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Indias external debt declines 1.1% in Q1 of FY2017
Sep 30,2016

Indias external debt declined by 1.1% or US$ 5.4 billion to US$ 479.7 billion at end June 2016 over end-March 2016 level, primarily on account of a decline in commercial borrowings. The decline in the external debt was augmented by valuation gains resulting from the appreciation of the US dollar against the Indian rupee and other major currencies. The external debt to GDP ratio stood at 23.4% as at end-June 2016, a shade lower than its level of 23.7% at end-March 2016.

Valuation gains due to appreciation of the US dollar against the Indian rupee and other major currencies was placed at US$ 1.4 billion. Excluding the valuation effect, the decline in external debt would have been US$ 4.0 billion instead of US$ 5.4 billion as at end-June 2016 over the level at end-March 2016.

Commercial borrowings continued to be the largest component of external debt with a share of 36.6%, followed by NRI deposits (26.3%) and short-term trade credit (16.6%).

At end-June 2016, long-term debt was placed at US$ 397.6 billion, recording a decline of US$ 4.1 billion over its level at end-March 2016. The share of long-term debt in total external debt was marginally higher at 82.9% as at end-June 2016 as compared to its level at end-March 2016.

The share of short-term debt (original maturity) in total debt witnessed a marginal decline over its level at end-March 2016. The ratio of short-term debt (original maturity) to foreign exchange reserves declined to 22.6% as at end-June 2016 (23.1% at end-March 2016).

On a residual maturity basis, short-term debt constituted 42.4% of total external debt at end-June 2016 (42.6% at end-March 2016) and stood at 55.9% of total foreign exchange reserves (57.4% at end-March 2016).

US dollar denominated debt continued to be the largest component of Indias external debt with a share of 57.1% as at end-June 2016, followed by the Indian rupee (28.6%), SDR (5.9%), Japanese yen (4.8%) and Euro (2.4%).

The borrower classification shows that the outstanding debt of the Government increased; however, non-Government debt declined at end-June 2016.

Debt service payments declined to 7.5% of current receipts as at end-June 2016 as compared with 8.8% at end-March 2016.

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NTPC Faces Regulatory Hurdles on Fuel Cost
Sep 30,2016

The Central Electricity Regulatory Commission (CERCs) tariff orders for a few of NTPC Limiteds (IND AAA/Stable) plants for the control period FY15-FY19, could lead to significant under-recoveries on fuel cost on account of a lower energy charge rate (ECR, INR/kWh), says India Ratings and Research (Ind-Ra). The ECR approved by CERC is lower in the range of 20%-31% than was sought by NTPC. The difference in the ECR is due to the change in the basis for measurement of the gross calorific value (GCV) of coal to as-receivedn++ as against n++as firedn++.

CERC is likely to follow the same principle for the rest of NTPCs plants leading to large differences in the fuel cost recovery. However, Ind-Ra expects NTPC to contest the same through regulatory process and initiate steps to install the infrastructure for measurement of coal GCV on n++as receivedn++ basis. There is also a possibility of a dialogue between NTPC and Coal India (CIL) to resolve differences over coal grade slippages.

As per CERCs tariff regulations 2014-2019, coal GCV has to be measured at the point of unloading of the coal at the power station gate, referred to n++as-receivedn++ basis compared to the earlier regulations, which allowed measurement of coal GCV at the point before coal is fired, referred to n++as-firedn++ basis. In its petition to CERC, NTPC had been highlighting the lack of infrastructure at its plants as the reason for its inability to measure coal GCV on n++as-receivedn++ basis. Therefore, CERC, in the absence of data on n++as-receivedn++ basis, has now considered the GCV on n++as-billedn++ basis while arriving at the ECR leading to the consideration of a higher GCV rate.

CERC had decided to shift to the n++as-receivedn++ basis of GCV measurement so that: a) the generating company bears the inefficiencies if any, post unloading of the coal and b) the generating company takes up the coal grade slippage with the coal supplier company and resolve it. On the other hand, NTPC had been highlighting problems with respect to the measurement of GCV on n++as-receivedn++ basis and was seeking n++as-firedn++ basis on four grounds. Firstly coal samples taken after the crushing of coal for firing are of small and homogenous size compared to samples taken from wagons which are big and heterogeneous. Secondly, sample collection time from wagons is longer leading to demurrage charges. Thirdly, safety for personnel collecting is better when samples are taken after crushing. Lastly samples taken from the wagons may not be accurately representative, since often good quality coal could be loaded at the top and superficial layers become dry during the transportation, while the moisture percolates inside the wagons to the lower layers.

The difference between the GCV on n++as-receivedn++ and n++as-firedn++ basis is governed by the ambient temperature, type of coal and duration for which coal is stored. As per the Central Electricity Authority of India, the heat loss during such time should not be more than 0.1% in GCV value, which is in line with international studies. However, in this case the difference between the GCV of the coal works out to 20%-31%.

Ind-Ra notes, that NTPC has been contesting the GCV calculation and had been highlighting the grade slippages in the quality of coal. The grade slippage discussion between CIL and NTPC has become more visible post the January 2012 change in coal grading methodology to GCV based grading from the earlier used heat value based system of grading.

Ind-Ra notes, NTPC over the last two years has seen tightening of operational norms- namely the station heat rate, specific consumption and auxiliary consumption, change in basis for providing the capacity charge incentives to plant load factor instead of plant availability factor and lower tax arbitrage. All these have had a negative impact on NTPCs profitability.

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One lakh villages will become ODF on 2nd October, 2016-Tomar
Sep 30,2016

The Union Minister for Rural Development, Drinking Water & Sanitation and Panchayati Raj Shri Narendra Singh Tomar said that by 2nd October, this year, one lakh villages will become Open Defecation Free, ODF and 40 Districts will achieve the status of ODF Districts in this financial Year. He said, to accelerate the efforts to achieve universal sanitation coverage and to put focus on sanitation, the Prime Minister had launched the Swachh Bharat Mission on 2nd October, 2014, after his historic address from the ramparts of the Red Fort on 15th August, 2014.

Shri Tomar said that the Central Government, State Governments, Municipal bodies, Panchayati Raj Institutions, NGOs, Spiritual and Religious leaders, Public Representatives, Educational Institutions and famous personalities from all walks of life have joined hands together to make India, a Clean India by 2nd October, 2019, the 50th Birth Anniversary of Mahatma Gandhi, as announced by the Prime Minister. Shri Tomar stressed that Swachh Bharat Mission is not a government programme, but its a peoples movement and there is need for behavioural change among the people as merely toilet construction will not be sufficient to achieve the ODF status.

Shri Tomar informed that the Ministry of Drinking Water and Sanitation is compiling the best practices from villages across the country and will bring it to the notice of the common man to emulate the same. The Minister expressed confidence that after Prime Ministers address at the INDOSAN, the Swachh Mission will gain new momentum.

At present 87, 666 villages are ODF, apart from 1,544 villages in Namami Gange areas. This needs to be underlined that the sanitation coverage was 42.12 percent on 2nd October, 2014, when the programme was launched, which has now increased to 55.31 percent, while 24 Districts have been declared as ODF ones. Sikkim is the only State which has achieved the ODF status, and Kerala, Haryana, Gujrat and Maharashtra will soon achieve the ODF status.

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Surgical Strikes havent affected gold prices in India: Dr M. Veerappa Moily
Sep 30,2016

Chairman, Parliamentary Standing Committee on Finance, Dr M. Veerappa Moily said today India Surgical Strikes on Pakistan have not affected gold prices in India at an ASSOCHAM event held in New Delhi today.

n++Need policies for promoting gold as investment of the country; shall suggest appropriate policies to standing committee. The domestic saving coming down drastically and the gold can play an important role in the economy of the country,n++ said Dr Moily while inaugurating an ASSOCHAM 9th International Gold Summit & Excellence Awards.

Due to its high liquidity, financing against gold has caught on very well with banks. With huge base of stable and growing depositors coupled with larger number of loan seekers, banks have become a vibrant hub for gold activities-both for purchase as well as lending. The importance of Banks in this activity cannot be undermined and as the demand for gold grows, it will increase the importance and effectiveness of banking sector -largely for its trust as well as affordable lending rates.

He said that gold has been considered as a safe haven asset throughout history as it has been viewed as a store of value and a means of exchange for millennia. It is essentially a currency that cannot be manipulated by the interest rate policies of the government and has traditionally been used as a hedge against inflation or a falling dollar.

The sentiment towards the yellow metal remains very high irrespective of the rise/fall in prices and this love for the commodity has made the nation heavily reliant on imports of commodities. Petroleum crude accounts for about 34 percent of the total inward shipments, followed by gold and silver (12 percent of the total imports), machinery (10 percent), electronic goods (7 percent) and pearls, precious and semi-precious stones (5 percent), added Dr. Moily.

The Indian gems and jewellery sector is among the most competitive in the world, contributing to 65% by value, 85% by carat and 92% by number of pieces globally, and accounting for more than USD 36 billion of total Indian exports as in 2014-15.In recognition of the business excellence demonstrated by entrepreneurs who make up this industry.

India is one of the largest importers of gold in the world. India accounts for nearly one-third of the total world demand for Gold. At more than 20,000 tonnes, Indian households hold the largest stock of gold in the world, noted Dr. Moily.

He also said that as per estimates, India is the worlds largest buyer of Gold followed by China and both countries account for over half of the global demand. India has an estimated private gold stock of 20,000 tonnes worth $1 trillion, while it mines only around 1.5 tonnes. About 35% of the Gold demand in India is for investment purpose and is held in the form of bars and coins.

Dr. Moily said, n++40% of the world gold stock is lying in India in the form of jewellery and some in temples. The World Gold Council estimates the annual consumer demand for gold will be excess of 1,200 tonnes, at a value of Rs 2.5 trillion, by 2020n++.

The gold policy until economic reforms in the early 1990s centred around the major objectives of discouraging people from purchasing gold, reducing domestic demand, regulating supply of gold, curbing smuggling and black income and conserving foreign exchange.

n++After the severe Balance of payment crisis during early nineties, there has been a shift in the approach of the gold policy. It was realized that the role of a liberalized and developed gold market was in the interest of consumers and efforts were made to integrate the gold market with financial markets,n++ said Dr. Moily.

He also said that to restrict the rising trend in gold imports, which is adversely affecting Indias balance of payments, measures were and are being taken by the government. In order to keep a check on the current account deficit, the UPA government had imposed import restrictions on gold, oil and other commodities. Now the government has come up with two schemes, Gold Monetization Scheme (GMS) and Sovereign Gold Bond Scheme (SGBS).

Over the past decade, the Indian gold industry has significantly matured. The market currently has several participants from Bullion Banks, Government Agencies, Premier Trading Houses, Precious Metal Exchanges, Institutions offering Gold Loans and Gold ETFs. However, the market needs policy action from the regulators for further growth of gold industry in India.

Asia has emerged as an extremely important market for the global gold trade. Five countries- China, India, UAE, Singapore and Thailand together last year imported 2,581 tonnes. In other words nearly 60% of the total global supplies flowed into these countries.

The annual consumption of gold which was estimated at 65 tonnes in 1982, has increased to about 1000 tonnes presently. About 80% is for jewellery fabrication for domestic demand, 15% for investor demand and barely 5% for industrial use.

Despite the fact that India is the worlds largest consumer of gold, there is no reference point for gold prices in the country. Though it is the leading player in import and trade in bullion and export of jewellery, it does not exert any significant impact in discovery of gold prices in the international market. The reason is that countrys bullion trade is fragmented and unorganized.

In order to make India, the global gold trading hub, it is necessary to identify the inefficiencies involved in Indian bullion market and to create a momentum to remove such inefficiencies in a gradual but steady manner. Finally, the institutional and policy-level issues associated with the various sections of the gold market have to be addressed by the government in coordination with the different regulatory bodies.

The Govt. of India has implemented hallmarking scheme to protect the consumer in purchasing gold jewellery of requisite purity, develop export competitiveness and make India a leading market for gold jewellery in the world. Hallmarking is the accurate determination and official recording of the proportionate content of precious metal in precious metal articles. Hallmarks are thus official marks used in many countries as a guarantee of purity or fineness of precious metal articles. The principle objectives of the Hallmarking Scheme are to protect the public against adulteration and to obligate manufacturers to maintain legal standards of fineness.

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MoU with World Bank for investing Rs 2,200 crore to set up training centres for MSMEs across India: Haribhai Parthibhai Chaudhury
Sep 30,2016

The union Ministry for Micro, Small and Medium Enterprises (MSMEs) has signed a Memorandum of Understanding (MoU) with the World Bank for investing Rs 2,200 crore to set up training centres for MSME sector across India by 2017, Minister of State for MSME, Mr Haribhai Parthibhai Chaudhury said at an ASSOCHAM event.

n++We will also monitor if the money disbursed by the Ministry has reached the target person,n++ said Mr Chaudhury while inaugurating an ASSOCHAM conference on Startup Integration in MSME sector.

n++Saudi Arabia is likely to invest up to Rs two lakh crore in India, it is a confidential matter, but since we have opened our defence and aviation sectors for foreign direct investment (FDI) we hope to get significant advantage of the same in MSME sector,n++ said the Minister.

Highlighting that the government will soon bring a project for promoting honeybee keeping, he said that Ministry had taken various steps like - making databank, introducing credit guarantee scheme, barcode, enabling online complaint and other such initiatives during the course of past two years.

Earlier in his address, a top MSME Ministry official informed that the government was working towards making the sector ready for GSTN (goods and services tax network) and make the sector tax compliant.

n++We are working to make MSMEs GSTN-ready and we need the support of various associations to see how the sector can take advantage of the new tax reform which is going to be historic, start up or no start up you have to be tax compliant,n++ said Mr S.N. Tripathi, additional secretary and development commissioner, MSME Ministry.

He said that the MSME Ministry had notified a framework to enable an entrepreneur to demand restructuring of his loan due to various changes.

n++A framework has been notified by the Ministry of MSME for quick restructuring of loans if the banks are convinced, RBI has also conquered it and in fact all banks have been mandated to create a committee at the branch level with representatives from state government and other institutions,n++ said Mr Tripathi.

He said that MSME Ministry was working towards nurturing academia and entrepreneurs budding ideas. n++Our ministry is working with about 202 engineering colleges and every year we get 100-150 ideas from each college and out of these till date we have nurtured about 600 ideas of which almost 25 per cent have been commercialised.n++

n++We want to commercialise such ideas, we are in talks with some investors - venture capitalists and angel investors and we have succeeded in this behalf as about 100 of the 750 ideas have been commercialised and some of these have clocked transaction and turnover of Rs 10-12 crore so we support good ideas in terms of what we call is incubation,n++ said Mr Tripathi.

He said that the Ministry was working in the domain of start up, scale up and even set up categories.

The top official also said that the MSME Ministry was working on framework to revive the industries that have been rendered inoperational or have been shut down, to unlock their potential.

n++We want to create framework to revive industries that have been shut, the banks are working in this behalf as per governments direction as they have made a committee for corrective action plan whereby an entrepreneur can approach banks for restructuring of loan due to change in technology, management or any other foreseen or unforeseen change on his own and not as per the banks terms,n++ said Mr Tripathi.

He said that considering cash flow based lending is a problem for MSMEs, so banks are working in this direction as per governments direction.

He also emphasised upon the need to bring about more awareness regarding intellectual property right (IPR) in MSME sector.

n++We are promoting awareness about IPR and how to file patents through about 32 institutions which includes chambers, industry bodies, colleges and others,n++ said Mr Tripathi.

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Sports Sector Gets the Infrastructure Status
Sep 30,2016

For addressing the issue of deficit of sports infrastructure in the country, the Ministry of Youth Affairs & Sports Affairs had moved a proposal for inclusion of Sports in the harmonized master list of infrastructure sub-sectors so that the sports sector becomes eligible for obtaining long term financial support from banks and other financial institutions on the same principle as is available to other infrastructure projects.

The Ministry of Finance after a series of meetings and discussions with different agencies including RBI have decided that sports infrastructure will be included under the Harmonized Master List of Infrastructure Subsectors and that it n++includes the provision of Sports Stadia and Infrastructure for Academies for Training / Research in Sports and Sports-related activitiesn++ In this connection Ministry of Finance, Department of Economic Affairs, had issued a Gazette Notification dated 09th September 2016.

This inclusion would encourage private investment in a public good which has socio-economic externalities in a country with young population. It will also bolster investment in sports infrastructure sector which will contribute to the economy and help in promotion of health and fitness of the people of this country as also provide opportunities for employment in the new and exciting sectors. It goes without saying that investment of the private sector will widen the platform from where the country can become a sporting power in future.

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Minister of Railways Launched and Dedicated Various Services to the Nation
Sep 30,2016

Shri Suresh Prabhakar Prabhu, Minister of Railways, as a part of fulfilment of Budget Announcements 2016-17, launched and dedicated following services to the nation : -

1.Liberalised station to station special freight rates policy

2.Policy providing sub quota of 33 % to women within reserved categories for the allotment in catering units.

3.Policy giving preference to local domicile holders for commercial licenses at stations.

4.New system of allocating vacant berths after final charting to wayside stations.

5.Launch of the new n++Train at a Glancen++ and new Time Table effective from 1st October 2016.

Speaking on the occasion, Minister of Railways Shri Suresh Prabhakar Prabhu said that the Indian Railways is striving hard to achieve full passengers satisfaction in all respects and todays initiatives are part of our such endeavours. He said that the introduction of new policy providing sub-quota of 33% to women in catering units is a step towards women empowerment and their increased participation in Railways. He said that Railways will continue to introduce such new reformative steps.

Speaking on the occasion, Minister of State for Railways Shri Rajen Gohain said that Indian Railways being the biggest organization of the country has lots of complex projects to implement throughout the country. But overcoming the difficulties and complexities, Railways is implementing its budget announcements in a very promised manner which is a landmark in itself.

Salient Features of the initiatives : -

POLICY PROVIDING SUB QUOTA OF 33 % TO WOMEN WITHIN RESERVED CATEGORIES FOR THE ALLOTMENT IN CATERING UNITS

n++ In compliance of Budget Announcement 2016-17, a Sub Quota of 33% for women in allotment of each of the reserved catering units is being introduced on Indian Railways in order to extend economic empowerment for women.

n++ Current Status of Reservation at Minor Catering Units (Stalls / Trolleys / Khomchas)

n++ A1, A, B, and C Category stations - 25% of the Units are reserved for various categories like SC (6%), ST (4%), BPL (3%), OBC (3%), Minorities (3%), Freedom Fighters (4%) and Physically Challenged persons (2%).

n++ D, E and F Category stations - 49.5% of the Units are reserved for various categories like SC (12%), ST (8%), OBC (20%) and Minorities (9.5%).

n++ 33% sub quota reservation for women shall ensure allotment of minimum 8% stalls to women at A1, A, B & C category station and minimum 17% at D, E and F category station.

n++ There are approximately 8000 Minor Catering Units over Indian Railways.

n++ Under this provision, Railways shall ensure that women participation does not fall below a specific level.

POLICY GIVING PREFERENCE TO LOCAL DOMICILE HOLDERS FOR COMMERCIAL LICENSES AT STATIONS

In compliance of Budget Announcement 2016-17, a process of giving weightage to district Domicile Holders for commercial licenses at stations is being proliferated at all stations over Indian Railways.

n++ The proliferation would help to build local ownership and rural empowerment along with socio - economic development.

n++ The weightage to district domicile holders is being proliferated for allotment of Catering Units at all categories of stations.

n++ The proliferation of weightage to district Domicile Holders at all category of stations will ensure protection of livelihood of the small vendors.

n++ The allotment of Minor Units over Indian Railways will ensure local ownership and will also promote regional / local cuisine, which is always a preferred choice.

n++ The weightage parameter would range from 20% to the local District Domicile holders to 12% to the State Domicile holders in techno-commercial scores.

TRANSFER OF VACANT BERTHS FOR OPTIMAL UTILISATION OF BERTHS

n++ IR is introducing the facility of transfer of berths remaining vacant after second charting at the train originating station to the next and subsequent stations for clearing the waitlisted passengers at such stations.

n++ The PRS system will automatically allot vacant berths available at the originating stations after preparation of second chart to the subsequent stations where waitlisted passengers are available. The passenger will get SMS on his registered mobile indicating the coach and berth number allotted. This will help passengers boarding at road side stations to get confirmed berths. Presently they get their berths confirmed only if confirmed berths from the pooled quota (PQ) allotted to the station are cancelled.

n++ The TTEs will be able to allot vacant berths on board after departure of the train only upto the next station where quota is available for the train. In case no person boards the train at the next station he can further allot/extend the same to the next quota station.

n++ At present about 3 lakh berths per year go unutilised while there may be demand at intermediate stations. This system will help in better utilization of available berths at the time of departure of trains from the originating station and also reduce the discretion available with TTEs in allotting the berths.

LIBERALISED STATION TO STATION SPECIAL FREIGHT RATES POLICY

n++ Section 32 of the Railways Act, 1989 empowers railway administration to quote Station to Station Rate (STS) in respect of carriage of various commodities.

n++ Railway Board used to issue guidelines to Zonal Railways for implementation of STS rates. Last guidelines on this subject were issued by Board in 2002, which were in operation till 2006. In November 2015, Zonal Railways were advised to exercise power vested with them to quote STS rates as per the Railways Act, 1989.

n++ On request from Zonal Railways and to enable them to garner more traffic from road and other modes, broad guidelines are being issued to Zonal Railways for finalising STS rates.

n++ Salient features of the proposed policy are as under:

n++ Existing as well as new traffic shall be eligible.

n++ Concession shall be granted up to a maximum of 30% on the incremental traffic over and above the benchmark NTKM. Benchmark NTKM is defined as average NTKMs of corresponding periods of previous 24 months.

n++ Concession shall be in the form of percentage discount over the Normal Tariff Rate (NTR). It should be ensured that the concessional freight should not be less than the NTR of Class 100.

n++ Concession shall be admissible to Block rake, two/multi point rake, Mini Rake etc.

n++ Concession may be granted for retention of traffic also up to maximum of 15%. In case of container traffic, STS discount upto maximum of 15% shall be given to commodities charged at Container Class Rate (CCR).

n++ STS scheme will be applicable for all terminals namely goods sheds, sidings, ports, CRTs, PFTOs etc.

n++ To avail STS, Rail users shall be required to apply to the DRM with details, who shall forward the same for approval of GM through CCM, COM and FA&CAO. If Railway administration approves grant of concession under STS, an agreement shall be executed between Railway and customer.

n++ The agreement shall be done for a maximum period of three years at a time and for not less than one year. Any change in freight rate (excluding imposition of any surcharge) shall not be applicable on the customer during the currency of the agreement or for one year, whichever is less.

n++ Commodities excluded from STS are -

o All commodities with classification below Class-100.

o All commodities under Main Commodity Head n++Coal & Coken++

o Iron ore (all types)

o Military traffic, POL and RMC

n++ Targeted customer: Food grain, Cement, Clinker, Dolomite, Limestone, Steel companies, Fly ash, etc.

n++ Expected additional l

Government Decides to Raise EPFO Investment in ETF from 5 Per Cent to 10 Per Cent
Sep 30,2016

The Government has decided to raise the Employees Provident Fund ( EPF) investment in Exchange Traded Funds from present 5 per cent to 10 per cent. Announcing this Shri Bandaru Dattatreya, the Minister of State(IC) for Labour and Employment said that the decision has been taken considering the good returns in ETF investment.

As per earlier decision EPFO is currently investing 5 per cent of the total accretion in Exchange Traders Fund (ETF). Accordingly, for the last one year, the EPFO has invested 6,577 crore in ETF for the financial year 2015-16. This investment has yielded a good return of 13.24 per cent. The past performance of the last six months from April, 2016 to August, 2016 shows gradual appreciation in the returns from 0.37 per cent in March, 2016 to 13.24 in August, 2016 per cent. Five per cent EPF has been invested in NIFTY 50 and SENSEX.

The pattern of investment prescribed by the Ministry of Finance has given guidelines for investment in equity from 5 per cent to 15 per cent.

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Monetary Policy Committee constitution under the Reserve Bank of India Act, 1934 notified
Sep 29,2016

The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalised framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth. The Monetary Policy Committee would be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level. A Committee-based approach for determining the Monetary Policy will add lot of value and transparency to monetary policy decisions. The meetings of the Monetary Policy Committee shall be held at least 4 times a year and it shall publish its decisions after each such meeting.

The provisions of the RBI Act relating to Monetary Policy have been brought into force through a Notification in the Gazette of India Extraordinary on 27.6.2016. The factors constituting failure to meet inflation target under the Monetary Policy Committee Framework have also been notified in the Gazette on 27.6.2016. The Government, in consultation with RBI, has notified the inflation target in the Gazette of India Extraordinary dated 5th August 2016 for the period beginning from the date of publication of this notification and ending on the March 31, 2021, as under:-

Inflation Target: Four per cent.

Upper tolerance level: Six per cent.

Lower tolerance level: Two per cent.

As per the provisions of the RBI Act, out of the six Members of Monetary Policy Committee, three Members will be from the RBI and the other three Members of MPC will be appointed by the Central Government. In exercise of the powers conferred by section 45ZB of the Reserve Bank of India Act, 1934, the Central Government has accordingly constituted, through a Gazette Notification dated 29th Sept 2016, the Monetary Policy Committee of RBI, with the following composition, namely:-

(a) The Governor of the Bankn++Chairperson, ex officio;

(b) Deputy Governor of the Bank, in charge of Monetary Policyn++Member, ex officio;

(c) One officer of the Bank to be nominated by the Central Boardn++Member, ex officio;

(d) Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) n++Member

(e) Professor Pami Dua, Director, Delhi School of Economics (DSE) n++ Member

(f) Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management (IIM), Ahmedabadn++ Member

The Members of the Monetary Policy Committee appointed by the Central Government shall hold office for a period of four years, with immediate effect or until further orders, whichever is earlier.

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Government approves further import of 80,000 Masur and 90,000 Tur
Sep 29,2016

The Government has approved further import of 80,000 MT Masur and 90,000MT Tur for buffer stock of pulses. The decision to this effect was taken in a meeting of Price Stabilization Fund chaired by Union Consumer Affairs Secretary, Shri Hem Pande here today. The meeting reviewed the procurement and distribution of pulses from buffer stock.

So far, the Government agencies have contracted about 1, 81,000 MT pulses for import , out of this 36,000 MT pulses have arrived. Besides this Government agencies have procured more than 1, 20,000 MT pulses from the domestic market and farmers.

The Department of Consumer Affairs has asked NCCF and NAFED to sell the the pulses, Tur and Urad through their outlets in other cities also other than Delhi. These agencies are selling Tur at Rs 105 / and Urad Rs. 120/kg.

The meeting was informed that to ensure procurement of pulses directly from farmers during current Kharif season, number of procurement centres has been increased to 417 so far, more will be opened if required.

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EESL assures of high quality LED Street Lights conforming to BIS standards
Sep 29,2016

Energy Efficiency Services Limited (EESL) strongly refutes all claims of having installed faulty LED street lights in their project in the South Delhi Municipal Corporation (SDMC) area.

Under the Government of Indias Street Lighting National Programme (SLNP) over 1.98 lakh conventional street lights have been replaced with LED street lights in Delhi. A social audit of about 4,500 people was conducted by Price Waterhouse Coopers (PwC) in SDMC area in May 2016. The audit shows that at an average 99.5% people feel that the LED street lights have contributed in enhancing the security of the vulnerable groups during nights. About 99.75% of the people responded that the intensity & the brightness of the LED street lights is better than the earlier street lights.

EESL procurements conform to BIS specification & carry a 7-year warranty against technical defects. EESL conducts appropriate quality checks right from the bidding stage to the field level. This has resulted in the LEDs overall technical fault being less than 2% in the 14 lakh lights installed by EESL in the country. As per the contract, EESL is required to maintain an uptime of 95%, which in the present case is more than 97%. This is one of the highest in the country.

EESL is also taking proactive measures for grievance redressal, such as use of social media platforms, BSES toll free helpline, email complaint system and use of mobile vans for night patrolling. EESL is installing Centralized Control and Monitoring System (CCMS) at a fast pace to enable remote operation and monitoring of the street lights across the Nation.

For complaints against non-functioning LED street lamps the consumers can send a message via WhatsApp on 7827999222 or they can send their complaints to info@eesl.co.in. Alternatively, complaints are also being recorded on the EESL social media handles. Strict action against erring vendors is being taken by EESL.

All complaints are redressed in a period of 48-72 hours and for that EESL has deployed its own staff as well as other Project Management Companies. EESL has received just 14,850 complaints in the last two months out of 1.98 lakh streets that have been installed. EESL has already resolved over 12,406 complaints in entire SDMC area.

To address all grievances, EESL has doubled its on-field teams which are deployed for maintenance. There are regular weekly meetings and reviews with SDMC to rectify the problems faced on field which are not covered in the MoU signed by the tri-parties.

EESL has guaranteed reduction in energy consumption by 53%. This project will result in annual reduction of 26.2 million kWh of energy during peak hours. SDMC will benefit by Rs. 41.47 crore over the said period without having to invest any capital upfront.

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Trilateral Meet between India, Afghanistan and Iran to Take Chabahar Agreement Further
Sep 29,2016

A Trilateral meeting was held between Minister of Road Transport & Highways and Shipping, Sh. Nitin Gadkari, Minister of Transport and Civil Aviation, Afghanistan, Dr. Mohammadullah Batash and Minister of Road and Urban Development, Iran, Dr. Abbas Ahmed Akhoundi in the capital. The three Ministers held discussions on Trilateral Agreement on Establishment of International Transport and Transit Corridor i.e. Chabahar Agreement which was signed by them on 23rd May, 2016 in Tehran in the presence of Prime Minister of India and Presidents of Iran and Afghanistan.

During the meeting the Ministers reiterated the importance of Chabahar as a hub for regional connectivity and their commitment to work towards this objective. It was decided to organize a connectivity event involving all stakeholders at Chabahar within two months to increase awareness about the new opportunities offered by Chabahar Port.

The Ministers expressed satisfaction that the three countries are taking prompt measures for completing internal processes for the ratification of the Agreement. They also exchanged views on the next steps to be taken for an early implementation of the Agreement. It was decided to evolve protocols related to transport and transit, ports, customs procedures and consular affairs. It was also decided to convene an Expert level meeting of senior officials of the three countries within one month in Chabahar.

Development of Ports, Road and Rail connectivity will open up new opportunities leading to new jobs and prosperity in all three countries. Trade is recognized as driving economic growth and development, the implementation of the Agreement would provide the eco-system for the private sector to seize the business opportunities emerging due to substantial reduction of logistic costs for trade among the three countries.

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TRAI Chairman believes that the interconnection controversy can be resolved through a discussion with CEOs
Sep 29,2016

TRAI Chairman, Mr R S Sharma speaking at an industry interaction at FICCI, said that the controversy regarding the interconnection issues between the telecom operators, can be resolved through an across-the-table discussion with the CEOs. He said that a meeting of the CEOs is being called soon, with a view to finding a resolution to the problem that has dominated the sector for the last two months. The interactive session was moderated by Mr. Virat Bhatia, Chairman, FICCI ICT and Digital Economy Committee.

When asked as to why the industry finds itself in this position, and whether it was due to lack of proper regulation or licensing issues, etc., he said that he did not want to elaborate, given the sensitivity of the matter, but that the regulations do not leave scope for ambiguity.

Chairman, TRAI, spoke on a range of issues, including the 20 consultation papers, in various stages, released in the last 18 months. These, according to Mr. R S Sharma, are necessary for removing ambiguity in the telecom sector and allowing the stakeholders to function in harmony. TRAI felt the need for consultation papers in order to bring about a comprehensive regulatory framework which will plug the gaps in the system and facilitate the industry to grow seamlessly.

He told members of the FICCI ICT and Digital Economy Committee that, with the advent of technology such as cloud computing and internet of things (IOT), ICT is transforming every sector and telecom should also leverage it. Earlier, technology was on the periphery but in the last decade with disruptive technologies coming in, it has become a central tool. He added that ICT also brings with it efficiency and cost effectiveness.

Speaking on competition issues in general, in the telecom sector, Mr. Sharma said that TRAI promotes healthy competition. He added that the idea is to encourage healthy competition and ensure that interest of the consumers is safeguarded. He added that for TRAI, the consumers interest is paramount and they must not suffer on any account.

Mr. Sharma said that India already has a world class network and with new technology coming in the service should also become world class. India should strive for next generation network by employing new technologies such as Loons, Solar Planes, and White Spaces. He said that there was a need to harmonize the issues of business interest with disruptive technologies. To achieve this, it was necessary to put down licensing rules, norms and quality aspects through regulation.

Mr. Sharma said that TRAI was one of the regulatory bodies that engaged in a consultative process with industry before coming out with any policy or guidelines. Industry has an opportunity to share its concerns with TRAI to work out a feasible and sustainable framework.

Responding to the queries raised by industry regarding restriction in experimentation and use of new technologies, Mr. Sharma said that TRAI and he were in favor of trying out new technologies with appropriate permissions. However, he added that these technologies should be interoperable with open APIs and should not be in silos.

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Gartner Says New Digital Disruptors Demand a New Approach to IT
Sep 29,2016

Digital disruptors such as algorithms, artificial intelligence (AI), bots and chatbots are already transforming businesses. Gartner, Inc. expects that algorithmic business will create even greater levels of disruption and new industries. To support the new capabilities and business models of digital and algorithmic business, CIOs must design and deploy their digital business technology platform.

Fueled by data, analytics and AI, algorithmic business will continue to grow and disrupt your business, said Steve Prentice, vice president and Gartner Fellow. This growth is unabated as algorithms are feasting on the wealth of data that grows inexorably. More than 500,000 new devices connect to the Internet every hour, and every one of them simply adds to the inevitable growth of data.

Mr. Prentice explored how digital disruptors are transforming the business landscape during Gartner Symposium/ITxpo 2016, which is taking place here through today.

Algorithms Are Moving to the Forefront of the Differentiation Race

Algorithms are taking center stage in the race for competitive differentiation as leading organizations uncover their true value. Algorithms capture the knowledge that turns raw data into valuable insight, and CIOs must use them to drive speed, scale and consistency in their digital business journey, said Mr. Prentice. Applied to huge datasets, algorithms allow highly accurate, personalized offerings, which in turn can drive revenue and differentiation.

Algorithms are already well established in many industries. In human resources, in order to evaluate candidates suitability for specific roles, algorithms are used to match talent very quickly to the work that needs to be done within an organization. Eventually, algorithms will replace both manual processing of CVs by recruiters and automated CV ranking based on word matching. In other industries, organizations are making advanced algorithmic models available via open marketplaces, which ultimately facilitates access to algorithms that are beyond the development reach of many organizations.

Digital Disruptors Will Dominate in the Next Few Years

In parallel, AI has advanced dramatically during the past year. When enhanced with machine learning through the application of capabilities such as deep neural networks, AI is starting to outperform humans in some areas. Algorithms, AI, bots and smart things will dominate business interactions during the next few years: AI and bots currently allow platforms to gain a voice, while algorithms and AI will deliver the intelligence to empower a new generation of robots, cobots and drones and self-driving vehicles. CEOs must ensure their CIOs are actively engaged in embracing those new business opportunities, said Mr. Prentice.

Design and Deploy Your Digital Business Technology Platform

The pace of digital disruption demands a new approach to IT. CIOs must build their digital business technology platform to support the development of digital business, said Mr. Prentice. At a minimum, the IT organization needs to be able to design the big picture of all the new information and technology capabilities required to support digital business. The CIO can then work with the rest of the organization to define who n++ if not IT n++ will build, fund, support and own these major components.

The five major platforms of digital business are as follows:

Information systems platform, which supports the back office, and operations such as enterprise resource planning and core systems.

Customer experience platform, which contains the main customer-facing elements, such as customer and citizen portals, multichannel commerce and customer apps.

Data and analytics platform, which contains information management and analytical capabilities. Data management programs and analytical applications fuel data-driven decision making, and algorithms automate discovery and action.

Internet of Things (IoT) platform, which connects physical assets for monitoring, optimization, control and monetization. Capabilities include connectivity, analytics and integration to core and operational technology systems.

Ecosystems platform, which supports the creation of, and connection to, external ecosystems, marketplaces and communities; API management, control and security are its main elements.

You cant afford to stay on the sidelines of this digital and algorithmic business wave. Define your algorithm, AI, ecosystem and digital platform strategies now, concluded Mr. Prentice.

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Debt burden mounts as telecom operators get into price war: ASSOCHAM-KPMG study
Sep 29,2016

Even as the telecom industry finds itself in a tariff war with entry of a major player, an ASSOCHAM-KPMG paper has pointed towards the operators grappling with a huge debt burden of Rs 3.80 lakh crore, reinforcing a case for rationalisation of taxes and other levies along with spectrum charges.

The telecom operators have an accumulated debt of around INR3.8 lakh crore. An additional customs duty of 10 per cent will lead to an increase in cumulated duty to 29.44 per cent, reveals the joint study.

Even though consumers are having a last laugh with competitive offers from the major players , the service providers need to penetrate further into the fast expanding data market and create a volume that would make their cash flow running, ASSOCHAM Secretary General Mr D S Rawat said.

Simplification and rationalization of tax regime will provide required financial stability to Indian telecom industry. Presently, multiple charges and taxes are levied on the sector in addition to the charges paid by other industries (such as corporate tax, VAT, etc.). Spectrum Usage Charges (SUC) in India are comparatively higher than other economies, noted ASSOCHAM-KPMG joint study.

Telecom sector is expected to contribute 8.2 per cent or INR 14 lakh crore to the GDP by 2020 and one of the highest contributors to the GDP over the last decade, adds the study.

Industry expects that there is a no rationalisation of multiple levies imposed. TRAI has recommended that license fee should be reduced to 6 per cent and Universal Service Obligation Fund to 3 per cent from current levels of 8 per cent and 5 per cent respectively.

Further, as per a study cited by COAI, reduction in Spectrum Usage Charges (SUC) by 1 per cent can increase GDP by INR1.76 lakh crore, highlighted the study.

The Telecommunication Industry is committed to realize the government vision of Digital India. A quick resolution on issues, that will facilitate ease of doing business will accelerate the same. We are confident that the government which has set a fast pace of policy and execution will support this endeavour said Mr. P.Balaji Chairman, ASSOCHAM National council on Telecommunications & Director-Regulatory, External Affairs & CSR, Vodafone India.

Telecom industry, due to its dynamic nature, witnesses continuous changing business and technology environment. In the recent past, India has witnessed a surge in data usage. Mobile data traffic grew by 50 per cent in 2015. Such tremendous growth is associated with mature network, device and content eco-system. In the current environment, Telecom Service Providers (TSPs) and Overthe-Top (OTT) service providers have leveraged on their synergies to work towards fulfilling the Digital India vision.

OTT service providers are playing a significant role in driving data consumption and transforming consumer behaviour. A major contributor to the increased data traffic is the growing customer demand for video which is expected to experience a further boost with the advent of 4G services.

Telecom service providers make huge investments in deployment of networks as well as in acquisition of spectrum. However, electromagnetic interference issues faced result in poor quality of services to the subscribers, customer dissatisfaction, losses to the TSPs and the exchequer at large, in spite of the huge investments made.

Among the major sources of interference are air-waves from nearby international borders and out of band emissions by institutions deploying links in free WiFi band or from illegal repeaters, boosters, jammers.

Non-coordinated use of frequencies is the primary cause of interference from telecom service providers in neighboring countries. Usage of frequencies should be regionally coordinated and globally harmonised to overcome this issue. There is a need to engage actively with the neighboring countries for specific regions where the TSPs are facing interference issues. Alternatively, the DoT should allocate the TSPs with spectrum in alternate frequency bands, wherever such issues cannot be resolved with the neighboring countries, noted the study.

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