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Issue No 625 I May 26-June 1, 2015
WEEKLY
ECONOMIC
BULLETIN
p. 02/04
ITP Division
Ministry of
External Affairs
Government of India
NEWS FEATURE
Modi launches DD Kisan channel, calls for big change in agriculture
Calling for a “big change” in agriculture, Prime Minister Narendra Modi on May 26 launched the DD
Kisan channel and pitched for increasing average productivity of paddy to three tonnes per hectare
from the present two tonnes.
India on fast track of development: PM Modi
Prime Minister Narendra Modi, in a message on the first anniversary of his government on May 26, has expressed his happiness to see India on “the fast path of development”, and added that the country’s environment since the NDA government came to power last May is “suffused with a new enthusiasm”.
More in this section
p. 05/11
OVERSEAS INVESTMENTS
Net FDI inflows touch record high of $34.9 bn in 2014-15
While foreign portfolio investments to India are slowing, net foreign direct investment (FDI) inflows, which
are far more stable, have touched a record high of $34.9 billion in 2014-15, as made clear by the chart, compiled by Nomura Global Markets Research.
France to cooperate in future Bengaluru, Kochi metro projects
France is looking to collaborate in a major way in India’s sustainable urban development and smart cities
projects, and has evinced interest in the phase II Metro projects in Bengaluru and Kochi as well as in the
launch of Metro services in Nagpur, officials said here on May 27.
More in this section
p. 12/14
TRADE NEWS
India plans to increase crude imports from Colombia
India is planning to increase crude oil imports from Colombia by 20-30%. Petroleum minister Dharmendra
Pradhan, who recently concluded his visit to the Latin American nation, discussed the matter with his
Colombian counterpart.
More in this section
p. 15/20
SECTORAL NEWS
$3.5 mn World Bank fund for Ganga project to come by next January: Official
The central government will be receiving the first tranche of $3.5 million from the World Bank by January 2016
for the Rs.4,200 crore estimated budget of the ambitious Jal Marg Vikas project on river Ganga, an official said
here on May 29.
More in this section
p. 21/24
NEWS ROUND-UP
India’s GDP growth tipped to beat China’s for second consecutive quarter
The gross domestic product data on May 28 is expected to show that the Indian economy is growing faster than
China for the second consecutive quarter, but sceptics could be forgiven for asking: Why does it feel so slow?
More in this section
Issue no 625 I May 26-June 1, 2015
WEEKLY
ECONOMIC
BULLETIN
2
>> NEWS FEATURE
Modi launches DD Kisan channel, calls for
big change in agriculture
Calling for a “big change” in agriculture, Prime Minister Narendra Modi on May 26 launched the DD Kisan channel and
pitched for increasing average productivity of paddy to three tonnes per hectare from the present two tonnes.
Launching the channel on the first anniversary of his government, Modi said the agriculture sector had been “neglected” and there was
need to make the sector “vibrant”.
He said 50 percent of farmers would not
know if there is an agricultural department of
the government.
“There is need for a big change in agriculture... It has been left to the fate of farmers,” he
said.
Modi said that if the country has to move forward, villages must make progress and if villages are to progress, it was essential for
agriculture to grow.
Modi, who was repeatedly cheered by the
gathering during his nearly 45-minute speech,
gave many suggestions to boost farm income.
“Agriculture should be divided into three
parts. Try this experiment and agriculture can
be self-sufficient. Keep one-third of field for traditional agriculture, one-third for animal husbandry and one-third for timber,” he said.
He said the country has to import timber but
lakhs of hectares of land has been wasted due
to fences erected by people along their fields.
“Plant timber trees (instead of a fence). Plant
them when a girl child is born and cut them
when she gets married,” he said, adding that the
sale of this wood will meet expenses for the
girl’s marriage.
He said there was a time when agriculture
was the most preferred profession but the situation has changed and it was now regarded below service and business.
Modi said if modern technology was taken to the fields, the youth of the country will be again connected to agriculture
and provide a new momentum to the economy.
The prime minister said the country’s population was rising and the only way to ensure food security was to boost productivity.
“At present, the average paddy productivity in India is two tonnes per hectare whereas the global average is three
tonnes per hectare. We will have to think how we can reach the global average. It looks small (step) but is a difficult
task,” he said.
Issue no 625 I May 26-June 1, 2015
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>> NEWS FEATURE
He also pitched for competition among the sub-divisions in the country about good agriculture practices.
Modi gave credit to late prime minister Lal Bahadur Shastri for the country gaining self-sufficiency in food after being
dependent on imports in the first few years after independence.
“Lal Bahadur Shastri ji gave a mantra ‘Jai Jawan Jai Kisan’, and the farmer of the nation got inspired by that mantra,”
he said.
Noting that India imports pulses and oilseeds, he said the country should attain self-sufficiency in their production.
He said farmers can benefit the most from information on weather being obtained through satellites and asked DD
Kisan to provide regular updates so that it becomes a habit with farmers.
Modi said the channel should also inform farmers about global markets so that they can take informed decisions
about the crops they sow.
He suggested that the channel can start competitions about best agricultural practices by inviting farmers and facilitate video-conferencing about innovations so that these can be replicated across the country.
Prasar Bharati chairman A. Surya Praskah said the channel was an idea of the prime minister.
He said the channel was in Hindi but the best programmes would be dubbed in regional languages.
Minister of State for Information and Broadcasting Rajyavardhan Singh Rathore said the first programme of the government on its first anniversary was dedicated to farmers.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> NEWS FEATURE
India on fast track of development: PM Modi
Prime Minister Narendra Modi, in a message on the first anniversary of his government on May 26, has expressed his
happiness to see India on “the fast path of development”, and added that the country’s environment since the NDA government came to power last May is “suffused with a new enthusiasm”.
In a message on the completion of the first year of his government, the Prime Minister said the nation can be proud of the
fact that it has an improved image on the international front and is determinedly marching forward to achieve its overall goal
of providing welfare to the poor and lifting the marginalized sections of society.
Prime Minister Modi’s message described himself as a “Pradhan Sevak”, and
adds that he was fulfilling his responsibilities “with that bhakti”.
“Antyodaya has been the principle of our political agenda. We have always kept in mind the welfare of the poor, marginalized, labourers and
farmers. The Jan Dhan Yojana, opening a bank account for all families, PM
Jeevan Jyoti Bima Yojana and the Atal Pension Fund are proof of this goal
of Annandaata Sukhi Bhava. That is our supreme goal,” he said.
“When our government was formed, the economy was in doldrums and
prices were rising. I am happy to say that India is on the fast path to development. The entire environment is suffused with a new enthusiasm. On
the international front, India’s image has improved. Foreign investment
has increased. Make in India and Skill India programmes are intended to
create jobs in youth,” he further stated in his message.
“Our goal is to change the way our villages are by working to provide basic facilities. Like, every family should have 24hour electricity, clean drinking water, toilets, roads and internet connectivity, so that the quality of life improves in villages. We are doing the job of connecting-from the borders of the country to the ports of the country, through roads and
railways, and also through Digital India and connectivity,” the Prime Minister’s message stated.
“All Chief Ministers are also working with Team India to erase distances in the first year of this development journey.
The country has found the faith it had lost in itself. This is just the beginning. The country is set to move forward. Come
let us all resolve that our every step will be taken in the service of the nation,” the message adds.
On farmers, the Prime Minister’s message says, “Our farmers toil to give us food security. PM Krishi Seenchai Yojana,
Soil health, improving power situation for farmers, new urea programme are all aimed towards Krishi Vikas.”
The message acknowledges the fact that farmers have faced difficulties due to unseasonal rains and hailstorms, but
emphasizes that the government is with them.
“We are providing a corruption free, transparent administration where decisions are taken quickly. Earlier, natural resources like coal and spectrum were allocated on whims and fancies to industrialists. But we believe that it is the country’s wealth, and as the government’s mukhiya, I am the trustee. Hence, we decided to allocate these by auction. The
country will earn three lakh crore with the coal auction. It will earn one lakh crore with spectrum auction. All this will
benefit the economy,” the Prime Minister’s message said.
“We have established a Mudra Bank where by even the smallest business owner can get loans from 10,000 rupees to 10
lakhs easily. We promised we would bring back black money, and one of the first things we did when we formed government,
was to form an SIT to do that. We also made strong law to book those who have illegally stashed wealth in foreign shores,”
the message states further. “Clean India programme’s goal is to ensure that women do not have to defecate in the open.
Young girls should not be bereft of education because of lack of toilets. Clean India programme also has the goal that children should not suffer from illnesses due to unhygienic conditions. The falling rate of births of girl children as compared to
male children is a cause of concern. Beti Bachao Beti Padhao programme is to tackle this problem,” his message said.
The message also states that down the ages, Indians have had faith in Mother Ganga, and to keep the river pure and
clean, the government has launched the Namami Gangey programme.
Source: Asian News International
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>> OVERSEAS INVESTMENT
Net FDI inflows touch record high of $34.9
bn in 2014-15
While foreign portfolio investments to India are slowing, net foreign direct investment (FDI) inflows, which are far more stable, have touched a record high of $34.9 billion in 2014-15, as made
clear by the chart, compiled by Nomura Global Markets Research.
In fact, net FDI inflows touched 1.7% of gross domestic product (GDP)
in the just-ended fiscal year, up from 1.1% of GDP the previous year.
The reason: more inbound FDI due to growing investor confidence in
India and lower outbound FDI as global growth remains anaemic, said
Nomura in a note on Tuesday. Foreign investment inflows to India are
predominantly to infrastructure, mainly telecom, oil and gas, mining
sectors, as well as the services sector.
In fact, FDI in manufacturing has remained lacklustre, although there
were some inflows into the auto sector.
Higher FDI flows are good for India’s current account deficit and also
help drive domestic investments. With the government opening up various sectors such as insurance and defence, these stable flows may
continue this year as well.
Source: Mint
Issue no 625 I May 26-June 1, 2015
WEEKLY
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>> OVERSEAS INVESTMENT
France to cooperate in future Bengaluru,
Kochi metro projects
France is looking to collaborate in a major way in India’s sustainable urban development and smart cities projects, and has
evinced interest in the phase II Metro projects in Bengaluru and Kochi as well as in the launch of Metro services in Nagpur,
officials said here on May 27.
French envoy Francois Richier, speaking at an
event here, said bilateral cooperation in the field
of sustainable development and smart cities
was “very important” and France was “committed to working with India” in both the areas.
France’s public financial institution Agence
francaise de developpement (AFD) is providing
the funding for the projects.
During Prime Minister Narendra Modi’s visit
to France (April 9-13), French President Francois Hollande decided to increase France’s line
of credit from euro 1 billion ($1.09 billion) for
three years to euro 2 billion ($2.18 billion) to
support projects related to sustainable urban
development and smart cities in India.
As part of its earlier euro 1 billion commitment, AFD has spent half the funding on the Metro projects in Kochi and Bengaluru.
S. Selvakumar, joint secretary in the Department of Economic Affairs, said on the sidelines of the event that among the
major projects AFD was involved in were the Kochi and Bengaluru Metro projects and a water supply plant in Jodhpur.
He said among the future projects that AFD has voiced keenness to participate in were the phase II of the Kochi and
Bengaluru Metro and a new Metro project in Nagpur.
Richier said France was also collaborating in the field of renewable energy, especially solar energy, in civil nuclear cooperation in the form of the six reactors to come up in Jaitapur in Maharashtra, and also in railways.
Pascal Pacaut, director for the Asia department of the AFD, said that after Modi’s visit to France, the credit line has been
increased to 2 billion euros.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> OVERSEAS INVESTMENT
ETI Dynamics introduces solar electric
hybrid vehicles in India
ETI Dynamics announced the launch of a solar electric hybrid vehicle here on May 29.
According to ETI Dynamics, the prototype is a hybrid scooter that has a canopy of bendable solar panel.
The company touts that it was the first of its kind vehicle in the country that can charge on the go.
The prototype can travel for more than 50 km on a single charge at a top speed of 45 kmph, the company said.
The scooter is light weight and accompanies a weather
proof design and propagates the concept of mobile charging infrastructure.
“The prototype is amongst several other adaptations of
the technology such as auto-rickshaws, buses, golf-carts,
shuttle that will be launched in the next 12 months. The
addition of solar panel to the vehicle increases the distance it is able to travel by 15-20, thus providing more efficiency gains,” a company spokesperson said.
Rajneesh Wadhwa, chief operating officer, ETI Dynamics said: “The electric vehicle market hasn’t yet taken off
in India due to high costs and lack of charging infrastructure. This is because the technology is restricted to very
few platforms like cars. We need the entire eco-system to
come up simultaneously which is what we are working
on.”
“Just like any electronic marketplace needs a critical
mass of buyers and sellers to succeed, the same way electric mobility needs a large number of vehicles with an elaborate
charging stations network to succeed. We are committed to bringing new technologies on the road coupled with charging
infrastructure coming up at the same time,” he added.
Asked about future plans, Sanmit Ahuja, chief executive, ETI Dynamics said: “The company will initiate pilots in 5-6 cities
in India immediately in the coming months and expects the first batch of vehicles plying commercially on the road in the
next 12 months.
“ETI Dynamics is working with a range of vehicle manufacturers and engineering institutions to bring prototypes to road.
It is also creating a number of mobile phone applications that will help consumers locate charging stations, make payments, monitor battery performance etc.”
“The company is also in active dialogue with the Digit Group of US and in partnership with Sunon Energy of India to
transform the community and charging landscape in urban areas,” he added.
ETI Dynamics is an investor in technologies, projects and innovations centred on sustainable development.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> OVERSEAS INVESTMENT
SAP ties up with IIMA to nurture
entrepreneurs
German software maker SAP SE’s Indian arm has joined hands with the Indian Institute of Management Ahmedabad (IIMA)
to launch a start-up accelerator programme aimed at mentoring early-stage entrepreneurs from small Indian towns.
Through the accelerator programme set up in collaboration with the Centre for Innovation, Incubation & Entrepreneurship (CIIE) at IIMA, SAP is looking to develop a pipeline of start-ups that can be invested in.
The initiative will let the entrepreneurs tap angel networks, co-working spaces, fabrication labs, incubators, industry associations, technology and academic institutions.
“The programme seeks to help entrepreneurs from
tier-II and tier-III towns drive sustainable economic growth
and innovation, and make Digital India real,” said Adaire
Fox-Martin, president of SAP Asia Pacific Japan.
As part of the programme, entrepreneurs will undergo
a three-month non-residential boot camp and monthly
training workshops and will work closely with domain experts from SAP Labs in Bengaluru.
Kunal Upadhyay, CEO of CIIE at IIMA, said it was looking to leverage its past experience and expertise “to fasttrack start-up growth through operational guidance,
mentoring and access to capital”.
The programme will support entrepreneurs focused on
a wide spectrum ranging from social entrepreneurship to
the Internet of Things.
Apart from IIMs and Indian Institutes of Technology, a clutch of incubators and accelerators such as Microsoft Start-up
Accelerator, Morpheus and Kyron have also been nurturing entrepreneurs in India.
China’s Alibaba Group recently announced plans to set up a start-up incubator in Bengaluru.
Source: Mint
Issue no 625 I May 26-June 1, 2015
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>> OVERSEAS INVESTMENT
India-Saudi Arabia discussing joint
investment fund
India and Saudi Arabia on May 28 agreed to continue discussions on setting up a joint investment fund, including the Saudi
request to consider a favourable tax treatment for such a fund. This was among the many issues agreed on at the end of
the 11th meeting of the India-Saudi Arabia Joint Commission here on Thursday in the context of major changes in the
movement of international crude oil prices in the past year shaped largely by actions of the oil-rich kingdom.
The Indian delegation to the talks was led by Finance Minister Arun Jaitley while the Saudi side was led by the country’s
Commerce and Industry Minister Tawfiq Bin Fawzan Al Rabiah.
Outlining the significant structural changes being planned in India towards opening the economy and inviting foreign investment, particularly in infrastructure, Jaitley said:
“Our bilateral trade of $48 billion was in slight decline
last year for the obvious reason of falling oil prices.
“There is, therefore, a need to expand the relationship in the non-oil sectors,” he added.
The agenda of the current joint commission covers
an array of sectors departments involved that range
from trade, investment, media, culture, agriculture and
tourism to finance, health, industry, technology and
skill development, involving a total of 22 Indian ministries. The directors of 14 different government departments from Saudi Arabia are part of the delegation
reflecting the wide-ranging engagement with the kingdom, which is otherwise the largest source of crude oil
for India, accounting for one-fifths of the country’s need.
In his address, Saudi Commerce Minister Al Rabiah said the bilateral trade figures were modest compared to their potential to increase significantly. “The 11th session is an opportunity to lay the foundation for closer cooperation,” he said.
“The Saudi-Indian joint ventures in Saudi Arabia have reached the figure of 231, for a total capital investment of $630
million,” the Saudi minister added.
He recalled the signing of the Riyadh Declaration in 2010 during former prime minister Manmohan Singh’s visit to Riyadh,
that raised the level of interaction to a strategic partnership involving the political, economy, security and defence areas. As
per data available with India’s external affairs ministry, Saudi Arabia is the fourth largest market for Indian merchandise,
while for Saudi Arabia India is the fifth largest market for its exports. Annual bilateral trade stands at nearly $50 billion. In
terms of imports, India ranks seventh and was the source of around 3.5 percent of Saudi Arabia’s total imports in 2013.
Besides being a major trade partner, India sees Saudi Arabia as a major pillar for its energy security and an important
economic partner for investments, joint ventures, transfer of technology projects. Both countries have been quietly doing a
lot of intelligence sharing and security cooperation on the anti-terror front.
There are nearly 80 major Indian companies operating in the kingdom, including Larsen & Toubro, Tata Consultancy
Services, Tata Motors, Wipro, Dayim PunjLloyd, Shapoorji Pallonji, Infosys, Air India and State Bank of India, among other.
Since mid-2000, a number of Indian firms have taken advantage of the new Saudi laws and established joint venture projects or wholly-owned subsidiaries in the Kingdom. Saudi Arabia is also home to over three millions Indians, including a
growing number of professionals, and is one of the largest Indian diaspora in the world.
The previous joint commission meeting was held in Riyadh in January last year and was co-chaired by then finance minister P. Chidambaram.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> OVERSEAS INVESTMENT
India to have first Gap store in Delhi
The first Gap store will open in India in the national capital on May 30, offering a wide range of collections from the American multi-national clothing and accessories brand.
“We are excited that Gap, one of the worlds’ most iconic brands, is now available to our Indian customers through the terrific partnership between Gap and
Arvind. Through this partnership, we plan open up to 40 stores across the country,” said J. Suresh, managing director and chief executive officer of Arvind
Lifestyle Brands Ltd.
“We are pleased to bring Gap’s casual American style to customers in India
and we have been encouraged by the positive response from our launch efforts
thus far,” said Ismail Seyis, vice president of Gap Franchise.
“Our brand awareness is very high and itas apparent there is a deep affinity
for Gap in India. We are looking forward to providing a unique branded shopping
experience across India,” Seyis said.
Source: Indo-Asian News Service
FDI may be allowed in sectors with high
employment scope
Hinting at opening up of more sectors to foreign investment, Prime Minister Narendra Modi on May 27 said areas with high
employment potential and strong local talent would be the focus to woo foreign investment and expressed confidence that
reforms measures like the Goods and Services Tax (GST) and land acquisition Bill will be passed in “a matter of time”.
On the land Bill, which the government wants to push early but has now been referred to a parliamentary committee, he
said the government would accept any suggestions that benefit “Gaon, Garib, Kisan (village, poor and farmer)”.
In a wide-ranging interview to PTI, Modi asserted that measures already taken in past one year had increased the attractiveness of India as an investment destination and investor confidence had improved.
He also dismissed suggestions of differences between finance ministry and Reserve Bank saying the central bank has
its functional autonomy which the government “will always respect and preserve”.
“Wherever there is high employment potential and wherever we have strong local talent, for example, in research and
development: those will be the areas of focus for foreign direct investment (FDI).
“We have created the National Infrastructure Investment Fund. This is a major step which will increase the flow of foreign investments into all infrastructure sectors, without needing separate sector-by-sector approaches,” he said.
Asked whether obstacles to reforms measures like GST Bill and amendment to Land Acquisition Bill was hurting the
economy, the Prime Minister said both the GST and the proposed Land Acquisition Bill were beneficial for the country.
“The core essence of these Bills should be appreciated by all the parties keeping aside political motives. Long term interest of the nation should be foremost.”
“The fact that the States have agreed to the GST design, shows the maturity of our federal system and the GST Bill has
already been passed by the Lok Sabha. It is a matter of time before these laws are passed,” he said.
To a question what kind of a message would it send to foreign investors if reform measures are not pushed fast, the
Prime Minister said, “One of the peculiarities of Delhi is that the term ‘reform’ is associated only with passing of laws in
Parliament.
Issue no 625 I May 26-June 1, 2015
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>> OVERSEAS INVESTMENT
“In fact, the most important reforms needed are those without new laws at various levels of Government, in work practices and procedures.”
Modi said the government has initiated a number of major reforms which include decontrol of diesel prices, direct transfer of cooking gas subsidy, enhancement of FDI limits, revamping of railways and many others.
“The truth is that reform has actually been pushed very fast and in fact as a result FDI has already witnessed an increase of 39 per cent in the period April, 2014 to February, 2015 compared to the previous year,” he said.
He also maintained that the success of steps that the government had taken and the positive response of the people to
them in the first year “have encouraged us to do even more”.
“Our focus will be on P2G2, i.e. Pro-active, Pro-people Good Governance reforms. Another aspect we will emphasize and
strengthen is that the State and the Centre are one team which has to work together for reforms to be effective,” he said.
Asked about reports of RBI and finance ministry on the same page on issues, Modi said, “I am surprised that an important and credible media agency like PTI is drawing an incorrect inference based on remarks made in different contexts. RBI
has its functional autonomy which the Government and the Finance Ministry always respect and preserve”.
On the economic growth prospects for the current year, Modi said based on experience of the last year and the enthusiasm of the people give confidence that all economic indicators will exceed the targets.
“I do not want to undermine the potential and the efforts by giving any figure which may turn out to be too low,” he said.
To a question about Opposition accusation that the government was pro-corporates while some in industry like Deepak
Parekh say nothing is happening on ground, he said, “The answer is to be found in your question itself. If opponents are accusing us of being pro-corporate but the Corporates are saying we are not helping them, then I take it that our decisions
and initiatives are pro-people and in the long term interests of the nation”.
On the issue of making progress on the BJP’s election promise on stringent action against back blackmoney, he said the
very first decision of the Government after taking office was to constitute the Special Investigation Team to pursue black
money.
“This step had been pending for years with no action and we executed it in our very first Cabinet meeting.
Subsequently, we have also brought a new Bill which will combat black money held abroad and it prescribes stiff penalties.
“Thanks to our efforts, an agreement was reached at the G-20 summit in November 2014 to curb tax evasion and in particular to exchange information between countries. This will help us to trace black money. These are very strong and concrete actions,” he said.To a question on the agrarian crisis in the country, the Prime Minister said suicide by farmers has
been a serious concerns for several years.
“Political point-scoring through comparing how many suicides occurred under which government will not solve the
problem. For a government of any party, and for every one of us, even one suicide is worrisome,” he said.
Source: Press Trust of India
Issue no 625 I May 26-June 1, 2015
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>> TRADE NEWS
India plans to increase crude imports
from Colombia
India is planning to increase crude oil imports from Colombia by 20-30%. Petroleum minister Dharmendra Pradhan, who
recently concluded his visit to the Latin American nation, discussed the matter with his Colombian counterpart.
Sources told FE that Pradhan met with minister of mines
and energy Tom s Gonz lez Estrada and other senior officials
in Bogota. While no firm decision has been taken yet, Colombia is keen on expanding crude export to India.
Also, ONGC Videsh, which is currently holding seven blocks
in Colombia, intends to expand its presence in the country.
Pradhan had also visited oil fields where Indian firms have
stakes.
Currently, India imports about 60% of its total crude oil
needs from Arab nations and 20% from Latin America. India
plans to increase the imports from Latin American nations to
50% over the next five years. At present, Venezuela, Mexico
and Colombia are the nations that supply larger amount of oil
to India.
“We already have a very strong relationship with Colombia
on hydrocarbons. At present, ONGC Videsh has operations in
the Llanos field in Colombia’s Orinoco and explored five wells.
The same company owns 50% of the Mansarovar, in a joint
venture with the Chinese company Sinopec, in the region of
Magdalena Medio,” Pradhan said.
According to Pradhan, the hike in the oil prices has not affected business between India and Colombia.
On the contrary we want to increase our economic relations, he said.
Colombia is a major supplier of oil to India, with figures rising. In 2014, the total exports of Colombian crude to India
reached $2.6 billion.
India has identified four areas of cooperation between Colombian and Indian companies: exploration and production of
oil; activities of refining, processing and purification of hydrocarbons; and looking for more oil in the country. The possibility
of involving Indian companies in contractual services with Colombian firms in the sector was also evaluated.
According to the Colombia-India Chamber of Commerce and Industry, last year the trade balance between both countries was $4,830 million. Also in 2014, there was an investment of $ 95 million by Indian private companies in the country.
Last year, Colombia exported about 6.3 million metric tonne of crude, according to figures from the chamber.
Source: The Financial Express
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>> TRADE NEWS
Cabinet approves India-Bangladesh
agreement on coastal shipping
The union cabinet on May 30 approved the agreement on coastal shipping between India and Bangladesh for coastal movement
of goods between the two countries.
“Exim trade between India and Bangladesh would be benefited by way of reduction in freight charges. It will also improve the
utilisation of port capacities of Indian ports and open up new opportunity for Indian coastal vessels. It will also help in decongestion of roads especially at the land custom stations/integrated check posts at the Indo-Bangladesh boarder,” an official statement
issued here said.
The Indian ports serving as trans-shipment ports for Bangladesh cargo will derive benefits by way of enhanced throughput as a
result of Indo-Bangladesh coastal trade, it said, adding that both the nations shall render the same treatment to the other country’s vessels as it would have done to its national vessels used in international sea transportation.
India’s trade with Bangladesh has grown rapidly during the past few years. Bangladesh is now India’s largest trade partner in
south Asia.
Currently, there is no significant cargo movement between the sea ports of Bangladesh and India as it is not profitable for the
big ocean going vessels to operate between the ports of the two countries.
Therefore, to reduce the cost of shipping operations, a lower but pragmatic standard of vessel known as River Sea Vessel (RSV)
has been prescribed for coastal shipping.
The RSV category has significantly lower construction and operation costs without compromising on safety. For IndoBangladesh coastal shipping, the RSV category of vessel has been agreed upon by both the countries.
Source: Indo-Asian News Service
India-Sweden MoU on micro, small, medium
industries approved
Ahead of President Pranab Mukherjee’s visit to Sweden, the union cabinet on May 30 approved signing of an agreement between
India and Sweden to promote cooperation in micro, small and medium enterprises
(MSME) sector.
“It provides a structured framework and enabling environment to the MSME sector in
the two countries to understand each other’s strengths, markets, technologies and policies,” a cabinet communique said.
The MoU contains an agreement between the two countries to enable their respective MSMEs to participate in each other’s trade fairs and exhibitions and to exchange
business delegations so that joint ventures, tie-ups and technology transfers could take
place, the statement said.
“It does not contain or involve any financial, legal or political commitment on the part
of either party, the ministry of micro, small and medium enterprises said.
“In no case does it attract any financial liability on the part of the government of
India,” it added.
The ministry has so far entered into long-term agreements with 17 countries Tunisia, Romania, Rwanda, Mexico, Uzbekistan, Lesotho, Sri Lanka, Algeria, Sudan, Cote d’lvoire, Egypt, Botswana, South Korea,
Mozambique, Indonesia, Vietnam and Mauritius.
Source: Indo-Asian News Service
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>> TRADE NEWS
Onion exports jump 25% in two months
Onion exports have gone up 25 per cent over the past two months, after a four-month slump, because of less competition in destinations such as Sri Lanka and West Asia.
Between December 2014 and March 2015, Indian onion exporters were facing tough competition from Pakistan, both in quality and prices.
Onions from Pakistan were sold in West Asia at $100 lower than
the price offered by Indian exporters. Their quality was also superior to the India counterpart, adversely affected by unseasonal rainfall in December, February and March. Rising exports have also
helped spurt modal prices in the benchmark Lasalgaon market at
Rs 1,175 a quintal on May 26 as against Rs 1,000 a quintal on May
2. Also, arrivals have risen to 13,000 tonne from 10,000 tonnes in
the same period under consideration. For exports also, prices have
surged by $25-50 to $375 so far this month.
“But, Pakistan has run out of stock. So, overseas importers do
not have any option but to accept onion from India. Despite being quality inferior than global standard of the fair average quality
(FAQ), the consignments are accepted,” said Ajit Shah, President, Horticulture Exporters Association.
Data compiled by the National Horticulture Research and Development Foundation (NHRDF) showed, India’s onion exports at
265,066 tonnes between April – May last year. Exports have been up by 20-25 per cent this year, said Shah.
In the preceding four months, however, onion exports from India remained lackluster due to high domestic prices. Onion was
selling at around Rs 25 a kg in domestic market due to reports of crop damage on unseasonal rainfalls and hailstorms. In exports
terms, therefore, India was uncompetitive.
Consequently, India’s overall exports between April 2014 and February 2015 reported a decline of 30 per cent as Indian market
was capture largely by Pakistan.
Data compiled by NHRDF, onion exports in the first 11-month of 2014-15 plunged to 0.97 million tonnes as against 1.26 million
tonnes in the same period last year.
Considering 0.11 million tonnes of export quantity of March 2014 to remain unchanged in March 2015, India’s overall onion export may hit seven-year low at 1.08 million tonnes in the financial year 2014-15.
Now, onion exports from India have rebounded as, according to trade sources, Indian exporters are offering the commodity at
$60-70 a cheaper than any other originating countries including China and Iran.
Consequently, India gets advantage over competition despite poor quality of product.
Due to political unrest, consignments from Yeman were also not coming into the Middle East markets.
But now, market is slowly coming in track. Export from Yemen has started, of course, in negligible quantity. Exporters from
China and Iran have also gradually initiated testing market pulse in Dubai and Doha.
“Now, stockists have started sorting out good quality from rain soaked onion for future sale. While good quality onion gets exported, the rain soaked one is brought into the market resulting into a sudden spurt in arrivals into mandis. Quality of Indian onion
is inferior and therefore, such onion cannot be dispatched for long distance for fear of rotting. Consequently, onion exports from
India were low until the last few months,” said R P Gupta, Director, NHRDF.
Meanwhile, onion availability may become scarce in lean season of August – September ahead of ensuing kharif crop harvest.
Various estimates suggest between 25-30 per cent of crop damage due to unseasonal rainfalls in February – March.
Gupta, however, believes that much would depend upon the ensuing monsoon rainfalls which would give a fair indication of
sowing, crop development and harvesting.
Source: Business Standard
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>> SECTORAL NEWS
$3.5 mn World Bank fund for Ganga
project to come by next January: Official
The central government will be receiving the first tranche of $3.5 million from the World Bank by January 2016 for the
Rs.4,200 crore estimated budget of the ambitious Jal Marg Vikas project on river Ganga, an official said here on May 29.
“The World Bank has approved $3.5 million (Rs.22.32 crore as per Friday’s exchange rate) and it will come by January,
2016,” Indian Waterways Authority of India
Chairman Amitabh Verma told media persons
here.
Conceived in 2014, the project is aimed at
connecting Uttar Pradesh Allahabad with
West Bengal’s Haldia over a distance of 1,620
km.
The World Bank is scheduled to fund 50
percent of the project, with the central government providing the remaining amount.
The big-ticket Jal Marg Vikas project has
the potential to connect Haldia, Howrah,
Kolkata, Bhagalpur, Patna, Ghazipur, Varanasi
and Allahabad.
It is also important as it can serve the eastern mining belt and provide an efficient means
to ferry coal, iron ore, bauxite, mica and several other minerals. The rail and road corridors in this region are nearly saturated.
East India forms a good grid for inland waterway connectivity as it is dotted with numerous navigable rivers and can
connect the north-eastern states through the network of rivers. Besides, there is also a possibility of ferrying cargo to
and from Bangladesh.
Source: Indo-Asian News Service
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>> SECTORAL NEWS
Coal India net profit declines by 9.2 percent in 2014-15
Despite a rise in both the production of coal and its offtake during 2014-15, world’s largest miner Coal India Ltd (CIL)
posted a 9.2 percent decline in its consolidated net profit for 2014-15.
The net profit, during the period under review stood at Rs. 13,726.70 crore compared to Rs. 15,111.67 crore in 201314.
The consolidated net income of the miner and its
subsidiary units stood at Rs.74,120.07 crore - up by a
moderate 5 percent against the total earnings of
Rs.70,607.52 crore during 2013-14.
During the fiscal, the Maharatna company and its
subsidiary units produced 494.24 million tonne (mt) of
coal which is an increase of 6.9 percent compared to
the production of 462.42 mt during 2013-14.
The offtake also rose by 3.8 percent during the periodfrom 471.58 mt to 489.38 mt.
On a standalone basis, the state-owned, Kolkataheadquartered firm posted a net income of Rs. 387.12
crore - up by an impressive 22 percent compared to
Rs.317.34 crore during 2013-14.
Its dividend earnings and other income sources, however declined by over 12 percent in 2014-15 resulting in the company posting a 11.9 percent drop in its net profit - at
Rs.13,383.39 crore during 2014-15 compared to Rs.15,008.54 crore during 2013-14.
Dividend from its subsidiaries and other income sources declined from Rs.16,086.76 crore in 2013-14 to Rs.14,143.40
crore in the recently-concluded fiscal.
The company, however was able to contain the declining profit in the fourth quarter of 2014-15 posting a decline of
4.4 percent in its consolidated net profit. It contained the same at Rs. 4,238.55 crore during the period compared to
Rs.4,434.18 crore in the corresponding timeframe in 2014.
The net consolidated revenue, however, during the quarter declined by 3.7 percent although the company posted a
strong standalone net profit at Rs.9,629.23 crore.
Although the coal offtake increased by 3.7 percent during this time, the coal production registered a sharp rise by 15.4
percent during Q4.
Source: Indo-Asian News Service
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>> SECTORAL NEWS
iYogi launches IoT platform on Microsoft
Azure
Tech firm iYogi on May 28 launched an IoT platform on Microsoft Azure to support the growth of the IoT ecosystem.
The company touts that the Digital Service Cloud Open IoT Platform is the first enterprise grade IoT platform from India.
It uses Microsoft Azure as its base and can
handle millions of devices.
“Innovators or entrepreneurs can use the
platform to deploy, monitor and automatically manage their products across millions
of end users, easily integrate their products
with the growing IoT ecosystem, and use its
advanced analytics capabilities to build and
fast track their global growth strategies,”
said iYogi co-founder Vishal Dhar.
The platform has been adopted by Cooey,
a family health-monitoring platform that
collects, analyses and provides insights
about patient data. Other users include
SmartBuildings which improves comfort,
health and energy efficiency in commercial
buildings via 24x7 monitoring and control of air conditioning systems.
Speaking on the platform’s launch, iYogi CEO Uday Challu said: “Recognising the potential economic and social impact of
IoT, the global technology industry is witnessing a burst of innovation. A platform that brings this innovation ecosystem together is essential to propel the industry further.”
“More than four years, and $35 million have gone into the development of our platform - and we believe this is exactly
what is needed by IoT innovators. It is easy to set up, and can scale from one-digit to over a million transactions quickly,” he
added.
iYogi also launched a partner programme to support growth of the IoT ecosystem, under which start-ups can use the
platform for free, for up to a million devices, and will receive additional resources and development support. The company
plans to create a showcase of more than 100 IoT solutions over the next one year.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> SECTORAL NEWS
Global diamond mines allowed to sell in
India in special zones
The government has finally allowed international mines to sell rough diamonds in India, which otherwise Indian merchants
had to earlier purchase from Antwerp.
The Special Notified Zone (SNZ) to allow import and sale of rough diamond directly by global miners like De Beers, Rio
Tinto, BHP Billiton and Al Rosa is set to become operational by July 1.
While plans to set up the SNZ were announced at the Bharat Diamond Bourse in December 2014, the government had not issued
any operational guidelines in consultation
with the Central Excise and Customs.
Therefore, despite the announcement,
global miners were apprehensive over setting
up of India offices to bring rough diamond and
conduct auctions here.
De Beers’ Chief Executive Officer Philippe
Mellier on his recent India visit had said his
company was ready to set up offices in India,
provided conducive trading regulations were
put in place.
“With operational guidelines in place, global miners will be able to set up offices in India which will reduce travelling time
for Indian diamantaires, and also cost of rough diamond procurement,” said Sabyasachi Ray, Executive Director, GJEPC.
The decision assumes significance especially for Indian diamantaires who currently travel to major trading centres like
Dubai, Johannesburg and Antwerp once for inspection of the lot of rough diamond and again for participating in auctions.
India process 11 out of every 13 rough diamond mined globally.
“This is first of its kind of revolutionary idea which the government of Israel and others want to replicate. We were pursing with the government for several years for this. The guidelines will transform India into the world class trading center
not only for rough diamond but also for other commodities, in case the same is adopted,” said Ray.
Meanwhile, the government has set up a special purpose vehicle —India Diamond Trading Centre (IDTC) — to handle import of rough diamond for auctions and sale here.
The government proposed BDB to outsource the handling of rough diamond, imported for auctions or sales to ITDC to be
constituted jointly by GJEPC and BDB. Also, the government asked BDB to identify and submit floor plan including security
related features. “Trading by global miners in India was not allowed in India. Global miners are allowed now to bring even
run-of-the-mines goods. For them, we have identified 4000 sq ft with 10-12 rooms which global miners would hire and conduct trading. The unsold quantity may always be taken back,” said Anoop Mehta, President, BDB.
The government has identified BDB as a custodian of rough diamond import and export for which the Precious Cargo
Customs Clearance Centre at BKC has been notified as a nodal agency.
The import of rough diamonds will be permitted through air cargo mode only. No import of hand carriage or express
courier service mode will be permitted.
Sanjay Kothari, an industry veteran, said, “We are in talks with global diamond miners to bring them for trading of rough
diamonds in India. As of now, individual traders, sightholders or processors were importing goods on their personal capacity. With this, however, Indian diamond processors will be at an advantage.”
Source: Business Standard
Issue no 625 I May 26-June 1, 2015
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>> SECTORAL NEWS
Kishore Biyani buys Grasim’s personal
care brands
Future Consumer, the food and consumer goods arm of the Kishore-Biyani-led Future group, on May 25 said it had
agreed to acquire the personal care business of Grasim.
The business, which has a turnover of close to Rs
10 crore a year, includes Kara wet wipes and allied
products such as Puretta, Handys, and Prim.
The transaction is expected to be completed next
month, the companies said in a filing to stock exchanges.
Grasim said the transaction was a slump sale.
The deal is expected to boost the Future group’s
personal and home care businesses, which include
brands such as Sach, Clean Mate, and Care Mate.
Biyani hopes to take his food and consumer
goods business to Rs 20,000 crore by 2020 from Rs
1,000 crore now, making it a key vertical in his retail
group. He proposes to do this by getting manufacturing in place, which is missing in his portfolio.
“We run one of the most modern distribution centres in the country. We have one of the best express fleets. We are in
the process of acquiring a cold-chain logistics provider. We already own retail stores. What was left was our manufacturing. The food parks are a step in that direction,” he had earlier told the Business Standard.
The group is setting up three food parks in Karnataka, Madhya Pradesh, and West Bengal. These will process and
package food products that the Future group will sell through its retail chains.
While food gives the group the bulk of its revenue in consumer goods, Biyani, often described as the country’s retail
king, wants to improve revenue from consumer goods to make his portfolio well-rounded. The latest acquisition is a step
in that direction, with the group likely to consider more such buys.
Source: Business Standard
Issue no 625 I May 26-June 1, 2015
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>> SECTORAL NEWS
Reliance leads India Inc. as the highest
profit earner
With the results season for 2014-15 drawing to a close, oil refining-to-retail major Reliance Industries has emerged as
the top Indian corporate to earn the highest net profit, followed by Tata Consultancy Services (TCS) and the state-owned
Oil and Gas Corporation (ONGC).
The Mukesh Ambani led-conglomerate reported a consolidated net profit of Rs.23,566 crore for 2014-15.
The consolidated net profit for the full financial year was up 4.8 percent from Rs.22,493 crore in 2013-14.
Reliance Industries profitability has also sustained its chairman Ambani’s stature as the world’s richest Indian with a
net worth of $19.6 billion, according to US business magazine Forbes.
The second in line for earning the highest net profits for 2014-15 was the IT major TCS, whose net profit stood at
Rs.19,852 crore. The net profit grew by 3.59 percent from Rs.19,163.87 crore.
The state-run ONGC came was in the third position by earning a net profit of Rs.18,334 crore. However, the company’s
net profit fell by 30.83 percent from Rs.26,506.53 crore during 2013-14.
The other major corporate earners include State Bank of India (SBI), whose net profit stood at Rs.16,994 crore, Tata
Motors at Rs.13,986 crore, and Coal India at Rs.13,727 crore.
Even on the fourth quarter of 2014-15 results basis, the Ambani led-conglomerate topped the list for the highest net
profit earners.
The net profit for the fourth quarter of 2014-15 stood at Rs.6,381 (over $1 billion), thanks to a jump in refining margins
to $10.1 per barrel, this also beat market expectations.
The company’s net profit for the corresponding period of 2013-14 stood at Rs.5,631 crore.
Reliance was followed by Coal India, whose net profit stood at Rs.4,239 crore, however, this was a decline of 4.4 percent from Rs.4,434.18 crore in the corresponding time frame in 2014.
IT major TCS came in at third spot, with net profit stood at Rs.3,713 crore. However, the net profit was down by 30.69
percent at Rs.5,357.61 crore.
TCS was followed by Infosys with a net profit of Rs.3,097. It grew by 3.5 percent from Rs.2,883 crore.
On stand-alone basis state-run oil refiner and marketer Indian Oil was the highest quarterly net profit earner this season.
It stood at Rs.6,285 crore. However, the net profit was down 33 percent from Rs.9,389 crore in the corresponding
quarter of the previous fiscal.
IOC was followed by ONGC, whose stand-alone net profit stood at Rs.3,935 crore and SBI whose net profit stood at
Rs.3,742 crore.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> NEWS ROUND UP
India’s GDP growth tipped to beat China’s
for second consecutive quarter
The gross domestic product data on May 28 is expected to show that the Indian economy is growing faster than China
for the second consecutive quarter, but sceptics could be forgiven for asking: Why does it feel so slow?
Celebrating his first year in office, Prime Minister Narendra Modi has basked in the success of transforming India into
the fastest growing major economy.
But there are nagging doubts over whether a new
way of calculating GDP, introduced by the government earlier this year, has distorted the macroeconomic view.
“The economy is not as strong as the GDP numbers might suggest,” said Shilan Shah, India Economist at Capital Economics. “The numbers should not
have any bearing on policies and both the central
bank as well as the government should look at other
activity indicators.”
The robust headline growth is hard to square with
weak industrial activity, grim corporate earnings and
an elusive recovery in bank credit.
The median estimate from a Reuters poll of economists put GDP growth at 7.3% in the January-March
quarter, slowing from 7.5% in the previous quarter.
For the 2014-15 fiscal year ending in March growth is expected at 7.4%, up from 6.9% in 2013/14, using the new series. That is a startling turnaround from the previous data series that showed the economy was still struggling to gather
steam after posting two successive years of growth below 5% - the longest spell of such low growth in a quarter century.
If India was doing so well there might be far less need for the central bank to lower interest rates for a third time this
year, as analysts expect it to do at a policy review on Tuesday.
But, the economy is still suffering from slack. Corporate sales and industrial production are down.
Merchandise exports have fallen for five months in a row.
Output of cement and steel, a proxy for construction, has been extremely weak. Growth in bank credit in the fiscal
year ending in March was the slowest in two decades.
Arvind Subramanian, the government’s chief economic adviser, this week likened the state of the economy to flying on
“one-and-a-half engines”.
“Bad stuff has stopped happening, but the good stuff is still waiting to happen,” he said.
Whereas India’s statisticians changed their calculation of GDP to come into line with global practices, it has left economists inside and outside government groping for a clear interpretation of the data.
The Reserve Bank of India (RBI) has warned the new series is clouding the picture, and reckons growth is still slow in
picking up. Still, the economy is in better shape than when Modi took the reins a year ago with the slogan “good days are
coming”.
He has been helped by a dramatic slide in global crude prices that has cooled inflation and helped narrow the fiscal
and current account deficits, giving the RBI leeway to cut interest rates.
Issue no 625 I May 26-June 1, 2015
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>> NEWS ROUND UP
Modi’s drive to make it easier to do business in India has generated optimism, and has led to a marked increase in foreign direct investment.
A massive increase in the government’s planned spending on roads, railways and ports this year is expected to break a
persistent investment logjam.
Yet, businesses complain that too little has changed and are reluctant to ramp up investment, as their balance sheets
are already stretched. Banks, saddled with mounting bad debt, are also cautious lenders.
“So far, not enough has been achieved to suggest that India can fulfil its economic potential over the medium term,”
said Shah of Capital Economics.
Source: Reuters
Forbes names SBI chief as 30th most
powerful woman in the world
Forbes has named State Bank of India Chairperson Arundhati Bhattacharya in its annual 100 Most Powerful Women list,
with a ranking of 30 in the world, a statement said here on May 27.
The Kolkata-born Bhattacharya, 59, has moved up six spots (from No.36) in the list from her ranking last year and is
the SBI’s first woman chairperson since October 2013.
As SBI chairperson, she oversees 220,000 staff in 16,000
branches which service 225 million customers as India’s largest
lender with offices in more than 36 countries.
Under her stewardship, the SBI with assets worth $400 billion,
undertook various initiatives in technology banking such as sbiINTOUCH digital banking outlet, BI Tech Learning Centres for educating customers and SBI e-Pay, a payment aggregator service.
Recognising the multiple roles played by women, Bhattacharya
has pioneered a two-year sabbatical policy for female employees
taking maternity leave to extend care to their families.
The Forbes 12th annual list of the 100 most powerful women
features extraordinary entrepreneurs, visionary CEOs, politicians,
celebrities, activists and philanthropists who are transforming the world and have been ranked according to wealth,
media presence and overall impact.
Source: Indo-Asian News Service
Issue no 625 I May 26-June 1, 2015
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>> NEWS ROUND UP
New tax forms ease detailing of foreign
travel, bank accounts
After complaints by individual income tax payers over the new forms announced in April, the government on May 31 notified
fresh set -- each of no more than three pages -- and did away with the much-resented details sought on foreign travel and
bank accounts.
Since the process is still on to recast the software to enable e-filing of
the returns, the last date for filing has also been extended to August 31,
it was announced by the finance ministry on Sunday. Notably, against
the details of foreign travel and the expenditure thereon required from
some categories of tax payers, the new forms require only the passport
number, including that of the old one, if available or issued.
Another clause grudged was over the bank accounts details and the
balances, in them for both operational and the dormant ones. Now, only
the Indian Financial System Code is required for all accounts. Exemption
from this has been extended to accounts dormant for over three years.
The finance ministry had acknowledged that the new tax forms had
caused much concern.
“The government has received representation on the new return forms notified on April 15, 2015 and taking into account
the concerns raised, the government has decided to modify the return forms,” Finance Minister Arun Jaitley told the Rajya
Sabha earlier this month.
The Central Board of Direct Taxes (CBDT) had notified the new norms that required an assessee to furnish all bank details,
accounts opened or closed in the year with the closing balance, as also the sources of funds for expenses in an overseas
travel. The purpose of asking details relating to foreign travel, according to the finance minister was to tackle the menace of
black money. He had further sought to justify the forms by saying fresh details were not required in forms filed by the majority of individual taxpayers.
The highlights of the new forms are:
- Individuals with income without any ceiling, other than agricultural income exceeding Rs.5,000, can now file Form ITR 1
(Sahaj). Similar simplification for individuals and Hindu undivided families (HUFs) in respect of Form ITR 4S (Sugam).
- A new Form, ITR 2A, can be filed by individuals or HUFs who does not have capital gains, income from business or profession, or foreign asset and foreign income.
- In lieu of foreign travel details, only passport number, if available, would be required to be given in Forms ITR-2 and ITR2A. Details of trips or expenditure thereon not required.
- On bank account details, only the IFS code and the number of current and savings accounts held during previous year
will be required. The balance is not required. Details of dormant accounts, not operational for last three years, not required.
- A foreigner in India on a business, employment or studies visa, not mandatorily required to report foreign assets acquired
during the previous years in which he/she was non-resident -- if no income is derived from such assets during the relevant
previous year.
- To simplify further, the main pages of Form ITR 2 and new Form ITR 2A, will not contain more than three pages. Other
information will be captured in Schedules, required to be filled only if applicable.
“As the software for these forms is under preparation, they are likely to be available for e-filing by the third week of June
2015,” a statement issued by the finance ministry said.
“Accordingly, the time limit for filing these returns is also proposed to be extended up to August 31, 2015 (31.08.2015). A
separate notification will be issued in this regard,” the statement added.
Source: Indo-Asian News Service
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>> NEWS ROUND UP
Govt contains fiscal deficit to 3.99% of
GDP in FY15
According to national accounts data released by Central Statistics Office (CSO), the Gross Domestic Product at current is
estimated at Rs 125.41 lakh crore in the last financial year ended March 31, 2015.
Fiscal deficit, gap between government’s expenditure and revenue, at 3.99 per cent of GDP is lower than the downwardly
revised estimate of 4.1 per cent provided in the government’s first full Budget announced in February.
“As a result of prudent policies and commitment to
fiscal consolidation, the fiscal deficit at the end of 201415, stands at Rs 5,01,880 crore which is 98 per cent of
the projected figure in Revised Estimate for 2014-15,”
the Finance Ministry had said in statement on May 17.
The ministry had said that “fiscal deficit as a percentage of GDP is 4 per cent as against revised estimates of
4.1 per cent for 2014-15 , but the GDP data had not been
released at that time.
The fiscal deficit target was set at 4.1 per cent by the
the UPA government, but Finance Minister Arun Jaitley
had said he was taking it as a “challenge” to meet this
ambitious and “daunting target” set up by his predecessor P Chidambaram.
The government has set the fiscal deficit target for the current fiscal at 3.9 per cent of the GDP or Rs 5,55,649 lakh crore
with the assumption that the size of the economy at current prices would be Rs 141.08 lakh crore in 2015-16.
As per the fiscal consolidation road map outlined in the Budget 2015-16, fiscal deficit is to be brought down to 3.9 per cent
of GDP in the current fiscal, then to 3.5 per cent in 2016-17 and further to 3 per cent by 2017-18.
The 3 per cent target would now be reached a year later than planned earlier.
The lower fiscal deficit reduces the government’s expenditure on interest payment and unlocks funds for investments in
social welfare programmes as well as infrastructure development.
Source: Press Trust of India
Issue no 625 I May 26-June 1, 2015
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DISCLAIMER
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