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Nikkei India Manufacturing PMI eases below 50 mark
Jan 02,2017

PMI data for December indicated that the rupee demonetization took a toll on manufacturing performance. Companies saw new work and output dip for the first time in 2016. In turn, quantities of purchases were scaled back and employment lowered. Meanwhile, input costs increased at a quicker rate, whereas output charge inflation eased.

The headline seasonally adjusted Nikkei India Manufacturing Purchasing Managers IndexTM (PMITM) recorded below the crucial 50.0 threshold for the first time in 2016 during December. Down from 52.3 in November to 49.6, the latest reading was indicative of a marginal deterioration in the health of the sector. Nevertheless, the average over the October-December quarter (52.1) was broadly in line with that seen in the July-September period (52.2).

Four of the five sub-components of the PMI edged below 50.0, while average delivery times lengthened further. At the sector level, operating conditions deteriorated in both the consumer and intermediate goods categories.

Panel members widely blamed the withdrawal of high-value rupee notes for the downturn, as cash shortages in the economy reportedly resulted in fewer levels of new orders received. Concurrently, manufacturers lowered output accordingly. Rates of contraction in new work and production were marginal overall, but in both cases the reductions were the first in 2016. Businesses also highlighted challenging conditions in external markets, with a fall in new business from abroad ending a six-month sequence of growth.

Cash shortages and lower workplace activity resulted in job shedding and falling buying levels during December. Payroll numbers decreased only marginally, however, as the vast majority of panellists signalled unchanged workforces. A similar trend was seen with regards to quantities of purchases.

Higher prices paid for a range of raw materials led average cost burdens to increase for the fifteenth straight month in December, with the rate of inflation picking up since November. On the other hand, output charges rose at the slowest pace since August.

Both pre- and post-production stocks decreased during December. The former saw the first monthly drop in 13 months, while inventories of finished goods declined for the eighteenth month running (albeit to the least extent in this sequence).

Finally, cash flow issues reportedly impaired manufacturers ability to work on outstanding business. Backlogs rose for the seventh consecutive month, but at the slowest rate in this sequence.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at IHS Markit and author of the report, said: Having held its ground in November following the unexpected withdrawal of 500 and 1,000 bank notes from circulation, Indias manufacturing industry slid into contraction at the end of 2016. Shortages of money in the economy steered output and new orders in the wrong direction, thereby interrupting a continuous sequence of growth that had been seen throughout 2016. Cash flow issues among firms also led to reductions in purchasing activity and employment.

As the survey showed only a mild decline in manufacturing production in the last month of the year, the average reading for the Oct-Dec quarter remained in growth terrain, thereby suggesting a positive contribution from the sector to overall GDP in Q3 FY16/17. With the window for exchanging notes having closed at the end of December, January data will be key in showing whether the sector will see a quick rebound.

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Hotel bookings for New Years Eve celebrations down by up to 5%: ASSOCHAM
Jan 02,2017

Demonetisation and the consequent cash crunch seems to have some impact on New Years Eve celebrations as bookings received by star-rated hotels in metros have registered a decline of about 5-7 per cent, noted a quick survey undertaken by ASSOCHAM Social Development Foundation.

n++Besides, many hotels have not revised rates of New Year packages and have in fact lowered the rates by about 2-3 per cent and are bundling various offers, promotions, deals and discounts on services in one package at a bargain price,n++ according to the fortnight long survey carried out by ASSOCHAM Social Development Foundation.

The survey also highlighted that while many party-goers are hoping to get some good discounts at star properties, most others plan to celebrate the New Years Eve at house parties with friends and family or at their home.

The ASSOCHAM Social Development Foundation had interacted with about 50 star-rated hotels in Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Indore, Jaipur, Kolkata, Lucknow and Mumbai during the course of past midnight to ascertain how top hotels in metros are gearing up for annual New Years Eve parties.

Simultaneously, the chamber representatives also interacted with about 250 youngsters to gauge how people in urban centres are planning to bid farewell to 2016 whereby most said they plan to usher in the New Year in a cost-effective way by opting to party indoors.

n++New Years Eve is the perfect occasion for especially the youth to unwind and soak in the festivities with their friends and family, though with ever-growing per-capita incomes people do not mind indulging in some extravagance but cash crunch in wake of demonetisation seems to an impact on their plans this time,n++ said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the chambers survey.

n++Star-rated hotels to seems to be reeling under some impact of the Centres bold move of demonetisation, more so as this is really the best season for hotel industry but are being forced to scale down their New Years Eve activities as they are not able to draw many people,n++ he said.

Many of the participants with moderate budget, said they though New Year celebrations in star hotels has always been a expensive affair but demonetisation has certainly dented their plans in this regard.

Some even said they were shying away from splurging the much-needed cash on new outfits, food and drinks which used to be a sort of norm.

While those with bigger budgets said they were hoping to get some good deals/discounts as many hotels are likely to do away with usual price-hikes in entry fees and drinks costs.

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26.03 crore accounts opened as on 21 December, 2016 under PMJDY out of which 15.86 crore accounts are in rural areas and 10.17 crore in urban areas
Jan 02,2017

Year End Review- 2016 of Department of Financial Services, Ministry of Finance

I. Pradhan Mantri Jan Dhan Yojana (PMJDY)

 With a view to increasing banking penetration and promoting financial inclusion and with the main objective of covering all households with at least one bank account per household across the country, a National Mission on Financial Inclusion named as  Pradhan Mantri Jan Dhan Yojana (PMJDY) was announced by the Prime Minister Shri Narendra Modi in his Independence Day Speech on 15th August , 2014 . The Scheme was formally launched by the Prime Minister, Shri Narendra Modi on 28th August, 2014 at National level.

Objectives of PMJDY

(i)     Universal access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) within a reasonable distance.

(ii)   To cover all households with atleast one Basic Bank  Account with RuPay Debit card having inbuilt accident insurance cover of Rs.1 lakh.

(iii) An overdraft facility upto Rs.5000/- after satisfactory operation in the account for 6 months.

(iv) A Life Cover of Rs.30,000/- to those beneficiaries who open their accounts for the first time from  15.08.2014 to 31.01.2015.

(v)   Financial literacy programme which aims to take financial literacy upto village level.

(vi) The Mission also envisages expansion of Direct Benefit Transfer under various Government Schemes through bank accounts of the beneficiaries.

(vii) Providing micro-insurance to the people.

(viii) Un=organised sector Pension schemes through the Business Correspondents.

  Achievements under PMJDY (as on 21st December,2016)

(i)     26.03 crore accounts have been opened under PMJDY out of which 15.86 crore accounts are in rural areas and 10.17 crore in urban areas. 

(ii)   Deposits of Rs. 71,557.90 crore has been mobilized.

(iii)  19.93 crore RuPay Debit cards have been issued under PMJDY.

(iv)  Aadhaar seeding in PMJDY accounts 14.43 crore

(v)   Zero balance accounts has been reduced to 23.86%

(vi)  Household Coverage: 99.99% households out of the 21.22 crore households surveyed have been covered under PMJDY.

 As on 23rd December, 2016, out of total requirement of 1,27,198 fixed location Bank Mitras in Sub Service Areas (SSAs), 1,26,985 Bank Mitras  have been deployed  by banks.

Overdraft (OD) in PMJDY accounts

 As on 23rd December, 2016, 44.28 lakh accounts have been sanctioned OD facility  of which 23.85 lakh account-holders  have  availed  this   facility involving an amount of Rs.316.56 crore.

 Insurance Claims settled

(i)     As on 23rd December, 2016, out of 1712 claims lodged, 1626 claims have been disposed off under accidental insurance cover of Rs. 1 lakh under RuPay debit card .

(ii)   As on 23rd December, 2016, out of 3936 claim lodged, 3421 claims paid under  Life Cover of Rs.30,000/- to those beneficiaries who opened their accounts for the first time from  15.08.2014 to 31.01.2015.

II         Jan Dhan to Jan Suraksha

 For creating a universal social security system for all Indians, especially the poor and the under-privileged by the Prime Minister Shri Narendra Modi launched three Social Security Schemes in the Insurance and Pension sectors; namely the Pradhan Mantri Suraksha Bima Yojna, the Pradhan Mantri Jeevan Jyoti Bima Yojana and the Atal Pension Yojana on Pan India basis on the 9th of May, 2015. Salient features of the two schemes related to Insurance are given below:

 Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)  

 The PMJJBY is available to people in the age group of 18 to 50 years having a bank account who give their consent to join / enable auto-debit. Aadhar would be the primary KYC for the bank account. The life cover of Rs. 2 lakhs shall be for the one year period stretching from 1st June to 31st May and will be renewable.   Risk coverage under this scheme is for Rs. 2 Lakh in case of death of the insured, due to any reason. The premium is Rs. 330 per annum which is to be auto-debited in one installment from the subscribers bank account as per the option given by him on or before 31st May of each annual coverage period under the scheme. The scheme is being offered by Life Insurance Corporation and all other life insurers who are willing to offer the product on similar terms with necessary approvals and tie up with banks for this purpose.

 By 28th December, 2016, Cumulative Gross enrolment reported by Banks, subject to verification of eligibility, etc. is over 3.08 crore under PMJJBY. 51,745 claims were registered under PMJJBY till 28thDecember, 2016 out of which 48,023 have been disbursed.

 Pradhan Mantri Suraksha BimaYojana (PMSBY)

 The Scheme is available to people in the age group 18 to 70 years with a bank account who give their consent to join / enable auto-debit on or before 31st May for the coverage period 1st June to 31st May on an annual renewal basis. Aadhar would be the primary KYC for the bank account. The risk coverage under the scheme is Rs. 2 lakh for accidental death and full disability and Rs. 1 lakh for partial disability. The premium of Rs. 12 per annum is to be deducted from the account holders bank account through auto-debit facility in one installment. The scheme is being offered by Public Sector General Insurance Companies or any other General Insurance Company who are willing to offer the product on similar terms with necessary approvals and tie up with banks for this purpose.

By 28thDecember, 2016, Cumulative Gross enrolment reported by Banks subject to verification of eligibility, etc. is over 9.88 Crore under PMSBY. 10084 Claims were registered under PMSBY till 28thDecember, 2016 out of which 7282 have been disbursed. 

 Atal Pension Yojana (APY)

(i)     APY was launched on 9th May, 2015 by the Prime Minister Shri Narendra Modi.

(ii)   APY is open to all bank account holders in the age group of 18 to 40 years and the contributions differ, based on pension amount chosen.

(iii) Subscribers would receive the guaranteed minimum monthly pension of Rs. 1000 or Rs. 2000 or Rs. 3000 or Rs. 4000 or Rs. 5000 at the age of 60 years.

(iv) Under APY, the monthly pension would be available to the subscriber, and after him to his spouse and after their death, the pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of the subscriber.

(v)   The minimum pension would be guaranteed by the Government, i.e., if the accumulated corpus based on contributions earns a lower than estimated return on investment and is inadequate to provide the minimum guaranteed pension, the Central Government would fund such inadequacy. Alternatively, if the returns on inv

Indian Railways Measures to Promote Digital Payments
Jan 02,2017

In pursuance of this announcement made by Government of India for promotion of Digital & Cashless Economy, Ministry of Railways has initiated some additional following package of incentives and measures. This shall be made effective from 1st January 2017.

1. Ministry of Railways has decided to instruct Yatri Ticket Suvidha Kendras (YTSKs) to install POS machines and accept payments through all banks debit/credit cards for issuing both reserved and unreserved tickets. They are encouraged to accept payments through other modes also like UPI, USSD, e-wallet, Aadhar enabled payments system.

2. Ministry of Railways has decided to instruct Jan Sadharan Ticket Booking Seva (JTBs) are also instructed to accept payments through other modes like UPI, USSD, e-wallets, Aadhar enabled payments system to issue unreserved tickets.

3. Ministry Of Railways have decided to allow 5% Discount for booking of Retiring Room through digital means like using debit/credit cards.

4. Ministry of Railways have decided that 0.5% discount in the base fare of season tickets (Monthly, quarterly, Half yearly, yearly) over suburban section shall be granted in case the payment is made through digital means through debit card, credit card etc.. Other charges like MUTP surcharge, Mela surcharge, service tax etc., if applicable shall be levied separately on the base fare arrived at after giving the 0.5% concession.

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Indian Railways takes Measures to Promote Digital Payments
Jan 02,2017

In pursuance of this announcement made by Government of India for promotion of Digital & Cashless Economy, Ministry of Railways has initiated some additional following package of incentives and measures. This shall be made effective from 1st January 2017.

1. Ministry of Railways has decided to instruct Yatri Ticket Suvidha Kendras (YTSKs) to install POS machines and accept payments through all banks debit/credit cards for issuing both reserved and unreserved tickets. They are encouraged to accept payments through other modes also like UPI, USSD, e-wallet, Aadhar enabled payments system.

2. Ministry of Railways has decided to instruct Jan Sadharan Ticket Booking Seva (JTBs) are also instructed to accept payments through other modes like UPI, USSD, e-wallets, Aadhar enabled payments system to issue unreserved tickets.

3. Ministry Of Railways have decided to allow 5% Discount for booking of Retiring Room through digital means like using debit/credit cards.

4. Ministry of Railways have decided that 0.5% discount in the base fare of season tickets (Monthly, quarterly, Half yearly, yearly) over suburban section shall be granted in case the payment is made through digital means through debit card, credit card etc.. Other charges like MUTP surcharge, Mela surcharge, service tax etc., if applicable shall be levied separately on the base fare arrived at after giving the 0.5% concession.

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Indian Railways Extends the facility of 10% rebate in Basic Fare on Vacant Berth/Seats after Preparation of First Chart In All Kinds of Trains
Jan 02,2017

In continuation with its earlier announcement of providing 10% rebate in the basic fare on the vacant berths/seats after preparation of first chart in Rajdhani/Duronto/Shatabdi trains, Indian Railways has decided to extend this rebate in the reserved class of all other trains w.e.f. 01 January 2017 on an experimental basis for six months.

The detailed provisions are as under

1.1. 10% rebate shall be applicable on the base fare of last ticket sold for a particular class and train just before preparation of first chart.

1.2. Reservation fee and superfast charge as applicable shall be levied in full & service tax etc. as applicable shall be levied.

1.3. 10% discount shall also be applicable for allotment of vacant berths (due to non-turned up passengers) in the train by TTEs.

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India to Supply Additional 80 MW of Power to Nepal from 1st January 2017
Jan 02,2017

From the first day of the new year, 1st January, 2017, additional power transfer of 80MW to Nepal is expected to commence. With this, the total supply of electricity to Nepal from India will be about 400 MW.

Shri Janardan Sharma, Minister of Energy, Government of Nepal, in a recent visit to India, held discussions with Shri Piyush Goyal, Minister of State (IC) for Power, Coal, New & Renewable Energy and Mines, Government of India. Besides reviewing cooperation and expanding ties between the two countries in the power/energy sector, Minister of Energy of Nepal requested for an additional supply of 80 MW from India to alleviate power shortage in Nepal due to seasonal reduction in supply from domestic hydro projects in winter months.

In a swift response to this request, within a period of 20 days, the Power Grid Corporation of India Limited (PGCIL) installed an additional 220/132kV, 100MVA transformer at Muzaffarpur substation in India. This transformer will facilitate additional power supply up to 80MW to Nepal through the Muzaffarpur (India) - Dhalkebar (Nepal) transmission line. With this augmentation, a total of 160 MW can now be supplied to Nepal through this transmission line.

The electrical grids of India and Nepal are connected through various radial lines at 132kV, 33kV and 11kV voltage levels. Prior to February 2016, as per the request received from Nepal from time to time, various short-term augmentation schemes were carried out which resulted in enhancement of power flow to Nepal from 50MW to about 240MW.

In February 2016, Prime Ministers of India and Nepal inaugurated the first high capacity 400kV cross-border line, initially being operated at 132kV, from Muzaffarpur in India to Dhalkebar in Nepal. This had resulted in additional flow of 80 MW, enhancing the total power supply to Nepal to about 320MW.

The Muzaffapur - Dhalkebar line is planned to be charged at 220kV with the commissioning of 220kV Dhalkebar substation in Nepal by March 2017. This will facilitate additional 150 MW of power transfer to Nepal. This would be followed by commissioning of 400 kV substation at Dhalkebar (Nepal), which would enable operation of Muzaffarpur - Dhalkebar 400 kV DC line at its rated voltage, leading to increase in power transfer to Nepal by 300-400 MW.

India is also working with Nepal to supply power through two more radial 132kV lines viz. Raxaul-Parwanipur and Kataiya-Kushaha, which are being commissioned through the grant assistance of Government of India.

India, through PGCIL, has also assisted Nepal in preparation of electricity Master Plan for Nepal- short term (up to 2018-19), medium term (up to 2021-22) and long term (up to 2035). Accordingly, a number of high capacity cross-border interconnections are being considered between India and Nepal. Initially, these interconnections would be utilized for transfer of power from India to Nepal and later with the development of hydro projects in Nepal, these links would be utilized for transfer of surplus power from Nepal to India.

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Rabi Crops Sowing Crosess 582 Lakh Hactare
Dec 30,2016

As per preliminary reports received from the States, the total area sown under Rabi crops as on 30th December, 2016 stands at 582.87 lakh hectares as compared to 545.46 lakh hectare this time in 2015.

Wheat has been sown/transplanted in 292.39 lakh hectares, rice in 10.68 lakh hectares, pulses in 148.11 lakh hectares, coarse cereals in 52.21 lakh hectares and area sown under oilseeds is 79.48 lakh hectares.

The area sown so far and that sown during last year this time is as follows:

Lakh hectare 

CropArea sown in 2016-17Area sown in 2015-16Wheat292.39271.46Rice10.6814.77Pulses148.11131.12Coarse Cereals52.2156.29Oilseeds79.4871.83Total582.87545.46

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India and Singapore Sign a Third Protocol for Amending the Double Taxation Avoidance Agreement (DTAA)
Dec 30,2016

India and Singapore have amended the DTAA for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income, by signing a Third Protocol today. This is in line with Indias treaty policy to prevent double non-taxation, curb revenue loss and check the menace of black money through automatic exchange of information, as reflected in Indias recently revised treaties with Mauritius and Cyprus and the joint declaration signed with Switzerland.

The Protocol for amendment of the India-Mauritius Convention signed on 10th May, 2016, provides for source-based taxation of capital gains arising from alienation of shares acquired from 1st April, 2017 in a company resident in India. Simultaneously, investments made before 1st April, 2017 have been grandfathered and will not be subject to capital gains taxation in India. Where such capital gains arise during the transition period from 1st April, 2017 to 31st March, 2019, the tax rate will be limited to 50% of the domestic tax rate of India. However, the benefit of 50% reduction in tax rate during the transition period shall be subject to the Limitation of Benefits Article. Taxation in India at full domestic tax rate will take place from financial year 2019-20 onwards.

The revised DTAA between India and Cyprus signed on 18th November, 2016, provides for source based taxation of capital gains arising from alienation of shares, instead of residence based taxation provided under the DTAA signed in 1994. However, a grandfathering clause has been provided for investments made prior to 1st April, 2017, in respect of which capital gains would continue to be taxed in the country of which taxpayer is a resident. It also provides for assistance between the two countries for collection of taxes and updates the provisions related to Exchange of Information to accepted international standards.

Fighting the menace of Black Money stashed in offshore accounts has been a key priority area for the Government. To further this goal, the Joint Declaration for the implementation of Automatic Exchange of Information (AEOI) between India and Switzerland was signed in November, 2016. It will now be possible for India to receive from September, 2019 onwards, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis.

The India-Singapore DTAA at present provides for residence based taxation of capital gains of shares in a company. The Third Protocol amends the DTAA with effect from 1st April, 2017 to provide for source based taxation of capital gains arising on transfer of shares in a company. This will curb revenue loss, prevent double non-taxation and streamline the flow of investments. In order to provide certainty to investors, investments in shares made before 1st April, 2017 have been grandfathered subject to fulfillment of conditions in Limitation of Benefits clause as per 2005 Protocol. Further, a two year transition period from 1st April, 2017 to 31st March, 2019 has been provided during which capital gains on shares will be taxed in source country at half of normal tax rate, subject to fulfillment of conditions in Limitation of Benefits clause.

The Third Protocol also inserts provisions to facilitate relieving of economic double taxation in transfer pricing cases. This is a taxpayer friendly measure and is in line with Indias commitments under Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases. The Third Protocol also enables application of domestic law and measures concerning prevention of tax avoidance or tax evasion.

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Awareness about Copyrights pertaining to Film and TV Industry emphasised to counter piracy
Dec 30,2016

The Department of Industrial Policy and Promotion (DIPP) convened a meeting of Stakeholders including producers from film and TV industry to discuss copyright and related issues concerning the industry on 28 December 2016. The meeting was chaired by Mr. Rajiv Aggarwal, Joint Secretary

The Department appreciated the efforts being initiated by the Telangana Intellectual Property Crime Unit (TIPCU) to curb piracy of copyright protected material and expressed the need to adopt this model by other states also to check this menace within their respective jurisdiction. The participants also expressed their views on various provisions of the Copyright Law and their effective implementation to counter piracy. The department exhorted the industry to undertake measures to create awareness in the general public, especially the youth, about piracy and its ill-effects.

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Ministry of Agriculture & Farmers Welfare decides to extend cut-off date for crop insurance during Rabi 2016-17 under PMFBY up to 10 January 2017
Dec 30,2016

The Ministry of Agriculture & Farmers Welfare keeping in view the difficulties faced by the farmers in obtaining crop insurance during Rabi 2016-17 under Pradhan Mantri Fasal Bima Yojana (PMFBY) due to demonetization of old currency notes, the Ministry of Agriculture & Farmers Welfare to protect the interest of farmers, has decided to extend the cut-off date up to 10th January, 2017 for enrolment of non loanee farmers/debit of premium from eligible crop loan account/Kisan Credit Card of loanee farmers under PMFBY. Now the farmers who could not insure their crops due to demonetization can get their crops insured till 10th January, 2017.

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Indias External Debt at end-September 2016 stock stood at US$ 484.3 billion
Dec 30,2016

n++ At end-September 2016, Indias external debt stock stood at US$ 484.3 billion, recording a decline of US$ 0.8 billion (0.2 per cent) over the level at end-March 2016. The fall in external debt during the period was due to commercial borrowings and short term external debt. However, on a sequential basis, total external debt at end-September 2016 increased by US$ 4,768 million from the end-June 2016 level.

n++ The maturity pattern of Indias external debt indicates dominance of long-term borrowings. At end-September 2016, long-term external debt accounted for 83.2 per cent of Indias total external debt, while the remaining (16.8 per cent) was short-term external debt.

n++ Long-term debt at end-September 2016 was placed at US$ 403.1 billion, showing an increase of US$ 1.4 billion (0.4 per cent) over the level at end-March 2016. Short-term external debt witnessed a decline of 2.6 per cent and stood at US$ 81.2 billion at end-September 2016.

n++ Valuation loss (depreciation of US dollar against the Indian rupee and most other major currencies) was placed at US$ 1.0 billion. This implies that excluding the valuation effect, the decrease in debt would have been higher by US$ 1.8 billion at end-September 2016 over the end-March 2016 level.

n++ The shares of Government (Sovereign) and non-Government debt in the total external debt were 20.1 per cent and 79.9 per cent respectively, at end-September 2016.

n++ US dollar denominated debt accounted for 55.6 per cent of Indias total external debt at end-September 2016, followed by Indian rupee (30.1 per cent), SDR (5.8 per cent), Japanese Yen (4.8 per cent) Pound Sterling (0.7 per cent), Euro (2.4 per cent) and others (0.6 per cent).

n++ The ratio of short-term external debt by original maturity to foreign exchange reserves stood at 21.8 per cent at end-September 2016 lower than the 22.6 per cent at end June 2016 and 23.1 per cent at end-March 2016.

n++ On a residual maturity basis, short-term debt constituted 42.0 per cent of total external debt at end-September 2016 (42.4 per cent at end-June 2016 and 42.6 per cent at end-March 2016) and stood at 54.7 per cent of total foreign exchange reserves (55.9 per cent at end-June 2016 and 57.4 per cent at end-March 2016).

n++ The ratio of concessional debt to total external debt was 9.4 per cent at end-September 2016, same as at end-June 2016 and a marginal increase from the 9.0 per cent at end-March 2016.

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Sugar mills produce about 66 Lakh MT of sugar so far
Dec 30,2016

During the current Sugar Season 2016-17, the sugar mills of the country have commenced the crushing operation smoothly and have produced about 66 Lakh MT of sugar so far. The sugar production is expected to be about 22.5 million MT by the end of the season. With a carryover stock of 7.71 million MT, the total availability of sugar is sufficient to meet the estimated domestic requirement of about 25 mMT. The stock position at the close of the current sugar season (Sept. 2017) is likely to be 5.21 mMT which will be carried forward for the next sugar season 2017-18.

Further, the sugar production in the next sugar season (2017-18) is expected to be good and is likely to start early and therefore there will be no shortage of domestically produced sugar in India. By November 2017, another 2 mMT would be available from early crushing. The government has taken necessary steps to maintain sufficient stocks in the country and keep the sugar prices under control.

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Direct Tax Dispute Resolution Scheme- 2016 extended up to 31st January 2017
Dec 30,2016

In view of the representations received from various stakeholders and for the convenience of the taxpayers, the last date for availing the Direct Tax Dispute Resolution Scheme, 2016 (the Scheme) has been extended up to 31st January 2017. The scheme was to close on 31st December 2016.

In order to reduce the pending litigation, the Scheme was introduced by the Finance Act, 2016. The Scheme came into force from 1st June, 2016 vide notification S.O. 1902(E) dated 26th May, 2016.

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During the current Financial Year 2016-17, the Indian Economy continues to consolidate the gains achieved in restoring macro-economic stability
Dec 30,2016

During the current Financial Year 2016-17, the Indian Economy has continued to consolidate the gains achieved in restoring macro-economic stability. Despite the continuing global sluggishness and recent pick-up in petroleum prices, the economic growth has continued to be robust and inflation has remained more or less stable in the current year, while Fiscal Deficit and Current Account Deficit as percentage of GDP have improved. The Growth Rate of the economy during the First Half of the current Financial Year is estimated at 7.2 per cent, which makes India one of the fastest growing major economies in the world. At the sectoral level, the growth rates for agriculture & allied sectors, industry and services sectors for the First Half of the current year are estimated at 2.5 per cent, 5.6 per cent, and 9.2 per cent respectively. The stress given to fiscal consolidation through expenditure rationalization and revenue raising efforts and the focus on administrative measures for cooperative financial governance and also steps towards containing inflation have contributed significantly to macro-economic stability.

Inflation

Inflation measured in terms of Consumer Price Index and Wholesale Price Index has remained in comfort zone during the current Financial Year 2016-17. CPI (Combined) inflation for 2015-16 declined to 4.9 per cent from 5.9 per cent in 2014-15. It averaged 5.2 per cent in 2016-17 (Apr-Oct) and stood at 4.2 per cent in October 2016. Food inflation as measured by Consumer Food Price Index (CFPI) declined to 4.9 per cent in 2015-16 from 6.4 per cent in 2014-15. It averaged 6.1 per cent in 2016-17 (Apr-Oct) and eased to 3.3 per cent in October 2016.WPI inflation declined to (-) 2.5 per cent in 2015-16 from 2.0 per cent in 2014-15. It averaged 2.7 per cent in 2016-17 (Apr-Oct) and stood at 3.4 per cent in October 2016.

As per the revised Monetary Policy Framework, the Government has fixed the inflation target of 4 per cent with tolerance level of +/- 2 per cent for the period beginning from August 5, 2016 to March 31, 2021. The Government monitors the price situation on a regular basis as controlling inflation is a key priority and has taken a number of measures to control inflation especially food inflation. The steps taken, inter alia, include, (i) increased allocation of Rs. 900 crore for Price Stabilization Fund in the budget 2016-17 to check volatility of prices of essential commodities, in particular of pulses; (ii) created buffer stock of pulses through domestic procurement and imports; (iii) announced higher Minimum Support Prices so as to incentivize production; (iv) issued advisory to States/UTs to take strict action against hoarding and black marketing under the Essential Commodities Act 1955 and the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980.

Trade

Indias merchandise exports (customs basis) declined by 15.5 per cent to US$ 262.3 billion in 2015-16. In 2016-17 (April-October), growth of exports declined by 0.2 per cent (US$ 154.9 billion vis-n++-vis US$ 155.2 billion in the corresponding period of previous year). Imports declined by 15.0 per cent to US$ 381.0 billion in 2015-16. Imports for 2016-17 (April-October) were at US$ 208.1 billion which is lower by 10.9 per cent as compared to US$ 233.4 billion in the corresponding period of previous year. During 2016-17 (April-October), trade deficit decreased to US$ 53.2 billion as against US$ 78.2 billion in the corresponding period of previous year. There has been significant market diversification in Indias trade from Europe and America to Asia and Africa in recent years -a process that has helped in coping up with the sluggish global demand.

Balance of Payments

Current Account Deficit (CAD) narrowed down to US$ 22.2 billion (1.1 per cent of GDP) in 2015-16 as compared to US$ 26.9 billion in 2014-15. CAD narrowed down to US$ 0.3 billion (0.1 per cent of GDP) in 2016-17 (April-June) from US$ 6.1 billion (1.2 per cent of GDP) in corresponding period of the previous year.

Foreign Exchange Reserves

In the current fiscal 2016-17, foreign exchange reserves culminated to US$ 372.0 billion at end September 2016 which reduced to US$ 366.2 billion at end October 2016. Foreign exchange reserves stood at US$ 365.3 billion on 25th November 2016, showing an increase of US$ 5.1 billion over the level of US$ 360.2 billion at end-March 2016. Countrys foreign exchange reserves are at a comfortable position to buffer any external shocks. In the current fiscal 2016-17 (April-November), the average monthly exchange rate of rupee (RBIs reference rate) was in the range of Rs. 66 - 67 per US dollar (Rs. 66.47 per US dollar in April 2016 and Rs. 67.80 per US dollar in November 2016).

External Debt

Indias external debt stock stood at US$ 479.7 billion at end-June 2016, witnessing a decline of US$ 5.4 billion (1.1 per cent) over the level at end-March 2016. The external debt-GDP ratio was 23.4 per cent at end-June 2016, as against 23.7 per cent at end March 2016. The share of long-term external debt in total external debt increased marginally to 82.9 per cent at end-June 2016 from 82.8 per cent at end-March 2016. All external debt indicators show that Indias external debt has remained within manageable limits. India continues to be among the less vulnerable nations in terms of its key debt indicators.

Agriculture and Food Management

Agriculture and allied sectors registered a growth of 2.5 per cent during the first half of 2016-17 as compared to 2.3 percent during the same period in 2015-16. As per the First Advance estimates (1st AE) 2016-17 released by Department of Economics and Statistics, production of Kharif food grains is estimated to increase to 135.03 million tonnes as compared to 124.01 million tonnes in 2015-16 (AE).

The report of the Committee on Incentivising Pulses Production through Minimum Support Price (MSP) and Related Policies set up under the Chairmanship of Dr. Arvind Subramanian, Chief Economic Adviser, Government of India was submitted on 16th September, 2016.The Committee has recommended, among other things, an increase in the minimum support price (MSP) for all pulses, elimination of the export ban and stock limits on pulses, and intensified procurement.

Industry

The data on Index of Industrial Production (IIP) released by the Central Statistical Office (CSO) shows that the production of industrial sector broadly comprising mining, manufacturing and electricity sectors has fallen by 0.3 per cent during April-October (2016-17) as compared to 4.8 per cent growth during April-October (2015-16). The Government has undertaken a number of policy measures including enhanced public investment, kick starting stalled projects, improving governance through systemic changes like open auction for natural resources like coal and spectrum, improving business environment through programmes like Make in India, Ease of Doing Business, Start-up India. The Government has also liberalized and simplified the foreign direct investment (FDI) policy in the sectors like defence, railway infrastructure, construction and pharmaceuticals etc.

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