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FDI in multi-brand retail
and Aviation passed
The Union Cabinet cleared the
proposal of foreign direct investment
(FDI) for 51 percent in the multi-
brand retail chains and 49 percent in
Aviation power exchanges industry.
Passing of the proposal have
cleared the floor for welcoming the
multi-brand retail chains like Wall mart
and Tesco and Carrefour in the
country for setting up of their shops
and retail outlets. Similarly, the 49
percent of FDI allowed in aviation and
Power exchanges will bring in funds
for the domestic carriers on a verge
of death and will help in
enhancement of power availability
and distribution management,
respectively.
Conditions put forward for Conditions put forward for Conditions put forward for Conditions put forward for Conditions put forward for
investors in the proposal for the investors in the proposal for the investors in the proposal for the investors in the proposal for the investors in the proposal for the
multi-brand retails multi-brand retails multi-brand retails multi-brand retails multi-brand retails
1. The proposal makes a clear
stand that investors looking
ahead for investments will have
to take the permission in form
of approvals from the Foreign
Investment Promotion Board
2. Investment of minimum $100
million is a must for any foreign
investor planning to invest in
India, out of which 50% of the
investment should be made in
creation of back-end
infrastructure. Back-end
investment means investments
that is made in quality control,
warehouse creation, cold
storage, design improvement,
manufacturing, processing and
packaging
3. The investors will have to get
30% of the production of their
total products by the small-scale
industries
4. The proposal also clears that the
agricultural produce like pulses,
flowers, fruits, vegetables,
poultry item, fishery, meat and
others can be unbranded
5. Investors can invest in the 51
cities with a minimum
population of 10 lakh people as
per the census presented in the
year 2011
For making investment in For making investment in For making investment in For making investment in For making investment in
the aviation sector, the the aviation sector, the the aviation sector, the the aviation sector, the the aviation sector, the
proposals have proposals have proposals have proposals have proposals have
1. This will help in making equity
invasion for the aviation
companies seeking financial
support at the time when
maximum of the domestic
airlines are passing through a
phase of losses.
2. Investors who are not functional
in airline business can own
equity of 49 percent directly or
indirectly in the Indian Aviation
Companies.
FDI in Power Exchanges FDI in Power Exchanges FDI in Power Exchanges FDI in Power Exchanges FDI in Power Exchanges
will be guided via will be guided via will be guided via will be guided via will be guided via
1. 49 percent of FDI in power
trading exchanges will be taken
care of as per the regulation laid
Economy Economy
Economy Economy Economy
UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs
down by SEBI and Central
Electricity Regulatory
Commission (Power Market)
Regulations) 2010
2. The commerce minister stated
that Foreign Institutional
Investors cannot exceed a limit
of 26 percent investment and
the paid-up capital will be
restricted to 23 percent
3. FII can be permitted under
automatic routes whereas; the
FDI will be scrutinized under
the route approved by the
government
4. The generation of electricity,
power transmission and
distribution along with trading
will be done in accordance to
the provisions of the Electricity
Act 2003
5. The current policy allows FDI
up to 100 percent in power
sector (atomic energy is an
exception)
What does it mean for What does it mean for What does it mean for What does it mean for What does it mean for
different economic sections of different economic sections of different economic sections of different economic sections of different economic sections of
I ndi a I ndi a I ndi a I ndi a I ndi a
1. Economy: Economy: Economy: Economy: Economy: Help in reversal of
the economic slowdown,
attract the investment of billions
of dollars from foreign market
and spin jobs to a greater extent
2. Ki rana Stores: Ki rana Stores: Ki rana Stores: Ki rana Stores: Ki rana Stores: Will lower
down the selling price, because
they will purchase the supplies
from deep down retailers
3. Retailers: Retailers: Retailers: Retailers: Retailers: Can sell their equity
up to 51% to the global leaders
4. Farmers: Farmers: Farmers: Farmers: Farmers: They can sell their
produce directly at higher
prices and the presence of
middle man will end
5. States: States: States: States: States: Decision to allow the
retail giants or prohibit lies in the
hands of states
6. Common Man: Common Man: Common Man: Common Man: Common Man: A chance to
gain big discount with many
options to shop
7. UPA government: UPA government: UPA government: UPA government: UPA government: Got a
chance to wash away the
blames of policy paralysis
Union Government Cleared
Increase of FDI in Insurance
The Union Government on 4
October 2012 approved the
Companies Bill, 2011 and Pension
Fund Regulatory and Development
Authority (PFRDA) Bill, moving with
its proposal to hike the foreign
investment in the insurance sector to
49 percent from the present 26
percent with also opening up the
pension sector for FDI. The decision
was taken by Union Cabinet headed
by Prime Minister Manmohan Singh.
The benefit of this amendment will
go to the private sector insurance
companies which require huge
amount of capital and that capital will
be facilitated with increase in FDI to
49 per cent. With this, the state-run
insurance companies will remain in
the public sector. The government
also gave green signal to foreign
investment in pension funds and said
the FDI limit could go up 49 per cent
in line with cap in the insurance
sector. Also with opening up the
pension sector, PFRDA bill gives
statutory powers to the interim
regulator, constituted through an
executive order in 2003. However, it
is not easy for the union government
to pass this legislation in the
parliament because the
Opposition Bhartiya Janta Party
(BJP) opposed the hike in FDI limit
in insurance and insisted for the bill
to be brought again in Parliament
Standing Committee.
Foreign Investment cap
hiked to 74 percent for
Broadcasting Services
The Government of India on 20
September 2012 hiked the foreign
investment cap for the broadcasting
service providers to 74 percent. The
registered hike in foreign investment
cap is for service providers of Direct
to Home (DTH), modernized cable
network and mobile television. This
move of the government will allow
the global players in acquiring major
stakes in the broadcasting
companies. Before his decision was
passed, the eligibility of DTH and
multi-system cable operators to make
foreign investment was limited to 49
percent only. In its decision last
week, the Cabinet Committee on
Economic Affairs cleared its stand on
the companies of broadcast content
that the TV news Channels and FM
radio channels can have a foreign
investment cap of 26 percent. This
decision was made to make sure that
majority of control remains back in the
hands of Indian Partner.
Trial to make Maharaja
Express affordable for
domestic tourists
In a hunt to pull the interests of
domestic tourists by making Maharaja
Express affordable, IRCTC (Indian
Railway Catering and Tourism
Corporation) announced a cut in the
journey along with discounted offers
for twin travellers. Indian Railway
Catering and Tourism Corporation
have declared four trips in the festive
season for the runnining financial year.
The IRCTC had shortened the
distance of travel and duration of two
trips along with a discounted offer of
50 percent discount to the second
companion.
The trips of eight days and
seven nights have been shortened to
be of four days and three nights. The
two trips scheduled for the year
includes the one during Dussehra
and the other during Diwali,
commencing on 20 October 2012
and 27 October 2012. The trip
named to be Indian Panorma will
move on the route mentioned Delhi-
Jaipur-Ranthamobore-Agra-Gwalior-
Or chha- Khaj ur aho- Var anasi -
Lucknow-Delhi). The offered
package includes meals along with
sight-seeing, 24-hour valet service,
paramedics on-board and entrance
fees to the sights. Beer, liquor and
house wines will be served as
complementary.
The other route of travel will
cover Delhi-Agra-Ranthambore-
Jaipur-Bikaner-Jodhpur-Udaipur-
Balasinor-Mumbai and is named to
be and Indian Splendour. The
package with deluxe cabin start at a
$ 5560 per person and the one
travelling with a companion will be
charged $8340 instead of $11120.
Packages with shortened distances
and duration are named as Gems of
India and Treasures of India and will
commence from Delhi and travel
through Agra, Ranthambore and
Jaipur and terminate back at Delhi
and have been priced at $ 3850 for
one in deluxe cabin and with the
discounted offer of 50 percent it will
cost $7160 for two persons.
EGoM cut down the loan
interest rate to 7 percent in
the drought affected areas
The EGoM (Empowered Group
of Ministers) declared to slash down
the interest rate from 10 to 12 percent
to 7 percent in the entire 350 drought
hit Talukas of the four states namely,
Gujarat, Maharashtra, Rajasthan and
Karnataka. They also came up with a
declaration of providing additional 50
days of work guarantee to that of 100
days under MGNREGS (Mahatma
Gandhi National Rural Employment
Guarantee Scheme) to the registered
households. The decision will be
applicable for a period of one year
from the day of announcement. The
decisions made in the meet, are
subject to be practiced in the
drought affected areas only. There is
a total of 8 percent deficiency in the
monsoon to that of the 20 percent
recorded in the first four months of
the season. The EGoM is headed by
Food Minister K V Thomas, Agriculture
Minister Sharad Pawar, Home Minister
Sushil kumar Shinde and Urban
Development Minister Kamal Nath. In
the current financial year government
has provided Rs 33,000 crore budget
for MGNREGS to make sure that
everyone gets a justifiable
employment opportunity of 100
days. EGoM during its last meet in
June 2012, declared a relief budget
of 2000 crore for the drought hit areas
along with the subsidy on diesel.
GAAR Report submitted by
the Shome Committee
The GAAR report was
submitted to the finance minister of
India by the Shome Committee
constituted by the Central Board of
Direct Taxes, after the approval of
Prime Minister of India. The
committee in its report has tried to
create a balance in between the
investors being invited to the country
and protection of the tax base from
tax avoidance and evasion, using
aggressive tax planning.
The major findings of the
GAARs committee to create a
balance in between the investors and
chances of tax avoidance and evasion
includes:
1. Tax Evasion, Tax Mitigation and
Tax Avoidance
2. Overcharging Principle
Applicability of GAAR
3. Monetary Threshold
4. Arms Length Test
5. Test to Misuse or Abuse the
Provisions of Act
6. Factors for determination of
Commercial Substance
7. Grandfathering of existing
Investments
8. GAAR will not override the
CBDT circular 789 of 2000 with
respect to the tax-treaty in
between India and Mauritius
9. GAAR will not be applicable at
places where so ever anti-
avoidance provisions are in
existence in the treaty of tax
and any type of anti-avoidance
rule exists in the Act
10. Impermissible Avoidance
arrangements
11. Tax abolition in cases of gains
that rises out by the transfer of
listed securities
12. Foreign Institutional Investors
13. Corresponding adjustments
14. Implementation of the Onus on
the revenue authority
15. Tax Withholding
16. Definition of the term
Connected Person
17. Constitution of approval panel
18. Time limit for GAAR provisions
19. AAR to pass ruling within 6
months
20. Prescription of Statutory forms
21. Implementation issue
22. Reporting requirements
The committee in its findings
has stated that the GAAR guidelines
should be introduced in the country
at the time of economic stability.
Hence, it has recommended the
postponement of its implementation
by 3 years. Committees recommen-
dation also states about the
implementation of the findings with
complete spirit and has laid emphasis
on transition period of the taxpayers
and preparedness of the
administrators. To provide clarity on
GAARs applicability provisions in
different situations 27 illustrations
were made and are mentioned under
different conditions like:
1. Tax Mitigation- GAAR cant be
invoked
2. Tax Avoidance- SAAR is
applicable hence GAAR is not
invoked
3. Court Approved
Amalgamations or demergers
4. Tax Avoidance- GAAR invoked
5. Tax Evasion can directly be
dealt of law without invoking
the GAAR
Following the Finance Act
2012, the introduction of the General
Anti-Avoidance Rules (GAAR) was
done into the Income Tax Act, 1961.
The committee briefly analysed the
provisions of GAAR as per the inputs
available from stakeholders and
following the recommendations
made the amendments in the Act
were made for finalization of the
guidelines for the Income Tax Rules,
1962.
Shomes Committee
The expert committee on
GAAR (General Anti-Avoidance
Rules) was constituted under the
Chairmanship of Dr. Parthasarsthi
Shome with members, namely Shri N.
Rangachary (Former Chairman of
IRDA and CBDT), Dr. Ajay Shah (Prof.
NIPFP) and Shri Sunil Gupta (Joint
Secretary-Tax Policy and Legislation,
Department of Revenue) for
undertaking the consultations of
stakeholders and finalization of
guidelines for GAAR. The main
objective of the committee was to get
feedbacks from the stakeholders and
prepare new guidelines or to amend
the previous guidelines after
examining the things finely.The
committee was constituted by the
Central Board of Direct Taxes after
being approved by the Prime Minister
of India.
The committee formed The committee formed The committee formed The committee formed The committee formed
referred to following terms: referred to following terms: referred to following terms: referred to following terms: referred to following terms:
To receive feedback from both
public and stakeholders on the
Guideline of GAAR mentioned
on the website of Government
of India.
To rework on the guidelines
following the feedback
received and examining the
same and then publish the same
in form of second draft
To find out and finalise,
guidelines along with an road-
map for implementation of
GAAR and submit it to the
government
Analysis of the GAAR
provisions
The provisions for the GAAR are
mention in Chapter X-A (Section 95
to 102) of the Act. Presented
provisions allow the authority of tax,
despite of containing anything in the
Act with clear declaration on the
arrangements made for assesses
(estimated value, nature or extent of
amount of the fine) that has entered
into the impermissible avoidance
arrangement to face the
consequences with regard to the tax
liability determined by the
arrangement.
Indian external debts are
within manageable limits
The Department of Economic
Affairs (DEA) published its annual
publication- Indias external debt: a
status report 2011-12. As per the
published report, Indias external
debt in the end of March 2012 was
$345.8 billion, which is 13% high than
the previous years debt or $ 39.9
billion from where India stood at the
end of March 2011. The publication
points out about the upward
movement of the stress that is put on
the current account deficit (CAD) of
the nation because of the risks thrown
on it, from the external sectors that
comprises Fall in the reserve cover
for imports and external debt,
depreciation in the exchange rate of
rupee, rise in the level of external
debts and the increased share of the
short term commercial borrowing in
the complete external debt
quantum. The finance ministry
cleared on 10 September 2012 that
there can be a rise in the global
economic risks that may rise with a
weakened recovery and a slow
growth scopes that may lead into high
debts and seek growth finances even
in the advanced economies. This
clearance was based on Indian
Vulnerability Index indicators, which
has been experiencing the euro zone
debt crisis and the global slowdown.
A detailed analysis of Indias
position in external debt at the end
of March, 2012 has been presented
in the status report. It is also based on
the data released by the Reserve Bank
of India on 29 June 2012. The report
not only presents the analysis of
external debts trend and
composition on the country but it also
presents a comparative picture of this
debt in reference to other developing
nations of the world with respect to
the fluid global economic situations.
The best part of the report produced
is that instead of all the facts
presented and developments Indias
debt is within manageable limits and
can be indicated by the debt service
ratio to 6 percent and external debt-
to-GDP ratio of 20 percent in 2011-
2012. Thus India continues to be
within the less vulnerable countries
when it comes to external debt
indicators compared to that of the
indebted countries. The Global
Development Finance, 2012 from
World Bank, India stood at the fifth
position for absolute debt stocks
when compared with the 20 other
developing debtor countries. But
when taken care of the ration of
external debt to that of the gross
national income, India was at the fifth
position from the lowest side.
Indian Sovereign Rating is
Stable-Moody
The rating agency, Moodys
Investors Services on 26 September
2012 in its Outlook for India
expected stability due to the newly
announced reforms (FDI & hike in
petrol rates). It believed that these
reforms will help India in pairing up
of the fiscal deficits. Indian sovereign
credit rating outlook was kept by the
agency at Baa3 for the medium
term. Sovereign Risk Group at
Moodys, vice-president, Atsi Sheth
said that the nations target may
exceed the fiscal deficit due to the
reforms being practiced. He also
predicted that the gross fiscal deficit
of India can overshoot the estimated
target of 5.1 percent of the GDP
proposed for the fiscal year 2012-13
that will end in March. Whereas, the
outlook to India by the rating
agencies Fitch and Standard & Poors
was negative, where the two
agencies showed concerns towards
the pace of reforms going on in India
along with the economic downfall.
Service Tax on high-end
class travel, freight and
auxiliary service rail fares
The new Railway Minister C.P.
Joshi and the Finance Minister P.
Chidambaram in their meeting held
on 26 September 2012 came up with
the decision to regulate service taxes
on high-end passenger classes like
AC along with freight and auxiliary
services provided by the railways. The
taxation will be in effect from 1
October 2012. Implementation of the
taxes will help the exchequer in
generating estimated revenue of Rs
3100 Crore annually.
Percentage increase in the Percentage increase in the Percentage increase in the Percentage increase in the Percentage increase in the
fair chart for different segments fair chart for different segments fair chart for different segments fair chart for different segments fair chart for different segments
is as follows: is as follows: is as follows: is as follows: is as follows:
First Class - 7 percent
Air-conditioned - 3.708
percent
Freight charges - 3.708 per cent
Auxiliary services at stations
12.36 percent
The fair for high-end passengers
have been increased by 30
percent
Busy route surcharge during
busy season of maximum 10 percent
varying from commodity to
commodity on freight will also come
on effect from 1 October 2012. This
step will help in winning an additional
sum of Rs 826 crore in upcoming six
months for the railways.
Shimla Municipal
Corporation introduced
Green Tax
Shimla Municipal Corporation
introduced Green Tax on Shimla
entry of vehicles not registered in
Himachal Pradesh. The Corporation
Commissioner M.P. Sood stated that
the vehicles crossing the entry points
of the town will have to pay the
imposed tax. The tax will be imposed
on automobiles on both commercial
and non-commercial category. By
imposing the tax, the corporation will
increase its revenue by Rs 6 crore per
year. The taxes will be charged on
the four entry points of the city
namely, Totu, Tara Devi, Dhalli and
Mahali.
Tax imposed as per the
category of vehicles:
1. Two wheelers- Rs 100 per entry
2. Car- Rs 200 per entry
3. Utility Vehicles- Rs300 per entry
4. Bus/truck- Rs 500 per entry
CVC instructed CBI to
expand the scope of
investigation on Coalgate
The Central Vigilance
Commission on 24 September 2012
instructed the Central Bureau of
Investigation to expand its
investigation scope on Coal Block
Allocation to private firms in between
1993 to 2004. The decision was made
after CVC received a letter from the
Coal Minister, Shriprakash Jaiswal
seeking a probe from CBI on
allocations made, since 1993.
Widening of the scope of
investigation will bring into scanner
the allocation done to private
companies during the reign of P.V.
Narasimha Rao led congress
government after 1993, including
United Front Government from 1996
to 1998 and BJP-led NDA
government from 1996 to 1998.
Report of Comptroller and Auditor
General of India (CAG) - Vinod Rai
on coal block allocations tabled in the
parliament states-
1. Due to arbitrary allotment of the
coal blocks the Indian
exchequer suffered a loss of Rs
1.86 lakh crore equivalents to $
37 billion
2. Up to 31 March 2011 total 194
coal blocks were allotted to
different private and
government parties with an
aggregate quantity of 44,440
million tonnes of coal
3. The beneficiary of these
allotments as per CAG report
were 25 major companies of
India including Essar Power,
Jindal Steel and Power,
Hindalco and Tata Power
4. To bring out transparency in the
process, the CAG suggested
competitive bidding as a better
solution
Finance Ministry demanded
the Bank details of Coal
Mining Firms
In wake of the raging Coal Gate
Scam, the Finance Ministry on 18
September 2012 asked for
information related to bank loans of
the mining companies. The ministry
also asked details of companies not
directly engaged in mining but
collaterally engaged to coal blocks
allocated from the public sector
banks. The ministry also demanded
details related to sanctioned and out-
standing fund and non-funds of the
companies along with their status of
asset classification. The move of the
ministry is a result of irregularities
found in allocation of the coal-blocks
to the 58 power and iron and steel
companies, whose bank guarantees
have been invoked by the Ministry of
Coal followed by the
recommendation made by the inter-
ministerial group on coal or the de-
allocation of the coal-blocks that is
under process. The need for all these
details by the finance ministry is in
the wake of the report submitted by
the CAG (Comptroller and Auditor
General) of India related to non-
transparent allocation of coal blocks,
which lead to an estimated
exchequer loss of Rs 1.86 lakh crore.
RBIs data related to
sectoral deployment of
credit states
1. Bank exposure to power sector
is Rs 344980 Crore
2. Bank exposure to iron and steel
is Rs 36320 Crore
3. Bank exposure to cement and
cement products is 36320 Crore
4. Bank exposure to mining and
quarrying is Rs 36600 Crore
Power producers in India
consume almost 70 percent of the
total production of coal in the
country.
Government cleared Rs 808
crore FDI proposal by
Cloverdell
Mauritius based, Cloverdell
Investments Ltd. got a clearance for
their foreign direct investment
proposal of investing Rs 808 crore on
6 September. The Mauritius based
companys case was taken into
consideration by the Foreign
Investment Promotion Board (FIPB)
in the meeting conducted on 27 July
2012, but the approval came after
getting clarifications on certain
issues. Clearance for making the
investment in form of FDI to
Cloverdell raised the total number of
cleared FDI application to 11 with
an expected investment of Rs
2,067.98 crore. Cloverdells
investment will be directed to
introduce the foreign equity directly
into the operating Non Banking
Finance Company (NBFC) like the
companies engaged in commodity
broking, stock broking, housing
finance and depository participant
service.
Chidambaram pitched for
Prime Minister led National
Investment Board
Finance Minister P.
Chidambaram on 15 September 2012
pitched for institutionalization of a
National Investment Board under the
leadership of Prime Minister. The
formation of the board will help in
speeding the approval of the
proposals, for the mega projects and
their implementation. Formation of
the board will help the country in
achieving the targeted growth for the
twelfth five year of 8.2 percent.
At the meeting of the full
planning commission under the
chairmanship of Prime Minister
Manmohan Singh, the finance
minister expressed his concern on the
delayed implementation of the mega
projects and stressed on the fact that
the decision made by the National
Investment Board (NIB) to be taken
as the final decision. Chidambaram
also insisted interference by any other
authority on the approvals and
decisions made by the NIB will be
entertained. He also added to his
statement that NIBs role will be
limited to the projects with
investments of Rs 1000 crore or more.
NBFC-MFI norms modified
All registered non-banking
financial companies (NBFCs)
intending to convert themselves into
non-banking financial company-
micro finance institutions (NBFC-
MFIs) must seek registration with
immediate effect, and, in any case,
not later than October 31, the
Reserve Bank of India said in a
notification on Friday. The NBFCs
have to maintain net-owned funds
(NOF) at Rs..3 crore by March 31,
2013, and at Rs.5 crore by March 31,
2014, failing which they must ensure
that lending to the micro finance
sector, that is, individuals, SHGs or
JLGs, which qualify for loans from
MFIs, would be restricted to 10 per
cent of the total assets, the RBI said
in a notification. The RBI made some
modifications in the directions issued
on December 2, 2011, to NBFC-MFIs.
In order to provide encouragement
to NBFCs operating in the north-
eastern region, the minimum NOF is
to be maintained at Rs.1 crore by
March 31, 2012, and at Rs.2 crore by
March 31, 2014.
However, all new companies
desiring NBFC-MFI registration will
need a minimum NOF of Rs.5 crore
except those in the north-eastern
region Rs.2 crore.
To allow operational flexibility,
the RBI has asked these NBFCs to
ensure that the average interest rate
on loans during a financial year does
not exceed the average borrowing
cost during that financial year plus the
margin, within the prescribed cap.
Moreover, while the rate of interest
on individual loans may exceed 26
per cent, the maximum variance
permitted for individual loans
between the minimum and the
maximum interest rate cannot
exceed 4 per cent.
The average interest paid on
borrowings and charged by the MFI
are to be calculated on the average
monthly balances of outstanding
borrowings and the loan portfolio,
respectively.
It has also been decided that
the cap on margins as defined by the
Malegam Committee may not exceed
10 per cent for large MFIs (loans
portfolios exceeding Rs.100 crore)
and 12 per cent for others. This
measure will ensure that in a low cost
environment, the ultimate borrower
will benefit, while in a rising interest
rate environment, the lending NBFC-
MFIs will have sufficient leeway to
operate on viable lines. The figures
may be certified annually by statutory
auditors and also disclosed in the
balance Sheet, the RBI said in the
notification.
CCEA approved 1.90 crore
lakh package on debt
restructuring for the SEBs
The Cabinet Committee on
Economic Affairs (CCEA) on 24
September 2012 approved a 1.90
lakh crore package on debt
restructuring for the state-electricity
boards. The taken step will allow the
state- distribution companies
(DISCOMS) to facilitate their
turnaround. The committee met
under the leadership of Prime
Minister Manmohan Singh and gave
its nod to the package forcing the red
marked distribution companies to
start the fresh round of tariff increase.
The note of the cabinet states that all
this has been done to maintain a
balance in between the average cost
of supply to that of the average of the
revenue released. To avail the
package the discoms and the state
government will have to keep revising
the tariffs on a regular basis.
RBI for open policy on
pricing of liabilities
The Reserve Bank of India
(RBI), on Tuesday, asked banks to
have a board-approved transparent
policy on pricing of liabilities and
they should also ensure that variation
between retail and bulk in
interest rates on single term deposits
of Rs.15 lakh and above and other
term deposits is minimal. Banks are
offering significantly different rates
on deposits with very little difference
in maturities. This suggests
inadequate liquidity management
system and inadequate pricing
methodologies, the RBI said in a
notification.
There are wide variations in
banks retail and bulk deposits rates,
making it unfair to retail depositors,
the RBI had said in its last annual
policy statement. The Reserve Bank
of India had permitted banks, in
1998, to offer, at their discretion,
differential rates of interest on single
term deposits of Rs.15 lakh and
above, subject to the condition that
the schedule of interest rates payable
on deposits, including deposits on
which differential interest was paid,
was disclosed in advance and not
subject to negotiation between the
depositor and the bank. Earlier, the
RBI had also stipulated that banks
should not discriminate in the matter
of interest rate paid on deposits,
except in respect of fixed deposit
schemes specifically meant for
resident Indian senior citizens and
single term deposits of Rs.15 lakh and
above.
IRCTC introduced Interbank
Mobile Payment System
The Indian Railway Catering and
Tourism Corporation Limited
introduced the Interbank Mobile
Payment System (IMPS) for making
the payment of the bookings via
mobile phones. On use of IMPS
system, the user will be charged with
Rs 5 for transactions of up to Rs 5000
and Rs 10 for transactions more than
that.
The facility of booking via IMPS
will be available to those with their
phone number registered in the
respective bank accounts as the M-
Pin and the MMID (Mobile money
identifier) will be required for
furnishing the details required. This
facility will ensure smooth and
functioning of the booking criteria via
SMSs.
Modified allotment system
The Securities and Exchange
Board of India (SEBI), in a move to
increase the participation of retail
investors, modified the share
allotment system, irrespective of his
application size. It ensures every retail
applicant gets allotted a minimum
bid lot, subject to availability of
shares in aggregate. The system will
satisfy more number of smaller
applicants in the oversubscribed
issues. The minimum application size
for all investors is also being increased
to Rs.10,000 -15,000, as against the
existing Rs.5,000-7,000.
To encourage professionals and
technically qualified entrepreneurs
who are unable to meet the requisite
20 per cent contribution by
themselves as promoters they will be
allowed to meet the same with the
contribution of SEBI-registered
Alternative Investment Funds such as
SME Funds, Infrastructure Funds, PE
funds and VCFs, subject to a cap of
10 per cent. SEBI also said that it
would permit additional routes,
including rights and bonus issue, to
facilitate companies to reach
minimum public shareholding
requirements. To allow more
flexibility to the issuers, changes up
to 20 per cent in the amount
proposed to be raised as given in the
objects of the issue at the red-herring
prospectus (RHP) stage, as against
the existing 10 per cent, will not
necessitate re-filing with SEBI. To
facilitate qualified institutional
placements (QIPs) even in a falling
market, issuers will be allowed to
offer a maximum discount of 5 per
cent to the price calculated as per
the SEBI regulations.
NSE became the Worlds
Largest Bourse in Equity
Segment
As per the latest global ranking
compiled and published by the
World Federation of Exchanges
(WFE) in August 2012, the National
Stock Exchange of India (NSE)
become the worlds largest bourse
in terms of the number of trades in
equity segment for the first six months
of 2012. A total of 735474 trades took
place in the equity segment of NSE
in the January-June period of 2012,
making it the worlds largest
exchange on this parameter. NSE
was followed by NYSE Euronext and
Nasdaq OMX at the second and the
third positions.
Industry experts attributed the
recent position of NSE acquired by
the bourse to growing investor base,
use of latest technology and new
products. NSEs platform is
connected to two lakh trading
terminals in more than 2000 towns
and cities across the country. NSE is
the second largest exchange globally
after Korea Exchange for index
options. Eurex was the third largest
exchange worldwide in terms of total
number of index options traded
during the first six months of 2012.
BSE recorded a total of 187824
trades during this period in its equity
segment. The total number of listed
companies is much larger in case of
the BSE, the exchange however lags
behind NSE significantly in terms of
volume and value of trades. The latest
data published by WFE indicated that
investors from tier-three cities
contributed more than 45 per cent
of total cash market retail turnover in
the financial year 2011- 12. The tier-
three cities account for more than half
of the total retail investor base on NSE
platform.
CRR slashed to inject Rs
17000 crore
Reserve Bank of India on 18
September 2012 injected a liquidity
of around Rs 17000 crore by slashing
down t he Cash Reserve Ratio
(CRR) by 25 basis points to 4.50
percent from 4.75 percent. The
indicative policy rates were remained
at its original level. The repo rate,
state-term policy rate and reverse
repo rate remained unchanged with
8 and 7 percent respectively. The RBI
stated following its mid-term review
of the monetary policy that with
increased risks of growth and
inflation. In the situation, where there
is a persistent inflammatory pressure
of fiscal and current deficits
constraints, there exists a need of a
stronger policy targeting growth risks.
The monetary policies are of great use
in reviving the growth rate as per the
expectations of the market.
The Cash Reserve Ratio
(CRR) will come into effect from 22
September 2012. So far in 2012, RBI
has slashed the CRR by 150 basis
points. Cash Reserve Ratio, basically
is a portion of deposits that the banks
are supposed to keep with the
central bank (RBI), these deposits
doesnt earn any interest the
depositing bank. Repo Rate is a rate
at which the central bank offer funds
to the borrowing banks, whereas the
reverse repo rate is the rate of parking
the funds available by the banks with
the central bank.
The Wholesale Price Index
(WPI) have been moving around 7.5
percent across the financial year,
without much changes and so is the
condition of Consumer Price Index
(CPI) that has been rotating around
10 percent in spite of price hike in
food items.
Wholesale Price Index (WPI)
means the price fixed as a
representative for a wholesale grain.
In India, WPI is used for monitoring
inflation. Consumer Price Index (CPI)
is a statistical estimate that helps in
measurement of price change of
services and consumer goods
purchased by the households.
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RBI KEPT REPO RATE UNCHANGED
The RBI on 30 October 2012 left
interest rates unchanged but had cut
the cash reserve ratio for banks and
indicated that it is going to cut mon-
etary policy further in the January-
March 2013 quarter, with inflation
remaining a near-term concern. The
decision of leaving the policy repo
rate unchanged at 8.00 percent,
which is at the same level for the past
six months was in line with forecasts
in a recent review of macroeconomic
and monetary developments by
Reuters. Also, the reverse repo, at
which RBI absorbs excess liquidity
through borrowings from banks, re-
mained at 7 percent. The new rates
will be effective 3 November
2012. The expectations for a rate cut
had grown after Indias finance min-
ister P. Chidambaram on 29 October
2012 outlined a plan to trim the
countrys hefty fiscal deficit. D.
Subbarao mentioned in his quarterly
policy review that with the reduction
in inflation, there is an opportunity for
monetary policy to act in conjunction
with fiscal and other measures to miti-
gate the growth risks and take the
economy to a sus-
tained higher
growth trajectory.
The RBI, however,
cut the Cash Re-
serve Ratio (the
amount parked by
banks with the RBI)
by 25 basis points
from 4.5 per cent to
4.25 per cent. This
measure is ex-
pected to infuse Rs 17,500 crore li-
quidity into the banking system. The
RBI cut its GDP growth forecast for
Asias third-largest economy to 5.8
per cent for the current fiscal year,
from 6.5 per cent previously, and in-
creased its projection for headline
inflation in March to 7.5 per cent,
from 7 per cent earlier.
Repo rate: Repo rate: Repo rate: Repo rate: Repo rate: The rate at which
banks borrow f from RBI. It is an in-
strument of monetary policy. When-
ever banks have any shortage of funds
they can borrow from the RBI.
Reverse Repo rate: Reverse Repo rate: Reverse Repo rate: Reverse Repo rate: Reverse Repo rate: The rate
at which the RBI borrows money from
commercial banks.
Cash Reserve Ratio (CRR): Cash Reserve Ratio (CRR): Cash Reserve Ratio (CRR): Cash Reserve Ratio (CRR): Cash Reserve Ratio (CRR):
the amount of total deposits that
banks are required to keep with the
central bank. If the central bank de-
cides to increase the CRR, the avail-
able amount with the banks comes
down. The RBI uses the CRR to drain
out excessive money from the system.
Highlights of the RBI Quar- Highlights of the RBI Quar- Highlights of the RBI Quar- Highlights of the RBI Quar- Highlights of the RBI Quar-
terly Monetary Policy Review terly Monetary Policy Review terly Monetary Policy Review terly Monetary Policy Review terly Monetary Policy Review:
Economy Economy
Economy Economy Economy
Repo rate remain unchanged at
8 percent
CRR decreased by 0.5 Percent,
coming down to 4.5 to 4.25
percent
Reverse repo rate remain un-
changed at 7 Percent
GDP growth forecast cut down
to 5.8 per cent for the current
fiscal year 2012-13 from 6.5 per-
cent.
IMF SLASHED INDIAS GROWTH
FORECAST TO 4.9 % FOR 2012
The International Monetary
Fund (IMF) 2012 had slashed Indias
growth forecast to 4.9 per cent for
2012 due to low business confidence
and sluggish structural reforms. The
International Monetary Fund earlier
in July projected a growth rate of 6.1
per cent for the year 2012-13. Dur-
ing the first quarter ended in June
2012, Indian economy expanded by
5.5 per cent. In the World Economic
Outlook (WEO) released in Tokyo
ahead of the IMF-World Bank 2012
Annual Meetings, International Mon-
etary Fund stressed that Indias ac-
tivity suffered from waning business
confidence amid slow approvals for
new projects, sluggish structural re-
forms, policy rate hikes designed to
rein in inflation, and flagging exter-
nal demand. The report has pro-
jected 6 per cent growth for the next
year (2013), compared to an earlier
6.5 per cent projection.
The IMF also expressed that the
series of reform measures taken by
the government was expected to
raise Indias gross domestic product
(GDP) growth to six per cent in 2013.
For 2012-13 fiscal, the IMF asserted
that growth is projected to average
5-6 per cent in 2012-13, more than
one percentage point lower than in
the April 2012 WEO. The down-
grade reflects both an expectation
that current drags on business senti-
ment and investment will persist and
a weaker external environment.
14 FDI PROPOSALS WORTH
113.35 CRORE RUPEES APPROVED
The Union Government of India
approved fourteen foreign direct in-
vestment (FDI) proposals, which
would bring in the capital inflow of
113.35 Crore Rupees. The major por-
tion of 81.05 crore Rupees invest-
ments accounts to the three clear-
ances made in the Pharmaceutical
Sector. Approval of these propos-
als was made in accordance to rec-
ommendations made by the For-
eign Investment Pro-
m o t i o n
B o a r d
(FIPB) dur-
ing the meet-
ing held on 18
S e p t e mb e r
2012. The FIPB
is headed by
Arvind Mayaram,
the Secretary of
Department of Eco-
nomic Affairs
(DEA). Proposals of
the companies ap-
proved include Dashtag, Neo Capri-
corn Plaza Ltd., Pipavav Defence and
Offshore Engineering Company Ltd.,
Prime Surgical Centers Private Ltd.,
Calyx Chemicals and Pharmaceuticals
Limited, Egon Software Pvt. Ltd. and
Alburaq Trading LLP. Datsang got an
approval to hike its foreign equity of
value 68.22 crore Rupees with a nod
of carrying out the pharmaceutical
business especially in products re-
lated to antibiotics, anti-histamines,
dermatology and oncology. Prime
Surgical Centers Private Ltd. is al-
lowed for setting-up of the Limited
Liability partnership (LLP) for carry-
ing put and setting up the business
of establishing centers for short stray
surgery in India. The company will
have its flagship center at Pune and
bring in an investment of 14 crore
Rupees. Neo Capricorn Plaza Lim-
ited a Mumbai based company was
allowed with post-facto approvals to
carry out its business of constructing
five-star hotels. Pipavav Defence and
Offshore Engineering Company Lim-
ited is allowed to issue foreign cur-
rency convertible bonds (FCCBs) for
raising its foreign equity
a n d carry-
i n g
out
the
b u s i -
nesses of ship repairs,
ship building and production of
offshore assets.
AIRPORT DEVELOPMENT FEE TO BE
OMITTED
The Civil Aviation Ministry on 16
October 2012 announced to abolish
the airport development fee on Delhi
and Mumbai Airports, from 1 January
2013. The ministry directed the op-
erators of the two airports to stop levy-
ing the charges for Airport Develop-
ment Fee from the travellers from next
year and also asked the Airport Au-
thority of India to infuse equity in form
of joint venture firms that operates
the two largest airports of the nation.
The Civil Aviation Minister Ajit Singh
asked the DIAL (Dial International
Airport Ltd) and MIAL (Mumbai In-
ternational Airport Ltd) to submit pro-
posals for stopping the Airport De-
velopment Fee to the Airports Eco-
nomic Regulatory Authority (AERA).
Charges paid by domestic fliers in
Delhi and Mumbai are 200 rupees
and 100 rupees and for international
fliers it is 1300 rupees and 600 ru-
pees respectively.
DEVELOPMENT OF PEOPLE FRIENDLY
ROADS APPROVED
C.P. Joshi, the Union Minister of
Road Transport and Highways on 11
October 2012, approved two pilot
projects for development of People
Friendly Roads. This project will in-
volve construction of National high-
ways on corridor redevelopment and
spot improvement concepts. This will
help in reducing the financial burden
from the government making it pub-
lic friendly. The pilot projects in this
regard will be experimented at the
Hero Honda chowk on the Delhi
Gurgaon Expressway for its spot im-
provement concept and Delhi-Dasna
Section of NH-24 will be used for
implementation of corridor redevel-
opment concept. Additional features
like premium cluster, higher educa-
tion cluster, business cluster, Social
Economic Zone (SEZ) and specialty
cluster will be provided in the corri-
dor redevelopment concept at Delhi-
Dasna section of NH-24. The con-
cept just not focus upon, develop-
ment of the Highways but also have a
prime objective of developing liveli-
hood spaces and residential com-
plexes, for people whose lands will
be acquired.
CHIDAMBARAM FOR RATIONAL
PRICING OF PETRO-GOODS
Worried over rising oil subsidy,
Finance Minister P. Chidambaram, on
Wednesday, pitched for a rational
energy pricing mechanism and cor-
rection of distortion in petrol and die-
sel prices resulting from unequal taxa-
tion. With less than adequate pass-
through, subsidies on these (petro-
leum) products have burgeoned.
The problem is that these are
clearly not sustainable, and we must
devise ways and means of correcting
price distortions, he said while ad-
dressing the valedictory session of
PetroTech-2012. The Minister also
made a case for introducing a ratio-
nal and transparent energy pricing
mechanism to prevent leakages
while protecting the interest of poor
and vulnerable sections of the soci-
ety. Referring to the impact of high
oil prices on the world economy,
Chidambaram said the relentless rise
in crude oil prices is hurting growth
... In the last few years, all economies
are under pressure. India is no ex-
ception.
India imports about 75 per cent
of its crude oil requirement. This has
resulted in widening of current ac-
count deficit (CAD), while the rising
subsidy bill increased the
governments fiscal deficit. Tighter
product markets, rising prices and
growing demand could slow and in-
deed have slowed economic growth
and has serious implications ... and
consequently a major challenge for
the policy makers, Mr. Chidambaram
said. Indian economy was growing at
9 per cent plus rate before the glo-
bal economic crisis struck in 2008.
The economic growth has slowed to
a nine-year low of 6.5 per cent in
2011-12. Our macro economic out-
come in 2008-09 (the year of global
financial crisis) and 2011-12 (which
witnessed the eurozone crisis) were
significantly impacted by the rise in
global prices of crude oil, he said.
While the government subsidises oil
marketing companies (OMCs) for sell-
ing diesel, kerosene and LPG at be-
low market rates, the price of petrol
is fixed by the OMCs themselves. At
present, petrol price in Delhi hovers
around Rs. 67.90 a a litre, while
subsidised diesel costs Rs.46.95 a li-
tre.
Mr. Chidambaram said the single
most fiscal risk not only to India but
to all developing countries was the
burgeoning subsidy bill. While some
provision is being made under oil
subsidy year after year, we have found
that provision is always way off the
mark as oil prices are globally deter-
mined, he said. Referring to price
disparities on account of unequal
taxation between petroleum prod-
ucts, he said it results due to in-effi-
cient substitution of one fuel with the
other.
RBI EXPANDED THE LENDING
NORMS ON PRIORITY SECTORS
The Reserve Bank of India (RBI)
on 18 October 2012 extended the
lendings on the Priority sectors like
housing, agriculture, small and me-
dium enterprises, and expanded the
scope of bank loans for these sectors
up to 2 crore Rupees. These amend-
ments would be in effect from 20 July
2012. The decision came after dis-
cussions were held with the CMDs/
CEOs of selected banks as well as the
heads of Priority Sectors of selected
banks and based on the same the
new guidelines and amendments
were made. The banks were permit-
ted by the central bank to offer loans
up to an aggregate limit of 2 crore
Rupees, to corporate that includes
farmers producer companies, co-
operatives and partnership firms of
famers indulged in agricultural and
allied activities including animal hus-
bandry, bee-keeping, dairy, fishery
and sericulture. The Priority loan
would also be made available for pre-
harvest and post-harvest activities like
weeding, spraying, grading, harvest-
ing and sorting. Export Credit loans
for exporting ones own farm pro-
duce would also be made available.
The lending scheme fulfills the crite-
rion mentioned under the MSMED
Act-2006. Bank loans to Micro and
Small Enterprises (MSEs) those are
engaged in providing services would
be eligible for the direct finance of
up to 2 crore Rupees per borrower
per unit under priority sector. In case
the loan amount per borrower in-
creases the limit of 2 crore rupees,
than it can be considered as the indi-
rect finance for agriculture.
Loans under priority sector
would also include loans provided to
Government agencies for develop-
ment of dwelling units or slum clear-
ance and rehabilitation up to 10 lakh
rupees. This provision also spreads for
low income group and the economi-
cally weaker sections of the society
in form of housing finance, construc-
tion and re-construction, purchase
and more up to ceiling. The Central
Bank also guided the banks to keep a
check on the loans, which are offered
for the approved purposes. Thus the
banks engaged in issuing loans would
have to put forward a fine and chan-
neled internal system and control in
this regard. The apex court decision
came to ensure that credit needs of
people who dont have access to in-
stitutional finance.
DOW CHEMICAL TO CLOSE
20 PLANTS
The Dow Chemical Co. will
eliminate about 2,400 jobs and close
roughly 20 manufacturing facilities as
part of a restructuring plan aimed at
coping with slowing economic
growth in Europe and elsewhere.
The manufacturing giant said on Tues-
day that the job cuts amounted to 5
per cent of the companys workforce
worldwide.
Dow expects the strategy will
result in roughly $500 million in an-
nual cost savings by the end of 2014.
The company also plans to slash capi-
tal spending and investments. It ex-
pects that will save an additional $500
million. Dow anticipates it will save
$2.5 billion, including other cost-cut-
ting measures. Dow produces mate-
rials used in nearly every business
sector and region of the world, leav-
ing it exposed to shifts in global eco-
nomic growth. Rival DuPont Co., on
Tuesday, reported a big drop in quar-
terly profit and missed Wall Street
expectations. The company an-
nounced a restructuring that in-
cludes 1,500 layoffs. Over the next
two years, Dow plans to close certain
manufacturing facilities in the U.S.,
Belgium, the Netherlands, Spain, the
United Kingdom and Japan.
NORTHERN RAILWAYS INTRODUCED
PINK COLOURED TATKAL FORMS
The Northern Railways on 18
October 2012 introduced Pink
coloured forms for Tatkal reservation.
These forms would be made available
with a printed warning column at the
booking counters itself and would
have enough space to fill in the de-
tails like names, contact number, ad-
dress and others. This step of Rail-
ways would help in getting away from
the menace created by touts and
unauthorized ticket agents. If the
passenger is caught for buying the
tickets from any of these touts or un-
authorized agents, he will be respon-
sible for the consequences that may
be a fine in form of penalty or impris-
onment following the provisions avail-
able in the Railway Act 1989.
In case address or phone num-
ber provided in the ticket is found
false, the passenger would be
deboarded from the train on the very
next station. Tatkal being a special
service offered by the Railways re-
quires special documents to be pre-
sented and hence the form would
serve to the requirements.
EXPORTS IN INDIA WITNESSED 11
PERCENT DIP
The Commerce Ministry on 11
October 2012 released a data that
showcased the dip of 11 percent in
exports and rise of 5.1 percent in
imports. Exports in India for the fifth
consecutive month reported fall in its
percentage. With 11 percent fall to
$23.7 in export, the trade deficit wid-
ened to $18.1 billion in a months
time. The imports of the country
showcased a positive figure in the
month of September saw a rise of 5.1
percent at $41.8 billion to that of
$39.8 percent recorded in the month
of August, 2012. The cumulative re-
corded value of the exports in a pe-
riod of April to September in 2012-
13 down by 6.8 percent at $143.7
billion as compared to the $154.1
billion recorded in the same tenure
in the previous fiscal year 2011-12.
RBI TOLD TO PROBE FDI NORM
VIOLATIONS BY WALMART
Walmart, the American multi-
national retail giant, is being report-
edly investigated by the Commerce
Ministry for allegedly clandestinely
and illegally investing $100 million
in an Indian chain of convenience
stores two years ago in violation of a
ban on foreign direct investment in
the retail sector that existed at the
time. The move could hinder
Walmarts plans to expand in India
following the governments recent
decision to allow foreign direct in-
vestment. The Financial Times said
it had obtained documents showing
that the Commerce Ministry last week
asked the Reserve Bank of India to
launch an investigation into Walmarts
allegedly illegal investment in as many
as 200 convenience stores and
hypermarkets in 2010 when foreign
direct investment was banned. The
Easyday stores in question are osten-
sibly owned by Walmarts partner,
Bharti Enterprises, though Walmart
effectively manages them and
Walmart executives have been sec-
onded to Bharti, it said.
The paper said the investigation
would focus on whether Walmart di-
rectly invested in Bhartis retail op-
erations through a holding company
known as Cedar Support Services
Ltd. Walmart insisted that it was in
complete compliance with FDI
laws. All procedures and processes
have been duly followed and details
filed with relevant Indian government
authorities, including the Reserve
Bank of India, it said. The company
has been previously investigated in
America for allegedly paying bribes
to open stores in Mexico. The Finan-
cial Times said that, according to
company documents and the Com-
munist Party of Indias Rajya Sabha
member M. P. Achuthan who has writ-
ten a letter to Prime Minister
Manmohan Singh demanding a ban
on Walmart, Cedar owns Bharti Re-
tail and thus the Easyday chain. Mr.
Achuthan alleged that Walmart used
complex arrangements to circum-
vent FDI rules.
Cedar was originally set up in
2007 as Bharti Retail (Holding) Pri-
vate Ltd, but its name was changed
in 2009. Its articles of association
were amended to make it a real es-
tate and design consultancy service
company, in which foreign direct in-
vestment was allowed, the newspa-
per said. The report said that accord-
ing to the commerce ministry,
Walmart Mauritius (4) Holdings in-
vested Rs.456 crore, equivalent to
about $100 million at the time, in
compulsorily convertible deben-
tures giving Walmart a 49 per cent
stake in the company on conversion.
RELIANCE INDUSTRIES GETS NOD
TO RAISE KG-D6 PRODUCTION
After months of intense stand-
off, the Oil Ministry has given nod to
Reliance Industries plans to raise
natural gas output from the flagging
KG-D6, and agreed that CAG cannot
do a performance audit of the com-
pany. The Ministry, on Tuesday, sent
a letter to RIL stating that all the gov-
ernment nominees on the KG-D6
block oversight committee have al-
ready approved to all the develop-
ment proposals made by RIL, sources
said.
Also, it relented and agreed to
RIL stand that an audit by the Comp-
troller and Auditor General of India
(CAG) of its spending on KG-D6
block has to be a financial audit and
not a performance audit. ...the pro-
posed audit would be under Section
1.9 of the Accounting Procedure of
the Production Sharing Contract, and
not a performance audit of the op-
erator (RIL), the ministry wrote. On
the same day, the ministry also wrote
to Principal Director of Audit (Eco-
nomic & Service Ministries), CAG,
stating that subject to certain con-
ditions, RIL has agreed for an audit
under Section 1.9 of Accounting Pro-
cedure to the PSC by CAG and to co-
operate with such audit without
prejudice to any of their rights and
contentions. Oil Ministry had been
withholding approvals to RILs invest-
ment plans saying the company must
first agree to CAG doing a second
round of audit of KG-D6 field for the
2008-09 to 2011-12 periods. RIL had
stated that it was ready for a CAG audit
if done under the PSC which provides
for checking of the contractors ac-
counts in order to verify the charges
and credits but not questioning effi-
cacies of processes or technology
used in the complex deep-sea op-
erations.
The Ministry finally agreed to RIL
position. Sources said the ministry
wrote to RIL to take necessary ac-
tions on the items approved by the
Management Committee (MC). While
the Management Committee (MC) of
KG-D6 block in August approved
annual capex plans pending for past
three years, the resolution had not
been signed. These capex included
those on well interventions to reverse
the trend of falling gas output. Also,
at least three discoveries RIL has made
in the block had not been declared
commercial, a step necessary to be-
gin production from them. Besides,
the MC had approved the revised
field development plan for MA oil and
gas field in the same block in August
but formal orders had not been is-
sued. All these investments, RIL says,
are necessary to reverse drop in out-
put at the fields. After the ministry
action, RIL can now implement ur-
gent remedial measures at KG-D6
where output has dipped by more
than 55 per cent in past two years to
about 26 million metric standard cu-
bic meters per day. The CAG has
called a kick-off meeting, called the
Entry Conference, with RIL on Octo-
ber 31 to begin the second round of
audit, sources said. RIL had, last
month, stated that CAGs 2009 audit,
which it had agreed to as a one-time
exception, turned out to be a per-
formance audit which was contrary
to the provisions of the PSC. The CAG
had, in its first round of audit, ques-
tioned the reasonableness of costs
incurred in the gas field development
and said the government should re-
visit the profit-sharing mechanism.
CABINET CLEARS 10 PER CENT
DISINVESTMENT IN NMDC
The Cabinet Committee on Eco-
nomic Affairs (CCEA), cleared a 10
per cent stake sale of the Centres
equity holding in NMDC through the
offer for sale route. The transaction
is likely to fetch about Rs.7,000 crore.
The CCEA has approved the disin-
vestment of 10 per cent paid-up eq-
uity capital (39.65 crore shares of face
value of Re.1 each) of NMDC out of
the governments shareholding of 90
per cent through Offer for the sale
of shares through stock exchange
(OFS) method, as per SEBI Rules and
Regulations, an official statement said
here.
STAKE SELL-OFF
Following the stake sell-off, the
governments equity holding in the
iron ore mining Navaratna public
sector undertaking under the admin-
istrative control of the Ministry of Steel
will come down to 80 per cent. Al-
though NMDC with a paid-up equity
capital of Rs.396.47 crore as of March
31 this year is primarily engaged in
the ore mining business, it is also ex-
panding its activities towards produc-
tion of steel and other value-added
products. The countrys largest pro-
ducer of iron ore, it is operating two
mining complexes in Chhattisgarh
and one in Karnataka. The govern-
ment, it may be recalled, had pro-
posed disinvestment in NMDC ear-
lier but the move had to be shelved
on account of poor market conditions.
As and when this transaction comes
through, it would be the first issue
during this fiscal. For, having set a dis-
investment target of Rs.30,000 crore
for 2012-13, the government has not
been able to roll out any public issue
thus far this fiscal, primarily owing to
uncertain market conditions. For the
very same reason, the government
could manage to mop up a paltry
Rs.14,000 crore through disinvest-
ment during the last financial year as
against a budgeted target of
Rs.40,000 crore set for the fiscal.
OFS METHOD
Alongside, at the meeting
chaired by Prime Minister Manmohan
Singh, the CCEA also approved
authorisation in favour of EGoM (Em-
powered Group of Ministers) to
change the method of disinvestment
from the OFS method, if the same is
required subsequently due to market
conditions or due to change in SEBI
Rules and Regulations. Moreover, the
floor price, the number of tranches,
the basis of allotment and the num-
ber of shares to be allotted in each of
the tranches will also be decided by
the EGoM. According to the official
statement, the EGoM may also accept
or cancel the offer, if there is not
enough demand at or above the floor
price; in case of over-subscription in
one or more tranches, the EGoM can
decide whether the over-subscribed
amount is to be retained subject to
the overall disinvestment of 10 per
cent. Allotment of additional shares
to eligible and willing employees can
be offered at a discount of 5 per cent
to the issue or discovered (lowest
cut-off) price up to a maximum of 0.50
per cent of the paid-up equity capi-
tal subsequent to completion of the
transaction under OFS. The method
and procedure of allotment of shares
to the employees will be worked out
in consultations with merchant bank-
ers or advisors to the issue, the state-
ment said.
U.S. DISCUSSED ECONOMY AND
TRADE BARRIERS WITH INDIA
U.S. Treasury Secretary Timothy
F. Geithner and Indian Finance Min-
ister P.Chidambaram for the third an-
nual meeting of the India-U.S. Eco-
nomic and Financial Partnership on 9
October 2012 discussed lowering
trade barriers and extending ways to
expand capital markets. Both the
countries agreed to deepen coop-
eration at various multilateral forums,
including the G20 and discussed
ways to remove trade and investment
barriers. Timothy F. Geithner wel-
comed the economic reform mea-
sures announced by the Indian gov-
ernment recently by saying that it
would help in boosting private invest-
ment. He also asserted that India and
US have agreed on the importance
improving coordination on bilateral
tax matters including with respect to
the tax treaty and Implementation of
the Foreign Account tax Compliance
Act (FATCA) to address offshore tax
evasion. Both the countries US and
India recognize the great potential
benefit from working together to
meet the challenges of a shared fu-
ture to generate jobs, sustain growth,
and help ensure macroeconomic sta-
bility. The growing trade and invest-
ment between two countries across
a wide range of products, services,
and technology is a sign of commit-
ment to build relationship on a solid
foundation that utilizes mutual
strengths
TEA BOARD, ETC JOIN HANDS TO
PROTECT DARJEELING TEA
A joint communiqu has been
signed between the Tea Board of
India and the European Tea Commit-
tee (ETC), supporting the Protected
Geographical Indication (PGI) regis-
tration granted to Darjeeling tea
within the European Union (EU). It
also involves evolving a joint working
relationship to implement the PGI
registration for Darjeeling in letter and
spirit. The Tea Board was represented
by M. G. V. K. Bhanu, Chairman, while
the Hamburg-based European Tea
Committee was represented by Will-
iam Gorman, President. The ETC and
the Tea Board have agreed that they
would co-operate and work together
in disseminating information about
the PGI registration and its implica-
tions in the local language in Germany
and other tea-consuming countries
within the EU.
ETC is the Central European
Federation of national associations in-
volved in tea. Its activities focus on
quality control and food laws mainly.
Darjeeling tea from India received the
PGI protection in October 2011. It is
said that more Darjeeling tea is sold
in the international markets than is
produced in Darjeeling as very often
only a small portion of the authentic
product is put in a packet of tea-
blends from other regions. Following
the registration, the teas sold in EU
would have to be 100 per cent
Darjeeling tea.
CHINAS ECONOMIC GROWTH SLOWS
TO 7.4 %
Chinas economic growth
tumbled to the lowest in more than
three years in the latest quarter but
retail sales and investment improved
in a possible sign a painful slump
might be stabilising. The worlds sec-
ond-largest economy grew 7.4 per
cent in the three months ending in
September, data showed on Thurs-
day. That was down from the previ-
ous quarters 7.6 per cent and the
lowest since the first quarter of 2009.
Retail sales rose 14.4 per cent, a small
acceleration over the first half of the
year, and investment in industrial as-
sets and some other indicators also
showed small improvements. Judg-
ing from the third quarter figures, we
can see a clear sign of steady eco-
nomic growth, said Sheng Laiyun,
spokesman for the National Bureau
of Statistics, at a news conference.
There is a smaller margin of decline
and some major indicators have been
growing faster.
Analysts expect Chinas eco-
nomic growth to rebound late this
year or early next year but say a re-
covery is likely to be too weak to drive
global growth without improvement
in the United States and Europe. The
slowdown is due largely to govern-
ment lending and investment con-
trols imposed to cool an overheated
economy and inflation. But the down-
turn worsened sharply last year after
global demand for Chinese goods
plunged unexpectedly.
The government has cut inter-
est rates twice since early June and is
injecting money into the economy
through high investment by state
companies and spending on build-
ing airports, subways and other pub-
lic works. But authorities have
avoided launching a massive stimu-
lus after huge spending fuelled infla-
tion. Premier Wen Jiabao said growth
appeared to be stabilising and he
expressed confidence the country
could meet its official targets for the
year. Economic growth is stabilizing
and we are confident through our
efforts we can achieve the fullyear
targets for economic and social de-
velopment, the premier said in a
Cabinet statement.
TELENOR FINDS A NEW PARTNER
After ending its telecom joint
venture Uninor with Unitech,
Norways Telenor, on Friday, said it
had signed Lakshdeep Investments
and Finance as the partner for its
newly formed Indian entity
Telewings Communications.
Lakshdeep, controlled by Sudhir
Valia, will contribute an agreed
amount of equity into Telewings. Mr.
Valia is the brother-in-law of Dilip
Shanghvi, the promoter of Sun Phar-
maceutical Industries.
This is a financial investment by
Mr, Valia in his personal capacity,
Telenor said in a statement. Upon
successful participation in the up-
coming spectrum auctions and post
all required government approvals,
the Telenor Group will eventually
own 74 per cent of the joint venture,
the statement said. All assets of
Unitech Wireless will be transferred
to this company after getting the ap-
provals.
OPERATIONAL CONTROL
The Telenor Group will main-
tain operational control and upon
necessary approvals all assets of
Unitech Wireless (Uninor) will be
transferred to this company for seam-
less continuity of operations, the
statement added. Telewings has al-
ready applied for prequalification
procedure to participate in the up-
coming spectrum auction. However,
a final decision on whether to par-
ticipate or not will be made before
the auction starts, it added. Recenlty,
realty major Unitech had said it would
exit from the telecom joint venture
with Telenor by selling its entire 32.75
per cent stake to the Norwegian firm.
Telenor and Unitech had been at log-
gerheads ever since the Supreme
Court in February cancelled Uninors
22 telecom permits. Telenor wanted
to scrap the joint venture and trans-
fer the business to a new firm and get
fresh licence, whereas Unitech was
opposing it. However, earlier this
month, Unitech and Telenor agreed
to transfer the business in Uninor to a
new entity controlled by the latter.
400 CCTV CAMERAS INSTALLED
TO ENHANCE SURVEILLANCE
Northern Railways, Delhi Divi-
sion on 9 October 2012 finished in-
stallation of about 400 CCTVs at 10
different stations of Delhi to enhance
security and surveillance. Sum of
more than 20 crore Rupees was spent
on the project. The stations where
these cameras have been installed
include New Delhi, Old Delhi,
Shahadra, Sarai Rohilla, Hazrat
Nizamuddin, Anand Vihar,
Ghaziabad, Delhi Cantt, Tilak Bridge
and Shivaji Bridge.
As part of the Integrated Secu-
rity System and to enhance quality of
security checks, nine baggage scan-
ners and 152 CCTV cameras were in-
stalled at the New Delhi Railway Sta-
tion. This made the New Delhi Rail-
way station, first and the only station
in India to have more than 100 secu-
rity cameras installed and operational.
Control rooms with monitoring
officers have also been set-up at the
stations and the Railway management
will also keep a check on these offic-
ers. Installation of 12 escalators at dif-
ferent stations is in process to man-
age the crowd on the stations. In-
dian Railways has decided to imple-
ment, the Integrated Security System
(ISS) at 202 different stations across
the country for fine and reliable ac-
cess controls, baggage and personal
screening and security surveillance.
DAHEJ PLANT OF BASF TO GO ON
STREAM IN MARCH 2014
BASF of Germany, announced
that it would invest Rs.1,000 crore to
set up a new chemical plant at Dahej
in Gujarat by March 2014. We have
drawn up plans to invest Rs.1,000
crore to set up a Greenfield special-
ity chemicals manufacturing facility
at Dahej. This will supplement our
existing plant, and also cater to ex-
pand our business, BASF India Chair-
man and Managing Director Prasad
Chandran told reporters at the inau-
guration of the Indo-German Urban
Mela here. The company has already
started the construction in April this
year, and the plant will be operational
by March 2014. The upcoming fa-
cility will help in expanding our busi-
ness in sectors such as automotives,
paints, paper, home care and life
style. It will also supplement our
Mangalore facility, he added.
EXPORTS
Besides catering to the demand
of the domestic market, the plant will
export chemicals to other nations,
including Pakistan, Sri Lanka,
Bangladesh, Thailand and some other
ASEAN countries. The company at
present has nine manufacturing
plants in India. BASF also showcased
a concept car jointly developed with
German auto major Daimler with an
advanced technology and energy-
efficient light-weight design. BASF
India had clocked a revenue of
Rs.7,500 crore for 2011, registering a
jump of 20 per cent over the previ-
ous year. The company, which has
2,300 employees in India, also has
research and development (R&D)
centres at Thane and Mangalore.
POLARIS INKS PACT WITH PYXIS
Polaris Financial Technology, on
Wednesday, announced that it had
entered into a business purchase
agreement with Pyxis to strengthen
its consulting capabilities. Pyxis,
which is a specialised player in tech-
nologies for global markets, would
help Polaris with its market solutions,
according to a press release. This
agreement would reinforce our ex-
pertise in the consulting business. We
are happy to have a team of domain
specialists from Pyxis joining us, the
release quoted Kedarnath Udiyavar,
Head of Polaris FT Consulting, as say-
ing. The details of the contract, how-
ever, were not disclosed.
NSE, MCX, BSE AMONG TOP 20
GLOBAL DERIVATIVES BOURSES
Three Indian bourses NSE,
MCX and BSE have made it to the
worlds top 20 derivative exchanges,
ahead of their peers in global finan-
cial centres such as London,
Singapore and Hong Kong. While the
list is topped by the CME Group, as
per a list compiled by the Futures
Industry Association (FIA) for trad-
ing volumes between January and
June 2012, the National Stock Ex-
change is ranked fifth. Among other
Indian bourses, MCX is ranked at 10th
and BSE at the 18th position. After
the CME Group, Korea Exchange is
ranked second, Eurex at third and
NYSE Euronext at fourth. As per FIA
data, the NSE recorded a decline of
7.2 per cent to 971.8 million con-
tracts in the derivative segment dur-
ing the period under review. MCX
saw its volume dip by 13.8 per cent
to 489.3 million, while the BSE re-
corded a sharp rally to 97.4 million
contracts after its renewed focus on
derivatives trading in recent months.
LARGEST F&O EXCHANGE
The CME Group topped as the
largest F&O exchange but recorded
a decline of nearly 9 per cent with
1.55 billion derivative volumes. The
second spot was taken by Korea Ex-
change, which witnessed a slump of
34.4 per cent at 1.39 billion contracts.
The two were followed by Eurex and
NYSE Euronext with 1.26 billion and
1.02 billion contracts been traded
during the first six months, respec-
tively. The exchanges ranked below
the three Indian bourses in the top
20 were: JSE South Africa at 19th and
the London Metal Exchange at the
20th place. Those ranked below the
20th position included Hong Kong
Exchanges and Clearing (23rd), Lon-
don Stock Exchange (24th), China
Financial Futures Exchange (25th),
Singapore Exchange (26th) and To-
kyo Financial Exchange (27th).
SECURITY DEPOSIT ON NEW
CONNECTION OF LPG CYLINDER
INCREASED
The Union Ministry of Petro-
leum and Natural Gas on 9 October
2012 approved the increase in the
onetime security deposit on availing
a new LPG Cylinder connection. The
domestic cylinder weighed 14.2 ki-
lograms saw a rise of 250 Rupees and
turned up to be 1150 Rupees from
the previous one of 900 rupees in the
North Eastern State and in rest of the
country it turned up to be 1450 Ru-
pees witnessing a hike of 200 Ru-
pees.
People seeking new connec-
tion of Indane will have to pay a
amount of 2500 Rupees as security
deposit for the new connection.
Apart from this, the security deposit
for pressure regulator would be 150
Rupees, Blue consumer book will be
charged 45 Rupees each and the
deposit for Suraksha Tube is 170 Ru-
pees. Consumers with stove facility
available at home will have to pay an
extra amount of 250 Rupees for in-
spection.
SCOPE OF PRIORITY SECTOR
LENDING EXTENDED
The Reserve Bank of India, on
Wednesday, eased norms for priority
sector lending by banks and also ex-
panded the scope for distributing
loans to agriculture and weaker sec-
tions of the society. The additions
and amendments will be operational
with effect from July 20, the RBI said
in a notification. The central bank al-
lowed banks to include loans to
corporates, including farmers pro-
ducer companies of individual farm-
ers, partnership firms and co-opera-
tives of farmers directly engaged in
agriculture and allied activities
dairy, fishery, animal husbandry, poul-
try, bee-keeping and sericulture (up
to cocoon stage) up to an aggre-
gate limit of Rs.2 crore per borrower,
to be considered as apriority sector
lending. Further short-term loans for
raising crops, which include tradi-
tional/non-traditional plantations,
horticulture and allied activities,
would be included in the priority sec-
tor.
Loans for pre-harvest and post-
harvest activities, spraying, weeding,
harvesting, grading and sorting will
be included in the priority sector.
Now priority sector lending would
also include export credit for export-
ing own farm produce. During the
interaction the RBI Governor had with
bankers on July 31, 2012 in connec-
tion with the first quarter review of
Monetary Policy 2012-13, certain
concerns were raised by the banks
on the revised priority sector guide-
lines. Discussions were held with
CMD/CEOs of select banks and also
with priority sector heads of select
banks. Based on the feedback re-
ceived, it has been decided to make
certain additions and amendments,
in the guidelines on priority sector
issued on July 20, the RBI added.
Bank loans to Micro and Small Enter-
prises (MSEs) engaged in providing
or rendering of services will be eli-
gible for classification as direct fi-
nance to the MSE sector under the
priority sector up to an aggregate loan
limit of Rs.2 crore per borrower/unit,
provided they satisfy the investment
criteria for equipment as defined un-
der the MSMED Act, 2006.
In the housing sector, bank
loans to any governmental agency for
construction of dwelling units or for
slum clearance and rehabilitation of
slum dwellers subject to a ceiling of
Rs.10 lakh per dwelling unit would
be considered as priority sector lend-
ing. For the purpose of identifying
the economically weaker sections
and low income groups, the family
income limit of Rs.1.120 lakh per an-
num, irrespective of location, is pre-
scribed, it added. Bank loans to hous-
ing finance companies (HFCs)
approved by the NHB for their refi-
nance for on-lending for the pur-
pose of purchase, construction and
reconstruction of individual dwelling
units or for slum clearance and reha-
bilitation of slum dwellers, subject to
an aggregate loan limit of Rs.10 lakh
per borrower, would come under
priority sector lending. However, the
RBI stipulated that all inclusive inter-
est rate charged to the ultimate bor-
rower would not exceed the lowest
lending rate of the lending bank for
housing loans plus 2 per cent per
annum. The eligibility under priority
sector loans to HFCs is restricted to 5
per cent of the individual banks to-
tal priority sector lending, on an on-
going basis. The RBI also asked banks
to ensure that loans extended under
the priority sector are for approved
purposes and the end use is continu-
ously monitored. The banks should
put in place proper internal controls
and systems in this regard, it added.
IOC SIGNS MOU WITH KOREA GAS
Indian Oil Corporation (IOC), on
Wednesday, entered into a memoran-
dum of understanding (MoU) with
Korea Gas Corporation (Kogas) for
jointly exploring opportunities in ex-
ploration of oil and gas and LNG busi-
ness. IOC and Kogas signed an MoU
for joint participation in exploration
and production of gas and oil at the
global level, and developing natural
gas infrastructure projects and LNG
sourcing, the company said in a
statement.
PETRONET LNG TERMINAL AT
KOCHI TO BE READY BY EARLY
2013
Petronet LNG, on Friday, said its
import terminal at Kochi in Kerala
would be commissioned by the first
quarter of 2013 calendar year. Talk-
ing to reporters here, Petronet LNG
CEO and Managing Director A. K.
Balyan said the Kochi terminal would
operate only to less than a fifth of its 5
million tonnes a year capacity as the
offtake infrastructure was not yet
ready. GAIL (India) is laying pipelines
connecting the Kochi terminal to
consumers in two phases. The first
phase, connecting four consumers
such as Kochi Refinery and FACT
Tranvancore, would be completed
by December-end. Upon this, the
Kochi LNG terminal would be com-
missioned. However, it would oper-
ate at only 0.5-1 million tonnes ca-
pacity for the first year due to limita-
tion of gas offtake, he added. The
second-leg of the pipeline, which
would connect Kochi to Bangalore
and Mangalore, was expected to be
completed by next year-end, he said.
The company reported its highest
quarterly profit at Rs.315 crore in the
July-September period on the back
of better margins and operational ef-
ficiency.
PROFIT UP 21 %
Mr. Balyan said the net profit
rose by 21 per cent to Rs.315 crore
from Rs.260 crore a year ago. We
operated the 10 million tonnes a year
Dahej import terminal at 106 per cent
capacity during the quarter, he
added. Volumes imported remained
flat at 135 trillion British thermal units
but there was a 5 per cent increase
in margin it gets on turning the liquid
gas (LNG) back into its gaseous state.
DAHEJ EXPANSION
The turnover soared 41 per cent
to Rs.7,549 crore. The company had
a forex gain of Rs.114 crore against a
loss of Rs.52.6 crore, year-on-year.
Petronet, which is in expansion
mode, will commission its second
import terminal at Kochi by the first
quarter of 2013 calendar year. The
Dahej facility will be expanded to 15
million tonnes by 2015, and a third
terminal is being planned at
Gangavaram in Andhra Pradesh.
APPLE OPENS BIGGEST ASIAN
STORE IN BEIJING
Apple, on Saturday, opened its
biggest Asian store yet in Beijing. The
shop, on the major shopping street
of Wangfujing in the heart of the capi-
tal, covers an area of 2,300 sq. metres,
according to Chinese media reports.
DR.REDDYS TO ACQUIRE
OCTOPLUS PHARMA
Dr.Reddys Laboratories an-
nounced the intended public offer
to acquire Octoplus N.V., a service-
based speciality pharmaceutical
company for 27.39 million euros
(nearly Rs. 192 crore) in cash.
Dr.Reddys offered to acquire 100 per
cent of the issued and outstanding
shares of OctoPlus with a premium of
30 per cent over the closing price of
OctoPlus, as on October 19.
Dr.Reddys already has commitment
from over 50 per cent of sharehold-
ers of OctoPlus, whose executive
board unanimously recommended
the offer to the remaining sharehold-
ers. A release from Dr.Reddys said
that the deal would help expand the
companys expertise and scientific
capabilities. We are looking forward
to build a research base in Leiden
(Netherlands). The acquisition would
help us remap up our technology
capabilities in drug delivery,
G.V.Prasad, CEO and Vice-Charman
of Dr.Reddys, said in a statement.
INDIAN FIRMS REAP BITTER
HARVEST IN AFRICA
Indian companies which in-
vested in controversial deals involv-
ing hundreds of thousands of acres
of land in Ethiopia have found them-
selves out of their depth in a fast-grow-
ing African economy that is still in the
process of building critical transport
and irrigation networks. Documents
related to one such transaction reveal
how Emami Biotech, a subsidiary of
the Rs.2,200-crore Emami Group,
pulled out of a Rs. 400-crore, 40,000-
hectare, bio-fuel plantation only a
year after the project was announced.
Indian companies are the second
largest investors in the Ethiopian
economy with approved investments
worth nearly $5 billion. While a ma-
jority of the businesses are small
manufacturing and trading enter-
prises run by business families long
settled in East Africa, the big money
has come with the recent entry of
large Indian investors. A number of
Indian companies have signed agree-
ments to lease more than 4,40,000
hectares of land across Ethiopia,
1,00,000 hectares of which has been
granted to a single Bangalore-based
company, Karuturi Global Ltd. Inter-
national. Rights organisations and
NGOs have characterised the deals
as instances of land grab and have
accused the government of forcibly
resettling pastoral communities.
The Ethiopian government has
denied these allegations, insisting
that large-scale commercial agricul-
ture is a vital part of an ambitious
project to transform the national
economy. Yet, the failure of Emami
Biotechs plantation and the glacial
progress of Karuturis 1,00,000-hect-
are project in Gambella have led
some to question the ability of these
companies to manage such large
plots of land. We think [that] before
making necessary preparations, they
just express interest, get investment
licences, get land and then prepara-
tions take more time, said Federal
Minister for Industries Mekonnen
Manyazewal. Once they start opera-
tions, obviously there will be chal-
lenges but we are prepared to solve
their problems. A senior Ethiopian
bureaucrat said the government had
taken considerable political risk by
embarking on such sensitive projects
involving the displacement of thou-
sands and felt that the Indian inves-
tors had not done their homework.
Emami Biotechs project in Oromia,
he said, was a case in point.
In August 2009, the company
announced it was investing Rs. 400
crore to acquire 100,000 acres to
plant Jatropha and other oil seeds and
to set up an oil extraction plant. Mott
McDonald, a reputed engineering
and development consultancy, con-
ducted a feasibility study. The Ethio-
pian government welcomed the in-
vestment and even appointed Emami
Director Aditya V. Aggarwal as Hon-
orary Ethiopian Consul at its newly
opened Consular Office in Kolkata.
PULLING OUT
The following year however,
Emami was ready to pull out. On De-
cember 22, 2010, the company wrote
to the Oromia Investment Commis-
sion, claiming that only half the land
initially allotted to Emami was suitable
for agriculture, and even that land
didnt have enough water. As per the
letter, the company invested $1.5
million in the project, dug several
bore wells, and constructed a check
dam. It also tried to grow maize,
pulses, soya bean and sunflower, but
all our hard works becomes in vain
[sic], the letter said. The other parts
of the land, the company claimed, lay
along a disputed border between
Oromia and the neighbouring prov-
ince of Somaliland. The letter lists
seven additional problems, including
crop damage by local villagers and
their cattle and a lack of cooperation
from the local administration. While
Oromia officials said there were no
clashes between the company and
the local villagers, a researcher ac-
quainted with the project said the
company and the villagers had
clashed over scarce water supplies.
The Ethiopian government is scepti-
cal of the companys claims. It is a
matter of due diligence, they must
have known [about the water]. I dont
think that has lead to the withdrawal,
said Mr. Mekonnen, the Minister for
Industries, noting that the company
had conducted a feasibility study.
GLOBAL RECESSION
Analysts said the global reces-
sion could have led to a slump in de-
mand for biofuels, affecting the vi-
ability of Emamis project. Since Ja-
tropha plantation does not require
[much] water, the land allocated was
arid and the lease rental was ex-
tremely low, said an analyst, adding
Emami realised that the Jatropha
plantation was not lucrative and tried
to cultivate other crops, This led
Emami to request the government to
reallocate the land and give them
land that has much better water re-
sources. [In Ethiopia] the cost of
clearing land and making it into a farm
is about $1,500 per hectare, said
Bharat Kulkarni, Director, Stalwart
Management Consultancy Services, a
firm that advises those looking to in-
vest in Africa. Unfortunately, inves-
tors land up in Ethiopia without actu-
ally realising this challenge. Other
factors include the high internal cost
of transport, the absence of trained
labour, government inefficiencies
and the high costs of equipment. We
have returned the 30,000 acres of land
handed over to us but are in talks with
the government for alternative land,
said a spokesperson from Emami
Biotech, but refused to share the rea-
sons for this decision. Asked whether
the Ethiopian government would re-
allocate land to the company, Mr.
Mekonnen was non-committal. We
will think twice, he said.
JINDAL TO BUY EXXONS BUSINESS
Jindal Poly Films has entered
into an agreement with ExxonMobil
Chemical to purchase its biaxially ori-
ented polypropyline (BOPP) global
films business. The agreement cov-
ers five BOPP production locations
in the U.S. and Europe. The transac-
tion also includes a technology cen-
tre and sales office in Rochester, New
York and an office in Luxembourg,
says a company release.
FM UNVEILS ROADMAP FOR FISCAL
CONSOLIDATION
A day ahead of the second quar-
ter monetary policy review by the
Reserve Bank of India (RBI), Finance
Minister P. Chidambaram, on Monday,
unveiled a five-year roadmap for fis-
cal consolidation in keeping with the
Kelkar Committee recommendations
to contain the twin deficits and high
inflation, spur investments and put the
economy back on a higher growth
track. Making a statement at a press
conference here to mark acceptance
of a number of reform measures in
taxation, disinvestment and expen-
diture recommended by the Kelkar
panel, which had cautioned the gov-
ernment that a business-as-usual
scenario for the current year might
lead to the fiscal deficit rising to 6.1
per cent of GDP [gross domestic
product], Mr. Chidambaram asserted
that efforts would be continued to
restrict the fiscal deficit to 5.3 per
cent of the GDP this fiscal, and re-
duce it to 3 per cent over a five-year
period in 2016-17.
Referring to the lower fiscal
deficit target that was set in the Bud-
get for 2012-13, Mr. Chidambaram
said: 5.1 per cent was very challeng-
ing. After looking at all the factors,
we think 5.3 per cent is doable, and
we intend to work hard and achieve
that. As per the roadmap, the defi-
cit is to be brought down to 4.8 per
cent by 2013-14, to 4.2 per cent in
2014-15 and further to 3.6 per cent
in 2015-16 and finally to 3 per cent
per cent in 2016-17. This plan is nec-
essary, this plan must be implemented
and the government is very serious
about implementing this fiscal con-
solidation planAs fiscal consolida-
tion takes place and investors confi-
dence increases, it is expected that
the economy will return to the path
of high investment, higher growth,
lower inflation and long-term
sustainability, he said.
The timing of the announce-
ment is significant, in that it is quite
evident that the government would
like the RBI to heed India Inc.s de-
mand, and ease its key policy rates to
kick-start the economy by reviving
demand and catalysing investment.
While it remains to be seen whether
the apex bank responds to the
governments fiscal action or waits for
the measures to take effect in view of
the persistently high inflation, Mr.
Chidambaram gave a clear indication
that the government would welcome
reciprocal action in view of the de-
celeration in industrial and overall
economic growth. Without referring
to the RBI, Mr. Chidambaram said:
Well, I am making the statement so
that everybody in India acknowl-
edges the steps which we are taking.
And also acknowledges the govern-
ment is determined to bring about
fiscal consolidation. And I sincerely
hope that everybody will read the
statement and take note of that... In
his statement, Mr. Chidambaram
pointed out that among the reform
measures recommended the Kelkar
panel strongly advocated a transition
to the Goods and Services Tax (GST),
a quick review of the Direct Taxes
Code (DTC) before its introduction
and passing in Parliament and a num-
ber of administrative measures to im-
prove tax collection. On disinvest-
ment, it suggested a number of new
models for disinvestment and has
pitched for disinvestment of the
governments residual stake in some
companies that were privatised ear-
lier. On the expenditure front, it sug-
gested rationalisation of schemes,
and strict control and monitoring of
expenditure. These recommenda-
tions are wholesome and have been
accepted by the government, he
said.
Expressing confidence that the
government would be able to mop
up Rs.30,000 crore from disinvest-
ment and Rs.40,000 crore from sale
of spectrum, Mr. Chidambaram
stressed that every effort would also
be made to realise the revenue bud-
geted under tax receipts. The gov-
ernment also expects to be able to
contain and economise on expendi-
ture, both on Plan and non-Plan side.
While funds will be made available
for essential expenditure, especially
capital expenditure, every effort will
be made to avoid parking or idling of
funds. As regards subsidies, the Gov-
ernment will also increasingly rely on
Aadhaar-enabled direct cash trans-
fers of merit subsidies to eliminate
duplication or falsification, he said.
The Finance Minister also expressed
the governments firm resolve to ad-
dress the challenges posed by the
rising current account deficit (CAD).
The CAD, he said, was expected to
come down to $70.3 billion or 3.7 per
cent of GDP in the current fiscal, from
$78.2 billion or 4.2 per cent in 2011-
12. The government is confident that
the CAD will be fully financed by
capital inflows, and expects that a
substantial part of it will be in the form
of foreign direct investments, foreign
institutional investments and external
commercial borrowings , he said.
As for the reforms in direct and
indirect tax laws, Mr. Chidambaram
said the introduction of the amended
Direct Taxes Code (DTC) Bill was
under review and would be pre-
sented to Parliament after taking the
recommendations of the Standing
Committee into account. A quick
review of the DTC Bill will be done.
We are looking at the Bill that was in-
troduced, at the Standing
Committees recommendations. We
are also looking at current economic
situation and therefore final version
of bill that will be introduced in Par-
liament will reflect all these. By and
large, we will have to abide by Stand-
ing Committee recommendations,
he said. Alongside, work is in progress
on the Goods and Services Tax
(GST).
PENGUIN, RANDOM AGREE TO
MERGE
Penguin and Random House,
two of the worlds top English-lan-
guage publishing houses, have
agreed to merge, it was announced
on Monday, in a move seen as a pre-
cursor to more such mergers as the
publishing industry struggles to over-
come growing competition from digi-
tal publishing, notably Amazon. At
present, Penguin is owned by
Pearson, publishers of The Financial
Times , and Random House by the
German media group Bertelsmann.
The latter will control 53 per cent of
the proposed joint venture, to be
called Penguin Random House, and
Pearson 47 per cent. The deal, which
will create a business with estimated
annual revenues of 2.5 billion ac-
counting for 25 per cent of the Brit-
ish and American book markets, will
be subject to normal regulatory ap-
provals. It is expected to come into
effect in the second half of 2013.
There were calls for competition au-
thorities to look at the deal closely,
given the size of the merged group.
The move came as Rupert
Murdochs News Corp, which owns
Harper Collins, was reported to have
approached Pearson with substan-
tial cash offer, estimated to be about
1 billion. But there was no official
comment either from News Corp or
Pearson. Meanwhile, Pearson said the
merger with Random House would
bring together two of the worlds
leading English language publishers,
with highly complementary skills and
strengths. Random House is the
leading English language publisher
in the U.S. and the U.K., while Pen-
guin is the worlds most famous pub-
lishing brand and has a strong pres-
ence in fast-growing developing mar-
kets. Both companies have a long his-
tory of publishing excellence, and
both have been pioneers in the dra-
matic industry transformation towards
digital publishing and bookselling,
it said.
SHARING COSTS
Marjorie Scardino, Chief Execu-
tive of Pearson, said that together two
publishers would be able to share a
large part of their costs, and invest
more in their authors.
Thomas Rabe, Chairman and
CEO of Bertelsmann, described the
proposed merger as the best course
for new growth for our world-re-
nowned trade-book publishers. It
will build on our publishing tradition,
offering an extraordinary diversity of
publishing opportunities for authors,
agents, booksellers, and readers, to-
gether with unequalled support and
resources, he said.

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National Cancer Institute
and a National Cardio Care
Centre to be developed at
Jhajjar
The Union Government of In-
dia on 24 November 2012 an-
nounced to set up a National Can-
cer Institute (NCI) and a National
Cardio Care Centre (NCCC) at the
second campus of All-India Institute
of Medical Sciences (AIIMS) in
Badhsa village of Jhajjar, Haryana
during the inauguration of the Out-
reach OPD of the AIIMS-II campus
spread over 300 acres. This outreach
OPD is well equipped with all the
facilities and has a capacity of 1000
beds and the first OPD in the nation
to provide free medicines to the
patients.
On this occasion, the Union
Health Minister Ghulam Nabi Azad
also declared that the AIIMS-II, with
a total capacity of 2,100 beds, would
be developed as a world-class in-
stitute. International bids in form of
the Expression of Interest for draft-
ing the master plan was already
called on by the ministry. The Pro-
posed National Cancer Institute
would be the countrys largest can-
cer institute with a capacity of 600
beds and facilities of treating almost
every form of cancer.
South African Government
Rolled Out Nelson Mandela
Bank Notes
The South African Reserve
Bank on 6 November 2012 rolled out
new bank notes bearing the face of
the countrys first black President
Nelson Mandela marking it as a trib-
ute to him. The Note issued by the
South African Reserve Bank, dis-
played the 94-year-old anti-apart-
heid icons smiling face. Also, the
earlier images of one of the five big
animals featured on the old bank
notes lion, leopard, rhino, buffalo
and elephant will be retained on
the reverse of the note. Nelson
Mandela is currently living out his
ECONOMY ECONOMY
ECONOMY ECONOMY ECONOMY
http://www.civilservicesmentor.com
42 42 42 42 42
http://upscportal.com
retirement in his childhood rural vil-
lage of Qunu in the Eastern Cape
Province. Nelson Mandela held of-
fice between 1994 and 1999 and he
is the first black face to appear on
South African money.
Mallya gets lifeline, loses
Royal Challenge
Dealing a shot of good news,
international liquor major Diageo, on
Friday, announced its decision to
acquire 53.4 per cent stake in Vijay
Mallya-owned United Spirits Ltd.
(USL) for Rs.11,166.50 crore.
Diageo announced from Lon-
don that it had entered into agree-
ments with United Breweries (Hold-
ings) Ltd. and USL to acquire 27.4
per cent stake in USL for Rs.5,725
crore at Rs.1,440 a share. Shares of
USL closed at Rs.1,343.25 on Thurs-
day. UB Holding and associate com-
panies will sell 19.3 per cent stake
to Diageo and a large part of this
money will directly go to UB Hold-
ings, which will de-leverage its bal-
ance sheet.
The board of directors of USL
has cleared a proposal to make a
preferential allotment of USL shares,
amounting to 10 per cent of the
companys enlarged share capital, to
Diageo at Rs.1,440 a share. The pro-
ceeds from this will go into clearing
a part of USLs debt of Rs.8,300
crore. After this stake sale, the UB
Holdings groups shareholding in
USL will come down to 14.9 per
cent.
Following completion of these
agreements, Mr. Mallya will continue
as Chairman of USL, and UBHL. He
will work with Diageo to build the
USL business in India.
Open offer to buy 26 %
stake
Since these agreements trigger
the Securities and Exchange Board
of Indias takeover code, Diageo will
launch an open offer to buy 26 per
cent stake from the public at
Rs.1,440 a share.
The open offer will cost Diageo
Rs.5,441 crore. Shareholders need
to approve this proposal.
On completion of this process,
Diageo will hold a total of 53.4 per
cent stake in USL with an aggregate
cost of Rs.11,166.50 crore.
It is completely a win-win for
both. I am personally very happy
that finally the dream has come
true, UB Group Chairman Mr.
Mallya said in a conference call with
journalists from London. He made
it clear that the money generated
from this deal would not be utilised
to revive Kingfisher Airlines as had
been widely speculated.
I have now done what I think
is best for my spirits business and,
of course, we will also address the
needs of Kingfisher Airlines, but
these will be done separately for the
good of the company and its stake-
holders, Mr. Mallya added.
I have had a long association
with Diageo and, therefore, I am
confident that this winning partner-
ship with Diageo provides USL with
the best possible platform for future
growth, he said. I am delighted to
remain part of that journey as Chair-
man of USL as we work together to
build continued value for the share-
holders of USL and UBHL, Mr.
Mallya said.
Family jewel?
He denied that he sold his fam-
ily jewel (USL) I have not sold my
family jewel, only embellished
them, he said.
Diageos COO Ivan Menezes
said the acquisition USLs
shareholding was fully aligned with
the companys strategy to build its
presence in the worlds faster grow-
ing markets besides enhancing its
position as the worlds leading pre-
mium drinks company.
He said UB groups manufac-
turing and distribution capabilities
and Diageos marketing and brand
building capabilities would be a
unique combination.
As a result of the agreements,
we will be well positioned to take
the growth opportunities presented
by a spirits market where growth is
driven by the increasing number of
middle-class consumers. The com-
bination of USLs strong business
with the capabilities which Diageo
brings as the worlds leading pre-
mium drinks company will ensure
that USL continues to lead the indus-
try in India, Paul S. Walsh, Chief
Executive of Diageo, said in a state-
ment. Diageo has asked the UB
group to release all security interests
over USL shares to be acquired by
it.
Good News
Analysts said this was the best
Mr. Mallya could have done. He is
pushed to the wall to sell stake and
there is no other choice. The deal is
in line with market expectation and
he fetched more money than ex-
pected. It is good for the company,
said market analyst Ambarish Baliga.
The entire deal is expected to
complete in early 2013. Diageo will
fund the acquisition through exist-
ing cash resources and debt.
Diageo and MR. Mallya have
entered into a MoU to form a 50:50
joint venture which will own United
National Breweries traditional sor-
ghum beer business in South Africa.
They are also considering the
possibility of extending this joint
venture to maximise opportunities
in Africa and Asia (excluding India).
USL shares closed with a gain of 1.22
per cent at Rs.1359.70 on the BSE.
United Spirits brands include
Royal Challenge, Directors Special,
Signature whisky; Black Dog scotch
and White Mischief in vodka.
Cabinet Committee on
Economic Affairs approved
9.5 percent Stake
Disinvestment in NTPC
Economic Affairs (CCEA) approved
the disinvestment of 9.5 percent
Government Stake in the Maharatna
PSU-National Thermal Power Cor-
poration (NTPC) on 22 November
2012 from its holding of 84.50 per-
cent.
The disinvestment would be
done through the stock exchanges
following the SEBI Rules, via an of-
fer for sales of the shares. The eq-
uity disinvestment of NTPC would
bring back a sum of about 13000
crore rupees.
With this disinvestment the
governments holding on NTPC
would fall down from present 84.5
percent to 75 percent, which will
adhere to the minimum public
shareholding norms that was stipu-
lated by the Securities and Ex-
change Board of India (SEBI), the
market regulators. The recorded
paid-up equity capital of NTPC on
of 31 March 2012 under administra-
tive control of the Ministry of Power
was 8245.46 crore rupees.
NTPC
NTPC-the National Thermal
Power Corporation is a Public Ser-
vice Undertaking Company engaged
in power generation that came into
existence in the year 1975 to accel-
erate the rate of power generation
in India. In the Forbes Global 2000
ranking list of the Worlds biggest
companies NTPC was ranked at
337th position in 2012.
At present NTPCs generating
capacity is 39674 MW and by 2032
it is expected that the company
would have a capacity of 128000
MW.
Oman Banned Import of
Eggs and Chicken from
India
The Sultanate of Oman on 10
November 2012 issued an official
decree banning the import of eggs
and chicken from India. Oman that
is the biggest egg export market of
India issued the ban following the
recommendations of the World
Organisation for Animal Health
about the outbreak of bird-flu was
confirmed by the Government run
Turkey Farm at Hesaraghatta,
Karnataka in the month of October.
The Sultanate of Oman banned
import of eggs and chicken from
India for second time in 2012 and
this ban is going to affect the eco-
nomic conditions of the poultry
farmers of India as this ban would
have an impact on a third of poultry
export from India. Oman resumed
the import of Poultry Products from
India after a ban that lasted for five
months in the last week of Septem-
ber. The previous ban was made in
effect of reports of bird flu wit-
nessed in Bihar.
GAIL and RSPCL signed an
Agreement of Joint Venture
on Gas Supply Pipeline
Project
The GAIL Gas Limited and the
Rajasthan State Petroleum Corpora-
tion Limited (RSPCL) signed an
agreement of Joint Venture on 5
November 2012 to lay down the
natural gas supply pipeline in the
state. Both the bodies will together
formulate a long-term plan on com-
mercial, domestic as well as indus-
trial consumption of the gas. The
agreement was signed by GAIL Gas
Limited Chief Executive Officer J.
Vasan and Ajitabh Sharma Manag-
ing Director of RSPCL in presence
of C.K. Mathew, State Chief Secre-
tary.
The joint venture would help
in supply of pollution free LPG, CNG
and LNG to consumers of different
categories and would also be re-
sponsible for development of the
CNG stations on the road sides of
the state and national highways. The
project would also supply the gas
required by the industrial units that
is coming up on the Delhi-Mumbai
industrial corridor. The transport,
supply and distribution of gas
would be carried after getting ap-
44 44 44 44 44
provals from the Petroleum & Natu-
ral Gas Regulatory Board.
Moodys downgrades
ArcelorMittal rating to
speculative
Moodys, on Tuesday, down-
graded ArcelorMittals long-term
credit rating by one notch to Ba1,
putting it into speculative or junk
territory, saying the deterioration in
steel markets means the company
can no longer reduce its debt
enough to keep an investment grade
mark. The downgrade reflects the
deterioration in global steel markets
over the last six months, said
Moodys, pointing to the company
posting its worst performance in
three years last quarter.
ArcelorMittal, the worlds top
steelmaker, had an operating loss
and its gross debt rose in the third
quarter.
As a result, the amount of debt
reduction the company must realise
in order to hold a Baa3 rating is so
large as to be unachievable... said
Steve Oman, Senior Vice-President
and lead analyst for the EMEA steel
industry at Moodys. The Baa3 rat-
ing is the lowest investment-grade
rating at Moodys.
Air India on course for a
turnaround
Air Indias (AI) performance in
the first half of the current fiscal in-
dicates that the national carrier is on
track to meet the various norms laid
down in the turnaround plan that
were approved by the government
in April. Various financial and opera-
tional restructuring currently under-
way would accrue substantial ben-
efits and the airline seems deter-
mined to turn EBITDA positive by
March 2013, said AI officials.
On-time performance in the
first half improved to 85 per cent
from below 80 per cent in the first
half last year. For domestic, it was
89 per cent (78 per cent) while in-
ternational was 81 per cent (78 per
cent).
Passenger load factor im-
proved to 70.9 per cent with the
domestic services contributing sub-
stantially, the requirement being
69.5 per cent. AI has achieved a net-
work yield of Rs. 4.31 per passen-
ger km, with domestic yield of Rs. 6
and an international yield of Rs. 3.5,
which is comparable with other full
service carriers. On fleet utilisation,
AI achieved an average utilisation of
10.9 hours for its Airbus fleet as
compared to 10.50 hours set in the
turnaround plan. The wide body
fleet hit 13 hours utilisation as
against 14 hours set in the turn-
around plan.
The number of passengers in
November showed a substantial in-
crease, with an average of 46,300
passengers flying daily, of which 66
per cent were domestic passengers.
Productivity Linked Incentives
have been abolished from July 1 and
the airline has taken steps to
operationalize the engineering and
ground handling businesses with
the appointment of SBI Caps as its
advisors. Towards monetizing its
real estate assets, DTZ has been ap-
pointed as global real estate consult-
ant. The objective is to monetize Rs
500 crore a year with a target of Rs
5,000 crore in 10 years. The IT sys-
tem has been upgraded. A voluntary
retirement scheme (VRS) has been
finalized at the board level and has
been submitted to the ministry of
civil aviation for approval. VRS is
targeted at 5,000 surplus employees.
With 20,000 employees to be
shifted to the ground handling and
engineering businesses, the effec-
tive strength of the parent company
would come down substantially.
The objective is to have an aircraft
to employee ratio of 1:100, an offi-
cial said.
Route rationalisation contin-
ues to be a significant part of our
strategy to return to profitability.
In the first half, domestic ser-
vices contributed surplus of Rs.200
crore as compared to Rs.57 crore
loss in the first half of last year. 65
per cent of the domestic routes con-
tributed to higher yield, said S
Venkat, Director-Finance, Air India.
Through various cost reduction
measures, AI has been able to bring
down cost by nearly Rs.600 crore in
the first half, officials said. The re-
structuring of working capital loan
and non-convertible debenture is-
sue will bring down AIs interest
burden substantially. AIs short term
loans will come down to Rs. 4,500
crore from Rs. 22,500 crore.
Reserve Bank of India asked
Banks not to Provide Loans
for Purchase of Gold
The Reserve Bank of India, in
its notification released on 19 No-
vember 2012 directed banks not to
provide loans to its customers for
purchase of all types of gold, which
includes primary gold, jewellery,
bullion, gold coins, units of Gold
Exchange Traded Funds (ETF) and
units of gold mutual funds. The or-
der was directed for discouraging
people from getting involved in
speculative activities. The notifica-
tion from the Reserve Bank of India
also directed the banks not to grant
advances against gold bullion to
traders or dealers, as such advances
would be utilised with the purpose
of offering finance for gold purchase
at auctions and speculative holding
of stocks and bullion. This notifica-
tion allowed the banks to provide
finances to the jewelers for their
general working capital require-
ments.
The decision of RBI came up
in response to the suggestion of the
working Group constituted after the
announcement if the Monetary
Policy Statement of April 2012. The
working group suggested that the
banks are not permitted to finance
purchase of any type of gold other
than the working capital. This de-
cision of RBI came up in response
to the significant growth in the im-
ports of the gold in past few years
that has created pressure on the
current account deficit. The Gold
imports of India in 2011-12 stood up
at 60 billion dollar.
Civil Aviation Ministry
approved New Traffic Rights
to Indian Carriers
The Civil Aviation Ministry in
the first week of November 2012
approved new traffic rights to Indian
carriers for the next three seasons
to expand international air travel out
of the country. The new cities in-
clude Rome, Madrid, Barcelona,
Sydney, Melbourne, Nairobi, Al
Najaf in Iraq, Moscow, Zurich,
Macau, Tashkent and Ho Chi Minh
City. Air India and its subsidiary Air
India Express got their number of
weekly flights enhanced.
Air India has also got the rights for
the first time to fly on sectors like
Delhi-Rome-Madrid/Barcelona,
Delhi-Moscow, Delhi-Sydney/
Melbourne, Mumbai-Nairobi and
Mumbai-Al Najaf. The allocation of
flight traffic rights is expected to
give a major boost to Indian carri-
ers and spur growth in the civil avia-
tion sector. The move will also en-
hance connectivity from various In-
dian cities to international destina-
tions. It will also enhance competi-
tiveness among airlines and is ex-
pected to bring down fares. Open-
ing of several new international sec-
tors and progressive increase in
number of flights will also give a fil-
lip to the domestic tourism sector
which will result in overall economic
growth of the country.
Government decided to
digitize Cable TV Network
in Thirty Eight Cities
dia on 6 November 2012 decided to
digitise Cable TV network in thirty
eight cities, spread over 15 States,
by 31 March 2013 in the second
phase of digitisation. Earlier, the
digitization was completed in Delhi,
Mumbai and Kolkata on the 31Oc-
tober 2012, while in Chennai the
deadline was extended till the 9
November 2012 by the Madras High
Court.
CAG hits back at RIL,
British Gas
Upset at the repeated failure of
Reliance Industries Limited (RIL) to
submit for audit records and infor-
mation relating to the Krishna
Godavari D6 block, the Comptrol-
ler and Auditor-General has asked
the Petroleum Ministry to withhold
all approvals to the Mukesh Ambani-
owned company, except in emer-
gency situations.
The government auditor has
also asked the Ministry not to clear
the plans of British Gas (BG) for ex-
ploration projects as it had also
failed to submit information and
records relating to the Panna-Mukta-
Tapti gasfields.
Sources in the government
said that soon after M. Veerappa
Moily took over as Petroleum Minis-
ter this month, following the uncer-
emonious exit of S. Jaipal Reddy,
the CAG wrote to the Ministry,
pointing to the continuous failure of
the two companies to submit the
records it had sought. The CAG, in
its communication, has pointed out
that every effort was being made to
thwart the audit by the constitu-
tional body, and one after another
obstacle was created in the conduct
of a smooth audit till 2011-12. Both
RIL and BG are shying away from
providing information and have
adopted an indifferent attitude to
the CAG, resulting in the audit com-
ing to a standstill, the sources said.
Furthermore, the sources said,
the CAG asked the Ministry to im-
mediately direct RIL to submit all
records pertaining to the KG D6
block for audit up to 2012, as any
increase in capital expenditure
would have an adverse impact on
the governments interest. Till the
time RIL and BG submit the relevant
46 46 46 46 46
records for audit and cooperate
with the CAG, their approvals
should be held back except in emer-
gency circumstances, it said.
Earlier this month, the CAG
strongly objected to the restrictive
conditions laid down by RIL for an
audit, which, it said, impinge upon
the basic mandate, rights and obli-
gations of the CAG to conduct an
audit and report the results to Par-
liament.
In a letter to Petroleum Secre-
tary G.C. Chaturvedi on October 26,
two days before Mr. Reddy was
shunted out of the Ministry, the CAG
said the conditions were unaccept-
able, and the CAGs (Duties, Pow-
ers and Conditions of Service) Act,
1971, gave it unfettered right and
would override all conditions
sought to be imposed on the audit
process.
In it, the government auditor
listed the conditions laid down by
RIL: audit be restricted to account-
ing books and records; audit of the
years that were time-barred be sub-
ject to the consent of the operator;
audit report be submitted to the
Ministry and not Parliament; audit be
subjected to confidentiality arrange-
ments between parties to the pro-
duction-sharing contract; and the
CAG be bound not to use the infor-
mation acquired during the audit for
any other audit under the Act.
It would not be possible for
us to conduct audit under such re-
strictions imposed by the operator
[RIL], A.M. Bajaj, Principal Director
of Audit, Economic and Service
Ministries, said in the letter.
The CAG said it reserved the
right to undertake an independent
audit of the entire process of award
of hydrocarbon blocks by the Min-
istry under Section 16 of the CAGs
Act as profit petroleum is a non-tax
revenue credited to the Consoli-
dated Fund of India, and this would
involve examination of all records
(including those of the operator)
that are relevant to our audit. This
Section gives us an unfettered
right and will override all conditions
sought to be imposed on our audit
process.
SEBI allows trading of ETFs
in SLB segment
The Securities and Exchange
Board of India (SEBI), on Thursday,
allowed liquid Index Exchange
Traded Funds (ETFs) eligible for
trading in the Securities Lending and
Borrowing (SLB) segment.
Earlier, SEBI had allowed only
securities traded in the Futures &
Options (F&O) segment for lending
and borrowing of securities.
Securities lending is a loan of
securities by a lender to a borrower
for an agreed period.
The lender earns lending fee
on securities lying idle, and the ob-
jective of the lender is to maximise
returns on the portfolio. Borrowers
objective would be to use SLB to
cover shortages and reverse arbi-
trage. SEBI has also stipulated that
position limits for SLB in respect of
ETFs would be based on the assets
under management of the respec-
tive ETF.
ETF shall be deemed liquid
provided the Index ETF has traded
on at least 80 per cent of the days
over the past six months and its im-
pact cost over the past six months
is less than or equal to 1 per cent,
SEBI added.
With the introduction of the
ETFs in the SLB segment, there
would be wider participation as
well as increased volumes.
Further, SEBI has introduced a
roll-over facility wherein the lender,
who is due to receive securities in
the pay-out of an SLB session, may
extend the period of lending and
similarly a borrower, who has to re-
turn borrowed securities in the pay-
in of an SLB session, may, through
the same SLB session, extend the
period of borrowing.
Roll-over shall be available for
three months, that is, the original
contract plus two roll-over con-
tracts. SEBI, however, said that net-
ting between borrow and lend po-
sition would not be permitted.
Core Sectors of Indian
Economy Grew By 6.5
Percent in October 2012
Eight core sectors of the Indian
Economy grew by 6.5 percent, the
eight-month high in October 2012-
2013 in comparison to 0.4 percent
in same time period last year, the
official data revealed on 30 Novem-
ber 2012. The sectors which weight
approximately 38 percent in Index
of Industrial Production (IIP) in-
creased by seven-month high in
September by 5 percent and 2.3
percent in August. However, the
growth of core sector is not depen-
dent on the data of industrial pro-
duction. For instance, inspite of the
higher growth in core sector, the
industrial production contracted
around 0.4 percent in September. A
lot of things are dependent on the
capital goods segment which
showed consistent contraction. The
official data revealed that the eight
main industries of the Indian
economy- steel, electricity, coal,
crude, cement, natural gas, refinery
products and fertilisers grew 3.7
percent in initial seven months of
2012-2013 fiscal year against 4.3
percent in the same period in 2011-
2012 fiscal year.
Output of the coal showed
regular growth with 10.9 percent.
However, on the monthly basis, it
was lower when compared with
21.4 percent in September. Refinery
products, steel as well as cement
contributed towards the strong eco-
nomic growth with 20.3 percent, 5.9
percent and 6.8 percent respec-
tively.
Natural gas as well as crude oil
remained in contractionary zone.
Crude oil witnessed a fall in the
growth consecutively for fifth month
at 0.4 percent in comparison to 1.7
percent in September. Production
of natural gas on the other hand,
decreased by 14.9 percent. In Sep-
tember as well, it decreased 14.8
percent. Production of natural gas
has continued to contract for more
than a year now. Initially, in Febru-
ary 2012, all these sectors grew at a
faster speed of 6.9 percent. The pro-
duction of cement decreased from
13.8 percent in September to 6.8
percent. Generation of electricity,
on the other hand increased by 5.2
percent after this segment saw a
decrease in previous three
months. Fertilisers indicated posi-
tive growth of 2 percent after 5.7
percent growth in September.
Income Ceiling for LIG
raised by Union
Government of India
The Union Governmentof India
on 15 November 2012 decided to
raise cap on the annual income
which is required for qualification
for the benefits under the present
housing schemes for the Low In-
come Groups (LIG) as well as Eco-
nomically Weaker Sections (EWS).
This step on the part of the govern-
ment will provide benefit to 20 lakh
people. The Ministry for Housing
and Urban Poverty Alleviation
(HUPA) raised the income criterion
for EWS housings from 60000 Ru-
pees per year initially to 1 Lakh Ru-
pees now.
This clearly indicates that
people with household income be-
low 1 Lakh Rupees will be able to
avail benefits of EWS housing
scheme. Likewise, the income bar
for LIG category has been raised to
2 lakh Rupees now. This decision
will be implemented during the 12th
Five Year Plan. Instructions have
been given to the state governments
as well as the banks so that the de-
cision could be implemented effec-
tively. People will now be able to
get benefits under the Rajiv Awas Rajiv Awas Rajiv Awas Rajiv Awas Rajiv Awas
Yogna (RAY) Yogna (RAY) Yogna (RAY) Yogna (RAY) Yogna (RAY)and EWS Housing EWS Housing EWS Housing EWS Housing EWS Housing
Schemes. Schemes. Schemes. Schemes. Schemes. Additionally, the Union
Minister added that they have the
target of including 20 lakh people
under this plan. It is the big step
because more people would qualify
for the home loans now.
Definition of Economically
Weaker Sections (EWS)
People falling within the in-
come limit set by the Ministry of
Urban Development fall under the
category of Economically Weaker
Sections (EWS). Ministry of Urban
Development revised this income
ceiling from Rs. 3,300 to Rs. 5,000.
This income ceiling has been made
applicable to loans for Interest Sub-
sidy for Housing the Urban Poor
Scheme (ISHUP) as well as Housing
and Urban Development Corpora-
tion (HUDCO).
Government of India
announced Minimum
Support Price for Cotton
The Union Government on 2
October 2012 announced a
revised Minimum Support Price
(MSP) for cotton and this would
help in inducing stabilisation in cot-
ton price. Cotton has witnessed a
sharp decline in the past and re-
mained operational round about its
minimum support price. After the
review meet conducted on 2 Octo-
ber 2012, by the Union Textiles Min-
ister, Anand Sharma the revisions
were done. The decided minimum
support price of medium staple cot-
ton has gone up to 3600 rupees per
quintal from initial rate of 2800 ru-
pees. Similarly, the MSP for long
staple cotton has gone up to 3900
per quintal from 3300 rupees. This
rate is fixed for the fiscal year 2012-
13.
The Cotton Advisory The Cotton Advisory The Cotton Advisory The Cotton Advisory The Cotton Advisory
Board Board Board Board Board has declared that the esti-
mated production of cotton in the
country for this year would be about
334 lakh bales, out of which the na-
tional consumption would record to
260 lakh bales. The surplous 70 lakh
bales would be available for exports
purposes. The government has for-
mulated a contingency plan to pro-
cure 90 lakh bales of cotton under
MSP operations in the season of
cotton production in the year 2012-
13. To carry on with this procure-
ment process, it has also
48 48 48 48 48
operationlised 288 procurement
centers across all the nine cotton
growing states of the nation. The
working capital requirement was
raised to 15000 crore rupees by the
Cotton Corporation of India (CCI)
for operationlisation of the MSP
fixed. To control the MSP plan a
special MSP cell has also been cre-
ated at the CCIs corporate office
and it is headed by the A.
Chokalingam, Director Marketing.
To alleviate the distress of farmers
from NAFED and CCI, the govern-
ment would be taking serious steps
for price stabilization and
operationlisation of the MSP de-
cided.
Criteria of Selection of
Procurement Centers
Centers that would cross the
expected arrivals of 50000
quintals of cotton
It should have an existence of
market yard that is functional
Weighbridge should be avail-
able in the market
Ginning and pressing factories
must be available in proximity
to the center, with availability
of facilities for fire fighting
Amul loses
TRIX to U.S. giant
The Gujarat High Court has re-
fused to set aside an order which
cancelled Amuls registration of its
trademark TRIX, on which a U.S.
firm has claimed its right.
In July this year, the Intellec-
tual Property Appellate Board had
directed Registrar of Trademarks to
cancel Amuls registration of TRIX
trademark.
A Division Bench of Chief Jus-
tice Bhaskar Bhattacharya and Jus-
tice J. B. Pardiwala, in a recent judg-
ment, dismissed the petition filed by
Kaira District Co-operative Milk Pro-
ducers Union Ltd., owner of Amul,
seeking cancellation of trademark
TRIX registered in favour of U.S.
food giant General Mills.
Amul, 35 years after registering
the trademark and after General
Mills entry into Indian market as late
as in 1995, had questioned the U.S.
firms right over TRIX.
Gujarat Co-operative Milk Mar-
keting Federation (GCMMFL), which
markets milk and milk products un-
der Amul brand under a licence
from the petitioner, registered TRIX
(coined from the word TRICKS from
the concept of appearing and dis-
appearing tricks as in magic show)
as a trademark in 1977.
In 1986 we launched a choco-
late under TRIX trademark. We ad-
vertised it in a manner that it was so
tasty that the chocolate bar just dis-
appears/melts in mouth quickly,
according to the petition.
However, Amul stopped using
TRIX in 1987. The U.S. food giants
subsidiary, General Mills India Pvt.
Ltd., came into existence in 1995.
In 2005, it applied for registra-
tion of trademark TRIX claiming that
in various countries it was holding
the same trademark since 1910.
Since Amul already owned the
trademark, General Mills Indias ap-
plication for registration was re-
jected.
Meanwhile, the U.S. firm made
a foray into the Indian market by in-
troducing a snack under the trade-
mark DIP-TRIX.
At the same time, Amul also
planned a re-launch of its TRIX
brand for a wafer-chocolate, which
was introduced in 2007. This led to
a legal battle between the two gi-
ants.
Amul objected to
unauthorised use of TRIX by Gen-
eral Mills.
The U.S. giant challenged
Amuls claim over TRIX by filing a
rectification application with Intel-
lectual Property Appellate Board
(IPAB), Ahmedabad.
On July 16, 2012, the IPAB di-
rected the Registrar of Trademarks
to cancel Amuls right over the
trademark.
The dairy brand challenged the
boards verdict in the HC, arguing
that IPAB had erred in its ruling.
Rectification application
could not have been allowed as
there was use of its registered trade-
mark TRIX in December 2005 by
AMUL leading to sale in May 2007
(of wafer chocolates) that is dur-
ing the statutorily required period of
non-use for a period of five years
and three months before the date
of rectification application, it said.
However, the Bench did not
find any error with the boards con-
clusion.
India, China to step up
infrastructure cooperation
Chinese officials said on Tues-
day that next weeks Strategic Eco-
nomic Dialogue (SED) in New Delhi
would help both countries deepen
cooperation on investment and in-
frastructure projects, with one of the
largest-ever delegations of Chinese
officials set to travel to India for the
November 26 talks.
Chinese Foreign Ministry
spokesperson Hua Chunying told
reporters that representatives from
Chinese government agencies, en-
terprises and financial and research
institutions will travel to New Delhi,
with a view to stepping up com-
munication and coordination of
macro-economic policies, and
deepening and expanding mutually
beneficial cooperation in invest-
ment, infrastructure, high technol-
ogy, energy conservation and envi-
ronmental protection.
The delegation will be led by
Zhang Ping, who heads the National
Development and Reform Commis-
sion (NDRC), the top planning body.
He will chair the talks along with
Montek Singh Ahluwalia, Deputy
Chairman of the Planning Commis-
sion. Officials said close to 200 Chi-
nese officials will travel to India, in-
cluding representatives from the
NDRC, Ministry of Commerce, the
Foreign Ministry, Ministry of Rail-
ways and State-run companies.
Rail corridors
At the first round of the SED in
Beijing in September 2011, both
sides discussed cooperation in rail-
ways, which might pave the way for
Chinese involvement in Indias plans
to set up high speed-rail corridors.
Sources said top officials from CNR,
one of Chinas biggest railway com-
panies that has played a key role in
Chinas high-speed rail expansion,
will travel to New Delhi next week.
Besides railways, separate
working groups on infrastructure,
energy, environment and high-tech
sectors will meet during the Novem-
ber 26 dialogue in New Delhi. Offi-
cials said the idea behind the SED
was to go beyond trade issues and
look at the bigger picture and
macro-level cooperation. Trade is-
sues will not be the focus of the SED
a separate Joint Economic Group
dialogue headed by Commerce Min-
isters of both countries discusses
bilateral trade issues, officials said.
As a new leadership in China takes
over, officials here have stressed
their desire to expand trade and
commercial engagement with India
an issue that found prominence
at Mondays meeting between Prime
Minister Manmohan Singh and Chi-
nese Premier Wen Jiabao in Cambo-
dia.
Ms. Hua, the Foreign Ministry
spokesperson, said both leaders
had agreed to seize the opportuni-
ties of development and to step-
up cooperation in infrastructure.
The Chinese government, she said,
will continue to encourage repu-
table Chinese enterprises to invest
in Indian projects.
Chinese officials stress that the
leadership transition will not affect
ties with India, and that there will
be continuity in all areas, whether
related to political, military or trade
issues. Government officials who
handle foreign policy and trade have
not stepped down at the recently
concluded National Congress, dur-
ing which the Communist Partys top
leadership retired.
Officials in government will
continue serving until March, when
the Parliament meets to appoint new
officials. Mr. Wen, the Premier; Mr.
Zhang, head of the NDRC; and State
Councillor Dai Bingguo, the Special
Representative on boundary issues,
will all continue in office until
March.
Union Coal Ministry
decided to deallocate Four
Coal Blocks allotted to 15
Firms
The Union Coal Ministry in the
fourth week of November 2012 de-
cided to deallocate four coal blocks
allotted to 15 firms, including JSW
Steel and Bhushan Steel and Strips.
The four coal blocks are as follow-
ing:- Gourangdih ABC coal block in
West Bengal, New Patrapara coal
block in Orissa, the Lalgarh coal
block in Jharkhand and north Dhadu
coal bloack. The ministry also asked
the Monnet Ispat to deposit a bank
guarantee of 62 crore rupees. The
Gourangdih ABC coal block in West
Bengal was allotted to Himachal
EMTA Power Ltd and JSW Steel Ltd.
The Coal Ministry in its letter to the
company stated that it has decided
to forfeit 50 per cent of the Bank
Guarantee related to the develop-
ment of coal block as per the rec-
ommendation of Inter-Ministerial
Group.
The Ministry also decided to
deallocate New Patrapara coal
block in Orissa and to return the full
bank guarantee amount without any
deduction.The Coal Ministry in an-
other letter to Monnet Ispat said that
the Bank Guarantee as calculated by
Coal Controller is to be deposited
by the allottee company within one
month from the date of letter failing
which the block may be
deallocated. In case of Domco
50 50 50 50 50
Smokeless Fuels, the Ministry de-
cided to deallocate the Lalgarh
(North) coal block in Jharkhand.
With regard to North Dhadu coal
block jointly allocated to four firms,
the Ministry has decided to
deallocate the North Dhadu coal
block in addition to the forfeiture of
full bank guarantee.
Union Cabinet of India
cleared Proposal for
Spectrum Sharing
The Union Cabinet of India on
8 November 2012 approved levy of
about 31000 crore rupees as one-
time spectrum charge to be imple-
mented on all incumbent telecom
operators like Bharati Airtel,
Vodafone, Idea and others. The pro-
posed charges had been imple-
mented to create a level ground
between the old players and the
new players of the telecom sector.
The Finance Minister of India P
Chidambaram declared that the rec-
ommendations of the EGoM (Em-
powered Group of Ministers) was
cleared and the GSM operators
would have to pay for the airwaves
that they hold beyond the 4.4 Mega-
Hertz, the price determined at the
auction and the operators holding
more than 6.2 mega hertz airwaves
would have to pay a retroactive fee
from July 2008 onwards. The CDMA
operators would have to pay for the
airwaves that they hold beyond 2.5
Mega-Hertz as per the validity of the
permits offered to them.
Retail Inflation in India
rose to 9.75 percent in
October 2012
The data on retail inflation was
released by the Government of In-
dia on 11 November 2012. The re-
tail inflation in India rose to 9.75
percent in the month of October
2012 after being measured on the
scale of Consumer Price Index Consumer Price Index Consumer Price Index Consumer Price Index Consumer Price Index
(CPI). (CPI). (CPI). (CPI). (CPI). The retail inflation was mar-
ginal as it witnessed a rise of 0.02
percent of the noted rise of 9.73
percent in the month of September
2012. The rise in rural India the con-
sumer price inflation rose to 9.98
percent from the 9.79 percent re-
corded in September 2012. The in-
flation in urban India was recorded
to be 9.46 percent in October from
9.72 percent recorded in the previ-
ous month. Reaching close to the
double digit mark, the inflation wit-
nessed the maximum price rise on
Sugar that rose at 19.61 percent per
year and was followed by edible oil
and fat which saw a rise of 17.92
percent, whereas pulses and cereal
grains witnessed a rise of 14.89 per-
cent. Prices of vegetable grew by
10.74 percent in October 2012, and
the rates of meat, eggs and fished
went up by 12.18 percent. Costs of
cloths, beds and footwear went up
by 10.47 percent year after year. All
India Provisional General (all
groups) the CPI numbers for the
month of October 2012 for urban,
rural and combined level were re-
corded as 122.6, 126.7 and 124.9
respectively.
Japan to fund multi-billion
dollar CBIC project soon
Japan has said it will soon an-
nounce funding for the multi-billion
dollar Chennai-Bangalore Industrial
Corridor (CBIC), the third mega
project that will be quarter-backed
by Tokyo. The other two projects
that Japan is backing are the Delhi-
Mumbai Industrial Corridor (DMIC)
and the Dedicated Freight Corridor
(DFC).
The announcement of the CBIC
project has led to considerable en-
thusiasm among most south Indian
states with Andhra Pradesh wanting
its extension to Krishnapatnam port
and Karnataka asking for the inclu-
sion of Chitradurga with the State
government planning to set up a
manufacturing hub between
Chitradurga and Tumkur. Kerala is
the only south Indian State which
has so far not expressed a desire to
be included in the project, accord-
ing to government sources.
The feasibility study for the
CBIC is likely to be financed from a
184 billion yen Official Development
Assistance (ODA) from Japan which
will also fund the second phase of
the DFC. This was conveyed by
Japanese Prime Minister Yosihiko
Noda during his second meeting in
as many days with Prime Minister
Manmohan Singh on the sidelines of
the Association of South East Asian
Nations (ASEAN) summit and re-
lated meetings with its dialogue
partners, including India.
New Delhi is putting immense
faith in CBIC, heralding a renewed
round of industrialisation in the
south, with T. K. A. Nair, Adviser to
Dr. Singh, regularly reviewing its
progress.
The project was first made
public during the India-Japan annual
summit in 2010.
The project will initially focus
on Phase-II of the Chennai Outer
Ring Road, Chennai-Bangalore Ex-
pressway, modernisation of airports
in Chennai, Bangalore and
Sriperumbudur and ports in Chennai
and Ennore, in addition to a high-
speed rail link between Chennai,
Bangalore and the Avadi rail link.
Simultaneously, State governments
and the Centre will deliberate on
easing customs procedures and en-
hanced use of IT and automation.
According to official sources,
the Prime Minister welcomed the
ongoing projects under the ODA but
emphasised that Indias priority was
investment by Japanese business in
infrastructure projects such as the
Delhi Metro which other cities
wanted to emulate. This is the same
message he gave to Chinese Prime
Minister Wen Jiabao on Monday.
Rare earths
After Dr. Singhs visit was put
off, the two countries on November
16 signed an MoU on rare earths and
inked a pact on social security. The
pact of rare earths too was first pub-
licly aired during the 2010 summit.
It is a fall-out of tensions be-
tween Japan and China which led
to Beijing clamping down on rare
earth exports to Tokyo.
India signed 70 million US
Dollar loan agreement with
World Bank
Government of India on 22
November 2012 signed a 70-million
US Dollar loan agreement with
World Bank for financing the
Karnataka Health Systems Develop-
ment as well as Reform Project.
Primary objective of this project is
improvisation of public-private col-
laboration, health services delivery
and financial aid for vulnerable
groups and underserved in
Karnataka. The agreement was
signed by the Joint Secretary, De-
partment of Economic Affairs and
India Operations Advisor of World
Bank in New Delhi.
The components of the The components of the The components of the The components of the The components of the
project include: project include: project include: project include: project include:
as well as trade showed slow pace
percent last year in the same quar-
ter.
The construction sector
showed signs of improvement
where the growth was 6.7 percent
as against 6.3 percent last year.
Apart from this, the rate of growth
in certain service sectors such as real
estate and insurance was 9.4 per-
cent as against 9.9 percent in last
years quarter.
Finance Minister of India P.
Chidambaram concluded that the
only way to overcome the situation
was through increased production
as well as innovation.
Petrol Price in India slashed
by 95 Paise due to fall of
Prices in International
Market
Petrol Prices in Indian market
on 15 November 2012 was slashed
by 95 paise per litre. The decision
came up as a result of the fall in oil
prices in the International Market.
The Indian market witnessed a sec-
ond slash in the rates of petrol since
9 October 2012, in October there
was a cut of 56 paise per liter in the
price of petrol. This slash in the
petrol prices would bring down the
prices of petrol in different states of
the country and would vary from
state to state due to the difference
in the state and local taxes of differ-
ent states. With this fall in rates of
petrol in Delhi went down to 68.19
Strengthening present health
programs of the Government
of India
Innovations in the health fi-
nancing as well as service de-
livery
Project management, evalua-
tion as well as monitoring
Additional financing of this
project is scheduled to be imple-
mented till 31 March 2016.
Economic Growth Declined
in July-September Quarter
of 2012-2013 Fiscal Year
The economy of India grew
just by 5.3 percent in July-Septem-
ber quarter of fiscal year 2012-2013,
revealed the Central Statistical
Organisation. The economy
dropped down the rate of growth
because of poor performance of the
agriculture as well as manufacturing
sectors and it is persistently indicat-
ing slowdown signs.
In the previous fiscal year, the
gross domestic product (GDP) had
grown by 6.7 percent in the same
quarter. In the first quarter of 2012-
2013, the economy had grown by
5.5 percent.
By the end of the July-Septem-
ber quarter, i.e., on 30 September
2012, the manufacturing sector had
grown marginally by just 0.8 percent
in comparison to 2.9 percent in the
same quarter last year, the Central
Statistical Organisation revealed.
The output of the farm sector
expanded merely 1.2 percent in this
quarter in 2012-2013 financial year
in contrast to 3.1 percent in same
quarter last year. The economic
growth for the time period of April-
September in this financial year is
5.4 percent in contrast to 7.3 per-
cent in previous fiscal year. In this
quarter in the present fiscal year,
hotels, transport, communications
52 52 52 52 52
rupees to 67.24 rupees per litre. In
Mumbai the price went down by
1.20 rupees and the petrol there
would cost 73.53 rupees per litre,
in Chennai the price went down to
70.57 rupees from 71.77 rupees.
Kolkata saw a slash of 1.19 rupees
per litre in the petrol prices and it
would be available to the consum-
ers at a rate of 74.55 rupees per li-
tre. Global Gasoline Rates helps in
creating a benchmark in fixing the
price of petrol in the domestic mar-
ket.
The gasoline rates also wit-
nessed a fall in rates globally but
declined and non-stagnant value of
Rupees against the US dollar and
would have an impact on the petrol
prices in the coming future. The
volatility of Rupees against the value
of exchange rates of US dollar is
being closely monitored to get out
of the uncertainties about the direc-
tion in which future decisions would
head towards. The Union Govern-
ment of India in June 2010 deregu-
lated the prices of petrol by offer-
ing freedom to the oil companies for
fixing the petrol rates following the
costs prevalent in the international
market. But this deregulation in the
petrol prices also had no impact in
getting the Indian Oil Companies in
getting out of the losses with which
they are overburdened and this hap-
pened because of the buckling po-
litical pressure on the oil companies
to have a check on curbing growing
inflation in Indian market.
Retail Inflation in India
rose to 9.75 percent in
October 2012
The data on retail inflation was
released by the Government of In-
dia on 11 November 2012. The re-
tail inflation in India rose to 9.75
percent in the month of October
2012 after being measured on the
scale of Consumer Price Index Consumer Price Index Consumer Price Index Consumer Price Index Consumer Price Index
(CPI). (CPI). (CPI). (CPI). (CPI). The retail inflation was mar-
ginal as it witnessed a rise of 0.02
percent of the noted rise of 9.73
percent in the month of September
2012. The rise in rural India the
consumer price inflation rose to 9.98
percent from the 9.79 percent re-
corded in September 2012. The in-
flation in urban India was recorded
to be 9.46 percent in October from
9.72 percent recorded in the previ-
ous month. Reaching close to the
double digit mark, the inflation wit-
nessed the maximum price rise on
Sugar that rose at 19.61 percent per
year and was followed by edible oil
and fat which saw a rise of 17.92
percent, whereas pulses and cereal
grains witnessed a rise of 14.89 per-
cent. Prices of vegetable grew by
10.74 percent in October 2012, and
the rates of meat, eggs and fished
went up by 12.18 percent. Costs of
cloths, beds and footwear went up
by 10.47 percent year after year. All
India Provisional General (all
groups) the CPI numbers for the
month of October 2012 for urban,
rural and combined level were re-
corded as 122.6, 126.7 and 124.9
respectively.
RBI revises definition of
infra lending
on Tuesday revised the definition of
infrastructure lending, which
would make sectors and sub-sec-
tors eligible for infrastructure lend-
ing by banks and financial institu-
tions with immediate effect. The
exposure of banks to projects un-
der sub-sectors which were in-
cluded under the RBIs previous
definition of infrastructure as per
the circular of November 30, 2007,
but not included under the revised
definition, will continue to get the
benefits under infrastructure lend-
ing till the completion of the
projects. However, any fresh lend-
ing to those sub-sectors from the
date of this circular will not qualify
as infrastructure lending, the RBI
said in a notification to all banks and
financial institutions. The Govern-
ment of India had notified a master
list of infrastructure sectors/sub-sec-
tors in March 2012 to avoid multi-
plicity of definitions among various
regulators which gives rise to con-
fusion and difficulties. The sectors
and sub-sectors come under revised
infrastructure lending are:
Transport: Transport: Transport: Transport: Transport: Roads and bridges,
ports inland waterways, airport, rail-
way track, tunnels, viaducts,
bridges, including supporting termi-
nal infrastructure such as loading/
unloading terminals, stations and
buildings, urban public transport
(except rolling stock in case of ur-
ban road transport).
Energy: Energy: Energy: Energy: Energy: Electricity generation,
electricity transmission, electricity
distribution, oil pipelines and oil/
gas/liquefied natural gas (LNG) stor-
age facility (including strategic stor-
age of crude oil) and gas pipelines,
including city gas distribution net-
work.
Water and sanitation: Water and sanitation: Water and sanitation: Water and sanitation: Water and sanitation: Solid
waste management, water supply
pipe lines, water treatment plants,
sewage collection, treatment and
disposal system and irrigation
(dams, channels, embankments and
the like) and storm water drainage
system.
Communication: Communication: Communication: Communication: Communication: Telecommu-
nication (fixed network) including
optic fibre/cable networks which
provide broadband / internet and
telecommunication towers.
Social and commercial infra-
structure: Educational institutions
(capital stock), hospitals (capital
stock), including medical colleges,
para medical training institutes and
diagnostics centres and three-star or
higher category classified hotels lo-
cated outside cities with population
of more than one million.
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42 42 42 42 42
ECONOMY ECONOMY
ECONOMY ECONOMY ECONOMY
Indian Economy Would Indian Economy Would Indian Economy Would Indian Economy Would Indian Economy Would
Dominate the Economy of the Dominate the Economy of the Dominate the Economy of the Dominate the Economy of the Dominate the Economy of the
World by 2030 World by 2030 World by 2030 World by 2030 World by 2030
US intelligence community in
its report called Global Trends
2030: Alternative Worlds which
was released on 10 December
2012 declared that India would
straddle international commerce
and will also dominate the
economy of the whole world by
2030. This would happen with
decelerating Chinese economy as
well as declining West.
Key points of the report:
Indias chance of powering
would begin only after 2015 as
Chinas fortunes would start
diminishing.
By the year 2030, Asia (mainly
India) would return back to its
position of being the power-
house of the world, like it was
before 1500.
Pakistan might not exist at all.
India will rush forward after
2020 as China would begin de-
celerating, primarily on certain
demographic trends.
China is indeed ahead of In-
dia, but the gap between In-
dia and China would start ze-
roing in by 2030. The eco-
nomic growth rate of India will
surge while that of China will
slow down.
In 2030, India might be rising
as the economic powerhouse
just like China is today. The
current economic growth rate
of China, 8-10 percent would
become just a memory for the
country.
Overall size of the working-
age population in China would
increase in 2016 and decrease
from 994 million to 961 million
in 2030. Contrarily, working
age population of India would
most probably rise until
around 2050.
The demographic opportuni-
ties of India will rise between
2015 to 2050. Chinas oppor-
tunities window is from 1990
to 2025. Contrarily, USs op-
portunity was best between
1970 to 2015.
Median age of India which is
at present 26 will increase to
32 by 2030, which would still
be the least among top 10
economies of world.
The report also mentioned
that anytime after 2030, India
instead of China would be
having the largest middle-
class consumption, which
would be even larger than US
and Europe combined. How-
ever, India might face trapping
in the status of middle-income
group in case the resources
constraint, especially food,
water and energy are not re-
solved. More investment
would be required in science
http://upscportal.com http://www.civilservicesmentor.com
43 43 43 43 43
and technology sector in order
to keep the pace of economy
in the value chain. It was how-
ever made clear that the jour-
ney of economic development
of both India as well as China
will not be smooth. But if the
difficulties were handled well,
India as well as China would
be dominating the world in
2030.
About Global Trends 2030: About Global Trends 2030: About Global Trends 2030: About Global Trends 2030: About Global Trends 2030:
Alternative Worlds Alternative Worlds Alternative Worlds Alternative Worlds Alternative Worlds
The latest National Intelli-
gence Councils (NIC) Global
Trends Report was released on 10
December 2012 by the Office of
the Director of National Intelli-
gence.
This report is called Global
Trends 2030: Alternative Worlds.
Global Trends project offers ex-
pertise beyond government on
certain factors like demography,
environment, globalisation. The
documents are prepared by Glo-
bal Trends to assist the makers of
policies in long-term planning on
major issues which hold world-
wide importance. First Global
Trends Report was released back
in 1997.
New global trends report is
being published after every four
years after the U.S. presidential
elections. For the production of
Global Trends 2030, a range of
analytical tools, in-depth research
as well as detailed modeling was
employed.
UN Slashed World Growth UN Slashed World Growth UN Slashed World Growth UN Slashed World Growth UN Slashed World Growth
Forecast to 2.4 % Forecast to 2.4 % Forecast to 2.4 % Forecast to 2.4 % Forecast to 2.4 %
United Nations on 18 Decem-
ber 2012 slashed its global growth
predictions to 2.4 percent for 2013
and 3.2 percent for the following
year and warned of a lasting em-
ployment crisis for western coun-
tries. The UNs World Economic
Situation and Prospects 2013 re-
port warned that the Debt crises
in Europe and the United States
and a slowdown in China could all
throw the world economy into re-
cession. Earlier in the t month of
June 2012 UN had predicted a
growth forecast 2.7 percent for
2013 and 3.9 percent for the year
after. As per the Report, With ex-
isting policies and growth trends,
it is going to take at least another
five years for Europe and the
United States to make up for the
job losses caused by the Great Re-
cession of year 2008-2009. The
report also predicted growth in
South Asia averaging 5 percent in
2013, up from 4.4 percent in 2012,
led by a moderate recovery in In-
dia.
Rollout of Direct Benefits Rollout of Direct Benefits Rollout of Direct Benefits Rollout of Direct Benefits Rollout of Direct Benefits
Transfers started on 1 January Transfers started on 1 January Transfers started on 1 January Transfers started on 1 January Transfers started on 1 January
2013 2013 2013 2013 2013
National Committee on Di-
rect Cash Transfers in its meet with
the Prime Minister of India Dr.
Manmohan Singh decided to roll-
out, the Direct Cash Benefits from
1 January 2013 in 43 identified dis-
tricts of the country. The decision
was taken to ensure that the ben-
efits could be transferred elec-
tronically into the bank accounts
of the individuals, without making
delays and diversions of any
type. A high level meet was con-
ducted on 13 December 2012 with
the District Collectors of thee iden-
tified areas and fine tuned infor-
mation related to steps that need
to be taken in case of Direct Ben-
efits Transfer.
Direct Benefits Transfer and
it covers:
Transfer of cash benefits like
pensions, scholarships,
NREGA wages and others di-
rectly through the Govern-
ment in the Bank or Post Of-
fice Accounts of identified
beneficiaries under the Direct
Benefits Transfer (DBT)
programme. The program
would also device necessary
system so that the transfers
can be done in a phased, time-
bound manner for Direct Ben-
efits Transfer.
Direct Benefits Transfer would
not act as a substitute for de-
livery of public services and it
would continue to be in place
via normal delivery channels.
The Direct Benefits Transfer
would not allow replacement
of food through cash managed
under Public Distribution Sys-
tem. The Government will be
committed towards legislation
of the National Food Security
Act.
Rollout on 1.1.2013 mean in Rollout on 1.1.2013 mean in Rollout on 1.1.2013 mean in Rollout on 1.1.2013 mean in Rollout on 1.1.2013 mean in
practice practice practice practice practice
The Rollout that would began
on 1.1.2013 in 43 districts of 16 dif-
ferent states under 26 different
schemes, which have been iden-
tified for first round of Direct Ben-
efits Transfer. All these districts
were selected on the basis of its
44 44 44 44 44
coverage of bank accounts and
Aadhaar.
BSE launched SME Platform BSE launched SME Platform BSE launched SME Platform BSE launched SME Platform BSE launched SME Platform
Index Index Index Index Index
The Bombay Stock Exchange
(BSE) on 14 December 2012
launched an SME index which pri-
marily aims at tracking the current
primary market conditions in the
Indian capital market and measur-
ing the growth in investors wealth
over a period. The index is going
to be constituted by small and
medium enterprises (SMEs) which
are listed on the BSE SME plat-
form. Presently, there are 11 com-
panies which are listed on the SME
platform and this index is going to
have features similar to the BSE
IPO index. Through SME index the
authorities can recognize the vi-
ability of the company and based
on the report, people can invest
in these companies, which will not
only help the organisations to
grow their businesses but also
suppose to create employment.
Small and Medium Enterprises
(SMEs) in India constitute an im-
portant segment of Indian
economy. Currently, the contribu-
tion of SMEs alone is greater than
7 per cent to GDP and 45 per cent
to industrial production. Small and
Medium Enterprises (SMEs) is also
the second largest provider of em-
ployment after agriculture. SMEs
also contribute to 40% of total ex-
ports directly and a significant
amount of exports indirectly
through large trading houses or
third parties. With the SME plat-
form, companies did not have to
rely on loans from banks, as they
can raise funds through the mar-
ket and play an important role in
contributing to the economic
growth of the country. Out of the
11 companies listed so far, 10 are
trading above their issue prices,
while one is below its IPO price.
Retail Inflation Increased to 9.90 Retail Inflation Increased to 9.90 Retail Inflation Increased to 9.90 Retail Inflation Increased to 9.90 Retail Inflation Increased to 9.90
Percent in November 2012 Percent in November 2012 Percent in November 2012 Percent in November 2012 Percent in November 2012
Consumer Price Index (CPI)
data released on 12 December
2012 showed that the retail infla-
tion increased for the second suc-
cessive month to 9.90 percent in
November 2012 mainly because of
the increase in price of food prod-
ucts like edible oil, sugar, veg-
etables as well as clothing. In Oc-
tober 2012, the retail inflation was
9.75 percent and in September
2012, it was 9.73 percent. Maxi-
mum increase in the price in the
month of November 2012 was in
oil as well as fats segment,
amounting to the annual inflation
of 17.67 percent. Apart from oil,
the price of sugar also increased
by 16.97 percent and pulses on the
other hand because costlier by
14.19 percent on yearly basis. The
prices of vegetables increased by
14.74 percent in November 2012,
while the price of egg, fish and
meat increased by 11.33 percent.
Also, there was an increase in the
price of footwear and clothing at
11.08 percent in November 2012.
In the urban areas, retail inflation
increased to 9.69 percent in No-
vember 2012 in comparison to
9.46 percent in October 2012.
However, in rural areas there was
a very slight decrease in inflation
to 9.97 percent in November 2012
from 9.98 percent in October
2012. The rural, urban and com-
bined All India provisional General
(all groups) CPI numbers for the
month of November 2012 are
126.9, 123.4 and 125.4, respec-
tively. It is important to note that
the Reserve Bank will keep an in-
crease in retail inflation in mind
while taking review about the mid-
quarter policy in the third week of
December 2012. In October 2012,
raising concerns over rising infla-
tion, Reserve Bank had kept the
standard interest rates unchanged.
SEBI allowed 12 more SEBI allowed 12 more SEBI allowed 12 more SEBI allowed 12 more SEBI allowed 12 more
Alternative Investment Funds Alternative Investment Funds Alternative Investment Funds Alternative Investment Funds Alternative Investment Funds
Indian Market regulator Secu-
rity and Exchange Board of India
(SEBI) allowed 12 entities to set
up Alternative Investment Funds
(AIFs), a newly created class of
pooled-in investment vehicles for
real estate, private equity and
hedge funds, in the last two
months of October and November
2012. The 12 Alternative Invest-
ment Funds AIFs that were reg-
istered with SEBI since October
2010 included India Realty Fund,
Dar Mentorcap Film Fund,
Capaleph Indian Millennium Small
& Medium Enterprises Fund and
Capaleph Indian Millennium Pri-
vate Equity Fund. SEBI in last few
years had already allowed nine
AIFs to set up shops in the coun-
try. As on 31 August 2012, a total
of 20 applications were pending
with SEBI for registration as AIFs.
45 45 45 45 45
As per the new SEBI guidelines,
AIFs can operate broadly in three
categories. The SEBI rules is ap-
plicable to all AIFs which also in-
cludes those operating as private
equity funds, real estate funds and
hedge funds.
The Category-I AIFs are those
funds that get incentives from
the government, SEBI or other
regulators. It includes Social
Venture Funds, Infrastructure
Funds, Venture Capital Funds
and SME Funds.
The Category-II AIFs are those
funds which can invest any-
where in any combination but
are prohibited from raising
debt, except for meeting their
day-to-day operational re-
quirements. These AIFs in-
clude PE funds, debt funds or
fund of funds.
The Category-III AIFs are
those trading with a view to
make short-term returns and
include hedge funds, among
others.
Core Sectors of Indian Economy Core Sectors of Indian Economy Core Sectors of Indian Economy Core Sectors of Indian Economy Core Sectors of Indian Economy
Grew By 6.5 % Grew By 6.5 % Grew By 6.5 % Grew By 6.5 % Grew By 6.5 %
Eight core sectors of the In-
dian Economy grew by 6.5 per-
cent, the eight-month high in Oc-
tober 2012-2013 in comparison to
0.4 percent in same time period
last year, the official data revealed
on 30 November 2012. The sectors
which weight approximately 38
percent in Index of Industrial Pro-
duction (IIP) increased by seven-
month high in September by 5
percent and 2.3 percent in Au-
gust. However, the growth of
core sector is not dependent on
the data of industrial production.
For instance, inspite of the higher
growth in core sector, the indus-
trial production contracted
around 0.4 percent in September.
A lot of things are dependent on
the capital goods segment which
showed consistent contraction.
The official data revealed that the
eight main industries of the Indian
economy- steel, electricity, coal,
crude, cement, natural gas, refin-
ery products and fertilisers grew
3.7 percent in initial seven months
of 2012-2013 fiscal year against 4.3
percent in the same period in
2011-2012 fiscal year.
Output of the coal showed
regular growth with 10.9 percent.
However, on the monthly basis, it
was lower when compared with
21.4 percent in September. Refinery
products, steel as well as cement
contributed towards the strong eco-
nomic growth with 20.3 percent, 5.9
percent and 6.8 percent respec-
tively. Natural gas as well as crude
oil remained in contractionary zone.
Crude oil witnessed a fall in the
growth consecutively for fifth month
percent in September. Production
of natural gas on the other hand, de-
creased by 14.9 percent. In Septem-
ber as well, it decreased 14.8 per-
cent. Production of natural gas has
continued to contract for more than
a year now. Initially, in February
2012, all these sectors grew at a
faster speed of 6.9 percent. The pro-
duction of cement decreased from
13.8 percent in September to 6.8
percent. Generation of electricity,
on the other hand increased by 5.2
percent after this segment saw a
decrease in previous three months.
Fertilisers indicated positive growth
of 2 percent after 5.7 percent
growth in September.
FII Investment in India FII Investment in India FII Investment in India FII Investment in India FII Investment in India
surpassed more than 24000 surpassed more than 24000 surpassed more than 24000 surpassed more than 24000 surpassed more than 24000
crore crore crore crore crore
Foreign Institutional Investors
(FIIs) in the month of December
had pumped in more than 24000
crore rupees in the Indian stock
market which is said to be the high-
est in 10 months timeline taking to-
tal FII inflow for the year 2012 to
over 24 billion dollars. As per the
SEBI Data, In December, 2012 For-
eign Institutional Investors (FIIs)
were gross buyers of shares worth
Rs 71595 crore rupees while they
sold equities amounting to 47412
crore rupees. This translates into a
net inflow of 24183 crore rupees or
around.4.42 billion dollar. Earlier in
the month of February FIIs had in-
fused 25212 crore rupees in stocks,
which is counted to be second high-
est investment in Year 2012 since
their entry into Indian capital mar-
kets in 1992. If we take the latest in-
flows into count, FII investment in
that case in the countrys equity
market reached 127455 crore rupees
($24 billion) for the year 2012 with
just one more trading session left.
Foreign investors are pouring money
into the Indian stocks in hopes of
cut in interest rates by the RBI. FIIs
continued their positive standpoint
on the Indian equities as the lack of
investment options make the coun-
try an attractive destination. In ad-
dition to equities, FIIs invested 1178
crore rupees in the debt market the
month taking the years tally to
34462 crore rupees. As on 28 De-
cember 2012 the number of regis-
tered FIIs in the country stood at
1759 and total numbers of sub-ac-
counts were 6358 during the same
period.
About Foreign Institutional About Foreign Institutional About Foreign Institutional About Foreign Institutional About Foreign Institutional
Investors Investors Investors Investors Investors
Foreign Institutional inves-
tors are those organizations which
sum up huge amount of money
and invest that amount in securi-
ties, real property and other invest-
ment assets. Some Foreign Insti-
tutional investors are also operat-
46 46 46 46 46
ing companies that decide to in-
vest their profits to some degree
in these types of assets. The most
common types of typical investors
includes banks, insurance compa-
nies, retirement or pension funds,
hedge funds, investment advisors
and mutual funds. They act as
highly specialized investors on
behalf of others which are consid-
ered as their economic role.
Foreign Investments through P- Foreign Investments through P- Foreign Investments through P- Foreign Investments through P- Foreign Investments through P-
Notes Increased to 8-Month Notes Increased to 8-Month Notes Increased to 8-Month Notes Increased to 8-Month Notes Increased to 8-Month
Highest Highest Highest Highest Highest
Foreign investments in the In-
dian markets through P-notes or
PNs (Participatory Notes) in-
creased to 8-month high of around
1.75 lakh crore Rupees or 32 bil-
lion dollar in October 2012. This
happened because different re-
form measures attracted the over-
seas investors towards the Indian
markets. Market regulator SEBI
(Securities and Exchange Board of
India) revealed in its data that the
overall value of P-Note invest-
ments in India (debt, equity or
derivatives) by October 2012 end
increased to highest since Febru-
ary 2012, when the total value of
investments like these were 1.83
lakh crore Rupees. Apart from
this, the overall value of P-notes
issued with the derivatives as ba-
sics stood at 95536 crore Rupees
by October 2012 end.
What are P-Notes or PNs? What are P-Notes or PNs? What are P-Notes or PNs? What are P-Notes or PNs? What are P-Notes or PNs?
P-Notes or PNs or Participa-
tory Notes are used by the HNIs
or High Networth Individuals, for-
eign institutions as well as hedge
funds. P-Notes allow them to in-
vest their money in Indian markets
via registered FIIs or Foreign Insti-
tutional Investors. This saves them
cost as well as time related to di-
rect registrations. So basically,
PNs are the tools or instruments
which are issued by the registered
FIIs to the overseas investors who
are willing to invest in stock mar-
ket of India without registering
with market regulator SEBI.
RBI signed Currency Swap RBI signed Currency Swap RBI signed Currency Swap RBI signed Currency Swap RBI signed Currency Swap
Agreement with Bank of Japan Agreement with Bank of Japan Agreement with Bank of Japan Agreement with Bank of Japan Agreement with Bank of Japan
The Reserve Bank of India on 4
December 2012 signed a three year
Bilateral Swap Arrangement (BSA)
with the Bank of Japan for swapping
of the local currencies to address
short-term liquidity problems. The
BSA will be effective from 5 Decem-
ber 2012. The main idea behind the
arrangement is to address short-
term liquidity difficulties and
supplement the existing interna-
tional financial arrangements, as one
of the efforts in strengthening mu-
tual cooperation between Japan
and India. The Bilateral Swap Agree-
ment (BSA) is going to enable both
the countries to swap their local cur-
rencies either Japanese yen or In-
dian rupee against US dollar for an
amount up to 15 billion dollars. Ear-
lier for a period of three years from
June 2008 to June 2011 both the
countries signed a similar agreement
for an amount of 3 billion dollar. The
enhancement of the BSA is going to
strengthen economic and financial
cooperation between the two coun-
tries and accordingly to financial
market stability. The BSA is acti-
vated when an IMF-support
programme already exists or is ex-
pected to be established in the near
future.
More Incentives Announced to More Incentives Announced to More Incentives Announced to More Incentives Announced to More Incentives Announced to
Exporters Hit By Global Exporters Hit By Global Exporters Hit By Global Exporters Hit By Global Exporters Hit By Global
Meltdown Meltdown Meltdown Meltdown Meltdown
The union government on 26
December 2012 announced more
incentives for the exporters who
were hit hard because of global
meltdown. An extension of 2 per-
cent interest subsidiary would be
provided for another year till
March 2014. Additionally, the
Commerce and Industry Minister
Anand Sharma decided an intro-
duction of pilot scheme of 2 per-
cent interest subsidiary for those
project exports that took place
through Exim Bank. Any incre-
mental export which would be
done in the time duration of Janu-
ary to March 2013 would also be
granted incentive. The ministry an-
nounced that the incentives would
enable to push the exports in last
quarter of 2012-2013 fiscal year.
The objective of these incentives
was stabilisation of the situation
as well as shift from the negative
territory to the positive one. An-
other objective of the incentives
was keeping trade deficit under
the control. Exports during the
period of April-November 2012
shrunk by 5.95 percent to 189.2
billion. If the situation continues,
it would be very difficult for India
to achieve export target of 360 bil-
lion dollar in 2012-2013 fiscal year.
Setting up of CCI approved Setting up of CCI approved Setting up of CCI approved Setting up of CCI approved Setting up of CCI approved
The Union government of In-
dia on 13 December 2012 ap-
47 47 47 47 47
proved the setting up of a Cabinet
Committee on Investment (CCI), to
fast track investment clearances
for mega projects. The decision
was taken in the Union Cabinet
meeting held under the chairman-
ship of Prime Minister Manmohan
Singh. Prime Minister will head the
CCI and he will also nominate the
members of the committee. The
CCI will expedite projects offer-
ing single window clearance for
projects costing 1000 crore rupees
or more by setting timelines for the
concerned ministries.
The Union Cabinet also
cleared the Land Acquisition Bill.
Under the new bill consent of 80
percent land owners is mandatory
for private acquisition of land
where as for Public-Private-Part-
nership 70 per cent consent is re-
quired. The award of compensa-
tion will also be as per the new bill.
The Cabinet also approved cutting
the 1800-MHz band 2G spectrum
auction reserve base price by 30
per cent for four circles that did
not attract bidders in November.
The circles are Delhi, Mumbai,
Karnataka and Rajasthan. The Cabi-
net Committee on Economic Af-
fairs also cleared a new urea in-
vestment policy.
The Minimum Support Price of The Minimum Support Price of The Minimum Support Price of The Minimum Support Price of The Minimum Support Price of
Wheat was Increased to 1350 Wheat was Increased to 1350 Wheat was Increased to 1350 Wheat was Increased to 1350 Wheat was Increased to 1350
Rupees per Quintal Rupees per Quintal Rupees per Quintal Rupees per Quintal Rupees per Quintal
dia on 26 December 2012 raised
the Minimum Support Price, MSP
of wheat by 65 rupees per quintal
to 1350 rupees per quintal. The de-
cision was taken in a Cabinet
meeting this morning in New Delhi
Chaired by the Prime Minister,
Manmohan Singh. The government
also decided to export additional
25 lakh tonnes of wheat from its
go-downs. The CCEA approved
the disinvestment of 12.5 per cent
paid up equity capital to the
Rashtriya Chemicals and Fertiliz-
ers. Current government holding is
about 92.5 per cent. This will make
the company compliant with the
SEBI norms that 10 per cent float
should be there. CCEA approved
the proposal to export an addi-
tional 25 lakh tonnes of wheat.
Earlier, we had approved export
of 20 lakh tonnes of wheat of that
a little over 17 lakh tonnes have
been contracted.
dia on 26 December 2012 raised
the Minimum Support Price, MSP
of wheat by 65 rupees per quintal
to 1350 rupees per quintal. The de-
cision was taken in a Cabinet
meeting this morning in New Delhi
Chaired by the Prime Minister,
Manmohan Singh. The government
also decided to export additional
25 lakh tonnes of wheat from its
go-downs. The CCEA approved
the disinvestment of 12.5 per cent
paid up equity capital to the
Rashtriya Chemicals and Fertiliz-
ers. Current government holding is
about 92.5 per cent. This will make
the company compliant with the
SEBI norms that 10 per cent float
should be there. CCEA approved
the proposal to export an addi-
tional 25 lakh tonnes of wheat.
Earlier, we had approved export
of 20 lakh tonnes of wheat of that
a little over 17 lakh tonnes have
been contracted.
Indirect Tax Collection Indirect Tax Collection Indirect Tax Collection Indirect Tax Collection Indirect Tax Collection
Increased at 16.8 Percent to Increased at 16.8 Percent to Increased at 16.8 Percent to Increased at 16.8 Percent to Increased at 16.8 Percent to
2.92 Lakh Crore Rupees in April- 2.92 Lakh Crore Rupees in April- 2.92 Lakh Crore Rupees in April- 2.92 Lakh Crore Rupees in April- 2.92 Lakh Crore Rupees in April-
November 2012 November 2012 November 2012 November 2012 November 2012
The Finance Ministry an-
nounced that indirect tax collec-
tion increased at the rate of 16.8
percent to 2.92 lakh crore Rupees
in the period of April-November
2012 in comparison to the yearly
growth target of 27 percent.
It was announced that in first
8 months of 2011-2012 fiscal year,
accumulation of the indirect taxes
which include excise, services tax
as well as customs, was 2.50 lakh
crore Rupees. Excise amounted
to 108470 crore Rupees during
April to November 2012, while
accumulation from service taxes
and customs was 78774 crore Ru-
pees and 104864 crore Rupees re-
spectively. In 2011-2012 fiscal
year, the government had propos-
als of collecting 5.05 lakh crore
Rupees in all, from customs, ser-
vice taxes and excise, which
would bring an expected growth
of 27 percent from last years
collection. Targeted collection
through customs for 2012-2013
was determined at 1.87 lakh crore
Rupees. The targeted collection
was 1.93 lakh crore Rupees
through excise and 1.24 lakh crore
Rupees through service tax. In the
third week of December 2012, the
government found it difficult for
achieving customs, corporate tax
as well as excise target as it was
projected in Budget. This hap-
pened because there were unre-
sponsive corporate profits. During
November 2012, indirect tax accu-
mulation increased by 17.2 per-
48 48 48 48 48
cent to 36081 crore Rupees in
comparison to 30790 crore Ru-
pees.
Union Government of India Union Government of India Union Government of India Union Government of India Union Government of India
lowered the Growth Projection lowered the Growth Projection lowered the Growth Projection lowered the Growth Projection lowered the Growth Projection
for Current Fiscal to 5.7 Percent for Current Fiscal to 5.7 Percent for Current Fiscal to 5.7 Percent for Current Fiscal to 5.7 Percent for Current Fiscal to 5.7 Percent
dia on 17 December 2012 lowered
down the growth projection for
the current financial year 2012-13
from 7.6 percent that was esti-
mated earlier to 5.7-5.9 percent. It
also pitched for the supportive
monetary and fiscal policies for
improving the confidence of the
investors. The projection was
showcased in the Mid-Year Eco-
nomic Analysis tabled in Indian
Parliament.
Indias Foreign Trade in Indias Foreign Trade in Indias Foreign Trade in Indias Foreign Trade in Indias Foreign Trade in
November 2012: Exports valued November 2012: Exports valued November 2012: Exports valued November 2012: Exports valued November 2012: Exports valued
at 22299.63 Million Dollars at 22299.63 Million Dollars at 22299.63 Million Dollars at 22299.63 Million Dollars at 22299.63 Million Dollars
As per the data released by
Union Ministry of Commerce and
Industry on11 December 2012, ex-
ports and imports during Novem-
ber 2012 were valued at 22299.63
and 41586.90 million US dollars re-
spectively. The trade deficit for
April - November 2012-13 was es-
timated at 129500.18 million US
dollars which was higher than the
deficit of 122638.35 million US
dollars during April -November
2011-12.
EXPORTS (including re-exports) EXPORTS (including re-exports) EXPORTS (including re-exports) EXPORTS (including re-exports) EXPORTS (including re-exports)
Exports during November,
2012 were valued at 22299.63 mil-
lion US dollars (122148.03 crore
rupees) which was 4.17 per cent
lower in Dollar terms (3.22 per
cent higher in Rupee terms) than
the level of 23269.71 million US
dollars (118341.35 crore rupees)
during November 2011. Cumula-
tive value of exports for the period
April-November 2012 -13 was
189222.20 million US dollars
(1030488.22 crore rupees) as
against 201185.40 million US dol-
lars ( 933049.70 crore rupees) reg-
istering a negative growth of 5.95
per cent in Dollar terms and
growth of 10.44 per cent in Rupee
terms over the same period in
2011.
IMPORTS IMPORTS IMPORTS IMPORTS IMPORTS
Imports during November
2012 were valued at 41586.90 mil-
lion US dollars (227795.59 crore
rupees) representing a growth of
6.35 per cent in Dollar terms and
14.55 per cent in Rupee terms
over the level of imports valued at
(198861.13 crore rupees) in No-
vember 2011. Cumulative value of
imports for the period April-No-
vember 2012-13 was 318722.38
million US dollars (1734998.17
crore rupees) as against 323823.75
million US dollars (1503492.73
crore rupees) registering a nega-
tive growth of 1.58 per cent in
Dollar terms and growth of 15.40
per cent in Rupee terms over the
same period in 2011.
CRUDE OIL AND NON-OIL CRUDE OIL AND NON-OIL CRUDE OIL AND NON-OIL CRUDE OIL AND NON-OIL CRUDE OIL AND NON-OIL
IMPORTS: IMPORTS: IMPORTS: IMPORTS: IMPORTS:

Oil imports during Novem-
ber 2012 were valued at 14522.1
million US dollars which was 16.77
per cent higher than oil imports
valued at 12436.6 million US dol-
lars in the corresponding period
in 2011. Oil imports during April-
November 2012-13 were valued at
110091.1 million US dollars which
was 10.84 per cent higher than the
oil imports of 99324.2 million US
dollars in the corresponding pe-
riod in 2011. Non-oil imports dur-
ing November 2012 were esti-
mated at 27064.8 million US dol-
lars which was 1.50 per cent
higher than non-oil imports of
26665.9 million US dollars in No-
vember 2011. Non-oil imports
during April - November, 2012-13
were valued at 208631.3 million
US dollars which was 7.07 per cent
lower than the level of such im-
ports valued at 224499.5 million
US dollars in April November
2011-12.
Ex| #r qoIqh#dw=#kwws=22z z z 1xsvf sr uwdo1f r p 2f IyIovhuyIf hv2er r nv
Logical Reasoning &
Analytical Reasoning
MCQ Series
KALINJAR PUBLICATIONS
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Economy Economy Economy Economy Economy
CCI approves Five Oil, CCI approves Five Oil, CCI approves Five Oil, CCI approves Five Oil, CCI approves Five Oil,
Gas Blocks Operations Gas Blocks Operations Gas Blocks Operations Gas Blocks Operations Gas Blocks Operations
Investment (CCI) on 21 March 2013
cleared Reliance Industries (RIL)
KG-D6 and NEC-25 blocks for oil
and gas exploration along with three
other areas. The work on these
blocks, which has an investment
close to 10.7 billion has dollars, was
having difficulties because of inter-
ministerial differences, particularly
relating to Defence issues. Eight
blocks, including RILs Krishna
Godavari basin KG-D6 block and gas
discovery area of NEC-25 in the
North East Coast (NEC) region, were
declared No-Go zones for reasons
relating to defence issues raised by
the Indian Navy, and the Indian Air
Economy
Force. An approval for eight blocks,
was Sought by the Petroleum and
Natural Gas Ministry of which one
was already renounced by the
contractor, Reliance Industries Ltd.
Out of the remaining seven,
conditional clearance for four
blocks two of Reliance Industries,
one each of ONGC consortium and
Cairn India were sought. The
Ministry had also sought CCI
approval to declare three blocks as
no go areas. Two blocks belonged
to the ONGC-led consortium and
one to the Oil India Ltd-led
consortium. The CCI, headed by
Prime Minister Manmohan Singh,
was set up to fast-track clearances
to infrastructure projects involving
investments of over 1000 crore
rupees.
Authorized Authorized Authorized Authorized Authorized
Capital of NABARD Raised Capital of NABARD Raised Capital of NABARD Raised Capital of NABARD Raised Capital of NABARD Raised
The Union Cabinet of India
approved raise in the authorized
capital of National Bank for
Agriculture and Rural Development,
Nabard to 20000 crore rupees from
5000 crore rupees.
The authorized capital was
increased with the aim to enlarge
the operations and broadening the
activities of NABARD.
10 Rupees 10 Rupees 10 Rupees 10 Rupees 10 Rupees
Plastic Notes in 5 Cities Plastic Notes in 5 Cities Plastic Notes in 5 Cities Plastic Notes in 5 Cities Plastic Notes in 5 Cities
The Union Government and
RBI on 12 March 2013 decided to
introduce one billion pieces of 10
Rupees bank notes made of plastic
on a field trial basis in five. A 10
Rupees note in polymer/plastic on
a field trial basis will be introduced
first; Minister of State for Finance
Namo Narain Meena said it in a
written reply to the Rajya. The field
trail is supposed to be conducted
in five cities of Kochi, Mysore,
Jaipur, Bhubhaneswar and Shimla
http://upscportal.com 49 49 49 49 49 http://www.civilservicesmentor.com
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with varied geographical locations
and climatic. As per the RBI, the
primary objective of introduction of
polymer notes is to increase its life,
it could also help in combating
counterfeiting. Various agencies
such as the RBI, Ministry of Finance,
Ministry of Home Affairs, Security
and Intelligence Agencies of the
Centre and States, Central Bureau of
Investigation are already working in
tandem to thwart the illegal
activities related to Fake Indian
Currency Notes (FICN). The work of
these agencies is periodically
reviewed by a nodal group set up
for this purpose.
RBI Cuts RBI Cuts RBI Cuts RBI Cuts RBI Cuts
Repo Rate by 25 Base Points Repo Rate by 25 Base Points Repo Rate by 25 Base Points Repo Rate by 25 Base Points Repo Rate by 25 Base Points
on 19 March 2013 cut the repo rate
by 25 basis points to 7.5 7.5 7.5 7.5 7.5 per cent
from 7.75 percent in its mid-quarter
review of the monetary policy. The
change of the Repo rate is aimed to
prompt growth and revive
investment. Consequently, the
reverse repo rate under the LAF
stands adjusted to 6.5per cent from
the earlier 6.75 per cent and the
marginal standing facility (MSF) rate
and the Bank Rate to 8.5 per cent
with immediate effect. The Cash
Reserve Ratio (CRR) has been
retained at 4 per cent. It is for the
second time since the start of the
year RBI has cut down the repo rate
in a bid to help revive flagging
growth in Asias third-largest
economy. RBI has also warned that
its scope for further policy easing is
limited. The RBI will continue to
actively manage liquidity through
various instruments, including open
market operations, so as to ensure
adequate flow of credit to
productive sectors of the economy.
With the change in Repo rate, the
Reserve Bank of India also
announced infusion of 10000 crore
rupees into the financial system by
purchasing government securities as
part of its liquidity injection
measure. The Indian economy
expanded at a 25-quarter low of
4.5% in October-December 2012
quarter, and the 2.4% rise in
industrial production in January
2013 after two months of
contraction suggests the recovery is
still weak. The current account
deficit hit a record-high 5.4 per cent
in the September quarter and is
expected to end the 2012/13 fiscal
year at its highest level ever.
What is Repo Rate?
The rate at which the RBI lends
money to commercial banks is
called repo rate. It is an instrument
of monetary policy. Whenever banks
have any shortage of funds they can
borrow from the RBI. A reduction
in the repo rate helps banks get
money at a cheaper rate and vice
versa.
What is Reverse Repo rate? What is Reverse Repo rate? What is Reverse Repo rate? What is Reverse Repo rate? What is Reverse Repo rate?
Reverse Repo rate is the rate at
which the RBI borrows money from
commercial banks. An increase in
reverse repo rate can prompt banks
to park more funds with the RBI to
earn higher returns on idle cash. It
is also a tool which can be used by
the RBI to drain excess money out
of the banking system.
What is cash Reserve Ratio? What is cash Reserve Ratio? What is cash Reserve Ratio? What is cash Reserve Ratio? What is cash Reserve Ratio?
Cash reserve Ratio (CRR) is the
amount of funds that the banks have
to keep with the RBI. If the central
bank decides to increase the CRR,
the available amount with the banks
comes down. The RBI uses the CRR
to drain out excessive money from
the system.
Highlights of the RBI Quarterly Highlights of the RBI Quarterly Highlights of the RBI Quarterly Highlights of the RBI Quarterly Highlights of the RBI Quarterly
Monetary Policy Review: Monetary Policy Review: Monetary Policy Review: Monetary Policy Review: Monetary Policy Review:
Repo rate changed to 7.5
Percent from 7.75 Percent
CRR Remain Unchanged at 4
Percent
Reverse repo rate changed to
6.75 percent from earlier 6.5
Percent
Marginal standing facility
(MSF) rate 8.5 Percent
Bank Rate to 8.5 per cent
CCEA approved CCEA approved CCEA approved CCEA approved CCEA approved
Increase of MSP of Copra Increase of MSP of Copra Increase of MSP of Copra Increase of MSP of Copra Increase of MSP of Copra
Economic Affairs approved
increase in the Minimum Support
Price (MSP) for 2013 season of both
Milling and Ball Copra by 150 rupees
per quintal over the MSP that was
regulated in 2012. The MSP for the
Fair Average Quality (FAQ) of
Milling Copra is fixed at 5250 rupees
per quintal, and for the Ball Copra it
is 5500 rupees per quintal. The
decision from government of India
may ignite the interests of the
farmers to invest in cultivation of
coconut to increase its
productivity. Government also
cleared that National Agricultural
Cooperative Marketing Federation
of India Ltd. (NAFED) is the body
that will act as the nodal agency for
undertaking the price support
operation at the minimum support
prices in the coconut growing
states.
Exports of Exports of Exports of Exports of Exports of
India Increased By 0.8 Per Cent India Increased By 0.8 Per Cent India Increased By 0.8 Per Cent India Increased By 0.8 Per Cent India Increased By 0.8 Per Cent
The exports of India increased
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by 0.8 percent in the month of
January 2013 to 25.58 billion US
dollars. Comparatively, exports in
January 2012 were 25.37 billion US
dollars. Imports on the other hand,
increased by 6.12 percent to 45.5
billion US dollars. During April to
January 2012-2013, the overseas
shipments of India dropped by 4.86
percent to 239.6 billion US dollars.
The main concern for the country is
however to widen the trade
deficit. As a cumulative result, the
exports depicted an arrest in
decreasing exports. Now, the result
is -4.9 percent. Import of crude oil
was growing at a faster pace. Oil
imports in January 2013 increased
by 6.91 percent to 15.89 billion US
dollars in comparison to 14.87
billion US dollars in January 2012.
BHEL and GAIL Granted BHEL and GAIL Granted BHEL and GAIL Granted BHEL and GAIL Granted BHEL and GAIL Granted
Maharatna Status Maharatna Status Maharatna Status Maharatna Status Maharatna Status
The Union Government of
India gave the Maharatna status to
two PSUs- BHEL and GAIL on 1
February 2013. Granting Maharatna
status to BHEL and GAIL will
provide them with better functional
and financial freedom and will also
guarantee them with better
valuation of the shares. Ideally any
Maharatna firm has a capacity to
take investment decision of around
5000 crore Rupees without taking
assistance from the government. On
the other hand, forms with Navratna
status have the capability of 1000
crore Rupees. However, both BHEL
and GAIL do not have enough non-
official directors on the board,
which is why they cannot exercise
their Maharatna powers. Even
though all other conditions of
Maharatna status were met by both
these PSUs but their boards do not
have requisite number of board
members. While GAIL is short of 4
independent directors, BHEL, on
the other hand is short of 6 non-
official directors. In terms of
turnover, networth as well as net
profit, both these companies meet
all the eligibility criterions.
Eligibility of a Company to get a Eligibility of a Company to get a Eligibility of a Company to get a Eligibility of a Company to get a Eligibility of a Company to get a
Maharatna Status Maharatna Status Maharatna Status Maharatna Status Maharatna Status
For any company to qualify for
Maharatna status, the annual
turnover should be over 25000
crore Rupees in past three
years, as per the guidelines
issued by Department of
Public Enterprises.
The net worth of the PSU
should be more than 15000
crore Rupees in past three
years.
The net profit should be over
5000 crore Rupees during past
three years.
At present, there are seven
Maharatna companies, after
inclusion of BHEL and GAIL and
these companies are - ONGC, Indian
Oil, SAIL, NTPC and CIL. Also, there
are 14 Navratna companies,
including Rashtriya Ispat Nigam
Limited and NMDC.
Price Pooling Mechanism on Coal Price Pooling Mechanism on Coal Price Pooling Mechanism on Coal Price Pooling Mechanism on Coal Price Pooling Mechanism on Coal
Economic Affairs (CCEA) gave its
principle approval for the price
pooling mechanism of coal. The
mechanism includes cost blending
of the domestic coal with the
imported one to counterbalance
price hike. Basic principles and
parameters of the price pooling
mechanism have been identified
and a specific data on the same
would be created by the Power and
Coal Ministries. The mechanism has
been created before government
decided to put on sale the 9.5
percent stake of the National
Thermal Power Corporation (NTPC)
from its present holding of 84.50
percent. The sale of the stake was
approved by the Empowered
Group of Ministers on disinvestment
chaired by Finance Minister P
Chidambaram on 5 February 2013.
This disinvestment of NTPC would
fetch about 12000 crore rupees for
the exchequer.
World Bank Estimated a growth World Bank Estimated a growth World Bank Estimated a growth World Bank Estimated a growth World Bank Estimated a growth
of over 6 Percent of over 6 Percent of over 6 Percent of over 6 Percent of over 6 Percent
The World Bank in the month
of March 2013 forecasted that the
Indian economy is estimated to
grow over 6 per cent during 2013-
14. World Bank Chief Jim Young
Kim, who is on a three-day visit to
India asserted that India is estimated
to have grown 5 percent in the
current fiscal and the growth rate is
likely to improve to 6.1-6.7 percent
in 2013-14. The Indian economy, like
any other economy, is subject to
global slowdown. It has effect here
and at the same time, the export
market has started doing better. On
the positive node, it also had be
seen that share of India in global
economy almost doubled in five
years between 2005 and 2010. Kim
is on his first visit to India after taking
over as President of World Bank
Group in July 2012.
Penalty on Rajasthan Royals Penalty on Rajasthan Royals Penalty on Rajasthan Royals Penalty on Rajasthan Royals Penalty on Rajasthan Royals
The Enforcement Directorate
(ED) slapped the IPL team Rajasthan
Royals with a penalty notice of
around 100 crore Rupees for
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violating the Forex laws. ED issued
this penalty notice after investigating
the matter for 2 years under the
Foreign Exchange Management Act
(FEMA).
Three notices in all were sent
across to the IPL franchise which
totaled to 98.5 crore Rupees. The
Jaipur IPL Cricket Private Limited
(JIPL) as well as its directors was
sent a penalty notice of 50 crore
Rupees. Apart from this, 34 crore
Rupees penalty notice was issued
against EM Sporting Holding,
Mauritius and its directors for
evading the Forex duties. A notice
of 14.5 crore Rupees was also issued
additionally against the Ms ND
Investments, United Kingdom and
its directors. All these three parties
are free to appeal against the penalty
order in appellate authority of
FEMA. According to the order, IPL
team needs to make the payment in
45 days. This is said to be the first
biggest order against any team
issued by the ED. According to the
penalty order, it was found that the
foreign investment in JIPL was
conducted in flagrant contravention
of FEMA. The first penalty order
was issued by ED against the
Rajasthan Royals in mid-2011. Now,
it issued the final orders after it
moved to FEMA Adjudicating
Authority in Delhi in order to
examine investigations in the case.
Coal India signed Fuel Supply Coal India signed Fuel Supply Coal India signed Fuel Supply Coal India signed Fuel Supply Coal India signed Fuel Supply
Pacts with 56 Power Plants Pacts with 56 Power Plants Pacts with 56 Power Plants Pacts with 56 Power Plants Pacts with 56 Power Plants
The Union government on 12
March 2013 informed that state-
run Coal India Ltd. (CIL) Coal India Ltd. (CIL) Coal India Ltd. (CIL) Coal India Ltd. (CIL) Coal India Ltd. (CIL)signed fuel
supply pacts with 56 power plants
so far. Minister of state for coal,
Pratik Prakashbapu Patil in his
written reply to Lok Sabha
mentioned that, Coal India Ltd has
signed 56 fuel supply agreements
(FSAs) with the power plants as on
2 March 2013. It is important to note
that the deadline set by the Prime
Ministers Office (PMO) for signing
of FSAs between CIL and power
producers expired in January 2013.
Chief vigilance officer replying to a
question regarding CILs highlighted
irregularities in awarding of FSAs.
CIL observed certain
inadequacies in the documents of
11 cases, during verification of the
documents in respect of milestone
achievement of LoAs (letter of
assurance). It was also affirmed by
the minister that appropriate action
would be taken in this regard by
CILs subsidiaries to ensure that all
due procedures are observed.
Minister of state for coal stated that
there is a proposal to engage an
independent third party sampling
agency by CIL for consumers having
FSAs.
Indias Trade Deficit was Indias Trade Deficit was Indias Trade Deficit was Indias Trade Deficit was Indias Trade Deficit was
estimated at 167168.12 Million estimated at 167168.12 Million estimated at 167168.12 Million estimated at 167168.12 Million estimated at 167168.12 Million
US Dollars US Dollars US Dollars US Dollars US Dollars
As per the data released by
Union Ministry of Commerce and
Industry on 13 February 2013, Indias
performance in export and import
are as following:
Exports
Exports during January, 2013
were valued at 25587.24 million US
dollars. (138981.70 crore rupees)
which was 0.82 per cent higher in
Dollar terms (6.67 per cent higher
in Rupee terms) than the level of
(130294.02 crore rupees) during
January 2012. Cumulative value of
exports for the period April-January
2012 -13 was 239687.01 million US
dollars (1305420.39 rupees) as
against 251930.14 million US
registering a negative growth of
4.86 per cent in Dollar terms and
terms over the same period 2011-
12.
Imports
Imports during January, 2013
were valued at 45583.25 million US
representing a growth of 6.12 per
cent in Dollar terms and 12.28 per
cent in Rupee terms over the level
of imports valued at 42952.47
million US Dollars ( 220514.54 crore
rupees) in January 2012. Cumulative
value of imports for the period April-
January 2012-13 was 406855.13
million US dollars (2215115.46 crore
rupees) as against 406820.28 million
US dollars (1934946.96 crore
rupees) registering a positive growth
of 0.01 per cent in Dollar terms and
terms over the same period 2011-
12.
Crude Oil and Crude Oil and Crude Oil and Crude Oil and Crude Oil and
Non- oi l I mpor t s Non- oi l I mpor t s Non- oi l I mpor t s Non- oi l I mpor t s Non- oi l I mpor t s
Oil imports during January,
2013 were valued at 15899.3 million
higher than oil imports valued at
14871.2 million US Dollars in the
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corresponding period last year. Oil
imports during April-January, 2012-
13 were valued at 140420.1 million
higher than the oil imports of
125874.2 million US dollars in the
corresponding period last year.
Non-oil imports during January 2013
were estimated at 29684.0 million
higher than non-oil imports of US
28081.3 million in January 2012.
Non-oil imports during April
January 2012-13 were valued at
was 5.17 per cent lower than the
level of such imports valued at
280946.1 million US dollars in April
- January 2011-12.
Trade Finance
The trade deficit for April -
January 2012-13 was estimated at
was higher than the deficit of
154890.14 million US dollars during
April -January 2011-12.
Economic Growth of India Economic Growth of India Economic Growth of India Economic Growth of India Economic Growth of India
Estimated to Fall To 5 Percent in Estimated to Fall To 5 Percent in Estimated to Fall To 5 Percent in Estimated to Fall To 5 Percent in Estimated to Fall To 5 Percent in
2012-2013 FY 2012-2013 FY 2012-2013 FY 2012-2013 FY 2012-2013 FY
The Central Statistics Office
(CSO) on 7 February 2013 revealed
that the economic growth of India
is estimated to fall to 5 percent in
2012-2013 financial year, which is a
lowest figure in 10 years. A fall in
the economic growth is because of
the poor performance of the
services, agriculture and
manufacturing sectors. The Central
Statistics Office (CSO) in its advance
forecast of the national income
chopped off the gross domestic
product (GDP) growth estimate to
5 percent for financial year which
will end on 31 March 2013. This is
much less than the GDP of 6.2
percent in 2011-2012 financial year.
This is said to be the worst
performance of economy of India
since 2002-2003 when the economic
growth was 4 percent. The major
share of Indias GDP comes from the
services sector. The services sector
is estimated to record a growth of
5.2 percent in 2012-2013 fiscal year
against 7 percent of 2011-2012 fiscal
year.
As far as the industry sector is
concerned, it is expected that the
growth would decrease to 1.9
percent in 2012-2013 FY. The farm
sector growth will fall down to 1.8
percent. It is important to note that
the official projection of the
economic growth of India is much
lower than budgetary estimate as
well as projections of the central
bank of India and other
organisations. In the union budget
for financial year 2012-2013 which
was presented in March 2012, the
government pegged Indias
economic growth at 7.6 percent.
Also in the quarterly monetary
policy review which took place in
the first week of February 2013, the
Reserve Bank of India projected the
growth of 5.5 percent for 2012-2013
financial year. In the meanwhile,
Finance Minister P. Chidambaram
had projected the economic growth
of 5.7 percent. In first half of 2012-
2013 FY, the economy of India grew
by 5.4 percent. However, as per the
latest estimate, the growth would be
around 4.6 percent in second half
of 2012-2013. Industry bodies in
the meanwhile asked the
government to press for the reform
process in order to revive the
economic growth.
Memu Coaches Manufacturing Memu Coaches Manufacturing Memu Coaches Manufacturing Memu Coaches Manufacturing Memu Coaches Manufacturing
Facility at Bhilwara Facility at Bhilwara Facility at Bhilwara Facility at Bhilwara Facility at Bhilwara
Memorandum of
Understanding (MoU) was signed
on 25 February 2013 between Indian
Railways and Bharat Heavy
Electricals Ltd (BHEL) for setting up
of Greenfield MEMU coaches
manufacturing facility by BHEL at
Bhilwara in Rajasthan. Main Line
Electric Multiple Unit Trains,
popularly known as MEMU trains
were first introduced in Indian
Railways in the Year 1994-95, as a
mode of rapid transit system, to
cater to non-suburban passengers,
residing in small towns and villages
surrounding urban and industrial
centres.
MEMU trains have higher
passenger carrying capacity and
higher average speed as compared
to conventional loco hauled
passenger trains due to faster
acceleration and braking
characteristics. These rakes are now
being manufactured with toilet
facilities to take care of passenger
needs. MEMU trains increase the
line capacity utilisation, and
therefore are more suitable for
running on high traffic density
routes.
These MEMU trains have
gained rapid popularity over the
years. Currently, there are about 160
MEMU services running. There are
demands coming from all over the
country for running more and more
MEMU trains. The demand for these
coaches will further increase as
Indian Railways have plans to
Electrify approximately 15000 route
kilometre during the next 10 years,
in addition to the existing 22000
route kilometre of electrified track.
There was a shortfall in acquisition
of 800 MEMU coaches during XIth
Plan Period due to capacity
constraints at Rail Coach Factory,
Kapurthala, where these MEMU
coaches are produced. Overall it is
expected that the requirement of
MEMU coaches will grow to nearly
9000 coaches during the next 10
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year period. Setting up of factory for
conventional MEMU coaches will go
a long way in meeting this demand.
Bharat Heavy Electricals
Limited (BHEL) is a Maharatna
Central Public Sector Unit (CPSU)
company, which is a partner of
Indian Railways for a period
spanning more than 40 years. It has
been manufacturing and supplying
electric rolling stock including
EMUs and MEMUs; as well as sub-
assembly and equipment for rolling
stock being manufactured at IRs
own production units. The
proposed facility for production of
MEMU coaches will be set up by
Bharat Heavy Electricals Limited
(BHEL) at Bhilwara in the State of
Rajasthan. The entire cost will be
borne by BHEL. Government of
Rajasthan will provide land to
Railways, for setting up the project.
In order to make the project viable,
Ministry of Railways will give
Assured Off- Take orders to BHEL.
Railway Revenue Earnings Railway Revenue Earnings Railway Revenue Earnings Railway Revenue Earnings Railway Revenue Earnings
Increased by 20.38 Per Cent Increased by 20.38 Per Cent Increased by 20.38 Per Cent Increased by 20.38 Per Cent Increased by 20.38 Per Cent
The total approximate earnings
of Indian Railways on originating
basis during 1 April 2012 to 31
January 2013 were 101223.95 crore
rupees compared to 84083.74 crore
rupees during the same period last
year, registering an increase of 20.38
per cent, as per the data released
by Ministry of Railways.
The total goods earnings have
gone up from 56163.30 crore
rupees during 1 April 2011
31st January 2012 to 70067.36
crore rupees during 1 April
2012 31 January 2013,
registering an increase of
24.76 per cent.
The total passenger revenue
earnings during 1 April 2012
31 January 2013 were
25924.29 crore rupees
compared to 23344.42 crore
rupees during the same period
last year, registering an
increase of 11.05 per cent.
The revenue earnings from
other coaching amounted to
2617.19 crore rupees during
April 2012 - January 2013
compared to 2353.54 crore
rupees during the same period
last year, an increase of 11.20
per cent.
The total approximate
numbers of passengers
booked during 1st April 2012
31st January 2013 were
7150.60 million compared to
6910.00 million during the
same period last year,
showing an increase of 3.48
per cent. In the suburban and
non-suburban sectors, the
numbers of passengers
booked during April 2012 -
January 2013 were 3753.32
million and 3397.28 million
compared to 3651.70 million
and 3258.30 million during the
same period last year,
showing an increase of 2.78
per cent 3.48 per cent
respectively.
Indian Financial Regulators Indian Financial Regulators Indian Financial Regulators Indian Financial Regulators Indian Financial Regulators
signed pact to Monitor signed pact to Monitor signed pact to Monitor signed pact to Monitor signed pact to Monitor
Conglomerates Conglomerates Conglomerates Conglomerates Conglomerates
The countrys top four financial
regulators on 8 March 2013 signed
an agreement among each other for
co-operation on consolidated
supervision and monitoring of
financial groups identified as
financial conglomerates- large banks
and other key players. The
decisivenesses were taken at a sub-
committee meeting of the Financial
Stability and Development Council
(FSDC) held in the Reserve Bank.
The regulators who signed the pact
were the Reserve Bank of India
(RBI), Securities and Exchange
Board of India (SEBI), Insurance
Regulatory and Development
Authority and Pension Fund
Regulatory and Development
Authority. The FSDC (Financial
Stability and Development Council)
meeting, chaired by RBI Governor
D Subbarao also approved
formulating a national strategy for
financial education by incorporating
the feedback received from public
consultations and from a global peer
review, RBI said without providing
details. RBI had on 22 February 2013
released rules on allowing
companies to start banks in India
and such coordination among
regulators is needed for effective
supervision.
Inflation goes Down to Three Inflation goes Down to Three Inflation goes Down to Three Inflation goes Down to Three Inflation goes Down to Three
Years Low Years Low Years Low Years Low Years Low
The inflation rate of India
dropped down to the three year low
in the chart to 6.62 percent in
January 2013 from the 7.18 percent,
measured in December 2012. The
inflation was measured based upon
monthly Wholesale Price Index.
The official Wholesale Price Index
for All Commodities (Base: 2004-05
= 100) in January, 2013 rose by 0.4
percent to 169.2 (Provisional) from
168.6 (Provisional) for the previous
month. Slowing exports and decline
in investments and low demand in
the domestic market have been a
major factor in slipping down the
growth rate of India. The two factors
have affected the manufatruing as
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well as service sectors of India. The
growth forecast for the running
fiscal year that would end on 31
March 2013 was lowered by the
Indias Statistical Office to 5 percent.
The Reserve Bank of India also
changed its forecast from 5.8
percent to 5.5 percent. To revive a
fresh air in the slowing down
economic conditions of India, the
Reserve Bank took a major step of
lowering the key interest rate from
8 percent to 7.75 percent; this was
the first step in nine months. The
Policy makers have also taken afresh
steps to revive the slowing
economic conditions of the nation.
Teledensity declined by 25.97 Teledensity declined by 25.97 Teledensity declined by 25.97 Teledensity declined by 25.97 Teledensity declined by 25.97
Million Million Million Million Million
As cellphone operators
continued disconnecting inactive
SIM cards, Indias total telecom
subscriber base declined by 25.97
million to 895.51 million in
December. In November, the
country had 921.47 million telecom
subscribers. Telecom Regulatory
Authority of India(TRAI) stated that
total wireless subscriber base
decreased from 890.60 million in
November 2012 to 864.72 million at
the end of December 2012. TRAI
reasoned that this decline is majorly
due to large scale disconnections of
inactive SIMs by some of the service
providers. With this, the overall
teledensity in India decreased to
73.34 per cent at the end of
December, 2012 from 75.55 per cent
in the previous month.
Export of Additional 5 Million Export of Additional 5 Million Export of Additional 5 Million Export of Additional 5 Million Export of Additional 5 Million
Tonnes of Wheat approved Tonnes of Wheat approved Tonnes of Wheat approved Tonnes of Wheat approved Tonnes of Wheat approved
India on 7 March 2013 approved
export of extra five million tonnes
of Wheat from its Godowns. The
group of ministers in its meeting also
decided that the added quantity of
5 million tonnes of wheat shall be
exported by the private traders. It
also cleared that the public sector
trading firms will not be a
participant in export of the
additional quantity of wheat.
The GoM (Group of Ministers)
have also decided that bidding
process would be used by the
Private traders to export the 2011-
12 crop and the floor price decided
for per quintal is 1480 rupees. For
the present fiscal, the permitted
export of wheat from the godowns
of the Food Corporation of India
now stands at 9.5 million tonnes.

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1083 Crore
Rupees Revival Plan for HMT
Economic Affairs (CCEA) under
Union Government on 18 April 2013
approved a 1083-crore Rupees
renewal package for watch and
tractor maker company HMT. The
approval of the revival Plan Directly
aims to modernise the company and
help it turn around in five years. The
package approved basi cal l y
includes a cash infusion of 450 crore
rupees and a non-cash assistance of
630 crore Rupees.
Significance of the Package
Approved
The package i s ai med at
turni ng the l oss maki ng
Economy
company to profit-making one
over five years by increasing
production.
The cash component of the
package wi ll be used for
moderni zation, worki ng
capi tal needs and wage
revision.
The company also aims to hike
production to 30000 units
from the current 4500 units
over five years.
Workshop on Green
National Accounting for India
Two- da y I nt e r na t i on a l
Workshop on Green Nati onal
Accounting for India finished in
New Delhi on 6 April 2013. The
Government of India established the
expert group under Ministry of
Stati sti cs and Programme
Implementation (MOSPI) in August
2011. The aim of this expert group
was development of framework for
green national accounts,
identification of data gaps and
preparation of a road map to
implement the framework. The
expert group conducted in-depth
deliberations on these issues over
past one and half years. The report
was submitted in the international
workshop. The report called, Green
National Accounts in India A
Framework was released by the
Prime Minister of India, Manmohan
Singh on 5 April 2013. The Green
National Accounts in India A
Framework report reflected the
state of economy. It also formed the
raw material for assessment and
policy formulation. This report
consi sted of si x chapters and
includes conceptual foundations of
economic evaluation. The report
also deal s wi th not onl y the
conceptual buil ding up of the
system of Green National Accounts,
but al so deal s wi th the
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Economy
implementation ability aspects
based on the conceptual framework
of Green Accounting Framework.
Changes in FTP 2009-14 to
Enhance Trade and SEZs
Union Minister for Commerce,
Industry and Textil es, Anand
Sharma rel eased the Annual
Supplement 2013-14 to Foreign
Trade Policy (FTP) 2009-14 18 April
2013 at Vigyan Bhawan, New Delhi.
During the fiscal year 2012-13, the
export of India grew to 300.60 US
Billion Dollar from 300 US Billion
Dollar, but it fell by 1.76 percent
previous year. The trade deficit
which was 183.4 US Billion Dollar
last year has increased to 190.91 US
Billion Dollar. On this occasion of
releasing the Annual Supplement
2013-14 to Foreign Trade Policy
2009-14 the government introduced
many strategic Changes to policies
to revive the interest of the investors
in Social Economic Zones (SEZs) as
well as to boost exports.
Few of the important changes
introduced
Changes in SEZs
Si ze of total area of land
requi red for development
of SEZs have been reduced
Graded Scale for Minimum
Land Cri teri a has been
introduced
Flexibilities are introduced to
set up additional units sector
specific SEZs
Policy to provide duty benefits
to pre-existing structures and
activities being undertaken
Salient Features of the Zero Duty
EPCG includes
Authorization holders will
have export obligation of 6
times the duty saved amount.
The export obligation has to
be completed in a period of 6
years
The period for import under
the Scheme would be 18
months
The di scharge of Export
Obl i gati on by export of
alternate products and the
accounti ng of group
companies has been barred
The benefits of the Zero Duty
EPCG Scheme can be availed
by the exporters who have
avai l ed benefi ts under
Technology Upgradation Fund
Scheme (TUFS) administered
by Ministry of Textiles
Under the new Zero Duty
EPCG Scheme, i mport of
motor cars, SUVs, all purpose
vehicles for hotel s, travel
agents, or tour transport
operators and companies
owning/operating golf resorts
will not allowed
Reduced EO for Domestic
Sourcing of Capital Goods
The quantum of speci fi c
Export Obligation (EO) in the
case of domestic sourcing of
capital goods under EPCG
authori zati ons has been
reduced by 10%. This would
promote domesti c
manufacturi ng of capi tal
goods.
Reduced EO for units in the State
of Jammu & Kashmir
To encourage manufacturing
activity in the State of Jammu
& Kashmir the specific export
obligation (EO) is reduced to
25% of the normal export
obligation. Earlier, this benefit
was announced on 5 June
after notification have been
introduced
In IT SEZs, the criterion of
mini mum l and area of 10
hectares has been done away
Zero Duty Export Promotion
Capital Goods (EPCG) Scheme
Foreign Trade Policy has two
variants under this scheme, Zero
Duty EPCG for few sectors and 3%
Duty EPCG for all sectors. On 5 June
2012, a new Post Export EPCG
Scheme was also announced which
was notified on 18 February 2013 by
the CBEC. Now the Uni on
Government has decided to merge
the Zero Duty EPCG and 3% EPCG
Scheme into one scheme and make
i t a Zero Duty EPCG Scheme
covering all sectors.
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2012 i n respect of uni ts
l ocated i n North Eastern
Region and Sikkim and the
same provision is now being
extended to J&K.
Widening of
Interest Subvention Scheme
Presentl y there exi sts
availability of 2% i nterest
subvention scheme to certain
speci fi c sectors l i ke
Handi crafts, Handl ooms,
Carpets, Readymade
Garments, Processed
Agricultural Products, Sports
Goods and Toys. The scheme
had been further widened to
include 134 sub-sectors of
engi neeri ng sector.
Government had al so
announced that the benefit of
this scheme of 2% interest
subvention could be available
up to 31 March 2014
Items covered under the
Chapter 63 of ITC (HS) (other
made up textile articles, sets,
rags) and additional specified
tari ff li nes of engineeri ng
sector i tems under the
scheme have al so been
included in the scheme by
widening its provisions
Widening the Scope of Utilization
of Duty Credit Scrip
Duty Credit Scrips issued
under Focus Market Schemes,
Focus Product Scheme and
Vishesh Krishi Gramin Udyog
Yojana (VKGUY) can be used
for payment of service tax on
procurement of servi ces
within the legal framework of
servi ce tax exempti on
noti fi cati ons under the
Finance Act, 1994. Holder of
the scrip shall be entitled to
avail drawback or CENVAT
credi t of the servi ce tax
debited in the scrips as per
Department of Revenue rules.
All duty credit scrips issued
under Chapter 3 can be
uti l i zed for payment of
application fee to DGFT for
obtaining any authorization
under Foreign Trade Policy.
This benefit shall be available
only to the original duty credit
scrip holders. Duty credit
scrip can also be paid for
payment of composition fee
and for payment of val ue
shortfalls in EO under para
4. 28 (b) of Hand Book of
Procedure Vol. 1.
Market and Product
Diversification
Norway has been added
under Focus Market Scheme
and Venezuel a has been
added under Special Focus
Market Scheme. The total
number of countries under
Focus Market Scheme and
Special Focus Market Scheme
becomes 125 and 50
respectively.
Approxi matel y, 126 new
products have been added
under Focus Product Scheme.
These products include items
from engineering, electronics,
chemicals, pharmaceuticals
and textiles sector.
About 47 new products have
been added under Market
Linked Focus Product Scheme
(MLFPS). These products are
from engi neeri ng, auto
components and texti l es
sector. 2 new countries i.e.,
Brunei and Yemen have been
added as new markets under
MLFPS.
MLFPS is being extended from
01.04.2013 to 31.03.2014 for
exports to USA and EU in
respect of items falling in
Chapter 61 and Chapter 62 of
ITC (HS).
Exports of Hi gh Tech
products would be incentived
and it would be separately
notified by 30th June, 2013.
The towns of Morbi (Gujarat)
and Gurgaon (Haryana) have
been added to the existing list
of towns of export excellence
for ceramic tiles and apparel
exports respectively. These
towns shall be eligible to get
benefit under ASIDE Scheme.
Incremental Exports
Incentivisation Scheme
Government has announced
Incremental Export
Incentivisation Scheme on 26
December 2012 for the
exports made during January
2013 to March 2013. Thi s
scheme i s avai l abl e for
exports made to USA, EU and
Asia. It has been agreed to
extend this scheme for the
year 2013-14. The calculation
of the benefit shall be on
annual basis under the
extended scheme.
The Government has also
agreed to include additional
countries under Incremental
Exports Incenti vi sati on
Scheme. 53 countries of Latin
America and Africa have been
added with the objective to
increase Indias share in these
markets. The present exports
to each of these markets are
less than US $ 100 million.
Changes have been introduced in
many other schemes and they are
Facil i ty to close cases of
default in Export Obligation
Served from India Scheme
(SFIS)
VKGUY Scheme
Status Hol der Incenti ve
Scheme (SHIS)
Re-credit of 4% SAD
Duty Free Import
Authorization Scheme (DFIA)
Import of Cars
Improvement in quality and
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timeliness of Foreign Trade
Data
Second Task Force on
Transacti on Cost i n
International Trade
Electronic Data Interchange
Initiatives
Ease of Documentation and
procedural simplification
Widening of items eligible for
import for Handloom/Made
ups and Sports Goods
WTO Slashed Trade Growth
Forecast for 2013 to 3.3 Percent
The World Trade Organization
(WTO) on 10 April 2013 slashed the
forecast of global trade by 1.2
percent to 3. 3 percent from
previous 4.5 percent. The WTO
called up for strengthening the trade
via multilateral system to ensure
trade emerges as the engine of
growth. WTO also informed that the
trade growth of the world slowed
to 2 percent in the year 2012 from
the previous year 2011 rate of 5.2
percent. As per the details provided,
the trade growth rate of the world
is likely to remain low in 2013 as the
economi c sl owdown of the
European Countri es was
suppressing the global import.
Merchandi se Trade: The
forecast of merchandise trade for
2013 is 3.3 percent and this is below
the average of 20 years from 1992
to 2012, i.e. 5.3 percent
Trade Forecast 2013: The WTO
made a forecast of 2.1 percent
growth in world output and it
depends upon the sovereign debt
crisis in Europe
In 2012 the World Growth Rate
was measured to be 2 percent but
have gone down from 5.2 percent
that was recorded in 2011.
IMF Slashed World Growth
Forecast to 3.3 percent for the
Year 2013
International Monetary Fund
(IMF) in its latest assessment of the
United States. Slow growth in
countries like Russia, Brazil, China
and Indi a is also a reason for
economic weakness. The global
economy survived from the crash
after defuse of the two largest short
term threats to the recovery and they
were disintegration of the eurozone
and extreme budget cuts and tax
hikes in United States. The U.S
growth forecasted for the year 2013
is 1.9 percent and for Eurozone it is
0.3 percent. The measures adopted
by the world to get out of the
financial crisis have been failing due
to the bad debt and weak capital
hobbled by the banks. Due to Bank
of Japans ambitious plan launched
to reflate the economy, the IMF
upped its forecast for the country
to 1.6 percent from initial 1.2
percent.
Statement from World Economic
Outlook Report of IMF
IMF i n i ts WEO Report
suggested that the Global prospects
have improved again but the road
to recovery i n the advanced
economies will remain bumpy.
ITPO Signed a MoU with
Government of India
Indi a Trade Promoti on
Organisation (ITPO) signed a
Memorandum of Understanding
(MoU) with Government of India for
the year 2013-14 on 20 March 2013.
The MoU was signed between Rita
Menon, Chairperson and Managing
Director of ITPO and S R Rao,
Secretary, Ministry of Commerce &
Industry.
global economy released on 16
April 2013 revised its world growth
forecast for 2013 and slashed it to
3.3 percent from previous forecast
of 3.5 percent predicted in January
2013. IMF revised its forecast
because of the continued recession
in the Eurozone. The IMF also
forecasted that the economi c
growth will be on its pick by the
second half of the year. The slow
growth rate of the United States
region is also a region behind the
downgrade of the forecast. The
Chief Economist of IMF, Olivier
Blanchard warned that the fresh
bailout of Cyprus and weakness of
Italy could spark setbacks for the
international economy. IMF in its
assessment al so expressed
concerns over the gl obal
fragmentation of the dynamism of
the emerging economies and the
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Highlights of the MoU
The major highlight of the
MoU is the projected surplus
of Rs. 100 Crore by ITPO
during 2013-14.
The MoU laid down target for
investment proposal to be
submi tted for the
redevel opment of Pragati
Maidan into a modern and
state-of-the-art integrated
Exhibition-cum-Convention
Centre, to the Union Cabinet
for approval.
Certain other targets were also
included in the MoU and these
included 850 man-days of
training to its both senior and
other employees during 2013-
14 and reduction of electricity
water consumpti on by 5
percent and 10 percent
respectively.
To Revive Interest in SEZs of
Investors Government announced
Changes in FTP
The Annual Supplement 2013-
14 to Foreign Trade Policy (FTP)
2009-14 was announced on 18 April
2013 by the Union Minister for
Commerce, Industry and Textiles,
Anand Sharma at Vigyan Bhawan,
New Delhi.
In the l atest Annual
Supplement 2013-14 the Union
Government has tried to implement
measures to revive the interest of the
investors in Social Economic Zones
(SEZs) as well as to boost exports.
Important features of the Package
are
The Government has reduced
the size of total land area
required for development of
SEZs to its half from its initial
requirement of minimum Land
Area of 100 hectares for
allowing the development of
SEZs. Now an investor needs
to have 50 hectares of land to
develop a SEZ. This has been
done in response to end the
difficulties being faced by the
investors in gaining collective
large area of uncultivable land
for setting up of the SEZ.
Graded Scale for Minimum
Land Cri teri a has been
introduced to permit the SEZ
an additional sector for each
contiguous 50 hectare parcel
of land. This has been done to
ensure flexibility in utilization
of the land tracts that falls
between the 50 to 450
hectares.
Fl exi bi l i ty is granted for
setting-up additional units in
a sector specific SEZ. This will
be done by i ntroduci ng
sectoral broad-banding to
encompass similar/related
areas under the same sector.
In context of Vacancy of Land:
the government has revised
the policy in existence that
allowed a parcel of land with
pre-existing structures but not
i n commerci al use to be
considered as a vacant land
and this was used with the
purpose of notifying it for a
SEZ. The new policy being
introduced is that pre-existing
structures and activities being
undertaken after notification
would be eligible for duty
benefits similar to any other
activity in the SEZ.
IT Exports constitute a very
significant part of Indias exports
and IT SEZs have a major
contribution in it. Exports from IT
SEZs during financial year 2012-13
have exceeded 1.40 lakh crore
rupees and it registered a growth of
over 70 percent, over the previous
years exports. The Government has
brought in new changes to boost
growth in the IT SEZ sector and to
encourage the employment
opportunities in Tier-II and Tier-III
cities.
Changes Implemented in IT
Exports
For development of IT SEZs,
the Government has done
away the cri teri on on
mini mum l and area of 10
hectares, maki ng it to no
minimum land requirement for
setting up an IT/ITES SEZ. The
SEZ developers will have to
meet up with the minimum
built in area requirement.
The criteria of requiring a
minimum build-up land area
has also been relaxed to a
greater extent. The
requi rement of one l akh
square meters is applicable in
7 major cities namely Mumbai,
Del hi (NCR), Chennai ,
Hyderabad, Bangalore, Pune
and Kolkata. For the other
Category B cities 50000 square
meters and for remaining
ci ti es onl y 25000 square
meters built up area norm will
be applicable.
The SEZ policy Framework in
existence at present doesnt include
a pol icy of exi t but now the
Government permits, the transfer of
ownership of SEZ units, including
sale. The Government has also
introduced several schemes and
modified different policies as per
the requirements.
4065.81 Crore Rupees for Water
Pollution Control
India on 5 April 2013 sanctioned
4065.81 crore rupees for pollution
abatement schemes of rivers and
lakes in different states. Of all the
states, Uttar Pradesh received
1385.95 crore rupees. The sanction
cost of projects and expenditure
includes the State Governments
share under the National River
Conservation Programme (NRCP)
and the National Lake Conservation
Programme (NLCP).
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National Lake Conservation Plan
(NLCP)
National Lake Conservation
Plan (NLCP) started in June 2001
with a funding scheme of 70:30 fund
sharing between centre and state.
The main objective of the scheme
is to restore and conserve the urban
and semi-urban lakes of the country
degraded due to waste water
discharge into the lake and other
unique freshwater eco systems,
through an integrated ecosystem
approach.
National River Conservation
Programme (NRCP)
National River Conservation
Programme (NRCP) is the centrally
sponsored Scheme implemented by
the central Government jointly with
the State Government on a cost-
shari ng basi s. The poll ution
abatement works under NRCP
presently cover identified polluted
stretches of 39 major rivers in 185
towns spread over 20 States in the
country.
Highlights of PMEAC Economic
Review 2012-13
The Prime Ministers Economic
Advisory Council (PMEAC) under
the Chairmanship of C Rangarajan on
23 April 2013 presented the
Economic review 2012-13.
Find here the highlights of the
Economic Policy Review presented
by the Prime Ministers Economic
Advisory Council:
Indias economy is expected
to grow 6.4 percent in the new
financial year that began on 1
April 2013.
PMEAC pegged the WPI
inflation at around 6 percent
and food i nfl ati on, at 8
percent.
FY13 bank credit growth at
14.1% vs 17% in the year-ago
period. Bank credit growth
lower due to weak credit
demand & tight liquidity.
Net FDI at 18 billion dollars in
FY13. FII inflows at 24 billion
dollar in FY13 We expect net
FDI i nfl ow at 24 bi l l i on
dollars and FII at 18 billion
dollars for FY14
The fiscal deficit of the Centre
for 2012-13 is estimated to be
5.2% of GDP. It was 520924
crores Rupees in 2012-13 as
per revised estimates, and is
expected to be 542499 crores
Rupees i n 2013-14 as per
budget estimates.
Current Account Deficit is
estimated to be 94 billion
dollars (5.1% of GDP) in 2012-
13 and is projected to be 100
billion dollars (4.7% of GDP)
in 2013-14.
Merchandise trade deficit is
estimated to be 200 billion
dollars (10.9% of the GDP) in
2012-13 and is projected to be
213 billion dollars (9.9% of
GDP) in 2013-14.
Net invisibles earnings are
estimated to be 105.8 billion
dollars (5.7 % of GDP) in 2012-
13 and are projected to be 113
billion dollars (5.3 % of GDP)
in 2013-14.
It is estimated that for 2012-
13 the net inflow of FDI was
18 billion dollars (26 billion
inbound and 8 billion dollars
outbound). For 2013-14 EAC
has projected higher inbound
flows of the order of 36 billion
dollars. Outbound FDI is also
expected to i ncrease,
resulting in net FDI inflow of
24 billion dollars.
FII inflows were weak in the
first quarter of 2012-13, but
picked up in the second and
third quarters. For the year as
a whole, portfolio inflows are
estimated to be close to $24
billion. Portfolio capital flows
are projected to be 18 billion
dollars in 2013-14.
The total inflows under the
head of loans are estimated to
be about 30 billion dollars in
2012-13. Thi s compri ses
mostly of external commercial
borrowings (ECBs) and short-
term loans. The projected
fi gure for 2013-14 i s $36
billion.
The total banki ng capital
i nfl ows for 2012-13 are
estimated to be $24 billion
and are projected to be at 22
billion dollars for 2013-14.
Reserve Bank of India to Start
Plastic Money Project on Trial
Basis
The Reserve Bank of India on
16 April 2013 announced that it
would start the introduction of
Plastic Notes in the market on trial
basis. The announcement was made
by the Deputy Governor of RBI, K.C.
Chakrabarty in Mangalore. The
Deputy Governor i n hi s
announcement informed that the
Central Bank would launch the
plastic notes the denomination of 10
rupees and will continue with other
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small denominations depending
upon the success of these notes. The
introduction of the scheme would
start on a trial basis following the
mandate of the Union Government
to i ntroduce pl asti c/pol ymer
currency notes of 10 rupees on a
field trial in five cities of India. The
date for launch of the Plastic Notes
was not cleared by the Bank.
NEEPCO granted Miniratna
Category1 Status
North Eastern Electric Power
Corporati on (NEEPCO) was
conferred with the Miniratna
Category 1 status by the President
of India, Pranab Mukherjee on 8
April 2013. NEEPCO was earlier the
schedule A Corporation.
Status of Category-I
Miniratna Firms
Category-I Miniratna firms can
incur the capital expenditure on
modernization, new projects as well
as equipment purchase without the
approval of the Government, up to
500 crore Rupees. The Category-II
Miniratna firms, on the other hand,
have the fi nancial freedom of
spending up to 300 crore Rupees or
50 percent of total net worth,
whichever out of these is lower.
NEEPCOs status after being
conferred with Miniratna
Category 1
NEEPCO was i ni tial ly the
schedule A Corporation. After
bei ng elevated to Mi ni ratna
Category 1 status, NEEPCO will
have autonomy to take the
investment decisions freely without
the consent of Ministry of Power.
About NEEPCO
NEEPCO plays a crucial role
in the power sector of North
East region. it serves around
50 percent power
requirement of this region.
By 2018, NEEPCO has plans to
add 2300 MW of power
through the thermal and hydro
projects.
At present, NEEPCO executes
5 projects in North East region
with total installed capacity of
917 MW.
List of Maharatna, Navratna and
Miniratna CPSEs
Maharatna CPSEs
1. Bharat Heavy El ectri cal s
Limited
2. Coal India Limited
3. GAIL (India) Limited
4. Indian Oil Corporation Limited
5. NTPC Limited
6. Oil & Natural Gas Corporation
Limited
7. Steel Authori ty of Indi a
Limited
Navratna CPSEs
1. Bharat Electronics Limited
2. Bharat Petroleum Corporation
Limited
3. Hi ndustan Aeronauti cs
Limited
4. Hi ndustan Petrol eum
Corporation Limited
5. Mahanagar Telephone Nigam
Limited
6. National Aluminium Company
Limited
7. NMDC Limited
8. Neyveli Lignite Corporation
Limited
9. Oil India Limited
10. Power Finance Corporation
Limited
11. Power Grid Corporation of
India Limited
12. Rashtriya Ispat Nigam Limited
13. Rural El ectri fi cati on
Corporation Limited
14. Shipping Corporation of India
Limited
Miniratna Category - I CPSEs
1. Airports Authority of India
2. Antrix Corporation Limited
3. Balmer Lawrie & Co. Limited
4. Bharat Dynamics Limited
5. BEML Limited
6. Bharat Sanchar Nigam Limited
7. Bri dge & Roof Company
(India) Limited
8. Central Warehousi ng
Corporation
9. Central Coalfields Limited
10. Chennai Petrol eum
Corporation Limited
11. Cochin Shipyard Limited
12. Container Corporation of India
Limited
13. Dredging Corporation of India
Limited
14. Engineers India Limited
15. Ennore Port Limited
16. Garden Reach Shipbuilders &
Engineers Limited
17. Goa Shipyard Limited
18. Hindustan Copper Limited
19. HLL Lifecare Limited
20. Hindustan Newsprint Limited
21. Hindustan Paper Corporation
Limited
22. Housi ng & Urban
Development Corporati on
Limited
23. India Tourism Development
Corporation Limited
24. Indian Railway Catering &
Tourism Corporation Limited
25. IRCON International Limited
26. KIOCL Limited
27. Mazagaon Dock Limited
28. Mahanadi Coalfields Limited
29. Manganese Ore (Indi a)
Limited
30. Mangal ore Refi nery &
Petrochemical Limited
31. Mishra Dhatu Nigam Limited
32. MMTC Limited
33. MSTC Limited
34. National Fertilizers Limited
35. National Seeds Corporation
Limited
36. NHPC Limited
37. Northern Coalfields Limited
38. Numaligarh Refinery Limited
39. ONGC Videsh Limited
40. Pawan Hans Hel i copters
Limited
41. Projects & Development India
Limited
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42. Railtel Corporation of India
Limited
43. Rashtri ya Chemi cal s &
Fertilizers Limited
44. RITES Limited
45. SJVN Limited
46. Security Printing and Minting
Corporation of India Limited
47. South Eastern Coal fi el ds
Limited
48. State Trading Corporation of
India Limited
49. T e l e c o mmu n i c a t i o n s
Consultants India Limited
50. THDC India Limited
51. Western Coalfields Limited
52. WAPCOS Limited
Miniratna Category-II CPSEs
53. Bharat Pumps & Compressors
Limited
54. Broadcast Engi neeri ng
Consultants (I) Limited
55. Central Mi ne Pl anni ng &
Design Institute Limited
56. Ed.CIL (India) Limited
57. Engineering Projects (India)
Limited
58. FCI Aravali Gypsum &
Minerals India Limited
59. Ferro Scrap Nigam Limited
60. HMT (International) Limited
61. HSCC (India) Limited
62. Indi a Trade Promoti on
Organisation
63. Indi an Medi ci nes &
Pharmaceuticals Corporation
Limited
64. M E C O N Limited
65. National Film Development
Corporation Limited
66. Nati onal Smal l Industri es
Corporation Limited
67. P E C Limited
68. Raj asthan El ectroni cs &
Instruments Limited
FCI Raised 5000 Crore Rupees by
Issuing Taxable Bonds
The Food Corporation of India
(FCI) raised 5000 crore Rupees by
issuing taxable bonds backed by
Government of India Guarantee in
order to meet the additi onal
working capital requirement. The
issue of bonds was opened on 21
March 2013 and closed on 22 March
2013. These bonds are of two
tenures- 10 years (300 crore Rupees)
and 15 years (4700 crore Rupees).
The coupon rate for 10 years was
8.62 percent per annum and 8.80
percent per annum for 15 years.
Food Corporation of India (FCI) has
the Cash Credi t Li mi t wi th
Consortium of 62 banks.
At present, the Cash Credit
Limit is 54495 crore Rupees which
is secured by mortgaging entire
stock of FCI and guaranteed by
Government of India. At present, the
interest rate on Cash Credit Limit is
10.79 percent monthly whi ch
eventually translates into 11.34 on
annual basis. Annual interest saving
through issue of this bond will be
127.54 crore Rupees.
CCEA approved Four
Laning of Jorhat to
Demow section of NH-37
Economic Affairs gave its approval
for the four laning of the Jorhat-
Demow secti on of Nati onal
Highway-37 in the state of Assam
under the Special Accelerated Road
Development Programme in North
Eastern Region (SARDP-NE) Phase
A on Design, Bui ld, Finance,
Operate and Transfer (DBFOT) basis
in Build-Operate-Transfer (BOT)
(Annuity) mode of delivery. The cost
is estimated to be 874.69 crore
rupees excluding land acquisition
and other pre-constructi on
activities. The total length of road
wil l be 80 ki lometres
approximately. The project will
expedi te the i mprovement of
infrastructure in the state of Assam
and also reduce the time and cost
of travel for traffic, particularly heavy
traffic, plying between Guwahati to
Dibrugarh and Nagaon to Dibrugarh.
It will also increase employment
potential for local labourers for
project activities. The project is
covered in the districts of Golaghat,
Jorhat, Sivsagar and Dibrugarh and
passes through the towns of
Numaligarh, Dergaon, Jorhat, Jhanji,
Gorisagar, Sivsagar, Demow, Sapan,
Maran and Dibrugarh.
CCI slapped fine of 8000 Crore
rupees in 19 Cases
Competition Commission of
India (CCI) penalised 19 business
enti ties for anti -competi ti ve
practices collectively for around
8000 crore Rupees by the end of
financial year 2012-13. It was figured
out as on 31 March 2013 that CCCI
had received 347 cases regarding
vi ol ations of anti -competi ti ve
practi ces. Out of the 347
registered cases , the Commission
had closed 262 cases, while in 28
cases cease and desist orders have
been passed, also in other 19 cases,
total penalties of 8013 crore rupees
was imposed along with cease and
desi st orders. In vi ew of the
Competition Act, the CCI has got the
authori ty to issue cease and
desi st order to abstai n the
company from pursuing any anti-
competitive practices. Also in
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another major upshot a total of 55.67
crore rupees of undisbursed funds
in the last fiscal have been credited
to Consolidated Fund of India. It was
calculated that during the 2001-
2012, a sum of 637.17 crore rupees
had been credited to the
Consolidated Fund of India. To deal
with the i ssue of credi t i n an
effecti ve way, the Union
government has establ i shed
Investor Education and Protection
Funds (IEPF) by which unclaimed
funds on account of dividends,
matured deposits, matured
debentures and share application
money are transferred to the
government by the company on
completion of seven years.
National Workshop on Grid
Integration

The Mi ni ster for New &
Renewabl e Energy, Farooq
Abdullah inaugurated the National
Workshop on Grid Integration of
Renewable Energy Sources and
Energy Efficiency on 8 April 2013.
The workshop discussed the
important areas of clean energy
devel opment which are gri d
integration of renewable energy and
energy efficiency. The National
Workshop on Grid Integration of
Renewable Energy Sources and
Energy Efficiency was organised in
collaboration with United State
Department of Energy under the
United States 21st Century Power
Partnership initiative. Grid planning
i n the hi gh-renewabl e energy
penetration scenario is of strategic
importance. Also, development of
smart gri ds for enabling more
effi ci ent, resil i ent, and safe
distribution of power is another area
of action.
There are certain highlights
under the 21st Century Power
Partnership initiative, which are as
follows:
Devel opi ng & shari ng
knowledge on topic relating to
expansion of electricity sector
Strengtheni ng and
disseminating these tools to
accelerate this transformation
Improving the capacity of
experts and building expertis
Leveragi ng al l three-
knowl edge tool s and
experti se to i mprove our
policies
CCEA
Approved de-control of Sugar
Economic Affairs (CCEA) on 4 April
2013 decided to de-control sugar
and did away the levy on sugar mills
and regulated release mechanism.
This de-control will raise the subsidy
burden to 5300 crore rupees from
previous 2700 crore rupees. De-
control on sugar will not have an
impact on the sugar made available
i n the Publi c Di stri buti on
System. The de-control of sugar will
abolish the rule for sugar mills that
makes it mandatory for sugar millers
to sell sugar to the Government at a
discounted price as well as the
l imitation on the amount they
choose to sell in the open market .
13 Power Projects and 25 Oil &
Gas Blocks approved
Investment on 22 April 2013 cleared
13 power projects that involves
investment of 33000 crore rupees.
The proj ects on whi ch the
investments will be made include
one hydro and two thermal project
as wel l as ten transmi ssi on
projects. 25 oil and gas blocks with
investment commitment of about
seven billion US dollars also got
approval during the same meet. Of
these 16 blocks were given
conditional clearances, while nine
blocks were approved without any
condition.
Approval of these projects was
pending due to the objections
raised by the Ministry of Defence
over national security. During the
meet of Cabinet Committee on
Investment in New Delhi twenty
different power projects that await
clearances from the Uni on
Environment and Forest Ministry
were also reviewed. The meet was
headed by the Prime Minister of
India, Dr. Manmohan Singh.
Core Sector Growth Slumped by
2.5 Percent in February 2013
The production of eight core
sector industries decreased by 2.5
percent in the month of February
2013, for the first time in 2012-13
financi al year. Thi s happened
because of a decrease in the output
of natural gas. The biggest decline
happened in the natural gas sector
with more than 20 percent i n
February.
This was followed by coal (-8
percent), electricity generation (-4.1
percent) and crude oil (-4 percent).
The overall output growth of the
core sector i ndustri es was
witnessed at 7.7 percent in February
2012. Negative performance in
February 2013 di mini shed
cumulative growth in 11 months of
2012-13 FY ending February to 2.6
percent i n comparison to 5. 2
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percent during same period in 2011-
12 FY. Eight core industries include
electri city, cement, crude oil ,
finished steel, petroleum refinery
products, fertil i ser, coal and
electricity.
These industries have weight
of 37.9 percent in Index of Industrial
Production (IIP). During February
2013, fertiliser output decreased by
4 percent in comparison to 4.1
percent growth in February 2012.
Cement output increased by 3.9
percent i n comparison to 9. 8
percent in February 2012. Petroleum
refinery output increased by 4.3
percent in comparison to 6 percent
in February 2012. Steel production
i ncreased by 0. 5 percent i n
compari son to 8. 7 percent i n
February 2012. In January 2013,
these core industries increased by
3.1 percent.
Indian Railways Carried 1009.73
Million Tonnes of Freight during
Fiscal 2012-13
Indi an Rai lways carri ed
1009.73 million tonnes of revenue
earning freight traffic during the
financial year 2012-13 as per the
data rel eased by Mi ni stry of
Railways. The freight carried shows
an increase of 39.95 million tonnes
over the freight traffic of 969.78
million tonnes actually carried
during the corresponding period
last year, registering an increase of
4.12 per cent. During the month of
March 2013, the revenue earning
freight traffic carried by Indian
Railways was 98.20 million tonnes.
There is an increase of 4.35 million
tonnes over the actual freight traffic
of 93.85 million tonnes carried by
the Indian Railways during the same
peri od l ast year, showi ng an
increase of 4.64 per cent.
Foreign Tourist Arrivals in India
Increased by About 3 Percent
Foreign Tourist Arrivals (FTAs)
showed a growth of 2.8 percent in
March 2013 over March 2012. The
growth rate in Foreign Exchange
Earnings (FEEs) from tourism in
Rupee terms in March 2013 over
March 2012 was 21percent. The
foll owing are the i mportant
highlights regarding FTAs and FEEs
from tourism during the month of
March, 2013.
Foreign Tourist Arrivals (FTAs):
FTAs during the Month of
March 2013 were 6.40 lakh as
compared to FTAs of 6.23 lakh
during the month of March
2012 and 5.36 lakh in March
2011.
There has been a growth of 2.8
percent in March 2013 over
March 2012 as compared to a
growth of 16. 3 percent
registered in March 2012 over
March 2011.
FTAs duri ng the peri od
January-March 2013 were
20.27 lakh with a growth of 2.3
percent, as compared to the
FTAs of 19.81 lakh with a
growth of 10.9percent during
January-March 2012 over the
corresponding period of 2011.
Foreign Exchange Earnings
(FEEs) from Tourism in rupee
terms and US dollar terms
FEEs during the month of
March 2013 were Rs. 9,491
crore as compared to 7843
crore rupees in March 2012
and 5522 crore rupees i n
March 2011.
The growth rate in FEEs in
rupee terms in March 2013
over March 2012 was 21.0
percent as compared to 42.0
percent in March 2012 over
March 2011.
FEEs from tourism in rupee
terms during January-March
2013 were 30075 crore rupees
with a growth of 20.5 percent,
as compared to the FEE of
24968 crore rupees with a
growth of 31.7 percent during
FEEs in US dollar terms during
the month of March 2013 were
1. 75 bi lli on US dol lars as
compared to FEEs of 1.56
billion US dollars during the
month of March 2012 and 1.23
billion US dollars in March
2011.
The growth rate in FEEs in US
dollar terms in March 2013
over March 2012 was 11.9
percent as compared to the
growth of 27. 1 percent in
March 2012 over March 2011.
FEE from tourism in terms of
US dol lar during January-
March 2013 were 5.55 billion
US dollar with a growth of 11.6
percent, as compared to 4.97
billion US dollar with a growth
of 18. 9 percent duri ng
Ministry of Tourism compiles
monthly estimates of Foreign Tourist
Arrivals (FTAs) on the basis of data
received from major ports and
Foreign Exchange Earnings (FEEs)
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from tourism on the basis of data
received from Reserve Bank of India.
Union Government achieved
FY13 Revised Tax Collection
Target
Union government i n the
Month of March 2013 announced
that it has met i ts revi sed tax
collection target for 2012-13. With
this there is also possibility that the
tax collection may even exceed the
estimates because of better-than-
expected indirect tax collections.
Combining (direct and indirect tax
collections) the government met the
revised estimates. From the revenue
side a bit for fiscal consolidation
was done. However the final
numbers for direct taxes will be
known only after 20 April 2013. For
the year 2012-13, the Uni on
government had revised its direct
tax collections target to 5.65 lakh
crore Rupees from budget estimates
of 5.70 lakh crore Rupees. The
target for indirect taxes was revised
to 4.69 lakh crore rupees from
budget estimates of 5.05 lakh crore
Rupees.
It is also important here to note
that the fiscal deficit target for 2012-
13 of 5.2% of the gross domestic
product (GDP) has also been
achi eved. For 2013-14, budget
estimates for direct taxes and
indirect taxes are 6.68 lakh crore
Rupees and 5.65 lakh crore Rupees,
respectively.The number of tax
returns fil ed i n 2012-13 was
esti mated around 2. 15 crore
compared to 1.64 crore a year ago.
On 31March 2013 as many as 7.5
lakh tax returns were filed. The
government was trying its best to
implement the Goods and Services
Tax (GST) as early as possible.
What is Direct tax?
Direct tax is a tax paid directly
to the government by the persons
on whom it is imposed. Direct taxes
mainly comprise of corporate tax
and income tax. It is imposed upon
an individual person (juristic or
natural) or on property, as distinct
from a tax i mposed upon a
transaction.
What is Indirect tax?
An indirect tax can be referred
to taxes such as sales tax, a specific
tax, value added tax (VAT), or goods
and services tax (GST). It is a tax
collected by an intermediary (such
as a retail store) from the person
who bears the ultimate economic
burden of the tax (such as the
consumer).
CCEA approved Special
Infrastructure Scheme in LWE
affected States
Economic Affairs(CCEA) on 2 April
2013 approved the proposal of the
Mini stry of Home Affairs for
continuation of the Scheme for
Special Infrastructure (SIS) in Left
Wing Extremism (LWE) affected
states during the 12th Plan period.
The proposal includes an added
objective of upgradation and critical
gap filling of training infrastructure,
residential infrastructure, weaponry,
vehicles and any other related items
pertaining to Special Forces of LWE
affected states. The total cost would
be 373 crore rupees comprising 280
crore rupees as central government
share and 93 crore rupees as state
government share on a 75 (central):
25 (state) fundi ng pattern.The
scheme will enhance the security in
the region which would provide an
enabl ing envi ronment for
development. The scheme was
being implemented from the year
2008-09 with the broad objective to
adequately provide for critical
infrastructure requirements that are
critical to the policing and security
needs in the field, but are not
adequately or otherwise provided
for in any other scheme. During the
11th Pl an period 100 percent
funding was provided by the Central
Government to the 9 LWE affected
states for implementing various
projects under the scheme. The total
funds were released under the
scheme by the central government
to the 9 LWE affected states during
the 11th Plan period is 445.82 crore
rupees.
Government permitted Railways
to use its Land for Metro
Networks
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The Union Cabinet of India on
18 April 2013 gave its approval to
the proposal of the Indian Railways
for permitting use of its land for
crossing metro networks under
ground, on the surface as well as
elevated/over ground. The Indian
Railways will also allow opening of
Kendriya Vidyalayas on its land in
order to provide adequate
educational facilities to children of
railway staff/officials placed in
remote areas, and where
educational institutions are not
adequate. Exchange of railway land
with central/state governments,
department/local bodies for setting
up public utilities shall also be
entered into by the Indian Railways,
wherever considered mutual ly
beneficial.
for

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