Mentor july 2017 national india launches South-Asia satellite

Union Cabinet Approves Allocation of 2.5% of Central Road Fund for National Waterways Development

The Union Cabinet has given its approval for allocating 2.5% of the Central Road Fund (CRF) for the development of the National Waterways. Central Road Fund is a duty on excise and customs levied on petrol and high-speed diesel.

The allocation will provide around Rs 2000 crore annually for the development and maintenance of the National Waterways which in turn will boost inland water transport. According to the Inland Waterways Authority of India, the development of National Waterways would require Rs 25,000 crore till 2022-2023. The move is also expected to provide employment opportunities to 1.8 lakh persons in the next 5 years A number of facilities like navigation aids, night navigation facility, facilities for embarking and disembarking at designated locations, facilities for expeditious crossing of the Farakka Navigation Lock, pilotage and assistance in distress will be provided by the IWAI.

Background

The National Waterways Act, 2016 was passed in 2016 for the development and maintenance of National Waterways. The act which came into force in 12 April, 2016 has declared 111 inland waterways across 24 states as national waterways. At present five National Waterways are operational. Inland Waterways Authority of India (IWAI) is the statutory body in charge of the waterways in India. Its headquarters is located in Noida, UP. Its main function is to build the necessary required infrastructure in these waterways, surveying the economic feasibility of new projects and also administration and regulation.

Pandit Deen Dayal Upadhyaya Sanchar Kaushal Vikas Pratisthan Scheme Launched

The Minister of State for Communications Manoj Sinha has launched three new initiatives, namely, BSNL’s satellite phone service; Pandit Deen Dayal Upadhyaya Telecom Skill Excellence Award Scheme & Pandit Deen Dayal Upadhyaya Sanchar Kaushal Vikas Pratisthan Scheme.

Salient Highlights BSNL’s satellite phone service will be offered in a phased manner. In the first phase, the service will be extended to the government agencies handling a disaster, state police, railways, Border security forces and other government agencies. In the subsequent phases, the phone service would be offered to those people who are travelling in flight and ships. Global satellite phone service is modern satellite phone service. Under Pandit Deen Dayal Upadhyaya Sanchar Kaushal Vikas Pratisthan Scheme, the ministry will impart training to 10,000 people from 10 States/UTs in the first phase. States like Uttar Pradesh, Bihar, Odisha, Punjab and Haryana will get benefitted in the first phase. Further, the Department of Telecommunications (DoT) plans to established more than 1,000 Sanchar Kaushal Vikas Pratisthan in future. In addition, a new award called Deen Dayal Upadhyaya Telecom Skill Excellence Award has been instituted to recognize achievers and talents in Telecom sector.
PM Inaugurates African Development Bank’s 52nd Annual General Meeting

Prime Minister Narendra Modi has inaugurated the 52nd Annual General Meeting of the African Development Bank in Gandhinagar. The AGM will be held in from May 22-26. This is the first time that India is hosting the annual meetings of the AfDB and its sister institutions, including of finance ministers of member countries, who comprise the AfDB board of governors. India had joined the African Development Bank (AfDB) in 1983. The Annual Meetings are the Bank’s largest annual event and offers a unique forum for representatives of government, business, civil society, think-tanks, academia and the media to debate key issues on Africa’s development. The event will see the participation of 4500 delegates including finance ministers and central bank governors belonging to AfDB’s 54 member countries and 26 non-member countries. The event is expected to deepen India’s ties with African continent.

Background India is the fifth largest investor in Africa. Indo-African trade had doubled to reach USD 72 billion in the five year time period that ended in 2014-15. In 2015-16, it felled sharply to USD 56 billion. However, the presence of Indian private sector in Africa is noteworthy and amounts to USD 35 billion made in the sectors like automobile, drugs and pharmaceuticals, textiles, IT services, water treatment, petroleum refining etc. As opposed to China, India is more oriented to improve local capacities in China. For instance, India’s EXIM Bank has helped incubate similar institutions in five African countries. Africa is also important to India as it is a crucial player in the India-fostered International Solar Alliance (ISA). More than a dozen out of ISA’s 24 members belong to Africa.
Paytm Launches Payments Bank

Paytm has rolled out its Payments Bank operations by launching its first physical branch in Noida. With this launch, there are three payments bank operational in the country, the other two being Airtel Payments Bank Ltd and India Post Payments Bank Ltd. The Paytm Payments Bank will be the first bank in the country to offer cashbacks on deposits.

e As a Payments Bank, Paytm will be able to accept deposits upto Rs 1 lakh per customer in wallet and savings/current accounts. Further it can also offer other services like Debit Cards, Online Banking and Mobile Banking. It will not be allowed to lend to customers. However, it will be able to offer financial products like loans, insurance, mutual funds, pension funds etc by partnering with other financial institutions and banks.

Other Salient Features

Interest Rate Paytm Payments Bank will offer 4% interest on savings account in line with the interest rates of all leading commercial banks including State Bank of India, Bank of Baroda and ICICI Bank Ltd, which also offers 4% interest rate on savings account deposits. Cash withdrawal charges Customers will be given five free transactions in non-metro cities and three free transactions in metro cities. After the exhaustion of free limits, customers will be charged Rs 20 for each subsequent cash transactions. Debit Cards The customers will be offered a Rupay debit card at an annual subscription cost of Rs 100 plus delivery charges. The bank will also provide a cheque book at a cost of Rs 100. Online fund transfer Paytm Payments Bank will provide services such as Immediate Payment Service (IMPS), Unified Payment Interface (UPI) and National Electronic Fund Transfer (NEFT) free of cost to its customers.

Background The Reserve Bank of India (RBI) had given in principle approval to Paytm Payments Bank Ltd, an entity majority owned by One97 Communications earlier this year. In 2015, RBI had awarded ‘in-principle’ approval to Vijay Shekhar Sharma to set up a Payments Bank along with 10 others with an objective of deepening financial inclusion. The Paytm Payments Bank aims to plans to roll out operations in 31 branches and 3,000 customer service points in the first year.
RBI to Reconstitute Oversight Committee to Tackle Bad Loans

The Reserve Bank of India is set to reconstitute Oversight Committee to operationalise the banking ordinance, which was recently cleared by the Union Cabinet to amend the Banking Regulation Act for the sake of giving more powers to Reserve Bank of India for effectively dealing with non-performing assets (NPAs) in the banking sector. The existing Oversight Committee was constituted by the Indian Banks’ Association (IBA). The move is aimed at containing the bad loans which have reached to over Rs 8 lakh crore.

Salient Highlights

In addition to reconstituting the Oversight Committee (OC), the RBI has also proposed to include some more members so that it can constitute requisite benches to deal with the volume of cases referred to the committee. the existing OC constituted by the IBA has only two members. RBI is also working on a framework to facilitate consistent decision making in those cases which are referred for resolution under the Insolvency and Bankruptcy Code, 2016. RBI envisages a vital role for the credit rating agencies and is exploring the feasibility of rating assignments being determined by the RBI itself. The agencies would be paid out of a fund constituted out of contributions from the banks and the Reserve Banks. RBI envisages coordination among various stakeholders including banks, ARCs, rating agencies, IBBI and PE firms. The apex bank has already sought information on the present status of the large stressed assets from the banks.

Background Recently, the union cabinet had authorised the RBI to issue directions to any banking company or banking companies to initiate insolvency resolution process under the provisions of the Insolvency and Bankruptcy Code, 2016. The ordinance also empowered the RBI to act against loan defaulters and defaulting companies under the bankruptcy code. Amendments will enable RBI to set up multiple oversight committees to deal with NPAs.
Union Cabinet Approves Abolition of FIPB

The Union Cabinet has approved the abolition of 25 year old FIPB. Henceforth, concerned ministries will be responsible for direct approval of foreign investment proposals. The decision falls in line with Finance Minister Arun Jaitley’s proposal to scrap FIPB in this year’s Union Budget. FIPB was constituted in the mid-nineties under the Prime Minister’s Office following economic liberalisation.

Rationale Over 90% of the FDI inflows in value terms enters through automatic route. The government expects that scrapping of FIPB would help in ease of doing business. At present, only 11 sectors, including defence and retail trading needs government approval for foreign direct investment (FDI).

New Mechanism : FDI proposals would be approved by the ministries concerned by following the standard operating procedure approved by the Cabinet. Those 11 sectors that require approval would be dealt directly by the concerned ministry. In proposals related to security, the proposals will also need to require the approval of Home Ministry. Those proposals which are presently pending before the FIPB will be sent back to the ministries concerned. The FDI proposals above Rs 5,000 crore will continue to come under the purview of the Cabinet Committee on Economic Affairs (CCEA).
GST Council Finalises 4-slab Service Tax Structure

The GST Council headed by finance Minister Arun Jaitley has finalised a 4-slab service tax structure at the rates of 5, 12, 18 and 28 per cent as against the single rate of 15% levied on all taxable services. GST regime is scheduled to be implemented from July 1. In the next GST Council meeting, tax rates on gold and other precious metals will be taken up for discussion.

Luxury hotels, gambling, race club betting and cinema services will attract a tax rate of 28%. Education, healthcare and non-AC rail travel will remain exempted from the GST tax regime. However, the states will be given the option to levy additional taxes on cinema to compensate for the revenue losses entailed due to merging of entertainment tax with GST. At present, the total tax incidence on cinema including entertainment and service tax is in the range of 55%. The states need to use the legislative route if it wants to levy additional tax on cinema. States will also be permitted to levy any new tax as the taxation powers of the states have only been restricted and not abolished after the rollout of GST. Telecom and financial services will be taxed at a rate of 18%. Transport services will be taxed at the rate of 5%. Cab aggregators like Ola and Uber will have to pay 5% under GST in place of 6%. AC rail travel will attract 5% tax. Economy class air travel will attract 5 % GST while business class will attract 12%. Travelling on metro, local train and religious travel such as Haj Yatra would be exempted from GST. The e-commerce players like Flipkart and Snapdeal would be required to shell out 1% Tax Collected at Source (TCS). Non-AC restaurants and AC restaurants will attract a GST of 12% and 18% respectively. Advertisements published in newspapers will attract 5% GST. At present it is exempt from service tax.
NITI Aayog Conducts First Samavesh Meeting

NITI Aayog has conducted the first Samavesh meeting of the National Steering Group and other knowledge partners under the co-chairmanship of Amitabh Kant, CEO and Ratan P Watal, Principal Adviser, NITI Aayog. The meeting was also attended by representatives of four States- Kerala, Assam, Uttar Pradesh and Rajasthan.

The objective of the meeting was to bring together 32 premier educational and policy research institutions to boost the development process, improve institutional capacity and forge a field level interface with the community in pursuance with the Prime Minister’s call for a New India 2022, In the meeting, Memorandum of Understands (MoUs) were signed between NITI Aayog and major think tanks across the country with an aim to create an atmosphere of evidence based policy research. This is the first ever initiative undertaken by the government to bring a huge number of institutions across diverse domain themes to deliberate together to promote inclusive development of the country. This network is expected to promote efficient knowledge sharing and information exchange among all partners in order to achieve a sustainable and more inclusive development in line with the National Development Agenda, Sustainable Development Goals and the 15 year Vision, 7 year strategy and 3 year action plan. NITI Aayog has been emphasizing upon the role that can be played by the country’s Premier institutes to promote for inclusive development of the country. As a part of Samavesh initiative, NITI Aayog will launch a new link in its website that would serve as a major repository of knowledge based reports and case studies across different sectors of the economy.

NITI Aayog NITI Aayog or National Institution for Transforming India was established on January 1, 2015 through a government resolution. NITI Aayog is essentially an advisory body that seeks to provide critical directional and strategic inputs across spectrum of key elements of policy to the centre as well as to the states. NITI Ayog was established by the government as a “Think Tank” which has no power to impose policies. NITI Aayog seeks to put an end to the slow and tardy implementation of the policy by fostering inter-ministry, inter-state and centre-state coordination. It has been envisaged to follow the bottom-top development approach whereby, it would develop mechanisms to formulate credible plans to the village level and aggregate these progressively at higher levels of government.
CCEA gives Approval to New Coal Linkage Policy

The Cabinet Committee on Economic Affairs (CCEA) has approved a new coal linkage policy to ensure adequate supply of the fuel to power plants through reverse auction. The new policy will help in ensuring fuel supplies to the power plants in an organised manner.

Though, the government’s initiatives and prevailing market conditions to a large extent has helped to bring down the prices of the dry fuel and boosted the domestic production, a proper mechanism for providing coal linkages to power plants at competitive rates was lacking. The new policy will address this issue and will ensure proper sourcing of the dry fuel by the power plants as per their schedules.

Coal linkage policy

Coal linkage policy is a policy designated by the union government for the allocation of coal among thermal power plants. Inadequate availability of domestic coal coupled with high price for imported coal requires the government to allocate the available coal rationally among the power plants. This is especially necessary as the coal producing firms are public sector companies. Also, the pricing of coal is an another important issue. In this context, the government designates coal linkage policies to allocate coal among different thermal power plants.

IT Department Launches Operation Clean Money

Income Tax Department (ITD) has initiated Operation Clean Money to investigate tax evaders. As a part of the operation, the government has launched a website on ‘Operation Clean Money’ operation. Salient Highlights The Operation Clean Money’ portal has been designed by the Central Board of Direct Taxes (CBDT). Initial phase of the operation involves identification of around 18 lakh persons who have made large deposits or purchases between 9th November to 30th December 2016, which do not appear to be in line with the tax payer’s profile. The provision of online verification of these transactions is aimed at reducing the compliance cost for the taxpayers while optimising the resources of the Income Tax department. The PAN holders can view the information in the portal. The taxpayers would be allowed to submit online explanation without the need to visiti the Income Tax Office. As a reminder, e-mail and SMS will also be sent to the taxpayers for submission of online response on the portal. The IT department will make use of the data analytics to select cases for verification. After selection of cases, additional information requested would be communicated electronically. On getting the information, the portal will get dynamically updated. The taxpayers covered under this phase are required to submit their responses within 10 days in order to avoid further notice and enforcement actions under the Income Tax Act. The response provided by the tax payer would be analyzed against available information with the department. If response found justified, the verification would be closed. The verification will also be closed if the cash deposit has been declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY).

Operation Clean Money was launched immediately after government’s demonetisation drive in order to bring the tax evaders with undeclared incomes under the tax net. The income tax department has so far identified about 1.8 million persons and asked them o explain their deposits, pay tax or disclose past undisclosed income through the Pradhan Mantri Garib Kalyan Yojana.
India’s GDP Growth Forecast for 2017 Revised Downward by UN

In the report titled, World Economic Situation and Prospects, the UN has projected a 7.3% growth for India in 2017. Earlier in the report’s January edition, UN had forecasted a growth of 7.7% for the year. The revised report also has predicted an impressive 7.9% GDP growth for the year 2018 which is an increase from its January estimate of 7.6%.

Salient Highlights

According to the report, despite India’s growth being revised downward, India remains one of the fastest growing developing economy which is ahead of China. China is projected to grow at 6.5% in 2017 and 2018. The report has observed that despite temporary disruptions caused by the demonetization policy, economic conditions underpinned by sound fiscal and monetary policies remain robust. However, the report has warned that the stressed balance sheets of the Indian banks is likely to have an adverse impact on investment rebound in the country. World gross product is likely to expand by 2.7% in 2017 and 2.9% in 2018. This is an improvement over 2.3% growth experienced in 2016. The report expects a recovery in world industrial production and global trade backed by rising import demand from East Asia. The report expects firmer growth in developed economies and economies in transition, especially in East and South Asia which is likely to remain as the world’s most dynamic regions supported by robust domestic demand and supportive macroeconomic policies. As a way forward, the report calls for renewed global commitments to deepen international policy coordination in key areas such as aligning the multilateral trading system with the 2030 Agenda for Sustainable Development; enlarging official development aid; supporting climate finance and clean technology transfer; and addressing the challenges posed by large movements of refugees and migrants etc.

World Economic Situation and Prospects

World Economic Situation and Prospects is UN/DESA’s flagship report on the state of the global economy. It is a result of the joint work of the United Nations Department of Economic and Social Affairs (UN/DESA), the United Nations Conference on Trade and Development (UNCTAD) and the five United Nations regional commissions: Economic Commission for Africa (ECA), Economic Commission for Europe (ECE), Economic Commission for Latin America and the Caribbean (ECLAC), Economic and Social Commission for Asia and the Pacific (ESCAP) and Economic and Social Commission for Western Asia (ESCWA). Apart from the above organizations, the United Nations World Tourism Organization (UNWTO) also contributs to the report.

World bank’s Power Accessibility List: India jumps 73 Spots to be ranked

India has jumped 73 spots to be ranked 26th in World Bank’s electricity accessibility list. The country was ranked 99th in 2014. Out of the 18,452 villages which lacked electricity, over 13,000 has been provided access to electricity. In addition, a person applying for new electricity connection would be able to get the connection within 24 hours in areas where power infrastructure is available and in areas where there is no power infrastructure, electricity connection would be given in a week. The government’s rural electrification programme is on track for completion within the targeted 1,000 days.

Background The flagship scheme Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) was launched by Prime Minister Narendra Modi with an aim to provide 24×7 uninterrupted electricity supply to each rural household across the country by 2022. It aims to strengthen sub-transmission and distribution network to prevent power losses. It focuses on feeder separation for rural households and agricultural purpose. The other features include metering at all levels including at input points, feeders and distribution transformers and strengthening of Micro grid and off grid distribution network of rural electrification. The Ministry of Power has also launched a new app, GARV-II to provide real-time data of all six lakh villages of the country. The app is envisaged to ensure transparency in the implementation of rural electrification programme.

New IIP, WPI Series Introduced

The government has released new-look index of industrial production (IIP) and the wholesale price index (WPI) , which have been built on the new series of data. The new IIP and WPI series has been released by Chief Statistician of India and Secretary, Ministry of Statistics & Programme Implementation, and Secretary, Department of Industrial Policy and Promotion to usher in greater accuracy and improved synchronisation leading to better policies.

Salient Highlights

Instead of the earlier 2004-05, base year for the IIP and the WPI will be 2011-12. Already, the Consumer Price Index (CPI), the Gross Domestic Product (GDP) and gross value addition etc., have 2011-12 as the base year. The common base year of 2011-12 is aimed at reducing discrepancies. IIP The new series of IIP will include 809 manufacturing products and 55 mining products that are re-grouped into 521 item groups. The new series of IIP will include technology items like smart phones, tablets, LED television etc. A technical review committee has also been established to identify new items by ensuring that the series remains relevant. The committee is slated to meet at least once a year. WPI The number of items covered in the new series of the WPI has increased from 676 to 697. Overall, 199 new items have been added and 146 old items have been dropped. Under the primary articles, new vegetables and fruits like radish, carrot, cucumber, bitter gourd, mosambi (sweet lime), pomegranate, jackfruit, and pear have been added. Under the mineral group, new items like copper concentrate, lead concentrate and garnet have been added and other items like copper ore, gypsum, kaolin, dolomite, and magnesite have been dropped. Under the manufacturing items, 173 new items including conveyer belt, rubber tread, steel cables, tissue paper, and wooden splint have been added, while 135 items like khandsari, poppadom, and video CD players have been taken out. Under the new series of WPI, weight of manufactured items has decreased to 64.2 per cent from 64.9 per cent in old series. Similarly, the weight of fuel and power has decreased to 13.1 per cent from 14.9 per cent. On the other hand, the weight of primary items have increased to 22.6 per cent from 20.1 per cent.