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CII Issues 6-Point Action plan for Apparel, Made-ups & Textile Industry; Potential to create 50 million jobs, 3x Growth
Jun 28,2016

Moving an entire industry and creating millions of jobs seems a herculean task, but with bold Labour reforms, implementation of GST, robust export infrastructure coupled with innovation & technology, Indian Textile and Apparel industry has the potential to fundamentally change its trajectory, create over 50 million jobs, bring social transformation and gain global dominance. These are some of the early conclusions of the a study on the Indian Apparel, Made - ups & Textile Industry commissioned by the Confederation of Indian Industry (CII) to the Boston Consulting Group (BCG) to identify the key catalysts that will enable breakout growth.

According to CII, global trends in the apparel, made-ups and textile industry today are ominous and opportune. With an increase in wages and the Yuan gaining strength, industry is shifting its base away from China, creating a potential market of USD 280+ billion for other countries to capture. The shift is already happening in the apparel sector, large shifts are expected in fabric and yarn sourcing as well. Though Bangladesh and Vietnam are the current frontrunners, emergence of hubs in Africa (e.g. Ethiopia) and a strong resurgence seen for manufacturing in the US, the future landscape could be dramatically different.

Capturing this opportunity can bring immense social and economic benefits. The sector is the largest industrial employer of women in the country and can provide quick employability to a large mass of workers. If the industry achieves breakout growth, we estimate another 50 million jobs to be created by 2025 ~ 35-40 million of which will be employing women. Potential economic benefits are sizeable as well. The Study estimates that the industry can triple in size over the next 10 years, get USD 150 billion annually in foreign exchange, and spur the apparel, made-ups and textile industry to reach USD 300 billion by 2025. The domestic market will also grow at least 2.5 times to become around 150 billion dollars in size.

According to Mr Chandrajit Banerjee, Director General, CII, n++India is uniquely positioned to capitalise on this opportunity. We are the only country in the world other than China to have the entire value chain from fibre to fashion, both in cotton and synthetics, an abundant and young labour force, a vibrant domestic market and a good starting point in exports (2nd largest exporter of textiles, apparel and made-ups in the world)n++.

The study notes that shifts in the global apparel, made-ups and textile industry are going to be shaped by four major factors a) Cost competitiveness, especially in labour / wage structures and energy structures per unit of output b) Ease of market access (both in terms of tariffs/duties and time to market) c) Ease of doing business and d) Technical innovations.

The CII 6-point agenda identifies the following game-changers for the Indian Apparel, Made-ups and Textiles industry.

Firstly, build scale, as the industry is currently highly fragmented and lacks scale. Being highly labour intensive, introduce flexible labour laws; job linked support schemes, innovative hub and spoke models for apparel / textile parks to employ labour in hinterlands and introduce PPP models for Industry to provide scale and create jobs.

Secondly, bridge the operating cost gap, especially on synthetics. Entrepreneurs need to aggressively drive up productivity by investing in world class facilities, process improvements and build a culture of manufacturing excellence. Simplified tax structures and neutral implementation of GST for both cotton and synthetic products will give the much required boost to the industry.

Thirdly, Infrastructure, especially at ports, import facilities and clearance procedures should be streamlined to cut turnaround times. Signing FTAs with major markets like the European Union can equalise market access positions with key competitors like Bangladesh.

Fourthly, increased investments in technology, especially processing and technical textiles either through capital subsidy or technology partnerships. The A-TUFS released in December 2015 has taken welcome steps in this respect.

Fifthly, to actualise Make-in-India movement, Government can create a comprehensive umbrella of support schemes under the Make-in-India banner. Entrepreneurs need to advertise the made-in-India aspect aggressively, over-invest in quality and make their products worthy of putting up Proudly Indian labels.

And lastly, Indian entrepreneurs need to invest both financial and human resources on technology and innovation to address the constantly evolving markets. Investments are required in technical textiles, processing, and apparel making in particular. India needs to create its own silicon-valleys for technical textiles, with a full ecosystem of investors, start-ups, production facilities and ultra-fast clearances. Ease of doing business is equally critical for innovation.

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Brexit fall-out: India must build firewalls by domestic reforms, says ASSOCHAM
Jun 28,2016

Britains exit from the European Union (EU), as decided by its people, has come about as a shocker not only for global financial markets but also the political leaders across the world, throwing a huge amount of uncertainty as to which way the economic winds would blow, ASSOCHAM Secretary General Mr D S Rawat said.

n++India is relatively safe thanks to its macroeconomic stability reflected by low current account deficit, comfortable foreign exchange reserves and improved GDP prospects with advancing Monsoon. However, given the heightened global risks emerging from todays event, it is time India further buffeted its domestic firewall by moving ahead with the GST Bill and other important reforms so that we remain as the most credible destination for global funds, the ASSOCHAM Secretary General said.

He said, however, since India has a huge corporate investment in the UK economy, the Indian firms with manufacturing or other facilities in Britain will have to re-align their business plans, depending on the terms of negotiations, hopefully for smooth exit of UK from the European Union.

Besides, India must also rework its trade and investment strategy for the EU in the changed circumstances and position itself as the best partner to both UK and the rest of Europe, not at the cost of the other.

In the short term, it is time to be watchful particularly with respect to the currency markets which RBI is expected to be watching proactively. As for the equity and debt markets, the best defence for India would be to move fast on domestic reforms to be able to provide a safe haven for the panicky global investors, Mr Rawat said.

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Moodys: Consolidation of Indian banking system presents greater risks than benefits
Jun 28,2016

Moodys Investors Service says that the Indian Governments (Baa3 positive) proposal to consolidate the countrys public sector banks (PSBs) creates risks that -- in the current weak economic environment -- could offset the potential long-term benefits.

Indias banking system has witnessed an increase in stressed assets since 2012, with the result that no PSB currently has the financial strength to assume a consolidator role without risking its own credit standing post-merger, says Alka Anbarasu, a Moodys Vice President and Senior Analyst.

Barring significant government support to boost the banks capitalization, we believe the risks arising from the potential consolidation currently outweigh the potential longer-term benefits, adds Anbarasu.

The consolidation of Indian PSBs is gaining policy momentum, says Moodys, as the government aims to strengthen the banking system. In his budget speech for the fiscal year ending March 2017 (FY2017), the finance minister stated that a road map was being formulated and an expert committee would be constituted.

In line with this trend, the State Bank of India (SBI, Baa3 positive, ba1) -- the countrys largest PSB -- in May announced that it will merge with six banks, including five associate banks.

From a credit perspective, industry consolidation would strengthen the banks bargaining power, help save costs and improve supervision and corporate governance across the banking system.

These potential benefits, however, are outweighed by multiple downside risks, says Moodys.

In particular, the banks weakened metrics since 2012 and weak performance mean that many have difficulties meeting minimum regulatory requirements without regular capital injections from the government. As a result, few public sector banks have the excess capital required to acquire meaningfully sized peers.

Adding to this financial pressure, all listed PSBs are trading at a significant discount to their book value, limiting their ability to attract external capital to support acquisitions.

Therefore, Moodys believes government support will be a crucial driver of the credit outcome of potential mergers, particularly in the form of the equity capital required to shore up capital buffers.

Finally, Moodys also sees considerable challenges from potential opposition from employee unions, which could hamper merger efforts and drive up costs. For example, SBI estimates that its merger with the associate banks will cost up to INR30 million due to differences in employee pension schemes.

The Indian governments ultimate aim is to reduce the number of PSBs to about 8-10 from the current 27.

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Shri J P Nadda launches new Nurse Practitioner courses and Live Register for Nurses
Jun 28,2016

Underscoring the importance of upgradation of skills of nurses across the country, Shri J P Nadda, Union Minister for Health and Family Welfare stated that the Government is committed to providing accessible, affordable and quality training to them. He also emphasised that the Nursing Staff occupies important position in healthcare delivery and without them the desired results cannot be achieved. n++The role of the nursing staff can be compared equally to that of the doctors when we think of achieving the SDGsn++. Shri J P Nadda was speaking at the inauguration of Indian Nursing Council Office Complex. Dr Kirit P Solanki, Member of Parliament, Shri Ganesh Singh, Member of Parliament, and Shri Dileep Kumar, President, Indian Nursing Council were also present during the inaugural function. Shri Nadda launched two new Nurse Practitioner Courses, one in Critical Care and the other in Primary Healthcare. He also launched a web-based Live Register for Nurses.

While laying stress on importance of adequate skill enhancement through appropriate training, Shri Nadda stated that the training course for the nurses should be contextualised, so that they are imparted education and knowledge of the Indian healthcare landscape. He also underscored the importance of informal education in addition to formal education, as it shall provide a holistic and rounded understanding of the various issues the nursed are required to deal with in their profession. The need for sensitisation towards laid down protocols in treatment should be made part of the curriculum, the Minister added. The Health Minister stated that in harmony with the vision of the Hon. Prime Minister to n++Skill Indian++, we also need to ponder on how the courses for skilling the nurses can be synced with the Skill India program.

Shri Nadda termed the newly launched n++Live Registern++ as path-breaking. Through the Live Register accurate data of active and registered nurses will be made available online. This will help the Government in better manpower planning and for making policy level decisions for the nursing professionals in India. Shri Nadda stated that this will help in rationalisation and optimum utilisation of manpower. He further added that the government has given high priority for improving the Nursing and Midwifery cadre through skill development and continued professional development. He said that the Government has undertaken major expansion of nursing and technical education leading to a three-fold increase in the numbers of nursing institutions and in the number of students passing out of these institutions.

The Health Minister informed that the Government has undertaken several initiatives for strengthening of nursing cadre are. Some of these are establishment of ANM/GNM schools, up-gradation of institutions from School of Nursing to College of Nursing, Training of Nurses, development of 11 one year specialisation courses, revision of curriculum for all nursing programs, establishment of national PhD consortium for Nursing Research.

The Nurse Practitioner in Critical Care Program will be a two-year residential M.Sc degree in Nurse Practitioner in Critical care. On completion of the program Nurses will be qualified to assume responsibility and accountability for the care of critically ill patients. Whereas, the Nurse Practitioner in Primary Healthcare Program will be a one-year residential Post Graduate diploma program.

The Health Minister further said that there is an urgent need to make training course contextual to countrys needs. The Health Minister also suggested that the Nursing courses can be blended with skill India training Courses for countering the shortage of Nursing Staff.

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Multi System Operators to display details of their nodal officers on their website and inform the same to their linked LCOs
Jun 28,2016

The Telecom Regulatory Authority of India (TRAI) wrote to all multi system operators to display details of their nodal officers on their website and inform the same to their linked LCOs for ease of business and to reduce disputes.

The Telecommunication (Broadcasting and cable services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012 requires that no Multi System Operator shall make available signals of TV channels to any linked local cable operator without entering into a written interconnection agreement. Further it also requires that each & every transaction between the MSO & its linked LCOs must be in writing.

It has been brought to the notice of TRAI that the authorized representatives or nodal persons of MSOs are either inaccessible or issue sometimes hand written transaction notes to LCOs without any specific authorization and company seal / stamp which is not in line with the regulations in this regard. These practices also give rise to disputes as LCOs are not sure whether the contact person is authorized by respective MSO or not.

For improving the coordination between multi system operators and local cable operators all MSOs are directed to declare their nodal officers, which must be easily accessible to LCOs, physically as well as through Email/ mobile, so that they can interact with each other and resolve their issues in time bound manner.

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Shri Thaawarchand Gehlot Releases First Ever Draft List of Denotified & Nomadic Tribes
Jun 27,2016

Shri Thaawarchand Gehlot, Union Minister for Social Justice & Empowerment, released first ever draft list of Denotified, Nomadic & Semi Nomadic Tribes, prepared by National Commission for Denotified, Nomadic & Semi Nomadic Tribes here today. The draft list has state wise details of the Denotified, Nomadic & Semi Nomadic Tribes.

Shri Gehlot said that it is intention of the Government to bring all the downtrodden groups of the country into the mainstream as envisioned by the Prime Minister. In addition to the draft list of DNT communities, Minister also released the feedback from these communities, decisions of the commission and its communication with the State Governments. He also said that for the first time his Government has reviewed the progress of development of these communities, so as to identify their issues and suggest appropriate measures for their improvement.

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CSIRs CRRI validates usage of Ghazipur Municipal Waste to NHAI for earth-filling in construction of highways
Jun 27,2016

NHAI had entrusted the assignment of technically verifying whether Solid Waste Material generated from Municipal/City waste can be utilized for highway construction to CSIR-Central Road Research Institute (CRRI). The CSIR-CRRI conducted a study by collecting 70 tonnes of Municipal Solid Waste from different locations of 5/10/15 years old from Ghazipur land fill site of Municipal Corporation of Delhi and have recommended the following :

The municipal solid waste contains about 65 to 70 % of Soil components which can be used in embankment construction after segregation from the municipal solid waste. The methodology suggested for use is by drying the collected municipal solid waste and passing through different sieves. The percentage passing from the 16 mm sieve contains 44 to 48 % of municipal solid waste which can be directly used in embankment construction. For utilizing the municipal solid waste passing through 32 mm sieve, the segregation of plastic material and PVC etc., will have to be blown by using high capacity blowers at the segregation plant.

Director CRRI presented the report and findings to Chairman NHAI in presence of senior NHAI officers and various stake holders.

The Municipal Corporation of Delhi (East) had earlier approached NHAI to make use of waste at Ghazipur Landfill site, whereupon Chairman NHAI had commissioned analytical study through CRRI. NHAI plans utilization of this Solid Waste Material for its highway construction program on NH-24, i.e. Meerut Expressway. To allay the doubts of Concessionaires and to encourage them to utilize this waste, NHAI has offered to indemnify the Concessionaires for the stretches where this waste material shall be tried. Also, NHAI will write to MoEF to allow usage of solid waste material in lieu of fly-ash wherever feasible. This initiative of NHAI shall promote the construction of Green Highways in the country as it amounts to substantial replacement of natural earth, mining of which causes environmental problems.

NHAI is already utilizing fly-ash upto 30% of earth filling in the Eastern Peripheral Expressway and using other slag materials elsewhere. This will be in keeping with Prime Ministers directions for use of waste in a productive way.

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RGI releases Census 2011 data on Age at Marriage by Category of Economic Activities
Jun 27,2016

The Registrar General and Census Commissioner, India today released the Census 2011 data on Age at Marriage by Category of Economic Activities.. Table C-7 presents data on number of ever married and currently married population by age at marriage, duration of marriage and economic activity at India/State/District level. The mean age at marriage, as calculated from the table, for both males and females for all the categories of economic activities has improved during the last decade of 2001-2011. The comparative position for census 2001 and 2011 for various economic activities is given below:

Mean Age at Marriage by category of economic activity, India 2001-11

Category of Economic ActivityMalesFemales2001201120012011Main Workers22.623.518.219.2Cultivators 21.522.517.618.6Agricultural labourers21.822.517.718.5Workers in household industry23.723.419.519.1Other workers24.420.8Marginal Workers21.822.517.618.7Non-Workers22.823.518.519.4

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Government initiates process to constitute Monetary Policy Committee (MPC) under the Reserve Bank of India Act, 1934
Jun 27,2016

Government decides to bring the provisions of amended RBI Act regarding constitution of MPC into force on 27th June, 2016 so that statutory basis of MPC is made effective; Rules governing the procedure for Selection of Members of Monetary Policy Committeeand Terms and Conditions of their Appointment and factors constituting failure to meet inflation target under the MPC Framework notified on 27th June, 2016.

With a view to maintain price stability, while keeping in mind the objective of growth, the Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016 to provide for a statutory and institutionalised framework for a Monetary Policy Committee (MPC). A Committee-based approach will add lot of value and transparency to monetary policy decisions. Out of the six Members of MPC, three Members will be from the Reserve Bank of India (RBI), including the Governor, who will be the ex-officio Chairperson, the Deputy Governor, RBI and one officer of RBI. The other three Members of MPC will be appointed by the Central Government, on the recommendations of a Search-cum-Selection Committee, which will be headed by the Cabinet Secretary. These three Members of MPC will be experts in the field of economics or banking or finance or Monetary policy and will be appointed for a period of 4 years and shall not be eligible for re-appointment. The meetings of the MPC shall be held at least 4 times a year and it shall publicise its decisions after each such meeting.

The Government has decided to bring the provisions of amended RBI Act regarding constitution of MPC into force on 27th June, 2016 so that statutory basis of MPC is made effective. The Rules governing the Procedure for Selection of Members of Monetary Policy Committee and Terms and Conditions of their Appointment and factors constituting failure to meet inflation target under the MPC Framework have also been notified on 27th June, 2016.

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Banks should shed reluctance in lending to urban poor as recovery is 98%, says Shri Venkaiah Naidu
Jun 27,2016

Reiterating the Governments top priority of eliminating poverty, Minister of Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu today urged the commercial banks to shed their reluctance in lending to the urban poor. In his inaugural address at the National Conference on Deendayal Antyodaya Yojana-National Urban Livelihoods Mission organized in the national capital, Shri Naidu stressed the need for enhanced credit flow to the Self-Help Groups and for self- employment through individual and group enterprises under the Mission.

Shri Venkaiah Naidu asserted that loan repayment by Self-Help Groups is 98% and hence, were most bankable and eligible for lending. He expressed concern over inadequate credit linkages to such groups in the States in the Northern and Eastern regions of the country with the Southern states accounting for 62% of total credit linkage of Rs.3,173 groups advanced during the last two years under DAY-NULM. He highlighted the importance of supporting Self-Help Groups that are in the forefront of addressing poverty by taking up various economically productive activities through internal lending among the members.

The Minister said that with several initiatives being taken to promote domestic and Foreign Direct Investment in various sectors, there is a vast scope for employment generation leading to increased demand for skilled manpower.

Shri Naidu said that the Government is committed to eliminating poverty by skilling the unskilled, funding the unfunded and reaching the unreached. The Minister stressed on the need for convergence in implementation of skill development programmes and scaling them up in a convergence mode. He said 25% of people still living Below Poverty Line is clearly unacceptable when the country is aspiring for a lead role in the comity of nations. Concerted efforts need to be mounted to eliminate poverty. Due emphasis needs to be given on training to catch the fish instead of giving fish all the time. While banks should scale up financing, loans need to be repaid.

Minister of Skill Development and Entrepreneurship Shri Rajiv Pratap Rudy said that an integrated eco-system is being put in place for skilling of 30 crore people while 24 ministries were involved in handling 70 skill development programmes. He expressed concern over skills not being given due recognition as a result of which in our country there are no Professors of Carpentry or Plumbing. Referring to what he called the paradox of people with 15 years of formal education and not finding jobs being promised jobs after a 15 week training, Shri Rudy said this needs to be resolved with proper course content and certification. He urged the banks to accept skill certification issued by approved agencies for advancing loans to skilled people.

Minister of State for Finance Shri Jayant Sinha suggested promotion of financial literacy among the beneficiaries as part of skill certification under skill development programmes to enable them with better management of money and enterprises for further growth in chosen area of career development. He favoured credit lending in the name of women stating that they proved to be more adept in managing finances. He also called for lending higher amounts under anti-poverty programmes. This suggestion assumes significance in the context of average loan amount sanctioned so far for setting up individual micro-enterprises under DAY-NULM being Rs.75,000/- against the permissible limit of Rs.2.00 lakh per beneficiary and Rs.3.11 lakh as against the ceiling of Rs.10 lakhs under group enterprises.

Shri Sinha said that under Prime Ministers MUDRA Yojana, Loan Origination System has been introduced under which credit history of beneficiaries would be tracked to help them develop further by extending all necessary support. He informed that lending target under MUDRA for the current financial year has been increased by Rs.50.000 cr from the Rs.1.30 lakh cr advanced to 3.40 cr beneficiaries during the last fiscal.

The National Conference on Deendayal Antyodaya Yojana-NULM is being organized by the Ministry of Housing and Urban Poverty Alleviation to discuss ways of scaling up skills training and credit flow to self-employment programmes and Self-Help Groups.

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MNRE sets Target of Setting up One Lakh Family type Biogas Plants for FY 2016-17
Jun 27,2016

With an objective to provide clean gaseous fuel for cooking and organic bio-manure as a by-product, the Ministry of New and Renewable Energy (MNRE) has allocated to the States /UTs an annual target of setting up one lakh family size biogas plants (1 m3 to 6 m3capacity) for the current year, 2016-17.

This will result in a likely saving of about 21,90,000 LPG cooking cylinders annually, besides providing biogas plant processed bio-manure to reduce and supplement use of chemical fertilizers. There would be saving of about 10,000 tonnes of urea equivalent. The average envisaged saving of emissions through carbon dioxide and methane into the atmosphere would be about 4,50,000 tonnes and about 2,50,000 tonnes respectively, that would help in reducing the causes of climate change.

The MNRE is implementing a National Biogas and Manure Management Progamme (NBMMP) for setting up family type biogas plants in the country. The objective of the scheme is to provide clean gaseous fuel for cooking and organic bio-manure as a by-product in the form of biogas plant left over slurry, which contains higher values of Nitrogen, phosphorus and potassium (N, P&K).

NBMMP also helps in mitigating drudgery of women in rural and semi-urban areas by saving in their time both in collection of firewood, making cattle dung cakes and cooking. A biogas plant will facilitate in achieving sanitary in villages by linking sanitary toilets with cattle dung based biogas plants and the slurry bio-manure can be applied for crop production in solid, liquid or dried form.

There are applications of biogas to meet n++lifeline energyn++ needs for cooking & lighting in the n++Integrated Energy Policyn++ of the Planning Commission, now National Institution for Transforming India (NITI) Aayog. Otherwise also biogas is clean gaseous fuel for cooking, heating, generating electricity, and also for motive power and operating vehicles. It has the potential for leveraging livelihood development as well as tackling the issues related with health hazard associated with indoor air pollution.

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145 villages electrified last week ; 8,529 villages electrified till date under DDUGJY
Jun 27,2016

145 villages have been electrified across the country during last week (from 20 th to 26th June 2016) under Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY). Out of these electrified villages, 67 villages belong to Assam, 16 in Jharkhand, 29 in Meghalaya ,8 in Rajasthan , 11 in Odisha, 3 in Madhya Pradesh , 8 in Bihar, 2 in Chhattisgarh and 1 in Uttar Pradesh.

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Indo-US Cooperation On Clean Energy Moving In Right Direction: US Embassy
Jun 27,2016

Minister Counsellor for Economic, Environment, Science and Technology Affairs, Embassy of the United States of America, Mr. George N Sibley on Friday asserted that the research and development engagements of Indo-US clean energy cooperation has been progressing objectively, making a prophesy that it might lead to invent technologies for storage facilities of solar and other clean energies.

Speaking at a Business Sustainability and Responsibility Reporting Summit 2016 under joint aegis of PHD Chamber of Commerce and Industry and FORE School of Management, Mr. Sibley even forecast that this exercise might also produce scholars for noble prize in case the storage solutions for clean energy are discovered.

n++The world has so far not been able to create storage facilities for energy generated both in the segments of fossil and non-fossil and, therefore, a time has come that research and development work is necessitated for creating energy store housesn++, he emphasised.

Speaking on the occasion Counsellor for Trade and Economic Affairs, Embassy of Sweden, Ms. Anna Ferry informed her country has come out with an action plan as per which its corporates are required to integrate their business processes with environment and ecology so that these are kept unspoilt from all possible sources of pollutions and degradation. The action plan makes it obligatory for the Swiss companies to apply same standards and tools including applications for production even outside their country so that the sensitivities of environment and ecology are hurt little, she added.

Convener and Chief Programme Executive (CSR), National Foundation for Corporate Social Responsibility (NFCSR), Indian Institute of Corporate Affairs, Ms. Gayatri Subramaniam emphasised that national voluntary guidelines pave a way for the companies to apply sustainability practices at their workplace taking care of people and plant along with profits.

Director, FORE School of Management, Dr. Jitendra Das sought the participation of all citizens of the world including those of India to resist all attempts intended or unintended so that production methodologies of any economic activity is prevented from hurting the environment.

In their remarks, President and Vice President, PHD Chamber, Dr. Mahesh Gupta and Mr. Anil Khaitan also emphasised the need to maintain an eco system that can strike is suitable balance between production processes and environment. Sr. Secretary, PHD Chamber, Dr. Jatinder Singh moderated the summit.

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UK Exit to Bring Central Banks Back in Focus for DebtFX Markets
Jun 27,2016

The formal exit of the UK from the European Union is likely to create more uncertainties rather than alleviating them in the coming months and will bring central banks back in focus, says India Ratings and Research (Ind-Ra). Indian markets are unlikely to be completely insulated from the impact of this global contagion, despite the relatively resilient domestic macroeconomic conditions.

Domestically, the ensuing global volatility could put the both currency and debt markets on tenterhooks, but the markets will await clarity from global central banks as they tackle this unprecedented event. The markets are likely to be gripped with two major concerns hereon: (1) the instability that euro area will face as other nations contemplate their membership in the European Union (2) the response of global central banks especially the US Federal Reserves stance on policy rates.

The UK referendum decision is a harbinger for more volatility in the short to medium term while the modalities, process and timeline of the exit are being ironed out. Ind-Ra believes that Brexit will have a destabilising impact on the UK and euro region with increasing scope for other nations to rethink their position in the euro region.

The financial markets are likely to move back into the central banks zone as the latter steps in to stave off global deflationary pressure while boosting growth. The US Federal Reserve is likely to delay its ongoing rate normalisation. Concomitantly, the possibility of a weak domestic and global recovery, stronger dollar and slump in commodity prices may necessitate the US Fed to reassess its policy rate trajectory. The median federal open market committee expectation of federal funds rate for end-2016 suggested two rate hikes (with members seeing the rate between 0.75%-1%). An extended period of global volatility, however, is likely to keep the Fed on the side of caution and constrain the imminent rate hikes before stability is restored.

Ind-Ra believes the Reserve Bank of Indias initial line of action will be to address temporary shocks in systemic liquidity through liquidity channels rather than policy rates. The possible tools can be (1) stepping up the size of open market operations (2) reducing the daily requirement of cash reserve ratio (3) broadening the collateral base in the repo market (4) increasing the size and duration of discretionary term repos. Presently, the liquidity conditions are broadly easy with core systemic deficit hovering in the range of 0.2%-0.4% of net demand and time liabilities.

The currency market is likely to witness high volatility, keeping the rupee trading with a weak bias in the near term. In terms of negative implications, an overall environment of risk-off is unlikely to revive foreign flows to India in a hurry. In 2016, the equity segment noted a net portfolio inflow of USD2.8bn while debt outflows stood at USD1.1bn. Additionally, tail risks over FCNR B (foreign currency non-resident) deposits redemption may get pronounced on account of external volatility. On the positive side, Ind-Ra believes the US Fed will stay put with a protracted pace of hikes. This may check the deterioration in overall emerging market sentiments.

For the bond market, an interplay of three factors will be critical (1) the period of low global yields and benefit from near-term softening of commodity prices may augur well for the domestic market, keeping the head room open for the Reserve Bank of India to ease rates later in the year (2) in event of weak portfolio flows, scope for stepping up open market operation purchase will be supportive for G-sec market and (3) the high portfolio investors debt exposure at INR3.3trn presently (INR1.7trn in government securities and INR1.6trn on corporate debt front) suggest the risk of outflows cannot be undermined.

Ind-Ra continues to assert that the domestic corporate sector outlook will remain challenging over the coming two years, aggravated by this recent episode. Ind-Ra earlier has highlighted external risks could derail a fragile recovery. Bouts of global risk aversion corresponding with rupee depreciation are likely to limit the corporate sector appetite for investments, keeping the economy on an overall low equilibrium.

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More jobs & entrepreneurship opportunities needed to promote women empowerment & achieve gender parity: Study
Jun 27,2016

There is an urgent need to create more jobs and entrepreneurship opportunities to promote women empowerment thereby making them economically independent as female labour force participation (FLFP) rate in India has fallen significantly by 10 per cent during the last decade, noted a recent ASSOCHAM-Thought Arbitrage Research study.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) along with knowledge firm Thought Arbitrage Research Institute (TARI) conducted a study titled Female Labour Force Participation in India, analysing Indias performance in female labour force participation (FLFP) in comparison with the rest of the world and identifying factors that determine FLFP in India along with barriers to its growth.

Though there was a spurt in the number of working women in India during 2000-2005, increasing from 34 per cent to 37 per cent, the female labour force participation rate has reduced continuously thereafter and reached 27 per cent in 2014, particularly during the period when economy was experiencing unprecedented growth according to World Banks report on World Development Indicators.

More so given the turn in Indian economy in the 1990s, and the rates of growth that have been achieved, an obvious conclusion that is often drawn is that FLFP should be increasing - due to increase in disposal incomes, job opportunities, education and healthcare - all factors that economic growth would normally have an impact on.

There are certain primary reasons for low participation of women in the labour force like lack of access to higher education among women, dearth of opportunities to work and even lack of flexibility in working conditions tends to dissuade women from joining the labour force as they turn to their domestic duties.

Another concerning aspect is that India rates lowest in terms of FLFP with a dismal score and a huge gap between it and the next among BRICS countries - China (64 per cent), Brazil (59 per cent), Russian Federation (57 per cent), South Africa (45 per cent) and India (27 per cent).

Further, the gap between rural male and female labour force participation in India in 2011 stood at about 30 per cent while in urban centres gap was more pronounced (about 40 per cent). n++This can be attributed to social and cultural curtailment and often the lack of work opportunities.n++

It has also been highlighted that in India, marriage decreases the probability of FLFP by about eight per cent in rural areas and more than twice as much in urban areas.

As per the latest available data, the FLFP rate in India was about 36 per cent as of 2011-12, with 31 out of 35 states and union territories scoring rates below national average, while only Andhra Pradesh (erstwhile), Chhattisgarh, Sikkim and Himachal Pradesh faring better in this regard.

Initiatives like Beti Bachao Beti Padhao, Make in India, Start-up India and others are positive steps in the direction to improve female labour force participation in India, however, more initiatives towards womens empowerment need to be taken to create an enabling environment for increasing female employment and entrepreneurship, noted the ASSOCHAM-TARI study.

The study suggested promoting skill training programmes for women, setting up child care centres in large numbers, ensuring women safety and security in every sphere through efforts by both the Central and state governments and other such measures are imperative to boost female labour force participation in India.

Considering that even a 10 per cent increase in FLFP rate can boost gross domestic product (GDP) by 0.3 per cent, according to The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), it is imperative that policy measures and programmes are introduced and implemented to increase the participation of women in the workforce in India.

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