocol of online collection of data
Sep 13,2016

The sixth meeting of Cauvery Supervisory Committee was held under the chairmanship of Secretary Ministry of Water Resources, River Development and Ganga Rejuvenation Shri Shashi Shekhar. 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. In the meanwhile Supreme Court passed another interim order today while the meeting of committee was on. During the discussion it was found that certain information that were required were not available. Those information were related to unauthorized withdrawal of water at a time when it is not permitted. The committee did not wish to pass an order which is not backed by supportive data.

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 next meeting of the supervisory committee will be held on 19th September 2016. All the three states and Union Territory of Puducherry have been requested the submitt the relevant information and data by 15th September 2016.

Chief Secretary of Tamil Nadu Dr P Rama Mohana Rao, Chief Secretary of Karnataka Shri Arvind Jadhav, Chief Secretary of Puducherry Shri Manoj Parida and senior officials from Kerala, Central Water Commission and Union Water Resources Ministry attended the meeting.

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