CAS 2013 Economic - Sakshi...Mukesh Ambani 18th richest man in world Indian business magnate Mukesh...

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2013 Current Affairs Special – Economic Affairs

January

SEBI suggested an omnibus set of measures

Proposing a major overhaul of corporate governance norms for listed companies, the

Securities and Exchange Board of India (SEBI) has suggested an omnibus set of

measures that align pay of top-level executives in companies with their performance and

providing greater powers to minority shareholders. It also makes it necessary to expand the

size of the boards by excluding nominee directors from the definition of independent directors.

SEBI has also proposed a new concept of ‘Corporate Governance Rating’ by independent

rating agencies to monitor the level of compliance by companies and regular inspection by the

SEBI and stock exchanges. The measures incorporate the Adi Godrej committee report, the

Companies Bill 2012 and SEBI’s own corporate governance guidelines in one document.

SEBI said institutional investors should show more involvement in the boards where they have

nominee directors instead of just protecting their investments. SEBI has proposed to exclude

the nominee directors from the category of independent directors to align the provisions of

Clause 49 with the bill.

Government mulling steps to reduce gold imports: FM

The government is considering steps to reduce gold import by making it more expensive,

Finance Minister P. Chidambaram said on 2nd January.

"Demand for gold must be moderated...We may be left with no

choice but to make it more expensive to import gold. The

matter is under government consideration," he told. Gold

import is a major constituent of India's rising Current

Account Deficit (CAD). The CAD, which represents the

difference between exports and imports after considering cash remittances and payment,

widened to a record high of 5.4 per cent of GDP, or US $ 22.3 billion, in the July-September

quarter. In value terms, gold imports stood at US$ 20.2 billion in the April-September period of

the current fiscal, a decline of 30.3 per cent over the corresponding period a year ago. For the

entire 2011-12 fiscal, gold imports stood at US $ 56.2 billion. The decline was mainly on

account of increase in customs duty on gold imports by government in January and March

2012.



Mukesh Ambani 18th richest man in world

Indian business magnate Mukesh Ambani is the 18th richest person in the world with a

personal wealth of US $ 24.7 billion in 2012, according to the Bloomberg Billionaires Index, a

daily ranking of the world's 100 wealthiest individuals. Mexican telecommunications

magnate Carlos Slim remained the world's richest person last year holding a personal

fortune of more than US $ 70 billion, it said. Ambani, 55, Chairman and MD of Reliance

Industries, has also retained his position as the world's richest Indian for the sixth year in a

row and increased his ranking from 19th to 18th position and personal wealth from US $ 21

billion to US $ 24.7 billion in the world, the Index showed. The world's top 100 billionaires got

even richer in 2012, with their total wealth rising by around 15% to US $ 1.81 trillion, it said.

Microsoft founder Bill Gates and the founder of fashion retailer Zara, Amancio Ortega,

rounded out the top three spots, with wealth estimated just over and just under $60 billion,

respectively. Renowned investor Warren Buffett slipped to fourth place, but added around $5

billion to his fortune over the year despite donating a substantial amount to charity last year.

IKEA founder Ingvar Kamprad saw his net worth rising 16.6% to approximately US $ 40

billion, putting him in fifth place on Bloomberg's billionaire index.

5 % cut in defence budget

The government has imposed around five per cent cut in the Rs. 1.93 lakh crore defence

budget this year in view of economic slowdown. The Ministry of Finance recently conveyed to

the Defence Ministry that there would be a cut of around Rs. 10,000 crore in the Rs. 1.93 lakh

crore allocated for the defence sector, Ministry officials said here. After the cut in budget,

several key acquisition plans of the three forces including the procurement of 126 combat

aircraft for the IAF are expected to be pushed for the next fiscal, they said. Defence Minister A.

K. Antony had given indications in this regard recently when he said that the Ministry would

be struggling to get even the allocated amount.

Center Doubled 12th Plan Outlay for S and T Ministry

Union Science and Technology Minister S. Jaipal Reddy on 4th January declared that the

Centre’s allocation for the Science, Technology and Earth Sciences Ministry had been doubled

for the 12th Plan period. The declaration came in the inauguration ceremony of Children

Science Congress as part of the 100th Indian Science Congress where Jaipal Reddy

announced that in the 12th Five-Year Plan, the combined planned allocation for science and

technology and earth sciences had been nearly doubled from Rs. 33,000 crore in the previous

Plan period to around Rs. 60,000 crore in the present 12th plan period. He also stated that the

newly announced Science, Technology and Innovation Policy would emphasize on the



importance of greater innovation and suggested that there is a need for integrating science,

research and innovation to develop valuable technologies.

EGM decided to auction 4 telecom circles in 1800 MHz Band

The Empowered Group of Ministers (EGoM) decided to auction the four telecom circles in

1,800 MHz band, which failed to win bidders in the November, 2012 auction on 7th January.

The EGoM also decided to reduce the reserve price fixed in November by 30 per cent. The

auction is planned in March 2013. Of the 1800 MHz Band the quantum of spectrum that would

be put forward for auction in different states and cities are 15 MHz in Mumbai and Delhi and 10

MHz in Rajasthan and Karnataka. There also are provisions of getting an extra topping of 3.75

MHz as was in November 2012

Fitch's threat of India's rating downgrade fails to ruffle govt.

Fitch Ratings has warned that India still faced the risk of a sovereign credit rating downgrade

despite the wave of reform measures announced in September last year, and has said that the

upcoming budget will indicate the government's commitment to fiscal consolidation. But the

government brushed aside the warning, saying it was taking steps to address the concerns of

rating agencies. Standard & Poor (S&P) has also had last month reiterated the possibility of

a downgrade and on 8 January, Fitch warned that the twin deficits, on the fiscal and current

account, were cause for concern. In June last year, Fitch had revised the outlook on India's

BBB- rating to negative, joining S&P that had in April said that India might become the first

BRIC nation to lose the coveted investment grade rating. Any downgrade will send India's

sovereign debt into junk grade, which could weaken capital flows and raise the cost of

borrowing overseas for Indian companies.

SEBI notifies regulations to set up SRO for MF distributors

In a move to regulate mutual fund distribution business, SEBI on 9th January said it has

notified regulations to set up a Self Regulatory Organisation (SRO) to monitor distributors

of mutual fund and portfolio management products. “The Securities and Exchange Board of

India (SEBI) hereby appoints the date of this notification as the date on which the regulations

shall come into force in relation to distributors engaged by asset management companies of

mutual funds and distributors engaged by portfolio managers,” the regulator said in its

notification dated January 8.In August, last year, SEBI in its board meeting had approved the

proposal made by its Mutual Fund Advisory Committee (MFAC), to set up an SRO to

regulate the Mutual Fund distribution business. The decisions followed concerns about mutual

fund distributors in India not being regulated and there having been various complaints against



them for mis-selling of products to the investors. Presently, the distributors need to register

with Association of Mutual Funds in India (AMFI) and their registration can be cancelled

by AMFI for violation of a prescribed Code of Conduct or for any other mala-fide practice.

CCEA approved the disinvestment of 10% paid up equity in EIL

The Cabinet Committee on Economic Affairs (CCEA) on 10th January, approved the

disinvestment of 10 per cent paid up equity in

Engineers India Ltd. (EIL) out of its equity

capital holding of 80.40 per cent through a

prospectus based Further Public Offering

(FPO), in the domestic market as per SEBI Rules

and Regulations. After this disinvestment,

Government of India’s shareholding in the

company would come down to 70.40 per cent. The

paid up equity capital of the company, as on 31st March, 2012 is Rs. 168.47 crore.

Cabinet approved a proposal of infusing Rs. 12,517 crore in PSB’s

The Union Cabinet approved a proposal of infusing Rs. 12,517 crore in public sector

banks on 10th January 2013, so that they could enhance the lending activity and meet the

capital adequacy norms. As per the Finance Minister P. Chidambaram about 9 to 10 public

sector banks are going to be benefitted from the capital infusion programme. Also, the name of

the banks, the amount for each bank and terms of the conditions will be decided in

consultation with them at the time of infusion. The government is supposed to provide capital

funds to PSBs during the year 2012-13 to the tune of Rs. 12,517 crore to maintain their Tier-l

CRAR (capital to risk-weighted assets ratio) at comfortable level. The need for that is to

make the PSU remain obedient with the stricter capital adequacy norms under BASEL-III as

well as to support internationally active PSBs for their national and international banking

operations undertaken through their subsidiaries and associates. In principle approval of the

Cabinet is accorded for need based additional capital infusion in PSBs from the year 2013-14

to 2018-19 for ensuring compliance to Capital Adequacy norms under Basel- III.

GoI launched new Project “Lakshya”

Dr M. Veerappa Moily, Minister of Petroleum and Natural Gas, launched new IT/web

enabled initiative Project Lakshya in domestic LPG business focusing on greater customer

empowerment, better subsidy administration, enhanced transparency in the distribution chain

along with a slew of IT-based customer service initiatives, on 11th January. Speaking on the

EIL is a listed “Miniratna” Public Sector Enterprise under the administrative control of the Ministry of Petroleum and Natural Gas. It is one of India’s largest companies to provide design, engineering and related project management and consultancy services for the hydrocarbon sector and the process plants industry in the country.



occasion, he said, currently the three oil marketing companies (OMCs) together home-deliver

over 30 lakh cylinders everyday across the length and breadth of the country, including far-

flung areas like Leh and the Andaman and Nicobar Islands, making it a mammoth and

challenging marketing exercise. With the launch of Transparency portal, the Minister said,

customers have already been empowered to know their consumption and enabled civil society

activists to look through and flag anomalies in the distribution of LPG cylinders. This effort has

started bearing fruit.

India’s first ‘Technology Innovation Research Centre’ likely to set up

The Apparel Training and Design Centre (ATDC) under the Education and Training

Initiatives of Apparel Export Promotion Council (AEPC) is going to set up India’s first

‘Technology Innovation Research Centre’ at the ATDC-Training of Trainers’

Academy, Gurgaon, in collaboration with JUKI India Pvt. Ltd. This Centre will demonstrate

cutting-edge technologies and undertaking applied research. The ATDC-JUKI TECH

Innovation Centre is an important initiative to strengthen the Apparel Industry, especially

the SMEs, to adopt new technologies for increasing productivity, efficiency and quality for

better price realisation and better global competitiveness. The Centre will be launched by

Textiles Secretary Kiran Dhingra on 17th January. The ATDC-JUKI TECH Innovation

Centre will be a platform where industry and academia can focus on showcasing and

demonstrating leading edge technology and carrying out applied ‘Research’ which is a key

word in SMART (Skills for Manufacturing of Apparel through Research and Training).

Applied Research combined with technology training can become a potent force to catalyse

advancement of apparel production techniques and praxis that would be relevant for India’s

apparel manufacturing environment.

UN estimated the Indian economy to grow by 6.1 % in 2013

Amidst a string of varying growth numbers being projected by multilateral institutions, a report

by the United Nations has estimated the Indian economy to grow by 6.1 per cent in

2013, marking a recovery from the decade-old slowest pace of 5.5 per cent in 2012. The UN,

in its report titled ‘World economic situation and prospects 2013’ (WESP), released in

New Delhi on 16th January, said: “GDP growth in India will accelerate to 6.1 per cent in 2013

and 6.5 per cent in 2014 as a result of stronger growth of exports and capital investment...

Investment demand is expected to respond to a more accommodative monetary policy stance

and slightly improved business confidence.

“The WESP noted that India’s economy, representing almost three quarters of the South Asian

region’s GDP (gross domestic product), slowed markedly in the past years with annual



growth declining from more than 9 per cent in 2010 to 5.5 per cent in 2012, the slowest pace

in 10 years. Releasing the report, United Nation’s ESCAP (Economic and Social

Commission for Asia and the Pacific) Chief Economist Nagesh Kumar, however, viewed

that India had a huge growth potential in the long term. As for the South Asian region as a

whole, the report pointed out that economic growth during 2012 also fell to its lowest pace in a

decade. After growing by 5.8 per cent in 2011 South Asia’s gross domestic product expanded

by only 4.4 per cent in 2012.

The Implementation of GAAR from 1 April 2016

The implementation of General Anti Avoidance Rules (GAAR) was deferred by two years by

the government of India. It will now come into force from 1st April 2016. Earlier, the provisions

of GAAR were to be implemented from 1 April 2014. GAAR will not apply to those Foreign

Institutions Investors, FIIs who are not taking any benefit under an agreement under the

Income Tax Act. Besides, it will also not apply to non-resident investors in FIIs. The

Parthasarathi Shome Committee in its final report submitted to Finance ministry on 30th

September 2012 had suggested that GAAR should be deferred by three years. The report was

made public on 14th January 2013. Union Government accepted major recommendations of

Shome Committee with some modifications. The Shome Committee was set up by Prime

Minister Manmohan Singh in July 2012 to address the issue of GAAR.

Ban on export of processed food products lifted

Cabinet committee on economic affairs (CCEA), on 17th January, lifted ban on exports of

processed foods and value added agricultural products. These include wheat of muslin flour,

cereal flours, grouts, meal pellets and grains, milk products including casein and its products,

butter and other fat derivatives from milk and dairy spread, cheese and curd and value added

products of onion and peanut butter. The move will give a push to India’s sagging merchandise

exports and is estimated to add US $ 5 billion to exports

over the next two year with West Asia identified as a key

market for processed food from India. Besides, it will help

Indian exporters to move up the value chain as well as

create additional employment in the country. At present,

India’s major agricultural exports comprise of raw or

primary produce and unprocessed or semi-processed

agriculture commodities, which are susceptible to restrictions due to various reasons such as

bad weather conditions, deficient or delayed rainfall and food security issues.



“The exports of processed and value added products constitute a very miniscule portion of the

overall exports, and hence their continuation would not affect the availability in the domestic

market owing to very marginal processing capacity in the country. Always open policy of this

sector will not only help reduce wastage of perishable products but also encourage value

addition,” a statement from CCEA said. For long, there has been no consistent policy on

exports of agricultural products in India, as a result of which the overseas buyers were

reluctant to import from India to meet their domestic requirement year-after-year. Even for

the raw or primary agricultural products, India has been adopting switch-on and switch-off

approach citing issues of domestic food security. Industry experts feel that the decision will

now bring clarity on India’s stand on exports of processed food and agricultural products and

help generate additional exports in coming years.

Cabinet Approved 50% Reduction in the prices for CDMA Spectrum

The Union Government approved a 50 per cent reduction in the reserve price of spectrum

used by CDMA mobile operators on 17th January 2013. Spectrum auction, for both GSM and

CDMA, is supposed to be completed by 31st March 2013 and thereafter the markets will decide

how much revenue the government will get. With the reduction of reserve price to 50 per cent

pan-India 5MHz of 800 MHz spectrum (CDMA radio waves) will now cost Rs. 9,100 crore. It

was witnessed that auction of CDMA spectrum that took place in November 2012 did not

attract bidders due to high reserve price. The reserve price set was 11 times higher than what

operators paid in 2008. Earlier CDMA spectrum price fixed by government was priced at 1.3

times more than the GSM spectrum in 1,800 Mhz band. The Cabinet has already approved a

30 per cent cut in the reserve price of 1,800 MHz band spectrum used for offering GSM

services. The Supreme Court has recently allowed the companies whose licenses were

cancelled to continue operations till 4th February 2013 when the government is supposed to

inform it of the final reserve or minimum price for the spectrum sale.

Import Duty on Gold and Platinum increased by 2 per cent

The Government of India increased import duty on gold and platinum by 2 per cent on

21st January 2013; from present 4 per cent to 6 per cent. The step of the Government came in

effect to control the import of the precious metals leading a widening gap in the Current

Account Deficit of the country as the import of gold has shown tumbling effects on different

economic fronts and has also played a major role in distortion of the balance of trade. The

Government has also linked the Gold ETFs (Exchange Traded Funds) along with the Gold

Deposit Schemes, so that the supply of the physical gold in the market can be increased.

These regulations and increased in the import duty would also show changes on the customs



duty as well as the excise duty of gold ores, refined gold, gold bars and more. Within a year,

the import duty on gold has been hiked for third time. Before this, the government increased

the duty on import of gold from 1 per cent to 2 per cent in January 2012 and it doubled the

import duty on standard gold from 2 per cent to 4 per cent in March 2012.

Government to auction 700 Mhz spectrum for 4G services

The government on 21 January said it will auction spectrum in 700 Mhz band, which is used

for offering high-speed Internet services through fourth generation technologies, in 2014. "We

are going to auction the 700 band in any case by 2014," Telecom Minister Kapil Sibal said

during the commissioning of country's first lab for measuring specific absorption rate (SAR)

for mobile handsets. The 700-Mhz spectrum band ranges from 698 Mhz to 806 Mhz and has

been identified by the International Telecommunication Union for telecom services.

100 important stations get coaches with bio-toilets

Aiming at providing hygienic condition at railway premises, the Railways has decided to

undertake cleanliness drive at about 100 important stations across the country and equip

maximum number of coaches with bio-toilets on 22nd January. Railway Minister Pawan

Kumar Bansal has written to General Managers of all zonal railways to ensure cleanliness at

100 stations with more than 10 lakh population and with religious and tourists importance. The

stations have been identified for taking up cleanliness drive in the first phase, Railway

Minister Pawan Kumar Bansal said at the Consultative Committee meeting held in New

Delhi on 22 January. The agenda of the meeting was 'Railways ongoing projects'. Bansal said

that more and more coaches will be provided with bio-toilets and the washing aprons are being

provided at the stations. Emphasising on cleanliness, he also informed the committee that a

team of officers of Railway Board will be formed who will go around the country to undertake

inspections to ensure cleanliness. Referring to the catering services, the minister said that

efforts are on to provide quality catering services at station and in running trains. The

committee was informed that new tenders are being floated and base kitchens are being

constructed to cook food in the most hygienic environment. Expressing concern over the

accidents at unmanned level crossings, Bansal said that railways is constantly working to

eliminate such crossings and cooperation of state governments is being sought in this regard.

Coca-Cola announced $ 100,000 fund for WEF

Beverages giant Coca-Cola on 22nd January announced US $ 100,000 fund for a WEF initiative

aimed at helping young people take action on issues they care about in more than 200 cities

worldwide. The Global Shapers Community, set up by the World Economic Forum in



2011 with the aim of engaging young people as active agents of change, is also supported by

DST Global Advisors and Reliance Industries. The funding is offered in a competition

aimed at more than 1,700 entrepreneurs, social activists and "positive disruptors" who make

up the 'Global Shapers Community', WEF said in a release.

IMF projected India’s growth rate at 5.9 per cent

The International Monetary Fund (IMF) on 23rd January 2013 projected that the

economic growth rate of India in 2013 would be 5.9 per cent. The IMF also projected an

increased growth rate of 6.4 per cent for 2014 looking forward towards the gradual

strengthening of the global expansion in India’s

context. In its update at the World Economic

Forum, the IMF also forecasted that the global

economic growth rate would be 3.5 per cent, little

higher than the 3.2 per cent estimated earlier. As per

the report of IMF, uncertainty in policy making and

supply bottlenecks were one of the most visible causes

that hampered the growth aspects of the economies like India and Brazil. It also stated that

the scopes of easing the policy to any further extent have also gone down in these countries.

FDI inflow touched two-year low in November 2012

The inflow of foreign direct investment (FDI) in India decreased to around 2-year low at US

$ 1.05 billion in November 2012 because of uncertainties of the global economies. Back in

November 2011, the FDI was worth US $ 2.53 billion. The Department of Industrial Policy

and Promotion (DIPP) announced that from

April-November period 2012-13, inflows of FDI

decreased by around 31 per cent to US $ 15.84

billion from US $ 22.83 billion in 2011-12.

Economic slowdown as well as absence of

political consensus on FDI-associated issues is the

main causes of decline in FDI inflow. During 2012-

2013, the sectors which remained on the positive side of the FDI inflows included services,

hotel and tourism, metallurgical, construction and automobile.

World Growth Rate would be 3.5 per cent in 2013: IMF

International Monetary Fund (IMF) in at update to World Economic Outlook (WEO) on

23rd January 2013, projected that the global economic growth rate would be 3.5 per cent in

The IMF is an organization of 188 countries that supposed to work for fostering the global monetary cooperation, promote high employment and sustainable economic growth, facilitate international trade, secure financial stability and reduce poverty around the world.

In India, maximum FDI inflow came from Mauritius (US $ 7.2 billion), Japan (US $ 1.56 billion), Singapore (US $ 1.5 billion) the Netherlands (US $ 1.09 billion) and the UK (US $ 615 million). The FDI declined to a low level earlier in January 2011 when the inflow was recorded to be US $ 1.04 billion.



2013. The update mentioned that the global economic growth would strengthen gradually as

the limitations of the economic activities have seen a positive note with the start of the year.

Some of the major projections of IMF are…

• Global growth would reach 3.5 per cent in 2013, from 3.2 per cent in 2012.

• Crisis risks would narrow down but the downside risks will remain crucial.Main sources

of growth would be the emerging markets, developing countries and the United States.

e-Biz Portal to provide one Stop Shop for all investors

The Union Minister for Commerce on 28th January 2013 launched an eBiz portal at the CII

Partnership Summit in Agra. This Government-to-Business (G2B) portal is developed by

Infosys in Public Private Partnership (PPP) mode. This Mission Mode Project will mark a

paradigm shift in the Government’s approach to

providing Government-to-Business (G2B) services

for India’s investor and business communities. In

order to enable businesses and investors to save time

and costs and improve the business environment in

the country, an online single window was

conceptualized in the form of the eBiz Mission Mode

Project under the National e-Governance Plan. E-

Biz will create a 24x7 facility for information and services and will also offer joined-up services

where a single application submitted by a customer, for a number of permissions, clearances,

approvals and registrations will be routed automatically across multiple governmental agencies

in a logical manner.

RBI slashed Repo Rate to 7.75 %

Reserve Bank of India (RBI) slashed the short-term lending rate called Repo Rate to 7.75

per cent and Cash Reserve Ratio to 4 per cent on 29th January 2013. The apex bank slashed

its key interest rates by 0.25 per cent and released Rs. 18,000 crore additional liquidity into

the system to perk up growth through reduced cost of borrowing. In its third quarter monetary

policy review, the RBI surprised the market by cutting repo rate by 0.25 per cent to 7.75 per

cent and Cash Reserve Ratio (CRR) by similar margin to 4 per cent. Unveiling the policy

review in Mumbai, RBI stated that the stance of monetary policy in this review is intended to

provide an appropriate interest rate environment to support growth as inflation risks moderate.

The eBiz Project is the first of its kind ever implemented in the country. It marks the highest level of maturity in web-based e-Governance applications as it strives to achieve horizontal integration across various verticals of Central government, State governments and para-statistical agencies.



CRR cut will have impact on long term interest rates. The RBI, however, has reduced

the growth projections for the current financial year to 5.5 per cent from its earlier estimate of

5.8 per cent. The repo rate, which was cut last in April 2012, stands revised at 7.75 per cent

with immediate effect, while the liquidity infusing CRR stands at 4 per cent effective 9th

February. Inflation has been the prime inhibiting factor that has prevented the RBI from

cutting repo rate in the last nine months, which have seen a host of liquidity infusing measures

like a cut of 1.75 per cent in CRR, government bond buybacks and a one percentage point cut

in Statutory Liquidity Ratio.

Food grain production expected to be around 250 million tonnes

India’s overall food grain production in the 2012-13 crop marketing year that will end in

June 2013 was expected to be around 250 million tonnes, which is nine million tonnes less

than last year’s revised record output of 259 million tonnes, due of low production during the

kharif sowing season, Agriculture Secretary Ashish Bahuguna said on 29th January.

According to the government’s first advanced estimate, food grain production during the

2012-13 kharif season is expected to be almost 9.8 % less than the kharif production of

2011-12 because of an uneven southwest monsoon in most parts of the country. However,

production of wheat during the ongoing rabi harvest season is expected to near 2011-12’s

harvest of around 94 million tonnes.

Economic growth for fiscal 2011-12 expected to 6.2%

Government on 31st January revised the economic growth for fiscal 2011-12 to 6.2%

from the earlier estimate of 6.5%. However, as per the first revised estimates of national

income, consumption expenditure, saving and capital formation, the GDP (Gross Domestic

Product) for the fiscal 2010-11 has been revised upwards to 9.3 per cent from 8.4 per

cent."GDP at factor cost at constant

(2004-05) prices in 2011-12 is

estimated at Rs. 52, 43,582 crore as

against Rs. 49, 37,006 crore in 2010-

11, registering a growth of 6.2% during

the year as against a growth of 9.3 per

cent in the year 2010-11," the estimates

showed. The estimates were released by

the Central Statistics Office (CSO), Ministry of Statistics and Programme

Implementation for 2011-12, along with second revised estimates for the year 2010-11 and

third revised estimates for 2009-10. At current prices, CSO said that GDP in 2011-12 is

The CSO said that the per capita income in real terms (at 2004-05 prices) is estimated at Rs. 38,037 for 2011-12 as against Rs. 36,342 in 2010-11, registering an increase of 4.7% during the year, as against an increase of 7.2% during the previous year. The per capita income at current prices is estimated at Rs. 61,564 in 2011-12 as against Rs. 54,151 for the previous year, depicting a growth of 13.7%, as against an increase of 17.1% during the previous year.



estimated at Rs. 83,53,495 crore as against Rs. 72,66,967 crore in 2010-11, showing an

increase of 15%, as against an increase of 19% in the previous fiscal.

Government approved Rs. 200 crore revival package to SIL

The government on 31st January approved the Rs. 200 crore revival package of ailing Lucknow-

based public sector undertaking Scooters India Ltd. (SIL) that includes debt waiver of

nearly Rs. 112 crore. The Cabinet also decided to hike salaries of

employees of the two-wheeler maker. Their retirement age has

also been increased to 60 years. According to an official

statement, the revival package will result in improvement of

SIL's productivity through enhanced capacity utilization and

improvement in efficiency. The automobile company has been

incurring losses since 2002-03. In March 2009, the company was declared sick. SIL's net loss

stood at about Rs. 20 crore during the 2011-12 fiscal.

CCEA approved ONGC Videsh Limited to acquire Participating Interest

The Cabinet Committee on Economic Affairs (CCEA) on 31st January, gave its approval to

authorise ONGC Videsh Ltd. (OVL) to acquire Participating Interest (PI) owned by Hess

Corporation's wholly-owned subsidiaries in the upstream and midstream oil and gas assets in

Azerbaijan comprising 2.7213 % PI in the Azeri Chirag Guneshli (ACG) contract area and

2.36 per cent PI in Baku-Tbilisi-Ceyhan (BTC) pipeline for an investment of US $ 1,001

million, plus certain adjustments including working capital, interest from the economic date

and other defined elements on cash sink basis, and also authorized OVL to incur expenses so

as to keep the total exposure up to the approved amount i.e. US $ 1,001 million at all times.

February

Maharatna status to BHEL and GAIL

The Union Government on 1st February granted Maharatna status to Bharat Heavy

Electricals Ltd. (BHEL) and GAIL Ltd. (GAIL), a development which will provide them

greater financial and functional autonomy and also ensure better valuation for shares of the

two PSUs. A Maharatna firm can take investment decision of up to Rs. 5,000 crore without

going to the government. For Navratna firms, this limit is Rs. 1,000 crore. The apex

committee, headed by Cabinet Secretary Ajit Kumar Seth, has approved both the proposals

for awarding the status to these two PSUs as they meet the eligibility criteria to qualify for the

status.

Incorporated in 1972, SIL initially manufac-tured scooters under the brand name Vijai Super for the domestic market and Lambretta for overseas markets.



Diesel prices to be hiked 40-50 paise every month

Diesel prices will be hiked by 40-50 paise per litre every month till losses on the nation's most

used fuel are completely wiped out, Oil minister M. Veerappa Moily said on 2nd February. The

government had on January 17th decided to move towards deregulating or freeing diesel prices

from state control and gave powers to state-owned oil firms to raise prices in small measures

every month till all of their losses are wiped out.

SBI will open its second branch in China

State Bank of India (SBI) will open its second branch in China in the north-eastern port city

of Tianjin in February, to cater to the growing trade with India, particularly from the northern

part of the country. While China’s more prosperous southern provinces drive much of the

annual US $ 66 billion bilateral trade, SBI officials believe the increasing trade from northern

China and particularly through the fast-developing trade hub of Tianjin will provide a platform

to grow the operations of the bank’s second China branch. SBI is also considering opening a

third office in the southern port city of Guangzhou. SBI Shanghai, in 2010, became the first

Indian bank to acquire a licence from Chinese authorities to do business in the local Renminbi

(RMB) currency. Dinesh Sharma, CEO of the SBI Shanghai Branch said the Tianjin

branch would open towards the end of February. Under Chinese rules, banks have to go

through a five-year waiting period before they can acquire an RMB licence. The Tianjin branch

will open with US $ 47 million capital. SBI Shanghai operates with US $ 76 million capital,

including 300 million RMB.

NTPC signs loan pact worth $250 million with SBI

State-run NTPC on 6 February said it has signed a loan agreement worth US $ 250 million

with State Bank of India and Japan-based Mizuho Corporate Bank for financing its expansion

plans. "NTPC has signed a term-loan agreement for US $ 250 million (approximately Rs. 1,327

crore) with the New York branch of State Bank of India and Singapore branch of Mizuho

Corporate Bank as lead arrangers and lenders," the company informed the stock exchanges

today.

Rs. 38,500 crore for Naxal-affected districts

The ambitious rural road scheme received a boost on 7th February, with the government

clearing projects worth an estimated Rs. 38,500 crore to connect left out habitations including

those in 82 Naxal-affected districts and areas of Arunachal Pradesh bordering China. The

Union Cabinet, chaired by Prime Minister Manmohan Sigh, gave "in principle" approval for



connecting all habitations with a population of 100 tribals and above 82 Naxal-hit districts with

all-weather roads under the Centre's flagship programme PMGSY. In case of multi-connectivity

at the block level, identified by the Union Home Ministry, it is not compulsory that tar-paved

roads should be constructed in such areas where Maoists target metalled roads used by

security forces. At present, the Pradhan Mantri Gram Sadak Yojana (PMGSY), envisages

connecting all habitations with a population of 250 peRs.ons and above in tribal areas in

Naxal-affected districts. The Cabinet also gave nod to connect unconnected small villages

with population below 250 in strategically important districts of Arunachal Pradesh bordering

China with all- weather roads. An amount of Rs. 1,200 crore is expected to be cost for

providing new connectivity to the habitations in the border districts of Arunachal Pradesh. Out

of the state's 17 districts, 10 districts are bordering China and Myanmar and the small

habitations in these districts will be major beneficiaries.

CSO releases national income at constant and current prices

The Central Statistics Office (CSO), Ministry of Statistics and Programme

Implementation on 7th February, has released the advance estimates of national income at

constant (2004-05) and current prices, for the financial year 2012-13. These advance

estimates are based on anticipated level of agricultural and industrial production, analysis of

budget estimates of government expenditure and performance of key sectors like, railways,

transport other than railways, communication, banking and insurance, available so far. The

advance estimates at current prices are derived by estimating the implicit price deflators

(IPDs) at sectoral level from the relevant price indices. The salient features of these estimates

are detailed below:

ADVANCE ESTIMATES OF NATIONAL INCOME, 2012-13 estimates Gross Domestic

Product (GDP) at factor cost at constant prices (2004-05) in the year 2012-13 is likely to

attain a level of Rs. 55,03,476 crore, as against the first Revised Estimate of GDP for the

year 2011-12 of Rs. 52,43,582 crore, released on 31st January 2013. The growth in GDP

during 2012-13 is estimated at 5.0 per cent as compared to the growth rate of 6.2 per cent in

2011-12.

Agriculture: The ‘Agriculture, Forestry and Fishing’ sector is likely to show a growth of

1.8 % in its GDP during 2012-13, as against the previous year’s growth rate of 3.6 %.

According to the information furnished by the Department of Agriculture and Cooperation

(DAC), which has been used in compiling the estimate of GDP from agriculture in 2012-13,

production of food grains is expected to decline by 2.8 % as compared to growth of 5.2 % in

the previous agriculture year. The production of cotton and sugarcane is also expected to



decline by 4.0 % and 6.5 %, respectively, in 2012-13. Among the horticultural crops,

production of fruits and vegetables is expected to increase by 3.5 % during the year 2012-13

as against 5.1 % in the previous year. Industry The manufacturing sector is likely to show a

growth of 1.9 % in GDP during 2012-13. According to the latest estimates available on the

Index of Industrial Production (IIP), the index of manufacturing and electricity registered

growth rates of 1.0 % and 4.4 %, respectively during April-November, 2012-13, as compared

to the growth rates of 4.2 % and 9.5 % in these sectors during April-November, 2011-12. The

mining sector is likely to show a growth of 0.4 % in 2012-13 as against negative growth of 0.6

% during 2011-12. The construction sector is likely to show a growth rate of 5.9 % during

2012-13 as against growth of 5.6 % in the previous year. The key indicators of construction

sector, namely, cement production and steel consumption have registered growth rates of 6.1

per cent and 3.9 per cent, respectively during April-December, 2012-13.

Services: The estimated growth in GDP for the trade, hotels, transport and communication

sectors during 2012-13 is placed at 5.2 per cent as against growth of 7.0 per cent in the

previous year. This is mainly on account of decline of 3.4 per cent and 4.8 per cent

respectively in passengers and cargo handled in civil aviation and decline of 3.1 per cent in

cargo handled at major sea ports during April-November, 2012-13. There has been an increase

of 4.3 per cent in stock of telephone connections as on November 2012. The growth rate of

'Community, Social and Personal services' during 2012-13 is estimated to be 6.8 per cent.

National Income: The net national income (NNI) at factor cost, also known as national

income, at 2004-05 prices is likely to be Rs. 47,64,819 crore during 2012-13, as against the

previous year's first Revised Estimate of Rs. 45,72,075 crore. In terms of growth rates, the

national income registered a growth rate of 4.2 per cent in 2012-13 as against the previous

year’s growth rate of 6.1 per cent.

Per Capita Income: The per capita income in real terms (at 2004-05 prices) during 2012-

13 is likely to attain a level of Rs. 39,143 as compared to the first Revised Estimate for the

year 2011-12 of Rs. 38,037. The growth rate in per capita income is estimated at 2.9 per cent

during 2012-13, as against the previous year's estimate of 4.7 per cent.

Estimates at Current Prices Gross Domestic Product: GDP at factor cost at current prices

in the year 2012-13 is likely to attain a level of Rs. 94,61,979 crore, showing a growth rate of

13.3 per cent over the first Revised Estimate of GDP for the year 2011-12 of Rs. 83,53,495

crore.



National Income: The NNI at factor cost at current prices is anticipated to be Rs. 83,68,571

crore during 2012-13, as compared to Rs. 73,99,934 crore during 2011-12, showing a rise of

13.1 per cent.

Per Capita Income: The per capita income at current prices during 2012-13 is estimated to

be Rs. 68,747 as compared to Rs. 61,564 during 2011-12, showing a rise of 11.7 per cent.

Cabinet approved the amendments to the NABARD Act

The Union Cabinet on 7th February gave its approval to the amendments to the National

Bank for Agriculture and Rural Development (NABARD) Act 1981.

The following amendments to the NABARD Act 1981 are proposed-

• Raising the authorized capital of NABARD to Rs. 20,000 crore from Rs. 5,000 crore.

• The meaning of cooperative society is proposed to be enlarged to include multistate

cooperative societies registered under any Central law or any other Central or State law

relating to cooperative societies.

• Change of owneRs.hip to facilitate the transfer of the remaining share capital of

NABARD from the Reserve Bank to the Central Government.

• Increasing the scope of operations of NABARD under short term funding purposes and

other changes

The following benefits are projected by this amendment

• By increasing the authorized capital of NABARD to Rs. 20,000 crore from Rs. 5,000

crore, the ability of NABARD to mobilize resources from the market will be enhanced

thereby new credit products, new credit

linkages and new clients will be developed.

• The amendments allow NABARD to lend to

new institutions, mainly Societies covered

under multistate cooperative societies act

and other central laws, producer

organizations or such class of financial

institutions which are approved by the

Central Government. This is likely to benefit a

larger segment of the financially excluded farmers in the country.

• The amendments allow combination of credit, creation of short term operations fund

and swapping of debt of farmers.

NABARD was established on 12 July 1982 to provide sharp focus to agriculture credit and rural development. NABARD adopted, as its mission, the promotion of sustainable and equitable development of agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives.



• The decision of the Government to transfer the balance one per cent shares to the

Govt. of India from Reserve Bank of India (RBI) in NABARD shall be carried out,

which will provide for increased public accountability, as the Government will acquire

the equity held by RBI.

• NABARD will combine the post of Chairman and the post of Managing Director, into

one, therefore Chairman and Managing Director, under the provisions of the NABARD

Act relating to these two posts. This shall ensure a distinct line of command.

The world's largest prime number identified

Researchers have identified the world's largest prime number yet, beating the previous

record by over four million digits. The number has now shot up to 2 multiplied by itself

57,885,161 times minus 1, breaking a four-year dry spell in the search for new, ever-larger

primes. Curtis Cooper from the University of Central Missouri in Warrensburg made the

finding as part of the Great Internet Mersenne Prime Search (GIMPS), a distributed

computing project designed to hunt for a particular kind of prime number first identified in the

17th century, the 'New Scientist' reported. All prime numbers can only be divided by

themselves and 1.

The rare Mersenne primes all have the form 2 multiplied by itself p times minus 1,

where p is itself a prime number. The new prime, which has over 17 million digits, is only the

48th Mersenne prime ever found and the 14th discovered by GIMPS. The previous record

holder, 2 multiplied by itself 43,112,609 times minus 1, which was also found by GIMPS in

2008, has just fewer than 13 million digits. All the top 10 largest known primes are Mersenne

primes discovered by GIMPS. GIMPS software runs on around a thousand university

computers, one of which spent 39 days straight proving that the number was prime, which was

then independently verified by other researchers.

NTPC stake sale fetched the government Rs. 11,500 crore

The successful NTPC stake sale, on 7th February, fetched the government Rs. 11,500 crore,

the second PSU share sale in a week that was over-subscribed, helping to move closer to the

disinvestment target of Rs. 30,000 crore. The share sale of the country’s largest power

producer, NTPC, was over-subscribed 1.7 times as an offer price lower than the scrip’s trading

rate on stock exchanges received tremendous interest from foreign investors. Coming within a

week of the share sale of Oil India, the NTPC issue was also lapped up by foreign investors in

a big way, making the government say there is still a huge demand for PSU shares in the

market. The total demand received for the offer was 132.84 crore shares, which is 1.7 times

over the 78.32 crore shares or 9.5 per cent stake on the block. The government had fixed the



floor price or the minimum offer price at Rs. 145 a share. The indicative price, which is the

weighted average price of all valid bids, came in at Rs. 145.91 at the close of the auction.

Spice Jet, becomes the only private Indian airline to fly to China

Spice Jet, the low-cost carrier, will become the only private Indian airline to fly to China

starting on 8th February, when it will launch four weekly

flights from New Delhi to Guangzhou. The first flight

by an Indian airline to the southern port city, home

to one of the biggest Indian expatriate communities in

China as well as the centre of the country’s

manufacturing heart land, will leave New Delhi on 8th

February. While much of India's trade with China is

driven by the southern manufacturing provinces,

Shanghai is the only major southern mainland city that is connected directly to India, through

Air India and Air China flights.

Air India releases exclusive flight magazine

Civil aviation minister, Ajit Singh on 8th February, released Shubh Yatra, an exclusive

monthly bi-lingual (Hindi and English) in flight magazine of Air India; it covers travel, lifestyle,

culture and entertainment in all colour and spice. This is the new name of the in flight

magazine.

The inflation rate of India dropped down to 6.62

The inflation rate of India dropped down to the three-year low in the chart to 6.62

per cent in January 2013 from the 7.18 per cent, 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 per cent

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 manufacturing as

well as service sectors of India. The growth forecast for the running fiscal year that would end

on 31st March 2013 was lowered by the India’s Statistical Office to 5 per cent. The Reserve

Bank of India also changed its forecast from 5.8 per cent to 5.5 per cent. 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 per cent to 7.75 per cent; this was the first step in nine

China became India’s biggest trade partner in 2011, with trade reaching US $ 73 billion. Bilateral trade fell to US $ 66 billion last year on account of the downturn. Spice Jet is looking to target the business community and will focus its China strategy on the southern part of the country.



months. The Policy makers have also taken afresh steps to revive the slowing economic

conditions of the nation.

India is likely to produce 250.14 million tonnes of food grains

India is likely to produce 250.14 million tonnes of food grains during 2012-13 (includes kharif

2012 and rabi crops in the field at present). This is happening despite a drop of 7 million

tonnes in production during kharif, owing to erratic monsoons. As per the second advance

estimates of crop production released on 8 February, by the Agriculture Ministry, production

of major crops except pulses is likely to be less than last year, which happened to be the year

of record food grain production helped by a favourable monsoon.

In the present crop year (2012-13), despite deficient and late rainfall in many parts of

the country in the monsoon season, the estimated production is higher than the food grain

production achieved any time before last year, showing the growing resilience of Indian

agriculture. A number of initiatives have been taken in recent years to increase production of

pulses, including raising MSP of main pulses crops significantly and special schemes to

encourage farmers to adopt modern agronomic practices in pulses production. The assessment

of production of different crops is based on the feedback received from States and validated

with information available from other sources.

MCX-SX, the third full-fledged equity bourse after BSE and NSE

The MCX-SX benchmark index SX40 went live with its equity-trading platform on both

equities and equity derivatives on 11 February, Reliance Industries, Suzlon shares got

spotlighted on MCX Stock Exchange launch. MCX-SX became the third full-fledged equity

bourse after BSE and NSE in the country. The bourse was formally launched by Finance

Minister P Chidambaram on 9 February. SX40 is a free-float based index of large-cap and

liquid stocks, representing diverse sectors. The base value will be 10,000 with a base date

of March 31, 2010, the exchange had said. The constituents of SX40 include ACC, ONGC,

RIL, Tata Motors, TCS, Coal India, among others. The benchmark includes companies that

have a minimum free float of 10 per cent and is within the top 100 liquid companies.

India is the largest diamond cutting and polishing center

Anand Sharma, Union Minister of Commerce, Industry and Textiles on 12th February,

accepted and unveiled a Task Group report to make India an International Trading hub for

rough diamonds. The task group on diamonds was constituted by the Minister of Commerce,

Industries and Textiles under the Chairmanship of Director General of Foreign Trade,

Dr. Anup K. Pujari keeping in view the slump in exports of diamonds from India through the



last few quarters. Some of the recommendations in report include setting up of a Special

Notified Zone for import and trading of rough diamonds, permission to import cut and

polished diamonds duty free up to the extent of 15% of the average of previous 3 years’

exports and reducing the rate of computation of profit under Benign Assessment Procedure

(BAP) from 6% to 2.5%, amongst others. India is the largest diamond cutting and

polishing center in the world, committed to continuing as a responsible and active member

of the Kimberley Process Certification System by implementing all its regulations. This report is

of great importance to the Government as India currently enjoys the status of the foremost

hub for manufacturing of diamonds in the world. Diamond Exports is also a major contributor

to the merchandise exports of the country. It also employs a

large number of people from the underprivileged section of the

society in India. Sharma appreciated the suggestions of the

Task Group to help India retain its primacy as a trading hub,

committed to take up the recommendations, which have been

put forward with the concerned departments of the Govt. in a time bound manner so as to

decrease the transaction cost of exports, simplify the compliance of the trade with taxation

authorities and benefit the trade with the natural resources that is emanating out of India.

SEBI orders freezing of bank accounts of Sahara

Securities Exchange Board of India (SEBI) the stock market regulator of India on 13

February 2013 ordered freezing of bank accounts and attachment of properties of two Sahara

group firms Sahara India Real Estate Corporation Ltd., and Sahara Housing

Investment Corporation Ltd. and its Chairman Subrata Roy as well as top executives

Vandana Bhargava, Ravi Shanker Dubey and Ashok Roy Choudhary after it failed to

refund more than Rs. 24,000 crore rupees to investors. The decision from the market regulator

came after the Supreme Court of India granted it the freedom to freeze the accounts of the

two companies and attach the properties of the defaulting groups. The market regulator gave

21 days time to Sahara Firms to submit the details of the investments done and not listed in

an order. SEBI’s orders restricts the Sahara India Estate Corporation from operating its demat

accounts and redeeming the mutual fund units held by it as well as from transferring the

shares controlled by it to any other body or company.

The exports of India increased by 0.8 per cent

The exports of India increased by 0.8 per cent in the month of January 2013 to US $

25.58 billion. Comparatively, exports in January 2012 were US $ 25.37 billion. Imports on the

other hand, increased by 6.12 per cent to US $ 45.5 billion. During April to January 2012 -



2013, the overseas shipments of India dropped by 4.86 per cent to US $ 239.6 billion. 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 per cent. Import of

crude oil was growing at a faster pace. Oil imports in January 2013 increased by 6.91 per cent

to US $ 15.89 billion in comparison to US $ 14.87 billion in January 2012.

American Airlines and US Airways agreed to merge

American Airlines and US Airways have agreed to merge in an US $ 11 billion deal to create

the world's biggest airline. The combined carrier will be called American Airlines but run

by US Airways CEO Doug Parker. The boards of the two airlines unanimously approved the

13th February, and the companies announced the agreement on 14th February. The merger

would reduce the number of major U.S. airlines to four: the new American, United, Delta and

Southwest. The deal is a coup for smaller US Airways Group Inc., which pushed for a merger

almost as soon as American parent AMR Corp. filed for bankruptcy protection in November

2011. While Parker runs the company, AMR CEO Tom Horton will serve as chairman until its

first shareholder meeting, likely in mid-2014. AMR interests including creditors will own 72 per

cent of the new company and US Airways shareholders 28 per cent. The companies said

merging would create savings of more than $1 billion a year. The merger will be part of AMR's

plan for exiting bankruptcy protection. The airlines said they expect US $ 1 billion in combined

savings. The new American would have more than 900 planes, 3,200 daily flights and about

95,000 employees, not counting regional affiliates. It will be slightly bigger than United Airlines

by passenger traffic, not counting regional affiliate airlines.

Indian aviation firm Aviator signed for EC135 helicopters

Indian business aviation firm Aviator on 14th February signed an order for supply of seven

EC135 helicopters from chopper major Eurocopter to be used for emergency medical

services. The firm order for an initial batch of seven Eurocopter EC135s for helicopter

emergency medical services (HEMS) operations was signed by the two companies in the

presence of French President Francois Hollande. A second order is expected to be carried out

later this year and rapid growth is anticipated in the HEMS market – as many as 50 helicopters

are expected to be deployed throughout the country in the coming years, Eurocopter said in a

statement. This is one of the first chopper orders placed by an Indian company for HEMS

purposes. The EC135 is operated worldwide for a broad range of missions, including HEMS,

law enforcement, rescue operations and business aviation. Eurocopter is part of the Franco-

German-Spanish Eurocopter Group and a division of the global aerospace and defence



conglomerate EADS. There are currently over 11,780 Eurocopter civil and military helicopters

in service in 148 countries.

8.5 per cent interest for EFPO

Retirement fund body EPFO on 25th February decided to pay 8.5 per cent interest rate to its

over five crore subscribers on their PF deposits for 2012-13, higher than 8.25 per cent

provided in the previous fiscal. The decision was taken at the meeting of the Central Board of

Trustees (CBT), the highest decision making body of the Employees' Provident Fund

Organisation (EPFO). The meeting was chaired by Labour Minister. "A decision has been

taken to pay 8.5 per cent interest on PF deposits ... but we have expressed our reservations as

we wanted higher interest rate," said D.L. Sachdev, secretary All India Trade Union

Congress (AITUC) after the CBT meeting. Earlier, a note

prepared by EPFO for consideration of the February 15 meeting of

the Finance and Investment Committee (FIC) had said, "...

8.5 per cent rate of interest for the year 2012-13 is feasible."

According to the EPFO's estimates, payment of 8.6 per cent

interest rate would result in a deficit of Rs. 240.49 crore whereas

8.5 per cent interest rate on PF deposits for current fiscal would

leave a surplus of Rs. 4.13 crore. In FIC meeting held on February

15, union leaders refused to discuss the issue regarding payment of interest in the current

fiscal because the agenda note for the issue was not provided well in advance to them, sources

said adding the note was tabled during the meeting.

e-Biz will serve as a 24X7 online single-window

The Minister of State for Commerce and Industry Dr. S. Jagathrakshakan in written reply to

a question in Rajya Sabha on 27th February gave the information that, as a part of

Government's initiative to improve the business environment and the ease of doing business in

the country, the Department of Industrial Policy and Promotion, Ministry of Commerce

and Industry launched the eBiz portal on 28th January 2013 comprising Licenses and

Permits Services component that will allow business users to obtain a customized list of

licenses, permits, and regulations that they require or need to comply with across all levels of

government. The eBiz portal will serve as a 24X7 online single-window system for

providing efficient and convenient Government to Business (G2B) services to the business

community, by reducing the complexity in obtaining information and services related to

starting businesses in India, and dealing with licenses and permits across the business life-

cycle.



Economic Survey 2012-13

Union Finance Minister P. Chidambaram presented the Economic Survey 2012-13 in the

Lok Sabha on 27th February. India's Economic Survey for 2012-13 pegs the country's

growth at 6.1-6.7% and inflation at 6.2-6.6% for the next fiscal 2013-14 and made a strong

call for cutting subsidies. Economic Survey is presented every year, just before the Union

Budget. It is a flagship annual document of the Ministry of Finance, Government of India.

The Economic Survey 2012-13 was prepared by a team of economists led by Chief

Economic Advisor Raghuram Rajan, and pitches for speeding up economic reforms to

activate a sluggish economy. It serves as an indicator of what is likely to be contained in the

General Budget proposals.

Following are the major Highlights of the Economic Survey 2012-13

o GDP growth seen at 6.1-6.7 per cent in 2013/14.

o Government target for fiscal deficit is 4.8 per cent of GDP in 2013/14.

o Government target for fiscal deficit is 3 per cent of GDP in 2016/17.

o Headline WPI inflation may decline to 6.2 - 6.6 per cent by March2013.

o Focus on curbing imports, making oil prices more market determined to reign in Current

Account Deficit.

o Prioritization of expenditure seen as key ingredient of credible medium-term fiscal

consolidation plan.

o Raising tax to GDP ratio to more than 11 per cent seen as critical for sustaining fiscal

consolidation.

o India likely to meet fiscal deficit target of 5.3 per cent of GDP in 2012/13, despite

significant shortfall in revenues.

o Recommends curbing gold imports to reign in Current Account Deficit.

o Industrial output seen growing around 3 per cent in 2012/13.

o Govt. priority to fight inflation by reducing fiscal impetus to demand as well as by focusing on

incentivizing food production.

o More jobs in low productivity construction sector.

o Balance of Payments under pressure with net exports decline.

o Service sector has shown more resilience despite global slowdown.

o Pitches for hike in price of diesel and LPG to cut subsidy burden.

o Railway freight grows by 5.1 per cent in 2012-13.



o Foreign Exchange reserves remains steady at US $ 295.6 billion at December 2012

end.

Union Budget 2013-14

The Union finance minister presented the Budget for the year 2013-14 on on 28th

February. Some of the key points that were highlighted by Chidambaram in the

Budget are:

o No change in slabs and rate for personal income tax.

o Tax credit of Rs. 2,000 to be provided to every person to having income of up to Rs. 5 lakh,

this will benefit 1.8 crore people.

o 5 to 10 per cent surcharge on domestic companies whose taxable income exceeds Rs. 10

crore.

o Commodities transaction tax levied on non-agriculture commodities futures contracts at 0.01

per cent.

o Modified GAAR norms to be introduced from April 1, 2016.

o No change in peak rate of customs duty for non-agriculture products.

o Direct Taxes Code (DTC) bill to be introduced in current Parliament session.

o No change in basic customs duty rate of ten per cent and service tax rate of 12 per

cent.

o Import duty on rice bran oilcake withdrawn.

o Series of concessions granted to Maintenance, Repair and Overhaul (MRO) business in the

aviation sector.

o Import duty raised on set-top boxes from 5 to 10 per cent to safeguard interest of domestic

producers.

o 10 per cent customs duty to be levied on unprocessed illuminate.

o Import duty rose from 75 to 100 per cent on luxury vehicles.

o Duty free limit on gold rose to Rs. 50,000 in case of male and Rs. 1,00,000 in case of female.

o No countervailing duty on ships and vessels.

o Specific excise duty on cigarettes and cigars raised by 18 per cent.

o Excise duty on SUVs to be increased to 30 per cent from 27 per cent, SUVs registered as taxis

exempted.

o Vocational courses offered by state-affiliated institutes to be exempted from services tax.



o Duty on mobiles above Rs. 2,000 rose from one to six per cent, based on their maximum retail

prices.

o Service tax to be levied on all a/c restaurants.

o One time voluntary compliance scheme for service tax defaulters to be introduced. Interest

and penalties to be waived.

o Direct tax proposals to yield Rs. 13,300 crore, indirect tax proposal to give Rs. 4,700 crore.

o Education cess to continue at 3 per cent.

o Contributions made to central and state government health scheme eligible to tax benefit.

o Eligibility conditions for life insurance policies of persons suffering disabilities to be liberalized.

o Investor Protection Fund set up by depositories will be exempt from tax.

o Transactions on immovable properties usually undervalued.

o TDS of one per cent on value of properties above Rs. 50 lakh. Agriculture land exempted.

o Securities Transaction Tax (STT) reduced on equity future, mutual fund.

o Fiscal deficit will be 5.2 per cent in current year and 4.8 per cent in the next fiscal.

o Will redeem our pledge to reduce fiscal deficit to 3 per cent by 2016-17 and revenue

deficit to 1.5 per cent of GDP.

o Tax Administration Reform Commission to be set up to regularly review tax law

applications.

o In 2011-12, tax-GDP ratio was 5.5 per cent for direct taxes and 4.6 per cent for indirect

taxes.

o Surcharge of 10 per cent for individuals whose taxable income is over Rs. 1 crore.

o Plan expenditure pegged at Rs. 5.55,322 crore.

o Non plan expenditure pegged at Rs. 11,09,975 crore for 2013-14.

o Low interest rate funds to be provided from Clean Energy Fund for green projects for a period

of five years.

o Generation-based incentives to wind energy projects reintroduced, Rs. 800 crore provided for

the purpose to Ministry of New and Renewable Energy.

o Constraints will not come in the way for providing additional funds for security of the nation.

o Rs. 2,03,672 crore, including Rs. 86,741 crore capital expenditure to Defence in 2013-

14.

o Grant of Rs. 100 crore each to AMU (Aligarh), BHU (Varanasi) and TISS (Guwahati) and

INTACH.

o National Institute for Sports to train coaches to be set up at Patiala at a cost of Rs. 250

crore.



o Rs 532 crore to make post offices part of core banking.

o Rs. 5,87,082 crore to be transferred to states under share of taxes and non plan

grants in 2013-14.

o Comprehensive social security package being evolved by convergence of several schemes run

by various ministries.

o Investor with stake of 10 per cent or less will be treated as FII; any stake more than 10 per

cent will be treated as FDI.

o FIIs will be allowed to participate in exchange traded currency derivatives.

o Small and medium companies to be allowed to listed on MSME exchange without making a

public offer.

o Concessional six per cent interest on loans to weavers.

o Financial Sector Legislative Reforms Commission (FSLRC) to submit its report next

month.

o Government to construct power transmission system from Srinagar to Leh at the cost of Rs.

1,840 crore, and Rs. 226 crore provided in current Budget.

o Plan expenditure in 12th Five Year Plan revised to Rs. 14,30,825 crore or 96 per cent of

budgeted expenditure.

o Budget expenditure is Rs. 16,65,297 crore and Plan expenditure Rs. 5,55,322 crore.

o The revised expenditure target is Rs. 14, 30,825 crore or 96 per cent of Budget estimate for

this fiscal. In 2013-14, the budget estimate is Rs. 6,65,297 crore.

o One overarching goal to provide education and skills to youth for securing jobs in the 2013-14.

o FM allocates Rs. 41,561 crore for SC sub-plan; Rs. 24,598 crore for tribal sub plan.

o Additional sum of Rs. 200 crore to Women and Child Welfare Ministry to address issues of

vulnerable women.

o Rs. 3511 crore allocated to Minority Affairs Ministry which is 60 per cent of the revised

estimates.

o CFM allocates Rs. 41,561 crore for SC sub-plan; Rs. 24,598 crore for tribal sub plan.

o Rs. 3,511 crore allocated to Minority Affairs Ministry which is 60 per cent of the revised

estimates.

o Rs. 110 crore to be allocated to the department of disability affairs.

o Rs. 37,330 crore allocated for Ministry of Health and Family Welfare.

o Rs. 1,069 crore allocated to Department of Ayush.

o In the Budget Rs. 65,867 crore allocated to Ministry of HRD in 2013-14.



o Medical colleges in six more AIIMS-like institutions to start functioning this year; Rs.

1650 crore allocated for the purpose.

o Rs. 5,284 crore to various Ministries for scholarships for SC/ST, OBC and minority students.

o Rs. 13,215 crore to be provided for mid-day meal scheme.

o Rs. 17,700 crore provided for Integrated Child Development Scheme.

o Rs. 15,260 crore to be allocated to Ministry of Drinking Water and Sanitation.

o Rs. 17,700 crore to be allocated for Integrated Child Development Scheme (ICDS).

o Rs. 80,194 crore allocation for Ministry of Rural Development in 2013-14. About Rs.

33,000 crore for MGNREGA.

o Rs. 80,194 crore allocated for rural development schemes.

o States which have completed Pradhan Mantri Gramin Sadak Yojana will be eligible

for PMGSY-II, others will continue with PMGSY-I.

o Rs. 14,873 crore for JNNURM for urban transportation in 2013-14 against Rs. 7,880 crore in

the current fiscal.

o Food grain production in 2012-13 will be over 250 million tonnes.

o Average annual growth rate of agriculture and allied services estimated at 3.6 per cent in

2012-13 when 250 MT food grains was produced.

o Rs. 27,049 crore allocations to the Agriculture Ministry in 2013-14.

o Rs. 7 lakh crore targets fixed for agriculture credit for 2013-14 compared to Rs. 5.75 lakh

crore in the current year.

o Eastern Indian states to get Rs. 1,000 crore allocation for improving agricultural production.

o Green revolution in east India significant. Rice output increased in Assam, Odisha,

Jharkhand and West Bengal; Rs. 1,000 crore allocated for eastern states.

o Indian Institute of Biotechnology will be set up at Ranchi.

o Rs. 10,000 crore set aside for incremental cost for National Food Security Bill over and above

food subsidy.

o Four Infrastructure debt fund have been registered.

o Tax free bonds issue to be allowed up to Rs. 50,000 crore in 2013-14 strictly on capacity to

raise funds from the market.

o Rs. 5,000 crore will be made available to NABARD to finance construction of godowns and

warehouses.

o Government has decided to constitute a regulatory authority for the road sector.

o Rajiv Gandhi Equity Scheme will be liberalised to allow first time investor to invest in Mutual

Fund and equity.



o First housing loan up to Rs. 25 lakh would get additional deduction of interest of up

to Rs. 1 lakh in 2013-14.

o Govt. to construct power transmission system from Srinagar to Leh at the cost of Rs.

1,840 crore, Rs. 226 crore provided in current Budget.

o Current Account Deficit continues to be high due to excessive dependence on oil, coal and gold

imports and slowdown in exports.

o DIPP and Japan's JICA preparing plan for Chennai-Bengaluru Industrial corridor.

o Two new major ports to be set up in West Bengal and Andhra Pradesh.

o Oil and gas exploration policy will be reviewed and moved from profit sharing to revenue

sharing.

o Policy on exploration of shale gas on the anvil; natural gas pricing policy will be reviewed and

uncertainty removed.

o Govt to set up India's first women's bank as a public sector bank by October.

o Coal imports during Apr-Dec 2012 crossed 100 million tonnes and expected to go up to 185

million tonnes in 2016-17.

o 5 million tons Dabhol LNG import terminal to be operate at full capacity in 2013-14

o SIDBI's re-financing facility to MSMEs to be doubled to Rs. 10,000 crore.

o Incubators set up by companies in academic institutions will qualify for Corporate Social

Responsibility (CSR) activities.

o Rs. 500 crore would be allocated for addressing environmental issues faced by textile industry.

o Financial Sector Legislative Reforms Commission (FSLRC) to submit its report next month.

o Standing Council of Experts in Ministry of Finance to examine transaction cost of doing

business in India.

o Rs. 14,000 crore capital infusion into public sector banks in 2013-14.

o PSU banks to have ATMs at all their branches by March 31, 2014.

o Rs. 6,000 crore to be allocated for rural housing fund in 2013-14.

o All Regional Rural Banks and cooperative banks to be e-linked by this year-end.

o Insurance companies will be empowered to open branches in Tier-II cities with

approval of IRDA.

o National Housing Bank (NHB) to set up urban housing bank fund and Rs. 2,000 crore

will be allocated in this regard.

o Public sector general insurance companies to set up adalts to clear disputes related to claims.

o Rashtriya Swasthya Bima Yojana benefit will be extended to rickshaw pullers, auto

and taxi drivers and sanitation workers.



o Comprehensive social security package being evolved by convergence of several schemes run

by various ministries.

o Investor with stake of 10 per cent or less will be treated as FII; any stake more than

10 per cent will be treated as FDI.

o FIIs will be allowed to participate in exchange traded currency derivatives.

o Small and medium companies to be allowed to listed on MSME exchange without making a

public offer.

Chennai Bengaluru Industrial Corridor being planned

The Finance Minister, P. Chidambaram in his Budget speech in Lok Sabha on 28th February,

said that the Delhi-Mumbai Industrial Corridor (DMIC) project has made rapid progress.

Plans for seven new cities have been finalized and work on two new smart industrial cities at

Dholera, Gujarat and Shendra Bidkin, Maharashtra will start during 2013-14. We

acknowledge the support of the Government of Japan. In order to dispel any doubt about

funding, the government will provide, if required, additional funds during 2013-14 within the

share of the Government of India in the overall outlay for the project.

The Department of Industrial Policy and Promotion (DIPP) and the Japan International

Cooperation Agency (JICA) are currently preparing a comprehensive plan for the Chennai-

Bengaluru Industrial Corridor. The corridor will be developed in collaboration with the

Governments of Tamil Nadu, Andhra Pradesh and Karnataka. The next corridor will be the

Bengaluru-Mumbai Industrial Corridor on which preparatory work has stared.

March

SEBI issued guidelines for Depository Participants

The Securities and Exchange Board of India (SEBI) on 1st March issued detailed

guidelines allowing shareholders to convert their depository receipts into equity shares of the

Issuer Company and vice-versa. Indian Depository Receipts (IDRs) are the instruments

denominated in rupees and allow overseas companies to raise funds from the Indian market. It

stipulated that IDRs would be redeemable into underlying equity shares after completion of

one year period from the date of listing them and the issuer will provide two-way fungibility of

IDRs. This move is expected to attract more foreign companies to be listed on Indian

bourses. So far only the UK-based banking major Standard Chartered PLC was listed as an

IDR.



Mukesh Ambani retained his title as the richest person of India

Mukesh Ambani retained his title as the richest person of India for the sixth consecutive

year with the net worth of US $ 21.5 billion, according to the annual rankings published by

Forbes on 4 March 2013. The richest man in the world for fourth time in a row was

Mexican business tycoon Carlos Slim with the net worth of US $ 73 billion. In the

overall list of the billionaires of the world, Mukesh Ambani was ranked at 22. Lakshmi

Mittal, on the other hand was ranked at 41 position with the net worth of US $ 16.5 billion.

The first in the list was Carlos Slim, followed by Bill Gates with the net worth of US $ 67

billion, Spain's Amancio Ortega with net worth of US $ 57 billion, Warren Buffett with the

net worth of US $ 53.5 billion and Larry Ellison with the net worth of US $ 43 billion. A total of

55 billionaires from India appeared on the list of 1,426 people from the world who have a

minimum net worth of US $ 1 billion. Among Indians, Mukesh Ambani as well as Lakshmi

Mittal was followed by Azim Premji, Dilip Shanghvi, Shashi and Ravi Ruia, Kumar Mangalam

Birla, Savitri Jindal, Sunil Mittal, Shiv Nadar, K P Singh and Anil Ambani.

Finance Bill 2013 introduced in Lok Sabha

Failure to pay excise duty and service tax could lead to arrest of defaulters, as per the

provisions proposed in the Finance Bill 2013 introduced by finance minister P. Chidambaram in

the Lok Sabha on 4th March. As per the provisions, offences relating to excise and customs

duty evasion of over Rs. 50 lakh would be made cognizable and non-bailable. Similarly in case

of service tax, the failure to deposit the tax amount exceeding Rs. 50 lakh with the

government would result in imprisonment up to seven years.

NASSCOM targets US $ 300 billion by 2020

The National Association of Software and Services Companies (Nasscom), the apex

body of the Indian business process outsourcing and software services industry, announced on

4th March that it is targeting revenues of US $ 300 billion by 2020, 177 per cent more than that

earned in 2012. N. R. Narayana Murthy, Infosys Chairman Emeritus, who headed an

expert committee that deliberated on the ways and means of achieving the target, said

revenues had traditionally come from four “focus areas” — IT services, Indian operatives of

MNCs, Business Process Management (BPM) and Engineering and R& D services. However,

the industry needed to focus on areas such as mobile and Internet and the domestic market if

it was to grow at a compounded annual growth rate of 15 per cent, which is the asking rate if

the industry plans to reach its target by 2020. Revenues from the domestic market, a new

focus area, are projected to increase from US $ 23 billion to US $ 75 billion. The biggest



chunk of revenues is projected to come from the Internet and mobile space, one of the seven

“focus verticals” identified by the committee. This segment is likely to account for one-third of

all revenues earned by 2020. The Chairman of Nasscom, N. Chandrasekaran, said the focus on

the domestic market reflected its large and growing size as well as the talent that was

available to tap the potential.

RIL received relief for KG D6 and discovery block of NEC-25

The Defence Ministry, in response to a direction by the Cabinet Committee on Investment

(CCI), has given a partial consent to two oil and gas blocks in areas near defence installations

even while five others continued to remain in the ‘no-go’ service zone. While five blocks,

bagged by Oil and Natural gas Corporation (ONGC), BG Group of the U.K. and Cairn India,

will continue to be in the ‘no-go’ areas, Reliance Industries Limited (RIL) received relief for

its KG D6 gas block and discovery block of NEC-25 in the Bay of Bengal. Nearly 30 per cent

of the KG-D6 block overlapped with one of the Navy's firing and exercise areas. The Ministry

was of the view that any exploration and production activities near its naval base would

hamper surveillance and detection operations. Following this, RIL agreed to relinquish 495 sq.

km of area, qualifying it for receiving a formal nod from defence authorities. ONGC's two KG

basin blocks, KG-OSN-2005/1 and KG-OSN-2005/2, have not been cleared as they fall directly

within the boundary of a proposed naval base. Also, the firm's KG-OSN-2009/4 block fell

within the range of the DRDO's Machhlipatnam launch site. BG’s block KG-DWN-2009/1 fell

right at the entry of the proposed naval base, while Cairn's KG-OSN-2009/3 block was in the

proximity of the Suryalanka GWFR. The Ministry has also imposed stringent conditions for the

exploration of the other 32 blocks.

Rs. 31,900 crore received by 68,000 NGOs

More than Rs. 31,900 crore was received by over 68,000 NGOs operating in different parts of

the country during 2008-11; Rajya Sabha was informed on 6th March. Minister of State for

Home Mullappally Ramachandra also said that registration of 4,138 NGOs was cancelled

under Foreign Contribution (Regulation) Act, 2010 for violating existing guidelines, while

24 cases were referred to CBI for investigation.

CAG slashed misuse of agricultural debt waiver and relief schemes

Considering the serious nature of the observations made by the Comptroller and Auditor

General (CAG) on the gross misuse of the agricultural debt waiver and debt relief schemes,

the Reserve Bank of India on 6th March, has asked all scheduled commercial banks and local

area banks to undertake a complete verification of the list of beneficiaries with priority being



given to areas where indebtedness was high. The RBI has told them to fix the accountability

on those officials involved in the administrative/accounting lapses. Banks have been asked not

to spare the internal auditors and statutory auditors who were responsible for verification,

certification, or for passing the claims. They must be identified, and full responsibility fixed at

the earliest with no exceptions, the bank said. The apex bank said debt waiver/debt relief

certificates must be issued in all eligible cases immediately, and full records of such issuance

must be kept ready for inspection. For effective monitoring of the action being taken, the RBI

has asked banks to report it on a monthly basis, latest 7th of every month so that the

government would be informed accordingly. The CAG in a report has pointed out that several

ineligible farmers had availed themselves of the benefits under the government’s much-

published Rs. 52,000 crore farm loan waver scheme.

Export of 5 million tonne wheat from government warehouses

A Group of Ministers (GoM) headed by Agriculture Minister Sharad Pawar cleared export

of 5 million tonne wheat from government warehouses through private

traders on 7 March. The proposal is targeted to clear the huge wheat

stock in the country ahead of the new harvest season. Earlier, the

government had allowed export of 4.5 million tonne through public-

sector trading agencies out of which about 2 million tonne has already been shipped in a price

range of US $295 - US $ 330 per tonne.

Financial sector regulators of India, signed an agreement

Financial sector regulators of India, on 8th March signed an agreement to monitor

conglomerates - large banks and other key players - in view of their rising importance to the

real economy, apart from approving a national strategy for financial education. The Reserve

Bank said in a statement that the decisions were taken at a sub-committee meeting of the

Financial Stability and Development Council (FSDC) held in New Delhi. The four financial

sector regulators are the Reserve Bank of India, Securities and Exchange Board of

India, Insurance Regulatory and Development Authority and Pension Fund

Regulatory and Development Authority. The MoU is aimed at better cooperation in the

field of joint supervision and monitoring of the large groups identified as financial

conglomerates. The FSDC 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. All the four RBI Deputy

Governors- K. C. Chakrabarty, Anand Sinha, H. R. Khan and Urjit Patel - and RBI

Executive Director G Gopalakrishna was also present.



World Bank estimates India’s economy grow over 6 per cent

The World Bank on 11th March 2013 forecasted that the Indian economy will 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 per cent in the current fiscal and the growth

rate is likely to improve to 6.1- 6.7 per cent 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.

CAD rise all-time high of 5.4 per cent

India’s Current Account Deficit (CAD) as a percentage of gross domestic product

(GDP) rose to an all-time high of 5.4 per cent in the second quarter of 2012-13 on account of

widening of trade deficit and slower growth in invisibles, the Reserve Bank of India (RBI)

said in its monthly bulletin for March released on 11 March. The rise in CAD to GDP ratio was

partly due to slower growth in GDP and rupee depreciation, the RBI report said adding that a

steeper decline in exports growth (12.2 per cent year-on-year) compared with imports growth

(4.8 per cent year-on-year) led to widening of trade deficit. The trade deficit widened to US $

48.3 billion during the quarter under review from US $ 44.5 billion during the corresponding

quarter of the previous year. While the net services receipts registered reasonable increase,

net invisibles earnings could finance only a lower proportion of trade deficit as net ‘primary and

secondary’ income flows were relatively smaller. As per this report, during the first-half of

2012-13, India’s Balance of Payments deteriorated as trade deficit widened and invisibles

remained sluggish. On the other hand, capital flows remained lower than that in the preceding

year and were just sufficient to meet the gap of current account leading to small accretion to

foreign exchange reserves, it said.

HPCL and Government of Rajasthan signed an MoU

Hindustan Petroleum Corporation Limited (HPCL) and the Government of Rajasthan

on 14 March 2013 signed a Memorandum of Understanding (MOU) at Jaipur for setting up

a refinery-cum-petrochemical complex in Barmer, Rajasthan. The project will be a joint

venture between HPCL and Rajasthan State Refinery Limited, apart from other equity partners.

The MoU was signed by Subhash Pant, Secretary Mines and Petroleum, Government of

Rajasthan and K. Murli, Director (Refineries) of HPCL. The refinery-cum-petrochemical complex

in Barmer will be set up at an estimated capital investment of Rs. 37,230 crore. The project

will be completed in 4 years. The purpose of the refinery is to process the locally available



crude apart from other crudes. The proposed complex will be the first of its kind to be

specifically designed to produce petrochemicals from the indigenous crude oil.

Isuzu setting up manufacturing unit in AP

Japanese automotive major Isuzu Motors on 15th March, announced setting up a

manufacturing plant in Andhra Pradesh to make Light Commercial Vehicles (LCVs) and

Sports Utility Vehicles (SUVs). The plant, coming up in Nellore district of Andhra Pradesh

with an investment of Rs. 1,500 crore, will manufacture one lakh units a year. Isuzu Motors

India signed a Memorandum of Understanding (MoU) with the Andhra Pradesh

government to set up the plant at Sri City in Nellore district. Officials of Isuzu and the state

government signed the MoU in Hyderabad, in the presence of Chief Minister Kiran Kumar

Reddy, Japan's Ambassador to India Takesai Yagi and Isuzu Motors Limited's

executive vice president and general manager, sales, Ryozo Tsukioka.

An agreement was also signed between Isuzu Motor India and Sri City, a special

economic zone. Shigeru Wakabayashi, deputy managing director, Isuzu Motors India, later told

reporters that the plant would manufacture pick-up truck (D-MAX) and SUV (MU-7) from late

2015 or early 2016. The company unveiled on the occasion both D-MAX and MU-7, which it

started selling this month by importing built up vehicles. It is currently selling it only in Andhra

Pradesh and Tamil Nadu. The plant in Andhra will also act as support foothold for Isuzu's main

LCV operation in Thailand. The company manufactures three lakh LCVs and SUVs in Thailand

every year. The oldest Japanese automobile firm is scouting for a local partner to assemble its

vehicles in India till its plant commences production. It is keen to start the assembly of its

products as soon as possible to avoid rising import duties. The Japanese envoy said India

account for seven per cent of the global production of Japanese automotive companies. He

hoped that India would overtake Thailand and China, which account for nine and 10 per cent of

their production respectively.

Infosys collaborated with India Post for online services

Infosys on 15 March has collaborated India Post for developing a service delivery platform

that will allow more than 1.30 lakh rural post offices to offer online services. The platform will

also connect and manage more than 1.30 lakh handheld devices used by rural postal workers

for distribution of social benefits under the National Rural Employment Guarantee Act and

process Electronic Money Orders, Infosys said in a statement. With this agreement, Infosys

will facilitate India Post’s Rural Systems Integration programme, which will increase

adoption of the department’s services and enhance the reach of postal services to the

country’s rural population.



GoI raked Rs. 620 crore through disinvestment in NALCO

The Central Government on 15th March, raked in over Rs. 620 crore through sale of its 6 per

cent stake in an aluminum producer Nalco, taking it closer to its disinvestment target for the

fiscal. Nalco share sale, whose size was pruned to 12.88 crore shares or 5 per cent plus an

option to retain an equal number in case of over-subscription, managed to get bids for 15.69

crore or 6 per cent of government shareholding. The government, which priced the issue at a

discount of Rs.40 a share, decided to retain all of additional bids for over 2.81 crore shares

that came in. The auction had received bids for over 15.69 crore shares, against an offer of

over 12.88 crore shares, according to stock exchanges’ data. The Empowered Group of

Ministers (EGoM) on disinvestment, headed by Finance Minister P. Chidambaram, on 13

March, cleared stake sale of 25.77 crore shares, or up to 10 per cent, in Nalco through the

offer for sale (OFS) route.

Andhra Pradesh Annual budget 2013-14

Andhra Pradesh on 18 March presented a tax-free, revenue-surplus budget for 2013-14

with an overall expenditure of over Rs. 1.61 lakh crore (nearly US$ 30 billion). Finance

Minister Anam Ramanarayana Reddy told the assembly during his budget speech that the

overall expenditure during 2013-14 would be Rs. 1,61,348 crore, comprising Rs. 1,01,926

crore under non-plan and Rs. 59,422 crore under plan heads.

Presenting his third budget, Ramanarayana Reddy said he estimated the revenue surplus

would be Rs. 10,023 crore and fiscal deficit Rs. 24,487 crore, at 2.85 per cent of Gross State

Domestic Product (GSDP). "I am confident that the budget 2013-14 will infuse new energy

to the strategy of inclusive growth of the state," he said. He described the budget as

momentous, as allocations enshrine the priority agenda of inclusiveness.

It is the first budget after the state enacted a historic legislation in December last year to give

statutory status to the scheduled castes and scheduled tribe sub-plan. Under this legislation,

the first in the country, funds have been allocated separately to SC sub-plan and ST sub-plan

in proportion to the population of these sections. The total allocation for SC sub-plan in 2013-

14 budget is Rs. 8,585 crore and for the tribal sub-plan Rs. 3,666 crore, which is 16.21 and

6.92 per cent of the annual plan size respectively. The finance minister said another path-

breaking feature of this year's budget is the presentation of the first-ever exclusive agriculture

action plan, which is expected to help in comprehensive development of the agriculture sector.

Another change brought in the budget presentation this year is the constitution of

departmentally related standing committees of the state legislature for considering the

demands for grants.



Farm sector in AP gets whopping Rs. 25,000 crore: New Agricultural Action

Plan, which is a first of the Congress Government in Andhra Pradesh, the Agriculture

Minister Kanna Lakshminarayana on 18th March presented immediately after the regular

budget for 2013-14 a new agricultural action plan for the farm sector which proposes to

allocate a sum of Rs. 25,962.02 crore for the year 2013-14.

The Minister said this agriculture budget will show a way in ushering in a new era for

the farmers and provide solutions for the problems engulfing the sector. The budget includes

plan component of Rs. 17,694.61 crore and non-plan component of Rs. 8,267.41 crore.

Supplementary to these proposed budgetary allocations, an amount of Rs. 72,450 crore

is planned under agricultural credit plan. This makes the total investment for the farm sector

as Rs. 98,940.54 crore as against Rs. 79,924.78 crore, an increase of about 24 per cent over

last year. In tune with the basic theme of 12th Five Year Plan, “faster, more inclusive and

sustainable growth” and in order to achieve the growth target of 6 per cent under the farm

sector, the State has set an ambitious target of increasing food grain production to 300 lakh

tonnes by 2016-17.

The Minister said key strategies identified for the farm sector to grow rapidly

are: establishment of agriculture technology mission for convergence among concerned

departments, strategies to optimise and harness potential of horticulture, animal husbandry

and fishery as farm sector growth engines.

Highlighting the farm sector initiatives, the Minister said for the year 2013-14, the

Government proposes to continue implementation of supply of quality seeds, Polam Badi

(Farmers Field School), extension services, RKVY, National Agricultural Insurance

Scheme, National Food Security Mission, Pavala Vaddi and interest free crop loans to

farmers , farm mechanisation and input subsidies.

RBI cuts repo to 7.50

The Reserve Bank of India (RBI) on 19th March 2013 cut the repo rate by 25 basis points

to 7.5 per cent from 7.75 per cent 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 6.5 per 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 Asia's 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, 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 Rs. 10,000 crore 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.

CCI cleared RIL KG-D6 and NEC-25 blocks

The Cabinet Committee on Investment (CCI) on 21st 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 US $ 10.7 billion, was

having difficulties because of inter-ministerial differences, particularly relating to Defence

issues. Eight blocks, including RIL's 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 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 Rs. 1000 crore.

FSLRC recommends SEBI, PFRDA, IRDA be under one roof

Financial Sector Legislative Reforms Commission (FSLRC) headed by Justice B.N.

Srikrishna in its final report submitted to the Union Government of India on 22nd March

2013 recommended constitution of unified financial sector regulator by deriving powers from

Indian Financial Code including Commodity Derivatives Market. The 200 page long

report in its key recommendations have directed the Government of India for unification of the

Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and



Development Authority (PFRDA), Insurance Regulatory and Development Authority

(IRDA) and Forward Markets Commission (FMC) under a single regulator.

It also recommended that the Reserve Bank of India should stay as the monetary Authority

Regulating Bank. As per the report of the commission, the regulatory structure shall be

governed by the Financial Regulatory Architecture Act that to create a uniform legal process for

the financial regulators before changing the legislative structure the Ministry of Finance shall

unify the regulatory structure.

The proposed regulatory structure will be governed by the Financial Regulatory

Architecture Act that will ensure a uniform legal process for the financial regulators The

Resolution notifying the FSLRC was issued by the Government on 24th March 2011. The FSLRC

is required to submit its findings within a period of 24 months. FSLRC was set up two years

ago for reviewing and harmonizing the financial sector legislations, rules and regulations that

have gone obsolete or outdated in about a century’s time since when it was written.

Commercial production of Aishwarya oil field started

Commercial production of Aishwarya Oil Field at Barmer in Rajasthan has started on 23

March 2013. The commercial production of natural gas will take place from the Rageshwari

Well of Barmer region. It is expected that every day production of the oil field shall be 25,000

barrels of Crude Oil and 50,000 lakh cubic feet of natural gas. The gas field was dedicated to

the nation by Petroleum Minister Veerappa Moily and Chief Minister of Rajasthan

Ashok Gehlot. After the operations of the Barmer Oil field will reduce the import bills of the

country for petroleum that is about Rs. 6.5 lakh crore at present. Creation of a national gas

grid is in plans of the government for better distribution of natural gas.

USFDA lifted import alert on the Hyderabad-based antibiotics

Aurobindo Pharma, the leading pharmaceutical research company in India, announced on 28

March 2013 that the US Food and Drug Administration (USFDA) lifted import alert on the

Hyderabad-based antibiotics facility. This would enable Aurobindo Pharma to export nine

products in all from its Hyderabad-based facility to US market. The USFDA lifted import alert

from the non-sterile products that are manufactured at the Unit-VI cephalosporin facility in

Hyderabad. It is worth noticing that before this import alert, the Hyderabad-based antibiotics

unit had annual sales of 33 million US dollar in America. USFDA had issued import alerts on

the products of Aurobindo Pharma’s Hyderabad-based cephalosporin facility in 2011 because of

which its exports had suffered. In December 2010, the USFDA audited the cephalosporin

facility, Unit VI of Aurobindo Pharma Ltd at Chitkul Village, Hyderabad. After the audit,



USFDA had imposed import alert on Aurobindo Pharma. Cephalosporins are actually the

class of antibiotics which are used for treatment of those infections that are caused by

bacteria.

India’s global financial liabilities increased to US $ 723.9 billion

India’s international financial liabilities increased by US $ 10.5 billion to US $ 723.9 billion as at

end- of December 2012 as per the India’s International Investment Position (IIP) Report

Published by RBI in March 2013. In the October-December 2012 period, international financial

assets of Indian citizens remained unchanged at US $ 441.9 billion. Net claims of non-residents

on India (as reflected by the Net IIP, i.e. International financial assets abroad less

International financial liabilities) increased by US $ 10.4 billion over the previous quarter

to US $ 282.0 billion as at end-December 2012, mainly on account of US $ 10.5 billion increase

in liabilities. The changes in IIP also reflect the valuation changes emanating from exchange

rate movements. Due to rupee depreciation during end-September 2012 to end-December

2012 equity liabilities in US dolloars term revised downwards by US $ 13.2 billion (US $ 8.4

billion in direct investment and US $ 4.8 billion in portfolio investment). The ratio of India’s

international financial assets to international financial liabilities decreased to 61.0 per cent in

December 2012 (61.9 per cent in September 2012).

SEBI summoned Sahara promoters “to appear in person”

The Securities and Exchange Board of India (SEBI) has summoned the promoters of

Sahara group “to appear in person” before it on April 10th to ascertain the details of their

assets and to facilitate settling of terms of proclamation of the sale of their immovable

properties attached as per Supreme Court order. The order was issued to Ashok Roy

Choudhary, Ravi Shankar Dubey, Vandana Bhargava and

Subrata Roy Sahara who are the directors / promoters of Sahara

India Real Estate Corporation Ltd. (SIRECL) and Sahara

Housing Investment Corporation Ltd. (SHICL). This order was

issued in compliance with the direction of the Supreme Court orders

of August 31, 2012 and December 5th, 2012. SEBI has also directed these individuals to

produce in original, all title deeds of their assets which were attached by SEBI. The Sahara

group has been making an all-out effort to circumvent the orders of the courts and the capital

market regulator, in an attempt not to reveal details of investors who deposited funds in the

optionally fully convertible debentures (OFCD) issued by the group companies of SIRECL

and SHICL.



BRICS Bank proposed in Durban

The proposed Bank announced by the BRICS leaders at their summit in Durban will focus on

infrastructure development due to insufficient long-term financing and foreign direct

investment, especially investment in capital stock. These are all areas of acute interest to

India, said government sources as well as Indian industrialists attending the Fifth BRICS

summit, which ended in Durban on 27th March. But the specifics of the scale, location and

structure of the Bank will be worked out over the coming months, and some finality is likely to

be achieved by September when the five leaders are likely to meet on the sidelines of the next

G - 20 summit in St. Petersburg.

Side by side with the Bank, the BRICS summit also saw action on another front — creation of

a Contingent Reserve Arrangement (CRA) amongst BRICS countries. This too has its

genesis last year when, meeting on the sidelines of the G-20 summit in Los Cabos (Mexico),

the BRICS leaders asked their finance ministers and central bank governors to explore the

construction of a financial safety net. The summit felt that the establishment of a self-managed

Contingent Reserve Arrangement would have a positive precautionary effect, help BRICS

countries forestall short-term liquidity pressures, provide mutual support and further

strengthen financial stability. It would also help to strengthen the global financial safety net

and complement existing international arrangements as an additional line of defence.

April

CCEA approved the continuation of the SSI

The Cabinet Committee on Economic Affairs (CCEA) on 2nd April 2013 approved the

proposal of the Ministry 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 up gradation 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 Rs. 373 crore

comprising Rs. 280 crore as central government share and Rs. 93 crore as state government

share on a 75:25 funding pattern by the Centre and states, respectively. The scheme will

enhance the security in the region which would provide an enabling environment 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 Plan period 100 per cent 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 Rs. 445.82 crore.

Web based Public Service Delivery System launched

Union Tourism Minister K. Chiranjeevi on 3rd April launched a web based Public Service

Delivery System for Hotel approval and classification with a view to bring in transparency in

granting approvals for hotel projects and classification status to functioning hotels. Speaking

on the occasion the Minister said that with the help of this system, all applicants seeking hotel

project approvals, hotel classification and approvals for other related services will be able to

track the progress of their cases online on a real time basis.

He said “By putting this system in place, there will be a pressure on the officers of the Ministry

to deliver on time and an increased accountability on their part. Now onwards, all applications

will have to be examined within 15 working days from receipt for completeness. Thereafter, all

hotel inspections will be scheduled within next 15 working days. The recommendations of Hotel

and Restaurants Approval and Classification Committee will be communicated on the spot to

the applicant and these recommendations will also be put on web with final decision within 10

days of the inspection”. The Minister stated that in due course, the Tourism Ministry would

move towards an e-regime and accept e-applications and proposals.

The Ministry of Tourism will now build such systems in other spheres of functioning.

Chiranjeevi urged his officers in the Ministry and industry to work in ‘one vision one mission’

framework Nakul Anand, President, Hotel Association of India; Vivek Nair, President,

Federation of Hotels & Restaurants Association of India and Rakesh Mathur,

Executive Committee Member, Heritage Hotels Association of India also spoke on the

occasion and lauded the efforts of the Ministry and stated that this is a path breaking initiative

taken by the Ministry of Tourism to bring transparency in its functioning. This measure will

bring in more transparency, make officials more accountable in working and enable the

applicants to access information and check status of their applications sitting at their own

places.

CCEA Controls the levy on sugar mills

The Cabinet Committee on Economic Affairs (CCEA) on 4th 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 Rs. 5300 crore from previous Rs. 2700 crore. De-

control on sugar will not have an impact on the sugar made available in the Public

Distribution System. The de-control 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 limitation on the amount they choose to sell in the open market.

SAIL, KSIDC signed an MoU

A Memorandum of Understanding (MOU) was signed on 4th April, in

Thiruvananthapuram, Kerala between Steel Authority of India Limited (SAIL), and

Government of Kerala PSEs, Kerala State Industrial Development Corporation

(KSIDC) and Kerala Minerals and Metals Ltd (KMML), for setting up a Titanium Project

in Joint Venture in Kerala. The MOU was signed in the presence of the Chief Minister of

Kerala, Oommen Chandy and the Minister for Industries and IT, Kerala, P.K.

Kunhalikutty and Special Secretary and Financial Advisor of Ministry of Steel, E.K. Bharat

Bhushan, and SAIL Chairman, C.S. Verma. Through this MOU, possibilities of setting up of

the Titanium Project in joint venture in Kerala will be explored by SAIL and KSIDC and

KMML, in a phased manner. To begin with in Phase 1, setting up of a Titanium Sponge and

Metal Plant based on supply of Titanium Tetrachloride by KMML will be considered. In

subsequent phases, backward and forward integration will be explored for ensuring long term

viability of the project. This will be the another major titanium project in the state of Kerala,

after the Nation’s first titanium sponge plant was put up at KMML’s Chavara complex in

Kerala between KMML, Vikram Sarabhai Space Centre (VSSC) and the Defence

Metallurgical Research Laboratory in 2011.

NEEPCO conferred 'Miniratna - Category 1' status

President Pranab Mukherjee on 8 April has conferred the status of 'Miniratna - Category

1' on the North Eastern Electric Power Corporation (Neepco). With this elevation to

Miniratna - Category 1 status, Neepco will now be able to take certain investment decisions on

its own without going through the Union power ministry. Neepco was earlier a schedule 'A'

corporation. Officials of the corporation said the new status will facilitate expeditious

execution of projects, including joint ventures with public and private sector utilities in and

outside the northeast. Neepco has been playing a pivotal role in the power sector of the

region and has been contributing to almost 50 per cent of the power requirement of the

northeast. Officials said Neepco is planning to add 2,300 MW of power in the next five years

through hydro and thermal projects in order to meet the rising demand. Presently Neepco is

executing five projects in the region with a total installed capacity of 917 MW, including the

600 MW Kameng Hydro Electric Projects in Arunachal Pradesh, which is expected to be

on the national grid by 2016-17. The remaining four projects are expected to be commissioned

by 2016.



ADB estimates India’s growth rate to be 6 per cent

The Asian Development Bank (ADB), on 9 April, maintained that the Indian economy

could grow at an improved rate of 6 per cent during the current fiscal, provided reforms are

put in place at a faster pace to sort out the structural bottlenecks and stem the deteriorating

investment situation and a strong external demand is able to facilitate a turnaround in the

worsening Current Account Deficit (CAD).

In its report ‘Asian Development Outlook 2013’ released in New Delhi, the Manila-based

multilateral lending agency, however, cautioned that its India projections on improvement in

the economy were subject to a number of downside risks such as another bad monsoon, a

slow pace of reforms and fiscal consolidation and a continued sluggishness in the global

economic environment. According to ADB Country Director Narhari Rao, supply and policy

obstacles have seen India’s economic growth decelerate and investment and industrial output

slump, with the statistics compounded by weak global demand.

TCS will acquire 100 per cent equity in Alti SA

Tata Consultancy Services (TCS), on 9th April, announced that it had signed definitive

agreements to acquire 100 per cent equity in Alti SA, an IT services company in

France. The deal, valued at 75 million Euro (around Rs. 530 crore), is an all-cash transaction,

TCS said in a statement. The deal is subject to customary closing conditions. Alti SA has

strong expertise in IT Services, including enterprise solutions, assurance and CRM solutions.

It is privately held, and owned by its management and two private equity funds, CM-CIC LBO

Partners and IDI. It reported revenues of 126 million euro in 2012, and its customers include

top French corporations in the banking, financial services, luxury, manufacturing and utilities

sectors. Alti has 1,200 employees based in France, Belgium and Switzerland. The France IT

services market is estimated at 30 billion Euro. TCS has been operating there since 1992. It

has over 50 clients in France and has significantly strengthened its position there.

FCI raised Rs. 5,000 crore by issuing taxable bonds

The Food Corporation of India (FCI) raised Rs. 5,000 crore by issuing taxable bonds

backed by Government of India Guarantee in order to meet the additional 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 (Rs. 300 crore) and 15 years (Rs.

4,700 crore). The coupon rate for 10 years was 8.62 per cent per annum and 8.80 per cent per

annum for 15 years. The FCI has the Cash Credit Limit with Consortium of 62 banks. At

present, the Cash Credit Limit is Rs. 54,495 crore 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 per cent monthly which eventually translates into 11.34 on annual basis.

Annual interest saving through issue of this bond will be Rs. 127.54 crore.

WTO slashed its forecast for trade growth to 3.3%

The World Trade Organization (WTO) on 10th April slashed its forecast for trade growth in

2013, saying it feared protectionism was on the increase. It cut its forecast for global trade

growth in 2013 to 3.3 per cent from 4.5 per cent and said trade grew only 2 per cent in

2012.That was the smallest annual rise since records began in 1981 and the second weakest

figure on record after 2009, when trade shrank. WTO Director General Pascal Lamy warned

that 2013 could turn out even weaker than expected, especially because of risks from the euro

crisis, and countries might try to restrict trade further in a desperate attempt to shore up

domestic growth.

CCI clears 13 Power projects

The Cabinet Committee on Investment on 22nd April 2013 cleared 13 power projects that

involves investment of Rs. 33,000 crore. The meet was headed by the Prime Minister of India,

Dr. Manmohan Singh. The projects on which the investments will be made include one hydro

and two thermal project as well as ten transmission projects and 25 oil and gas blocks with

investment commitment of about US $ 7 billion 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 Union Environment and Forest Ministry were also

reviewed. The Ministry of Corporate Affairs has taken note of the misuse by certain “Chit Fund

Companies” who have raised huge sums of money from the public at large. The State

Governments are the appropriate authorities for regulation of such Chit Fund

companies/Schemes under the Chit Funds Act 1982.

However, in view of the larger public interest involved in these cases, and concerns regarding

misuse/laundering by such companies of the ill gotten wealth, and the possibility that the

promoters of these companies may strip these companies, it has been decided by the Ministry

of Corporate Affairs to set up a Special Task Force in the Serious Fraud Investigations

Office (SFIO) to investigate the affairs of such companies. Accordingly, all investigations into



such companies are being entrusted to SFIO with immediate effect. The Task Force will also

co-ordinate with other law enforcement agencies and regulators wherever required.

21 New Textile Parks Launched in India

The Union Minister for Commerce, Industry and Textiles, Anand Sharma launched 21

New Textile Parks approved under Scheme for Integrated Textile Parks (SITP) in New

Delhi on 23 April. These new parks take the total number to 61 parks as 40 Parks were

sanctioned earlier. The Scheme for Integrated Textiles Parks (SITP) has been

instrumental in development of wide range of models for green field clusters from a 1000 acre

FDI driven integrated cluster, to a 100 acre power loom cluster and a 20 acre handloom

cluster. Under the scheme, 61 parks have been sanctioned – 40 projects were started in the

11th Five Year Plan and another 21 projects are to be implemented in the 12th Five Year

Plan.

Out of the 40 parks sanctioned earlier, a total of 25 parks are already operational. Most of the

remaining parks are expected to be completed during this financial year. The estimated

employment generation is over 10 lakh persons with total estimated investment of Rs. 27,562

crore. Out of the 21 new parks, six are in Maharashtra, four in Rajasthan, two each in Andhra

Pradesh and Tamil Nadu and one each in Uttar Pradesh, West Bengal, Tripura, Karnataka,

Gujarat, Himachal Pradesh and Jammu and Kashmir. In this year’s budget speech, the Finance

Minister announced an additional amount of up to Rs. 10 crore per park for setting up apparel

manufacturing units for the projects under the SITP. Necessary action is being taken for

implementing the announcement.

New Campus of IITTM inaugurated at Noida

Union Tourism Minister K. Chiranjeevi inaugurated the new campus of Indian Institute of

Tourism and Travel Management (IITTM) at Noida on 23rd April 2013. Speaking on the

occasion, the Minister said India has the age-old tradition of Athiti devo bhava that has been

shadowed by social tensions of modern days. He said, “We cannot promote tourism if our

visitors do not trust hosts and hosts do not welcome visitors. The host community must

provide the landscape for tourism. To revive the tradition of Athithi Devo Bhava; tourism

students can act as the brand ambassadors and help the host community in realizing the

importance of this industry”. The new campus of IITTM is spread over 10 acres of land in

Sector 62 of Noida. The campus has been constructed at a cost of Rs. 27.70 crore. The IITTM

is an autonomous organization of the Ministry of Tourism, Government of India and is one of

the premier institutes in South Asia offering education, training, research and consultancy in

sustainable management of tourism, travel and other allied sectors.



Indira Gandhi Super Thermal Power Project dedicated to the nation

Minister of State (I/C) for Power Jyotiraditya M. Scindia along with Haryana Chief

Minister Bhupinder Singh Hooda on 26th April dedicated to the nation the Indira Gandhi

Super Thermal Power Project at Jhajjar in Haryana. The minister lauded the efforts of

NTPC, Government of Haryana and Delhi Government for making this Project a success. While

addressing the gathering, Scindia said with the commissioning of this project, all the three

units in the first stage is commissioned and commercial operation started. Presently, 1500 MW

of power is being generated through this plant. In 2007, UPA Chairperson Sonia Gandhi laid

the foundation of this project. The project is completed with a total cost of Rs. 7,900 Crore.

Haryana, Delhi, and other northern region states and Union Territories will greatly benefit from

this Thermal Power Project in which NTPC holds 50 % share.

The Prime Minister’s Economic Advisory Council (PMEAC) under the Chairmanship

of C. Rangarajan on 23 January 2013 presented the Economic review 2012-13. Some of the

highlights are-

o India’s economy is expected to grow 6.4 per cent in the new financial year that began on 1

April 2013.

o PMEAC pegged the WPI inflation at around 6 per cent and food inflation, at 8 per cent.

o Net FDI at US $ 18 billion in FY13. FII inflows at 24 billion dollar in FY13 We expect net FDI

inflow at 24 billion dollars and FII at 18 billion dollars for FY14

o The fiscal deficit of the Centre for 2012-13 is estimated to be 5.2% of GDP. It was Rs.

5,20,924 crore in 2012-13 as per revised estimates, and is expected to be Rs. 5,42,499 crore

in 2013-14 as per budget estimates.

o Current Account Deficit is estimated to be US $ 94 billion (5.1% of GDP) in 2012-13 and is

projected to be us $ 100 billion (4.7% of GDP) in 2013-14.

Committee constituted for MSME Exports review

Worried over widening trade gap, the government on 27th April 2013 has set up a six-member

inter-ministerial committee under the chairmanship of Finance Secretary R.S. Gujral. The

committee will suggest measures to boost MSME exports. Micro, Small and Medium

Enterprises (MSME) sector contributes about 40% in the country's total exports and over 8%

to India's Gross Domestic Product (GDP). "The committee will suggest short and long term

measures to enhance exports from MSME sector. It will submit its recommendations by mid-

May," an official said.



The official said there is an urgent need to look at the MSME sector as exports are not doing

well due to which the country's trade deficit has touched an all-time high of US $ 190.1 billion

in 2012-13. Although the government is taking every step including recent announcement of

incentives and revamping special economic zone (SEZ) policy in order to increase

shipments from the country, more needs to be done, the official added. India's exports

declined by about 2% to US $ 300.5 billion in 2012-13, way below the US $ 360 billion target

that was set at the beginning of the year, due to the global demand slowdown. The widening

trade gap is adding woes on the Current Account Deficit (CAD), which has emerged as a

tough policy challenge for the government. CAD crossed 6.7% of the GDP in the third quarter

of last fiscal. As per estimates, the share of MSME exports has fallen from 40% to 36% to the

country's total exports. The sector accounts for around 45% of the manufacturing output and

provides employment to about 6 crore people through 26 million enterprises.

BSE Launches Islamic Equity Index

The Bombay Stock Exchange (BSE) on 30th April has launched an Islamic Equity Index

based on the wide-measure S&P BSE 500 index, providing a new benchmark for Islamic

investors in one of the world's largest stock exchanges. The new index comprises the largest

500 companies in the BSE, out of more than 5,000 listed, which fit Islamic finance principles

such as bans on investing in alcohol, tobacco and gambling-related businesses. The country's

first Islamic Index was launched in 2010, also by the BSE, tracking the 50 largest and most

liquid stocks. The Mumbai Exchange had a total market capitalization of US $ 1.32 trillion as of

January 2013. In order to cater to an estimated 177 million Muslims in India, the largest

Muslim minority population in the world, the industry is hoping to develop investment products

that work around this requirement, but political and legal obstacles mean progress has been

slow.

World Bank scaled down India's growth rate to 6.1 per cent

World Bank on 30th April scaled down India's growth forecast to 6.1 per cent for the

current fiscal from 7 per cent projected six months ago. The decline in the growth forecast is

largely due to the decline in agriculture sector which is expected to grow at 2 per cent during

2013-14 against the previous estimate of 2.7 per cent despite normal monsoon projection.

However, the multi-lateral funding agency said that India is regaining economic momentum

and growth is expected to recover gradually to its high long-term potential. As per the latest

India Development Update of the World Bank, Indian economy would grow by 6.1 per cent in

2013-14 on account of robust domestic demand, strong savings and investment rate.



Growth projections for 2013-14 have been arrived at by taking into account present internal

and external factors. "Economic growth is likely to accelerate to over 6 per cent during the

current financial year (April 2013-March 2014). Growth is expected to increase further to 6.7

per cent in 2014-2015," said Denis Medvedev, Senior Country Economist, World Bank, India.

"Recent data point to some improvements in economic activity: inflation and trade deficit came

down in recent months, while private consumption and investment growth had accelerated in

the third quarter of 2012-2013," he said. According to the Update, a twice-yearly report on the

Indian economy and its prospects, GDP growth during 2012-13 would be around 5 per cent,

lowest in the decade. As per the International Monetary Fund (IMF) report released yesterday,

India's GDP is likely to improve to 5.7 per cent during year ending December 2013 and further

to 6.2 per cent a year after.

May

SC upheld decision allowing 51 per cent FDI in MBR

The Supreme Court on 1st May 2013 upheld the constitutional validity of Government’s

decision allowing 51 per cent foreign direct Investment in the multi-brand retail

sector. A bench of Justices R. M. Lodha, Madan B. Lokur and Kurian Joseph gave the ruling.

The bench observed that there was no harm in giving the policy a chance. It saw merit in the

policy that it would eliminate intermediaries and help provide farmers a better price for their

produce. It dismissed the petition filed against the 51 per cent FDI in multi-brand retail. As per

the court, the policy will affect the lives of only 13.3% of the country's population living in 53

cities.

Rajiv Lal elected as IDFC MD and CEO

Infrastructure financier IDFC on 2 May has announced that its current Managing Director

and Chief Executive Officer Rajiv Lal would replace outgoing

chairman Deepak Parekh. Mr. Parekh will leave the government-

promoted IDFC to chair the IDFC advisory council - consultative body

that will be formed within the next few months. Mr. Parekh has been

the chairman of the government promoted infrastructure financier for

the last fifteen years. IDFC said in a statement, "Parekh has

relinquished his post as Chairman. The board has appointed Rajiv Lall

(55) as the Executive Chairman and Vikram Limaye as the

Managing Director and CEO."



CCEA approves FDI of Ingka Holding BV Netherlands

The Cabinet Committee on Economic Affairs (CCEA) approved to the proposal of Ingka

Holding B.V., Netherlands on 2 May, as recommended by the Foreign Investment

Promotion Board (FIPB). The approval would result in FDI inflows amounting to Rs. 10, 500

crore approximately into the country.

CCEA approves setting up of CPSE ETF

The Cabinet Committee on Economic Affairs (CCEA) on 2 May, approved the setting up of

a Central Public Sector Enterprises (CPSE) Exchange Traded Fund (ETF), which would

comprise CPSE stocks (from amongst the listed CPSE stocks). Each stock would have a fixed

weightage in the basket. The composition of the basket, the launch of the New Fund Offer

(NFO), the discount to be provided and other issues relating to contribution and pricing of the

ETF would be decided by the Empowered Group of Ministers (EGoM). This will help in

minimizing market disruptions seen in public offerings of listed CPSEs; increase ability of the

Government to monetize partial stakes in listed CPSEs, some of which have low liquidity and

free float; broad base retails participation of shares of CPSEs, and moreover, help to deepen

the market for equity-based products; beneficial to the Government from a pricing perspective

as part of the discounts could be back-ended; in the perspective of success of ETFs globally, a

CPSE ETF will boost the ETF product in the country, and will help fulfill the domestic

investors.’ appetite for an equity ETF products as the domestic Indian investor is vastly under-

served vis-a-vis the foreign investor community. CPSE ETF is made up of a basket of shares of

different CPSEs that tracks an index fund, but trades like a stock on the exchange.

RBI cuts the key interest rate to 7.25

Sticking to its cautious stance, the Reserve Bank of India (RBI) on 3rd May cut the key

interest rate by just 0.25 per cent to 7.25 per cent and kept the liquidity enhancing cash

reserve requirement unchanged, disappointing the industry and stock market. The RBI in its

annual monetary policy statement said there would be modest improvement in the country’s

economic growth to 5.7 per cent in the current fiscal, as against the decade’s low of 5 per cent

in 2012-13. Justifying the limited easing, RBI Governor D. Subba Rao said the “monetary

policy action, by itself, cannot revive growth. It needs to be supplemented by efforts towards

easing the supply bottlenecks, improving governance and stepping public investment”.

The upside risks to inflation, which cooled to a three-year low in March, “still remain

significant” in the near term on suppressed inflation on the energy front, Mr. Subba Rao

added. “Overall, the balance of risks stemming from the Reserve Bank’s assessment of the



growth-inflation dynamic yields little space for further policy easing,” he said. The decision to

leave the CRR unchanged seems to have been driven by an improvement in the liquidity

deficit, as the banks are now drawing around Rs. 84,000 crore from the overnight window

compared to Rs. 1.8 lakh crore late last fiscal. RBI expects inflation to hover broadly around

the 5.5 per cent mark in the current fiscal and said it will deploy “all instruments at command”

to bring it down to 5 per cent by March next year.

US $ 6 billion ADB loan to India

Asian Development Bank (ADB) on 5th May 2013 announced that it is going to provide

about US $ 6 billion loan to India over the next three years which was decided at the

concluding day of the 46th annual meeting of the funding agency. Although, the ADB is facing

the challenge of raising resources, the basic idea behind providing loan is to maintain its

lending level to India. The bank is working on partnership strategy and is planning to maintain

the level of lending to India. It is important here to note that India is the biggest borrower of

ADB; it has barrowed a loan of US $ 2.4 billion in 2012 across sectors like transport, energy,

commerce, industry, trade and finance. The bank will also continue to lend US $ 10 billion a

year across the member-nations despite generating lower return from investments.

Cobraposts , Red Spider 2 operation slams PSB’s

In connection with Cobrapost, Red Spider 2 Expose, which was released on 6 May, Rajiv

Takru, Secretary, Department of Financial Services (DFS) and Ministry of Finance have

ordered the Chairman cum Managing Directors (CMDs) of various Public Sector Banks and

Life Insurance Corporation of India an immediate action in the matter. The Secretary of DFS

had also sought compliance and action taken report to be submitted on utmost priority. As a

result, certain PSBs have already taken action and in some cases, the work is still in progress.

So far, 15 officers/employees of various PSBs have been suspended including one from

insurance sector. Besides that, ten officers of PSBs have been divested of their work and six

have been asked to proceed on leave. More action taken reports are expected in near future.

10 per cent equity sale in Coal India approved

An Inter-ministerial Group has approved 10 per cent equity sale in Coal India which is

expected to fetch over Rs. 17,000 crore to the government on 9th May. At present, the

government holds 90 per cent stake in Coal India Ltd. The Group headed by Disinvestment

Secretary Ravi Mathur is guiding the process of disinvestment of government's equity in CIL.

Besides, the panel has members drawn from Ministry of Coal, Departments of Legal Affairs,

Economic Affairs, Corporate Affairs and Chairman-cum-Managing Director of CIL. Coal



India, which has a cash balance of about Rs. 60,000 crore, will be the biggest disinvestment

for the government in the 2013-14 fiscal. The government would like to earn Rs. 40,000 crore

through PSU stake sale in this fiscal.

CCEA approves setting up of two major ports in the country

The Cabinet Committee on Economic Affairs (CCEA) approved the proposal of the

Ministry of Shipping for setting up of two major ports in the country on 9th May 2013. The

two ports will come up in Andhra Pradesh and West Bengal each through Public Private

Partnership mode. As per the proposal approved, one port is expected to come up

at Dugarajapatnam, Nellore district in Andhra Pradesh and looked forward to find out the

techno-economic feasibility report for commissioning of the port. Another port will be

developed at Sagar Island in West Bengal after obtaining environmental clearances and

following exact procedures for development of the project. The cabinet also agreed for

appointment of the transaction advisers and legal consultants and finalisation of the project

structure in consultation with the State Government of West Bengal and the Planning

Commission.

NSE launches country’s first dedicated debt trading platform

National Stock Exchange launched the country’s first dedicated debt trading platform

on 11 May, 2013. The new Platform launched is awaiting the market regulator Securities and

Exchanges Board of India’s (SEBI) guidelines for allowing participation of mutual funds,

insurance companies and pension funds. NSE had recently received approval from SEBI to

launch the debt segment. The debt trading platform is supposed to provide retail investors an

opportunity to invest in corporate bonds on a liquid and transparent exchange platform. Banks

and primary dealers are the first to enter and they will provide enough liquidity in the debt

segment. The mutual funds, insurance companies and pension funds are also expected to

participate after guidelines for the same are issued. The Debt Trading exchange platform is

an innovation, which has been launched after intensive feedback from market participants. It is

similar to RBI’s NDS-OM, where Government securities are traded on a transparent platform.

UP accounted the largest number of mobile subscribers

According to TRAI data, Uttar Pradesh accounted for the largest number of mobile

subscribers in India followed by Tamil Nadu, Maharashtra, Andhra Pradesh and

Bihar. Uttar Pradesh has a total of 121.60 million mobile phone connections, while, Tamil

Nadu has 71.81 million subscribers. Maharashtra is at the third position, with a subscriber base

of 67.73 million followed by Andhra Pradesh and Bihar at 64.12 million and 60.73 million,



respectively. These five states together account 366 million mobile subscribers, which is 45 per

cent of the total cell phone connections in the country. Karnataka stands sixth with 52.45

million mobile subscribers followed by the central Indian state of Madhya Pradesh with 51.43

million subscribers.

Gujarat, fast rising as the most industry-friendly state, came eighth with 51.23 million cell

phone connections, while Rajasthan, the largest state in terms of area, has 47.83 million

mobile subscribers. India, which is the world's second largest mobile phone market in

terms of subscribers, had 861.66 million mobile connections as on February

2013, data from telecom regulator Telecom Regulatory Authority of India (TRAI)

showed. Mobile subscriber base in the country declined by 0.11 per cent to 861.66 million at

the end of February 2013 from 862.6 million in January 2013 India's total telecom subscriber

base, which includes mobile and landline connections, declined marginally to 892 million in

February 2013 from 893.1 million at the end of January this year. India's telecom subscriber

base had touched an all-time high of 965.5 million in June 2012.

RBI imposed restrictions on gold import

The RBI imposed restrictions on gold import by banks in order to moderate the

demand of gold for domestic use, on 12th May 2013. The RBI decided to restrict the

import of gold on consignment basis by banks, only to meet the genuine needs of exporters of

gold jewellery. The RBI stated that the decision is based on the recommendations of the

Working Group on Gold that had suggested aligning gold import regulations with the rest of the

imports for creating a level playing field between gold imports and other imports. The

restrictions have come into effect immediately.

Union proposed stronger powers to SEBI

The Union Government in month of May 2013 proposed enhanced powers to Securities and

Exchange Board of India (SEBI) enabling it to carry out search and seizure operations and

for attachment of assets. With this a special power has also been proposed to SEBI with which

it can seek information on telephone call data records, from any persons or entities in respect

to any securities transaction being examined by it. It is worth mentioning here that proposals

to make required amendments in the SEBI Act and other relevant regulations have been

finalized after detailed consultations with the market regulator and are being presented before

the Union Cabinet for its approval. The Government is planning to introduce the Securities

Laws (Amendment) Bill, 2013 in Parliament to carry out the proposed changes for grant of

stronger powers to the market regulator. The Government has come up with the decision of

accepting most of the proposals made by SEBI in this regard and the amendments would be



carried out after the Cabinet approves them and the required amendment Bill is passed by

Parliament.

GoI hiked monetary assistance to Indira Awas Yojana

The Union Government hiked the monetary assistance by 25,000 rupees under the Indira

Awas Yojana (IAY), the housing scheme for the poor, giving priority to the scheduled castes,

tribes and minorities, on 13th May 2013. The cost for 250 square foot housing unit has gone up

to Rs. 70,000 in plain areas and Rs. 75,000 in hilly and difficult areas from Rs. 45,000. The

Union Government under the new guidelines of the IAY has decided to transfer the share of its

funds to the State Governments rather than making a district based allocation. The Union

Government’s assistance got procurement of a homestead site to the states has been doubled

for landless poor from Rs. 10,000 to Rs. 20,000. The changes has been brought in following

the agreement reached between the Government and the Jan Satyagraha on 11 October 2012

at Agra, also known as the Agra Agreement on Land Reforms in which 10-point agreement was

signed by the Rural Development Minister Jairam Ramesh at Agra.

Planning Commission approved Project Ananta

The Planning Commission approved Project Ananta, a Rs. 8,000 crore programme that

looks for pulling Anantapur district out of the control of the perennial drought. The Planning

Commission has approved a Rs. 53,000 crore Plan for the State, up by 8.2 per cent,

compared to Rs. 48,935 crore in year 2012. The project will take a holistic approach to achieve

the target. The Commission is supposed to send its team to study the feasibility of the scheme.

Both the State and the Centre would fund the Project. After getting the Planning Commission

nod, the State would consider starting similar programmes for other backward districts such as

Medak, Adilabad and Srikakulam. A high-level team of scientists suggested that the district

required a five year plan to take stock of the situation and prepare a plan to address issues

such as natural resource management, crops and livestock.

GoI decided to launch Inflation Index Bonds

Pursuant to the announcement made in the Union Budget for 2013-14, the Government of

India in consultation with Reserve Bank of India (RBI) has decided to launch Inflation

Index Bonds (IIBs) as instruments that will protect savings of the poor and middle classes

from inflation and incentivise the household sector to save in financial instruments rather than

buy gold. An official press release on 16 May said that, for appropriate price discovery and

market development, however, it is necessary to issue comparable instruments through

auctions to the institutional investors such as Pension Funds, Insurance, and Mutual Funds.



"This will create demand for IIBs and help in making them tradable in the secondary market.

It is therefore proposed to issue initial series for institutional investors (including 20% to retail

investors.) and later, another series, exclusively for retail investors. First series of IIBs would

be issued in H1 of the current FY. With a view to target greater retail participation for this

series also, it has been decided to enhance the non-competitive segment for retail investors to

20%, from the present level of 5%," the release said.

US may granted conditional authorisation to export LNG

Opening up the prospects of export of shale gas to energy-starved India, the U.S. on 17

May, has granted conditional authorisation to export domestically-produced liquefied

natural gas (LNG) to countries that do not have a free trade agreement (FTA) with it. In a

decision, which has major implications for India, the Department of Energy (DoE), on 17

May, announced that it had conditionally authorised Freeport LNG Expansion, LP and FLNG

Liquefaction, LLC (Freeport) to export domestically-produced LNG to non-FTA countries from

the Freeport Terminal on Quintana Island in Texas. Given that the companies from countries

such as China, Japan and Britain have already an overwhelming stake in this Texas Company,

India is unlikely to benefit immediately from this grant of licence. But the decision paves the

way for India, which does not have a free trade agreement with the U.S., to get its companies

seek similar licences for import of the much-needed gas from the U.S. in large quantities from

other terminals. The existing federal law generally requires approval of natural gas exports to

countries that have an FTA with the U.S. For countries that do not have an FTA with the U.S.,

the Natural Gas Act directs the Department of Energy to grant export authorisations

unless the Department finds that the proposed exports “will not be consistent with the public

interest.”

RBI restricts Banks and NBFCs from lending against gold coins

The Reserve Bank of India (RBI) on 27th May 2013 imposed restrictions on banks and

NBFCs for providing loans against gold coins as well as units of gold ETFs and mutual funds to

curb demands for gold. Also banks were asked to ensure that the amount of loan to any

customer against gold ornaments, gold jewellery and gold coins (weighing up to 50 grams)

should be within the board approved limit. Banks are currently permitted to grant advances

against gold ornaments and other jewellery and against specially minted gold coins sold by

banks. However, no advances can be granted by banks for purchase of gold in any form,

including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded

funds and units of gold mutual funds. Government has taken several steps recently, including

raising import duty, to curb the inbound shipments of gold. RBI too had put restrictions on



banks on gold imports, which has led to forex outflow and widening of the Current Account

Deficit.

IMF lowered China’s economic growth to 7.75

The International Monetary Fund (IMF) lowered its forecast for China’s economic

growth at 7.75 % for the year 2013, citing a weak world economy and exports in

Washington on May 29th. Earlier, it had forecasted 8 % growth. Annual economic growth

of China fell to 7.8 % in 2012, the slowest since 1999 because of its decreasing export

demand and increasing costs, the euro-zone debt crisis and uncertainty over the US economic

recovery. China is world’s second largest economy. The IMF advised that China should put

priority on reining in social financing growth, or else the country's fast credit supply may fuel

inflation in future.

Economic growth rate fell at 5 %for 2012-13

According to data released by the Central Statistical Organization (CSO) on 31st May

2013, economic growth slowed to 4.8 % in the January-March quarter and fell to a decade's

low of 5 % for the entire 2012-13 fiscal due to poor performance of farm, manufacturing and

mining sectors. The economic growth or GDP had expanded by 5.1 % in January-March quarter

of 2012-13. The Indian economy had grown by 5.4 %, 5.2 % and 4.7 % and in the first,

second and third quarters, respectively, of 2012-13.

The country had clocked 6.2 % growth in 2011-12 fiscal. In January-March quarter of

2012-13, manufacturing sector grew marginally by 2.6 %, against 0.1 % growth in the same

period of the earlier fiscal. During 2012-13, the sector grew by a meager one per cent

compared to 2.7 % in the previous fiscal. Mining and quarrying sector contracted by 3.1 %

during the fourth quarter of last fiscal. Farm sector output expanded by just 1.4 % in January-

March this year, as against 2 % in the same quarter of 2011-12. The agriculture sector also

grew at a slower rate of just 1.9 % in 2012-13 compared to 3.6 % in 2011-12.

1 lakh crore in petroleum subsidy for 2012-13

Following the intervention of Prime Minister Manmohan Singh, the Finance Ministry on

May, has been pushed to release nearly Rs. 1 lakh crore in petroleum subsidy for 2012-

13 for the three oil marketing companies (OMCs) with a caveat that the Petroleum

Ministry would shift to export parity price (EPP) for pricing of petroleum products. This

move is likely to save Rs.18,000 crore in subsidy outgo. The move to shift to a new formula for

pricing of petroleum products would be done soon after the submission of a report by Kirit



Parekh panel, which is looking into the issue. The Finance Ministry is of the view that petrol

and diesel should be priced at a rate they can get in export market, rather than the present

practice of pricing the fuels after adding transportation cost and customs duty to the

international price. The subsidy issue was resolved after a meeting between the Finance

Minister, P. Chidambaram, and Petroleum and Natural Gas Minister Veerappa Moily in the

presence of Dr. Singh.

IOC and CPC set a Joint Venture

Indian Oil Corporation (IOC) and Ceylon Petroleum Corporation (CPC) are set to form a

joint venture (JV) for taking up various initiatives in the oil and gas sector, including supply

of LNG to Sri Lanka by Petronet LNG Limited (PLL) to feed power plants in that

country. The decision to form the jv was taken following a meeting between the Petroleum

Secretary, Vivek Rae and the Ministry of Finance and Planning and Secretary, Ministry of

Economic Development, Sri Lanka, P. B. Jayasundara, recently.

Seeking to put the co-operation in the oil and gas sector on the fast track, the government has

asked IOC to formalize a proposal within this month, and submit the same to CPC to facilitate

further discussions. While acknowledging that there were pending issues of Lanka IOC, the Sri

Lankan side suggested that the best way forward was to carry the initiative for enhancing co-

operation between the two countries. It was decided during the meeting that IOC would

submit a comprehensive proposal on the structure of the proposed JV that would address all

concerns of IOC.

June

Narayana Murthy back in Infosys as Executive Chairman

In a surprise rejig at the top on 1st June, N.R. Narayana Murthy is back in Infosys as

Executive Chairman at a time when the IT major has lost ground to rivals, and the stock has

been among the worst performers in its league. The company, which Narayana Murthy co-

founded with six others for US $ 250, is now US $ 7-billion software major but has been going

through a rough patch in the last two years. With Murthy’s appointment as Executive Chairman

of the board and Additional Director for the next five years, the country’s third largest software

exporter hopes to make up the lost ground. The board proposes to extend the retirement age

for the Executive Chairman to 75 years. “This is my second innings and an exciting, yet

somewhat new level of challenges awaits me,” said Murthy who got to know of his role this

morning. However, the shareholders have to give their nod to the appointment of Murthy, who



retired from Infosys in August 2011 and has not held an executive role the last seven years.

K.V. Kamath, who was appointed Chairman after Murthy’s exit, will step down this month.

RBI released clarifications for licensing of new banks

The Reserve Bank of India (RBI) released certain clarifications on the guidelines issued for

licensing of new banks on 3rd June. Based on the feedback received from the interested

entities, the RBI increased the validity period of the in-principle approval of setting up of banks

from one year to 18 months. The RBI stated that intending applicants have brought out several

complex issues pertaining to reorganization of the existing corporate structure, restructuring of

businesses and meeting the regulatory requirements.

Once the in-principle approval is given by the RBI for setting up of a bank, the promoter

group has to set up a Non-Operative Financial Holding Company (NOFHC) and the bank

within 18 months from the date of in-principle approval. The bank has to start banking

business within this period after getting the banking licence.

GoI hiked the import duty on gold from 6 to 8 per cent

The Union Government hiked the import duty on gold from 6 per cent to 8 per cent

here on 5th June. The hike is aimed at curbing the import of gold, which is largely responsible

for the rise in Current Account Deficit (CAD) and impacts the foreign exchange reserves of

the country as well as the value of rupee. The import duty on platinum was also increased

from 6 per cent to 8 per cent, following the Customs notification. Before the hike in import

duty, the RBI took several steps to limit the imports to meet genuine domestic demands for

jewellery and export purposes. The excise duty on gold ore was also raised from 5 per cent to

7 per cent through another notification issued by Central Board of Excise and Customs.

This is the second hike on the duty of gold imports in six months and the decision of

government came up after witnessing the alarming 162 tonnes import of gold in May 2013. In

April and May 2013, import touched new figures of US $ 15 billion. The CAD touched a historic

high of 6.7 per cent of GDP in the quarter ending December 2012. Earlier the import duty on

gold was hiked from 4 per cent to 6 per cent in January 2013. CAD is the difference between

inflow and outflow of foreign currency.

GAIL signed MoU with Shipping Corporation of India

GAIL India announced signing an MoU with Shipping of Corporation India (SCI) on 6th

June for transporting LNG sourced by GAIL from the U.S. The MoU was signed in the

presence of B. C. Tripathi, Chairman and Managing Director, GAIL India, and B. K. Mandal,



Chairman and Managing Director, SCI. Under the MoU, both entities would join hands for

transportation of 5.8 million tonnes LNG per annum, which is being sourced by GAIL from

Sabine Pass and Cove Point terminals in the U.S.

The co-operation would include SCI assisting GAIL in the charter hiring of LNG ships

and GAIL assigning step-in right to SCI in the owneRs.hip of LNG ships. GAIL has signed an

LNG sales and purchase agreement with Cheniere Energy Partners, LP (Cheniere) for 20 years.

It has also signed a terminal service agreement with Dominion through GAIL Global (U.S.) LNG

LLC.

WEF 2013 meeting held in Myanmar

The Union Minister of Commerce, Industry and Textiles Anand Sharma on 6th June,

asserted that fostering of democracy in Myanmar has provided an enabling environment

which can inspire the investors’ confidence and India remains committed “to be a steadfast

partner of Myanmar as it charters its path to growth and progress.”

Speaking during a session entitled “The Long-Term View” at the World Economic

Forum on East Asia 2013 in Nay Pyi Taw, Myanmar, Sharma highlighted that India’s

engagement with Myanmar is premised on a strong development partnership and India

would like to align its cooperation with the economic priorities of Myanmar. With India

concluding a Comprehensive Economic Partnership Agreement with ASEAN, Sharma

stressed that this over-arching framework will act as a catalyst to boost trade and investment

ties with countries of the region including Myanmar.

Sharma also spoke on the importance of investment in development of human

resource, by adding that India has always believed that it will reap dividends in the long run.

“We have already established Centre of Excellence in IT sector in Yangon. We are going to

establish another university-like Information Technology Institute in Mandalay. In addition to

that we have also established an Industrial Training Centre in Pakokku to develop skilled

labour for Myanmar industry,” said Sharma. During the visit of Indian Prime Minister Dr.

Manmohan Singh in 2012, India announced doubling the number of training slot to Myanmar

from 250 to 500.

Emphasizing the fact that sound infrastructure will help in the creation of a robust

economic linkage between India, Myanmar and beyond, Sharma said that “India is developing

Kaladan Multimodal Transit-Transport Project which will connect Mizoram to Sittwe

port in Myanmar.”



National Skill Development Agency constituted

Pursuant to the Union Cabinet approval, the Government has constituted the National

Skill Development Agency (NSDA) on 7th June by subsuming the Prime Minister’s

National Council on Skill Development (PMNCSD), the National Skill Development

Coordination Board (NSDCB) and the Office of the Adviser to the PM on Skill

Development.

The NSDA will coordinate and harmonise the skill development efforts of the

Government of India and the private sector to achieve the skilling targets of the 12th Plan and

beyond. It will endeavour to bridge the social, regional, gender and economic divide by

ensuring that the skilling needs of the disadvantaged and marginalized groups SCs, STs, OBCs,

minorities, women and differently-abled persons are taken care of through the various skill

development programmes.

While the Central Ministries and National Skill

Development Corporation (NSDC) will continue to

implement schemes in their remit, the NSDA will develop and

monitor an overarching framework for skill development,

anchor the National Skills Qualifications Framework

(NSQF) and facilitate the setting-up of professional certifying bodies in addition to the existing

ones. NSDA will be an autonomous body chaired by a person of the rank and status of a

Cabinet Minister supported by a Director General and other support staff.

Discontinue of telegraph service from July 15, 2013

Smart phones, emails and SMSes seem to have pushed the humble telegram service to a

quiet corner with the BSNL deciding to discontinue the 160-year-old telegraph service

from July 15. Once the main source of quick and urgent communication, the service delivered

several happy as well as sad news to the people all over the country. But with the advent of

technology and newer means of communication, the telegram found itself edged out.

As per a circular issued by Shameem Akhtar, Senior General Manager (Telegraph

Services) Bharat Sanchar Nigam Ltd (BSNL) Corporate office, New Delhi, the telegraph

service is to be discontinued with effect from July 15, 2013.

The circular has also directed the telecom offices to maintain the log books, service

messages, delivery slips only for six months from the date of bookings. However, complaints,

press reports and other messages from different consumer forum are to be kept for one year.

Two months ago, telegram services for overseas communication were withdrawn by BSNL.



Facebook opened its first data centre outside the US

Facebook on 12 June, opened its first data centre outside the United States, in Luleaa, a

coastal Swedish town near the Arctic Circle. In opening the facility in the arctic north,

Facebook joins Google and other tech companies attracted by chilly temperatures that rarely

exceed levels that require special cooling capabilities which critics say hurt the environment.

Luleaa, just south of the Arctic Circle, was also chosen due to its renewable energy resources.

Facebook said data equipment inside the facility were to be powered by locally generated

hydro-electric energy.

Apollo Tyres to acquire Cooper Tire & Rubber Company

Apollo Tyres, on 12th June, said it would acquire U.S.-based Cooper Tire and Rubber

Company in an all-cash transaction valued at approximately Rs. 14,500 crore (US $ 2.5

billion), making the combined entity the seventh largest tyre company in the world.

Cooper is the 11th largest tyre maker in the world by revenue. It supplies premium and mid-

tier tyres through brands such as Cooper, Mastercraft, Starfire, Chengshan, Roadmaster

and Avon. As part of the deal, Apollo Tyres will take over the operations of the American firm,

including eight plants and 14,000 employees spread across different parts of the world.“This

transformational transaction provides an unprecedented opportunity to serve customers across

a host of geographies in both developed and fast-growing emerging markets around the

world,” Apollo Tyres Chairman Onkar S. Kanwar said. In terms of tyre production, Apollo's

capacities will more than double from 1,500 tonnes per day to 3,500 tonnes per day, according

to Apollo Tyres Vice-Chairman and Managing Director Neeraj Kanwar.

World Bank slashed China's economy to 7.7 per cent

The World Bank slashed its growth forecast for China's economy for 2013 to 7.7 per cent

from 8.4 per cent, here on 14th June. In its report, the World Bank stated that the main risk

related to China remains is - the possibility of high investment rates proving unsustainable and

provoking a disorderly unwinding and sharp economic slowdown. The projection is lower than

the 7.8 per cent expansion the country recorded in 2012, which was its weakest in last 13

years.

The report also stated that the Chinese household debt is around two to three times

higher than the level before 1997, when the Asian Financial Crisis hit. It added that, while the

headline inflation rate is mild, price pressures remain in certain rapidly growing segments of

the economy, including real estate. In April 2013, China announced unexpectedly weak growth



of 7.7 per cent for the first quarter, surprising analysts who had expected expansion to

accelerate in 2013, after showing strength at the end of 2012.

Other recent indicators have raised alarm bells, with exports showing almost no growth

in May 2013, while industrial output expanded at a slightly slower pace than April 2013 and big

ticket investment growth also eased. The World Bank's forecast cuts followed a recent lowering

by the International Monetary Fund to 7.75 per cent from the previous 8.0 per cent.

Indian telecom sector become second largest telephone network

The Indian telecom sector has registered a phenomenal growth during the past few years

and has become second largest telephone network in the world, after China. A series of

reform measures by the Government, the wireless technology and active participation by

private sector played an important role in the exponential growth of telecom sector in the

country. National Telecom Policy-2012 (NTP-2012) was announced with the primary

objective of maximizing public good by making available affordable, reliable and secure

telecommunication and broadband services across the entire country.

With the implementation of NTP 2012, the number of telephonic connections rose

exponentially. The number of telephone connection was 893.14 million as on January 2013

with the rural telephone connections having increased by nearly 10 million in the last

year. The overall teledensity stood at 73.07 per cent as on January 2013 with the rural

teledensity crossing 40 per cent. This is in sharp contrast with the overall teledensity of

7.04 per cent and rural teledensity of merely 1.7 per cent in March 2004.

As far as mobile penetration is concerned, the preference for use of wireless telephony

continues. The share of wireless telephones increased from 96.62% as on March 31, 2012 to

96.74% by the end of June 2012 and thereafter slightly declined to 96.56% by the end of

December 2012. On the other hand, the share of landline telephones slightly increased from

3.38% to 3.44% during the period from April to December 2012. The wireless subscriber base

increased from 33.6 million in March 2004 to 864.72 million as on December 2012. On the

other hand, the average tariff for each outgoing call per minute for GSM services dropped from

Rs. 2.89 in March 2004 to 47 paisa in December 2012.

IIFCL launched its first infrastructure debt fund

India Infrastructure Finance Company Limited (IIFCL) has launched on 18th June, its

first infrastructure debt fund (IDF) with targeted initial corpus of US $ 1 billion. The

company has launched the debt fund through the mutual fund route. After launching the new



scheme, Finance Minister P. Chidambaram said the fund would help mobilize long-term

financing for infrastructure projects. Chidambaram said introduction of the new scheme by the

IIFCL would "pave the way for setting-up of more such infra debt funds."Besides IIFCL, other

investors in the debt fund include Canara Bank, Oriental Bank of Commerce, Corporation Bank

and HUDCO. The new scheme will mainly undertake investment in debt securities or

securitized debt instruments of infrastructure companies, infrastructure capital companies or

infrastructure projects, special purpose vehicle (SPV), bank loans etc. with the investment

objective of capital appreciation and trade on the stock exchange, according to a statement

issued by the finance ministry. IIFCL chairman S.K. Goel said the IDF will complement

commercial banks in providing the required long-term funding to infrastructure sector and help

in addressing their asset liability mismatch.

FDI limit to 74% in multi-brand retail recommended

A government panel on 19th June has recommended a dramatic liberalization of India's

foreign direct investment (FDI) regime, including raising the FDI limit to 74 per cent in

multi-brand retail and allowing complete foreign ownership of telecom and aviation

companies.

"We have given our recommendations to the finance minister. He has forwarded them to the

Department of Industrial Policy and Promotion (DIPP)," department of economic affairs

Secretary Arvind Mayaram, who headed the panel, told reporters on 19th June. He did not

provide details of the report's contents. It has also batted for raising or doing away with FDI

caps in a number of sectors, including non-scheduled air transport, ground handling at

airports, satellites, private security agencies and Internet Service Providers (ISPs) to

attract capital flows that are needed to finance the Current Account Deficit and bolster the

rupee. The DIPP, the administrative ministry in charge of FDI policy, will now have to

implement the Mayaram Committee report.

Key ministers, notably Finance Minister P. Chidambaram and Commerce Minister Anand

Sharma, are expected to meet in the first week of July to finalise the plan. The panel has

suggested allowing foreign supermarkets to buy up to 74 per cent in Indian retailers with prior

government approval. The multi-brand retail sector was thrown open to foreign investors in

September 2012 but has failed to see any investment so far. The panel has suggested 100 per

cent FDI in telecom and non-scheduled air transport and amending rules to allow complete

ownership by foreign investors, including airlines, in scheduled carriers.

FDI in telecom will need approval of the Foreign Investment Promotion Board (FIPB), a

government panel. The committee has also favoured allowing 100 per cent FDI in ISPs,



private security agencies, satellite, ground handling operations, cable networks, direct-to-

home services, mobile TV and teleports. It has also suggested lifting caps to 49 per cent from

26 per cent in a number of sectors and doing away with mandatory FIPB clearance in these

industries. The government is actively discussing raising FDI in defence production to 49 per

cent and in telecom to 100 per cent.

CCEA approves disinvestment of Neyveli Lignite Corporation

The Cabinet Committee on Economic Affairs (CCEA) on 21st June approved the

disinvestment of 5 per cent equity of Neyveli Lignite Corporation (NLC), out of its holding

of 93.56 per cent through an Offer For Sale (OFS) in the domestic market according to

Securities and Exchange Board of India (SEBI) rules and regulations. The authorized

capital of NLC is Rs. 2,000 crore of which the issued and subscribed equity capital as on 31st

March, 2012 is Rs. 1677.71 crore comprising 167.771 crore equity shares of face value of

Rs.10 each.

After this disinvestment, Government of India’s holding in the company would come down to

88.56 per cent. NLC is a Central Public Sector Enterprise with Navratna status under the

administrative control of the Ministry of Coal. NLC was incorporated in the year 1956 under

the Companies Act, 1956 with the objective of meeting the electricity demand of the southern

states of India by excavating lignite for generation of power. The Company currently has lignite

mines and power stations in Tamil Nadu and Rajasthan.

The first Unit of ONGC’s Mega Power project dedicated to the Nation

The first Unit of ONGC’s Mega Power project in Tripura was formally dedicated to the

Nation by the President of India, Pranab Mukherjee at Palatana on 21 June 2013. The

Unit-I of the gas-based plant will generate 363.3 MW. The Unit II of the 726.6 MW power plant

is expected to be commercially operational later this year. ONGC realized the audacious dream

of transporting such heavy and over-dimensional equipment through the territories of

Bangladesh. The nature has bestowed Tripura with abundant natural gas. This power plant

would meet the requirements of power deficient states in the region and open up avenues for

industrialization in Tripura. The power project not only constituted the largest investment in

the North East but it was also the largest project in the world registered under the Clean

Development Mechanism of the UNFCC. It would earn India over a million of carbon credits.

OTPC, a joint venture company of ONGC, IL&FS Energy Development Co. Ltd. and Govt. of

Tripura, is setting up a 726.6 MW (2x363.3 MW) capacity Combined Cycle Gas Turbine based

Mega Power Project in the state of Tripura with the objective of monetization of gas, which had



been lying idle for want of adequate market in the region. The project cost is estimated at Rs.

3,804 crore.

SEBI adopted K.M. Chandrasekhar Committee report

Market regulator Securities and Exchange Board of India (SEBI) on 25th 0June has

adopted the K.M. Chandrasekhar Committee report on ways to simplify foreign portfolio

investment regime. Finance Minister P. Chidambaram had set the ball rolling in his budget

speech, and the mandate of picking out ways to ease the entry routes for various foreign

portfolio investors (FPIs) into India was given to a committee headed by former Cabinet

Secretary K.M. Chandrasekhar.

However, the panel's original report, submitted to SEBI on the 12th June, was

converted into a draft report and the panel was asked to modify it. This modified report, which

the SEBI board adopted at its June 25th meeting, had significant changes.

One, the draft report called for a 34 per cent automatic cap for a new category of investor

called FPIs that's an amalgam of the 24 per cent automatic cap for FIIs, and the 10 per cent

cap for qualified foreign investors (QFIs). But the final report sets this FPI cap at just 24

per cent or as per the discretion of companies in keeping with the sectoral cap in effect.

Hence, many think this makes for a narrower investment window. The other big change

was that the original report dwelt in detail on the changes required to the IT Act to ensure

smooth transition from FII to FPI regime.

But the final report has none of these recommendations and puts the onus of making

any necessary changes to the IT Act on the finance ministry. SEBI and the Finance Ministry

have now accepted recommendations to expand the jurisdiction for QFIs from the current 48,

to 168 jurisdictions. This means QFIs, especially those coming via Mauritius, will be welcome

as long as the investor does not fall under the 'high-risk and non-cooperative jurisdictions' list.

World Bank to aid Bihar Panchayat Strengthening Project

An agreement for credit of US $ 84 million from World Bank for the Bihar Panchayat

Strengthening Project was signed on 27th June at New Delhi. Mr. Nilaya Mitash, Joint

Secretary, Department of Economic Affairs, Ministry of Finance signed on behalf of

Government of India and Mr. Michael Haney, Operations Advisor, World Bank, India on behalf

of the World Bank. On behalf of Government of Bihar, Mr. Amitabh Verma, Principal

Secretary, Department of Panchayati Raj signed the documents.



The Objective of the project is to support the State Government in promoting inclusive,

responsive and accountable gram panchayats in six districts, namely Patna, Nalanda,

Bhojpur, Saharsa, Supaul and Madhepura. Successful experimentation and learning in

these six districts can be scaled up to other districts under other Government programmes.

The new project has five main components viz (i). Gram Panchayat Sarkar Bhawan (ii).

capacity building for gram panchayats (iii). strengthen the State Government capacity to

manage a gradual decentralization and empowerment process (iv). panchayat performance

grant and (v). project management and coordination. The closing date for the project is

December 2017.

Cabinet approves Coal Regulatory Authority Bill, 2013

The Union Cabinet on 28th June gave its nod to the proposal for setting up of an

independent regulatory authority for the coal sector and also approved the introduction

of the Coal Regulatory Authority Bill, 2013 in Parliament. The setting up of an independent

regulatory body for the coal sector shall help in the regulation and conservation of coal

resources and will benefit all stakeholders; that is coal companies, coal consuming industries

such as power, steel, cement and coal bearing States and people, directly or indirectly

associated with the coal industry.

The Cabinet also approved that pending enactment of the legislation, the regulator will

be set up through an executive order. The Authority shall specify methods of testing for

declaration of grades or quality of coal, monitor and enforce closure of mines, specify principles

and methodologies for price determination of raw coal and washed coal and any other by-

produce generated during the process of coal washing, adjudicate upon disputes between

parties and discharge other functions as the Central Government may entrust to it.

A fund called “The Coal Regulatory Authority Fund” would be created and all

grants, fee and charges received by the Authority shall be credited to this fund. After passing

of the Bill, details would be worked out and submitted to the Government for appropriate

financial sanction for the initial start-up funding.

CCEA approves disinvestment of National Fertilizers Ltd

The Cabinet Committee on Economic Affairs (CCEA) on 28th June approved the

disinvestment of 7.64 per cent paid up equity capital of the National Fertilizers Limited

(NFL) that is approximately 3.74 crore shares, each of Face Value of Rs. 10. The

disinvestment will be out of Government of India‘s (GOI's) shareholding of 97.64 per cent,



as per the Securities and Exchanges Board of India (SEBI) rules and regulations in order

to make the NFL compliant to public share holding requirements under the Securities

Contracts (Regulation) Rules (SCRR).

The paid up equity capital of the company as on 31.03.2012 is Rs. 490.58 crore that is

approximately 49.05 crore equity shares, each of Face Value of Rs. 10. NFL is a Scheduled

'A' Mini Ratna Central Public Sector Enterprises (CPSE) under the administrative control

of the Ministry of Chemicals and Fertilizers, and is engaged in manufacturing and marketing of

urea, 16 industrial products and three types of bio-fertilizers from its five operating units.

These are one each at Nangal and Bhatinda in Punjab, Panipat in Haryana and two units at

Vijaipur in Madhya Pradesh.

CCEA fixes price of domestic natural gas

The Cabinet Committee on Economic Affairs (CCEA) on 28th June gave its approval for

fixation of price of domestic natural gas according to the recommendations of the committee

constituted under the Chairmanship of Dr. C. Rangarajan on Production Sharing

Contract (PSC) mechanism in the petroleum industry. The present gas pricing policy under

the New Exploration Licensing Policy (NELP) had been approved by the Government for

five years beginning April, 2009. This pricing policy will be due for revision with effect from

April, 2014.

The CCEA approved the Rangarajan Committee Report recommendations, known as

the Natural Gas Pricing Guidelines, 2013 will remain valid for five years. On the one hand

these guidelines will help incentivize investment in the Indian upstream sector, so that

production reaches optimum levels and all exploitable reserves are put to production

expeditiously. At the same time these guidelines will ensure that producers do not cartelize

because of the huge unmet demand. This will protect consumer interests. These guidelines will

be applicable from April, 2014 to all domestically produced gas. However, the guidelines will

not be applicable in respect of gas for which prices have been fixed contractually for a certain

period of time, till the end of such period. These guidelines will also not be applicable where

the contract provides a specific formula for natural gas price indexation/fixation.

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