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Gartner Says PC Leaders Must Overhaul Their Businesses or Leave the Market by 2020
Sep 15,2016

Business leaders of PC vendors face a stark choice and must decide between overhauling their businesses or leaving the PC market by 2020, according to Gartner, Inc. If they decide to stay, they need to rapidly determine what changes to make or what alternatives to adapt in todays over-penetrated PC market.

The PC business model as we have traditionally known it is broken. The top five mobile PC vendors have gained 11 percent market share over the past five years G from 65 percent in 2011 to 76 percent in the first half of 2016; but this has come at the expense of profitable revenue, said Tracy Tsai, research vice president at Gartner. While this does not mean that the PC market is finished, the installed base of PCs will continue to decline over the next five years, with a continuing erosion of PC vendors revenue and profit.

Worldwide PC Installed Base, 2015-2019 (Actual Units)

Device Type20152016201720182019PCs (Desk-based, Notebook and
Ultramobile Premium)1,485,2761,442,3291,400,0501,362,6221,333,450

Source: Gartner (September 2016)

The traditional way of gaining shipment market share by competing on price to stimulate demand simply wont work for the PC market over the next five years, said Ms. Tsai. Todays PC vendors need to adjust to the new realities that are shaping consumption, including the fact that PC users are extending PC lifetimes until end of life, business PC applications and storage are moving into the cloud, and are less reliant on PC performance and, crucially, that price and specification are not enough for a user to upgrade a PC G a new and better customer experience is the only true differentiation.

Gartner has identified four alternative strategies that PC vendors can use to adapt to the PC market of the future. These are based on corporate culture and assets, business operation and technology innovation, and completely revamping the business.

Alternative 1 G Current Products and Current Business Model

This alternative is the most conservative approach, with the vendor running a current business operation and selling a current PC product. It requires high volumes to generate enough cash flow to cover the cost of business, so, in a declining market, consolidation of vendors is inevitable. The purpose here is to protect and keep the PC business running, but the risks are high, especially given Intels and Microsofts alternative focus moving forward.

PC vendors need to streamline operations, shift their focus away from gaining share, and increase the sales proportion of midtier and high-end products to improve operating profits for long-term business sustainability, said Ms. Tsai. Another key factor that needs to change is the sales compensation scheme. PC vendors need incentives to drive their internal sales teams and channel partners to move away from a focus on volume and market share to margins and profitability. PC vendors also need to shift focus away from distributor and reseller customers wants to users needs.

Alternative 2 G Current Products and New Business Model

This alternative suggests that PC vendors form a new team that can experiment with new business and revenue models for PC products, such as PC as a service. In this scenario, the business model is agile, allows risk taking and accepts failure. Vendors could, for example, partner with a digital education content publisher. The vendors two-in-one devices are bundled with digital content on a subscription basis; the PC is free to users but is subsidized by the publisher.

Alternative 3 G New Products With Current Business Model

The third alternative is a more conservative way to explore new product offerings and new market opportunities, such as making PCs smarter in terms of sensing, speech, emotion and touch; expanding new products for the connected home; or developing products targeted to vertical markets. Its a gradual way for PC vendors to expand into new products based on their current business model.

Alternative 4 G New Products With New Business Model

Alternative 4 is the most aggressive way to transform in terms of business operations and product innovations. In this scenario, PC vendors could establish a new business unit to run business in a different mode and explore new technology solutions to create a completely new product line. This would include working with new channel partners and independent software vendors (ISVs) and partnering with startups. The resources and revenue model might be completely different from a vendors existing structure.

An example could be personal assistant robots. A PC can serve as an information butler at home, a combination of a chat bot and voice-activated virtual personal assistant, with revenue from developers and third-party content and service providers, such as those in retail, healthcare, education, video or music.

Business leaders of PC vendors need to think about business outcomes based on the four alternatives discussed here, said Ms. Tsai. Some vendors may need a whole new business and product strategy to turn their situation around. PC vendors need to identify their core competencies, evaluate their internal resources, and adopt one or more alternative business and product innovation models to stay in or leave the PC business.

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Direct Tax Dispute Resolution Scheme, 2016 which has come into force from 1st June, 2016, can be availed up to 31st December, 2016
Sep 15,2016

Litigation is a scourge for a tax friendly regime. In order to reduce the pending litigation, the Direct Tax Dispute Resolution Scheme, 2016 (the Scheme) has come into force from 1st June, 2016 and can be availed up to 31st December, 2016. The Scheme is available to the cases pending with the first appellate authority [i.e. CIT (A)] as on 29th February, 2016, subject to certain conditions. It also extends to the cases pending litigation owing to retrospective amendment at different levels.

Under the Scheme, if the amount of disputed tax is

n++ Up to Rs.10 lakh, complete waiver from levy of penalty and from initiation of prosecution is provided on payment of assessed tax along with the interest.

n++ More than Rs.10 lakh, the declarant is required to pay only 25% of the minimum penalty leviable along with the due tax and interest.

In respect of penalty appeals, the declarant shall get waiver of the 75% of the penalty levied and immunity from prosecution. In respect of specified tax, the declarant gets complete waiver of/immunity from levy of penalty and immunity from prosecution.

CBDT has received various queries from stakeholders seeking clarifications about various provisions of the Scheme. The issues raised have been examined and a set of 14 FAQs has been issued vide Circular No. 33 of 2016. The circular inter alia provides clarifications regarding eligibility of cases for the Scheme, fate of pending penalty appeals, determination of amount payable under the Scheme, right to appeal in other years, date of withdrawal of pending appeal and time limit for intimation of payment by the declarant and issuance of certificate by the designated authority.

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Gartner Says Worldwide Public Cloud Services Market to Grow 17 Percent in 2016
Sep 15,2016

The worldwide public cloud services market is projected to grow 17.2 percent in 2016 to total $208.6 billion, up from $178 billion in 2015, according to Gartner, Inc. The highest growth will come from cloud system infrastructure services (infrastructure as a service [IaaS]), which is projected to grow 42.8 percent in 2016. Cloud application services (software as a service [SaaS]), one of the largest segments in the global cloud services market, is expected to grow 21.7 percent in 2016 to reach $38.9 billion.

Growth of public cloud is supported by the fact that organizations are saving 14 percent of their budgets as an outcome of public cloud adoption, according to Gartners 2015 cloud adoption survey, said Sid Nag, research director at Gartner. However, the aspiration for using cloud services outpaces actual adoption. Theres no question there is great appetite within organizations to use cloud services, but there are still challenges for organizations as they make the move to the cloud. Even with the high rate of predicted growth, a large number of organizations still have no current plans to use cloud services.

IT modernization is currently the top driver of public cloud adoption, followed by cost savings, innovation, agility and other benefits. The focus on IT modernization indicates a more sophisticated and strategic use of public cloud services. Not only are public cloud services being used to recognize the tactical benefits of cost savings and innovation, but they are also being used to establish a more modern IT environment n++ an environment that can serve as a strategic foundation for future applications and digital business processes.

Security and/or privacy concerns continue to be the top inhibitors to public cloud adoption, despite the strong security track record and increased transparency of leading cloud providers.

Gartners position on cloud security has been clear n++ public cloud services offered by the leading cloud providers are secure. The real security challenge is using public cloud services in a secure manner, said Ed Anderson, research vice president at Gartner. More education is needed to help organizations overcome the hype associated with security concerns. This should be a key area of focus for providers in working with their clients to unlock the benefits of public cloud services.

Most organizations are already using a combination of cloud services from different cloud providers. While public cloud usage will continue to increase, the use of private cloud and hosted private cloud services is also expected to increase at least through 2017. The increased use of multiple public cloud providers, plus growth in various types of private cloud services, will create a multicloud environment in most enterprises and a need to coordinate cloud usage using hybrid scenarios.

Although hybrid cloud scenarios will dominate, there are many challenges that inhibit working hybrid cloud implementations. Organizations that are not planning to use hybrid cloud indicated a number of concerns, including: integration challenges, application incompatibilities, a lack of management tools, a lack of common APIs and a lack of vendor support.

Of course in the case of hybrid cloud, these top concerns also highlight some of the top opportunities for providers, said Mr. Anderson. We know that public cloud services will continue to grow. We also know that private cloud services (of various types) will become more widely used. Therefore, providers must focus on the top hybrid cloud challenges to be successful in meeting the growing demand for hybrid cloud solutions.

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Bengaluru image among Fortune 500 firms sullied by Cauvery related agitation; losses up to Rs 25,000 cr ASSOCHAM
Sep 15,2016

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.

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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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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