ECONOMY
ECONOMY
Economic Growth/Reforms
Growth trends firming up in Indian economy: OECD
India's economic growth is firming up and prospects are also looking better in most of the other major
economies, says Paris-based think tank OECD.
The Organisation for Economic Cooperation and Development (OECD), which is also a grouping of about
34"countries, today projected stable growth momentum for mast major economies.
The readings are based on its Composite Leading Indicators (CLIs),which are designed to anticipate turning
points in economic activity· relative to trend. "In India; the CLI continues to indicate firming growth, while in
Russia the CLI still points to a loss in growth momentum,'" the grouping said in a statement Reflecting positive
sentiment, India's CLI rose to 99.5 in January from 99.3 registered in December. The indicator has been
inching up since September last when it stood at 99.
The Hindu Business Line
London, 10.03.2015
Economy to grow 6.5% in 2016, says report
The Indian economy is likely to grow around 6.5% in 2016 as macro-economic conditions seem to be improving
on the back of lower crude prices and easing inflation, says a McKinsey & Company report.
According to the firm, the economy has experienced “broad improvements” in macro-economic conditions and
especially low energy prices have eased inflationary pressures and reduced import bills. “Conditions in India
appear to be improving and growth through 2016 is forecast at around 6.5%,” the report said.
The Financial Express
New Delhi, 11.03.2015
IMF ups India growth forecast to7.2% for current fiscal
Terming Indian economy a “bright spot" on the global economic landscape, IMF today raised its growth forecast
for the current fiscal to 7.2 per cent, even as it called for steps to revitalize the investment cycle and accelerate
structural reforms in the country.
In its annual assessment report for the country, the International Monetary Fund (IMF) also said India has
emerged as one of the fastest-growing big emerging market economies and the growth rate would further
accelerate to 7.5 per cent in the next fiscal 2015-16.
The new forecasts have taken into account a revised methodology adopted by India earlier this year for
calculating the GDP figures, about which IMF said that the country has “improved the way it measures
economic output”. The new methodology, however, has been termed as ‘guzzling’ initially by some including
Chief Economic Advisor Arvind Subramanian and RBI Governor Raghuram Rajan.
Last year, IMF had forecasted a growth rate of 5.6 per cent for the current fiscal, and 6.4 per cent for the next.
The Indian economy is reviving, helped by positive policy actions that have improved confidence and lower
global oil prices, the IMF said, while anticipating stronger growth in the next fiscal on the back of stronger
investment flows following improvements to the business climate.
To continue on this trend, India needs to revitalize the investment cycle and accelerate structural reforms, it said
in its annual assessment report for the country.
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“Indian economy is the bright spot in global landscape, becoming one of the fastest-growing big emerging
market economies in the world,” IMF said in a report after its recently concluded annual consultations with
India.
The Hindu Business Line
Washington, 12.03.2015
Public Finance Taxes And Duties
Changes in NDA’s land Bill only cosmetic
The National Democratic Alliance (NDA) has made nine amendments to its land Bill, tabled in Parliament on
Monday. Most of these were cosmetic in nature, leaving the key elements of the original promulgation intact the lack of need for consent and social impact assessment while acquiring land for private projects; publicprivate partnerships and government acquisitions.
Rural Development Minister Chaudhary Birender Singh did move two amendments that brought some clarity to
the class of projects that would be permitted forceful acquisition of land. The minister's amendment clarified that
forceful acquisition for industrial corridors would be permitted only up to one kilometre of land on either side of
designated highways or railway lines.
In the land ordinance, the NDA government had left the term 'industrial corridor' undefined leading to fear that
vast swaths of land would be acquired for various kinds of projects in the name of industrial corridors. Even
now, in just the case of the 1,483-km. Delhi-Mumbai Industrial Corridor, the government would able to
forcefully acquire land over 2,966 sq.km spread across six states.
The NDA government also brought in an amendment, claiming it would no more acquire land for 'social
infrastructure'. In a way, it was only fixing a badly drafted ordinance as the term 'social Infrastructure' was not
defined to begin. Additionally, most other projects that could fan under the term are already covered by other
provisions of the 2013 land law and continue to enjoy exception from the need for consent or social impact
assessment through the ordinance.
The government hoping to win over some allies in the battle of wits with the Congress of the ordinance also
removed the clause that provided government the power to forcefully acquire lands for hospitals and educational
institutions built either through the private, PPP or government route.
A clause was brought in through the amendments that would now require the government to ensure the extent of
land required for the acquisitions is the bare minimum. But this too, just as in the case of deciding compensation
and rehabilitation packages, would be at the discretion of the state or central government authorities.
Reacting to the criticism about not doing enough for those besides landowners in terms of compensation, the
government moved an amendment, making it mandatory for the acquiring entity to provide employment to one
member of a family of farm labour impacted by the forceful acquisition of land. But the 2013 Act passed by the
UPA not only provided for employment to impacted farm labourer but also other impacted groups of people.
The government also changed the technical language about whether an officer making decisions under the law
would be prosecuted for any illegal acts. Even the amended clause makes it mandatory for the prior consent of
central or state governments to prosecute any officer that commits a crime under the land acquisition law as per
Section 197 of the Code of Criminal Procedure.
In another cosmetic move, the Centre has now provided that the appeals authority - a single person appointed by
the government to review the compensation and rehabilitation package - shall be able to hold hearings in the
district where the land acquisition takes place. The 2013 law did not expressly disbar this from in the first place.
The Business Standard
New Delhi, 11.03.2015
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CEMENT INDUSTRY
Growth/Marketing/Demand/Takeover
Cementing a vision of sustainability
Philippe Fonta, Managing Director, Cement Sustainability Initiative (CSI), was in Bengaluru recently to chair
the CSI’s Safety Working Group in India, for the year 2014-15. He spoke to Business Line and shared global
best proactive and where India stands in the world order among cement producers.
What is CSI? What is the action plan for India?
The Central Sustainability Initiative (CSI) is an industry body that works for common good, mainly on issues
affecting the cement industry. Companies proprietary issues are not part of CSI agenda. We provide a platform
to enable companies to share best practices with strict compliance with anti-trust rules. There is information that
cannot be exchanged or shared with competitors. We (secretariat) use the third-part for data collection. The main
agenda for India is in handling issues related to sustainability aspects from climate change to alternative fuels,
health and safety, biodiversity, water, sustainable construction, working with suppliers and communications.
How many companies is part of CSI in India and globally?
At present there are ten companies in CSI network in India. Globally, there are 24 companies spread across more
than 100 countries. Of the ten companies in India, three are head-quartered in India and seven subsidiaries of
major groups are functioning here. Recently, CSI has brought together 10 major cement producers – Ambuja,
ACC, UltraTech, Zuari Cement, Shree Cement, Dalmia, Holcim, Heidelberg Cement, Lafarge and others to
discuss issues facing the sector.
What are the challenges faced by you here towards addressing sustainability?
Challenges in India are common to global issues. The elements like the climate change, health and safety, may
be an issue in some parts of India. But water and water scarcity is a major issue. I would say similar to parts of
Europe, but is also comparable to other parts in the world like China or in Latin America, where you have
equally big an issue. So, lot needs to be done to recycle the water, to use less water in the process and a lot is
being worked out by the companies both globally and in India.
Alternative fuels and co-processing: is there any breakthrough?
Some amount of work is on energy efficiency, especially the use of alternative fuels. The traditional fuels that
are used are coal and pet coke. A lot of alternative fuels are possible and here we are exploring municipal solid
waste, sewage sludge, including biomass, used tires, there are plenty of opportunities to be used in the cement.
How are Indian companies performing on biodiversity and land use management?
Biodiversity and land use management is the most important issue in the industry. The industry depends on
natural resources to make cement – to get some limestone, to get all the raw materials from that, and it is
important where the quarry are in operations.
The Hindu Business Line
Bengaluru, 09.03.2015
Cement: Sector earnings at risk in Q4 and FY16
Cement producers are expected to exit FY15 on a weak note. They have not increased prices in the March
quarter, despite an increase in freight rates, as demand remained weak. Demand halved in the December quarter
compared to the first half of the financial year, as rural incomes weakened and the government spent less on
schemes. This is rather unusual, as producers tend to increase prices in March, when demand picks up.
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Other than the southern and central regions, demand and price remained weak. While demand rose 9.7 per cent
over a year in the first six months of the financial year, the third quarter saw demand grow 4.5 per cent. The allIndia average price is up only two per cent over a year but down three per cent month-on-month, say analysts.
Announcements in the Union Budget have made coal, freight and diesel more expensive but cement producers
have not announced any price rise so far, other than a few in Maharashtra and Rajasthan. Emkay Global says
prices are witnessing deep pressure in the north and central regions, where the average was down 16 per cent/14
per cent over a year in February. Instead of increasing in the fourth quarter, prices have dropped a big concern.
With prices staying put, earnings assumptions for FYl6 are at risk. According to IIFL Institutional Equities, if the
February trend for demand and prices continues into March, the exit price for FY15 could be substantially lower
than the consensus expectation, which puts FY16 estimates at a huge downward risk. The risk to earnings growth
might persist for the next two to three quarters, say analysts, till demand recovers and producers are able to pass
on higher costs to consumers.
Despite the risk to earnings in the near term, analysts remain positive on the sector for several reasons. At 11-13
times earnings, the sector is valued fairly. Additionally, the sector tends to command premium valuation
compared to the market when demand picks up and operating margins expand.
Morgan Stanley believes the sector is at the cusp of a cyclical recovery. The global brokerage believes with eight
per cent demand growth (against nine per cent earlier) and five per cent compound annual growth in over F1517, capacity, utilisation could improve to 84 per cent in F17, compared with 78 per cent in F15, driving a 600
basis points earnings before interest, taxes, depreciation and amortisation margin gain. While near-term earnings
estimates are moderating, the long-term story remains strong.
The Business Standard
Mumbai, 12.03.2015
New Projects/Expansions/Diversification
Holcim’s Schmidheiny wants better deal in Lafarge merger
Holcim’s largest stakeholder, Thomas Schmidheiny, wants a better deal for the Swiss cement maker’s
shareholders in its planned merger with Lafarge, SonntagsZeitung reported, citing people close to the Swiss
billionaire.
The merger with France’s Lafarge to create the world’s biggest cement maker was agreed last April but analysts
have since flagged a potential divergence between the two companies earnings prospects, raising the possibility
of a renegotiation of terms.
The Business Standard
New Delhi, 10.03.2015
Housing & Building Construction
Some not-so-smart ideas
Instead of pursuing glamorous urban projects, why not work out affordable and contextually sound goals?
The Budget numbers for urban development tell an interesting story of enthusiasm overwhelming realism. The
emphasis on smart cities in the rhetoric of Arun Jaitley’s first Budget last year was backed by the economic
muscle of the government, with the allocations for the ministry of urban development being much more than
double the actual expenditure in the previous year. But it was soon clear that enthusiasm was not matched by
clarity about what needed to be done. The Revised Estimates for the year now indicate that more than a third of
the allocation could not be spent.
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Undeterred by that stumble, Jaitley has once again budgeted for urban expenditure in 2015-16 that is more than
50 per cent higher than the Revised Estimates for 2014-15. And the ministry should be in a better position to
meet its targets this year. It is well on its way to making the transition from the Jawaharlal Nehru National Urban
Renewal Mission of the previous government to its own initiatives. The Budget does retain the combined head of
100 smart cities and JNNURM, but the allocation has dropped dramatically from `7,016.8 crore to a minimal
`143.05 crore.
Questionable allocation
In purely financial terms, the main thrust of the new urban strategy would appear to be the Urban Rejuvenation
Mission for 500 habitations with an allocation of `3,919 crore. A judgment on what can be achieved with an
investment of less than `8 crore per habitation must await details on what exactly is being planned. What is
bound to attract greater attention is the creation of a separate mission for 100 smart cities with an allocation of
`2,020 crore. Here again, some, weight must be given to the argument that an allocation of less than `20 crore per
Smart City is underwhelming. And this is not helped by the Government's current thinking on what constitutes a
Smart City.
The much revised official concept note defines smart cities as "those cities which have smart (intelligent)
physical, social, institutional and economic infrastructure while ensuring centrality of citizens in a sustainable
environment".
The resources required are clearly much greater than what can be allocated. And the effectiveness of these investments will be further eroded if we continue to focus on a few grand infrastructure projects. Rather than
trying to achieve some dramatic and clearly non-realisable ideal, it would be much more productive to see smart
cities as a process rather than a specific outcome. The UK Department of Business, Innovation and Skills, for
instance, considers smart cities to be those "in which increased citizen engagement, hard infrastructure, social
capital and digital technologies make cities more liveable, resilient and better able to respond to challenges".
Affordable goals
Once we know the direction in which we would like to encourage a city to move, we could identify the specific
measures that are needed. In such an approach all investments, howsoever small, would help.
Treating Smart Cities as a process has other advantages too. Rather than trying to impose a new concept on an
old city from above, this approach would require understanding the processes that are already at work in a city.
The government could then use citizen engagement, social capital, physical capital, including digital
technologies, to make these processes more intelligent. The impact of such a strategy on urban development
should not be underestimated. When we have a preconceived notion of a high technology city it could lead to
decisions that are not entirely smart.
Bengaluru chose to close down a functioning airport in order to make its new airport economically viable. It does
not appear to be particularly intelligent to close down existing infrastructure in order to get over a shortage of
infrastructure.1t could have kept open the option of modernising its existing airport.
The difficulty in treating smartness as a process is that it is much less appealing than building a few glamorous
projects. An improved road that has been modified with citizen engagement and modern technology will tend to
appear a less dramatic change than a large new flyover. But flashing fancy products is not always a sign of
intelligence.
The Hindu Business Line
New Delhi, 09.03.2015
RBI gives a fillip to affordable housing
A sustained decline in home loans in the under `10 lakh category may have prompted the Reserve bank of India
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to liberalise housing loan norms.
On Thursday, the central bank allowed banks to include stamp duty, registration and other documentation
charges to the cost of the house/dwelling unit, whose cost does not exceed `10 lakh, for the purpose of
calculating LTV (loan-to-value) ratio. This is expected to give a fillip to affordable housing.
According to extant norms, banks can give small value home loans up to 90 per cent of the value of a house
property. For example, to buy a house costing `10 lakh, a bank will give `9 lakh loan. Henceforth, the `9
lakh home loan will cover expenses incurred towards stamp duty, registration and other documentation
charges. These expenses were excluded earlier.
Loans dip
According to a National housing bank repro of 2013, in the case of public sector banks, home loans in the
up to 10 lakh slab, which constituted about 48.73 per cent of total home loans outstanding in financial year
2010-11, slipped to 40.14 per cent in financial year 2011-12 and to 35.98 per cent in financial year 201213.
The relaxation in housing loan norms for the affordable housing will lessen the burden on those in the
economically weaker sections (EWS)/low income groups (LIGs) who want to buy/construct a house.
This will help banks increase their home loan portfolio in the up to `10 lakh segment, which was hitherto
declining, said a senior public sector bank official.
EWS' are households having an average annual income of `1 lakh. LIGs are households having an average
annual income of between `1 lakh and `2 lakh. Housing shortage in urban India was estimated at 18.78 million units in 2012.
A technical group on housing shortage assessed that 95 per cent of the shortage in housing is in the
EWS/LIG segments. The group said the rapid pace of urbanisation owing to the rural- urban migration has
led to substantial housing shortage. The urban housing shortage is primarily driven by the EWS and LIG
categories.
Further, there is a looming housing shortage in rural India where 67 per cent of the country's population
resides.
The rural housing shortage was estimated at 43.9 million by the working group on rural housing shortage in
2012. Of this, more than 90 per cent lies with the lower income and marginalised groups.
A survey by the erstwhile Planning Commission showed that 66 per cent of households in India construct
homes using their own resources, 9 per cent using institutional finance, and the remaining depend on noninstitutional sources such as family, friends and money lenders, among others.
The Hindu Business Line
Mumbai, 07.03.2015
Sri Lanka govt reviewing Tatas’ $400 m housing project
Sri Lanka has said it was reviewing a $400-million housing project by Tata group, weeks after the country's
new government said it was looking for a fresh start into the first of- its-kind township plan in the country.
"We are also examining a housing project by Indian conglomerate Tata. The Tatas come in and say they
will put in $250 million, but they put in $20 million, use our land, and sell it back to us for a higher price.
How does that work," finance minister Ravi Karunanayake told Hong Kong-based South China Morning
Post.
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Tata launched the $400million housing project last year in central Colombo that involved the displacement
of 65,000 people. The scale of displacement and the compensation offered have been a sore point with former
president Mahinda Rajapaksa's opponents, it said.
The government had decided to recommence the whole project from the very beginning Cabinet spokesman and
minister of health Rajitha Senaratne had said on February 26. Meanwhile, Tata Housing spokesperson refused to
comment on the matter.
The Financial Express
Colombo, 10.03.2015
ENERGY, FUEL & POWER
Coal
Coal-mining states to be richer by `71,000 crore
The second phase of the e-auction of 11 coal mines proved to be a bonanza for mineral-rich states, whose
revenues increased to `2.05 lakh crore from `1.35 lakh crore in the first phase. Out of the received bids worth
`7l,027 crore for 30 years (mines life), `59,736 crore is towards royalty and the rest is the auction amount.
The second phase was almost similar to the first with sector majors grabbing richer· coal blocks at high price.
The only exception was Jindal with the lowest bid to get a rich coal block with power generation end-use. While
operational coal blocks were auctioned in the first phase, the second last day witnessed Jaypee Cement winning
Mandla South in Madhya Pradesh for `1,852 a tonne. This will fetch the state `55.2 crore a year as auction
proceeds. Gujarat Ambuja Cement won Gare Palma-IV/8 at a new high bid of `2,291 largest private power
producer, Adani Power, its first domestic captive coal mine in Jharkhand. Adani paid `302 a tonne, outbidding
incumbent Jindal Steel & Power.
If any bidder puts a `O bid, then reverse bidding would kick in. This will help power tariff go cheaper by at least
6 paise per `100 fall in coal bid amount. Hindalco quoted `2,127 a tonne to grab the Dumu block in Jharkhand
for iron, steel and cement sectors. Some coal blocks were dropped from auction.
The Business Standard
New Delhi, 09.03.2015
Jaypee Cement Bags Coal Mine in MP, Ambuja in Chhattisgarh
In another revenue bonanza from the ongoing auction of coal mines, the government on Sunday garnered `5,164
crore from sale of two more mines to Jaypee Cement and Ambuja Cements with cumulative proceeds surging to
`1.57 lakh crore.
The auction for Ganeshpur mine in Jharkhand, which is meant for power sector, is still on. On the fourth day of
second tranche of ongoing auctions, in fierce biddings that lasted for hours, Ambuja Cement clinched GarePalma Sector-IV/8 block in Chhattisgarh while Jaypee Cement Corporation grabbed MandlaSouth block in
Madhya Pradesh.
"Gare Palma IV/8 closes at `2,291. Ambuja Cements is highest bidder. Jaypee cement highest bidder at `1,852
for Mandla South," Coal Secretary Anti Swarup said. These two mines would contribute a cumulative `5,164
crore to the exchequer.
The government generated a revenue of `1.52 lakh crore till Saturday that included over `1 lakh crore from
auction of 19 mines in the first round.
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Two more coal blocks - Utkal C and Lohari -- will be put up for auction when bidding starts on Monday. The
amount of proceeds has been calculate based on extractable reserves an highest bid price.
"Auction for Ganeshpur block, which is for power sector, began at 11 am with `100 bid. For Mandla South, the
auction began at `1,850 per tonne while for Gare Palma IV/8, it started at `1,675 per tonne," an official told PTI.
The Economic Times
New Delhi, 09.03.2015
Power Projects/Generation/Distribution/Tariff
Sumitomo to set up 4,000 MW project in Andhra Pradesh
Japanese major Sumitomo Corporation has evinced interest in setting up of a 4,000 MW ultra-mega power
project in Srikakulam district of Andhra Pradesh.
A representative of the corporation told Business Line that it would be based on ultra-super critical technology
with each unit of 1,000 MW. Supercritical technology projects are extremely energy-efficient and productive.
Normally, supercritical technology units come in 660 MW and some 800 MW but this ultra-super critical unit
takes it to 1,000 MW for each unit.
EPC contract
Takumi Fujita, General Manager, Sumitomo Corporation Asia & Oceania, said that the project would be set up
once all clearances are secured from State and Central governments.
"We expect to play the role of an EPC contractor. It takes about four years to complete such a project," he said.
Speaking on the sidelines of a conference where Japanese companies had converged, Fukita said that Sumitomo
had signed up four MoUs with the State government during the Chief Minister N Chandrababu Naidu's visit to
Japan in November 2014. This visit is aimed at taking forward these commitments.
Getting clearances
Sumltomo Corporation has worked on at least three power projects in Andhra Pradesh, which includes one hydel
plant, a thermal power plant and a gas-based power project in the coastal region of the State, he said. Ajay Jain,
Secretary, Energy, Government of Andhra Pradesh, confirmed the proposed move stating that the 4,000 MW
project is proposed to be developed by AP Genco where Sumitomo would play the role of an EPC contractor,
"We are in the process of identifying land for the project and then seek mandatory clearances such as
environmental before initiating interest for development. It takes about 12 months to secure clearances and about
3-4 years to execute the project," he said.
The Hindu Business Line
Hyderabad, 09.03.2015
TRANSPORT
Railway
Rail route may help push India-Pakistan trade
India wants to explore the option of trading more with Pakistan through the rail route as existing product restrictions on
trade through the Attari-Wagah land route and the high cost of sea transportation are acting as hurdles to bilateral trade.
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“In our discussions with businesses in Amritsar, we were given to understand that if the trains running between India and
Pakistan became more regular, it could be used by traders as a viable option for transporting their goods,” Commerce
Ministry Joint Secretary Arvind Mehta said at a seminar on non-tariff barriers organized by the Centre for Policy Research
at New Delhi on Tuesday (10.03.2015).
Rail vs land
Interestingly, while Pakistan allows only 137 items to be traded through the Attari-Wagah land route, no such barriers
exist on paper for supplies via the rail route. Railways has the potential of absorbing much of the trade happening via the
sea-route.
Railways has the potential of absorbing much of the trade happening via the sea-route, which is very expensive for traders
and increases cost manifold.
The idea of improving the train schedule, however, is at a conceptual stage, as the trade dialogue between the two
countries has to re-start before new issues can be discussed. “I have discussed the proposal with my counterpart in the
railways, but we have to wait for the dialogue to restart,” said Mehta.
Hopes on talks
There are hopes that the Indo-Pak trade dialogue, which has been stalled for some time due to political differences, could
re-start in the near future as the Foreign Secretaries from both countries met last week in Islamabad after one year of
suspending talks.
The absence of fixed schedules for trains was the main reason why traders do not use trains regularly for transporting
goods. Exporters have to spend money on either keeping the goods stored in trucks or warehouses while waiting for the
train, which boosts costs of operations.
“If the railways, come up with a fixed schedule, exporters will benefit hugely even if just one or two trains are run every
week. They will then know exactly when to get their goods and load it on the trains,” Mehta said.
According to figures collated by CPR, less than 5 per cent of trade between India and Pakistan took place through the land
route in 2013-14, the cheapest option for traders from both sides. India exported goods worth $2.27 billion to Pakistan and
imported items amounting to $427 million in 2013-14.
The Hindu Business Line
New Delhi, 11.03.2015
LIC to invest `1.5 lakh crore in railways
The Indian Railways on Wednesday signed a memorandum of understanding with the public insurer Life
Insurance Corporation (LIC) to bring in `1,50,000 crore of investments over the next five years to meet its `8.5crore capital requirement by 2019.
According to railway minister Suresh Prabhu, the national carrier, which is trapped in a vicious cycle of high
operating expenditures resulting in meagre capital left to fund its capacity building needs, Will benefit from the
initiative.
"With such encouraging initiatives, the ministry of rail ways will be able to augment its resources for speedier
execution of projects. The resultant enhanced throughput of traffic is likely to further increase the capacity to
carry more to meet with a growing transportation demand leading to a robust economy," Prabhu said.
LIC Will make available the financial assistance with a limit of `1,50,000 crore over the next five years for
implementing Railway projects, starting from FY16.
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Railway is currently struggling to operate and run its locomotives on the existing 65,000 kms of rail network.
And the situation has worsened due to an addition of a hefty number of new trains by consecutive rail way
ministers.
As per the Budget estimates, Railways will require some `8.56,000 crore over the next five years as investments
and `1,00,011 crore in the next fiscal.
According to Rajalakhshmi Ravikumar, the railway finance commissioner, railways has been in talks with the
World Bank, IIFCL and other multilateral institutions, apart from LIC, for quite some time to attract investments
to increase its rail network. And LIC with its `1 lakh crore cash reserves will help meet 20% of its target by
FY19.
The Financial Express
New Delhi, 12.03.2015
Highways/Roads/Bridges
TN road project: final round of talks soon for `5,115 crore World Bank aid
Final round of negotiations for the `5,115-crore World Bank aided road development project for Tamil Nadu will be held on
March 20 in New Delhi, said Rajeev Ranjan, Principal Secretary, Department of Highways & Minor Ports; Government of
Tamil Nadu.
The World Bank will provide $300 million for the project while the State government is seeking $500 million, Ranjan said at a
seminar on TN Vision 2023: The Way Forward to mark the Tamil Nadu State Annual Day of the Confederation of Indian
Industry.
Infra upgradation
A Detailed Project Report for 2,079 km is ready. Of this, 435 km will be two-lane project and 165 km will be four-lane, he
said. Financing of infrastructure project is a major' issue and the State government need to find innovative methods for road
development. "
Under the Vision 2023, `134 lakh crore is to be spent to upgrade road and port infrastructure. Last financial year, `3,800 crore
was spent on road development and this year it will be `5,000 crore. However, the challenge is to do more public-privateprojects, he said.
On the second phase of Outer Ring Road, Ranjan said work is expected to be completed six months ahead of schedule. The
second phase costing nearly `1,400 crore was from Nemilichery to Minjur, in the northern periphery of the city while in the
first phase it was from Vandalur to Nemilichery.
Funding details
Kumar Jayant, Secretary, MSME, Government of Tamil Nadu, the department will work with a consortium of banks -- both
Public and private to fund small units that often find it difficult to get funds. The department also plans tie-up with banks
seeking details from them on the failure of units to identify sectors that are not doing well and help them in recovery.
Vision 2023
Industry Secretary CV Sankar said Vision 2023 is very significant and a doable plan roadmap that will take Tamil Nadu to the
next level of growth.
Of the 217 mega projects identified under the vision programme, 64 are under implementation and for nearly 40 preliminary
works are going on. A large chunk of the projects are in the energy sector, he said.
Tamil Nadu has the largest number of factories and industrial workers. In attracting Foreign Director Investment, the State is
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next to Maharashtra, which is twice the size of Tamil Nadu, and NCR. In the Gross State Domestic Product, the State is second
behind Maharashtra, in exports, the State is behind Maharashtra and Gujarat. The latter has the advantage of the huge
petroleum products. If this is removed, Tamil Nadu will be second, he said.
State Minister for Electricity Natham R Viswanathan said the Vision 2023 had targeted 20,000 MW of power but the various
projects being taken up' would ensure that the State will have 20,251 MW of Power. This will be achieved well ahead of the
target. On solar power, the minister said anybody can sell it to Tamil Nadu Electricity Board at `7.l per. unit with Plans to sign
power purchase agreement with various parties for 200 MW by this month-end, he said. The minister released CII's District
Development Plan 2015 on the occasion.
The Hindu Business Line
Chennai, 09.03.2015
Govt to build 30 km of roads a day in 2 years, says Gadkari
The Centre plans to lay 30 kms of roads a day in the next two years, up from the current level of 11 kms a day, Rajya Sabha
was informed on Monday (09.03.2015).
Union road transport and highways minister Nitin Gadkari said this in reply to a question during Question hour. At present, 11
kms of road are being laid each day which is likely to go up to 15 kms by the end of March this year, he said. To another
question, the minister said the toll collected on the Delhi-Agra Highway by DA Toll Road, which is an SPV of Reliance Infra,
was being kept in an escrow account following a CAG report. In December last year, a CAG report had said that by the end of
August 2013, DA Toll Road collected a toll amounting to 120 crore.
The minister said the national highways Authority of India (NHAI) had been facing serious delays in project completion on
account of various factors including land acquisition, environment and forest clearance. The government will also come out
with a new “model agreement” for road projects, he said.
The Financial Express
New Delhi, 10.03.2015
Land trouble forces MMRDA to reroute Virar-Alibaug corridor
Problems in acquiring land from locals in Navi Mumbai has forced the Mumbai Metropolitan Region
Development Authority to alter the Virar-Alibaug Multimodal Corridor (VAMC) plan. The corridor will join the
proposed Vadodara- JNPT expressway near Matheran, and continue as a single-highway for 22km before ending
at JNPT.
At first, both highways were planned to run parallel for 20 km. VAMC would cut through the middle of the Navi
Mumbai Airport Influence Notified Area (Naina), which is being developed by Cidco. However, authorities said
they cannot construct VAMC through Naina, not only because of some technical issues, but also because locals
were opposed to it.
"We tried, to get the VAMC to pass through Naina. But, the local people expressed their opposition. Now, it will
pass through Naina's outskirts," said Sanjay Bhatia, managing director, Cidco.
As the Vadodara-JNPT expressway, being built by National Highway Authority of India (NHAI), has also been
planned to run through the outskirts of Naina, it was decided to merge them both.
"The decision was made at a recent meeting between state bureaucrats and NHAI officials. Merging the
highways will avoid unnecessary expenditure. Once merged, the Virar-Alibaug corridor will be wider up to
JNPT," said a senior MMRDA official, requesting anonymity.
The MMRDA plans to develop the 126 km multimodal corridor on a cash-contract basis. The corridor will
connect the Mumbai Trans harbor Link, proposed Navi Mumbai airport, Delhi Mumbai Industrial Corridor and
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growth centres such as Kalyan, Dombivli and Panvel.
The Hindustan Times
Mumbai, 11.03.2015
Inland Waterways & Irrigation Canals
Maharashtra plans to change how irrigation projects are funded
The Maharashtra government is planning to make significant changes in how it funds irrigation
projects, which it hopes, will help make the state drought-free over the next five years. Under the new
rules, the state government will stop fund allocations to irrigation projects where less than 15% of the
work has been completed.
Instead, projects that are closer to completion and have nearly 70% of the work done, will get a bulk of
the government's funds.
An announcement to this effect is likely to be made in the first budget of the Bharatiya Janata Party Shiv Sena government to be presented on 18 March, said a senior official from the state's irrigation
ministry, who did not want to be named.
Maharashtra's track record on irrigation has come under severe criticism after a study showed that
despite heavy expenditure, irrigation levels in the state have not seen much change.
According to the state's economic survey for fiscal 2011-12 presented in March 2012, while the state
spent nearly `70,000 crore over the preceding decade, the state's irrigation potential increased by only
0.1%.
The uproar over the issue and subsequent allegations of corruption had forced deputy chief minister
Ajit Pawar to step down from his post for three and a half months between September and December
2012 to allow the state government to come up with a white paper. Pawar held the irri gation portfolio
between 2000 and 2010.
Unsatisfied with the white paper, social activists and the opposition continued to attack the government,
forcing the then state chief minister Prithviraj Chavan to announce a special investigation team to probe
the alleged irregularities in awarding irrigation project contracts.
There are currently about 800 irrigation projects under implementation in Maharashtra, which will
require close to `80,000 crore over the next decade, according to the official cited above. It is felt that if
funds are diverted away from early-stage projects, then an additional `15,000-20,000 crore can be made
available for late-stage projects, said the official.
Of the 800 projects, 110 have less than 15% work complete. "If at all state government walks the talk, it
will indeed be a welcome step. However, while doing so, state government must give priority to
complete projects in state's drought-prone and backward regions. In the name of completing projects
which are near completion, funds should not be diverted to irrigation projects in the prosperous parts of
the state," said Pradeep Purandare, a former professor at the Water and Land Manage ment Institute in
Aurangabad, which is an autonomous institute working under the aegis of the state government.
Purandare added that preference should be given to projects where water availability has been
ascertained. "Otherwise once again we will be sending thousands of crores of tax payers' money down
the drain,” he said.
According the Parineeta Dandekar, associate co-ordinator with South Asia Network on Dams, River
and People, the state government must stop funding unviable projects.
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"The classic example of how state government's agenda was driven by the contractor lobby is Krishna
Marathwada Lift irrigation Scheme whose the total cost is expected to be around `4,000 crore and the
state government has so far spent around `400 crore,” she said.
"This scheme can be successful only if a much larger Krishna Bheema Stabilisation Scheme
(transferring water from Krishna basin to Bheema basin) is completed. However, this project was
denied permission by Krishna Water Dispute Tribunal (KWDT),” she pointed out.
KWDT is a body headed by a retired Supreme Court judge, created to settle disputes between states
through which Krishna river flows which include Maharashtra, Karnataka, Telangana and Andhra
Pradesh.
The state government should not only stop funding unviable projects but should scrap them all together,
Dandekar demanded.
The Mint
Mumbai, 13.03.2015
LABOUR
General
Labour Unions to oppose budget proposal on PF
Trade unions are set to challenge the government over a budget proposal to use unclaimed money lying in
two provident funds to build a senior citizens' welfare fund an~ subsidize the insurance premiums of old
people and below poverty level (BPL) card holders.
In his budget speech on 28 February, finance minister Arun Jaitley had said unclaimed deposits of about
`3,000 crore in the public provident fund (PPF) and about `6,000 crore in the employees' provident fund
(EPF) will be used to "subsidize premiums of vulnerable groups such as old age pensioners, BPL card
holders, small and marginal farmers and others”.
Labour unions across the political spectrum have opposed the proposal. Union members say they will
oppose any move by the labour ministry in this direction when the central board of trustees (CBT), the top
decision-making body of the Employees' Provident Fund Organisation (EPFO), meets on Wednesday.
The unions have already written to the finance minister and labour minister stating their opposition and.
warning they would go on strike if the government tries to use workers' unclaimed money.
Bharatiya Mazdoor Sangh (BMS), the labour wing of the ruling Bharatiya Janata Party, has already raised
the matter with Prime Minister Narendra Modi and labour minister Bandaru Dattatteya.
"They don't have any constitutional right to take away provident fund money of poor workers for some
other scheme. We challenge them," said B.N. Rai, president of BMS. "We have apprised the authorities
concerned about the seriousness of the issue and all central trade unions will oppose the labour ministry in
case they push for it at the CBT meeting," Rai said.
D.L. Sachdeve, national secretary, All India Trade Union Congress (AITUC), said such a move is
regressive when EPFO has already started the process of consolidating PF accounts with universal
account numbers. Sachdev, who is also a CBT member, said the retirement fund manager has started
a help desk to release idle funds to their owners.
On 18 February, EPFO had started the process of returning as much as `40,000 crore of workers' money lying idle
in inoperative accounts by setting up a help desk.
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A labour ministry official, who declined to be named, said that unions will try their best to block this move and
by law, the CBT is the final authority on such matters. "We are negotiating with all stakeholders but one issue is
clear: if a worker comes with his demand, then EPFO cannot say no to the person, even if his money is lying
unclaimed for years. Else, such matters can easily land in legal hassles."
In its letter to the finance minister AITUC said: "Central board of trustees of EPF are custodians of this fund and
they also cannot utilize this unclaimed amount as per the provisions of general law. The government itself should
fund the senior citizen welfare fund:'
Unions will also oppose two other moves-one to make EPF contributions by low-paid workers optional and
another making national pension scheme an alternative to EPF. “Making EPF and ESI (employees' state
insurance) optional will lead to undoing of two social security schemes. The entire trade union movement will
oppose such a move by the government," trade unions said in their letter to the finance ministry.
The Mint
New Delhi, 11.03.2015
Under New Cos Act, Firms Can Offer Loans to Staff at Low Interest Rates
Companies can now offer loans to their employees at low interest rates as the government has relaxed conditions
related to loan threshold and interest rate in the Companies Act, 2013. Compliance requirements such as seeking
approval from the board of directors and shareholders in certain cases have also been removed.
"Loans and advances made by the companies to their employees, other than the managing or whole-time
directors, are not governed by the requirements of section 186 of the Companies Act, 2013," a notification from
the Ministry of Corporate Affairs said.
However a company can offer such a loan only if it is in accordance with the conditions of service applicable to
the employee taking the benefit. It also needs to be in compliance with the company's remuneration policy.
Earlier the rate of interest on loans for employees was benchmarked to the yield on government securities. Under
Section 186 of the new Act, the government has fixed an overall limit within which a company can give loans or
provide security.
To exceed that limit, it needs a prior shareholder approval through a special resolution passed at the general
meeting. "It (the move) will make lending to employees free of any compliance (requirements), particularly the
condition of charging a minimum rate of interest. Now, lending to employees will be subject to only the terms of
employment as agreed between the company and the employee," said Lalit Kumar partner at law firm J Sagar
Associates.
The Economic Times
New Delhi, 11.03.2015
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