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FM: Launches SMS Alert Service for about 2.5 crore private and Government salaried employees to directly inform deposit of tax deducted at qtr end
Oct 25,2016

The Union Finance Minister Shri Arun Jaitley said that better facilities and services to the taxpayers are the central to Direct Tax Reforms. He said that the tax payers have a right to know the deductions made from their salary/income on regular basis. He said that more and more tax payer services have to be provided in order to make the people tax complaint. He stressed on the Governments commitment towards continuously upgrading tax payer services. The Finance Minister Shri Jaitley was speaking after launching the SMS Alert Service for direct taxes for about 2.5 crore private and Government salaried employees.

The new step is an effort by the Income Tax Department to directly communicate deposit of tax deducted, through SMS alerts to salaried taxpayers, at the end of every quarter. In case of a mismatch, they can contact their deductor for necessary correction. Simultaneously, SMS alerts will also be sent to deductors who have either failed to deposit taxes deducted or to e-file their TDS returns by the due date.

This initiative will initially benefit approximately 2.5 crore salaried cases. The CBDT will soon extend this facility to another 4.4 crore non-salaried taxpayers. The frequency of SMS alerts will be increased, once the process for filing TDS returns is streamlined to receive such information on a real-time basis.

All taxpayers who wish to receive such SMS alerts are advised to update their mobile numbers in their e-filing account.

The CBDT constantly endeavours to provide better taxpayer services and reduce taxpayer grievances. New schemes and e-initiatives to redress and reduce complaints of mismatches in tax deducted at source are key to this effort.

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The Government of Bihar should provide relief of 4% interest on loan to the farmers like other States
Oct 25,2016

The Union Agriculture and Farmers Welfare Minister, Shri Radha Mohan Singh called on Government of Bihar to bear the 4% interest on loan to farmers so that they can get loans at zero percent interest. At present, the farmers of Bihar receive, loan at 7% interest, 3% of which is borne by the Central Government. Union Minister of Agriculture reiterated this at the Cooperative Conference of Primary Agriculture Cooperative Societies (PACS) organized by Indian National Cooperative Union in Motihari (East Champaran). Shri Radha Mohan Singh added that if we require to take the country ahead in the developmental arena, we will have to develop the farmers agriculture as well as villages. We will have to increase the income of the farmers and for this purpose we will have to bring in another revolution.

The Minister further added that the Primary Agriculture Cooperative Societies (PACS) are the fundamental base for the development related to agriculture and cooperatives. The PACS are organized on the level of villages and have farmers as members. At present nearly 8463 Primary Agriculture Cooperative Societies (PACS) are working in the State of Bihar and almost 521 Trade Cooperatives are operational.Apart from this nearly 372 Primary Agriculture Cooperative Societies (PACS) are performing their tasks in the district of Motihari.

Shri Singh said that there must be a provision of reservation in PACs with the purpose to ensure the partnership of weaker section of the society scheduled castes, scheduled tribes, backward class and most backward classes. It is also essential to bring about institutional improvement to develop these PACS in the form of development centre of rural economy. Through these PACS farmers are provided seeds, fertilizers, agricultural equipments along with short term loan.

The Union Minister opined that the farmers must be provided more grants so as to strengthen the distribution system and substantiate the economic base of the PACS in Bihar. It is required to ensure the surplus achievement of paddy as well as wheat through the PACS so that farmers could get the appropriate support price declared by the government on the basis of their producce. Simultaneously these PACS will have to be developed in the form of institutes based on beneficial democratic values for the farmers.

The Union Minister of Agriculture and Farmers Welfare further added that fifty per cent PACS do not own their own godowns in Bihar for the storage of their products. Shri Singh said that until and unless there are storage facilities, the farmers will have to bear losses. The Minister further said that it is very much imperative to have the godowns raised for more and more PACS under Integrated Cooperative Development Project, National Agriculture Development Scheme so as to enhance the storage capacity of the godowns. Shri Singh further said the rice mills should be established under National Agriculture Development Scheme. The PACS should be provided enough margin money for common business particularly for storage of off season fertilizers. The Union Minister said that the attempts are on to computerized all the 8463 Primary Agriculture Cooperative Societies in Bihar. This programme will cost almost Rs. 2000 crore. 50% of which would be borne by Central Government through NABARD, 45% will be funded by Government of Bihar and rest of 5% will be provided by District State Cooperative Banks.

The Union Minister of Agriculture and Farmers Welfare said that during the year 2015-16 the dairy cooperatives of Bihar were provided Rs. 149 crore, Rs. 51.05 crore for ICDP, Rs. 12.5 crore for cold storage cooperatives, Rs. 28.10 crore for the cooperatives related to marketing. In this way as a whole a sum of Rs. 240.80 crore were provided . Shri Singh reiterated his resolve that the representatives should avail themselves of different development programmes related to NCDC to remove the regional imbalances and to enjoy the economic improvement of the Societies. On this occasion, the Minister requested the personnel related to the cooperatives that the Primary Agriculture Cooperative Societies (PACS) should make the farmers aware about the Soil Health Card Scheme in their respective areas so that they could protect the fertility of their soil. Shri Singh said that existing resources to meet the necessities related to human resources development of the sophisticated techniques and cooperative personnel are inadequate. Keeping in view, the increasing needs of cooperatives movement, Shri Singh said that due to the presence of only one National Level Cooperative Training Institute in Pune the participation of Eastern States and North Eastern States cannot be materialized. The Minister further said that the State Government was requested at Bihar State Cooperative Development Conference in February 2016 that a Cooperative Management Institute of National level should be set up in Eastern Champaran, Bihar.

Shri Radha Mohan Singh said that the Central Government for the first time has requested the people that they should frame all rules and regulations and schemes for the development of agriculture. Thereafter the Ministry of Agriculture and other Central Institute will enforce these schemes throughout the country altogether. They will be provided strategic as well as financial help to make them operational.

Union Minister of Agriculture and Farmers Welfare requested the State Government of Bihar that they should work together while making the blue print of the schemes so that the new ways and means could be found out to work out the problems coming in the way of agricultural development.

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Indias fuel product consumption declines 0.7% in September 2016
Oct 24,2016

Indias fuel product consumption or sales declined 0.7% to 14.60 mt in September 2016 over a year ago. Diesel sales dipped 11.4% to 5.22 mt, while Petrol sales declined 3.4% to 1.82 mt. Sales of Kerosene fell 11.1% to 0.50 mt and Others slipped 2.9% to 0.57 mt. Consumption of Naphtha also eased 1.3% to 1.05 mt, while that of LDO moved down 0.3% to 0.04 mt. However, the consumption of Pet. Coke gained 20.2% to 1.78 mt, LPG 16.1% to 1.87 mt, and ATF 11.6% to 0.55 mt. Further, the consumption of Lubes/Greases increased 18.0% to 0.30 mt, Fuel Oil 5.5% to 0.59 mt, and Bitumen 7.6% to 0.32 mt in September 2016.

Consumption or sales of fuel product increased 8.3% to 95.57 mt in April-September 2016 over April-September 2015. Sales of Pet. Coke increased 35.1%, Petrol 10.8%, Diesel 2.9%, and LPG 11.2%. Consumption of Fuel Oil also moved up 17.1%, ATF 12.3%, Bitumen 12.4%, Lubes/Greases 15.0%, LDO 13.6% and Others 0.6%, but declined for Naphtha 0.3% and Kerosene 10.1% in April-September 2016.

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Indias natural gas production declines 5.5% in September 2016
Oct 24,2016

Indias natural gas production declined 5.5% to 2.60 billion cubic meters (bcm) in September 2016 over a year ago. Natural gas output of ONGC rose 1.5% to 1.84 bcm, but that of private and JV companies dipped 27.3% to 0.51 bcm. Meanwhile, the natural gas production of Oil India rose 7.2% to 0.24 bcm in September 2016.

Natural gas output declined 4.4% to 15.72 bcm in April-September 2016 over April-September 2015.

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Sagarmala: Revolutionizing logistics in India through port led development
Oct 24,2016

Sagarmala, the ambitious programme for Port-led development in the country is all set to change the logistics sector performance by optimizing Indias logistics modal mix. The flagship programme by the Ministry of Shipping will help in reducing the logistics cost for both domestic and EXIM cargo with optimized infrastructure investment. An overall cost savings of INR 35,000 to 40,000 Crore per annum by 2025 is estimated from the same.

According to a study conducted under the Sagarmala programme, there lies a significant potential for moving raw materials and finished products using coastal shipping and inland waterways which is 60-80% cheaper than road or rail transport. Although the share of coastal shipping and inland waterways in the countrys modal mix remains low, an emphasis on coastal shipping to complement road and rail transport can lead to overall logistic cost savings.

The programme aims to increase movement of coal through coastal route from 27 MTPA in FY 2016 to 129 MTPA by 2025 and increase the share of inland waterways and coastal shipping in modal mix to increase from 6% to 12%. The programme envisions reduction in the cost of power generation by Rs 0.50 per unit of power.

It is estimated that for power plants located 800 to 1,000 km away from coal mines, the cost of coal logistics can contribute up to 35 per cent of the cost of power production. Particularly in the case of the Coastal power plants in Andhra Pradesh and Karnataka, that currently receive coal from Mahanadi Coalfields by Railways, significant savings can be achieved by taking coal through the rail-sea-rail (RSR) route. It is estimated that coastal movement of coal to these plants can result in annual savings of over INR 10,000 Crore to the power sector.

In addition, up to 50 Million tonnes of coal can be moved via coastal shipping for non-power thermal coal users (for example steel plants). Other commodities such as steel, cement, fertilizers, POL and food grains could also be moved via coastal shipping to the extent of about 80-85 MN tonnes by 2025. Additionally, an estimated 60 to 70 MN tones of cargo can also be moved over inland waterways (with focus on NW1, NW2,NW4 and NW5) by 2025.

The concept of port led development is central to the Sagarmala vision. Port led development focuses on logistics intensive industries (where transportation either represents a high proportion of costs, or timely logistics are a critical success factor). The population in adjoining areas would have to be sufficiently skilled to participate in economic opportunities on offer. The synergistic and coordinated development of four components, namely logistics intensive industries, efficient ports, seamless connectivity and requisite skill-base will lead to unlocking of economic value.

India, where the logistics cost (19% of GDP) is amongst the highest in the world will undergo complete transformation under the Sagarmala Programme, by unlocking the full potential of Indias coastline and waterways.

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Indias crude oil refinery production rises 7% in September 2016
Oct 24,2016

Indias crude oil refinery output increased 7.0% to 18.88 mt in September 2016 over September 2015. The output of public sector refineries improved 6.9% to 9.87 mt, while the output of private refineries also moved up 12.7% to 7.83 mt. However, the refinery output of public-private JV refiners dipped 19.7% to 1.18 mt in September 2016.

Among public refineries, the output of Mangalore Refineries jumped 27.9% to 1.11 mt, while the output of Chennai Petroleum Corporation moved up 27.5% to 0.85 mt, and Bharat Petroleum Corporation 11.6% to 2.00 mt in September 2016 over September 2015. The output of Indian Oil Corporation also inched up 8.3% to 4.60 mt, but that of Hindustan Petroleum Corporation declined 12.7% to 1.23 mt, and Numaligarh Refineries plunged 69.8% to 0.07 mt in September 2016.

Among private refiners, the output of Reliance Petroleum increased 1.7% to 6.13 mt, while that of Essar Oil zoomed 84.5% to 1.70 mt in September 2016 over September 2015.

Among JV refineries, the output of Bharat Oman declined 22.2% to 0.45 mt, while the output of HPCL Mittal also fell 18.1% to 0.73 mt in September 2015.

The cumulative refinery output increased 7.2% to 118.05 mt in April-September 2016. The output of public refineries increased 9.7% to 62.82 mt, while that of private refineries moved up 5.1% to 47.14 mt. The refinery output of JV refineries rose 1.3% to 8.09 mt in April-September 2016. Among public refineries, the output of Chennai Petroleum Corporation improved 14.6%, Indian Oil Corporation 13.2%, Hindustan Petroleum Corporation 7.5%, Numaligarh Refineries 6.7%, Bharat Petroleum Corporation 4.8% and Mangalore Refineries 4.1%.

The overall capacity utilization was higher at 104.3% in September 2016 compared with 102.4% in September 2015, while it was also higher at 105.3% in April-September 2016 compared with 104.7% in April-September 2015.

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Indias crude oil production declines 4.1% in September 2016
Oct 24,2016

Indias crude oil production declined 4.1% to 2.92 million tonnes (mt) in September 2016 over September 2015. Crude oil output of ONGC fell 2.8% to 1.80 mt, while that of private and joint venture (JV) companies dipped 7.8% to 0.85 mt. However, the crude oil production of Oil India rose marginally by 0.1% to 0.26 mt in September 2016. ONGCs offshore output declined 4.7% to 1.31 mt, while onshore production rose 2.5% to 0.49 mt.

Crude oil output fell 3.3% to 18.06 mt in April-September period of the fiscal year ending March 2017 (April-September 2016), snapping marginal 0.4% rise recorded in the corresponding period of last year. Output of ONGC eased 1.9% to 11.03 mt, while that of Oil India declined 2.7% to 1.60 mt and private companies fell 6.2% to 5.43 mt in April-September 2016 over April-September 2015.

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Swachh Bharat Mission(Urban) broadly on course meeting toilet construction target
Oct 24,2016

During the two years of Swachh Bharat Mission, 22,97,389 individual household toilets have so far been constructed in urban areas of the country as against the five year mission target of 66,42,221 such toilets to be built by 2019. With 35% of mission target being met in two years i.e 40% of the mission duration, construction of toilets meant for ending Open Defecation in urban areas is broadly on course.

Gujarat and Andhra Pradesh have met the mission targets three years ahead in September this year with Gujarat fulfilling the target of 4,06,388 toilets and Andhra Pradesh building 1,93,426 toilets in urban areas and have declared them Open Defecation Free in urban areas.

Minister of Urban Development Shri M.Venkaiah Naidu reviewed the progress of the mission in urban areas today.

Other leading performers are kerala having built 62,450 which comes to 68% of the mission target of 90,986, Chattisgarh-1,83,726 (61% of 3,00,000), Madhya Pradesh -2,34,377 (46% of 5,12,389) and Tamil Nadu -2,57,781 (43% of mission target of 6,02,029 toilets).

The States that have met over 30% of mission targets are: Maharashtra -33% having built 2,07,888 toilets out of the mission target of 6,29,819, Uttar Pradesh-31% (2,53,979/8,28,237), Karnataka-31% (1,09,704/3,50,000) and Jharkhand -30% (47,968/ 1,61,713).

Telangana has met 28% of the mission target having built 59,967 of the 2,16,075 toilets, followed by West Bengal-23% (1,20,628/5,15,419), Puducherry -22% (2,135/9,626), Punjab-19% (26,188/1,38,010).

States and Union Territories who have built less than 10% of mission targets are : Manipur (9%), Bihar (7.40%), Uttarakhand (7%), Odisha (4.40%), Mizoram (3.34%) and Arunachal Pradesh (1.60%).

Swachh Bharat Mission was launched on October 2,2014 targeting construction of 1.04 cr individual household toilets in urban areas based on 2011 Census. Subsequently, taking in to consideration the construction of toilets during 2011-14, mission target in this regard has been revised to 66,42,221 toilets based on the assessment of States/UTs.

As per the revised targets 14 States and the UT of Delhi account for 80% of the target. These 15 States/UT have till September this year built 21,64,860 toilets accounting for 94% of the total toilets so far built and 32% of the total mission target. States and UTs lagging behind proportionate targets are expected to catch up as mission progresses.

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Gartner Says Insurance Firms Should Investigate Insurtechs to Complement Their Own Digital Strategies
Oct 24,2016

Insurance sector CIOs need to expand their market insight concerning the innovation and disruption potential of insurance technology startups (insurtechs) to complement their digital insurance strategies, according to Gartner, Inc.

According to Gartner research, 64 percent of the worlds 25 largest insurance companies have already invested directly or indirectly via their venture capital arms in insurtech startups.

Gartner predicts that 80 percent of life and property & casualty (P&C) insurers worldwide will partner with or acquire insurtechs to secure their competitive positions by the end of 2018.

Juergen Weiss, managing vice president at Gartner, said insurtechs can stimulate or accelerate innovation among incumbent industry players and complement existing digital insurance strategies.

Gartner has seen growing interest among insurance business and IT leaders in collaborating with insurtechs or making them part of their overall innovation policies, but the research has also found that most insurance CIOs are not familiar with these companies or their value propositions, said Mr. Weiss. We advise CIOs to identify areas where insurtechs could complement their digital insurance strategies, and evaluate potential collaboration or investments.

Gartner defines insurtechs as technology companies (1) that are in their early stages of operation; (2) that drive specific innovation across the insurance value chain by leveraging new technologies, user interfaces, business processes or business models; and (3) that leverage different forms of funding, including, but not limited to, venture capital.

The number of technology startups in the insurance industry has more than doubled globally during the last three years, according to Gartner analysis of the sector conducted in the second quarter of 2016. Digital customer engagement, mobile insurance management and analytics are the most common technology focus areas of insurtechs.

Sixty percent of insurtechs have been founded within the last three years, and two-thirds of them have their headquarters in the U.S. EMEA is the second-most important region for insurtechs, with 27 percent having their headquarters there, mainly in Germany and the U.K. In Asia, countries such as Singapore and China (mainly Hong Kong and Shanghai) have begun to promote the development of a local insurtech ecosystem.

Digitalization is one of the top priorities for insurance CIOs, according to Gartner surveys. However, the vast majority of insurance CIOs are still struggling to progress their digital strategies.

Gartners research indicates that only 12 percent of insurance business and IT leaders consider their organizations to be digitally progressive, while the majority believe that their organizations are digital beginners or intermediate, at best. Reasons for this include a lack of agility caused by legacy IT systems, flat IT budgets and a lack of the right skills or the delivery models to support innovative business models.

Collaborating with insurtechs, or at least evaluating them, could therefore provide a number of potential benefits for insurers, said Mr. Weiss.

According to Gartner, insurers have six main options to capitalize on the opportunities that insurtechs provide:

1.Partner (for example, Axa partnering with BlaBlaCar for carsharing).

2.Acquire, that is, purchase the intellectual assets and hire all resources of an insurtech.

3.Purchase (like one would buy technology from an incumbent vendor such as SAP).

4.Invest (obtain a minority or majority share, either directly or indirectly, via a VC arm, such as Allianzs investment in Simplesurance).

5.Incubate (for example, let insurtechs compete to get into a startup accelerator; mentor them; and give them a space to work and exchange ideas).

6.Insure the operations or assets of insurtechs.

Insurance CIOs who are planning to partner with insurtechs also need to be aware of the risks.

Not all of them will survive, said Mr. Weiss. Insurance CIOs will need to develop a fail-fast approach and an exit plan that secures intellectual property and critical resources.

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Gartner Says Retailers Must Use Algorithms for Competitive Advantage
Oct 24,2016

In the new digital economy, retailers can best gain competitive advantage through the application of algorithms that reduce costs and grow top-line revenue, according to Gartner, Inc.

Kelsie Marian, principal research analyst at Gartner, said examples of algorithmic retail in action are emerging and yielding results for aggressive retailers.

Retailers are some of the original data hoarders, using years of store-level sales data for demand planning since the mid-1980s, but what we see today is vastly different, said Ms. Marian.

Data is ubiquitous in the new retail environment, and retailers will survive only if quality data is embedded into every decision, minute by minute, across the retail organisation. But retailers cant humanly scale to keep pace with growth of data, so a fundamentally different approach is necessary.

Gartner describes algorithmic retailing as the application of big data through advanced analytics across an increasingly complex and detailed retail structure, to deliver an efficient and flexible, yet unified, customer experience. Algorithms connect big data to results.

Gartner predicts that merchant leaders will be algorithms by 2020, prompting the top 10 retailers to cut up to one-third of headquarters merchandising staff.

According to Gartner, there are four main functions where algorithms can have a big impact in retail.

1) Cost of goods sold

Cost of goods sold is the largest cost of retail operations at 55-60 percent. Since it is driven by the selection, assortment, pricing, promotion and inventory levels of items listed for sale, it has the largest possible benefit from the application of algorithms. Algorithms can both reduce the cost basis and increase top-line revenue.

2) General and administrative

General and administrative is an overhead at 15-18 percent of the cost of retail operations. It typically covers headquarters activities such as finance, legal, HR, advertising and IT, as well as warehousing and distribution. Algorithms used here will significantly improve cost optimization.

3) Labor

Labor represents 13-16 percent of the cost of retail operations, but is rising sharply, and directly impacts the quality of the customers experience. Algorithms can support both cost optimization and customer service.

4) Stores

Stores will remain a major cost of retail operations and an integral part of the retail landscape. They provide a major source of competitive differentiation for multichannel retailers, with store services much of what employees provide to customers. Algorithms can help with pricing, inventory and improving the in-store customer experience.

Retail CIOs and their teams play a pivotal role in helping business leaders understand the benefits and limitations of algorithms, and how algorithms can support their business goals, said Ms. Marian.

Gartner advises retail sector CIOs to:

1) Identify and classify all data sources, and identify data gaps that must be filled.

2) Prepare for an explosion of Internet of Things (IoT) data generated by products, customers and stores.

3) Review examples of how other retailers are successfully using algorithms.

4) Develop a framework for identifying current and future opportunities to improve performance through automation by algorithms.

5) Ensure that smart data discovery technology is bringing big data discovery to the business user at the time of decision. This is a critical step on the path to process automation.

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Smart Manufacturing to improve quality of jobs : Amitabh Kant, CEO, NITI Aayog
Oct 24,2016

n++Smart manufacturing practices will increase productivity and the quality of employment opportunitiesn++ said Amitabh Kant, CEO, NITI Aayog. Kant observed that Indian manufacturing sector has to adopt advanced technologies to survive in a highly competitive environment.

Kant highlighted that n++productivity and efficiency are critical for the growth of Indian industry. Industry needs to produce high quality products at a competitive price to withstand the global competition. n++Manufacturing unit shop floors are now as fashionable and automated as any other industry and consumers are now directly influencing the shop floors. Collecting and processing data coupled with cutting edge technologies will enable shopfloors to respond to the rapidly changing consumer demands, according to him.

He informed that amalgamation of 9 systems - robotics, big data, 3D printing, analytics, additive manufacturing, automation, electronic system, design, IOTs will lead to Smart manufacturing 4.0. Globally, countries are looking at manufacturing sector for driving their GDP, Europe will be investing over 40 billion Euros in the next 5 years in manufacturing industry. He urged industry to focus on quality and productivity as essential pre-requisites for increasing exports.

Kant stressed on the need for MSMEs to be interconnected and technically agile to be globally competitive and support the Indian industry. Productivity, cost, employment, after sales services, logistics and others facets of production are now integrated on real time basis with adoption of smart technology.

To shape the transformation, NITI Aayog has also introduced robotic technologies in the incubation centers / labs in 500 schools to promote smart manufacturing.

Anshu Prakash, Additional Secretary, Department of Heavy Industry emphasized that Smart manufacturing is a dynamic process which will happen over a period of time and Government is willing to provide enabling eco-system. Upgradation of skills and news skill sets are critical for manpower to adopt smart manufacturing.Prakash informed about an umbrella Capital Goods Scheme to be announced soon. The new scheme includes technology development fund and is also incentivizing smart manufacturing.

Sumit Sawhney, Country Chief Executive Officer & MD, Renault Operations in India focused on smart thinking and smart mindset for promoting innovation in manufacturing. He illustrated the small car n++KWIDn++ segment has been made lean and smart with smart thinking and processes. He concluded that n++Think Smart - Think Innovativen++ is key to manufacturing and automation will create more jobs in future.

Dilip Sawhney, Summit Chair & MD, Rockwell Automation India mentioned that the Summit is not just a one-off initiative of CII and is aligned with a broader objective of CII Mission Smart Manufacturing programme which aims at promoting smart manufacturing across the Indian manufacturing industry. CII Mission Smart Manufacturing creates a framework at firm level to embrace smart manufacturing technologies. In addition, as per the study conducted by CII to identify Champion Manufacturing industries which have a potential to drive the double digit growth in manufacturing sector, Technology is identified as one of the key drivers.

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INR550bn OMOs to Keep Liquidity Balanced during 2HFY17
Oct 24,2016

India Ratings and Research (Ind-Ra), according to base case scenario, expects another INR550bn of durable liquidity needs to be infused through open market operation (OMO) purchases in 2HFY17, over and above INR1.05trn in 1HFY17. Ind-Ras base case scenario is built on RBIs stated objective of neutral liquidity, which ensures minimal shortages as well as minimal surpluses. Hence, any preference towards considerable excess in liquidity will be adjusted through durable liquidity creation or OMO purchases. Similarly, surge in Fx flows may not necessitate permanent sterilization in the near-term.

BoP, CIC Surprises or Change in Reserve Bank of India (RBI) Strategy could lead to Higher OMOs: Since INR1trillion of OMOs has already been conducted during 1HFY17, necessity of similar amount of OMO in 2HFY17 will only be limited to certain conditions. Higher than expected INR550bn amount of OMO purchase in 2HFY17 would be contingent upon i) subdued net forex flows, or lower than estimated17.4bn BoP surplus ii) sharp rise in currency in circulation (CIC) against tepid growth in nominal variables iii) RBI continuing to maintain high surplus liquidity in the interbank market against the stated strategy for neutral liquidity.

Healthy BoP Surplus will be Major Contributor to Reserve Money Creation: Ind-Ra, after financing of the current account deficit (CAD), expects the capital inflows to add nearly USD17.4bn (INR1.18trn) to the forex reserve in FY17. These accretions take into account the FCNR (B) redemptions. According to the latest BoP data available, USD7bn had been added to the forex reserves till August 2016.

Rise in CIC to Remain Limited: Growth rate in CIC for the current year is likely to be restricted by multiple factors; such as drive against declaration of unaccounted wealth which could bring back large amount of cash into the system. An increase of 13%yoy RM as against similar growth in FY16 (13% yoy as on 18th March 2016) could reduce large (another INR1trn) requirement for OMO.

RBI to Keep Adequate Interbank Liquidity: Ind-Ras prognosis suggests that the urge for maintaining high surplus in the systemic liquidity will reduce after FCNR (B) redemption is over by November. Further, there may be legitimate reasons to retain the appetite for OMO purchase in the next fiscal ahead of limited room for the incremental rating action. This will support policy makers to maintain an accommodative strategy in sync with the RBIs accommodative stance. Otherwise absence of rate action or OMO purchase may exert undue pressure on yields during FY18, limiting the efficacy of RBIs accommodative monetary policy transmission.

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Moodys: Basel modeling proposals will broadly impact risk-weighted assets for large banks
Oct 24,2016

The Basel Committee on Banking Supervisions (BCBS) recent proposals regarding the use of models in calculating risk-weighted capital ratios among medium to large-sized banks would help make minimum capital requirements more consistent across banks, Moodys Investors Service says in a report.

The report Banks -- Global: Basel Proposals Restricting Models Broadly Impact GSIBs Risk-Weighted Assets, focuses on the impact that the reforms would have on so-called global systemically important banks, both in the US and Europe.

The new rules would largely replace internal modeling with a standardized approach to calculating capital. BCBS has proposed removing models completely as a tool for measuring operational risk, significantly restricting internal model use in a large number of credit risk portfolios and using floors in cases where models are still used.

Greater consistency in reported capital ratios is a positive development, says Meredith Roscoe, a Vice President and Senior Research Analyst at Moodys.

The proposed changes are likely to have the greatest impact on risk-weighted asset calculations for the large US banks and banks in Europe, given the current prevalence of modeled approaches across risk areas for these banks.

These banks are most likely to use advanced (model-based) approaches to calculating capital and are the main lenders to low-default large corporate borrowers and financial counterparties, who are the largest consumers of counterparty, market and operational risk.

If the proposals were to be implemented in their current form, capital requirements could increase for many banks. However, as authorities have said the intention of these changes is not to increase capital requirements overall, but rather to reduce variability in risk-weighted assets for similar exposures across banks, the final rules might include offsets or changes from what has been proposed to date.

Recent comments from European Union officials suggest that the proposals will not be adopted by European authorities unless they are modified, while reports suggest that US and Swiss officials are more supportive of the current proposals. Moodys view is that a breakdown of the international agreement on capital rules would be credit negative as it could lead to further fragmentation of capital standards.

Moodys also highlights that the proposed changes to the calculation of risk weights should be viewed in context of Basel IIIs entire capital framework and the importance of additional capital adequacy metrics outside of the risk-weighted capital ratio, which are equally as binding. This includes the unweighted leverage ratio requirement and annual stress testing in the US, UK and Europe for the largest banks.

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Bank card fraud was waiting to happen, says ASSOCHAM-Mahindra SSG
Oct 24,2016

The credit/debit/ATM card frauds as detected by some of the largest banks were waiting to happen as India has been on the radar of the global cyber criminals who hack into the computer servers using the malware, putting the entire financial structure into a big risk, an ASSOCHAM-Mahindra SSG joint study had forewarned.

Shocked that we are by such large volume of frauds forcing most of the big banks to recall their swiping cards resulting into not only a huge financial losses but also raising a question mark on our cyber security, the ASSOCHAM has been continuously sensitising the government, RBI and the banks against the unfolding cyber risks, the study said.

He said an ASSOCHAM-Mahindra SSG study published recently pointed out that India has become a favourite hunting ground for global hackers and criminals. In fact, according to this study, India was the third biggest target for these hackers after the US and Japan.

A rapid increase in the use of computers and the emergence of the Internet in particularly in the last few decades has led to the evolution of cyberspace. Cyberspace is borderless and anonymous due to which it becomes difficult to actually trace the origin of any kind of cyber attack. The study had further noted that mobile frauds are an area of concern for companies as 35-40% of financial transactions are done via mobile devices and this menace is expected grow to 60-65% by 2017.

Credit and debit card fraud cases top the chart of cybercrimes. There has been a sixfold increase in such cases over the past three years. According to the data, about 42% complaints of online banking related to/credit/debit card fraud followed by Facebook (31%)-related complaints (morphed pictures/cyber stalking/cyber bullying). Other major cyber complaints were cheating through mobile (12%), hacking of e-mail ID (10%), abusive/offensive/obscene calls and SMS (5%), and others.

These attacks have been observed to be originating from the cyberspace of a number of countries including the US, of Europe, Brazil, Turkey, China, Pakistan, Bangladesh, Algeria and the UAE.

Andhra Pradesh, Karnataka and Maharashtra have occupied the top three positions when it comes to cybercrimes registered under the new IT Act in India.

Phishing attacks of online banking accounts or cloning of ATM/debit cards are common occurrences. The increasing use of mobile/smartphones/tablets for online banking/financial transactions has also increased the vulnerabilities to a great extent. The maximum offenders came from the 18-30 age group, the report added.

Internet frauds alone have cost India a whopping 4 billion $(about Rs 24,630 crore) in 2013 as cyber criminals are using more sophisticated means like ransom ware and spear-phishing, the report said.

During the years 2011, 2012, 2013 and 2014, a total number of 21,699, 27,605, 28,481 and 36,554 Indian websites were hacked by various hacker groups spread across worldwide. In addition, during these years, a total number of 13,301, 22,060, 71,780 and 95,189 security incidents, respectively, showing a sharp increasing trend. The total number of security incidents reported to CERT-In has been on the rise.

There is urgent need for having public-private-partnership (PPP) in cyber security for protecting the critical online data and creating awareness amongst the public. Internet has many stakeholders and the government is involved in terms of making laws and the private sectors are involved in creating technologies like hardware, software and so on and this cant be seen in an isolated manner thats why PPP model is important. The fifth domain warfare is real and expanding at a rate which is more concerning, ISIS use cyber space for expanding its base and support is glaring example of this.

Cyberattacks around the world are occurring at a greater frequency and intensity. Operating securely in the cyber environment is among the most urgent issues facing the government, industry and individuals. It is important to take proactive measures rather than reactive methods as building safe environments will always be the best line of defence against rising cybercrime. Safety first through security by design should be the motto. Security by design ensures reduction in overall cost to the business and increases the efficiency of the system by making it robust and secure.

The government and regulators should develop comprehensive cyber security policies and frameworks from the perspective of incentives, tax breaks and technological development. The policies should be such that they encourage private sector participation in public sector research and promote the commercialisation of research and development and intellectual property.

Effective mechanisms should be established to ensure coordination and cooperation between various countries. India should ensure active collaboration with the other countries and global cyber security agencies through international treaties, bilateral agreements and Memorandum of Understandings in order to understand the latest threats and take proactive security measures.

The government, and specifically the regulators, should look at developing sector-specific policies and frameworks tailored to meet the requirements of the particular sector in order to strengthen cyber security in that domain and ensure compliance with the defined security standards.

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Detailed annual plan on spreading awareness about new IPR Policy soon: Controller General of Patents
Oct 24,2016

The Indian Patent Office is soon going to put in place a detailed annual plan in consultation with all stakeholders to spread awareness about the new Intellectual Property Rights (IPR) Policy by conducting workshops, seminars in schools, universities and other such institutions, Controller General of Patents, Designs and Trademarks, Mr O.P. Gupta said at an ASSOCHAM event.

n++As part of awareness program, we as Indian Intellectual Property office are interacting with all possible stakeholders and working out a detailed programme so that we may conduct workshops in schools, colleges, universities, seminars together with industry and academia and specific programs for specific industries like SMEs and certain other specialised fields,n++ said Mr Gupta.

n++The idea is to spread awareness, as more and more people become aware, it serves our purpose,n++ he said.

n++We simultaneously try to promote and encourage people to take up programs on their own and involve larger communities whereby we involve agriculturists, farmers and producers on a larger scale,n++ added Mr Gupta.

Talking about the implementation in terms of enforcement aspect of IPR, he said, n++The IPR Policy does talk about that, those steps are being taken, toolkits are being prepared which will circulated to various police stations and other law enforcement agencies.n++

Highlighting that all commercial courts are also now listening to all IPR related matters, he said, n++With law universities and judiciary we are already conducting training programs in different places they are also part of the outreach programs.n++

Mr Gupta said that the basic idea of IPR Policy is to provide an ecosystem which encourages individuals and corporate entities for risk taking for putting in their efforts, money, labour so that they also derive reasonable benefits out of their own efforts. n++But the underlined larger focus still is that all this has to benefit to the society as a whole and India in particular.n++

n++There is a need to foster a kind of an ecosystem and provide an environment to all whereby awareness spreads not only by way of programs which we conduct but people inculcate this as part of their culture,n++ he added.

He also said that creation/innovation and protection are two different aspects of the IP regime. n++When you talk about creation and innovation, it is more about kind of inculcating a culture, providing protection is in terms of seeking balance between both these aspects.n++

Elaborating on this, he said that the main objective of IPR policy is actually to inculcate generative aspect of it and there is certainly not the main thrust on protection.

n++The idea is that whosoever is seeking IP protection in India, should get it in a reasonable period of time without much problems and that kind of facilitation regime in terms of IP administration and management will be and should be provided through this policy,n++ said Mr Gupta.

He added that it is not that number of filings that need to go up necessarily but whosoever seeks protection should get it in specified timeframe with minimum problems/difficulties is the main objective of the IPR Policy.

In his address at the ASSOCHAM conference, Dr H. Purushotham, chairman and managing director (CMD), National Research Development Corporation (NRDC) said that promotion of IPR is imperative to bring equilibrium between knowledge and wealth creation.

n++It is imperative to introduce IPR as a subject in schools and colleges and make it compulsory to promote its awareness,n++ said Mr Purushotham.

He also said that it is also significant to address the issue of poor patent filing in India to position it as a top innovative nation in the world.

He also suggested the Indian Patent Office to strengthen the existing systems and mechanisms vis-n++-vis IPR rather than bring up new ones to avoid duplication of efforts.

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