weekly economic bulletin

NEWS FEATUREModi, Merkel to inaugurate Germany's Hanover Fair 2015 Prime Minister Narendra Modi and German Chancellor Angela Merkel will jointly inaugurate the Han-nover Messe 2015 fair on April 12, where India is a partner country, said a commerce ministry state-ment here on March 23.

Three-nation tour focused on economy: PMPrime Minister Narendra Modi said on March 28 his visit to France, Germany and Canada is centred aroundsupporting India's economic agenda and creating jobs.

More in this section

India, Taiwan to jointly chip in for Make in IndiaIndia Electronics and Semiconductor Association (IESA), an industry lobby, on March 24 said it signed anMoU with Taiwan Electrical and Electronic Manufacturers’ Association to promote cooperation and in-vestment between Indian and Taiwanese companies in the electronic industry.


France promises $5 billion for insurance sector in IndiaWith Parliament recently giving its nod for raising the cap on foreign direct investment in the insurancesector from 26% to 49%, India can look forward to $5 billion in investment from France in the sector,French ambassador to India Francois Richier said on March 23.

OVERSEAS INVESTMENTS

ITP Division Ministry of

External Affairs Government of India

Issue no 616 IMarch 24-March 30, 2015

p. 02/08

TRADE NEWSIndia, Qatar ink six agreements during Emir's visitIndia and Qatar inked six agreements, including one on transfer of sentenced prisoners, as visiting Emir ofQatar Tamim Bin Hamad Al Thani held talks with Prime Minister Narendra Modi here on march 25.


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SECTORAL NEWS

Net bids in India's spectrum auction at Rs.109,874 crore The e-auction of radio frequency spectrum, or airwaves, for telecom operators concluded on March 25 after 19days and 115 rounds of rigorous bidding with officials placing the provisional estimate of commitments atRs.109,874 crore -- the highest ever.


NEWS ROUND-UPFinance Minister certain there will be more rate cuts in futureDays ahead of Reserve Bank of India (RBI)’s annual monetary policy, Finance Minister Arun Jaitley on March 25said India needs lower interest rates for high growth and certainly there will be more rate cuts in future trigger-ing reduction in cost of borrowings.


WEEKLYECONOMIC BULLETIN

WEEKLYECONOMIC BULLETIN 2


>> NEWS FEATURE

Modi, Merkel to inaugurate Germany'sHanover Fair 2015

Three-nation tour focused on economy: PM

Prime Minister Narendra Modi and German Chancellor Angela Merkel will jointly inaugurate the Hannover Messe 2015fair on April 12, where India is a partner country, said a commerce ministry statement here on March 23.

"By adopting the theme of Make in India, the country isbranding strongly in the forthcoming fair in Germany dur-ing April 2015," Commerce Minister Nirmala Sitharamantold reporters here on March 23.

"Large scale participation is being made by India inHannover Messe 2015, by branding the Make in India slo-gan of the government in a widespread manner in Ger-many and other neighbouring European countries," sheadded.

The Hannover Fair, which attracts nearly 200,000global leaders in business, technology, industrial scien-tists and policy makers, will be held April 13-17, thestatement said.

In a Make in India networking event last week in Frankfurt with the German corporate sector, the Indian consul generalinvited companies to visit and do business with India.

Germany is the eighth largest foreign direct investor in India. German FDI in India during the period 1991-2014 was val-ued at $7.57 billion.

Source: Indo-Asian News Service

Prime Minister Narendra Modi said on March 28 his visit to France, Germany and Canada is centred around supportingIndia's economic agenda and creating jobs.

"France, Germany and Canada visit is centred aroundsupporting India's economic agenda and creating jobs forour youth," Modi said in a tweet.

"Will discuss strengthening India-France economic co-operation and visit some high-tech industrial units out-side Paris. In Germany, Chancellor Merkel and I willjointly inaugurate Hannover Messe where India is a part-ner country," the prime minister said.

"Looking forward to enhancing ties with Canada andinteracting with leaders, captains of industry and dias-pora in Canada," Modi said in another tweet.

Modi will first travel to France on April 9 and fromthere he will leave for Germany on April 12.

On the third and final leg of the tour, he will visit Canada from April 14-16.Source: Indo-Asian News Service

WEEKLYECONOMIC BULLETIN >> NEWS FEATURE3


India launches fourth navigation satellite India successfully put into orbit its fourth navigation satellite with its own rocket on March 28 evening in copybook style.

Exactly at 5.19 p.m., the rocket - Polar Satellite Launch Vehicle - (PSLV-C27) standing about 44 metres tall and weighingaround 320 tonnes, roared into the bright blue clear evening sky trailing an orange plume.

The expendable rocket had a single but important piece of luggage: the 1,425 kg IRNSS-1D.The rocket blasted off from the second launch pad at the

Satish Dhawan Space Centre here, around 80 km from Chen-nai.

For onlookers the rocket resembled an inverted flare/torchwith a long handle as it gathered speed amidst the cheers ofthe Indian Space Research Organisation (ISRO) officials andthe media team assembled at the rocket port here.

At the rocket mission control room, Indian space scientistsat ISRO were glued to their computer screens watching therocket escaping the earth's gravitational pull.

The PSLV-C27 ejected the IRNSS-1D around 20 minutesinto the flight. Immediately, scientists at the mission controlcentre were visibly relieved and started clapping happily.

Soon after ejection into orbit, the satellite's solar panelswere deployed.

The satellite's control was taken over by the Mission Con-trol Facility (MCF) at Hassan in Karnataka.

The MCF will manage the satellite's orbit raising operations by firing the on-board motors till it is placed in the circulargeosynchronous orbit.

The system is similar to the global positioning system (GPS) of the US (24 satellites), Glonass of Russia (24 satellites) andGalileo of Europe (27 satellites), China's Beidou (35 satellites).

While GPS and Glonass are fully functional global systems, the Chinese and the Japanese systems offer regional coverageand Europe's Galileo is yet to be operational.

The IRNSS will provide two types of services - standard positioning service and restricted service. The former is providedto all users and the later is an encrypted service for authorised users.

With this success, India moved closer towards joining a select group of nations with its own satellite navigation system.President Pranab Mukherjee and Prime Minister Narendra Modi congratulated Indian scientists on the successful launch of

the country's fourth navigation satellite.In his message to ISRO Chairman A.S. Kiran Kumar, Mukherjee said: "My heartiest congratulations to you and your entire

team at the Indian Space Research Organisation for the successful launch of PSLV-C27, carrying the IRNSS-1D.""I am very happy to know that this is the fourth in the series of seven satellites of the Indian Regional Navigation Satellite

System. I understand the IRNSS-1D will provide navigation, tracking and mapping services which will take us closer to settingup our own navigation system."

The nation is proud of this achievement which has demonstrated, yet again, India's increasing space capabilities, he said.The prime minister also congratulated the scientists."Launch of satellite IRNSS-1D is yet another manifestation of the exemplary efforts and utmost brilliance of our scientists.

Congrats to them," Modi said.Source: Indo-Asian News Service

WEEKLYECONOMIC BULLETIN 4


>> NEWS FEATURE

Finance Minister Arun Jaitley on March 27 called for more widespread use of cheques and "plastic" currency to tackle thescourge of black money.

"As the economy grows, there is a roadmap, and the roadmap is more and more people start discarding the use of currencyand switch over to either cheques or plastic currency," he said at the foundation day celebrations of the Security Printing andMinting Corporation of India (SPMCIL).

Pointing out how countries like Britain and US have highest currency denominations in 50 pound and 100 dollar currencynotes respectively to discouraging hoarding and use of unac-counted wealth, Jaitley said that "one of the objectives is todis-incentivise the use of currency and incentivise the use ofplastic currency or any other negotiable instrument which isavailable".

"Some steps have also been announced which make useof cash little difficult," he added.

In his first full budget presented last month, Jaitley hasannounced steps to deal with black money by disincentivis-ing cash dealings in real estate and similar transactions.

He also proposed to amend the Income Tax Act to prohibit"acceptance or payment" of an advance of Rs.20,000 ormore in cash for purchase of immovable property.

This is the fourth year in succession that state-run SPMCIL has paid 20 percent dividend, the finance ministry said in astatement here. The company's turnover now stands at Rs.3,798 crore.

SPMCIL produces bank notes, coins, medals and medallions, weights and measures as well as various security productslike passports, travel documents, non-judicial stamp papers and postal stationery.


Jaitley urges more cheque, plastic moneyuse to check black money

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WEEKLYECONOMIC BULLETIN >> NEWS FEATURE


Government is trying to create a conducive environment, both in terms of taxation and ease of doing business, as invest-ments won’t come just by opening doors, said Finance Minister Arun Jaitley.

The new government has endeavoured to restore credibility of the Indian economy and the decision making process inorder to boost investments, domestic as well as foreign, he said addressing investors at the ‘Urja Sangam’ conference.

The government, he said, is focusing on “quick and effec-tive decision making”, as the country needs huge amount ofinvestments.

“Investment has to be both domestic and international andfor that we have to in the first instance open our doors forthat investments. But merely by opening doors, investmentswon’t come,” Jaitley said.

The Finance Minister, who presented his first full yearbudget last month, said investors expect a conducive environ-ment and a reasonable return.

“…and for that conducive environment, what we popularlycall ease of doing business… slowly but surely we have beentaking steps in that direction,” he said.

The Finance Minister stressed on rationalisation of subsidy regime.“At some point of time, India will have to take a decision as to distinguish between those who can afford to pay and those

who cannot afford to pay. And those who cannot afford to pay must get benefit of state support,” he said while referring tosubsidy on cooking gas.

Jaitley said the government will have to make efforts to rapidly reduce dependence on energy imports as suggested byPrime Minister Narendra Modi.

“…so our own exploration programme, within the resource available, our own efforts for acquisition of assets internation-ally are all areas we will have to look at…,” he said.

Jaitley further said that the government is undertaking some of the most significant taxation reforms.He told the gathering that in the second part of the Budget Session, starting April 20, the government intends to go ahead

with the Constitutional Amendment Bill on the GST, an ambitious indirect tax reform.“I already said with regards to taxation, direct or indirect, the regime of enacting retrospectively or taking people by sur-

prise is now over. Our effort is to make direct taxation system not only non-adversarial but also globally compatible,” headded.

Talking about the slump in global oil prices, Jaitley said both the government as well as the domestic oil companies havetaken “very responsible positions”.

“Huge benefits have been transferred to consumers. This in turn helped us in containing inflation, which in turn has re-versed the need of the increasing interest rates, at least we had two reductions (by the RBI…,” Jaitley added.

As part of making taxation system globally compatible, Jaitley said he has announced a roadmap for next four years tobring down the corporate tax from 30 per cent to 25 per cent in a phased manner and do away with exemptions.

The new government has taken several steps to attract investors, which include raising FDI ceiling in defence and insur-ance sectors, in addition to opening the railway infrastructure segment, to foreign investors.

Earlier in the day, while referring to India’s 77 per cent dependence on energy imports, Modi said the effort should be to re-duce it by 10 per cent by 2022, when India will celebrate 75 years of Independence.

Source: Press Trust of India

Govt to scout for overseas asset acquisitionto reduce energy bills


The sustained indigenisation efforts of Delhi Metro Rail Corporation (DMRC) have helped them to achieve the milestone ofmanufacturing 90 per cent of Delhi Metrocoaches in the country and it is now planning toexport rakes to Queensland and Sydney Metrosin Australia.

"Delhi Metro's initiatives to indigenise manu-facturing is in consonance with the 'Make inIndia' initiative of the central government andthe establishment of three Metro coach manu-facturing units in India to cater to the require-ments of Metro market is a very positivedevelopment," said Mr Mangu Singh, ManagingDirector, DMRC. The contract conditions man-dating indigenisation have resulted in majorcoach manufacturing companies setting up pro-duction facilities in India.

The contract mandates a cap on upper limit of 25 per cent for production abroad while the balance is to be necessarilymanufactured in India either through tie-ups or a wholly-owned subsidiary. Manufacturing units set up to supply coachesto DMRC are now engaged in manufacturing of rakes that will be exported to Australia for Queensland and Sydney Met-ros. Three Metro coach manufacturing units have already been established in Savli (Gujarat), Bengaluru (Karnataka) andSricity (Tamil Nadu).

Besides manufacturing coaches, eighteen major sub systems of these coaches have also been indigenised. This has ledto establishment of ancillary industry and skilled man power development in house. Window glasses, battery boxes, brakeblocks, bogie frames, vacuum circuit breakers, propulsion among others are also being manufactured in India.

Source: Mint

Prime Minister Narendra Modi on March 23 batted for "greater cooperation" between India and Cuba in areas like tradeand investment, health and renewable energy.

"The prime minister expressed support for greater cooperation, including in the areas of trade and investment, health,biotechnology, renewable energy, sports and human resource development between the two countries," a statement said,after Modi held talks here with Cuba's First Vice President Miguel Diaz-Canel Bermudez Mario.

Modi also accepted an invitation from President Raul Castro to visit Cuba.During the meeting, Modi recalled the close and multi-faceted relations between the two countries that developed dur-

ing the tenure of President Fidel Castro and nurtured by the successive generation of leadership.Modi also appreciated the role being played by Cuba to support the cause of the developing countries, including in inter-

national fora. In this context, the prime minister appreciated that Cuba had sent teams of doctors to the affected countries in Africa in

the wake of the Ebola crisis.Source: Indo-Asian News Service

DMRC plans to export rakes for Queenslandand Sydney Metros

Modi bats for 'greater cooperation' with Cuba




The Asian Development Outlook 2015 projected Emerging Asian economies to clock average 6.3 per cent growth in both2015-16 and 2016-17 fiscal, as in the current financial year.

The growth would be supported by a strengthening recovery inthe major industrial economies and soft global commodity prices.

“The expected pick-up in India and in most members of the Asso-ciation of Southeast Asian Nations (ASEAN) could help balancegradual deceleration in the region’s largest economy, China,” ADBsaid.

The ADB has forecast that India’s growth will improve from 7.4per cent in current fiscal to 7.8 per cent in 2015-16 and further to 8.2per cent in 2016-17.

As regards China, the ADB projected the economic growth to de-celerate from 7.4 per cent in current fiscal to 7.2 per cent next fiscaland 7 per cent in 2016-17 as the government proceeds with itsstructural reform agenda and fixed asset investment slows.

ADB said the growth in Asia would be aided by soft commodityprices and recovery in major industrial economies.

It said India is poised to overtake China in terms of growth as asgovernment removes structural bottlenecks and lifts investor confidence. Besides, expected easing of monetary policy andpick up in capital expenditure would also boost growth.

Developing Asia is making a strong contribution to global economic growth, ADB Chief Economist Shang-Jin Wei said.However, ADB warned of several risks to Asia’s growth outlook.“Risks to the outlook include possible missteps in the PRC as it adjusts to its new normal, less decisive action on reforms

in India than anticipated, potential spillover effects on the global economy of the Greek debt crisis and the deepening reces-sion in the Russian Federation,” it said.

The impending rise in interest rates in the US may reverse capital flows to the region, requiring monetary responses tomaintain stability, ADB said.

“Falling commodity prices are creating space for policy makers across the region to cut costly fuel subsidies or initiateother structural reforms. This is a key opportunity to build frameworks that will support more inclusive and sustainablegrowth in the longer term,” he added.


India to lead Asia’s economic growth: AsianDevelopment Bank



With India-US relations stronger than ever since the election of Prime Minister Narendra Modi, the two countries have be-come drivers of growth across the region and around the world, according to a senior US official

"If there is one overarching positive trend that is driving the energy and optimism across South Asia, it is the resurgenceof India," Nisha Desai Biswal, Assistant Secretary of State for South and Central Asian Affairs, told a Congressional panelon March 24.

This was "evidenced by their vibrant election last year, which was the largest such democratic exercise in history, shesaid testifying on "The US Rebalance in South Asia: Foreign Aid andDevelopment Priorities."

Asserting that less than one year after Modi's election as PrimeMinister US "relations with India are stronger than ever," Biswal saidPresident Barack Obama's historic Republic Day visit was critical be-yond its symbolism. She listed "important outcomes in four key areas- advancing our strategic partnership, deepening our security cooper-ation, revitalizing the economic partnership, and advancing criticalclean energy and environmental goals.

"As we have energised bilateral relations with the new Indian gov-ernment, there can be no doubt about the strength of our joint strate-gic vision," Biswal said.

"Our two countries are indispensable partners in promoting peace,prosperity, and stability across the Indo-Pacific region," she said.

"We are drivers of growth across the region and around the world. And we are net providers of security, together ensur-ing freedom of navigation and safeguarding the maritime domain," Biswal said.

The US, she said, supported "India's economic rise, including its domestic economic transformation" because for "India tobe a strong partner in the region and around the world, it must be strong at home." So Obama and Modi had agreed to "ele-vate our commercial and economic partnership as part of the Strategic and Commercial Dialogue to advance our sharedprosperity." Biswal said the US was optimistic that the many challenges to creating the investment climate and innovationeconomy that will power India's growth in the 21st century can be overcome.

Modi and Obama, she noted had agreed that the two "countries will continue to work together on our ambitious energyand environment goals by renewing and expanding a five-year MOU on Energy Security, Clean Energy, and ClimateChange." They also committed to work together towards a successful climate agreement in Paris and pledged to work to-ward the goal of phasing down hydrofluorocarbons under the Montreal Protocol, Biswal said.

US assistance programmes in India are a model for making "a little go a long way," she said noting "by leveraging the pri-vate sector and Indian resources, we are getting sizable outcomes out of small inputs."

"Our programmes connect to India's public and private sectors to jointly achieve development gains in a cost-effectivemanner in India and in third countries, where India's achievements stand to jump-start development results," Biswal said.

"This model of assistance - which positions India as a development lab with global reach - combines US and Indian inno-vation and best practices, which can be road-tested and refined in India and then exported to developing countries in Africaand Asia," she said.

In keeping with both US and Indian priorities, the USAID programme focuses on four key areas: health, energy and envi-ronment, education, and food security, Biswal said.

"With nearly 2 billion people, a growing middle class, an entrepreneurial culture, and a resurgent Indian economy, SouthAsia will play an increasingly important role in the Asian growth story," she said.


Resurgent India driving Asian growthstory: US official

WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENT9


With Parliament recently giving its nod for raising the cap on foreign direct investment in the insurance sector from 26% to49%, India can look forward to $5 billion in investment from France in the sector, French ambassador to India FrancoisRichier said on March 23.

According to Richier, in 2014, French investment flows into India were comparable with those into China.Richier was speaking at an event organised by the French embassy and the Federation of Indian Chambers of Com-

merce and Industry (FICCI) on the number of French companies in India.“When you compare the share of French FDI (foreign direct investment), India receives 6% whereas China receives 7%

as of 2014. This shows that while China has GDP four times greater than India, the French investment is roughly thesame. There is far more attraction to India than China due to the large market, wonderful workforce and cultural connec-tion,” the French ambassador said.

On Prime Minister Narendra Modi’s visit to France next month, Richier said he was sure that Modi would “carry a mes-sage so that it encourages companies to enjoy the ease of doing business in India”.

In his comments, Amitabh Kant, secretary, Department of Industrial Policy and Promotion noted that there was a “newvibrancy and dynamism in India” with the Narendra Modi-led government “determined to ease the process of doing busi-ness in India”.

In the past six decades, India had become a “very complex and difficult place to do business” with the addition of rules,regulations and paperwork. “Over the last six months, we have removed 40%-45% of them,” Kant said, citing the exampleof filling of forms for imports and exports for which 11 forms were required.

“Now, we have brought it down to three. For setting up business, we have shortened procedures and cut down on thenumber of days,” he said.

To further ease the experience of doing business in India, Kant said the government had created an e-business platformwhere 14 departments have been brought together and all approvals can be taken at one place.

“Our objective is that over a period of time, we can link up all the state and central governments so that India becomesan easy place to do business.” Modi’s visit to France next month offers “a unique opportunity to promote market India cre-ate a huge awareness about India,” he said.

Modi will be in France 9-12 April and in Germany 12-14 April and then head onwards to Canada.Referring to the Make in India campaign launched by Modi in September to encourage foreign manufacturers to invest

in the country, Kant said this was aimed at integrating India into the globalized economy and making it part of the globalsupply chain.

“The objective is to open up our economy to the maximum extent. In the last six to seven months, we have opened uprailways, construction, medical devices, insurance, just about everything. Other than multi-brand retail, India is the mostopen economy in the world,” he said.

India was also working to improve infrastructure, he said, adding the intention was to ramp up capacities in size andscale.

“As India advances, one of the key lessons to learn from France is the process of urbanisation,” he said, adding 700 mil-lion people would be living in cities in the next five decades.

Addressing the media separately in New Delhi, trade minister Nirmala Sitharaman said India would be showcasing itsstrengths at the 13-17 April Hannover Messe fair in Germany.

“Prime Minister Narendra Modi would be reaching out to the global business and technology leaders on the new initia-tives of the Indian government for doing business in India,” a statement from the commerce ministry said.

Source: Mint

France promises $5 billion for insurancesector in India

10

WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENT


India Electronics and Semiconductor Association (IESA), an industry lobby, on March 24 said it signed a memorandum ofunderstanding (MoU) with Taiwan Electrical and Electronic Manufacturers’ Association (Teema) to promote cooperationand investment between Indian and Taiwanese companies in the electronic system design & manufacturing (ESDM) indus-try.

The partnership is targeted at “establishing strong India-Taiwan relationship” and “creating a differentiating propositionfor India in the field of electronics and ICT (information and communication technology).”

Under the pact, IESA said it will encourage Taiwan-based electronics companies to bring more investments and commit-ments to the ICT ecosystem in the country and also partner with Indian companies in technology and knowledge transfer.

In September, IESA signed an MoU with Taiwan Computer Association (TCA) to promote investment in the sector as wellas skill development.

“India is positioned among priority destinations for electronics innovation, development and manufacturing, primarily dueto its maturity of market, availability of talent and the expertise India can bring to the ESDM supply chain with componentslike designing, embedded system, very-large-scale integration (VLSI) etc.,” said M.N. Vidyashankar, president, IESA.

“This partnership will speed up industry government relations promoting faster economic development.”Source: Mint

Chicago-based hotel operator Preferred Hotels Group Inc., which rebranded the company earlier this month globally toPreferred Hotels & Resorts and in India on March 26, plans to expand its portfolio of hotels in India by one-and-a-half by2018.

“In three years’ time we are hoping to takethe number of independent hotels in our groupto 45 from 30 at present, which would mean50% growth,” Saurabh Rai, area managing direc-tor of South Asia and the Middle East for Pre-ferred Hotels & Resorts, said in an interview.

“We are going for the organic route underwhich we will grow as our business partnersbuild or acquire new properties.”

The company, which comprises more than650 independent luxury hotels, resorts, resi-dences, and hotel groups across 85 countriesand entered India in 2002 with one property,partners hotel companies to provide them global reach for marketing, sales and distribution.

“The business has been sluggish during last 4 to 5 years, and we have indeed seen a de-growth in our business in India,”he said. “But now with the economy recovering and India seeing a stable political regime, we hope that we would be able togrow in India at much higher pace.”

Source: Mint

India, Taiwan to jointly chip in for Make in India

Preferred Hotels plans portfolio expansion in India

Times Internet, the digital arm of the Times of India Group and Uber have entered into a strategic partnership to supportUber's expansion in India, a statement issued by the former said here on March 23.

The deal is centred around a commercial marketingarrangement accompanied by a small investment, itstated.

"Times Global Partners is a platform we establishedto help the best companies in the world succeed inIndia, and we're confident that together, we can improvelives and create jobs for millions of Indians," SatyanGajwani, chief executive officer (CEO) of Times Internet,said.

"India is one of our fastest growing markets in thehistory of Uber and one where we are investing heavilyin continued growth," said Travis Kalanick, CEO of UberTechnologies.

Uber, however, is struggling to resume its opera-tions in the national capital where it was banned after one its drivers was accused of rape in December 2014.

It has resumed partial operations in the city after applying for a radio taxi licence in January. At present, it offers serv-ices in 11 Indian cities.




Uber ties up with Times Internet for expansion in India

11

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Japanese auto manufacturer Honda Motor Co. will invest Rs.965 crore in its two-wheeler and car businesses in India as itlooks to increase production capacity.

The plan is to increase manufacturing capacity by600,000 units for two-wheelers and by 60,000 unitsfor cars by 2016, Honda’s local units said in two sepa-rate statements.

While Honda Motorcycles & Scooters India (HMSI)will invest Rs.585 crore in its third two-wheeler produc-tion plant in the Narsapura area near Bengaluru, HondaCars India Ltd (HCIL) will invest Rs.380 crore in itsTapukara plant in Rajasthan.

The expansion of the second plant will increaseHCIL’s overall annual production capacity from the cur-rent 240,000 units to 300,000 units including the120,000-unit capacity of its first plant in Greater Noidaon the outskirts of New Delhi.

HMSI’s annual production capacity will reach 6.4 million units, combined with that of its fourth plant, which is scheduledto become operational in the first half of 2016 in Gujarat.

These investments will also require an additional workforce of 2,500 people, of which 1,900 will be employed by thetwo-wheeler maker.

The fresh investments are intended to strengthen the company’s operations in India in deference to Prime MinisterNarendra Modi’s Make in India campaign, according to Keita Muramatsu, president & chief executive, HMSI.

“This investment will provide new opportunities for expansion of brand Honda in the largest two-wheeler market of theworld,” he said. “Honda is strengthening its Make in India resolve through steady and strategic investments with a longterm objective of creating 39% additional capacity within 3.5 years.”

Modi launched the Make In India campaign in September to attract foreign companies to invest and manufacture in Indiaand export to other countries after leading the National Democratic Alliance to victory in the April-May general election.

India has set for itself an ambitious target of increasing the contribution of manufacturing output to 25% of gross do-mestic product (GDP) by 2025, from 16% now.

In 2014, industry-wide motorcycle sales in India increased to 16 million units, a year-on-year increase of 10%. In thesame year, Honda motorcycle sales increased to 4.2 million units, a year-on-year increase of approximately 30%.

In 2014, sales of passenger vehicles in India increased to 2.55 million units, a year-on-year increase of some 3%. In thelast 10 years, the market has grown around 2.5 times, making India the world’s sixth largest automobile market whensales of commercial vehicles are included.

Honda Cars said the new investments are driven by strong sales momentum for its cars. “India has emerged as a veryimportant market for Honda and holds great potential for future growth as well,” it said in its statement.

HCIL is the fastest growing automobile company in India with a 44% increase in its domestic sales during April 2014-Feb 2015 with 166,366 units from 115,913 units in the year-ago period.

Source: Mint

Honda to invest Rs965 cr to expand capacity for cars, bikes

Detroit-headquartered Ford Motor Company’s Indian arm on March 26 inaugurated its second factory in this country atSanand, 30 kilometres from Ahmedabad.

The arm showcased its upcoming car from the site, a compact sedan, Ford Figo Aspire. The company said it hadplanned to establish India as an export hub. Also, it wanted to triple its exports from here over five years.

Anurag Mehrotra, executive director for marketing, sales, and service, Ford India, said half of the combined productionfrom their Sanand and Chennai units would be for export. The company, however, did not wish to put a figure to the tar-get.

Nigel Harris, the president of Ford India,said the Figo Aspire would be launched inthe second half of the year.

The initial production would be for the do-mestic market and the company wouldeventually focus on exporting the model.With 240,000 cars and 270,000 engines ayear at the $1-billion (Rs 6,200 crore) factoryhere, Ford’s capacity in the country wouldrise to 610,000 engines and 440,000 vehi-cles annually.

Mehrotra said it planned to launch threemodels in the Indian market over 12 to 18months.

Sanand, the company said, was one of itsmost highly automated plants across theglobe. Mehrotra said the body shop was 95 per cent automated and the paint shop almost fully. "There are 125 stationsalong the production line that have been set up for quality checks," he said. “There were more than 437 robots at the facil-ity.”

Gujarat chief minister Anandiben Patel said the factory would create direct and indirect employment for more than4,000, and the company's vendor park nearby would give employment to more than 6,000.

Calling the 125 km Sanand-Hansalpur-Vithalapur belt, with the connected nodes of Kadi and Halol, a major automobilehub in the making for the Asia-Pacific region, she said an investment of about Rs 15,000 crore in all had already beencommitted by various companies, to create annual capacity of 1.25 million four-wheel and two mn two-wheeled ones.

Another Rs 10,000-crore investment is awaited from Maruti Suzuki India and Honda Cars India, taking the installed ca-pacity to 2.2 mn vehicles annually in the next six to eight years.

A similar amount of investment has been readied by vendors of these companies. Around 100 of these have either setup facilities or are working on doing so. As for Gujarat, the CM said the government planned to take the share of automo-tive industries in its overall engineering output to 10 per cent by 2020, from a current 3.7 per cent.

Source: Business Standard

Ford opens Sanand plant to triple exportsfrom India

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India and Qatar inked six agreements, including one on transfer of sentenced prisoners, as visiting Emir of Qatar Tamim BinHamad Al Thani held talks with Prime Minister Narendra Modi here on march 25.

The Emir, who is here on a two-day visit, was in the morning accorded a ceremonial reception at the forecourt of Rash-trapati Bhavan. External Affairs Minister Sushma Swaraj called on him, after which he held talks with Prime Minister Modiat Hyderabad House.

The six agreements, besides transfer of sentenced prisoners, are: an MoU for Cooperation in the field of Information andCommunication Technology; an MoU between the ministry ofearth sciences and Qatar Meteorological Department for Scien-tific and Technical cooperation; an MoU between Diplomatic In-stitute of the Ministry of Foreign Affairs, Qatar and ForeignService Institute of the ministry of external affairs; an MoU forcooperation in the field of Radio and Television; and an agree-ment for Mutual Cooperation and Exchange of News.

External affairs ministry spokesperson Syed Akbaruddintweeted: "Opening new doors for investment. Minister @Sush-maSwaraj meets Emir of Qatar."

Under the agreement on transfer of sentenced prisoners, In-dian prisoners convicted in Qatar can be repatriated to India toserve the remaining part of their sentence.

Similarly Qatari citizens convicted in India can be sent to theirhome country to serve their sentence. This agreement wouldenable the sentenced persons to be near their families and would help in the process of their social rehabilitation, said anofficial statement.

The Qatar emir is accompanied by a high-level delegation comprising ministers, senior officials and captains of industry.The former Emir of Qatar, Sheikh Hamad Bin Khalifa Al Thani, had visited India thrice: in 1999, in 2005 and in 2012. For-

mer prime minister Manmohan Singh had visited Qatar in November 2008.Around 600,000 Indian nationals work in Qatar, comprising the largest expatriate community in Qatar. Qatar is also the

largest source of India's LNG imports, at 86 percent. Bilateral trade stands at $16 billion, heavily weighted in favour of Qatardue to India's LNG imports.


14

WEEKLYECONOMIC BULLETIN >> TRADE NEWS


India, Qatar ink six agreements duringEmir's visit

15

WEEKLYECONOMIC BULLETIN >> TRADE NEWS


India was "ready to talk" with the European Union (EU) on the proposed bilateral free trade agreement, Commerce Minis-ter Nirmala Sitharaman said on March 23.

"I have assured the EU ambassador and ambassadors of individual EU countries that we are ready to talk with the Eu-ropean community. They have been our traditional trading partners," Sitharaman told reporters here.

Negotiations on the FTA, officially dubbed the Broad-based Trade and Investment Agreement (BTIA) between Indiaand the EU, were launched in June 2007 but have been facing hurdles with both sides having differences on crucial is-

sues.No negotiation was held after both sides failed to bridge dis-

agreements in May 2013 on crucial issues including data securitystatus for the IT sector.

Sitharaman said the agreement had been delayed for a verylong time and several rounds of negotiations were held, but did notreach any logical conclusion.

"This was stated by great concern and worry by the Europeancommunity ambassador. We did ask the ambassador if their prior-ity is till on an FTA with India, considering there is talk about atrans-Atlantic partnership going on and the ambassador said yes.The EU is looking forward to having an FTA with India and talkswould be encouraging," she said.

"We readily accepted and therefore we certainly and definitelywant to engage with the EU on that," she added.

Both sides are also yet to resolve issues related to tariffs and movement of professionals.Launched in June 2007, the negotiations for the proposed Broad-based Trade and Investment Agreement (BTIA) be-

tween India and the European bloc has witnessed many hurdles with both sides having major differences on crucial is-sues.

The EU-India bilateral trade stood at $101.5 billion in 2013-14.Source: Indo-Asian News Service

India ready to resume talks on free tradepact with EU: Sitharaman

16

WEEKLYECONOMIC BULLETIN >> SECTORAL NEWS


Net bids in India's spectrum auction atRs.109,874 crore The e-auction of radio frequency spectrum, or airwaves, for telecom operators concluded on March 25 after 19 days and 115rounds of rigorous bidding with officials placing the provisional estimate of commitments at Rs.109,874 crore -- the highestever. "At the end of 115th round, about 89 percent of the spectrum has been provisionally allocated to the bidders. The provi-sional amount committed by bidders at the end of 115th round is Rs.109,874 crore," an official statement said.

This amount can be considered as a windfall for the government as it has surpassed the previous high of Rs.106,200 crore thatit had received in the 2010 auction, which was spread over 34 days with 183 rounds of bid-ding. Officials said the names of the winners would not be divulged as yet since the SupremeCourt, while allowing the auction to proceed, had directed that its consent be taken beforeawarding spectrum, due to litigations filed by interested parties. The court is to take a call onthat Thursday. The eight companies that participated in the auction were: Reliance Commu-nications, Reliance Jio, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellularand Aircel. The winners will have to pay around a third of the winning bid price within 10 daysand the rest by 2027. On offer were blocks for 69 service areas at a total reserve price ofRs.80,277 crore, and the provisional allocation was announced for 63 of them at a winningprice of Rs.109,874.91 crore. In 50 service areas, the winning bids went at a premium.

A look at official data further, however, showed that there was short bidding for everyblock on offer. The maximum bids of 85 were for the Tamil Nadu circle, 10 short of the 95on offer, in the 1,800 MHz band with a winning amount of Rs.45 crore per block. The sec-ond highest bids of 75 were received for Punjab circle with a winning amount of Rs.72.15crore per block in the 900 MHz band. This circle also saw three less bids.

The central government has budgeted for Rs.43,161.72 crore from e-auctions of spectrum for the current fiscal. The reserveprice for the entire spectrum in the four bands on offer, across India, was around Rs.80,000 crore.

The commitment for telecom spectrum comes over and above the Rs.200,000 crore that India Inc has already bid undertwo phases of auctions for award of coal blocks. But the proceeds from the auction of coal blocks will go to the respectivestate governments over 30 years. "I am glad the presumptions some people had, that spectrum is worth zero, have been be-lied," said Finance Minister Arun Jaitley, referring to the criticism India's official auditor faced when a notional loss ofRs.176,000 crore was assigned for handing over the airwaves without auctions.

But his predecessor Kapil Sibal of the Congress said the auctions were flawed. "The telecom sector is hugely in debt to the extent of Rs.340,000 crore. Now, in paying for the high spectrum prices, there'll

be no money for investment in infrastructure," Sibal told IANS just ahead of the conclusion of the auction.During the latest auctions, the total spectrum put up for bidding was 103.75 MHz in 800 MHz band, 177.8 MHz in 900 MHz

band and 99.2 MHz in 1,800 MHz band for second generation (2G) telephony. Another 5 MHz was in the 2,100 MHz band for 3Gservices. A reserve price of Rs.3,423 crore per MHz was fixed for 800 MHz frequency, Rs.3,399 crore for 900 MHz band andRs.1,425 crore for the 1,800 MHz band. The government also fixed a reserve price of Rs.3,511 crore per MHz for the frequency for3G spectrum. Analysts were worried over the impact of the high bid price on the industry and customers. "The whole auction wasdesigned by the government to extract maximum revenues from the operators. As a result, the industry is going to face financialneeds," Rajan S. Mathews, director general of the representative body, Cellular Operators' Association of India, told IANS.

Pointing to a financial indicator for the industry, analysts quoted GSMA's research body and said while the bidding in Indiawas at global levels, the average revenue per user was already low for Indian operators at $2.55, against $17.65 for Germany,$29.30 for the Netherlands and $28.52 for Britain. "The spectrum auction outgo will impact on the rollout and quality of tele-com network. In this competitive environment, operators will find it difficult to raise data or voice tariffs in the immediate term,"said Arpita P. Agarwal, telecom leader for PriceWaterhouseCoopers.


WEEKLYECONOMIC BULLETIN >> SECTORAL NEWS17


Cabinet nod for auction to import gas for31 idle power plants The 31 gas-based power units in the country with a capacity of 14,000 MW that are lying idle for lack of feed stock, willbe allowed imports way of e-auctions, it was decided on March 25.

A meeting of the Cabinet Committee on Economic Affairs, presided over by Prime Minister Narendra Modi, gave the goahead that will immediately lead to the resumption of powergeneration to the extent of 14,000 MW, officials said.

"The additional generation would help light up many un-connected households in the country, besides benefiting thepublic at large, including farmers and poorer sections of thesociety who have limited access to electricity," an officialstatement said.

"This decision will also help improve grid stability andsafety, as gas based plants are ideal for being used as spin-ning reserve, and for meeting peaking power requirements, asthey can be started and shut down at very short notice," itsaid.

"This gains importance especially in the context of India'saspiration to rapidly scale up renewable generation. Gasbased power is also environment friendly and much less pol-luting than coal based generation."

"In order to revive these stranded gas-based plants, the mechanism envisages importing Regasified Liquified NaturalGas (RLNG) for supply to these plants so that they can generate power," a cabinet communique said.

Speaking to reporters after the meeting, Power and Coal Minister Piyush Goyal told reporters that "GAIL and GSPL(Gujarat State Petronet Limited) will be permitted to import gas by purchasing on a spot basis from the internationalmarket and supply to companies, who can bid for this gas depending on their requirements".

"The bidding process will be reverse bidding, where companies can bid for this gas for upto 30 percent of their plantload factor (PLF)," he added.

Explaining the reverse bidding to keep down power tariffs, Goyal said: "We could start the bidding at around Rs.5.50 aunit and then see if we can go lower depending on the international gas prices."

The need for this intervention has arisen because discovery of domestic natural gas in the Krishna-Godavari basin, no-tably from the blocks awarded to Reliance Industries, had raised expectation of considerable increase in the availabilityof domestic gas in the country.

Accordingly, a large number of gas-based plants were set up by developers, some with firm allocation and others withexpected allocation. But the supply of domestic gas to power plants started declining since 2012 and stopped fromMarch 2013.

Since then, these plants have either stopped operating or being under-utilized."Out of 24,150 MW gas-grid-connected power generation capacity in the country, 14,305 MW of capacity has currently

no supply of domestic gas and may be considered as stranded," the statement said."This represents an investment of over Rs.60,000 crore which is at the threshold of becoming non-performing assets.

The balance capacity of 9,845 MW involving an investment of over Rs. 40,000 crore is also working at a sub-optimallevel.




PGCIL to develop 20K MW green corridorState-owned Power Grid Corp (PGCIL) has been nominated to develop green transmission corridors for 20,000 MW of up-coming solar and wind power projects.

While PGCIL was earlier selected on a nomination basis for the execution of the Bhuj-Banasthali-Chittor-Ajmer 765 kVgreen corridor to harness solar energy in Gujarat, officials said that for the next leg of this corridor, PGCIL — a utility with anear monopolistic presence in the transmission sector and having a 35 per cent institutional shareholding — has beenasked to extend this corridor from Ajmer (Rajasthan) to Suratgarh and Moga (Punjab).

For this leg of the project, PGCIL is learnt to be negotiating a soft loan through the Manila-based Asian DevelopmentBank.

Under the Tariff Policy, transmission projects arerequired to be awarded through a competitive bid-ding process. The only exceptions are those linesthat need to be built within a compressed timeschedule or under an exigency, where the CentralTransmission Utility (POSOCO) can offer these proj-ects on a nomination basis.

The rationale for awarding these contracts toPGCIL on a nomination basis, thereby bypassing thecompetitive bidding route, is that the gestation pe-riod of transmission projects is much longer thanbuilding solar plants.

Recently, PGCIL had won three projects throughcompetitive bidding for the Vindhyachal, Gadwaraand Feroze Gandhi Thermal Power stations, which will cost more than Rs 10,000 crore. PGCIL was the lowest bidder in allthe three cases, with bids that were significantly lower than the next private sector bidder.

The other companies that won five of the other six projects include Reliance Power Transmission, Essel Infra technoElectric, Patel-Simplex joint venture and Sterlite Technologies.

Although the power transmission sector was opened to the private sector in 2010, PGCIL continues to command 99 percent market share and garners 87 per cent of the total revenue realised from the use of inter-state lines, including statelines used for the purpose.

In contrast, the power generation sector has private producers contributing well over one-third of the capacity after theElectricity Act, 2003, opened up the sector to private participation.




37 coal mines allotted to state powerunits, one to SAILThe government on March 24 allotted 38 coal mines, from the allotments earlier cancelled by the Supreme Court, tocentral and state public sector units (PSUs).

"The government has allotted 38 coal mines to central andstate PSUs," Coal Secretary Anil Swarup announced here.

The coal ministry earlier planned to allot 43 mines, but al-lotted a lower figure as there were no applications for somecoal blocks, an official told IANS.

The Supreme Court in September last year cancelled theallocation of 204 blocks allotted between 1993 and 2010,leading to the current round of auctions and allocations underan ordinance that was made into law by parliament last week.

All the blocks allotted are for the power sector, except theSitanala mine given to state-run steel maker SAIL.

Most of the 38 blocks have gone to the earlier allotees, in-cluding power majors NTPC, DVC, West Bengal Power Devel-opment Corp., Karnataka Power Corp. and Rajasthan RajyaVidyut Utpadan Nigam.

The auction of 33 coal blocks in two tranches to private companies yielded the government revenue of overRs.200,000 crore.

The Delhi High Court on Monday granted interim relief to Jindal Steel and Power Ltd. (JSPL) and restrained the cen-tral government from allocating two coal blocks to Coal India, for which JSPL had emerged as the successful bidderduring a recent auction.

JSPL approached the court against the government's March 20 decision to cancel the company's winning bids for thetwo coal blocks in Chhattisgarh.

The ministry said last week it was "re-examining" nine winning bids out of the coal blocks auctioned so far, on whetherthere were any price discrepancies in those nine winning bids, including those made by companies like Jindal Steel andBalco.

Swarup had in this connection told reporters last week that "the government can re-auction the mines, it can allot themines to the state and it can give the blocks to Coal India".




Defence buys worth Rs 8,341 cr clearedWith Prime Minister Narendra Modi heading to France, Germany and Canada next month, the Defence Acquisition Coun-cil (DAC) chaired by defence minister Manohar Parrikar cleared projects close to Rs 8,341 crore on March 28.

The DAC gave its approval for buying two Airbus A330 planes for R5,113 crore for the Indian Air Force, the radar forwhich will come from the Defence Research and Development Organisation (DRDO).

In fact, the DRDO has been the key player behind the IAF’s smaller Airborne Early Warning and Control System(AEWACS), which is based on the Embraer businessjet from Brazil with AWACS systems (an Israeli air-borne early warning and control (AEW&C) radar sys-tem developed by Israel Aerospace Industries andElta Electronics Industries of Israel).

European consortium Airbus Defence & Space hademerged as the sole bidder for a global tender forDRDO’s AWACS India programme. The tender — forsix airborne early warning and control (AEW&C) sys-tem aircraft — was issued in March 2014. Interest-ingly, sources have indicated that the Europeanplayer was the only company to have responded to arequest for proposals linked to the project.

As per officials, the commercial bids have yet to beopened for this programme, which is presently for two aircraft, of which four more could be bought, with an option ofgoing up to 10.

Now, Airbus would have to integrate the mission systems on the aircraft and gain certification that it is safe to fly withthe radome.

Company officials had indicated to FE that there have been regular discussions between the DRDO and Airbus aboutthe technicalities involved in this programme, which is actually ‘semi-make’ in India.

Though the defence ministry has given its approval for two of these aircraft from Airbus, once the contract is inked forthe A330 as a platform for the Indian AWACS effort, it will be the first instance of the type being used in the AEW&Crole.

Airbus Defence & Space has also been involved in jointly reviewing New Delhi’s indigenously developed AEW&C sys-tem with India’s Centre for Airborne Systems, with the first Embraer EMB-145-based example likely to secure initial op-erational clearance later this year.

Approval was also given for buying 22 Harpoon missiles for for HDW submarines for R913 crore.The government had sent a letter of request to the US administration for buying 22 Harpoon missiles for the Indian

Navy’s Shishumar-class of submarines.The Indian Navy has already ordered 26 Harpoon missiles for eight Indian Navy P-8I Long Range Maritime Reconnais-

sance aircraft for an estimated $200 million and 24 Harpoon missiles for the Indian Air Force Jaguar aircraft in an orderworth $170 million.

While India’s Hindustan Aeronautics is to integrate the missiles on to the Jaguar, Boeing will integrate them on to theP-8I aircraft itself.

Approval also was given for 1,512 mine ploughs for T90 tanks worth R710 crore and 30 weapon-locating radars fromdefence public sector undertaking Bharat Electronics for R1,605 crore.

Source: The Financial Express

WEEKLYECONOMIC BULLETIN >> NEWS ROUND UP21


Finance Minister certain there will bemore rate cuts in futureDays ahead of Reserve Bank of India (RBI)’s annual monetarypolicy, Finance Minister Arun Jaitley on March 25 said Indianeeds lower interest rates for high growth and certainly therewill be more rate cuts in future triggering reduction in cost ofborrowings.

“I am quite certain we will see more cuts (in policy rates) infuture. But as of today if you ask me how much and when, it isin the domain of the Reserve Bank and I will leave it to them(RBI),” he said at an event here.

The Reserve Bank of India (RBI), which cut interest ratestwice this year outside the scheduled policy reviews, will comeout with annual monetary policy for 2015-16 on April 7.

“My own view has been that India needs to lower its interestrates,” Jaitley said.

The Finance Minister, however, said he would let the centralbank “have the last word” on deciding interest rates as it wasRBI’s domain.

“I mentioned a few days ago in the presence of the (RBI) Governor (Raghuram Rajan) that we do not pressurise thebanks to cut rates. But we do expect the banks after assessing the situation to act in a prudent manner. Our banks havebeen by and large responsible. And I am quite certain we will see more cuts in future,” he said.

On what should be the value of the rupee, the Finance Minister said the government would “like the real value of thecurrency to reflect itself”.

Currency management is done by the RBI.“It (RBI) is effectively handling that situation and therefore I do not think the government should be unusually worried

if the movement takes place a little higher or little lower than that. We leave it at that,” he said.Exports would be benefit if the currency losses a little, but other areas like essential imports including oil become

costlier.“So that it balances itself out. I would rather go by what the real value of the currency is,” Jaitley added.Asked if he favoured a fixed term for the RBI Governor to provide stability to fiscal policy, he said, “I think let others

participate in the debate and I should speak at the end. I would rather reserve my comments for end.”Source: Indo-Asian News Service



India’s economic momentum could unlockcorporate growth: Standard & Poor’sIndia’s reform drive and economic momentum could give plenty of growth opportunities to India’s top corporates, ac-cording to three articles that Standard & Poor’s Ratings Services published as part of a special report, titled “India CreditSpotlight.”

But many corporates are waiting for the government to put policy into action before investing further. “The key to cor-porate growth will be whether the government can deliver on its reform promises. If it does, we believe the top playerswill be ready to capitalise,” said Standard & Poor’s credit analyst Mehul Sukkawala. “In the meantime, we believe the In-dian corporate sector will maintain its conservative stance toward growth rather than throw caution to the wind.”

In the article titled “Myth Busted: India’s Top Corporates Are Hardly Regional Weaklings,” Standard & Poor’s analysedthe operating, cash flow, and leverage data of India’s top 100 corporates, whose members are based mostly on marketcapitalisation. The article suggests that on these parameters, the Indian corporate sector is by no means a laggard to itsChinese and ASEAN neighbours.

“The issues identified with Indian corporates–overindebted and underperforming companies–are concentrated in just ahandful of Indian sectors, albeit critical ones: utilities and infrastructure, and metals and mining,” said Mr. Sukkawala.

“Fixing the well-known problems within these sectors will predominantly require government decision-making andexecution of regulations; the companies can’t do it themselves.”

Overall, we believe the view of India as a global bright spot for investing appears fully justified from a credit risk per-spective. However, in the article titled “India’s Private Sector Companies Adopt A Wait-And-See Approach To CapitalSpending,” Standard & Poor’s forecasts that capital spending will take 12 more months to start recovering.

“Companies are likely to consider new projects only after they can sense the operating environment in India is improv-ing at the ground level. They would also need to be confident that current investments are likely to generate good cashflows before committing fresh investments. This is positive from a credit assessment perspective over the next 12months, especially for companies with weak financial ratios and liquidity,” said Mr. Sukkawala.

The new Indian government has promised to tackle some of India’s longest-festering problems that have kept thecountry’s enormous economic potential in check. The country’s favorable economic conditions and a strong central gov-ernment give it the flexibility to pursue reforms. Initiatives include auctions of energy resources, such as coal, simplifiedtax regimes, and accelerated approval procedures to speed up the ease of doing business.

In the article titled “India’s Reform Push Is An Encouraging Start For Corporates,” Standard & Poor’s suggests thegovernment will need to turn its plans into actions, coordinate better with states, and remove bottlenecks across sectorsto implement reforms. The government may have to dilute some of its reforms because of differing views of oppositionparties and the hesitancy of some of its allies. “Overall, we are optimistic that the impact of government reforms will bepositive in the next few years. The cumulative effect is likely to result in an improved economic and business environ-ment for India’s corporates,” said Standard & Poor’s credit analyst Abhishek Dangra.

Under Standard & Poor’s policies, only a Rating Committee can determine a Credit Rating Action (including a CreditRating change, affirmation or withdrawal, Rating Outlook change, or CreditWatch action).

This commentary and its subject matter have not been the subject of Rating Committee action and should not be in-terpreted as a change to, or affirmation of, a Credit Rating or Rating Outlook.

Source: The Financial Express



Sagarmala to have coastal economiczones, 12 smart cities: GadkariAsserting that the Sagarmala project approved by the cabinet on March 25 will alone lift India's GDP growth by 2 per-cent, Highways and Shipping Minister Nitin Gadkari on Thursday said at least 12 smart cities and several coastal eco-nomic zones will be set up under it.

"Sagarmala project which is a priority project for Prime Minister Narendra Modi has been designed in a fashion that itwill see at least 12 smart cities at India's major portsbesides special economic zones (SEZs)," Gadkari toldreporters here.

Describing the decision as "revolutionary and his-torical", he said "this project alone will boost India'sGDP by 2 percent."

"An allocation of Rs.4,000 crore has been made forthe SEZ (special economic zone) at Jawaharlal NehruPort Trust, which is one of 12 major ports in Indiaunder the Sagarmala project, while a coastal eco-nomic zone is in the offing at Kandla port which has 2lakh acres of land in its possession," he added.

The ambitious Sagarmala project intends to en-hance the capacity of major and non-major ports andpromote port-led direct and indirect development.

Besides smart cities, 1,208 islands have been identified for development to attract tourists, Gadkari said.He said a National Perspective Plan (NPP) for the entire coastline will be prepared within six months which will iden-

tify potential geographical regions to be called Coastal Economic Zones (CEZs).The Sagarmala project will also boost export-import as well as domestic trade."At present Indian ports handle more than 90 percent of India's total export-import trade volume but the current pro-

portion of merchandise trade in GDP is only 42 percent, whereas in Germany and European Union, it is 75 percent and 70percent respectively," the minister said.

Soon after assuming office, Prime Minister Narendra Modi had proposed the Sagarmala project to connect all coastalcities in the country through road, rail, ports and airports through a special development package. The project is de-signed to enhance the unique identities of coastal cities in consonance with their sea-side culture.

Speaking at the Growth Net 2015 event here on Thursday, Power and Renewable Energy Minister Piyush Goyal saidthe government will facilitate building energy efficient and self-dependent smart cities.

"We are focusing on enhancing infrastructure access to water, public transport and renewable energy. However, theprocesses that we are working on will take time to generate outcomes," he said.




India's forex reserves up $4.26 bnIndia's foreign exchange reserves increased by $4.26 billion to $339.99 billion for the week ended March 20, ReserveBank of India (RBI) data showed.

According to analysts, the Indian reserves are being build-up by the Reserve Bank of India (RBI) to absorb any futureglobal financial shock that was witnessed in June 2013.

"The RBI is building up the reserves to counter any future financial shocks like the one which was witnessed at thetime of the tapering announcements were made. Apart from that the reserves will also act as a support to the Indianrupee," Anindya Banerjee, senior manager, currency derivatives, Kotak Securities told IANS.

The RBI is cautious about the US Fed's stand that the rate hike might take place in the later part of the year. With higher interest rates in the US, the foreign portfolio investors (FPIs) are expected to be led away from the emerg-

ing markets such as India.The US Fed dropped an assurance to be "patient" in raising interest rates and signalled the hike could come by mid to

late this year. "Just because we removed the word patient from our statement doesn't mean we will be impatient," Janet Yellen, US

Federal Reserve Board chairman said at a press conference after a globally-awaited meeting of the policy committee onMarch 18.

For the previous week ended March 13, the reserves had decreased by $2.06 billion to $335.72 billion. For the weekended March 6, the reserves had fallen by $286.3 million to $337.79 billion.

The fell in reserves for the previous week (March 13) was attributed to rally in the US dollar and that major non-dollarcurrencies were trading at their weekly lows. The Indian reserves hold nearly 20-25 percent of the non-dollar currencies.

According to the RBI's weekly statistical supplement, foreign currency assets, the biggest component of the forex re-serves grew by $4.53 billion at $314.88 billion in the week under review.

The foreign currency assets had declined by $1.97 billion at $310.34 billion in the week ended March 13. under review.However, for the week ended March 6, the foreign currency assets had risen by $122.4 million at $312.32 billion.

The RBI said the foreign currency assets, expressed in US dollar terms, include the effect of appreciation or deprecia-tion of non-US currencies such as the pound sterling, euro and yen held in reserve.

India's reserve position with the International Monetary Fund (IMF) in the week ended March 20 decreased by $295.8million and stood at $1.28 billion.

The value of special drawing rights (SDRs) was higher by $18.2 million in the week under review at $3.97 billion.Gold reserves were static at $19.83 billion. The gold reserves had plunged by $346.2 million in the week ended March

6. Source: Indo-Asian News Service

Railways' freight business to grow between 9 to 15 percent: ReportThe government on March 27 said the Indian Railways' freight business is expected to rise between 9 to 15 percent dur-ing the next four years from the average growth of around four percent recorded during the last four years.

The freight potential was revealed in a report ontraffic optimisation which was presented to RailwayMinister Suresh Prabhu here.

According to the report, the railways will be ableto meet its growth forecast if progress on comple-tion of last-mile projects, doubling of traffic facility,signalling and electrification works is made at a fastpace.

"The great leap forward would be achieved onlywith completion of dedicated freight corridor," thereport said.

The report observed that in the ensuing periodvarious other capacity-augmentation measures willhave to be completed such as improvements in therolling stock, utilisation of alternate routes, higherwagon capacity and setting up of private freight ter-minals.




Cabinet approves Rs.4,500 crore NationalSupercomputing MissionThe Cabinet Committee on Economic Affairs on March 25 approved the launch of the visionary Rs.4,500 crore NationalSupercomputing Mission (NSM) aimed to steer India into the league of world class computing power nations.

The centre said the mission will be implemented and steered jointly by the Department of Science and Technology(DST) and Department of Electronics and Information Technology (DeitY) over a period of seven years.

"These supercomputers will be networked on the National Supercomputing grid over the National Knowledge Net-work (NKN)... Academic and R&D institutions as well as key user departments and ministries would participate by usingthese facilities and develop applications of national relevance," an official statement said after the cabinet meet.

The NKN is connects academic institutions and R&D labs over a high speed network.As per the government, implementation of NSM across 70 high-performance computing facilities will bring supercom-

puting within the reach of the scientific and technology community in the country and provide "significant qualitative andquantitative improvement in research and development" in science and technology.

Under the present scenario, in the top supercomputing machines in the world, a major share is taken from advancedcountries such as the US, Japan, China and the European Union (EU).

"The mission envisages India to be in the select league of such nations. This will create requisite expertise to buildstate-of-the-art next generation supercomputing. The Mission supports the government's vision of Digital India and Makein India initiatives", it said.

Centre for Development of Advanced Computing (C-DAC) and the Indian Institute of Science (IISc), Bangalore will alsocontribute in implementation of the initiative, it added.




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