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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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Furnishing details on the data bank is compulsory for all MSMEs: Secy MSME
Sep 20,2016

Mr. K K Jalan, Secretary, Ministry of Micro, Small and Medium Enterprises (MSME), today urged the Micro, Small and Medium Enterprises (MSMEs) in the country to update the details of their enterprises on the MSME data bank. This, he said was mandatory the updated data would be used for evolving parameters for the growth of MSMEs in the country.

Mr. Jalan said that the government was also planning to identify 25-30 sub-sectors in MSMEs and focus on these sectors for raising productivity and enhancing the overall landscape of MSMEs.

Mr. Jalan said that there was a need to carry out academic work in the space to understand the challenges and issues of the sector. He suggested that FICCI should come out with knowledge papers focusing on the specific concerns of the sector.

Speaking about the financing aspect of the MSMEs, Mr. Jalan said that there was a need to carry out research in this area as it has been seen that SME credit by banks was going down. He suggested that for MSMEs, a dedicated financing institute could be established like private sector non-banking financial companies (NBFCs).

Mr. Jalan said that in the MSMEs, manufacturing has been the focus area but now was the time to look at MSME in a holistic perspective. MSMEs in services, training, retail and wholesale and ancillary industries of big companies, traditional set ups, should also be given due importance. He added that employment generation and import substitution should also be focused on.

Ms. Pannuda Boonpala, Director, ILO India, said that In India, the Governments efforts to support the MSME sector through initiatives such as Make in India or Start Up India reflect the importance of this sector to national development, and hold great promise. As part of its contribution to strengthening the MSME sector, the ILO in India has introduced programmes such as the Start and Improve Your Business (SIYB) to help set up micro- and small enterprises and to run and expand them successfully, and, for more established SMEs, the Sustaining Competitive and Responsible Enterprises or SCORE programme, which helps improve productivity, competitiveness and job quality of SMEs.

Ms. Boonpala said that about 10,000 persons have been trained in SIYB, with an average business start-up rate of about 55%, and a job creation rate of 2.4 jobs per enterprise, while beneficiaries of the SCORE programme, which has so far been implemented in 100 factories thanks to a network of 20 trainers, have reported improvements of 20% or more against key industry benchmarks such as process efficiency, reduction in defects, or on-time delivery. She added that the key objective for the coming years will now be to upscale these programmes and to ensure their sustainable implementation.

Highlighting the challenges for MSME sector, Mr. Sanjay Bhatia, President, FICCI-CMSME and Managing Director,

Hindustan Tin Works, said that to propel MSMEs there was a need to build an enabling environment for MSMEs. The Government was already working on a MSME Policy, but he suggested that the MSME Policy document must contain some provision for sector specific dedicated industrial estate/ clusters for MSMEs with the support from State Government. Also, micro enterprises should be exempted from all compliance, inspection and labour laws for certain period. A guide could be provided to them on the compliances that they need to adhere to in those years. In order to make MSMEs grow vertically, MSMEs should be facilitated with the tax benefits linked to direct employment generated by MSMEs and Start-up businesses. As per policy benefits, MSMEs adopting latest clean and green technologies across sectors should be incentivized by the government. The Government should look for a possible collaboration with institutions which can help MSMEs in their R&D activities.

Mr. Bhatia said that financial assistance should be provided to those units who have successfully adopted and are adopting Quality Standards (TQM), energy efficiency standards and environmental norms, etc. Going forward, units which complied with the latest systems and standards should be encouraged to participate in Government/PSU tenders by providing them the incentives such as EMD/ Security deposit exemptions.

In his concluding remarks Mr. R Narayan, Vice-President, FICCI-CMSME and Founder & CEO, Power2 SME, said that the IT had the power to propel MSME growth with the ability to extend revenue-making opportunities by selling products and services online. MSMEs could also utilize modern technology and the internet as the medium to reduce procurement costs and thus reduce overall cost of goods sold to improve profitability.

Dr. A Didar Singh, Secretary General, FICCI & FICCI-CMSME, said that the programme Make in India should focus on MSMEs as it is the sector which will generate employment and not the big industries where manpower was being replaced with technology. He added that the objective of the summit was to create awareness and understanding among the Indian MSMEs on the various schemes and initiatives being taken by the government and private institutions/organizations for the development of MSME sector.

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Investors Eye Acquisitions in the Highway Sector Worth INR245bn
Sep 20,2016

Investors are keenly looking to pick up stake in projects worth INR245bn of completed highways, with an average of six years of operational history, estimates India Ratings and Research (Ind-Ra). The agency notes that there has been a paradigm shift in the acquisitions - from developers to financial investors. Ind-Ra believes that this is a positive shift and it will give impetus and provide opportunities for the opening up of businesses in the operation and maintenance vertical. Ind-Ra estimates that deals which are yet to be sealed have a debt size of over INR164bn. The activity pipeline has been abuzz in the last three years and Ind-Ra estimates that the highway sector has witnessed transactions of around INR111bn in debt, during February 2013-June 2016.

Ind-Ra, based on publicly available information as well as further limited information received from the issuer, notes that the list of sellers or potential sellers include companies, namely, HCC Concessions, NCC Infrastructure, Soma Enterprises, Reliance Infrastructure Limited (IND A+/RWN) and GMR Infrastructure.

The Indian highway sector is witnessing an enhanced level of activity in the acquisition space, largely led by global marque funds and investors namely, I Squared Capital, Brookfield Asset Management, PSP Investments and Macquaries India Infrastructure Fund among others. These international funds have picked up stake or are in advanced stages of acquisition of around 2,900km length of national and state highway projects. Similarly, domestic financial investors namely, IDFC India Infrastructure Fund and other infrastructure companies such as, Tata Realty and Infrastructure Ltd. have made a mark by showing interest in deals of around 780km length of highways. With Infrastructure Investment Trusts gaining traction, Ind-Ra believes highways, as an asset class will further evolve and will set benchmarks.

Road projects worth over INR400bn, spanning around 3,600km, have either been sold off in the last three years or are currently in the process of being divested. This recent increase in investor appetite could well be sustained, with reports doing the rounds that the government is working towards clearing the roads to provide access for global sovereign wealth funds to invest into private highway projects.

Ind-Ra believes that the National Highway Authority of Indias (NHAI, IND AAA/Stable) 100% exit policy, which was cleared in mid-2015 and road developers bid to deleverage their balance sheet have both aided the momentum in the last year. Ind-Ra had highlighted this in June 2016 in the report Opportunities Manifest Despite Overt Limitations.

A study of the deals shows that out of a total of 40 deals, including the ones in the pipeline, only five projects have been or are likely to be acquired by another corporate house, while institutional investors mostly account for the balance. Barring one project, all the projects have operational history of over six years, which could well be one of the reasons for investors evincing interest, since such projects reveal actual traffic potential. National highways and toll road projects are the most in-demand projects, around 94% of highway projects in the fray are national highway projects and around 87% of the projects are toll-based projects, which normally have a higher potential of giving returns to the acquirer.

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11.8% growth in Foreign Tourist Arrivals in August 2016 over the same period in 2015
Sep 20,2016

11.8% growth in Foreign Tourist Arrivals (FTAs) in August 2016 over the same period in 2015. Bangladesh accounts for highest share of tourist arrivals followed by USA and UK in August 2016. Rs.12, 903 crore Foreign Exchange earned through tourism in August 2016.

Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) on the basis of Nationality-wise, Port-wise data received from Bureau of Immigration (BOI) and Foreign Exchange Earnings (FEEs) from tourism on the basis of data available from Reserve Bank of India. The following are the important highlights regarding FTAs and FEEs from tourism during the month of August, 2016.

Foreign Tourist Arrivals (FTAs):

n++ FTAs during the Month of August, 2016 were 6.70 lakh as compared to FTAs of 5.99 lakh during the month of August, 2015 and 5.76 lakh in August, 2014. There has been a growth of 11.8% in August, 2016 over August, 2015.

n++ FTAs during the period January- August,, 2016 were 55.92 lakh with a growth of 10.2% as compared to the FTAs of 50.73 lakh with a growth of 4.6% in January- August, 2015 over January- August, 2014.

n++ The Percentage share of Foreign Tourist Arrivals (FTAs) in India during August, 2016 among the top 15 source countries was highest from Bangladesh (16.61%) followed by USA (12.59%), UK (10.57%), Sri Lanka (5.92%), Malaysia (3.41%), China (2.77%), Japan (2.75%), Canada (2.63%), Germany (2.57%),France (2.54%),Australia (2.40%), Oman (2.19%), Nepal (1.95%), Singapore (1.91%) and UAE (1.68%).

n++ The Percentage share of Foreign Tourist Arrivals (FTAs) in India during August 2016 among the top 15 ports was highest at Delhi Airport (28.38%) followed by Mumbai Airport (17.32%), Chennai Airport (10.17%), Haridaspur Land check post (9.10%), Bengaluru Airport (6.83%), Cochin Airport (5.08%), Hyderabad Airport (3.98%),Kolkata Airport (3.93%), Gede Rail (2.05%), Trivandrum Airport (1.72%), Ahmadabad Airport (1.68%),Tiruchirapalli Airport (1.64%), Ghojadanga land check post (1.07%), Amritsar (1.05%) and Attari-Wagh (1.05%).

Foreign Exchange Earnings (FEEs) from Tourism in India in Rs. terms and in US$ terms

n++ FEEs during the month of August, 2016 were Rs.12, 903 crore as compared to Rs. 11,411 crore in August, 2015 and Rs. 10,385 crore in August, 2014.

n++ The growth rate in FEEs in rupee terms during August, 2016 over August, 2015 was 13.1% as compared to the growth of 9.9% in August, 2015 over August, 2014.

n++ FEEs from tourism in rupee terms during January- August, 2016 were Rs. 1,00, 287 crore with a growth of 14.7% as compared to the FEE of Rs. 87,428 crore with a growth of 9.6% during January-August, 2015 over January- August, 2014.

n++ FEEs in US$ terms during the month of August, 2016 were US$ 1.927 billion as compared to FEEs of US$ 1.752 billion during the month of August, 2015 and US$ 1.706 billion in August, 2014.

n++ The growth rate in FEEs in US$ terms in August, 2016 over August, 2015 was 10.0% compared to the growth of 2.7% in August, 2015 over August, 2014.

n++ FEE from tourism in US$ terms during January- August , 2016 were US$ 14.922 billion with a growth of 7.8% as compared to the US$ 13.839 billion with a growth 4.9% during January- August , 2015 over January- August, 2014.

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Indian electronics products to touch $75 bn by 2017: ASSOCHAM-EY study
Sep 20,2016

The Indian electronic products industry in India is expected to grow at a CAGR of 10.1% to reach US$ 75 billion by 2017 from US$ 61.8 billion in 2015 with increasing penetration across consumer products especially in semi-urban and rural markets, along with government push for infrastructure development, locomotive and energy, there exists a significant opportunity for rapid expansion of this industry, adds the ASSOCHAM-EY joint study.

The electronic components industry in India was valued at US$13.5 billion in 2015, growing from US$10.8 billion in 2013 at a CAGR of 11%. The market is dominated by electromechanical components (such as PCB and connectors) which form 30% of the total demand, followed by passive components (such as resistors and capacitors) at 27% , according to an ASSOCHAM-EY study titled Turning the Make in India dream into a reality for electronics and hardware industry.

Indias attractiveness for manufacturers is growing due to availability of low-cost labor. Rising manufacturing costs in China and Taiwan are compelling manufacturers to shift their manufacturing base to alternate markets. In 2014, the average manufacturing labor cost per hour in India was US$0.92 as compared to US$3.52 of China, noted the study.

The Indian manufacturing ecosystem for electronics and hardware industry is still at a nascent stage and faces various demand side as well as supply side challenges are limited scale of operations and local component demand due to the nascent product manufacturing in India. Component demand in India is muted due to very limited value addition as primarily last-mile assembly takes place. Norms such as safety regulations for automotive, medical and industrial sectors have driven the uptake of electronic content globally.

However, manufacturers in India do not add high electronic content in the products due to limited industry-specific standards. The current market is dominated by secondary sales and primary sales are limited due to reduced disposable income in semi-urban and rural markets. The market penetration for most of the consumer appliances and electronics is currently lagging behind global average by up to 60% in certain categories and there lies huge untapped potential in rural markets (approximately 69% of Indias households).

Although global markets are witnessing rapid consumer uptake as electronic content increases across verticals (e.g., automotive with applications around safety, connectivity, infotainment, consumer electronics, smart homes, etc.); India has a slower adoption as consumers remain highly sensitive to even a marginal increase in product prices.

Due to nascent stage of electronics manufacturing in India, scale of operations is low, resulting in reduced cost competitiveness. Traditional electronics manufacturing destinations such as China, Taiwan and South Korea have built significant capacities across manufacturing value chain (SKD assembly, CKD assembly, Semiconductor Assembly & Testing Services). In addition, emerging (Malaysia, Vietnam) destinations have also built capacities. Although labor cost is low in India, labor productivity is lower than traditional destinations.

The basic infrastructure for any industry comprises good roads, power, water, telecommunications, ports and logistics. In India, availability of these facilities is not up to the mark, even in established industrial estates. While the Government has notified Greenfield Electronic Manufacturing Clusters, they still remain un-operational due to infrastructure issues.

The lack of proper roads and sales infrastructure results in distribution challenges for companies catering to markets in small semi-urban cities, rural areas and remote villages. Additionally, from both import and export perspective, there is port congestion due to unavailability of containers and long documentation process.

Availability of relevant manpower is crucial to the development of any industry. Since the electronics manufacturing industry has high dependence on skilled manpower, especially for highly specialized activities such as electronics system design, IC design and manufacturing etc., the availability of talent with relevant skill sets assumes considerable importance.

Both SKD and CKD are labor intensive and require delicate handling and process adherence during the manufacturing process. With changing technology, the labor needs to be constantly trained. However, the current labor scenario in India poses certain challenges.

According to National Skill Development Corporation (NSDC), the incremental human resource requirement in the electronics and IT hardware sector will be 8.9 million by 2022. The lack of training centers that administer courses relevant to the job functions in electronics sector is also a concern. Moreover, the country has strict labor laws including restrictions on overtime work, employee headcount and work timings for women employees, which act as a barrier for growth in the sector.

The high cost of working capital and capex-related financing (receivables and payables) due to high interest rates is a major challenge faced by domestic manufacturers, since it increases the overall cost of finance. Additionally, there is an increase in the cost of manufacturing (conversion costs) due to inadequate availability/reliability of power, high cost of real estate, etc. The cost of borrowed capital is 12%-14% in India as compared with ~5%-7% global average. Moreover, with the frequently changing energy efficiency norms, manufacturers need to make significant investments for products with a high rating.

Indias taxation system is complex, especially where indirect taxes are concerned. Currently, the base direct tax incidence in India stands at around 30%, whereas the corresponding tariff in other Asian countries is between 16% and 25%. Although, the Government has proposed the implementation of Goods and Services Tax (GST) for a state-of the-art indirect tax system, there are concerns that the industry faces in terms of the clarity on the revenue-neutral rate, non-creditable tax on inter-state movement of goods, status of existing state incentives granted and transition from existing taxation system to GST regime.

Procedural and regulatory clearances are time consuming and complex. According to industry sources, it takes up to a year to set up a manufacturing plant in the country and a new production line could take up to six months to become fully operational.

Additionally, the refund processes and clearances to avail benefits under tax are highly cumbersome and time-consuming. Procedure to claim concessional duty on many raw materials/ parts/components used in manufacturing of electronics products has been recently simplified in the Union Budget 2016-17 by introducing the concept of self-assessment.

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IndiaGÖs external debt stock stood at US$ 485.6 billion at end-March 2016, increasing by US$ 10.6 billion over the level at end-March 2015
Sep 20,2016

The rise in External Debt was due to the rise in long-term debt particularly NRI deposits.

The Twenty Second Issue of the Annual Publication GÿIndias External Debt: A Status Report 2015-16 prepared by the Department of Economic Affairs, Ministry of Finance, Government of India presents a detailed analysis of Indias external debt position at end-March 2016, based on the data released by the Reserve Bank of India (RBI) on June 30, 2016 and data and information available from other sources. Apart from analysing the trend, composition and debt service of Indias external debt, the Report provides a comparative picture of Indias external debt vis-a-vis other countries, particularly developing countries.

The salient features of the Report are:

-+Indias external debt stock stood at US$ 485.6 billion at end-March 2016, increasing by US$ 10.6 billion (2.2 per cent) over the level at end-March 2015.The rise in external debt was due to the rise in long-term debt particularly NRI deposits.

-+At end-March 2016, long-term external debt was US$ 402.2 billion, showing an increase of 3.3 per cent over the level of 2015 (end-March). Long-term external debt accounted for 82.8 per cent of total external debt at end-March 2016 as compared to 82.0 per cent at end-March 2015.

-+Short-term external debt declined by 2.5 per cent from US$ 84.7 billion at end-March 2015 to US$ 83.4 billion at end-March 2016. This was mainly due to the decline in trade related credits. The share of short-term external debt in total external debt declined from 18.0 per cent at end-March 2015 to 17.2 per cent at end-March 2016.

-+Government (sovereign) external debt stood at US$ 93.4 billion at end-March 2016 vis-a-vis US$ 89.7 billion at end-March 2015. The share of Government external debt in total external debt was 18.9 per cent at end-March 2016 vis-+-vis 18.8 per cent at end-March 2015.

-+Indias external debt has remained within manageable limits in 2015-16 as indicated by the increase in foreign exchange reserves to debt ratio to 74.2 per cent, the external debt-GDP ratio of 23.7 per cent, and fall in short term debt to 17.2 per cent. External debt of the country continues to be dominated by the long-term borrowings. Indias external debt position in recent years is given below: 

Table: Indias Key External Debt Indicators (Per cent)At end March External Debt (US$ billion)External Debt to GDPDebt Service RatioForeign Exchange Reserves to Total DebtConcessional Debt to Total DebtShort-Term Debt to Foreign Exchange ReservesShort- Term Debt to Total DebtLong-Term Debt to Total Debt1234567892013-14     446.223.8        5.968.210.430.120.579.52014-15 PR    475.0 23.8        7.671.98.825.018.082.02015-16 QE    485.623.78.874.29.023.117.282.8PR: Partially Revised; QE: Quick Estimates.

A cross country comparison based on International Debt Statistics 2016 of the World Bank which presents the debt data for 2014, shows thatIndia continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries. Indias key debt indicators, especially debt to GNI and debt service ratios continue to be comfortable.

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Indias external debt stock stood at US$ 485.6 billion at end-March 2016, increasing by US$ 10.6 billion over the level at end-March 2015
Sep 20,2016

The rise in External Debt was due to the rise in long-term debt particularly NRI deposits.

The Twenty Second Issue of the Annual Publication Indias External Debt: A Status Report 2015-16 prepared by the Department of Economic Affairs, Ministry of Finance, Government of India presents a detailed analysis of Indias external debt position at end-March 2016, based on the data released by the Reserve Bank of India (RBI) on June 30, 2016 and data and information available from other sources. Apart from analysing the trend, composition and debt service of Indias external debt, the Report provides a comparative picture of Indias external debt vis-a-vis other countries, particularly developing countries.

The salient features of the Report are:

-+Indias external debt stock stood at US$ 485.6 billion at end-March 2016, increasing by US$ 10.6 billion (2.2 per cent) over the level at end-March 2015.The rise in external debt was due to the rise in long-term debt particularly NRI deposits.

-+At end-March 2016, long-term external debt was US$ 402.2 billion, showing an increase of 3.3 per cent over the level of 2015 (end-March). Long-term external debt accounted for 82.8 per cent of total external debt at end-March 2016 as compared to 82.0 per cent at end-March 2015.

-+Short-term external debt declined by 2.5 per cent from US$ 84.7 billion at end-March 2015 to US$ 83.4 billion at end-March 2016. This was mainly due to the decline in trade related credits. The share of short-term external debt in total external debt declined from 18.0 per cent at end-March 2015 to 17.2 per cent at end-March 2016.

-+Government (sovereign) external debt stood at US$ 93.4 billion at end-March 2016 vis-a-vis US$ 89.7 billion at end-March 2015. The share of Government external debt in total external debt was 18.9 per cent at end-March 2016 vis-+-vis 18.8 per cent at end-March 2015.

-+Indias external debt has remained within manageable limits in 2015-16 as indicated by the increase in foreign exchange reserves to debt ratio to 74.2 per cent, the external debt-GDP ratio of 23.7 per cent, and fall in short term debt to 17.2 per cent. External debt of the country continues to be dominated by the long-term borrowings. Indias external debt position in recent years is given below:n++

Table: Indias Key External Debt Indicatorsn++(Per cent)At end March External Debt (US$ billion)External Debt to GDPDebt Service RatioForeign Exchange Reserves to Total DebtConcessional Debt to Total DebtShort-Term Debt to Foreign Exchange ReservesShort- Term Debt to Total DebtLong-Term Debt to Total Debt1234567892013-14 n++n++n++ 446.223.8n++n++n++n++n++n++n++ 5.968.210.430.120.579.52014-15 PRn++n++n++ 475.0 23.8n++n++n++n++n++n++n++ 7.671.98.825.018.082.02015-16 QEn++n++n++ 485.623.78.874.29.023.117.282.8PR: Partially Revised; QE: Quick Estimates.

A cross country comparison based on International Debt Statistics 2016 of the World Bank which presents the debt data for 2014, shows thatIndia continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries. Indias key debt indicators, especially debt to GNI and debt service ratios continue to be comfortable.

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Union Minister Mr Venkaiah Naidu lays foundation stone for Bharat Electronics Advanced Night Vision Products Factory in Andhra Pradesh
Sep 20,2016

Union Minister for Information & Broadcasting, Shri M. Venkaiah Naidu laid foundation stone for the Bharat Electronics Advanced Night Vision Products Factory at Nimmaluru, Pamarru (M) in Krishna District of Andhra Pradesh here today. The factory, which is coming up in 50 acres is likely to be completed by 2018 at a cost of Rs 300 crore and is likely to provide employment to over 1200 people. The factory also has a scope for further investment of up to Rs 1000 Crore. BEL factory is presently operating from a campus of five acres. Once completed the Advanced Night vision facility will have state of the art infrastructure like Assembly Hangars, ultra-high clean rooms for assembly of devices, modern optical workshops with precision SPDT, CNC optical fabrication machines and high performance durable thin film.

New products like IR seekers & missile warning systems, tank sights, weapons sights, thermal imager based multi-function sights, EO system for radar and AD guns, Border surveillances system un-cooled TI weapon sights, night sights for CQB carbine, compact multi-purpose stabilized systems for advanced light helicopters shall be designed and manufactured in this factory.

Speaking on the occasion , Shri Naidu urged the people to be cautious with those creating hurdles to the development of the State. He said that the Centre has focused on the development of State and is paying special attention to its progress by granting special financial assistance. n++People are more intelligent than the political leaders and they realise what is true and what is notn++. He urged the BEL management to provide employment to the locals in the new factory and assured that he would take up the issue with the defence minister. The Prime Minister has focussed on n++make in Indian++ products so that people get employment he said. The Union Minister further said that of the 28 demands made by the people of the State in the wake of bifurcation, the Centre has already agreed upon 27 demands except the special category status which is not possible as it was not included in the bifurcation bill and 9 more states are demanding it.

Andhra Pradesh State is to become hub for manufacturing of defence products with over Rs 6,600 Crore worth defence projects sanctioned, he said. He reiterated that the Centre had assured special package to the State which would be more than what Special status would give. He appreciated the efforts of the Chief Minister Mr Nara Chandrababu Naidu for earmarking 50 acres of land to the BEL management for establishing the factory. He also said that another defence project is in final stage of sanction to be set up Bobbili. The Union Minister pointed out that industrial development is as important as agriculture for development and they are like two eyes.

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