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Varanasi to get Heritage Walk around Kabir Chaura; 86 sites to be developed under HRIDAY
Oct 07,2016

Ministry of Urban Development has approved projects worth Rs.114 cr under Heritage Infrastructure Development and Augmentation Yojana (HRIDAY) for improving infrastructure facilities around core heritage sites in five cities of Varnasi, Amritsar, Dwaraka, Puri and Warangal.

Minister of Urban Development Shri M.Venkaiah Naidu has directed the officials of the Ministry and concerned State Governments to ensure implementation of approved projects by March next year.An inter-ministerial HRIDAY National Empowered Committee chaired by Shri Rajiv Gauba, Secretary(UD) yesterday cleared Detailed Project Reports of these five cities.

An investment of Rs.13.25 cr has been approved for Varanasi for Developing a Heritage Walk around Kabir Chaura and Piplani Katra at a cost of Rs.2.50 cr and developing required infrastructure at 86 historical sites scattered across the city. Kabir Chaura is known as the home of renowned musicians like Kishan Maharaj, Gop Krishan, Samta Prasad and Rajan and Sajan Mishra brothers. Access roads and gallis leading to 86 heritage sites in the city will be improved at a cost of Rs.10.75 cr. Fan++ade improvement, provision of on route amenities and signages, site development etc., will be undertaken. These heritage sites include temples, residences of famous personalities, kunds, parks and palaces.

For Amritsar, nine heritage infrastructure related projects have been approved for implementation with a total investment of Rs.57 cr. These include comprehensive road development and upgradation of 21 major roads leading to the Golden Temple to address congestion at a cost of Rs.21 cr, improving Maharaja Ranjit Singh Panorama with Rs.50 lakhs, revitalization of historical 40 Khoo (Wells) by providing necessary infrastructure at a cost of Rs.5.00 cr, improving connectivity, street and landscape at Gol Bagh with Rs.5.00 cr, providing a mobility corridor along outer and inner circular roads at a cost of Rs.5.00 cr, providing interpretative signages with censors with Rs.5.35 cr, refitting and upgradation of colonial era building i.e Deputy Commissioners Office that was damaged in a fire at a cost of Rs.2.00 cr, development of an Environmental Park at UBDC canal with Rs.1.00 cr and development of public plaza along southern edge of Rambagh Garden with Rs.1.00 cr.

In Puri, five projects with an investment of about Rs.17.00 cr will be undertaken for revitalization of different heritage zones. These include, landscape development of Shri Jagannath Ballabh Temple at a cost of about Rs.9.00 cr, retrofitting of building facades along Parikrama Marg of the temple with Rs.3.00 cr, improvements at Bada Odiya Matha and Ganga Mata Matha at a cost of Rs.2.00 cr, landscape development along the River Front of Athanarla with Rs.2.00 cr and revival of seven Jagagharas and Ponds at a cost of over Rs.1.00 cr. there are 60 Jagagharas and Akharas in Puri which are over 400 year old and were centres of learning music and martial arts.

The Fort of Warangal in Telangana State will be revived and developed with necessary interventions with Rs.15.30 cr under HRIDAY. Access routes, pathways and entry points will be developed at a cost of Rs.4.17 cr, revival of water bodies and setting up of a sewage treatment plant would be undertaken at a cost of Rs.10.00 cr, public amenities at North Gate and Srungarapu Bavi (well) with Rs.2.15 cr, landscaping along access routes with Rs 0.80 cr and illumination of North Gate, access routes and other areas at a cost of Rs.0.60 cr.

In Dwaraka, Gujarat, Dwarakadhish Temple Square will be developed at a cost of Rs.2.75 cr by providing pedestrian pathway, surface improvement of roads, adding green elements, street furniture, lighting, signages, dustbins, space for vendors etc. The main Processional Street (Darshan Path) will be improve with Rs.7.25 cr by providing parking spaces, pedestrian pathway, public amenities block, repairing o0f Iskcon gate, lighting and signages etc.

HRIDAY is a Central Scheme for which Central Assistance of Rs.500 cr has been provisioned till March,2017. Twelve cities have been included in this mission. Other cities being Amaravati (Andhra Pradesh), Badami (Karnataka), Kanchipuram and Vellankini (Tamil Naidu), Ajmer (Rajasthan), Mathura (UP) and Gaya (Bihar).

City Hriday Plans of all the 12 Mission cities have been approved and Detailed Project Reports based on these plans costing over Rs.350 cr have so far been sanctioned for implementation. Remaining will soon be cleared.

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India aggressively pursuing trade prospects with LAC
Oct 07,2016

Indias engagement with LAC (Latin American Countries) has gained further momentum with recent developments that have taken place. India signed an agreement on the expansion of India-Chile PTA in New Delhi on 6th September, 2016. The expanded PTA will have far greater trade coverage in comparison to the agreement signed earlier in March, 2006 as both sides have offered tariff concessions on a number of lines.

In recent years, Trade between India and Peru has been growing. Indias trade with Peru stood at US$ 1,523.35 million during 2015-16. Among the top ten commodities of Indias export to Peru are Motor Vehicle/Cars, Products of Iron and Steel, Cotton Yarn/ Manmade yarn/Fabrics. Drugs Formulations, Iron and Steel, Two and three wheelers, Auto Tyres and Tubes, Bulk Drugs and RMG Cotton including Accessories. The top ten commodities of Indias import from Peru are Bulk Minerals and Ores (under this copper ore is the top most import commodity), Gold (wrought gold), Fertilizers Crude (under this natural calcium phosphate is the topmost import commodity), Zinc and products made of Zinc, Fresh Fruits, Inorganic chemicals, Cocoa Products Finished Leather and Aluminum & Aluminum products.

In order to explore the possibility of a trade agreement with Peru, India has concluded a Joint Study Group report on the feasibility of such a trade agreement during the recent visit of a delegation to Lima, Peru on 26-28 September, 2016. Both sides have agreed to a time frame to carry forward the discussions for negotiating a trade agreement. With the finalization of the report, India will now seek internal approvals of the Government of India for going ahead with the negotiations on a trade agreement which would include trade in goods, trade in services and investment. There is keen interest on the part of Peru also for negotiating a trade agreement at the earliest.

India is also aggressively engaged in the expansion of its Preferential Trade Agreement (PTA) with MERCOSUR (a Six Country trade bloc with Brazil, Argentina, Paraguay and Uruguay as its original members). During the third meeting of the Joint Administrative Committee (JAC) on the expansion of the India-MERCOSUR PTA held on 29th September, 2016 in Brasilia, Brazil, there was expansive discussions on the wish lists which had been exchanged by both sides in July, 2016. Both sides are expected to hold the next round of negotiations early next year. The existing India MERCOSUR agreement was signed in New Delhi on January 25, 2004 which came into effect from 1st June, 2009. This agreement has a limited coverage and contains only 450 tariff lines. Both sides have now agreed to expand to cover up to 2500 tariff lines.

Indias bilateral trade with MERCOSUR was US$ 10081.42 million in 2015-16 as compared to US$ 14,240.46 million in 2014-15 which constitute 37.01% and 39.96% of LAC trade during 2014-15 & 2015-16 respectively. With the expansion of the existing PTA, the bilateral trade is expected to be doubled.

India has held bilateral discussions with Brazil under the institutional mechanism i.e India-Brazil Trade Monitoring mechanism, the 4th meeting of which was held in Brasilia on 30th September, 2016 after a hiatus of more than four years. Both sides have discussed an array of bilateral issues which impede trade between both the countries. During the meeting India highlighted its concerns on issues relating to market access in agriculture, textiles, pharma and services including high tax on import of services to Brazil. Brazil has responded favorably and has assured to address these issues. Collaboration in areas such as auto, food processing, leather and civil aviation were also discussed. Both sides have agreed for discussions on an agreement on social security.

Both sides discussed setting up of the India-Brazil Business Leaders Forum for facilitating interaction and cooperation amongst the private sector.

Brazil is currently the leading trading partner of India in Latin America region. Total Bilateral trade with Brazil stood at US$ 6,690.33 million during 2015-16 and both sides agreed endeavor is to meet a trade target of US$ 15 billion by 2020.

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Global air passenger growth slowed in August 2016: IATA
Oct 06,2016

The International Air Transport Association (IATA) announced global passenger traffic data for August showing that demand (measured in total revenue passenger kilometers or RPKs) climbed 4.6% compared to the year-ago period. This represented a slowing from the 6.4% increase recorded in July (revised). August capacity (available seat kilometers or ASKs) increased by 5.8%, and load factor slipped 0.9 percentage points to 83.8%.

Growth in passenger demand dipped to 4.6%. While thats disappointing compared to the previous months performance, it is still healthy growth. And although terrorist attacks in Europe have dampened demand, the impact is ebbing, said Alexandre de Juniac, IATAs Director General and CEO.

International Passenger Markets

August international passenger demand rose 4.7% compared to August 2015. All regions recorded increases, but growth was dominated by airlines in the Middle East. Capacity climbed 6.5%, causing load factor to slide 1.4 percentage points to 83.9%.

Asia-Pacific airlines August traffic climbed 5.6% compared to the year-ago period. Capacity rose 6.8% and load factor slipped down 0.9 percentage points to 81.9%. There are signs of Asian travelers continuing to be put-off by recent terrorism in Europe. Traffic on Europe-Asia routes grew just 1.5% in July, the most recent month for which route-specific figures are available, while international traffic growth on routes within Asia accelerated to 9.9%.

European carriers saw August demand climb 3.3% year-on-year. European traffic continues to be affected by the impact of terrorism, however, there are indications this may be easing. Capacity rose 5.1%, which caused load factor to drop 1.6 percentage points to 86.6%--which still was the highest among regions.

Middle Eastern carriers posted a 10.3% traffic increase in August, while capacity climbed 13.7%, resulting in a 2.5 percentage point fall in load factor to 81.2%.

North American airlines international demand rose 1.8% compared to August a year ago. However, seasonally-adjusted traffic has risen at an annualized rate of 7% since March, supported by transpacific demand and leisure routes to Central America and the Caribbean. Capacity rose 3.8%, causing load factor to drop 1.7 percentage points to 85.3%.

Latin American airlines experienced a 6.7% demand rise compared to the same month last year, helped by strong demand on international routes within the region, spurred in part by the 2016 Summer Olympics in Brazil. Capacity increased by 4.0% and load factor rose 2.1 percentage points to 84.0%. Carriers in this region were the only ones to see a rise in load factor compared to the year-ago period.

African airlines traffic climbed 1.8% in August. International growth has tracked sideways since the start of the year, reflecting challenges in the major economies. Capacity rose 3.1%, with the result that load factor slipped 1.0 percentage point to 75.6%, lowest among regions.

Domestic Passenger Markets

Demand for domestic travel climbed 4.3% in August compared to August 2015, which was slightly exceeded by a 4.4% increase in capacity. Load factor slid 0.1 percentage points to 83.6%. All markets reported demand increases with the exception of Brazil and Russia, with India and China reporting double-digit rises.

Russias domestic traffic fell 2.7% but the failure of Transaero last year has taken significant capacity out of the market, and load factor reached a record high for the month at 86.5%. It was also the highest among the domestic markets tracked by IATA.

US airlines domestic traffic climbed just 1% year-on-year in August and traffic has trended sideways in seasonally-adjusted terms since late 2015.

Lower airfares are a major factor sustaining demand for air travel. And airline profitability is stronger than ever as a result of a better industry structure and efficiency gains. But the lingering impact of terrorist attacks in Europe earlier in the year reminds us that the aviation industry is vulnerable to many external factors beyond its control. The risks - including the normal ups and downs of the business cycle - wont go away. The industry has improved resilience along with its profitability. That will be critical to responding quickly should the business environment change, said de Juniac.

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Ferry Vessels Operations In River Yamuna Likely From December 2016: IWAI
Oct 06,2016

Ferry vessels operations into the 16 km length of river Yamuna from Delhi could be a reality from December 2016 as Inland Waterways Authority of India (IWAI) has submitted all necessary details to National Green Tribunal (NGT) for obtaining its green signal for the job, disclosed its Chairman, Mr. Amitabh Verma.

Speaking at Infrastructure Conclave-2016-Accelerating Growth with Inclusion & Equity organized by the PHD Chamber of Commerce and Industry, Mr. Verma also announced that tenders for seven waterways would be floated in next 3-4 months.

The government, according to Mr. Verma has already notified 106 inland waterways out of which 30 are highly doable among which tender for one such inland waterways has already been floated and the tender for remaining 22 waterways would follow in due course.

Mr. Verma also announced that new Inland Vessel Act is likely to be passed in the forthcoming winter session of the Parliament, replacing it with the prototype Vessel Act of 1917 as also a new legislation relating to dredging would come about in the same session.

Ferry vessels operations in river Yamuna are likely by December 2016 as the IWAI have cleared off the misgivings of NGT and a fresh report to this effect has already been submitted to the tribunal which is likely to be cleared off before the IWAI resumes the ferry vessels operations in December 2016.

Chairman, National Highways Authority of India (NHAI), Mr. Raghav Chandra who was also present on the occasion said that in the current fiscal the NHAI would tender out roads and highways projects measuring 7,000 km at various part of the country.

According to him, the approach of the government towards improving the road and highways connectivity is to bring about efficiency and competitiveness in the Indian economy for which all out efforts are being made with awards of new projects, the focus of which is not to broaden the existing road infrastructure but to develop it in the green field sector also.

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All ASI Protected Historical Monuments and Archaeological Sites Declared Polythene Free Zones
Oct 06,2016

All ASI Protected Historical Monuments and Archaeological Sites have been declared Polythene Free Zones. Advisory has been issued to all State Governments/UTs to support ASI in keeping Monuments Polythene Free up to 300 meters from the protected boundaries of the Monuments. This information was given by Dr. Mahesh Sharma, Minister of State (I/C) for Culture and Tourism while briefing the media persons on the various initiatives of Ministry of Culture and Ministry of Tourism during Swachhata Pakhwada 16th - 30th September, 2016. He was addressing a Joint Press Conference on n++Swachh Bharat Missionn++ along with Shri Narendra Singh Tomar, Minister for Rural Development and Drinking Water & Sanitation.

He informed that Ministry of Culture has sanctioned Rs.350 crores to provide facilities like Protected Boundaries, Toilets and Disabled Friendly Access in all ASI Protected Monuments. Work has been awarded to PSUs like WAPCOS and TCIL. They have been directed to complete the work in the current financial year 2016-17.

The Minister said that ASI has ranked top 25 Adarsh Monuments on the basis of Cleanliness parameters such as amenities like toilets, green lawns, Polythene Free Zone, signage for awareness, disabilities access, drinking water and provision for garbage bins etc. n++Rani ki Vav (Gujarat)n++ a World Heritage Site has been declared as the cleanest iconic place in the country.

Dr. Mahesh Sharma further informed that 75 more Adarsh Monuments protected by ASI have been identified to be included in the Swachh Paryatan Mobile App launched by the Ministry of Tourism. With this a total of 100 Adarsh Monuments protected by ASI will be included in the Swachh Paryatan Mobile App. This App was launched in February 2016 and is monitored by the Project Monitoring Unit of Swachh Bharat Mission in Ministry of Tourism.

The Minister said that since the general public and the tourists are the largest stakeholders in keeping the monuments clean, the Ministry of Tourism has decided to facilitate the general public to communicate their complaints about any unclean area/garbage piles in and around tourist destinations. This useful mobile App enables a citizen to take photograph of garbage at the monument and upload the same along with his/her remarks. The application then sends an SMS to the ASI Nodal Officer concerned with the monument upon receipt of which the Nodal Officer gets the garbage cleared/removed. The Nodal Officer thereafter sends confirmation about the redressal of the complaint through an SMS to the complainant. This Mobile App is available on Google Search Engine as Swachh Paryatan.

Dr. Sharma said that on completion of 2 years of Swachhata Abhiyan, Ministry of Culture and Ministry of Tourism have taken up various initiatives namely: -(i) Creating permanent mechanism of cleanliness for all organisations under Ministry of Culture and Ministry of Tourism; (ii) to spread awareness through various cultural activities by involving all their organisations; and (iii) spread of swachhata awareness through Music, Dance and Drama by their Academies/Institutions and maintaining cleanliness at all ASI Protected Monuments etc.

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Ministry of Minority Affairs has taken over the work of Haj Division of MEA with effect from 1st October, 2016
Oct 06,2016

The work related to management of Haj pilgrimage, including administration of the Haj Committee Act, 2002 and rules made thereunder has been transferred from Ministry of External Affairs to Ministry of Minority Affairs. Ministry of Minority Affairs has taken over the work of Haj Division of MEA with effect from 1st October, 2016.

Hajj is one of the most complex organizational tasks undertaken by Government of India outside Indian borders. Indian pilgrims constitute the third largest national group performing the Hajj. Since the year 2013 about 136,000 pilgrims visit Saudi Arabia every year for performing Haj. Given its complexity and geographical spread, Haj Management requires meticulous planning and close coordination with various ministries and agencies. Thus it is a year long managerial exercise.

Haj management involves concerted efforts of Ministry of External Affairs, Ministry of Civil Aviation, M/o Health, Consulate General of India, Jeddah (CGI), Haj Committee of India (HCoI) and State/UT Haj Committees. All aspects of the arrangements for the HCOI pilgrims in Saudi Arabia are coordinated by the Consulate General of India (CGI), Jeddah under the overall supervision of the Ambassador of India in Riyadh. In India, the Haj Committee of India established under the Hajj Committee Act, 2002 is responsible for making the arrangements for matters connected with Hajj.

With the transfer of Haj related works from MEA, M/o Minority Affairs will be the nodal Ministry for all matters related to Haj pilgrimage.

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Heritage Infrastructure projects worth Rs. 350 cr approved, says Shri M. Venkaiah Naidu
Oct 06,2016

Shri M.Venkaiah Naidu, Minister of Urban Development inaugurated a two day conference on Heritage Cities here today. The conference is being jointly organised by Ministry of Urban Development and Indian Heritage Cities Network (IHCN).

In his inaugural address, Shri M.Venkaiah Naidu said that India is blessed with tangible and intangible heritage assets and it consists of 32 World Heritage Sites, both cultural and natural, recognized by UNESCO. He said that India ranks 5th in the world and 2nd in Asia, in terms of number of World Heritage Sites. The Minister highlighted the importance of heritage sites for tourism. He said that India attracts millions of tourist every year and in 2013, India received 69 lakh foreign tourists and 114 crore domestic tourist visits, generating revenue of Rs. 2 lakh crore. i.e. 6.6 % of GDP. Shri M.Venkaiah Naidu pointed out that the heritage management has often been carried out in isolation, with no linkages to the urban planning process.

The Minister further said that HRIDAY (Heritage City Development and Augmentation Yojana) scheme was launched by the Government in 2014 for heritage/ tourism oriented urban development. He said that, the scheme is 100% centrally sponsored with an outlay of Rs 500 crores and in the pilot phase, 12 cities have been selected. He highlighted that there is need for convergence of schemes like Smart City, AMRUT and other state Government schemes to reinforce the cultural and Heritage India. Projects worth about Rs. 350 cr have so far been approved for implementation.

Shri M.Venkaiah Naidu said that France had expressed interest to intervene on the subject of heritage and urban renewal heritage around waterfronts and accordingly two cities, namely Puri and Varanasi, have identified the projects relating to waterfront development.

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ADB to Provide India $500 Million for Solar Rooftop Systems
Oct 06,2016

The Asian Development Bank (ADB) is set to provide $500 million in financing for rooftop solar systems that will help the Indian government expand energy access using renewable energy.

ADB will provide the financing to Punjab National Bank - one of Indias largest commercial banks - which will use the ADB funds to make loans to various developers and end users throughout India to install rooftop solar systems.

There is huge potential for India to expand its use of solar rooftop technologies because of the sharp drop in the price of solar panels, Jawaharlal Nehru National Solar Mission to increase its overall solar energy generation to 100 gigawatts by the same date.

Indias Intended Nationally Determined Contribution, or the carbon emission reduction target under the 2015 Paris climate agreement, is to lower the emissions intensity of the Indian economy by 33% from 2005 levels and to increase the share of non-fossil-fuel-based power generation capacity to 40% of installed power capacity by 2030. India formally ratified the Paris climate agreement yesterday.

To support efforts by India and other Asian developing member countries to meet their targets, ADB has also committed to doubling its annual financing for climate mitigation and adaptation to $6 billion by 2020.

The solar rooftop market is still at an early stage of development in India and awareness of the latest technologies and the financial benefits is low. Banks see lending to such projects as risky, in part because they have limited past experiences. In this context, an additional $5 million technical assistance from the multi-donor Clean Technology Fund, administered by ADB, will be used to provide training, promote market development, and raise market awareness. meaning the cost of producing solar energy is at or close to that from fossil fuels, said Anqian Huang, finance specialist in ADBs South Asia Department. Sourcing more solar energy will also help India meet the carbon emissions reduction target that it has committed to as part of the recent global climate change agreement.The financing comprises $330 million from ADB and $170 million from the multi-donor Clean Technology Fund administered by ADB. This funding should mean that 11 million fewer tons of greenhouse gases are emitted over the typical 25-year lifetime of solar rooftop systems.Combined with an additional $300 million in subproject equity investment and $200 million in loans from commercial banks and other financiers, the entire cost of the Solar Rooftop Investment Program is $1 billion. The Government of India aims to increase the amount of energy sourced from solar rooftop systems to 40 gigawatts by 2022. This is part of a wider goal under the

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Three agreements between India and Switzerland
Oct 06,2016

The Union Home Minister Shri Rajnath Singh met the visiting Minister for Justice and Police of Swiss Confederation, Ms. Simonetta Sommaruga. Shri Rajnath Singh stated that the two countries have made significant contributions to strengthen peace and prosperity based on their shared vision of a peaceful and progressive future.

The Union Home Minister proposed training facilities for Indian Police Officers in Switzerland Police Academies/other Training Institutes in the fields of Anti-Hijacking and Cyber Forensic etc. Shri Rajnath Singh said India looks forward for cooperation with Switzerland on the issue of exchange of tax information since the black money issue is the main corruption issue which needs to be tackled.

On the occasion, the two sides signed three agreements including Mutual Visa Exemption Agreement for Holders of Diplomatic Passports, Technical Arrangements on Identification and Return of Illegal Migrants and Arrangement for Dependent Person of Diplomatic, Consular, Technical and Administrative Staff of Diplomatic and Consular Mission to Perform Gainful Employment.

Shri Rajnath Singh also sought a more liberal visa regime for Indian business people since India has been offering multi-year multiple entry visas to Swiss businesses in a bid to enhance bilateral trade and investment.

Other subjects of interest to the two countries were also discussed. These included cooperation in transfer of sentenced persons and Mutual Legal Assistance Treaty in Criminal matters that would help in combating terrorism, transnational organized crimes and corruption including money laundering.

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Loan Against Property- Rising Stress, Shrinking Spreads
Oct 06,2016

Delinquencies in Indias non-banking financiers loan against property (LAP) portfolio could significantly increase in the next four quarters and may even exceed 5% on a static basis for a few players, says India Ratings and Research (Ind-Ra). The signs of early stress are visible in the LAP business loan pools assessed by Ind-Ra, including a sharp rise in 90 days past due delinquencies for some of the large players. A combination of stagnant property prices especially in metros and large cities, which are the primary markets for large and medium ticket LAP, and squeeze on refinancing due to risk aversion building up in some financiers is bringing stress to the fore.

Ind-Ra analysed data from the LAP portfolios generated over the last five years and observed that all loans, irrespective of their years of origination, are experiencing a concurrent rise in delinquencies in 2016. Ind-Ra believes that the LAP market has now entered into a delicate phase with rising delinquencies accompanied by shrinking yields, thereby leaving limited buffers to absorb unexpected shocks. The average lending rate in the urban high-ticket LAP segment has shrunk to close to 300bp from 500bp over State Bank of Indias (IND AAA/Stable) base rate, which in Ind-Ras opinion may not be adequate to absorb any spike in credit costs. Ind-Ra also believes the eventual losses through the liquidation route could be higher than what is being priced in by non-banking financial institutions (NBFIs). Ind-Ras rated transaction pool data for the housing loan mortgage portfolio acquired by asset reconstruction companies since 2006 show a recovery rate of over 100% of principal outstanding, but when adjusted for the time value it drops to 70%. Furthermore, this recovery ratio drops sharply to 25% for SME loans where collaterals include either industrial or commercial properties.

Ind-Ra believes that over the last few quarters, portfolio churn, through balance transfer among NBFIs, has been the significant driver of incremental loan growth. Additionally, a large segment of the market utilised third-party intermediaries to expand its loan portfolio. Ind-Ra believes that it has led to less than optimum credit assessment rigour. Furthermore, elevated balance transfer has led to inadequate seasoning for a part of the portfolio.

Ind-Ra observes that small ticket LAP portfolio has shown a better performance than large ticket loans, though the portfolio is less seasoned. Newer geographies are facilitating volume growth and due to limited competitive intensity, are allowing lenders to price in the risk. Also, the recent applicability of SARFAESI Act (to systemically important NBFIs and on a loan amount higher than INR10m) may improve portfolio performance as it could reduce slippages and improve recovery.

Ind-Ra believes that credit appraisal systems based on borrower cash-flow assessment and standardised valuation practices would be critical risk mitigants. Ind-Ra expects players with largely residential mortgage collaterals to fare well on asset quality metrics. Finally, strong equity and liquidity buffers and matched asset liability profile would continue to differentiate players in this segment.

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Moderating Demand Trend for Air Cargo Continues in August: IATA
Oct 06,2016

The International Air Transport Association (IATA) released data for global air freight markets in August 2016 showing that demand, measured in freight tonne kilometers (FTKs), rose 3.9% year-on-year. Freight capacity measured in available freight tonne kilometers (AFTKs) increased by 4.1% over the same period. Load factors remained historically low, keeping yields under pressure.

Industry conditions have improved since the particularly soft patch at the start of the year. Carriers in all regions except Latin America reported an increase in year-on-year demand in August. However, regional results varied considerably. For the third time in four months airlines based in Europe posted the highest collective annual growth of all regions, while airlines in the Middle East experienced their slowest growth in more than seven years.

August numbers showed improvements in cargo demand. While this is good news, the underlying market conditions make it difficult to have long-term optimism. World trade volumes fell by 1.1% in July with no improvement on the horizon. And the current global political rhetoric in much of the world is more focused on protectionism than trade promotion. Economies need to grow out of the current economic doldrums. Governments should be focused on promoting trade, not raising protectionist barriers, said Alexandre de Juniac, IATAs Director General and CEO.

Regional Performance

Asia-Pacific airlines reported a 2.8% increase in demand for air cargo in August compared to last year. Capacity in the region expanded 1.2%. International traffic within the region has been the strongest of the big-four markets (Asia Pacific, Europe, North America, and Middle East) so far this year, with traffic up by 6.5% year-on-year in July 2016.

North American carriers saw freight volumes expand 5.5% in August 2016 year-on-year, and capacity increase by 3.7%. International freight volumes grew by 4.6% in August - their fastest pace since the US seaports disruption boosted demand earlier in 2015. However, seasonally adjusted activity has barely altered from 2008 levels. The strength of the US dollar continues to keep the US export market under pressure.

European airlines posted the largest increase in freight demand of all regions in August 2016 - 6.6% year-on-year. Capacity increased 4.7%. The positive European performance corresponds with an increase in reported new export orders in Germany over the last few months. European freight demand has now broken out of the corridor that it occupied between mid-2010 and the start of the year.

Middle Eastern carriers saw air freight demand slump to 1.8% year-on-year in August 2016 - the slowest pace since July 2009. Capacity increased by 6.9%. The strong upward trend seen in Middle Eastern traffic over the past year or so has halted. In seasonally-adjusted terms, volumes in July 2016 were slightly below those seen in January 2016. The weakening performance is partly attributable to slower growth between the Middle East and Asia. This suggests that Middle Eastern carriers are facing stiff competition from European airlines on the Europe-Asia route.

Latin American airlines saw demand contract in annual terms for the sixth consecutive month. FTKs in August 2016 fell by 3.3% compared to the same period last year and capacity decreased by 0.2%. The region continues to be blighted by weak economic and political conditions, particularly in the regions largest economy, Brazil.

African carriers saw demand rebound sharply in August to 3.7% - the fastest growth rate in 12 months. Despite this, freight capacity continues to outstrip demand, due to rapid long-haul expansion. Capacity surged in August year-on-year by 29.2%. The combination of rising capacity and modest growth has significantly affected the load factor of African airlines. In August 2016 it was almost six percentage points lower than a year ago and is around half the industry average.

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Govt Remains Committed to Curb Cheap Steel Imports, Anti-dumping Duty May Replace MIP
Oct 06,2016

The recent government action to extend the minimum import price (MIP) on 66 steel products by two months till 4 December 2016 shows the governments desire to extend protection for a longer time, says India Ratings and Research (Ind-Ra). Many of the 66 products are mostly subject to an anti-dumping investigation, which is likely to be completed over the next two months. Ind-Ra believes that once this is completed anti-dumping duty (ADD) is likely to be imposed on most of these products for an extended period.

Ind-Ra had highlighted the need for safeguards in June 2016 in the report Steel Production May Not Rise in FY17, In the Absence of MIP. Ind-Ra notes that in August 2016, GoI reduced the items under MIP to 66 from 173 and imposed an ADD on most of the excluded items, namely on hot rolled flat products and cold rolled flat products. The ADD is slightly less restrictive since they apply only to a specified country of origin; in this case the six named countries included, Peoples Republic of China, Japan, Korea RP, Russia, Brazil and Indonesia which account for around 90%-95% of hot rolled products imported into India. While a notification for cold rolled flat products originating or exported from Peoples Republic of China, Japan, Korea RP and Ukraine accounted for around 90% of imports.

During April-August 2016, Indias steel imports declined by 34.5% yoy to 3.01m tonne. Ind-Ra expects GoI to continue to protect domestic steel players from cheap imports. Over FY15-FY16, GoI took various quantitative and qualitative steps to curb the increase in imports into India, however it is only post the imposition of MIP on 5 February 2016, the domestic steel industry heaved a sigh of relief.

The scope of ADD is restricted to the originating countries named and is therefore narrower in scope than MIP, its impact however when applicable is the same as MIP. The ADD imposed on steel products are not fixed and will be calculated at a rate which is equivalent to the difference between the amount identified in the notification and the landed value of the goods covered under ADD, provided the landed value is less than the amount specified. This will protect the domestic steel industry from cheap imports, in the event the landed price of steel further declines and will have a similar impact as MIP. The key difference between MIP and ADD is that MIP is applicable on the import of goods from any country, whereas ADD is specific to goods imported from certain countries/producers as is notified.

Under General Agreement on Tariffs and Trade (GATT) ADD is a more acceptable protection measure provided against dumping of products. GATT provides member countries with the liberty to protect the domestic industry from external injuries; however it is against the restriction of fair trade. Thereby any member country can use ADD for the protection of their domestic industry, in the event that an investigation proves that dumping by other countries is injuring the domestic industry.

The absence of safeguard measures either in the form of MIP or ADD on value added flat rolled products of alloy or non-alloy steel, clad, plated or coated will lead to a surge in imports. As raw material for these value added products, mainly flat products, are already under ADD and therefore domestic producers will be compromised if the end product is allowed to be imported freely at cheaper prices internationally. Ind-Ra expects the protection for the steel industry in the form of ADD or MIP to continue even beyond December 2016.

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Festive mood uplift: Medium term outlook for Indian FMCG bright; to reach $ 104 bln by 2020: study
Oct 06,2016

In the midst of ringing cash registers on the back of festive sale, an ASSOCHAM-TechSci Research report has projected more than doubling of Indias market for the fast moving consumer goods to $104 billion by 2020 from the present level of $49 billion, growing at an impressive compounded annual growth rate of 20.6 per cent.

The optimism is based on steady economic growth, increasing share of organised retail, improving awareness about health and ethnic products being launched by the likes of Patanjali while a favourable demographic dividend is already given. n++It is certainly good news for giving a much-needed consumption boost to the economy, said ASSOCHAM Secretary General Mr D S Rawat.

Currently, India accounts for a share of just 0.68% of the Global FMCG market, this share is expected to increase significantly over the next 5 years mainly due to the macroeconomic factors such as improving demographics, rising disposable income, expansion of organised retail in tier II & III cities in India, changing consumer preferences etc, according to the study titled Indian FMCG Market 2020.

Major FMCG markets include USA, China, European Union, Japan etc. Globally, the FMCG sector is expected to grow at a CAGR of 4.4%, which when compared to India is a lot slower. Many foreign FMCG multinationals have established themselves in India.

Globally, the FMCG companies have now shifted their focus on E-commerce due to the increasing mobile internet penetration. Globally, the share of online sales of FMCG products accounted for around 5% in 2015, which is relatively higher than India where online FMCG sales accounted for a share of just 1-2% of the overall FMCG market in 2015.

The global economic growth has been decelerating as several large economies face decreasing economic growth, primarily China and the Eurozone, as well as a few key emerging markets like Brazil and Russia. This offers an advantage to India which has a significantly better economic condition.

Indian FMCG sector had a market size of USD43.08 billion in 2015. Well-established distribution networks, as well as intense competition between the organised and unorganised segments are the characteristics of this sector. The FMCG market in India is anticipated to grow at a significantly high CAGR during the forecast period and is expected to cross USD100 billion mark by 2020. FMCG in India has a strong distribution presence across the entire value chain.

The fast-moving consumer goods (FMCG) sector is an important contributor to Indias GDP growth. The sector includes food & dairy products, packaged food products, household products, drinks and others.

FMCG is the fourth largest sector in Indian economy and provides employment to around 3 million people accounting for approximately 5% of the total factory employment in India. The sector is characterized by strong presence of leading multinational companies, competition between organized and unorganized players, well established distribution network, and low operational cost.

The growth in the countrys FMCG sector is being fuelled by improving scenario in both demand as well as supply side. The major demand side drivers include growing affluence and appetite for consumption of the Indian consumer, growing youth population, rise in per capita expenditure, and increasing brand consciousness.

On the other hand, easier import of materials and technology, reduced barriers to entry of foreign players, and new product development, rapid real estate infrastructure development and improvement in supply chain efficiency are the major supply side drivers for the sector.

The growth of the FMCG sector, which primarily includes Food & beverages, personal care and household care has been driven in both the rural and urban segments. Rural consumption growth has outpaced urban consumption with the increase in percentage in monthly per capita expenditure in rural markets surpassing its urban counterparts over the past five years. Several government measures such as GST Bill, Food Security Bill and FDI in retail sector are expected to have a significant positive impact on the countrys FMCG sector in the coming years.

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9 mineral blocks to be put up for auction soon: Secretary, Mines
Oct 06,2016

A total of 9 mineral blocks put on auction including two from Karnataka iron ore plots with excellent response upto 100% bidding over reserve price, Secretary, Ministry of Mines, Mr Balvinder Kumar said at an ASSOCHAM event.

On the current status of mineral auction, He said, n++a total 9 nine blocks have been put on successfully auction including two from Karnataka iron ore plots and total 7 blocks are being put up to auctions by state government of Karnataka and we expect extremely good response in these seven mineral areasn++, said Mr Kumar while inaugurating an ASSOCHAM conference on India Mining Summit 2016.

The bids for the first iron ore in karnataka were 90% above the reserve price. In the second mine, the bid was almost 100% over reserve price and these are very encouraging results. He further said, the Government will be getting above Rs. 25000 crore by the way of royalties etc over the period of 50 years.

On the issue of aluminium industry minimum import duty hike or minimum import price (MIP), Mr Kumar said, we are examining this matter in great depth and two-three rounds of discussions have taken place with different segments of aluminium industry. So, either we may go for MIP or alternatively to increase the import duty but we want to develop consensus among the different segment of aluminium industry. We are working on it and in next 15 days will take decision on this issue.

Mr Balvinder Kumar, Secretary, Ministry of Mines said, n++we are also examining the both the options of buy back of shares or declaration of special dividend or both optionsn++.

By end of this fiscal year, minimum 40-50 mining leases to be auctioned by various states. 15 category C mines were re-auctioned, earlier cancelled by Supreme Court.

He further said, 250 districts District Mineral Foundation (DMFs) have been set up. They are implementing Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) and nearly 2800 crore have already got in these districts by district mineral foundations.

If we see exports, exports have increased tremendously. In 2015-16, it was 5.32 billion tonne; in this fiscal we have already bypassed that figure. Imports have also decreased sharply as against 2015-16 about 7 billion tonnes and now this has reduced to 1.022 billion tonnes. The overall mineral growth this year is about 10.6% in first five months. Iron Ore production has increased by 32% percent.

n++Backward districts to get 200-400 crore every year, the huge amount will be spent on social economic development of these areas and these district area soon see transformation in their overall development scenario and many of these districts are Maoist affectedn++, said Mr. Kumar.

n++SBI Cap consulting private sector participations in exploration of 100 mineral blocks to be explored by the agencies, the notification of this process will be in 2-3 weeks timen++.

n++Agencies to get 10 times of exploration fee if auctionable resources discovered; auctions to start after March 2017n++, said Mr. Kumar.

The Aero-geophysical survey to start in 3rd week of November to complete in 2-3 years, said Mr. Kumar.

He further said that we are also relaxing the guidelines governing exploration process to be easier and simpler.

Mr. Kumar focused on sustainable Mining- the star rating by self certification basis and if they dont get 4 or 5 star rating they will get 2-3 years to comply. By end of November, we will finish first phase of star rating.

To check illegal mining across the country through imaginary from National Remote Sensing Centre (NRSC); We are going to monitor all the mining area through the satellite imaginary. We are also going to launch mobile app where anybody can upload photo of illegal miningn++, said Mr. Kumar.

The automation of mining plan with online web portal giving real-time base data across all states, said Mr. Kumar.

n++The export duty structure on iron ore shall not be changen++. About the pending cases of section 10A2C, there are about 304 cases pending under this category, said Mr. Kumar.

Mining industry is in the phase of recovery where many reforms are taking place. Mining provides direct employment to 2.6 billion people. On real time basis, one can see production of all minerals across states.

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Need to link Cross Subsidy Charges to avoid states losses: ASSOCHAM
Oct 06,2016

To reduce states discoms burgeoning losses, the Industry body ASSOCHAM has suggested linking of Cross Subsidy Charges (CSS) with aggregate technical and commercial (AT&C) losses faced by them.

In a note submitted to the Chief Minister of Haryana, Mr. Manohar Lal Khattar by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) says that n++will ensure that as states reduce their losses, additional charges levied on industry will correspondingly decreasen++.

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) feels this will provide a level playing field and a fair window for private sector to operate at lower but reasonable operating cost.

The industry body lamented that the concept if CSS is higher than the Average Cost of Supply and Average Revenue realization (ACS-ARR) gap of any State, then the State has a public interest in levying CSS as a sign of protectionism.

Concept of open access to absorb excess generation of power was brought by the Government of India with a view to ensure higher operating efficiencies which shall cut down T&D losses. However, power tariffs paid by industry have increased sharply across States owing to a rise in the levy of cross subsidy surcharges (CSS) almost to an extent of 30-600%. In the State of Haryana, the CSS charges increased sharply from Rs. 930 MWh to Rs. 1570 per MWh.

The National Tariff Policy (NTP) had suggested capping the CSS at 20% of tariff. The NTP also introduced additional surcharge for consumers who shift to other sources apart from State Discoms. This is clear deviation from the fundamental principal of open access, which is one of the most important amendments suggested by the Electricity Act. While the Government of India has given the option of procurement of power through open access, the States have been levying various charges, restricting the concept and success of open access policy.

CSS is levied by state power distribution companies (discoms) to recover cost of supply. This comes at a time when most states have signed up for the Union governments Ujwal Discom Assurance Yojana (UDAY) schedule that aims to reduce losses and improve efficiency.

According to market estimates the gap between the average cost of supply (ACS) and the average revenue realization (ARR) of state-owned discoms is around 27 per cent, and around 35 per cent in big states such as UP and Rajasthan.

The National Electricity Policy (NEP) allows states to subsidies a section of consumers. It also has provisions for levying additional charges on consumers capable of paying higher rates to make up for the ACS-APR gap.

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