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Will take 126 years for India to reach education standards of developed nations: ASSOCHAM Paper
Sep 21,2016

India does have ambitions to reach the level of developed nations in education, but it will take at least six generations or 126 years to scale up to the top standard , if the country continues at its present pace in one of the most vital sectors, an ASSOCHAM Paper has said.

n++Though India has made rapid strides, the yawning gap between the standards of education does not seem to bridge soon as the developed world has not slowed down spending on educationn++, the paper noted.

It said with India spending mere 3.83 per cent of its Gross Domestic Product (GDP) on education, it is not sufficient to catch up. n++It will take six generations or 126 years to catch up with developed countries if we do not change our education system dramaticallyn++.

The US spends 5.22 per cent of its GDP on education, whereas for Germany it is 4.95 per cent and UK 5.72 per cent. n++With the GDP base of these developed counties so high, the absolute money earmarked for education is huge. For instance the size of the US GDP would be something like seven times the size of the Indian GDP and then on top of it, its ratio on education on a higher base would be very significantn++, said ASSOCHAM Secretary General Mr D S Rawat said.

The ASSOCHAM Paper also noted, however, that India has a resource constraint, but then, the country must catch up to reach the levels of spending as recommended by the United Nations, which wants countries to spend at least six per cent of their GDP on education.

If India steps up its resource commitment to education, it can really become a major source of talent to the rest of the world, given the demographic advantage it has. With 315 million students, it has the largest pupil population in the world, besides being the youngest country.

Shortages of quality teachers are among the major challenges for the education sector, the paper said. At present, the shortage of teachers has been measured at 1.4 million. Besides 20 per cent of the teachers do not measure up to the standards of the National Council for Teachers Education (NCTE).

Also, due to absence of focus on effective skill development, India is one of the least skilled countries. n++Majority of the college graduates and post graduates have employability challengesn++. This is ironical because India has a surplus work force but it is not skilled enough.

n++In our country only 4.7 per cent of the work force has any formal training, whereas this figure is 80 per cent for Japan, 95 per cent for South Korea, 75 per cent for Germany, 68 per cent for UK and 52 per cent for the USn++.

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Silent Revolution on within govt. for path-breaking reforms, GST likely to be implemented as schedule: Cabinet Secretary
Sep 21,2016

The Cabinet Secretary Mr. Pradeep Kumar Sinha re-assured India and its trade and business including international community, emphasizing that the goods and services tax (GST) and other path breaking reforms that the government has committed to its people will be implemented as promised since it is working overtime to accomplish the targets.

Addressing a Chief Secretaries Conclave- Accelerate Ease of Doing Business to the Next Orbit organized by the PHD Chamber of Commerce and Industry here today, Mr. Sinha also stressed n++a silent revolution is underway and despite teething problems, India would move on to accomplish the objectives and targets set in by its government in all sectors of economic activities with increased participations of all stakeholders to further improve the spirit of governancen++.

n++The entire infrastructure sector, be it roads, civil aviation, energy, conventional and non-convention, power and petroleum including railways and host of other areas in infrastructure have improved their performance as per targets and the civil aviation sector has begun to grow at the rate of 20%, pausing a serious challenge to railways in terms of its trafficn++, pointed out Mr. Sinha.

Referring to the GST implementation roadmap, the Cabinet Secretary exuded confidence that since government has been working overtime to make sure that the path breaking legislation is implemented as per intended deadline.

The stuck-up projects have already been facilitated for implementation in all segments of Indian economy and whatever remaining needed to be done would be completed as the government has turned out much more serious for its projects implementation in comparison with past practices, concluded Mr. Sinha.

President, PHD Chamber, Dr. Mahesh Gupta demanded for enactment of laws that would lead to de-criminalization of business activities as also sought that practices be put in place so that entry into business and exit from it becomes hassel free.

Secretary General, PHD Chamber, Mr. Saurabh Sanyal complimented the government of the day on moving in right direction to smoothen ease of doing business as it would empower the entrepreneurs and make Indian economy reach double digit growth trajectory.

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Amritsar tops the list of 27 new smart cities
Sep 21,2016

The Golden Temple city of Amritsar topped the list of 27 new smart cities announced by the Minister of Urban Development Shri M.Venkaiah Naidu here today. Eight other cities of pilgrim and tourism importance that made  to the third list of smart cities are ; Ujjain, Tirupati, Agra, Nashik, Madurai, Thanjavur, Ajmer and Varanasi. With this the number of cities selected under Smart City Mission for financing implementation of smart city plans has gone up to 60.

Announcing the cities that were selected in a competition among 63 cities, Shri Naidu said The willingness and enthusiasm among cities to participate in more than one round of competition is a clear evidence of the urban renaissance set in motion. Competition bases selection has made the cities rediscover themselves as they are undertaking a thorough assessment of gaps in the present levels of infrastructure and service delivery and come out with comprehensive, credible and actionable plans for area based development and technology based Pan-city solutions

The Minister informed that the new 27 smart cities have proposed an investment of Rs.66,883 cr under smart city plans including Rs.42,524 cr under Area Based Development and another Rs.11,379 cr for technology based Pan-city solutions that benefits all the citizens of respective cities. With this, the total investment proposed by the 60 cities selected so far has gone up to Rs.1,44,742 cr, he said.

The 27 cities selected in the latest round of Smart City Challenge competition in order of the marks scored by them are:









Madhya Pradesh



Andhra Pradesh









Tamil Nadu









Uttar Pradesh












Tamil Nadu









Tamil Nadu












Tamil Nadu



















The 27 smart cities announced today are from 12 States including 5 from Maharashtra, 4 each from Tamil Nadu and Karnataka, 3 from Uttar Pradesh and 2 each from Punjab and Rajasthan. Nagaland and Sikkim have made it to the smart city list for the first time.

With todays announcement, implementation of smart city plans is now spread over 27 States and UTs, said Shri Venkaiah Naidu. 9 States/UTs still to enter implementation phase are; Uttarakhand, J & K, Meghalaya, Mizoram, Nagaland, Arunachal Pradesh, Puducherry, Lakshadweep, Daman & Diu and Dadra, Nagar& Haveli.

Stating that Smart City Mission is running ahead of schedule, Shri Venkaiah Naidu informed that the next round of competition to select the remaining 40 cities would begin in January next year.

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Rapid Growth key for Indias Economic Transformation, says CEO NITI Aayog
Sep 21,2016

NITI Aayog emphasized that India needs to inch towards rapid growth for its economic transformation and that States and UTs need to be partner with it for fulfilling the desired objectives, says its CEO, Mr. Amitabh Kant

In order to grow at the rapid rate of growth, the States and UTs should have a growth rate of 12 per cent per annum, only then the intended growth level will be realized, he added.

In his Key Note Session at Chief Secretaries Conclave, organized by PHD Chamber of Commerce and Industry here today, the CEO also said that the NITI Aayog would support all those States that strive for higher growth rate with pro-active policies so that industry is activated to committing investments in them as growth and investments are key to economic transformation as well as job creation.

n++A minimum of 12 States of Indian union will have to grow at 12 per cent rate to avail of NITI Aayogs handholding and support. With this approach, India would move on an overall growth rate of 9-10 per cent and even beyondn++, said Mr. Kant.

He lamented that education and other such activities that should have been reformed objectively in the last 68 years, could have led to betterment of Indian economy as a whole, however, with new focus on such activities, India might regain a new strength to recover to attain the desired objective.

Mr. Kant also made a prognosis that with jump in reformative spirits in the list of ease of doing business, a minimum of two per cent growth rate could be added to existing rate of growth and that is why there is clamor within all states and UTs for increasing ease of doing business, India would be attractive hub for economic activities through a spirit of partnership between domestic and global industries.

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EESL Raises Domestic Bonds to Fund Energy Efficiency Projects in India
Sep 21,2016

Energy Efficiency Services (EESL) has made its maiden issuance of bonds in the domestic market to fund energy efficiency projects in India. Domestic bonds worth Rs. 500 crore were issued to investors on private placement basis at a coupon rate of 8.07% per annum. These bonds have been rated AA by ICRA and CARE. The maturity of the bonds range from 3.5 to 7 years on STRPP basis. Meanwhile, Trust Investment Advisors is the sole arranger of the issue.

The bonds are proposed to be listed in WDM segment of the Bombay Stock Exchange. The issuance has been fully subscribed showcasing the faith investors have in the energy efficiency business of the company.

The access to Indian bond markets will be a key milestone for EESL to channelize more investments in the energy efficiency market. For FY 2016-17, the capex requirement of EESL is Rs.3500 crore. Aiding this requirement, these corporate bonds will be the first of many tranches.

EESL is also planning to introduce Green Masala Bonds worth USD 100mn (approx. Rs.700 crore) in November. The company has also tied up funding from multi-lateral agencies like KFW, AFD and ADB for funding its energy efficient projects.

Saurabh Kumar, Managing Director, EESL said, n++Our requirements from the markets is quite high; however, we are confident of a great response from investors looking at our unique model.n++

Energy Efficiency Services (EESL), a JV of NTPC, Power Grid Corporation of India (PGCIL), Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), under the administration of Ministry of Power, Government of India, is working towards mainstreaming energy efficiency and is responsible for the worlds largest energy efficiency portfolio (worth 13 BLN USD over a period of 4 years).

EESL aims to unlock the energy efficiency (EE) and demand side management (DSM) market valued at Rs. 1.5 Lakh crore, and implement large-scale EE projects. It seeks to create market access, particularly in the public facilities (municipalities, buildings, agriculture, industry etc.), implement innovative business models, handhold private sector Energy Service Companies (ESCOs) in an effort to ensure replication.

For the year ended March 31, 2016, the company reported total revenue of Rs.715.65 crore and profit before tax (PBT) of Rs 48.12 crore compared to total revenue of Rs.71.10 crore and a PBT ofRs.13.57 crore in the previous year.

EESL has implemented energy efficiency programs in domestic and street lighting, buildings, agriculture, etc., at a scale, which no organization has been able to achieve. The growth of the company during FY 2015-16 has been 10 times in terms of turnover as compared to FY 2014-15. The growth is built on careful design of projects in consultation with stakeholders, robust business models, structured strategy of market aggregation, transparency in operations, addressing barriers for different programs and a professional team of 450+ dedicated officers. With strong linkages to national policies such as NMEEE, UDAY, 24X7 Power for All, EESL seeks to create market access for energy efficiency, particularly for domestic consumers and public facilities like municipalities, buildings, agriculture, industry, etc.

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IIMs to participate in developing 20 world class institutes in the country
Sep 21,2016

IIMs shall be forerunners in developing world class education system in the country. This was stressed by the Union Minister of Human Resource Development Shri Prakash Javadkar during an interaction with the Press after the meeting with Chairpersons and Directors of IIMs in Shillong today. He said that few important decisions have been taken during the meeting to cater to the increasing demands of quality education in the country.

Firstly, IIMs will submit plans for expansion of their intake capacity, so that more students get opportunity to enroll themselves in the best institutes. Directors of IIMs pondered upon the possibility of the extent of increasing the intake capacity in their respective institutes and assured of submitting the proposals at the earliest.

The Union HRD Minister also said that possibility of expansion of Doctoral programmes was discussed. The Union Minister expressed that creating more quality Ph.D programmes will address the issue of shortage of faculties in institutes. And for creating more PhDs, the Minister said that, better avenues of fellowship will be offered to willing candidates. The Minister also said that in line with the IIT Council, where it has been decided to award PMs scholarship for Ph.D programme, government approval will be sought for PMs scholarship for best of PhD scholars in IIMs. Final decision in this regard will be taken with Cabinet approval, the Minister said.

Also, it was decided that IIMs will participate in a new initiative of government to make 20 world class universities/institutes. Of these 20 world class institutes that the government wishes to build, 10 institutes will be in government sector and 10 in private sector. IIMs will actively participate in creating contents for SWAYAM which is an Information Technology platform hosting Open Online Courses and will provide high quality education on various subjects from 9 to Under Graduate and Post Graduate students -- covering all disciplines. SWAYAM is a free course which can be availed online and shall be a complete channel of new Open Learning system comprising of lectures, reading materials, tutorials, mid exams, final exams and certification.

While replying to one of the query of the reporters regarding reservation in education policy, the Minister reiterated that as far as reservations are concerned, it is the constitution which provides for it and the government has no plans to make changes in reservations.

Earlier in the morning the Minister interacted with the students of IIMs. Remembering the great teacher Late A.P.J Abdul Kalam, the minister said that there is a need to inculcate the willingness for adopting teaching profession among students as the country requires 10 million good teachers to improve the quality of education from primary to higher education; and from higher education to research and innovation. While reiterating the fact that India is the youngest nation with the youngest population, he said that unless there are good passionate teachers to educate these young minds they would not turn into be dividends. He ended his interaction with an appeal to the students to ponder upon the need for research and innovation for developing good quality education.

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HUDCO Pays Dividend of Rs. 120 crore
Sep 21,2016

Dr. M Ravi Kanth Chairman & Managing Director, HUDCO presented the dividend cheques for the financial year 2015-16 to Shri M Venkaiah Naidu, Honble Minister for Urban Development, Housing & Urban Poverty Alleviation and Information & Broadcasting.

HUDCO has declared a total dividend of Rs. 120.37 crore (inclusive of dividend tax of Rs. 20.36 crore) for the financial year 2015-16 to the Government of India. Out of the total dividend paid, Rs. 69.20 crore to the Ministry of Housing & Urban Poverty Alleviation, Rs. 10.08 crore to the Ministry of Urban Development and Rs. 20.73 crore to the Ministry of Rural Development, Government of India.

In the financial year 2015-16, HUDCO registered highest ever profit after tax of Rs.783.79 crore.

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Under 5 Child Mortality Rate falls significantly by 4 points during 2014
Sep 20,2016

Focussed, committed and targeted interventions of the Government have borne positive fruits in 2014. The Under-5 Child Mortality has fallen by a significant four points during 2013-14. This was stated by the Union Minister of Health and Family Welfare, Shri J P Nadda.

Shri Nadda further mentioned that the recent RGI data released for the Sample Registration Survey (SRS) for the year 2014 indicates 8.16 percent decline in under-five mortality (during 2013-2014) as compared to 5.76 percent decline during 2012-2013. The U5MR in 2014 is 45 compared to U5MR in 2013, which stood at 49 indicating a 4 point decline. While the decline between 2012-13 was by three points ( it was 52 in 2012 and 49 in 2013). This implies that about 1.26 lakh additional under-five deaths have been averted in 2014. The Union Health Minister stated considering the significant progress in 2014, India is set to achieve MDG4 target of under-five mortality of 42 per 1000 live births in 2015.

Significant point decline (4 points and more) in the U5MR has been recorded in 15 states. These are: Assam (7), U.P (7), Rajasthan (6), Chattisgarh (4), Delhi (5), Gujarat (4), Haryana(5), Odisha (6), Himachal Pradesh (5), Jammu & Kashmir (5), Jharkhand (4), Karnataka (4), Madhya Pradesh (4), Punjab (4), West Bengal (5). 16 out of 20 states have shown a decline of more than and equal to 3 points.

Moreover, the rural urban differential in under-five mortality is reduced to 23 points in comparison to 26 points in 2013 indicating good progress in rural areas.

The success has been possible due to dedicated efforts during the neonatal period through establishment of special new-born care units (SNCU), systematic home visits by ASHA workers to all new-borns for improving breastfeeding practices, improvement in quality institutional delivery.

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Govt announces list of new 27 smart cities
Sep 20,2016

The Union Minister of Urban Development M. Venkaiah Naidu announced the list of 27 new smart cities. With this the number of cities selected under Smart City Mission for financing implementation of smart city plans has gone up to 60.

The Minister informed that the new 27 smart cities have proposed an investment of Rs 66883 crore under smart city plans including Rs 42524 crore under Area Based Development and another Rs 11379 crore for technology based Pan-city solutions that benefits all the citizens of respective cities. With this, the total investment proposed by the 60 cities selected so far has gone up to Rs 144742 crore.

The 27 cities selected in the latest round of Smart City Challenge competition in order of the marks scored by them are:            

S.NoCityState1AmritsarPunjab2Kalyan-DombiviliMaharashtra3UjjainMadhya Pradesh4TirupatiAndhra Pradesh5NagpurMaharashtra6ManagaluruKarnataka7VelloreTamil Nadu8ThaneMaharashtra9GwaliorMP10Agra Uttar Pradesh11NashikMaharashtra12RourkelaOdisha13KanpurUP14MaduraiTamil Nadu15TumakuruKarnataka16Kota Rajasthan17ThanjavurTamil Nadu18NamchiSikkim19JalandharPunjab20ShivamoggaKarnataka21SalemTamil Nadu22AjmerRajasthan23VaranasiUP24KohimaNagaland25Hubbali-DharwadKarnataka26AurangabadMaharashtra27VadodaraGujarat

 The 27 smart cities announced are from 12 States including 5 from Maharashtra, 4 each from Tamil Nadu and Karnataka, 3 from Uttar Pradesh and 2 each from Punjab and Rajasthan. Nagaland and Sikkim have made it to the smart city list for the first time.

The implementation of smart city plans is now spread over 27 States and UTs. Nine States/UTs still to enter implementation phase are; Uttarakhand, J & K, Meghalaya, Mizoram, Nagaland, Arunachal Pradesh, Puducherry, Lakshadweep, Daman & Diu and Dadra, Nagar & Haveli.

Stating that Smart City Mission is running ahead of schedule, M Venkaiah Naidu informed that the next round of competition to select the remaining 40 cities would begin in January next year.

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User friendly Earthquake Hazard Zoning Maps with Tehsil level details released
Sep 20,2016

To enable earthquake resistant construction, the National Disaster Management Authority (NDMA) and Building Materials Technology Promotion Council (BMPTC) have come out with easy to use Earthquake Hazard Zoning Maps at the Country, State and District level incorporating Tehsil level features. These maps were released here today by the Minister of Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu.

The colour coded maps easily convey location in five different Zones of earthquake intensity which helps in planning for disaster resistant construction with necessary technical assistance. BMPTC of the Ministry of HUPA has prepared these maps at the behest of NDMA.

Appreciating the joint effort of NDMA and BMPTC, Shri Naidu urged both the agencies to ensure digitization of these maps at the earliest so that they could be used by the public. He also suggested evolving Mobile App based on these maps. He said that the maps would be of significant help to architects, engineers, land use planners, insurance agencies and those involved in disaster mitigation and emergency planning and management.

Shri Sailesh Agarwal, Executive Director of BMPTC said on the occasion that out of the 304 million households in the country, about 95% are vulnerable to earthquakes in different degree.

BMPTC prepared the maps using the data available with the Survey of India, Geological Survey of India, Meteorological Department and Census of India.

The additional features of these maps include housing and population data, railway lines, expressways and highways, rivers, waterbodies, geological fault lines etc.

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437 Pradhan Mantri Jan Aushadhi Kendras (PMJAY) operational in the country
Sep 20,2016

One of the major objectives of Government of India is to ensure availability of quality medicines at affordable prices for all, especially the poor and the disadvantaged. To achieve the aforesaid objective, the Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers has been taking several regulatory and fiscal measures from time to time.

A countrywide campaign, for ensuring availability of generic medicines at affordable prices for all, under the project title n++Pradhan Mantri Jan Aushadhi Yojana (PMJAY)n++ was initiated by the Department of Pharmaceuticals in association with Central Pharma Public Sector Undertakings. It envisages key initiative of opening of dedicated outlets Pradhan Mantri Jan Aushadhi Kendras (PMJAK) where high quality generic medicines are sold at low prices. Bureau of Pharma PSUs of India (BPPI) is implementing the scheme.

As on 20 September 2016, 437 Pradhan Mantri Jan Aushadhi Kendras spread over 26 States/UTs are operational across the country. The Government is committed to open 3000 PMJAK by March 2017 across India. Agreements have been signed with many national NGOs/Trusts/Societies like CSC, PCI, CNRI, Shree Tapovan vikas Trust, Indian Red Cross Society, Lions Club, CISSIL, CMAI, IMA, Vignan Bharathi, Bharat Sevak Samaj etc. for setting up of Pradhan Mantri Jan Aushadhi Kendras in different States. State-wise list of PMJAKs is given in Annexure.

Discussions are in progress with State Governments of Andhra Pradesh, Chhattisgarh, Punjab, Haryana, Kerala, Maharashtra, Arunachal Pradesh and Assam for implementation of the PMJAY by opening of Pradhan Mantri Jan Aushadhi Kendras in Govt. Hospitals.

At present, Central Warehouse (CWH) of BPPI has around 416 medicines and 122 surgical & consumables for sale. BPPI is in process to augment the basket of products. BPPI has established a central warehouse at IDPL Complex, Gurgaon to store adequate stock of medicines. Management of CWH has been entrusted to a professional agency selected and appointed through an open tendering process.3 C&F agents (Punjab, Odisha & Jharkhand) and 36 Distributors have been appointed in different States to strengthen our supply chain.

For quality assurance purposes, each batch of the procured medicines is sent to NABL accredited Laboratories for analysis to ensure the quality as per prescribed pharmacopeial standards prior to their supply to Pradhan Mantri Jan Aushadhi Kendras (PMJAK). All products are stored as per prescribed storage conditions of drugs and cosmetics rules 1945. Walk in cooler has been installed at Central Ware House for proper storage of the thermo degradable products like vaccines, sera, insulin etc. from 2 to 8 degrees centigrade.

Following incentives are provided to open PMJAK:

When free space provided by State Govt./MCD/PSU etc.

An amount of Rs 2.5 lakhs to be given to NGOs / agency running JAS in government hospital premises:

n++ Rs 1 Lakh reimbursement of furniture and fixtures

n++ Rs 1 Lakh by way of free medicines in the beginning

n++ 0.5 Lakh as reimbursement for computer and other miscellaneous items

For NGO/Society/Trust/Individual Entrepreneurs/Pharmacist/Doctor etc. other than Govt. Hospital Premises

PMJAK run by private entrepreneurs / pharmacists / NGOs / charitable institutions that are linked through internet are also entitled for sales incentive of 15% of monthly sales subject to ceiling of Rs 10000/- per month up to Rs 2.50 lakhs. In North east states the incentive is 15% and subject to monthly ceiling of Rs. 15000 and total limit of Rs 2.50 lakhs.

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Over 3,273 MT Moong procured since arrival of new crop benefiting 330 farmers
Sep 20,2016

Since the start of arrival of new crop in the market, the Government agencies have procured 3273.16 MT Moong as on Sept 19, 2016 benefiting 330 farmers. The Government agencies-FCI, NAFED and SFAC have set up about 200 centres to procure Moong direct from farmers at Minimum Support Price (MSP) i.e Rs. 4800 and bonus Rs. 425 during kharif 2016-17 season.

Procurement was started in the second week of current month in Karnataka, Maharashtra, Madhya Parades, Andhra Pradesh and Telangana. The Agencies have been directed to publicize their procurement activities among farmers through various modes in local languages in pulses producing States so that farmers can get the benefit of MSP.

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Moodys: Auto sector faces rising credit risks due to carbon transition
Sep 20,2016

Moodys Investors Service says that the automotive manufacturing sector globally faces a rapidly evolving environment and rising credit risk as companies need to make material changes to more effectively reduce the sectors carbon footprint and respond to expected growth in the demand for alternative fuel vehicles (AFVs).

Given that the auto industry is one of the most significant emitters of greenhouse gases, there is a clear need for the industry to improve emissions-reducing technologies and adapt to the broadening emergence of AFVs, says Brian Cahill, a Moodys Managing Director who is a lead representative for Moodys on environmental, social and governance (ESG) topics.

In its analysis, Moodys uses a baseline emissions scenario consistent with the nationally determined contributions (NDCs) established as part of the Paris Agreement signed by 180 countries as of 7 September 2016.

Although the NDC scenario is forecast to be insufficient to limit global warming to less than 2 degrees Celsius that was the commitment under the agreement, it represents a plausible central scenario, as it tracks the current policy commitments of national governments, says Cahill.

While we use the NDC scenario as our baseline, our analysis also qualitatively considers a wider range of potential outcomes, depending upon either more or less rapid carbon transition, adds Cahill.

We believe that major auto manufacturers face material risks, which are transmitted through four channels: [1] rising policy pressure, with stricter emissions-reducing regulatory targets a likely outcome; [2] increasing pressure on margins and cash flows; [3] changing consumer preferences; and [4] disruptive technological shocks, adds Yanase.

Policy risk is substantial as the transport sector is a major carbon dioxide emitter. In this context, the sector needs to improve emissions-reducing technologies and adapt to the global emergence of AFVs.

Moodys believes that regulators increased focus on emissions compliance will accelerate the reduction of emissions. Along with the advanced economies, many emerging economies have also introduced regulations that will likely affect the strategies of automotive manufacturers for AFVs.

Financial risks are increasing as the manufacturers R&D and capital spending may need to increase against the backdrop of the global push to reduce emissions and in view of the likely emergence of new competitors. Financially strong companies are best positioned to manage the added drain on their resources, but increased spending will likely further pressure the sectors already low margins.

Changing consumer preferences -- such as demand for AFVs -- is likely to become an important sales driver. We expect demand to grow amid technological improvements, incentives created under government policies and growing concerns over climate change. Automotive manufacturers with a broad range of AFV models and better consumer reputations for reducing emissions will be best positioned to meet this demand.

Finally, Moodys considers that disruptive technological shocks are possible. For example, the difficulty of predicting the degree and speed of AFV take-up is a significant risk for auto manufacturers because producing such vehicles will require changes to the manufacturing process and heightened coordination with auto-parts suppliers. Auto manufacturers without a well-developed technology strategy and ability to rapidly retool, or those with long product life cycles, will fare the worst as the need for manufacturing flexibility and speed-to-market rises.

In this situation, Moodys has developed a heat map to help assess auto manufacturers relative exposure and positioning to carbon transition risks, and which will assist in our qualitative consideration of the implications for their credit ratings. We will also have more intensive discussions about these issues with the manufacturers to better understand their ability to deal with them.

In summary, Moodys is increasing its focus on the risks related to climate change for auto manufacturers globally. While we do not anticipate any immediate rating changes, we are monitoring rising risks in this sector for possible future implications. We have developed a carbon transition risk heat map as an informational tool to better organize and more consistently communicate our assessment of companies positioning to manage these risks, and our evolving view of these risks for the sector and individual companies will be considered in our scoring of qualitative factors in our global automotive industry rating methodology scorecard, adds Yanase.

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Indias step-wise reforms set in motion, but weak investment and banking risk may act as speedbreakers
Sep 20,2016

Moodys Investors Service says that the credit implications of Indias (Baa3 positive) reforms will materialise in the medium term, fostering a more stable macroeconomic environment conducive to fiscal consolidation. In the nearer term, challenging budget targets could lead to significant spending cuts late in the fiscal year, especially since in the first four months of the fiscal year, 74% of the whole years budget target has already been reached.

Moreover, structural hurdles will continue to constrain private sector investment and growth. The banking sector will continue to pose contingent liability risks to the government over the near to medium term.

From ICRAs perspective, we expect Indias growth-inflation dynamics to display mixed trends during the fiscal year ending 31 March 2017 (FY2017), says Nayar.

Specifically, growth of gross value added (GVA) at basic prices is set to improve to 7.7% from 7.2% in FY2016 on the back of domestic consumption demand, amid a hardening of CPI inflation to an average of 5.1% from 4.9% over the same period, adds Nayar.

In Moodys view, over time, the multi-pronged but step-wise approach to reform will contribute to stable robust growth, moderate inflation and narrower budget deficits. In particular, the cementing of the monetary policy framework with the objective of maintaining inflation at moderate levels is credit positive. Moodys expects continuity in monetary policy says Diron.

Meanwhile, a few fiscal measures entail some, although limited, immediate savings for the government, including through subsidy reform and more moderate increases in Minimum Support Prices (MSP) than in the past, adds Diron. The implementation of the goods and sales tax (GST) n++ which Moodys assumes will become effective in 2017 n++ will enhance revenue collection for the government over time, through better tax compliance and higher profits, as businesses save on tax administration costs.

Moreover, Moodys points out that some measures, if effectively implemented, will bolster Indias growth potential, including an easing of restrictions on Foreign Direct Investment (FDI) that could foster productivity growth in some sectors; the bankruptcy law, which, if credible, would enhance investor confidence; improved access to bank accounts; and measures aimed at easing business starts.

However, these reforms will ease rather than remove some of the hurdles to robust and sustained investment, and therefore growth in India. In the nearer term, private investment will remain weak as corporates in investment-intensive sectors are burdened by elevated debt levels. In addition, the economy will remain vulnerable to fluctuations in monsoon rains, because of the only partial irrigation of crops and gradual progress in food storage and transport infrastructure. In general, infrastructure gaps will continue to constrain investment and the rise in FDI will not make up for muted domestic investment.

With the sequential dip in growth of GVA at basic prices and GDP in Q1 FY2017 to 7.1% and 7.3%, respectively n++ results which were in line with ICRAs expectations n++ ICRA maintains its forecast of a pick-up in economic growth in FY2017, with GVA growth of 7.7% and GDP expansion of 7.9%, compared to 7.2% and 7.6% in FY2016.

The staggered implementation of pay revisions by the central government and a number of state governments, as well as the improved outlook for the rural economy post-monsoon, portend that consumption will continue to drive economic growth in FY2017.

However, fiscal constraints will limit the space available for direct infrastructure investment by the central government in FY2017. In addition, the mixed global growth outlook will prevent merchandise exports from emerging as a major growth driver in the near term.

In terms of the monetary policy framework, the Government of India has notified a CPI inflation target of 4%, within a tolerance band of 2%-6% until March 2021. Such a scenario would help to anchor inflationary expectations. In addition, a favourable base effect as well as improved crop sowing dynamics will ensure that CPI inflation remains within this tolerance band in the near term.

However, higher global food prices and the anticipated improvement in domestic demand n++ after the implementation of revised scales for the Central Government employees and pensioners n++ pose modest risks to the inflation trajectory.

Without taking into account the impact of the eventual increase in allowances n++ based on the recommendations of the Seventh Central Pay Commission, because the timing of the implementation is unclear n++ ICRA expects that CPI inflation will record a mild hardening to about 5.1% in FY2017 from 4.9% in FY2016.

Moodys points out that banking sector risk will also remain a constraint on Indias sovereign ratings. While bad asset recognition is a first step, the measure does not strengthen the resilience of banks, and therefore does not reduce the contingent liability risks for the sovereign. Moodys estimates that the fiscal costs of equity injections in public sector banks are manageable, although they are larger than currently budgeted and will add to the governments challenge in meeting its fiscal targets.

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ADB Approves Funds to Build Indias First Coastal Industrial Corridor
Sep 20,2016

The Asian Development Bank (ADB) today approved $631 million in loans and grants to develop the first key 800-kilometer section of a planned 2,500-kilometer-long East Coast Economic Corridor that will spur development on Indias eastern coast and create seamless trade links with other parts of South and Southeast Asia.

The Visakhapatnam-Chennai Industrial Corridor section of the East Coast Economic Corridor, connecting four economic hubs and nine industrial clusters, will mark the first industrial corridor developed along Indias coast. The East Coast Economic Corridor will ultimately extend from Kolkata in West Bengal in the northeast of India to Tuticorin in Tamil Nadu near the southern-most point of the country.

n++By combining state-of-the-art industrial clusters, efficient transport, and reliable water and power supplies with a skilled workforce and good business policies, we expect the Visakhapatnam-Chennai industrial corridor to become a favored investment destination,n++ said Manoj Sharma, Principal Urban Development Specialist, in ADBs South Asia Department. n++We estimate that by 2025, annual industrial output along the corridor will increase fourfold to $64 billion from about $16 billion in 2015 if investment opportunities are maximized over the coming 10 years.n++

The Indian government is keen to encourage manufacturing, including through its n++Make in Indian++ initiative, to maintain strong economic growth over the longer term and to create productive, well-paying jobs for a labor force that is growing by around 12 million people per year. Currently, manufacturing provides around 15% of Indias gross domestic product (GDP) and around 12% in Andhra Pradesh where the new corridor will be developed. Indias National Manufacturing Policy is targeting manufacturing contributing at least 25% of GDP by 2022, much the same as in the Peoples Republic of China, Malaysia, and Viet Nam now.

ADBs loans and grants comprise a $500 million two-tranche facility to build key infrastructure and a $125 million two-tranche loan to help with industrial policies and business promotion.

There will also be a $5 million grant from the multi-donor Urban Climate Change Resilience Trust Fund that is managed by ADB to build climate change resilient infrastructure and a $1 million technical assistance to help the Andhra Pradesh local government manage the corridor. The Indian government will provide extra funding of $215 million to the $846 million project.

The new infrastructure will be built in the four main centers along the corridor - Visakhapatnam, Kakinada, Amaravati, and Yerpedu-Srikalahasti - as well as in nearby industrial areas. It will include 138 kilometers of state highways and roads, effluent and water treatment plants, 488 kilometers of drinking water pipes, 47 kilometers of storm drains, 10 power substations, and 281 kilometers of power transmission and distribution lines.

The program will also focus on increasing womens participation in the industrial workforce. Skills training for 25,000 male and female workers, entrepreneurs, and students along with an investor promotion plan is expected to help develop businesses along the corridor.

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