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Chola MS General Insurance Raises INR 100cr of Tier 2 Capital to Fuel Growth in Fiscal 2017-18
May 31,2017

Cholamandalam MS General Insurance Company Limited has announced the successful private placement of 1,000 Unsecured, Subordinated, Fully Paid-up, Listed, Redeemable, Non-Convertible Debentures having face value of Rs. 10,00,000 each (the NCDs), at par, aggregating to Rs. 100 crores. The coupon rate is 8.75% per annum and a maturity period of 10 years with a call option after 5 years.

Mr. S S Gopalarathnam, MD & CEO, Chola MS General Insurance said, We have augmented our capital base by issuing subordinated debt, post the recent measures announced by the Insurance Regulatory and Development Authority of India (IRDAI), allowing alternative forms of capital. The funds raised through this issue would be used to fuel and facilitate business growth by further strengthening the Companys solvency. During Fiscal 2017-18, Chola MS is poised to grow its Gross Written Premium (GWP) to INR 4,500 cr - a growth of 40% over the last fiscal.

The NCDs have been assigned a credit rating AA+ (Outlook: Stable) by rating agencies CRISIL and ICRA.

The NCDs will be listed in National Stock Exchange of India Limited.

The issuance of these NCDs are in accordance with the provisions of inter alia the Insurance Regulatory and Development Authority of India (Other Forms of Capital) Regulations, 2015, as amended from time to time, which were notified in November 2015 whereby Indian insurers were allowed to raise additional capital through subordinated debt or preference shares

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Moodys downgrades RCOM to Caa1; ratings on review for further downgrade
May 31,2017

Moodys Investors Service has downgraded Reliance Communications (RCOM) corporate family rating and senior secured bond rating to Caa1 from B2.

At the same time, the ratings are under review for further downgrade.

RATINGS RATIONALE

The downgrade reflects RCOMs weak operating performance, high leverage and fragile liquidity position. The companys reported EBITDA has fallen 29% year-over-year, evidencing its weak market position and contracting subscriber base, says Annalisa DiChiara, a Moodys Vice President and Senior Credit Officer.

On 27 May, RCOM reported an 11% YoY decline in revenues and a 29% contraction of EBITDA to INR53.9 billion ($830 million) for full year ending 31 March 2017 from INR76.3 billion ($1.2 billion) a year ago, while its EBITDA margin dropped to 27.0% from 34.2% over the same period. RCOMs weak operating results reflect the intense state of competition, driven in turn by the free services offered by Reliance Infocomm Limited (RJio) from mid-September 2016 through 1 April 2017.

RCOMs liquidity position is fragile. RCOM has around INR 230 billion short-term debt and current long term debt maturities through 31 March 2018. In addition, the company disclosed in its financial statements that it is still awaiting formal confirmation from lenders for waivers of certain loan covenants so the loan amount continues to be classified as a non-current liability. We believe failure to obtain could exacerbate near-term liquidity pressures, adds DiChiara.

Historically, the company has relied on short-term debt and covenant waivers from its banking relationships.

Should the waivers not be received, this development could have significant implications for the holders of RCOMs $300 million bond, as there are cross-payments and cross-defaults for any acceleration, in each case by the issuer or any restricted subsidiary, with respect to debt in aggregate of $10 million.

Separately, the company announced that it is current on interest payments as related to its $300 million bond.

Meanwhile, as of 31 March 2017, RCOM reported cash and cash equivalents of INR10.2 billion. Together with Moodys expectation of the companys limited ability to generate free cash flow, Moodys believes this will be insufficient to cover upcoming debt maturities, absent waivers from its lenders while the company pursues the completion of its corporate restructuring.

The restructuring includes the sale of its telecommunications tower assets and the de-merger of its core wireless operations which it will merge with Aircel Limited (unrated) in a new joint venture (MergerCo).

At the same time, RCOMs consolidated debt levels continued to rise through year-end. The company reported total debt of INR457 billion at 31 March 2017, resulting in reported debt/EBITDA of 8.5x. Including its reported INR 33.2 billion of deferred payment liabilities, leverage increases further to over 9.0x.

Given the weak operating outlook and high competitive intensity of the Indian mobile sector, there is no scope for RCOM to delever, absent the successful execution of its corporate restructuring.

RCOM announced on 27 May that it will transfer around INR140 billion of balance-sheet debt and INR60 billion of deferred spectrum liabilities to MergedCo and repay an additional INR110 billion of balance-sheet debt with the proceeds from the sale of its tower assets.

However, even assuming these transactions are completed as planned, post restructuring, Moodys estimates that RCOM will have over $3.0 billion of debt remaining on its balance sheet. This total includes both RCOMs $300 million senior secured bond and a $350 million senior secured bond issued by its 100%-owned subsidiary, GCX Limited.

But GCX, which Moodys estimates will account for a significant portion of revenues post restructuring (based on Moodys estimates), is not a restricted subsidiary under RCOMs $300 million bond indenture, and therefore RCOM has no recourse to those assets or cash flows. GCX is ring-fenced from creditors at RCOM, with dividend payments currently representing the only form of cash flow stream from GCX.

GCX is able to pay dividends so long as its leverage remains below 3.75x and interest coverage above 2.25x. In addition, GCX can incur additional indebtedness under its indenture, including drawing down on its $30 million revolving credit facility.

Depending on the outcome of the restructuring process and the lenders consent process, Moodys will also further evaluate the RCOMs business risk position, business strategy, financial policies, liquidity position, and the effect these have on its credit profile. The cash flow-generating capabilities of some of RCOMs remaining businesses n++ namely the enterprise and fiber optic business segments n++ remain unclear.

Moodys review will focus on: (1) timely progress in RCOMs announced transactions, including regulatory approvals and processes related to lender and bondholder consents, as required, for the de-merger of the wireless business and the sale of its tower assets; (2) assessing the credit quality and financial strength of the remaining businesses, particularly as related to the companys enterprise and fiber optic business; and (3) assessing the effects of the proposed restructuring on the collateral package for RCOMs USD bondholders as well as the cash flow prioritization relative to other debt and cash obligations.

Further downward pressure on the ratings is possible if the company fails to address its liquidity position within the next 3 months, or fails to provide a clear refinancing plan for pending maturities over the next 12-15 months.

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Moodys: Global luxury retailers earnings growth could double in 2017 but wont return to double-digit levels soon
May 31,2017

Global luxury retailers earnings growth could nearly double in 2017 (4% in 2016 to 7% in 2017), but is unlikely to reach the double-digit levels achieved in the halcyon 2010-13 period, says Moodys Investors Service in a report published today.

Moodys report looked at a sample of 11 luxury product manufacturers comparing a broad range of financial metrics including revenue growth, EBITDA margin, share buybacks and dividends.

A return to double-digit growth for the global luxury retail segment is unlikely until at least 2020 as the Chinese consumer boom has slowed, value-conscious consumers are now less likely to stand for price hikes, and competition from other sectors like travel and fine dining remains elevated, says Vincent Gusdorf, Vice President -- Senior Analyst at Moodys.

The overall credit quality of the luxury industry should improve slightly in 2017. Shiseido Company, Limiteds (A2 stable) Moodys-adjusted debt/EBITDA Moodys-adjusted will strengthen on the back of higher earnings and conservative financial policies. SMCP Group (B1 stable), which owns the Sandro, Maje and Claudie Pierlot brands, will see the most marked improvement in credit metric terms on the back of new store openings and high like-for-like growth.

US firms Tiffany & Co. (Baa2 stable), and Ralph Lauren Corporation (A2 stable) will cut capex and shareholder remuneration to maintain stable leverage in the face of a slowdown in earnings growth into 2018 as a result of a strong dollar, department store deterioration and operating issues. On the other hand, The Estn++e Lauder Companies Inc. (A2 stable) should perform well thanks to its good international diversification and its portfolio of well-recognized brands.

Other factors facing the luxury goods sector include rising competition, which is pushing some to improve productivity. Many luxury groups also intend to reduce their reliance on department stores, particularly in the US where companies such as Macys, Inc (Baa3, stable), Kohls Corporation (Baa2, stable), or Nordstrom, Inc. (Baa1, stable), have been hard-hit by changing shopping trends, lower mall traffic, and competition from online and off-price retailers.

Companies are also now putting the brakes on new store openings, with some choosing to instead focus on improving the productivity of existing stores. Others, such as Ralph Lauren Corporation (A2, stable) are reducing their store portfolio. This decline in openings is credit positive as it reduces fixed costs such as rent, improves the financial flexibility of luxury companies and bolsters cash flow generation.

Luxury companies will also look to cut share buybacks when necessary to preserve their credit ratios, but payout ratios will remain high. Estn++e Lauder, which has a history of large and frequent share buybacks, will likely remain one of the most shareholder-friendly companies in the sector.

M&A will continue to constrain ratings as luxury companies are now considering large acquisitions. The companies in Moodys sample will spend $7 billion on acquisitions in 2017, compared to $2 billion in 2016. Coach, Inc.s (Baa2, ratings under review) planned purchase of Kate Spade & Company for $2.4 billion, largely using debt, will be credit negative. More positively, multi-brand groups may sell underperforming subsidiaries and improve their credit ratios.

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Ind-Ra: NHAI Releases INR9.8 Billion Under Arbitration Scheme, Road Developers Face Hurdles in Providing Guarantees
May 31,2017

The pace of release of arbitration claims for infrastructure developers has gained limited traction, due to the inability of road developers/project companies to provide bank guarantees, says India Ratings and Research (Ind-Ra). Ind-Ra notes that in the last six months since introduction of the arbitration scheme INR9.8 billion funds have been released compared to INR26.3 billion claims made to National Highways Authority of India (NHAI; IND AAA/Stable).

Due to the financial difficulties faced by many developers in the sector, Ind-Ra believes that banks are wary of taking exposure in the form of bank guarantees, without adequate margins/collateral. The governments initiative to release 75% of locked amount in arbitration awards has thus had a limited impact on the liquidity of developers except a few road developers.

As per NHAI data, HCC has been the biggest beneficiary receiving INR3.80 billion (out of total claims of INR10.8 billion) while the balance claims are pending due to absence of BGs or opening of Escrow Accounts. Other notable beneficiaries who received full claims are namely, IRB Infrastructure Developers Ltd (IND A-/Rating Watch Positive) - INR2.70 billion, Shapoorji Palonji -INR1.41 billion, Atlanta Infra Assets Ltd INR1.18 billion. Companies which submitted claims (in the absence of BGs) but have not received any funds are Oriental Structure Engineers Pvt Ltd and its group companies (claimed INR2.83 billion), IL&FS Engineering and construction company ltd (claimed INR1.54 billion) and Reliance Infrastructure Group (claimed INR1.33 billion).

Ind-Ra notes that non-submission of bank guarantees (BGs) despite reminders from NHAI and non-opening of Arbitral Award Escrow Account (escrow account) are the key deterrent to the success of the scheme initiated by the Cabinet Committee on Economic Affairs. The scheme was approved on 31 August 2016, and the NHAI started accepting claims under the scheme on 7 December 2016.

In its effort to revive the ailing construction sector, the arbitral scheme had been approved and put forward by NITI Aayog and the NHAI started accepting claims. As per the scheme, NHAI would release 75% of the arbitration award amount to an escrow account against margin free BGs, in those cases where the award is further challenged by NHAI. To ensure receipt of funds (from NHAI) under this scheme, concessionaire/contractor needs to furnish BG equivalent to 75% of arbitration award along with interest amount for one year. Ind-Ra believes that speedy settlement of arbitration claims would have provided much needed relief to the infrastructure developers in dire need of funds, deservingly in this case.

NHAI has pending arbitration awards amounting to INR220 billion as on 31st March 2015. As per NHAI, 65 claims amounting to INR26.3 billion have been submitted by road developers and funds for 19 cases amounting to INR9.8 billion have been released/settled against margin free BGs as of 26 May 2017. Data from NHAI website suggests that out of 47 claims yet to be settled, 45 claims are pending on account of non-receipt of BGs and non-opening of Escrow Account and two claims have been submitted with improper BGs.

As per the scheme, on opening the designated escrow account and receipt of bank guarantee from the concessionaire, NHAI shall deposit 75% of the arbitration amount. The claims so received shall be appropriated in the following order: a) debt service payments; b) all payments relating to construction/completion of the said project; c) all payments relating to construction of other projects of NHAI under execution by the developer; and d) balance, if any, in accordance with the instructions of the developer after receiving the prior written approval of the lenders representative and NHAI.

The Confederation of Indian Industry has highlighted that arbitration claims are the key reasons behind burgeoning debt of construction companies, accounting for around 150% of the debt and average time taken for resolution of such claims is seven years. Ind-Ra believes that NHAIs latest proposal to set up a conciliation committee of independent experts is a positive development for the sector against the back drop of increase in stressed assets and poor response to the arbitration scheme by the highway developers.

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Urgent need to recognize retail e-commerce exports as an industry
May 31,2017

Recognizing the immense potential of retail ecommerce exports from India, a FICCI report allows Indian MSMEs to explore prospects in B2C ecommerce retail export. Exploring Potential of E-Commerce for Retail Exports of Indian MSMEs in Manufacturing Sector was prepared by FICCI, Indian Institute of Foreign Trade-Centre for MSME Studies and Apex Cluster Development Services. As per the study, the total potential for B2C ecommerce exports is estimated at approximately. USD 26 billion, of which USD 3 billion can be achieved in the next three years from 16 product categories.

The study, supported by eBay India, involves an in-depth survey on the major MSME clusters across the country. The survey brings forth limitations pertaining to ICT infrastructure; epayment and logistics across MSME sectors. It also highlights reasons like bandwidth and network restrictions, lack of availability of skilled workforce, privacy and security concerns and inaccessibility to finance amongst other reasons that are collectively dissuading Indian MSMEs from adopting modern retail practices. The study highlights the need for the Government to recognise ecommerce retail exports as an industry and work towards removing regulatory barriers, including reviewing the FTP policy, simplifying customs duty procedures etc.

The study provides MSMEs with the requisite information to undertake ecommerce retail exports while exploring the untapped potential of the international B2C e-commerce market by leveraging the digital platform to bridge the gap between buyers and sellers. It also aims to intensify the global reach of Indian MSMEs and enhance the export competitiveness of Made in India products.

However, this huge potential of e-commerce towards will only be feasible through modifications in the current Merchandise Exports from India Scheme (MEIS) policy under.

Mr. Tripathi said that there was a need to reduce the distance between the producer and consumer and e-commerce could help in bridging this gap. Besides, it would also reduce the cost of products. He added that today Indian manufacturers were producing locally for global markets and the study revealed that manufacturers were taking advantage of technology to reach global markets.

Alluding to various initiatives of the government of India such as Zero Defect Zero Effect, Mr. Tripathi said that the MSMEs should take advantage of schemes to improve the quality of their products and scale up their business. He added that the government was working towards improving ease of doing business and addressing various challenges faced by MSMEs.

Mr. J. V Patil, Additional DGFT, Director General of Foreign Trade, Ministry of Commerce & Industry, Government of India, said that there was a need to facilitate movement of products through e-commerce. Referring to MEIS, he said that it provides benefits on various products and exporters should leverage it. Citing the success story of an online store, eShakti, which caters to people across the globe including the US and Canada, Mr. Patel said that e-commerce provides immense business potential.

Mr. Sanjay Bhatia, President, FICCI-CMSME, stated, n++There is no way we can undermine the contribution of MSMEs to our economy and it is in fact very important that we continue to explore synergies to integrate this very important sector with the latest emerging trends. Ecommerce is one such trend which is massively changing the mechanism of global businesses. Online retail segment has seen tremendous growth globally over the past couple of decades. Even though this trend has caught up recently in India but the exponential growth has certainly been striking.n++

He said that the e-Commerce spend in India still accounts for less than 2 per cent of the total retail spending (compared to 10-13 per cent in developed countries), nonetheless the segment has become a key driver to create new markets in erstwhile unreachable geographies. The online international trade is flourishing and given the increasing accessibility to internet and the focus of the Government on Digital drive, our MSMEs can benefit directly from this opportunity. It is important that the Government recognised retail e-commerce exports as an industry.

Mr. Bhatia said that the study highlights the need for MSMEs to increase their presence in international market places using B2C exports as major tool. The study covers in detail the status, missing opportunity by MSMEs and also suggests the policy changes required to make B2C ecommerce a smooth and attractive option for the exports by MSMEs. The suggestions are related to changes to be made in the existing system and need for new policy measures to adopt in areas of customs, DGFT, banks and ICT.

Commenting on the report, Mr. Navin Mistry, Director Retail Exports, eBay India, said, n++Since 2012, eBay India has always been proactively driving the agenda for Cross Border Trade in India. We are happy to have contributed to the study given our understanding of working with over 25,000 small and medium entrepreneurs who actively leverage our platform to sell across 200+ countries. We are positive that together with FICCI and IIFT we will be able to initiate dialogues at policy level to ease norms for e-commerce retail exports and encourage larger MSME base to tap the potential of ecommerce.n++

The study emphasizes on creating synergies with numerous export promotion programs and schemes by the government and their agencies, which will help in on-boarding large number of sellers and more exports per seller. The study also highlights policy recommendations towards integrating Make in India and Digital India, which will enable access to new geographies and market diversification for the Indian MSMEs.

Dr. Tamanna Chaturvedi, Consultant, MSME Centre at IIFT, explained that Centre works extensively towards promoting exports from MSME sectors and has found immense CBT potential of certain sectors including textiles and apparel, sports good, handicrafts, handlooms, gems and jewellery etc. having potential to uplift the CBT (B2C) revenue from existing USD 500 million to USD two billion by the year 2020.

Mr. Rajveer Singh, MD, Apex Cluster Development Services Private Limited, said that there were infrastructural issues such as stronger ICT support in terms of speed and reliability of the network, power failure in rural areas and perception issues on technical complexities needs to be addressed in parallel to exploit full potential.

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GST would help in creating lot of jobs for young generation
May 31,2017

Dr. Hasmukh Adhia, Revenue Secretary, Ministry of Finance, Government of India categorically stated that the Goods and Services Tax (GST) will be implemented from 01 July 2017.

Dr. Adhia further said that the Karnataka Government has made maximum contribution for GST and the Central Government is moving ahead as the GST would prove to be a game changer. He said that GST would help in creating lot of jobs for young generation. Dr Adhia further said that Indias economic potential is much higher and the GST would help in converting the economic energy in to real growth.

Dr Adhia elaborated the benefits of GST, explained how it would lead to ease of doing business, how to comply with its various provisions among others. He said that GST would bring in uniformity of different tax laws and tax rules. He said that there would be seamless transfer of input tax credit under GST regime. In his concise briefing, Dr Adhia clarified the doubts of various stakeholders about different issues relating to GST. He also assured to reply to the queries and to clarify the doubts of people at large about GST through the GST Twitter handle.

Shri Krishna Byre Gowda, Agriculture Minister, Government of Karnataka and Member of the GST Council spoke at length and explained the rationale of tax structure under GST regime. He also elaborated the contribution of GST Council under the Chairmanship of the Union Finance Minister Shri Arun Jaitley which took all the decisions so far unanimously and helped in reaching the present stage of GST implementation. He said that the GST is a major customer-friendly indirect tax reform. He said that the intention is not to increase the taxes but to increase the revenue by implementing GST as it would bring transparency, simplification and efficiency in tax administration and help in curbing tax evasion & thereby leading to tax buoyancy.

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India sees three years of path-breaking and inclusive growth in aviation sector Emerges as worlds third largest aviation market
May 31,2017

The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. With a 19 percent growth in domestic passenger traffic from about 6.1 crore in 2014 to 10 crore in 2016-17, India is now the third largest aviation market in the world, with the promise to grow even further. What is most impressive about this growth is its inclusive nature defined by the Regional Connectivity Scheme -UDAN, that has made air travel possible for even the common man in remote areas. According to Shri P Ashok Gajapathy Raju, Union Minister for Civil Aviation, his Ministry has worked towards reshaping aviation ecosystem for affordable and convenient flying for everyone by bringing in the National Civil Aviation Policy 2016.

Shri Raju said that average or median airfares fell by 18 percent during 2016-17, making flying more affordable for the common man. Scheduled domestic flight movements also rose from 7 lakh in 2014 to 8.2 lakh in 2016, an 8.2 percent CAGR growth. As against 395 aircrafts in the fleet of Indian carriers, there are 496 aircrafts in operation today, and another 654 are under purchase. Route Dispersal Guidelines have been rationalized, multiple provisions have been made for MRO service providers and a slew of initiatives like the AirSewa portal, enhanced compensation for cancellation and boarding denial have been taken for improving passenger convenience

The Regional Connectivity Scheme UDAN has been by far the most path-breaking achievement of the Ministry. 31 currently served, 12 under-served and 27 unserved airports are now connecting 128 RCS routes across the country. 50 airports are being revived and 13 lakh new UDAN seats are being added annually under the first round of UDAN for a Viability Gap Funding of Rs 205 crore.

Shri Raju also talked about the other achievements of the Ministry like promoting Ease of Doing Business by allowing 100 % FDI in domestic scheduled air transport, Open Skies Service Agreements offers to 49 countries and 5 SAARC nations etc, developing a robust security architecture by complying with ICAO requirements, Anti Hijacking Act etc, promoting innovative technology like GAGAN, Indias first navigation based system to improve accuracy of air navigation services and focusing on skill development in the aviation sector. About skill development the Minister informed that the first Executive Aviation Course was launched by Indias first Aviation University in February 2017. 800 ATCs were recruited by AAI in the last 2 years and more than 400 are planned to be recruited in 2017. The Minister said that Aerospace and Aviation Skill Sector Council has been formed to monitor growth of skill development.

Also speaking on the occasion MoS Civil Aviation Shri Jayant Sinha said that the civil aviation sector in India has undergone a complete transformation in the last three years with India emerging as the worlds third largest aviation market. As against 70-75 airports in the country in all these years, we now have more than 100 airports with the implementation of UDAN. We hope to have 200 plus airports in the next 10-15 years. He informed that the capacity of existing major airports is also being increased rapidly, while Greenfield airports are coming up at several places in the country like Goa , Navi Mumbai and other places. Shri Sinha informed that Air India has also performed extremely well during the last three years.

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Production of horticulture crops in the country during 2016-17 is estimated to be more than 295 million tonnes
May 30,2017

The Department of Agriculture, Cooperation and Farmers Welfare has released the Second Advance Estimates of Area and Production of Horticulture Crops for 2016-17. These estimates are based on the information received from different State/UTs in the country.

                        The following table summarizes the Second Advance Estimates of area and Production of horticulture crops for the year 2016-17 along with First Advance Estimates for      2016-17 and Final Estimates for 2015-16:

(Area in G000 Ha, Production in G000MT)

Total Horticulture2016-17

(Second Advance Estimate)

2016-17 (First Advance Estimate)2015-16 (Final)% change of 2016-17 (Second Adv.  Est.) with respect to:2016-17

(First Adv. Est.)

2015-16

(Final Est.)

Area2492524369244722.31.9Production2951642873232861882.73.1

Highlights of the Second Advance Estimates for 2016-17: The production of horticulture crops in the country during 2016-17 is estimated to be more than 295 million tonnes which is 3.2 % higher as compared to the previous years 2015-16 estimates.The area under horticulture crops has increased from 245 lakh ha to 249 lakh ha in 2016-17 recording an increase of 1.9% over previous year.Fruits production during the current year is estimated to be 93 million tonnes which is 2.9% higher than the previous year.Production of vegetables is estimated to be around 175 million tonnes which is 3.5% higher than the previous year.With 21.6 million tonnes estimated onion production in the country, there is an increase of 3% over the previous year. The major onion producing States are Maharashtra, Karnataka, Madhya Pradesh, Bihar and Gujarat. Potato production in the country has increased from 43.4 million tonnes to 46.5 million tonnes in the current year which is 7.2% higher than the previous year. Major Potato growing States are Uttar Pradesh, West Bengal, Bihar, Gujarat, Madhya Pradesh and Punjab. During the current year tomato production is estimated to be around 19.7 million tonnes which is 5.1% higher than the previous year. The major tomato growing States are Madhya Pradesh, Andhra Pradesh, Karnataka, Odisha and Gujarat etc. Production of flowers is estimated to be around 2.2 million tonnes which is 2.9% higher than the previous year.Production of Aromatics & MedicinalPlants is estimated to be around 1.03 million tonnes which is marginally higher by 0.8% than the previous year.During the current year the production of Plantation crops is estimated to be around 17 million tonnes which is 1.3% higher than the previous year.Production of spices is estimated to be around 7.1 million tonnes which is 1.3% higher than the previous year.

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New National Commission for Backward Classes to be constituted in the same manner as National Commissions for SCs & STs
May 30,2017

The new National Commission for Backward Classes will be constituted under Article 338B and will commence functioning as a constitutional authority, in the same manner as the National Commission for Scheduled Castes under article 338 and the National Commission for Scheduled Tribes under Article 338A. This was stated by Shri Thaawarchand Gehlot, Minister for Social Justice and Empowerment. The new Commission will exercise the function of hearing the complaints/grievances of socially and educationally backward classes. It will have the powers of a Civil Court for this purpose. It will have the duty of advising of the socio economic development of the socially and educationally backward classes and evaluate the progress of their development, unlike the present Commission which does not have this role.

He informed the media persons that the objective of Venture Capital Fund for Scheduled Castes is to promote entrepreneurship amongst the Scheduled Caste and to provide concessional finance to them. The projects/units are promoted in manufacturing and services sector ensuring asset creation. The Scheme provides higher level of loans ranging from Rs. 50 lakhs to Rs. 15 crores. Till date loans amounting to Rs. 242.36 crores were sanctioned to 65 Scheduled Cast entrepreneurs and Rs. 118.99 crores has been disbursed.

The Minister said that the Skill Training is under taken by the three corporations of the Ministry viz. National Scheduled Caste Finance and Development Corporations (NSFDC), National Backward Classes Finance and Development Corporation (NBCFDC) and National Safai Karamcharis Finance and Development Corporation (NSKFDC). During the last three years i.e. from 2014-15 to 2016-17, 2.5 lakh beneficiaries have been trained under the skill development programme of the Corporations and the Scheduled Castes Sub Plan. Out of these beneficiaries, 48.42% have got wage/self-employment.

Ministry of Social Justice & Empowerment has released scholarships to 3.45 crore students through Direct Benefit Transfer (DBT) providing direct benefit to the students. Amount released is Rs. 18000 crores in the last 3 years.

He said that the five places relating to Dr. Ambedkar such as Janam Bhoomi, Mhow; Shiksha Bhoomi 10, King Henry Road, London; Deeksha Bhoomi, Nagpur; Chaitya Bhoomi, Mumbai; and Parinirvan Bhoomi, 26 Alipur Road, New Delhi were declared Panchtirth by the Government of India. Besides this, the Dr. Ambedkar Foundation under Ministry of Social Justice and Empowerment had sponsored 100 students for study tour to Universities of Columbia and London School of Economics (UK) where Dr. Ambedkar studied.

The Minister informed that the Government of India declared 26th November as Constitution Day. Various programmes by Ministries/Departments/ State Governments were organised throughout the country and Indian Mission abroad. It has been decided to increase income limit from Rs. 1.00 Lakh to Rs. 2.50 Lakh on yearly basis to provide assistance to families under Dr. Ambedkar Medical Aid Scheme. Under Dr. Ambedkar Scheme for Social Integration through inter-caste marriage, 126 Married couple benefitted during the last three years. The Ministry of Social Justice and Empowerment has enhanced Overseas Scholarship for boys and girls belonging to SC/ST community from 60 to 100 for pursuing higher studies aboard.

He said that his Ministry has launched the Rashtriya Vayoshri Yojana for the welfare of Senior Citizens, which aims at providing Senior Citizens, belonging to BPL category and suffering from any of the age related disabilities/infirmities viz. Low vision, Hearing impairment, Loss of teeth and locomotor disabilities, with such assisted-living devices which can restore near normalcy in their bodily functions, overcoming the disability/infirmity manifested.

The Minister said that the Department of Empowerment of Persons with Disabilities has created 4 Guinness World Records, during the year 2016-17, as detailed in the list below: -

1.First record, created by Biggest Wheelchair Logo/Image by 1000 PwDs at Navsari, Gujrat;

2.Second world record, created by fitting 1200 Hearing Aids to 600 persons within 8 hours at a single location at Navsari, Gujrat;

3.Third world record, created in Gujrat by lighting most oil lamps simultaneously at a single venue by Divyangjans; and

4.Fourth Guinness World Record was created when 3911 persons with hearing impairment were fitted with hearing aids in 8 hours in Manipur.

The Minister informed that the financial assistance under Voluntary Organisations working for Welfare of SCs is released to NGOs/VOs to provide an environment for Socio-Economic up-liftment and overall development of Scheduled Castes (SCs). Also, the Ministry introduced the Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS) in January 2007, with the objective to rehabilitate the remaining manual scavengers and their dependents in alternatives occupations

He said that Scheme for Prevention of Alcoholism and Substance (Drugs) Abuse aims at creating awareness and educate people about the ill-effects of alcoholism and substance abuse on the individual, the family, the workplace and society at large. There are 431 Drug-de-addiction centres functioning through NGOs, supported by the Ministry.

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Ind-Ra: JNPT Quick Import Program Credit Negative for Container Freight Stations in Short-term
May 30,2017

The focus of the customs department at the Jawaharlal Nehru Port Trust (JNPT) to clear import cargo through the Direct Port Delivery (DPD) model is credit negative for most container freight stations (CFS) located proximate to the port in the short-term, says India Ratings and Research (Ind-Ra). Volumes under DPD have increased considerably to 27%-28% of total volumes compared to under 10% a year ago.

The DPD model entails efficient customs clearance of imports at the port itself, thereby obviating the need to divert containerised cargo to CFS, where typically they used to be stored for a couple of days before being cleared by customs and then forwarded by rail or road to the importers premises. Under the DPD model, the cargo is directly moved from the container terminal at the port to the delivery destination. Delivery of DPD containers at JNPT terminals is on 24x7 basis, which is not possible in custom bounded warehouses. The objective of DPD is to facilitate ease of doing business for domestic companies through the reduction of dwell time at the port. The targeted dwell time under DPD is 24 hours vis-n++-vis average of 1.6 days currently and 7-9 days in the JNPT eco-system (time between landing at port terminal to receipt of container from customs bonded warehouses).

The customs department has targeted the biggest importers over the past year for implementation of the DPD model and around 778 agencies (companies engaged in imports or their representatives) have registered with the customs department for DPD clearance of containers as against 11 agencies as of 9 February 2016 (as per information on JNPT website). While initially at the time of launch (February 2007) there was a minimum volume criteria to avail DPD, this was removed in February 2016 to facilitate higher volumes under this scheme.

Importers Benefit From Increased Transparency: The customs clearance of containers which were moved to CFSs was typically handled by customs house agents (CHAs), who would issue a consolidated bill (including a mark-up) to the importer. In addition, to attract container volumes, CFSs would offer financial incentives typically amounting to INR4000-6000 per twenty foot equivalent units (TEU) to shipping lines, which would be recovered from the importer in terms of higher container storage, handling and processing charges. Direct billing by the customs department to the importer has resulted in price discovery for the latter, who earlier had to deal with an opaque pricing system adopted by intermediaries. By not having to deal with CFSs, the importer can now also avoid certain costs charged to it by CFSs over which especially the smaller importers had limited bargaining power.

Change in Strategy for Shipping Companies: Due to intense competition in the shipping industry, several shipping lines used to charge negligible freight to importers; however the incentives charged to CFS would contribute significantly to their revenues and offset the loss due to low freight rates. In a recent trend observed during FY17 and this year, container lines have been forced to revise their sea freight charges upwards to make up for the loss of revenue from incentives. Shipping lines can no longer decide which CFS their container volumes will be moved to. It is the importer or its DPD registered representative (typically a CHA) who decides this. The rental charges that shipping companies pay to CFS for storage of empty containers could see a substantial increase in instances where the shipping company is unable to offer significant import volumes to a particular CFS but is dependent on that CFS for storage of empty containers.

Import Dependent CFS More Impacted: While all CFSs would be impacted to some extent due to the reduction in the average dwell time. Those whose revenue model is heavily dependent on imports are likely to be impacted more by the reliance on the DPD model by the customs department. On the other hand those reliant on export volumes for the major portion of their revenues will not be affected significantly. CFS aligned to certain shipping lines for bulk of revenues could also face a decline in revenues if the importers clear their cargo at JNPT itself under DPD. In addition, non-integrated logistics companies operating CFSs near JNPT will be vulnerable to decline in TEU volumes. There are also several small CFS located within JNPT itself, which will also be face decline in volumes due to the lack of alternate revenue sources due to space constraints.

High Margin Era Passn++, In Search of Alternate Revenues: Considering the intense competition already prevailing among the 33 CFSs around JNPT for TEU volumes, the reduction in TEUs moved to CFSs due to DPD has led to a couple of CFSs reducing their rates for container handling and storage during the last few months. Ind-Ra believes companies in its rated portfolio namely Gateway Distriparks Limited (GDL, IND AA-/Stable) and Continental Warehousing (Nhava Sheva) Private Limited (IND A-/Negative) will also be impacted to some extent due to some moderation in import volumes in the next few quarters. To stem the decline in volumes, companies such as GDL are negotiating directly with importers for business by offering discounts to them (rather than incentives to shipping companies) so that the importers insist on shifting their containers to those CFSs in particular. This strategy is being deployed in case volumes are large and the importer will want to take delivery of containers in smaller lots. Additionally those CFSs that are highly leveraged due to large outstanding term loans availed for building the facility, could see a further deterioration in their credit profiles in the near term due to shrinking cash flows. The agency does not rule out the likelihood of consolidation in the JNPT linked CFS industry due to these developments.

Ind-Ra believes that the era of high EBITDA margins (typically over 45% for most CFS) is over and that margins will rationalise to 30%-35%. Offering integrated logistics solutions will be the norm to sustain profitable operations. The agency opines that some CFS faced with consistent declining volumes will opt for tie ups with international shipping lines for storage of their empty containers. However this is a service that any CFS with a large container yard outside of the customs bonded area, will be able to provide. Some companies could convert their facilities into logistics parks or warehouse facilities if the CFS revenue model continues to remain unsustainable.

Capacity Increase at JNPT to Improve Volumes for CFS Over Mid to Long Term: With the first phase of the fourth container terminal (designed for handling 4.8 million TEU likely to come on-stream by December 2017, the overall container volumes handled at the port will rise sharply over the next two to three years from around 4 million TEUs, according to the agency. Consequently, although the share of pie of the container handling business is expected to steadily change in favour of the port due to DPD, the CFSs in around JNPT will benefit by an increase in absolute volumes from the reduced levels of 2017.

No Impact on ICDs: Inland Container Depots (ICD) will not be impacted given that even historically; the importer or consignee would decide which ICD the containers will have to be moved to, after despatch from the port.

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Ind-Ra: Recent Performance of Microfinance Securitisation Calls for A Tighter Structure to Handle Extreme Events
May 30,2017

India Ratings and Research (Ind-Ra) believes that the higher volatility of default in microfinance (MFI) loans warrants higher rating level stresses and structural mechanisms to ensure rating stability. Ind-Ra believes that if the default rate (PAR>0 as % of original principal of the pool) in an MFI transaction remains 20% higher than the budgeted stress levels for the first nine months, then the senior class, which is typically rated in the A rating category, may be downgraded by three notches. Also, a 10% higher-than-budgeted stress for the first nine months could lead to a four-notch downgrade of a BB+ rated junior tranche.

In the recently published report PSBs Relying on Inorganic Route to Grow Retail Book, Ind-Ra has highlighted that the past performance of MFI loans is a poor proxy of future defaults because of the higher default volatility of this asset class than of other retail loan asset classes. Ind-Ra believes structural mitigants and an appropriate default assumption lend stability to these transactions. The pass through certificates (PTCs) issued by MFI securitisation trusts are typically promised a timely payment of interest and ultimate payment of principal (TIUP) structure. Ind-Ra believes that such structure lends more stability to the rating of senior class tranche than a timely interest and timely principal structure. Many MFI securitisation transactions closed during 4QFY17 had a default based trigger which allows EIS to be trapped in the EIS account. The trapped EIS has to be used to amortise PTCs. Quicker amortisation of PTCs has allowed the transactions to withstand slightly more stress, leading to better rating stability.

Maharashtra, Karnataka, Madhya Pradesh, Gujarat and Uttar Pradesh together contribute 90% to the total defaults in four moderately stressed Ind-Ra rated transactions which are seasoned by less than nine months. Several districts in these five states have witnessed a higher level of defaults. The reasons behind the high delinquencies in these districts vary from state to state and are largely a manifestation of local political interference, drought and event risks such as demonetisation coupled with borrower overleverage.

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India and Fiji Sign MoU on Defence Cooperation
May 30,2017

The Minister of Defence and National Security of Fiji, Honourable Ratu Inoke Kubuabola accompanied by his delegation met the Minister of Defence, Finance and Corporate Affairs, Shri Arun Jaitley.

The Ministers discussed expanded defence partnership in maritime security between both the countries, and naval cooperation was identified as an area of promise.

An MoU on defence cooperation envisaging several areas of cooperation including in defence industry, military training and humanitarian assistance & disaster management was signed.

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Special Drive to enroll left out electors giving focus on first time electors (young Indian Citizens in age group of 18-19 (extendable to 21 years)
May 29,2017

The Election Commission of India has decided to launch a Special Drive from 1st June this year for maximization of registration of eligible electors and removing the impurities in the rolls. In tune with the theme of No voters to be left behind the ECI has decided to utilise the period of continuous updation for maximisation of enrolment of young electors particularly 18-19 age group by launching a special drive in all States.

During the campaign, which will be completed by 31st July 2017, following activities will be undertaken by election official in all States.

n++ Submission of Forms shall be available to electors in following modes:-

n++ Submission of Form 6 at EROs Office

n++ Sending of Form 6 by Post

n++ Online Submission of Form 6 at National Voters Service Portal (NVSP)

n++ Submission of online Form 6 at Common Service Centers (CSCs)

Following additional services for the purpose shall also be provided during special drive:-

n++ Door to Door visit of BLOs: BLO shall visit door to door of the households to collect Form 6 from the applicants, particularly 18-19 age group (extendable to 21years of age) from 1st July 2017 and 31st July 2017 (except the Special Campaign Dates).

n++ Mobile App.: A user can also fill the Form using mobile app The Voter Services mobile application, available only on the Commissions website.

n++ National Call Centre (NCC): The ECI has also provided facility of National Call Centre for extending Citizen Services. At the State level, CEO will provide State Call Centre (SCC) and District Contact Centre (DCC) at district level by upgrading 1950 on the same line of National Contact Centre. A citizen making a call at NCC/SCC/DCC will be informed about procedure of Form submission through the above modes. If a differently abled person making call at any of these centres, expresses his inability to utilize any of the above services, then a visit by BLO concerned will be arranged at his/her address for getting the Form filled and receiving it back from that person for further processing. This service will be provided free of cost.

n++ Paid Services: CSCs will provide services of making online filling and hard copy Form digitization on payment basis.

i. Special Campaign Dates: Special Campaigns will be organized on two dates in the month of July 2017, which will be publicised through media by the Chief Electoral Officer. On these dates, Camps will be held in each polling station where Booth Level Officer will sit with adequate number of Forms 6, to receive Forms from the applicants. On the day of camp, entire final electoral roll, 2017 along with its supplements, if any, shall be pasted on the wall of the polling stations. The roll shall also be read out publically by the BLO on that date. The left out eligible citizens will fill Forms 6 and give the same to the BLO at the polling station itself, or submit through any other available means during the Special Drive. Special camps will also be conducted in all Government and Private Educational Institutions (colleges and Schools)/Vocational Training Institutes on at least any two different days between 1st July 2017 and 31st July 2017.

ii. Removal of names of dead electors: During the Special Drive, removal of names of dead electors will also be taken up. For identification of such dead electors, data on registered deaths shall be collected from the Registrar of Deaths and all registered death entries should be removed during the Special Drive.

iii. Disposal of Forms: Disposal of Forms 6 and Forms 7 (death cases), received during Special Drive will be done by 31st August 2017. However, Forms 7 (other than death cases), Form 8 and 8A received during the period will be done only after the Special Drive.

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40 crore workers from unorganized sector to be covered under social security schemes: Shri Bandaru Dattatreya
May 29,2017

The Minister of State for Labour & Employment (IC), Shri Bandaru Dattatreya has announced that the 40 crore workers from unorganized sector will be covered under social security schemes such as ESIC & EPFO. The Minister said that the Government is committed to ensure wage, jobs and social security for all workers including unorganized sector. Shri Dattatreya was addressing a function on the 3 years achievements of the his ministry in New Delhi today. He said that the Ministry is implementing reforms and new ways and means for employment generation. India is the only country which has launched Shram Suvidha Portal for effective compliance and ease of doing business. The Ministry is implementing the National Career Service (NCS) project as a vibrant platform for transforming and strengthening the public employment services in the country.

Shri Dattatreya said that the Ministry got the following Acts passed by the Parliament during last 3 years.

1- The Child Labour (Prohibition and Regulation) Amendment Act, 2016 which ensures complete prohibition on employment of children below 14 years and also prohibited the adolescents (14-18 years ) to work in hazardous occupation/processes

2- The Maternity Benefit (Amendment) Act, 2017 under which maternity benefit to woman has been increased from 12 weeks to 26 weeks for two surviving children and 12 weeks for more than two children

3- The Payment of Wages(Amendment) Act,2017 enables the employers to pay the wages to their employees by cash or cheque or crediting it to their bank account.

4- The Employees Compensation (Amendment) Act, 2017 has the provision to increase the penalty for contravention of Act from present Rs.5000/- to Rs. 50,000/- extendable to Rs.1 Lakh.

5- Payment of Bonus Amendment Act, 2015 has enhanced the eligibility limit under section 2(13) from Rs. 10,000/- to Rs.21,000/- per month.

6- The Industrial Employment (Standing Orders) Act, 1946 has been amended by notification to include n++fixed term employmentn++ for textile (apparel) sector as a part of textile package to enhance employment.

The Labour & Employment Minister said that the Ministry is working on the proposed codification of existing Labour Laws into 4 Labour Codes.

(i) Labour Code on Wages

(ii) Labour Code on Industrial Relations

(iii) Labour Code on Social Security and Welfare

(iv) Labour Code on Occupational Safety and Working Conditions

The Group of Ministers has approved the Labour Code on Wages and it will be sent to cabinet for approval.

The Minister said that the Minimum wage (per day) for non-agricultural worker in the C area category increased from Rs 246 to Rs 350, Rs 437 in B Area category and Rs 523 in A area category. He also informed that the Shram Suvidha Portal is a single unified web portal for submissions of common Annual Return under 9 Central Acts and monthly common Electronic Challan Cum Return (ECR) for EPFO and ESIC. He also informed that Unique Labour Identification Number (LIN) is allotted to Units and 19,23,162 Lakhs LIN allotted as on on 22nd May, 2017. Total 2,95,423 inspections have been assigned and out of that 2,76,931 inspections have been uploaded as on 22nd May, 2017. Common registration under EPFO and ESIC has been facilitated on the Shram Suvidha Portal since 30th April, 2017.

Shri Dattatreya said that Registers/Forms to be maintained under various labour laws are simplified. 56 Registers/- Forms under 9 Central Labour Laws and Rules made thereunder have been replaced with 5 common Registers/Forms. The notification has been issued on 28th March, 2017 for reducing Forms under certain Labour Law Rules from 36 to 12. It is applicable to the establishments under the jurisdiction of Central as well as State Governments.

He said that employers can apply for EPF code number online by uploading of digitally signed documents. As on 06th December, 2016 around 1.52 Lakhs establishments have been obtained online registration on OLRE portal. Universal Account Number(UAN) has been made compulsory and online credit system introduced. Minimum pension under Employees Pension Scheme, 1995 has been revised to Rs. 1000/- in perpetuity per month w.e.f. April 2015. Time limit for claim settlement has been reduced to 10 days from 20 days. No documents required and only self-certification is necessary for withdrawal under the EPF scheme for the accounts linked with Aadhaar.

The Minister informed that ESIC is now covering complete districts instead of targeted industrial clusters. Coverage expanded to all 393 districts where these clusters are located. 301 districts have been fully covered. In the second phase, the target is to cover all the remaining districts of the country. n++One IP-Two Dispensariesn++ scheme has been launched for the benefit of migrant workers. Now Insured Persons can choose two dispensaries, one for self and another for family through an employer.

Shri Bandaru Dattatreya said that over 3.87 crore candidates, 14.8 lakh establishments are registered on the National Career Service (NCS) Portal and it has mobilized over 6 lakh vacancies. Around 540 job fair were organised in 2016-17. The NCS project also involves setting up of 100 Model Career Centre to deliver quality employment services and these centres are being set up in collaboration with States and Institutions. NCS has partnered with Department of Posts and common services centre to extend registration of job seekers through the Post Offices.

Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) scheme has been announced to incentivize employers for new employment. Government will be paying the 8.33% EPS contribution for these new employment for the period of 3 years. For the textile (Apparel & made up) sector, Government will also pay the 3.67% EPF contribution of employers for these new employees. Till now benefit have been transferred to 1,954 establishments covering 75,848 beneficiaries under the scheme with an expenditure of Rs. 6 crores (approx.).

Rehabilitation of Bonded Labour Scheme has been revised with effect from 17th May, 2016 where financial assistance has been increased from Rs.20,000/- Rs.1,00,000/- per adult male beneficiary, Rs 2 Lakh for special category beneficiaries such as children including orphans or those rescued from organized & forced begging rings or other forms of forced child labour and women. Rs 3 Lakh in cases of bonded or forced labour involving extreme cases of deprivation or marginalization.

The Secretary, Ministry of Labour & Employment, Ms. M. Sathiyavathy in her welcoming address said that the Government is creating environment to facilitate employment with quality and fair wages. For this number of initiatives and programmes have been undertaken.

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Railway PSU RITES records 18% rise in revenue in FY 2016-17
May 29,2017

RITES, under the Ministry of Railways has recorded 18% increase in its total income in FY 2016-17 compared to 2015-16. It has for the first time crossed the Rs. 1500 crores benchmark. Despite severe competition from domestic and foreign consultancy companies, RITES recorded PAT of around Rs.330 crores on a turnover of Rs.1508 crores, according to the provisional results submitted to its Board of Directors.

The company has also issued 2 bonus issues during the year, increasing its paid-up capital from Rs. 100 crores to Rs. 200 crores.

During the year, the company completed the supply of 120 coaches to Bangladesh Railways and has signed two new contracts with Sri Lanka Railways for the supply of Indian Railways produced locos (DLW, Varanasi) and DMU train sets (ICF, Chennai) which will be exported in the coming year by RITES to Sri Lanka Railways.

In India, RITES is also involved in mega transportation projects like dedicated freight corridors, metros, high speed rail studies, logistics parks, rail infrastructure and green energy etc.

With positive scenario for investments in railways and other infrastructure sectors, the company sees high growth in the coming years. In India, RITES is working on two major turnkey projects from the Ministry of Railways, for the third line in Pendra Road- Anuppur section of Bilaspur division of South East Central Railway and Gooty- Dharmavaram doubling works for South Central Railway.

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