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Cabinet approves implementation of Supreme Courts Judgment regarding Target Plus Scheme (TPS)
Apr 12,2017

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the implementation of Supreme Courts Judgment dated 27 October 2015 regarding Target Plus Scheme (TPS) 2004-09 in Civil Application No. 554 of 2006.

The revenue implication under the TPS arising from the Honble Supreme Courts Judgment is about Rs 2700 crore.

Benefit is being extended to all the applicant exporters eligible as per provisions of the initially notified TPS Scheme under FTP for the year 2005-06, and as per provisions of Foreign Trade Policy 2004-09 throughout the country.

The Target Plus Scheme (TPS) 2005-06 was already implemented partially. However, the claims which were denied as a result of retrospective Notification will be now settled as per direction of the Supreme Court in the CA No. 554 of 2006. The scheme has been discontinued w.e.f. 01.04.2006.

The claims will be considered as per original notifications till the date of the Notification No. 48 dated 20.02.2006 and Notification No. 8 dated 12.8.2006. The guidelines and modalities for processing the claims will be worked out by the DGFT HQs in consultation with Department of Revenue and is proposed to be completed in one year from the date of approval of the Cabinet.

The corrective measure will bring an end to multiple litigations with the Government and the claims under the TPS will be issued as per original provisions under Foreign Trade Policy in compliance with the decision of the Honble Supreme Court.

In the Civil Appeal No. 554/2006 titled DGFT v/s Kanak Exports & Ors., the Honble Supreme Court, in its Judgment dated 27.10.2015 gave verdict on the Target Plus Scheme for Export Promotion. It held that the Notification No. 48/2005 dated February 20, 2006 (certain products were made ineligible) and Notification No. 8/2006 dated June 12, 2006 (rates were reduced to 5% from the earlier 5, 10 and 15%) related to the Target Plus Scheme (TPS) could not be applied retrospectively and they would be effective only from the date of their issue.

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Cabinet approves setting up of Indian Institute of Petroleum and Energy (IIPE) at Visakhapatnam
Apr 12,2017

The Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for setting up of Indian Institute of Petroleum and Energy (IIPE) at Visakhapatnam in Andhra Pradesh as an Institute of National Importance through an Act of Parliament. The Institute will have the governance structure as well as legal mandate to grant degrees in a manner similar to that enjoyed by IITs. A separate Act will also impart the required status to the Institute to become a Centre of Excellence in petroleum and energy studies.

The Cabinet has also approved Rs 655.46 crore as capital expenditure to set up IIPE and contribution of Rs 200 crore towards its Endowment Fund (in addition to a contribution of Rs 200 crore from Oil Companies towards the Endowment Fund).

As committed under the 13 Schedule of Andhra Pradesh Reorganization Act, 2014, it has been decided to set up this Institute. The objective is to meet the quantitative and qualitative gap in the supply of skilled manpower for the petroleum sector and to promote research activities needed for the growth of the sector. The academic and research activities of IIPE will derive strength from the Institutes proximity to sector-related activities such as KG-Basin, Visakhapatnam refinery and the planned Petrochemical complex at Kakinada.

Andhra Pradesh Government has allocated 200 acres of land, free of cost, for setting up of IIPE at Sabbavaram Mandal in Visakhapatnam district. IIPE has been registered as a Society under the AP Society Registration Act, 2001 on 18/04/2016. A temporary campus of IIPE has been set up from academic session 2016-17 from the Andhra University Campus with two undergraduate programmes namely, Petroleum Engineering and Chemical Engineering (with capacity of 50 students each). IIT, Kharagpur has taken up the responsibility of mentoring the Institute.

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Cabinet approves measures to increase oil palm area and production in India
Apr 12,2017

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved measures to increase oil palm area and production in India. These include:

i. Relaxation of land ceiling limit for oil palm cultivation under NMOOP (National Mission on Oilseeds and Oil Palm).

The Cabinet approved relaxation in restrictions for providing assistance to more than 25 hectare area also under NMOOP to attract corporate bodies towards oil palm and derive maximum benefit of 100% FDI.

ii. Revision of norms of assistance under Mini Mission-II of NMOOP.

The Cabinet further gave its approval to revise the norms of assistance mainly for planting materials, maintenance cost, inter-cropping cost and bore-well to make oil palm plantations attractive.

The measures will yield following results:

. To encourage oil palm plantation on large scale by corporate bodies and to utilize wastelands. By relaxing restrictions under NMOOP, private entrepreneurs/cooperative bodies/joint ventures will show their interest in investment in oil palm plantation and availing the NMOOP support.

n++ To encourage farmers for oil palm cultivation in a bigger way. The revision of cost norms will motivate fanners for oil palm plantation.

Annual Action Plan (AAP) of the State / Agencies will be approved by Department of Agriculture, Cooperation & Farmers Welfare on revised cost norms. The private entrepreneurs/ cooperative bodies/ joint ventures will be invited by the respective state Governments for oil palm plantation in their state.

At present, the programme is being implemented in 12 States, namely, Andhra Pradesh, Karnataka, Tamil Nadu. Mizoram, Odisha, Kerala, Telangana. Chhattisgarh, Gujarat, Arunachal Pradesh, Nagaland & Assam. Nearly 133 districts are under oil palm cultivation in these 12 states, However, all the potential states of Oil palm are covered under NMOOP.

There will be some financial implication in relaxing restrictions of area and up-scaling the norms of subsidies but the same would be accommodated within NMOOP fund. Therefore, no additional funds would be required.

At present, oil palm development programme is being promoted in individual farmers field. There is no scope to provide assistance directly to private entrepreneurs/Cooperative bodies/Joint ventures for large scale plantation. The waste land/degraded land/cultivable land in the oil palm growing states can be given on lease/rent or bought by private entrepreneurs/ cooperative bodies/ joint ventures for oil palm plantation. However, financial assistance under NMOOP is available for 25 hectare. Therefore, there is a need for relaxation of restrictions under NMOOP to attract corporate bodies towards oil palm and derive maximum benefit of 100% FDI. A combination of individual farming, contract farming and captive plantation (by relaxing land ceiling norms) can only boost oil palm cultivation in the country.

The norms of assistance for various interventions were decided on the basis of prevailing prices at the time of formulation of the NMOOP programme. In view of large investment towards the cost of planting material, digging of pits, planting, manuring, irrigation and maintenance of plantation for four years without any income, farmers particularly small and marginal have shown reluctance in taking up oil palm plantation. Besides, in North Eastern States, which have good potential for oil palm needs additional investment in land preparation being hilly terrain.

Edible Oil is an important component of household food basket. The total production of edible oil in the country is about 9 million MT. while the domestic requirement is around 25 million MT. The gap between demand and supply is being met through imports, which amounted to Rs 68000 crore in 2015-16 (Prov.). Palm oil contributes 70% of vegetable oil import and is one of the cheapest oil due to high productivity per hectare.

Oil Palm is one of the worlds most efficient crop in terms of yield of vegetable oil per ha and today it is largest source of vegetable oil in the world. Malaysia, Indonesia, Nigeria, Thailand and Columbia are the major oil palm producing countries. An average oil yield of 4-5 tonnes/ hectare has been recorded with oil palm against the highest oil yield of 1.3 tonnes/ hectare from rapeseed.

Government of India is promoting oil palm by implementing several programmes since 1986-87 and from 2014-15 through NMOOP. NMOOP aims to bring an additional area of 1.25 lakh hectare under oil palm cultivation by the end of 2016-17. The developmental efforts have resulted in area expansion under oil palm from 8585 hectare in-1991-92 to around 3 lakh hectare by the end of 2015-16. Similarly, production of fresh fruit bunches (FFBs) and crude palm oil (CPO) have increased from 21,233 ton and 1,134 ton respectively (1992-93) to 11,50,000 ton and 1,98,000 ton during the year 2014-15.

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Cabinet approves policy for Purchase Preference in all PSUs under Petroleum Ministry
Apr 12,2017

The Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for Policy to provide Purchase Preference (linked with Local Content (PP-LC) in all Public Sector Undertakings under Ministry of Petroleum & Natural Gas.

The Policy will be applicable for five years. A steering committee will be constituted to oversee implementation of the Policy and carry out annual review and recommend continuation of the policy from year to year basis.

Under the Policy, the targets of Local Content (LC) will be stipulated for certain oil and gas business activities. The manufacturers/ service providers who meet the local content targets and whose quoted price is within 10% of the lowest valid price bid would be eligible for purchase preference for a stipulated portion of the purchase order on matching such price.

The Policy is expected to encourage suppliers and service providers to progressively adopt Make in India practices and add value to their goods and services within the country.

The Policy will apply to all the Public Sector Enterprises and their wholly owned subsidiaries, Joint Ventures that have 51% or more equity by one or more Public Sector Enterprises, attached and subordinate offices of Ministry of Petroleum and Natural Gas.

The Make in India initiative was launched by Prime Minister in September, 2014 as part of a wider set of nation-building initiatives devised to transform India into a global design and manufacturing hub. In tune with this campaign, the Government has decided to incentivize the growth in local content in goods and services while implementing oil and gas projects in India through a policy for providing Purchase Preference to the manufacturers/ service providers who meet the local content targets in oil and gas business activities.

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Cabinet approves setting up of a SPV for govt procurement of goods & services
Apr 12,2017

The Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for the following:-

Setting up of a Special Purpose Vehicle to be called Government e-Marketplace (GeM SPV) as the National Public Procurement Portal as Section 8 Company registered under the Companies Act, 2013, for providing procurement of goods & services required by Central & State Government organizations. GeM SPV shall provide an end-to-end online Marketplace for Central and State Government Ministries / Departments, Central & State Public Sector Undertakings (CPSUs & SPSUs), Autonomous institutions and Local bodies, for procurement of common use goods & services in a transparent and efficient manner.

DGS&D shall be wound up and cease its functions by 31 October 2017. In case it is not possible to wind up DGS&D by 31 October 2017, the Department may extend the date of closure with proper justification latest upto 31st March, 2018.

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Major ports of India register 6.79% traffic growth in FY2017
Apr 12,2017

The twelve major ports under the Ministry of Shipping handled a record 647.43 million tonnes (mt) of traffic in 2016-17, registering an annual growth rate of 6.79%, as against 4.32% last year. With this, these ports have out- performed private ports for the second consecutive year. The private ports have registered a traffic growth rate of 4% this year.

The top position in cargo handling was retained by Kandla Port that handled 105.44 mt of cargo, registering a growth of 5.39% over last year. This was followed by Paradip Port with 88.95 mt of cargo handled, and an impressive growth rate of 16.45%. Mumbai Port holds the third position with 63.05 mt of cargo handled and growth rate of 3.17%.

JNPT recorded highest ever handling of 4.50 million TEUs during 2016-17. The port owned terminal, JNPCT, achieved highest ever handling of 1.53 million TEUs during the year, registering a growth rate of 7.33%.

Iron-ore traffic attained the highest growth rate of 163.67%. Other miscellaneous and general cargo grew by 18.53% and POL products by 8.16%.

In terms of Operating Surplus too, the Major Ports have shown highest ever achievement in 2016-17. JNPT net surplus has crossed Rs. 1300 crore as against Rs. 1091 crore of 2015-16. Kandla Port posted its highest ever net surplus of Rs. 651 crore during 2016-17, an increase of 54.4% over last years profit of Rs 422 crore.

For the first time ever, JNPT raised Foreign Denominated Loan of US $400 million. It became the first major port to raise foreign currency loans. Kamarajar Port Limited (Ennore) is also in the process of raising USD $100 million foreign currency loan. This mode of financing at low interest rates and natural hedging has been followed in the Major ports for their infrastructure development for the first time.

The major ports have also recorded the highest ever capacity addition of 100.37 mt during 2016-17. The capacity of major ports during 2015-16 was 965.36 MTPA. This crossed 1065 MTPA during 2016-17.

In respect of development of port infrastructure, 56 projects have been awarded with a capacity of 103.52 MTPA against a target of 102 MTPA with an investment of Rs. 9490.51 crore during 2016-17.

The efficiency indicators in major ports are also improving steadily. During 2016-17, total turn-around time came down to 3.44 days as against 3.64 days during last year. Likewise, Average Output Per Ship Berthday has gone up to 14583 tonnes as against 13748 tonnes during last year.

Major Ports have been benchmarked to international standards. 116 initiatives were identified. Out of these, 70 initiatives have been implemented and remaining will be implemented by 2019. This has resulted in unlocking 80 MTPA capacity. Implementation of these initiatives would further improve the efficiency & productivity of the Major Ports.

Mumbai Port has become Home Port for cruise tourism. Asias largest passenger ship Genting Dream with a capacity of 3,400 guests anchored at Mumbai Port on 29th October, 2016. The ship also ferried 1,900 passengers from Mumbai to Singapore via Colombo. 51 cruise vessels have called at Mumbai Port during 2016-17. A total number of 158 Cruise vessels anchored at 5 Major Ports during 2016-17, registering an increase of 23% over 2015-16.

In addition to the outstanding performance of the ports, the Ministry has taken several initiatives. The dredging of Mumbai Channel and JNPT Channel phase - II has been awarded to increase draft upto 15 meters at an estimated cost of Rs. 1963.17 crore. Smart Port Industrial Cities are being developed at Paradip and Kandla, Master Plans for which have been finalised. Multi Modal Logistic Park is being set up in Paradip.

The Ministry of Shipping has initiated several Policy during the year. The New Captive Policy guidelines were issued in July, 2016 to ensure uniformity and transparency in the procedure for awarding captive facilities in the ports. This will allow concessionaire to handle non captive cargo upto 30% of the designed capacity of the berth.

The New Berthing Policy came into effect from August, 2016. This policy provides standardized framework for calculation of norms, specific to the commodity handled and infrastructure available on the berth. This will improve the efficiency at ports and productivity norms across ports.

The New Stevedoring Policy has been implemented since July, 2016. This will improve productivity, efficiency and safety in the ports.

The existing Model Concession Agreement of 2008 is under process of revision which will address the concerns of PPP projects and prevent them from getting stressed.

The Major Port Authorities Bill has been introduced in the Lok Sabha in December, 2016 to modernize the institutional structure of the ports to usher in professional governance in the ports.

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IIP declines 1.2% in February 2017
Apr 12,2017

Indias industrial production declined 1.2% in February 2017 over February 2016, snapping 3.3% growth recorded in January 2017. The manufacturing sectors production dipped 2% in February 2017, mainly contributing to the dip in industrial production. The mining output increased 3.3%, while the electricity generation rose 0.3% in February 2017.

In terms of industries, 15 out of the 22 industry groups in the manufacturing sector have shown negative growth during the month of February 2017 as compared to the corresponding month of the previous year.

Industrial production rose 0.45% in April-February FY2017, compared with 2.61% growth in the corresponding period last year. The manufactured product sector output declined 0.3%, while the mining and electricity generation improved 1.6% and 4.6% in April-February FY2017.

As per the use-based classification, the basic goods output improved 2.4% in February 2017 over a year ago, while the output of capital goods declined 3.4%. The consumer goods output dipped 5.6%, while the output of intermediate goods also fell 0.2% in February 2017. Within consumer goods, the production of consumer durables declined 0.9%, while that of consumer non-durables plunged 8.6% in February 2017 over February 2016.

The IIP growth in January 2017 has been revised upwards to 3.3% in the first revision compared with 2.7% growth reported provisionally. Meanwhile, the growth in November 2016 has been revised marginally downwards to 5.6% at final revision.

The industry group Tobacco products has shown the highest negative growth of (-) 42.8% followed by (-) 21.7% in Food products and beverages and (-) 20.6% in Office, accounting and computing machinery. On the other hand, the industry group Electrical machinery & apparatus n.e.c. has shown the highest positive growth of 17.4% followed by 10.7% in Wearing apparel; dressing and dyeing of fur and 9.9% in Basic metals.

Some important items that have registered high negative growth include woollen carpets (-) 66.4%, plastic machinery including moulding machinery (-) 52.2%, ship building and repairs (-) 49.7%, sugar machinery (-) 47.8%, sugar (-) 41.6%, molasses (-) 39.0%, cigarettes (-) 37.7%, aluminium conductor (-) 29.3%, three-wheelers (including passenger and goods carrier) (-) 24.5% and leather garments (-) 22.0%.

Some important items showing high positive growth during the current month over the same month in previous year include cable, rubber insulated 241.2%, cement machinery 116.5%, electric sheets 90.1%, HR coils/ skelp 29.1%, antibiotics and its preparations 25.6%, biaxially oriented polypropylene bopp film 25.5% and stainless/ alloy steel 24.2%.

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CPI inflation rises to 3.81% in March 2017
Apr 12,2017

The all-India general CPI inflation increased to 3.81% in March 2017 (new base 2012=100), compared with 3.65% in February 2017. The corresponding provisional inflation rate for rural area was 3.75% and urban area 3.88% in March 2017 as against 3.67% and 3.55% in February 2017. The core CPI inflation rose marginally to 4.79% in March 2017 from 4.75% in February 2017.

The cumulative CPI inflation was lower at 4.52% in April-March FY2017 compared with 4.91% in April-March FY2016.

Among the CPI components, inflation of food and beverages increased to 2.54% in March 2017 from 2.39% in February 2017 mainly contributing to the rise in CPI inflation. Within the food items, the inflation increased for vegetables to (-) 7.24%, fruits 9.35%, milk and products 4.69%, prepared meals, snacks, sweets etc. 5.65%, egg 3.21% and cereals and products 5.38%. The inflation was flat for non-alcoholic beverages at 3.17%. On the other hand, inflation declined for pulses and products to (-) 12.42%, spices 2.99%, meat and fish 2.96% and sugar and confectionery 17.05% in march 2017.

The inflation for housing rose marginally to 4.96%, while that for miscellaneous items was flat at 4.78% in March 2017. Within the miscellaneous items, the inflation for personal care and effects eased to 4.52% and education 5.20%, while inflation rose for transport and communication to 6.04% in March 2017.

The inflation for clothing and footwear increased to 4.60% in March 2017, while the CPI inflation of fuel and light surged to 5.56% in March 2017.

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Trade recovery expected in 2017 and 2018, amid policy uncertainty: WTO
Apr 12,2017

The WTO is forecasting that global trade will expand by 2.4% in 2017; however, as deep uncertainty about near-term economic and policy developments raise the forecast risk, this figure is placed within a range of 1.8% to 3.6%. In 2018, the WTO is forecasting trade growth between 2.1% and 4%.

The unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled. A spike in inflation leading to higher interest rates, tighter fiscal policies and the imposition of measures to curtail trade could all undermine higher trade growth over the next two years.

Weak international trade growth in the last few years largely reflects continuing weakness in the global economy. Trade has the potential to strengthen global growth if the movement of goods and supply of services across borders remains largely unfettered. However, if policymakers attempt to address job losses at home with severe restrictions on imports, trade cannot help boost growth and may even constitute a drag on the recovery, said WTO Director-General Roberto Azevn++do.

Although trade does cause some economic dislocation in certain communities, its adverse effects should not be overstated - nor should they obscure its benefits in terms of growth, development and job creation. We should see trade as part of the solution to economic difficulties, not part of the problem. In fact, innovation, automation and new technologies are responsible for roughly 80% of the manufacturing jobs that have been lost and no one questions that technological advances benefit most people most of the time. The answer is therefore to pursue policies that reap the benefits from trade, while also applying horizontal solutions to unemployment which embraces better education and training and social programmes that can quickly help get workers back on their feet and ready to compete for the jobs of the future, he said.

The WTOs more promising forecasts for 2017 and 2018 are predicated on certain assumptions and there is considerable downside risk that expansion will fall short of these estimates. Attaining these rates of growth depends to a large degree on global GDP expansion in line with forecasts of 2.7% this year and 2.8% next year. While there are reasonable expectations that such growth could be achieved, expansion along these lines would represent a significant improvement on the 2.3% GDP growth in 2016.

In 2016, the weak trade growth of just 1.3% was partly due to cyclical factors as economic activity slowed across the board, but it also reflected deeper structural changes in the relationship between trade and economic output. The most trade-intensive components of global demand were particularly weak last year as investment spending slumped in the United States and as China continued to rebalance its economy away from investment and toward consumption, dampening import demand.

Global economic growth has been unbalanced since the financial crisis, but for the first time in several years all regions of the world economy should experience a synchronized upturn in 2017. This could reinforce growth and provide an additional boost to trade.

Forward looking indicators, including the WTOs World Trade Outlook Indicator, point to stronger trade growth in the first half of 2017, but policy shocks could easily undermine positive recent trends. Unexpected inflation could force central banks to tighten monetary policy faster than they would like, undercutting economic growth and trade in the short-run. Other factors, such as the uncertainty provoked by the United Kingdoms withdrawal from the European Union could potentially have an effect. Meanwhile, the possibility of a rise in the application of restrictive trade policies could affect demand and investment flows, and cut economic growth over the medium-to-long term. In light of these factors, there is a significant risk that trade expansion in 2017 will fall into the lower end of the range.

The recovery of world trade this year and next is based on expected world real GDP growth at market exchange rates of 2.7% in 2017 and 2.8% in 2018. This GDP estimate assumes that developed economies maintain generally expansionary monetary and fiscal policies, and that developing economies continue to emerge from their recent slowdown. It should be noted that the WTO does not produce its own GDP forecasts, but rather uses consensus estimates based on a variety of sources including the International Monetary Fund, the Organization for Economic Cooperation and Development, and the United Nations, among others.

Historically, the volume of world merchandise trade has tended to grow about 1.5 times faster than world output, although in the 1990s it grew more than twice as fast. However, since the financial crisis, the ratio of trade growth to GDP growth has fallen to around 1:1. Last year marked the first time since 2001 that this ratio has dropped below 1, to a ratio of 0.6:1. The ratio is expected to partly recover in 2017, but it remains a cause for concern.

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1.86 lakh fair price shops installed PoS devices so far
Apr 11,2017

The Department of Food and Public Distribution has prepared guidelines for Fair Price Shop (FPS) automation, which have been shared with all States/UTs. FPS automation involves, installation of Point of Sale (PoS) devices at FPS for authentication of beneficiaries, recording of sales to beneficiaries at the FPS; and uploading of transaction data in central server. There are 5.26 lakh Fair Price Shops in the country out of which 1.86 lakh FPSs have been automated so far installing ePoS devices/mobile terminals across 22 States/UTs. A statement showing the total number of FPSs in each States/UTs including Andhra Pradesh and automation of FPSs is given below.

Targeted Public Distribution System (TPDS) is operated under the joint responsibility of the Central and State/UT Governments wherein operational responsibilities including the issuance of licenses to the Fair Price Shops (FPSs) rest with the concerned State/UT Governments.

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Food Processing Industries Minister emphasizes need to set up Integrated Cold Chain Projects for fast-tracking transformation of Indian economy
Apr 11,2017

Minister of Food Processing Industries Smt. Harsimrat Kaur Badal emphasized the need to set up Integrated Cold Chain Projects on war scale in the country for all-round development of India and for fast-tracking transformation of the Indian economy.

Smt. Badal said given the challenge of post-harvest losses which currently are Rs.92,000 crores annually, the facilities set up by the Ministry of Food Processing Industries like 42 Mega Food Parks and 234 Cold Chain Projects (including 101 newly sanctioned Cold Chain Projects) have created preserving and processing capacity of 139 lakh Metric Tonnes of Agro Produce with a value of Rs.35,000 crores which means that setting up of these Cold Chain Projects and Mega Food Parks already undertaken would reduce post harvest losses substantially. She said apart from reducing wastage, the projects will generate employment for 3.5 lakh persons and benefit 15 lakh farmers.

The Minister also informed about the steps being taken by the Ministry to build a strong, efficient and integrated supply chain for agri-produce involving backward linkages with the farm, processing to add value to the farmers produce and creation of forward linkages through organised modern retail.

Formulation and implementation of a National Food Processing Policy is also under consideration of the Ministry. The vision of the Policy is to position India as a World Food Factory by creating an enabling framework for the sustainable growth of the food processing industry. The Policy is based on the principle of inclusive growth in partnership with the States with the overarching goal of providing remunerative return to farmers. The model Food Processing Policy focuses development of clusters based on production strength of different region to enable a targeted and coordinated approach for developing the food processing industry and bringing down wastages. As a step in this direction, the Ministry proposes to undertake mapping of areas of fruits &vegetables and other perishable production in different States with the target to set up agro processing clusters.

To achieve the vision of National Food Processing Policy, the Ministry will be shortly launching a revamped National Mission on Food Processing called SAMPADA (Scheme for Agro-Marine Produce Processing and Development of Agro-Processing Clusters) to complete the on-going Mega Food Parks, take up more cold chain and also to launch 3 new schemes - Creation/Expansion of Food Processing and Preservation Capacities, New Agro-Processing Clusters and Backward and Forward Linkages.

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Timelines for Closure of financial accounts under Rule 114H (8) of the Income-tax Rules, 1962 under alternative procedure of FATCA
Apr 11,2017

The Inter-Governmental Agreement (IGA) with USA for implementation of FATCA entered into force on 31st August 2015. Under the alternative procedure provided in Rule 114H(8) of the Income-tax Rules, 1962, the financial institutions need to obtain self-certification and carry out due diligence in respect of all individual and entity accounts opened from 1st July 2014 to 31st August 2015. Such self-certification and documentation was required to be obtained by the financial institutions by 31st August 2016, otherwise they were required to close the accounts and report the same if found to be a reportable account as per the prescribed due diligence procedure for pre-existing account.

In view of the difficulties highlighted by stakeholders in following the provision for closure of financial accounts, it was informed vide Press Release dated 31st August 2016 that the financial institutions may not close the accounts by 31st August 2016 in respect of which self-certifications have not been obtained under the alternative procedure and a revised time line shall be notified in due course. The financial institutions were also advised to continue to work on completing the required due diligence, including obtaining self-certifications.

Queries are being received from the financial institutions regarding the revised time lines for completion of due diligence. The financial institutions are advised that all efforts should be made by the financial institutions to obtain the self-certification. The account holders may be informed that, in case self-certifications are not provided till 30 April 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts. The transactions by the account holder in such blocked accounts may, thereafter, be permitted once the self-certification is obtained and due diligence completed.

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CBDT issues PAN and TAN within 1 day to improve Ease of Doing Business
Apr 11,2017

In order to improve the Ease of Doing Business for newly incorporated corporates, CBDT has tied up with Ministry of Corporate Affairs (MCA) to issue Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) in 1 day.

Applicant companies submit a common application form SPICe (INC 32) on MCA portal and once the data of incorporation is sent to CBDT by MCA, the PAN and TAN are issued immediately without any further intervention of the applicant. The Certificate of Incorporation (COI) of newly incorporated companies includes the PAN in addition to the Corporate Identity Number (CIN). TAN is also allotted simultaneously and communicated to the Company.

Till 31st March 2017, 19,704 newly incorporated Companies were allotted PAN in this manner. During March, 2017, of the 10,894 newly incorporated companies, PAN was allotted within 4 hrs in 95.63% cases and within 1 day in all cases. Similarly, TAN was allotted to all such companies within 4 hrs in 94.7 % cases and within 1 day in 99.73% cases.

CBDTs initiative in starting of a business is expected to significantly improve the ranking of India in the Ease of Doing Business Study conducted by World Bank by reducing the number of processes of registration before various authorities under law, reducing the time taken for allotment of the registration number (CIN, PAN, TAN) and making the entire registration process for new companies much simpler.

CBDT has also introduced the Electronic PAN Card (E-PAN) which is sent by email, in addition to issue of the physical PAN Card, to all applicants including individuals where PAN is allotted. Applicant would be benefited by having a digitally signed E-PAN card which they can submit as proof of identity to other agency electronically directly or by storing in the Digital Locker

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Moodys: Collections on loans in Indian auto ABS rise in February
Apr 11,2017

Moodys Investors Service says that the collection of repayments on the loans in Indian auto asset-backed securities (ABS) improved in February, returning to levels that occurred prior to the governments decision to remove a high proportion of currency notes from circulation (demonetization) in November 2016.

At the same time, auto ABS delinquencies increased in February 2017 after a slight improvement in December 2016 and stabilization in January 2017, but will decline back to pre-demonetization levels by June if economic activity continues to pick up and oil prices remain in a range between $40 and $60 a barrel.

Delinquencies had increased in the wake of demonetization because the decline in economic activity triggered by the policy resulted in a loss of income for some commercial vehicle operators, causing them to miss auto loan repayments, says Vincent Tordo, a Moodys Analyst.

At end-February, over 30 days in arrears was at 12.7%, compared with 10.9% in December 2016.

However, measures of economic activity in India -- such as manufacturing, services and industrial production activity -- now appear to have bottomed post the governments action in November last year, adds Tordo.

Another reason for the rise in delinquencies in February was the increase in prepayment rates, which reduced outstanding balances in auto loans at a faster rate than the average rate.

This development contributed to the increase in delinquency rates, because arrears levels were higher relative to the smaller outstanding balances.

In India, commercial vehicle loan originators often attempt to persuade borrowers to sell their vehicles and repay their loans if the vehicles are not being used intensively.

Such a development may have occurred in the aftermath of demonetization, thereby pushing up the prepayment rate. Given the circumstances that drive prepayments in India, prepayment rates can be volatile and do not necessarily reflect improving performance.

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Government makes compliance of Labour Laws and Rules easy
Apr 11,2017

The Government has undertaken an exercise to promote ease of compliance of Labour Laws and Rules by various establishments. The n++Rationalisation of Forms and Reports under Certain Labour Laws Rules, 2017n++ has reduced the number of forms and reports prescribed under 3 Acts and the Rules made thereunder from 36 to 12. The overall aim of the exercise is to make the forms and reports easy to understand for the users. This will save efforts, costs and lessen the compliance burden of various establishments. As per the sixth Economic Census of Central Statistical Office, conducted during 2013-2014,there are about 5.85 crore establishments in agriculture and non- agriculture sectors of the country.

While reviewing the requirement of filing forms under various Labour Laws it was observed that 36 forms prescribed under 3 Acts and the Rules made thereunder had several overlapping/redundant fields. Therefore, an exercise was undertaken by the Ministry of Labour and Employment to do away with overlapping fields and reduce the number of forms. An intention notification for reducing the number of forms and reports was placed in the public domain on 9th February, 2017 and objections and suggestions thereon were sought from all stake-holders.

The Labour Laws under which these forms are filed include:

(I) The Contract Labour (Regulation and Abolition) Act, 1970

(II) The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

(III) The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.

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