Daily Economic News 19 Dec 2016

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19 Dec, 2016

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Indian Economy News

December 16, 2016

ND has initiated a new section of daily news, where our news desk compiles the latest news on the Indian economy, to keep our readers abreast and updated on daily economic state of affairs.

The economy news compilations bring business news reports that are relevant today and tomorrow, based on the new pattern of current affairs, and for English awareness. This gives vital inputs on the various sectors of the Indian Industry and trade.

A new dawn in Renewable Energy- India attains 4th position in global wind power installed capacity

Press Information Bureau:  December 19, 2016

The Ministry of New and Renewable Energy (MNRE) has taken several steps to fructify Prime Minister Shri Narendra Modi’s dream of clean energy. The largest renewable capacity expansion programme in the world is being taken up by India. The government is aiming to increase share of clean energy through massive thrust in renewables. Core drivers for development and deployment of new and renewable energy in India have been Energy security, Electricity shortages, Energy Access, Climate change etc.

A capacity addition of 14.30 GW of renewable energy has been reported during the last two and half years under Grid Connected Renewable Power, which include 5.8 GW from Solar Power, 7.04 GW from Wind Power, 0.53 from Small Hydro Power and 0.93 from Bio-power.   Confident by the growth rate in clean energy sector, the Government of India in its submission to the United Nations Frame Work Convention on Climate Change on Intended Nationally Determined Contribution (INDC) has stated that India will achieve 40% cumulative Electric power capacity from non-fossil fuel based energy resources by 2030 with the help of transfer of technology and low cost International Finance including from Green Climate Fund. As on 31st October, 2016, Solar Energy Projects with an aggregate capacity of over 8727.62 MW has been installed in the country.

The government is playing an active role in promoting the adoption of renewable energy resources by offering various incentives, such as generation-based incentives (GBIs), capital and interest subsidies, viability gap funding, concessional finance, fiscal incentives etc. The National Solar Mission aims to promote the development and use of solar energy for power generation and other uses, with the ultimate objective of making solar energy compete with fossil-based energy options. The objective of the National Solar Mission is to reduce the cost of solar power generation in the country through long-term policy, large scale deployment goals, aggressive R&D and the domestic production of critical raw materials, components and products. Renewable energy is becoming increasingly cost-competitive as compared to fossil fuel-based generation.

In order to achieve the renewable energy target of 175 GW by the year 2022, the major programmes/ schemes on implementation of Solar Park, Solar Defence Scheme, Solar scheme for CPUs Solar PV power plants on Canal Bank and Canal Tops, Solar Pump, Solar Rooftop etc have been launched during the last two years.

Various policy measures have been initiated and special steps taken in addition to providing financial support to various schemes being implemented by the Ministry of New and Renewable Energy (MNRE) for achieving the target of  renewable energy capacity to 175 GW by the year 2022. These include, inter alia,  suitable amendments to the Electricity Act and Tariff Policy for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO); setting up of exclusive solar parks; development of power transmission network through Green Energy Corridor project; identification of large government complexes/ buildings for rooftop projects; provision of roof top solar and 10 percent renewable energy as mandatory under Mission Statement and Guidelines for development of smart cities; amendments in building bye-laws for mandatory provision of roof top solar for new construction or higher Floor Area Ratio; infrastructure status for solar projects; raising tax free solar bonds; providing long tenor loans; making roof top solar as a part of housing loan by banks/ NHB; incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory and raising funds from bilateral and international donors as also the Green Climate Fund to achieve the target.


The increased use of indigenous renewable resources is expected to reduce India’s dependence on expensive imported fossil fuels. India has an estimated renewable energy potential of about 900 GW from commercially exploitable sources viz. Wind – 102 GW (at 80 meter mast height); Small Hydro – 20 GW; Bio-energy – 25 GW; and 750 GW solar power, assuming 3% wasteland


The Government of India has set a target of 175 GW renewable power installed capacity by the end of 2022. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass power and 5 GW from small hydro power. A target of 16660 MW grid renewable power (wind 4000 MW, solar 12000 MW, small hydro power 250 MW, bio-power 400 MW and waste to power 10 MW),  has been set for 2016-17. Besides, under off-grid renewable system, targets of 15 MW eq. waste to energy, 60 MW eq. biomass non-bagasse cogeneration, 10 MW eq. biomass gasifiers, 1.0 MW eq. small wind/hybrid systems, 100 MW eq. solar photovoltaic systems, 1.0 MW eq. micro hydel and 100,000 nos. family size biogas plants have been set for 2016-17.

The target set for the various renewable energy sources for the next three years are:

            Source 2016-17 2017-18 2018-19
Solar Power 12,000 15,000 16,000
Wind 4000 4600 5200
Biomass 500 750 850
SHP 225 100 100
Grand Total 16725* 20450* 22150

*(Capacities in MW)


Economic growth, increasing prosperity, a growing rate of urbanisation and rising per capita energy consumption has increases the energy demand of the country. In order to meet the energy demand, India has total installed power generation capacity of 307.27 GW as on 31.10.2016 from all resources. With 46.33 GW installed renewable power capacity, the renewable power has a share of about 15% to the total installed capacity.


The details of year round initiatives and achievements of the Ministry of New and Renewable Energy are as follows:

Green Power Capacity Addition

A total of 7,518 MW of grid-connected power generation capacity from renewable energy sources has been added so far this year (January 2016 to October 2016) in the country.

A total of 7060 MW of grid-connected power generation capacity from renewable energy sources like solar (3019 MW) and wind (3423 MW), Small Hydro Power (218 MW), Bio-Power (400 MW) has been added during 2015-16 in the country against target of 4,460 MW.  During 2016-17, a total 3575 MW capacity has been added till 31.10.2016, making cumulative achievement 46,327 MW.

Sector-wise highlights of achievements 

  • Largest ever wind power capacity addition of 3423 MW in 2015-16 exceeding target by 43%. During 2016-17, a total 1502 MW capacity has been added till 31.10.2016, making cumulative achievement 28,279 MW. Now, in terms of wind power installed capacity India is globally placed at 4th position after China, USA and Germany.
  • Biggest ever solar power capacity addition of 3,019 MW in 2015-16 exceeding target by 116%. During 2016-17, a total 1750 MW capacity has been added till 31.10.2016, making cumulative achievement 8728 MW.
  • 31,472 Solar Pumps installed in 2015-16, higher than total number of pumps installed during last 24 years i.e. since beginning of the programme in 1991. So far, 92305 Solar Pump have been installed in the Country as on 31.10.2016.
  • Solar projects of capacity 20,904 MW were tendered in 2015-16. Of these, 11,209 MW  capacity already awarded.
  • A capacity addition of 0.53 GW has been added under Grid Connected Renewable Power since last two and half years from Small Hydro Power plants.
  • Biomass power includes installations from biomass combustion, biomass gasification and bagasse co-generation. During 2016-17, against a target of 400 MW, 51 MW installations of biomass power plants has been achieved making a cumulative achievement to 4882 MW.
  • Family Type Biogas Plants mainly for rural and semi-urban households are set up under the National Biogas and Manure Management Programme (NBMMP). During 2016-17, against a target of 1.00 lakh biogas plants, 0.26 lakh biogas plants installations has been achieved making a cumulative achievement to 49.35 lakh biogas plants as on 31.10.2016.

The sector wise achievements from January 2016 to October are as follows:

Programme/ Scheme wise Achievements in Year 2016 (January- October 2016)

Sector  Achievement (January- October 2016) Cumulative Achievements as on 31.10.2016
Wind Power 3191.21 28279.40
Solar Power 3848.77 8727.64
Small Hydro Power 146.47 4323.37
BioPower (Biomass & Gasification and Bagasse Cogeneration) 331.78 4882.33
Waste to Power 7.50 114.08
Total 7525.73 46326.82
Waste to Energy                    14.61 161.12
Biomass(non-bagasse) Cogeneration           49.54 651.91
Biomass Gasifiers    
0.19 18.34
15.58 176.30
Aero-Genrators/Hybrid systems 0.26 2.93
SPV Systems 84.98 373.99
Water mills/micro hydel 1.60 18.81
Total 166.80 1403.40
Family Biogas Plants (in Lakhs) 1.014 49.354



Major Initiatives taken by Ministry

Solar Power

  • Under National Solar Mission, the target for setting up solar capacity increased from
  • 20 GW to 100 GW by 2021-22. Target of 10,500 MW, set for 2016-17 which will take the cumulative capacity to 17 GW till 31st March 2017.
  • As on date, 19,276 MW has been tendered out, of which LOI issued for
  • 13,910 MW/PPA signed for 10,824 MW.
  • 34 Solar Parks of capacity 20,000 MW in 21 states have been sanctioned which are under various stages of execution.
  • As on 31.10.2016, a total of 90,710 solar pumps have been installed throughout the country.
  • Also, A total amount of Rs. 67.01 crore has been sanctioned for preparation of master plans, solar city cells, promotional activities and installation of renewable energy projects and an amount of Rs. 24.16 crore has been released, so far, under Solar City Programme.
  • Various departments and ministries under central government have collectively committed to deploying 5,938 MW of rooftop solar capacity for their internal power consumption. SECI is aggregating demand for a part of this requirement and helping in procuring rooftop solar systems. SECI has issued a tender for development of 1,000 MW rooftop solar capacity on pre-identified central government/ department owned buildings. It is the largest such tender in India’s fledgling rooftop solar market.
  • Several schemes namely (i) Defence scheme (ii)  Central Public Sector Undertakings (CPSUs) scheme (iii)  Bundling scheme (iv) Canal Bank/ Canal Top scheme  (v) VGF Scheme (vi) Solar Park scheme (vii) Solar rooftops, have been initiated/launched by the Ministry under National Solar Mission which are under implementation.
  • Under Defence scheme against a target of 300 MW, 347 MW sanctioned, under Central Public Sector Undertakings (CPSUs) scheme against a target of 1000 MW, all capacity sanctioned, under 3000 MW Bundling scheme, Tranch-I: 3000 MW has been tendered, under 100 MW Canal Bank/ Canal Top scheme, all capacity sanctioned, under 2000 MW & 5000 MW VGF Scheme, tenders issued for 4785 MW, and under 20,000 MW Solar Park scheme, 34 Solar parks have been approved in 21 States with aggregate capacity of 20,000 MW.

Solar Rooftop

  • A target of 40 GW grid connected solar rooftops to be achieved by 2022 has been set. So far, about 500 MW have been installed and about 3,000 MW has been sanctioned which is under installation. All major sectors i.e. Railways, Airports, Hospitals, Educational Institutions, Government Buildings of Central/State/PSUs are being targeted besides, the private sector.
  • A massive Grid Connected Solar Rooftop Programme launched with 40 GW target. State Electricity Regulatory Commissions of 30 States/UTs notified regulations for net-metering/feed-in-tariff mechanism. Rs.5000 crore approved for solar rooftops. About 500 MW solar rooftop capacity installed till 30.09.2016.
  • A total sanction of 1300 million dollars has been received from World Bank, KFW, ADB and NDB through which the SBI, PNB, Canara Bank and IREDA will be in the position to fund at the rate of less than 10%.
  • Ministry has tied up with ISRO for Geo tagging of all the Rooftop plants using ISRO’s VEDAS Portal.

Wind Power

  • During the year 2015-16, wind power capacity addition of 3.42 GW was made, which is highest ever wind power capacity addition in the country during a single year.   The present wind power installed capacity in the country is around 28.28 GW. Now, in terms of wind power installed capacity India is globally placed at 4th position after China, USA and Germany.
  • India has a strong manufacturing base of wind power equipment in the country. Presently, there are 20 approved manufacturers with 53 models of wind turbines in the country up to a capacity of 3.00 MW single turbines. Wind turbines being manufactured in India are of international quality standards and cost-wise amongst the lowest in the world being exported to Europe, USA and other countries.
  • The wind power potential of the country has been reassessed by the National Institute for Wind Energy (NIWE), it has been estimated to be 302 GW at 100 meter hub-height. Online wind atlas is available on NIWE website. This will create new dimension to the wind power development in the country.
  • India has long coastline where there is a good possibility for developing offshore wind power projects. The cabinet has cleared the National Offshore Wind Energy Policy and the same has been notified on 6th October 2015. Certain blocks near Gujarat and Tamil Nadu coast line have been identified. NIWE is in process of doing the wind resource assessment in these coastal areas.
  • Comprehensive Guidelines for Development of On-shore Wind Power Projects in the country have been formulated and issued on 22nd October 2016.
  • Guidelines for implementation of “Scheme for Setting up of 1000 MW Inter-State Transmission System (ISTS) – connected Wind Power Projects” issued on 22nd October 2016.
  • The Policy for Repowering of the Wind Power Projects has been released on 5th August, 2016 to promote optimum utilization of wind energy resources by creating facilitative framework for repowering.

Small Hydro Power

A capacity addition of 14.30 GW of renewable energy has been reported during the last two and half years under Grid Connected Renewable Power, 0.53 GW from Small Hydro Power.

Biomass Power

Biomass power includes installations from biomass combustion, biomass gasification and bagasse co-generation. During 2016-17, against a target of 400 MW, 51 MW installations of biomass power plants has been achieved making a cumulative achievement to 4882.33 MW.

Family Size Biogas Plants

Family Size Biogas Plants mainly for rural and semi-urban households are set up under the National Biogas and Manure Management Programme (NBMMP). During 2016-17, against a target of 1.00 lakh biogas plants, 0.26 lakh biogas plants installations has been achieved making a cumulative achievement to 49.35 lakh biogas plants.

Off-Grid Solar Applications

A special programme for 1,00,000 solar pumps launched of which 31,472 Solar Pumps installed in 2015-16, higher than total number of pumps installed during last 24 years i.e. since beginning of the programme in 1991.

Amendments in Tariff Policy to promote Renewable Energy

  • Enhancement in Solar RPO to 8% by March 2022.
  • Introduction of RGO for New coal/lignite based thermal plants after specified date.
  • Ensuring affordable renewable power through bundling of renewable power.
  • No inter-state transmission charges and losses to be levied for solar and wind power.
  • Further, pursuant to the revised tariff policy, the Ministry of Power on 22nd July 2016 has notified the long term growth trajectory of RPO for solar and non-solar energy for next 3 years 2016-17, 2017-18 and 2018-19 as under:-
Long term trajectory 2016-17 2017-18 2018-19
Non-solar 8.75% 9.50% 10.25%
Solar 2.75% 4.75% 6.75%
Total 11.50% 14.25% 17.00%


Indian Renewable Energy Development Agency (IREDA) has been awarded Mini Ratna Status and the authorised capital of IREDA is increased from Rs.1000 Cr. to Rs.6000 Cr.

New Office Building of MNRE

Foundation Stone Laying Ceremony of ‘Atal Akshay Urja Bhawan’, an integrated headquarters building for the Ministry of New and Renewable Energy was held on
19th October, 2016. The Foundation Stone was laid by Shri Piyush Goyal, Hon’ble Minister of State (Independent Charge) for Power, Coal, New and Renewable Energy and Mines.

Installation of 200 MW or more Capacity Solar Power Plant at the Central State Farm at Jetsar, Rajasthan 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for utilization of 400 hectares of un-cultivable farm land at the Central State Farm (CSF), Jetsar in Sri Ganganagar District, Rajasthan for setting up of a solar Power Plant of capacity exceeding 200 MW. The land is presently in possession of National Seeds Corporation (NSC), a Central Public Sector Enterprise (CPSE) under the administrative control of the Ministry of Agriculture and Farmers Welfare. The Solar Power Plant will be set up by a CPSE, which would be selected through negotiation. The Project, by utilizing un-cultivable land for a Solar Power Project, will yield revenue for NSC and will also generate clean energy for the nation

Green Energy Corridor

Rs.38,000 crore Green Energy Corridor is being set up to ensure evacuation of Renewable Energy. Power Grid Corporation of India Limited (PGCIL) has sought a Loan assistance of US$ 1,000 million from the Asian Development Bank (ADB) comprising of Sovereign guaranteed loan of US$ 500 million and Non-Sovereign loan of US$ 500 million. the Loan would be utilized for funding of the following transmission projects including a project under Green Energy Corridor projects in next 3-4 years:

(i)  HVDC Bipole link between Western Region (Raigarh, Chhattisgarh) and Southern Region (Pugalur, Tamil Nadu) – North Trichur (Kerala)- Scheme 1: Raigarh-Pugalur 6000 MW HVDC System.

(ii)  HVDC Bipole link between Western Region (Raigarh, Chhattisgarh) and Southern Region (Pugalur, Tamil Nadu) – North Trichur (Kerala)- Scheme 3: Pugalur- Trichur 2000 MW VSC based HVDC System.

(iii) Real Time Measurement/ monitoring scheme.

(iv)  Inter State Transmission System (ISTS) associated with Green Energy Corridor as under:

  1. a)    Ajmer(New) – Bikaner (New) 765 kV D/c
  2. b)Bikaner(New) – Moga (PG) 765 kV D/c
  3. c) LILO of one circuit of 400kV Bhadla- Bikaner (RVPN) line at Bikaner(New)
  4. d)    Establishment of 2×1500 MVA, 765/400 kV S/s at Bikaner (New)

Enhancement of Budget

Ministry’s budget enhanced from Rs.1500 crore to Rs.9,000 crore (Rs.5,000 crore gross budgetary support + Rs.4,000 crore in way of bonds to be raised by IREDA) by 2016-17.


Solar tariffs have fallen to an unprecedented low of Rs. 4.34 / kWh through reverse auction for one of six projects of 70 MW each to be put up in Rajasthan under the National Solar Mission. NTPC on 18.01.2016 conducted the reverse bidding for 420 MW solar power projects  However, the  tariff had further fallen to Rs 3 per unit, which was quoted by Amplus Energy Solutions in an auction for rooftop solar power conducted by Solar Energy Corporation of India (SECI).


Surya Mitra Scheme has been launched for creating 50,000 trained solar photovoltaic technicians by march 2020. A total number of 5492 Surya Mitra’s have been trained as on 30.09.2016 and more than 3000 are undergoing training. A network of over 150 Institutions, spread all over the country, have been created for implementing Surya Mitra scheme.

In addition, short term training programmes for small hydro, entrepreneurship development, operation & maintenance of solar energy devices and boiler operations in co-generation plants, have been organised.

About 7800 persons have been trained through these short term training programmes during the last two years.

Shri Piyush Goyal, Minister of State (IC) for Power, Coal and New & Renewable Energy launched “Surya Mitra” mobile App at National Workshop on Rooftop Solar Power on 07.06.2016. The GPS based mobile app has been developed by National Institute of Solar Energy (NISE) which is an autonomous institution of Ministry of New & Renewable Energy (MNRE). The Surya Mitra Mobile App is currently available in Google play store, which can be downloaded and used across India. This App is a high end technology platform which can handle thousands of calls simultaneously and can efficiently monitor all visits of Suryamitra’s. The trained Suryamitra’s who opts for entrepreneurship have joined in the Mobile App in several states. These Suryamitras are once again sensitized by NISE on soft skills Customer Relations Management, Punctuality and are now ready to deliver the services.

 Other Initiatives

  • International Solar Alliance was launched as a special platform for mutual cooperation among 121 solar resource rich countries lying fully or partially between Tropic of Cancer and Tropic of Capricorn at COP21 in Paris on 30th November, 2015 to develop and promote solar energy, with its headquarter in India.  On 25th January, 2016, the Foundation Stone for the proposed Headquarters of the ISA was laid at Gurgaon, Haryana (India) and its interim Secretariat was inaugurated. The International Steering Committee (ISC) of the ISA has held four meetings so far. The Framework Agreement of ISA has been finalized after discussions with various stakeholders. It was presented in the fourth meeting of the ISC of ISA. The Framework Agreement of ISA has been signed by 20 member countries including India, France, Brazil and others on 15th November, 2016 at Marrakech, Morocco on the side-lines of COP-22.
  • Bank loans up to a limit of Rs.15 crores will be given to borrowers for purposes like solar based power generators, biomass based power generators, wind power systems, micro-hydel plants and for renewable energy based public utilities viz. Street lighting systems, and remote village electrification. For individual households, the loan limit will be Rs.10 lakh per borrower.
  • Coal cess has been increased 8 times from Rs.50 to Rs.400/ton in last two years
    (2014-15) which will make available around Rs.40,000 crore/year for supporting and incentivizing development of Clean Energy projects in the country.
  • Foreign Direct Investment (FDI) up to 100% is permitted under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act, 2003.

In order to achieve the targets, various initiatives have been taken by the Government which interalia include:

  • amendments in the Tariff Policy for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO);
  • setting up of exclusive solar parks;
  • development of power transmission network through Green Energy Corridor project;
  • identification of large government complexes/ buildings for rooftop projects;
  • provision of roof top solar and 10 percent renewable energy as mandatory under Mission Statement and Guidelines for development of smart cities;
  • amendments in building bye-laws for mandatory provision of roof top solar for new construction or higher FAR;
  • infrastructure status for solar projects;
  • raising tax free solar bonds;
  • making roof top solar a part of housing loan by banks/NHB;
  • incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory
  • raising funds from bilateral and international donors as also from the Green Climate Fund to achieve the target. and
  • creation of Surya Mitras for installation and maintenance of the Solar Projects.

Start-up Initiative: a ”Fund of Funds” of INR 10,000 Crores to Support Innovation Driven Start-Ups has been Established to be Managed by Small Industries Development Bank of India (SIDBI)

Press Information Bureau:  December 19, 2016

New Delhi: Start-up India is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Start-ups in the country. For providing fund support for Start-ups, a ”fund of funds” of INR 10,000 crores to support innovation driven Start-ups has been established which shall be managed by Small Industries Development Bank of India (SIDBI). The fund will invest in Securities and Exchange Board of India (SEBI) REGISTERED Alternative Investment  Funds (AIFs) which, in turn, will invest in Start-ups. It will act as an enabler to attract private capital in the form of equity, quasi equity, soft loans and other risk capital for Start-ups. Rs. 500 crore has been released to SIDBI in FY2015-16 and Rs. 600 crore in FY2016-17. Further, a new trading platform  called the “Institutional Trading Platform (ITP)” with simplified framework has been introduced on August 14, 2015 by SEBI making it easier for companies, including the Start-ups, to get listed either pursuant to a public issue or otherwise. In case of public offer on ITP, the minimum application size shall be Rs. 10 lakh and the minimum trading lot shall be of Rs. 10 lakh. Thus the retail investors cannot buy or sell shares of the companies listed on ITP. No company has been listed on the ITP so far.

The Government of India has issued the Companies (Share Capital and Debentures) Rules, 2014, which lays down the procedure for issuance of shares and debentures, disclosures, filing requirements and other compliances under the Companies Act, 2013. These provisions are applicable to all companies including start-ups and seek to ensure that companies raise monies in a transparent and accountable manner. The modification in the Rules made under this provision for start-ups do not compromise on the basic premise of due disclosures, accountability and protection of interest of investors including minority investors.

The Start-up India Program is reviewed every month by a Monitoring Committee consisting of representatives from Department of Industrial Policy and Promotion (DIPP), NITI Aayog, Department of Revenue (Ministry of Finance), Ministry of Micro, Small and Medium Enterprises, Department of Science and Technology (Ministry of Science and Technology), Department of Electronics  and Information Technology (Ministry of Communication and Information Technology), Department of Higher Education (Ministry of Human Resource Development) and SIDBI. Decisions taken by the Monitoring Committee are regularly followed up with various stakeholder departments/ organizations for implementation.

This was stated by Shri Arjun Ram Meghwal, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

CSCs complete digital training of over 10 lakh people in rural areas

Economic Times:  December 19, 2016

New Delhi: The common service centres (CSCs) have reached a new milestone by digitally training more than 10 lakh people in the rural areas, the ministry of information technology said on Saturday.

“As of today, the CSCs have trained more than 10 lakh people. Three to four days ago, the figure was around five lakhs which means that within these few days CSCs have trained another 5 lakh people,” said Ravi Shankar Prasad, IT and law minister, while addressing the media at the DigiDhan Mela.

In an attempt to promote digital transactions and to educate the citizens on the various methods of cashless payments, the IT ministry has organized the DigiDhan Mela, a two-day event.

“It feels really nice to see the enthusiasm amongst the people about digital payments. 29 banks and 18 mobile wallets have participated in this event,” he said.

More than 20-25 institutions, including schools and colleges, are expected to attend the event. Around 3,000 people visited on the first day of the event.

“We plan to organize such events for the other cities and districts with the help of urban development departments and private sectors as well,” said Prasad.

A total of 476 districts, 1,491 blocks and more than 33,230 merchants have already been covered under the digital education programme for rural areas.

“We aim to digitally train more than 1.20 crore people. Other than this, the target is to train around 20 lakh shopkeepers and 14 lakh traders as well,” he added.

During the two-day event, assistance is also being extended to citizens for opening their bank accounts, to enroll them into Aadhaar, and to enable their existing accounts into Aadhaar enabled payment system (AEPS) accounts.

The participants at the DigiDhan event include telecom companies like Airtel, Reliance Jio, popular social networking platform Facebook, transportation network companies, AEPS vendors, department of Post, merchants (through marketing associations), co-operatives like Kendriya Bhandar and organised retail fruits and vegetable chains like Safal, Mother Dairy among others.



Centre notifies liquidation norms under new bankruptcy code

Livemint:  December 19, 2016

New Delhi: The government on Friday notified the rules by which companies can go through liquidation under the Insolvency and Bankruptcy Code (IBC), 2016.

The regulations for the liquidation process are part of the rules being notified by the Insolvency and Bankruptcy Board of India (IBBI) to implement the code and, in the process, improve the ease of doing business in India.

The government earlier notified rules empowering the National Company Law Tribunal (NCLT) to be the appropriate adjudicating authority to handle corporate insolvency matters under the code.

Together with the registration of insolvency professionals (IP), IP agencies and notification of regulations under the code, IBBI now has the required infrastructure in place to address bankruptcy matters under the code.

Parliament passed the bankruptcy code in May. It aims to improve the ease of doing business in the country by facilitating smoother and time-bound settlement of insolvency and faster turnaround of businesses, along with creating a database of serial defaulters.

The regulations for the liquidation process issued by IBBI provide details of actions to be taken during the process of liquidation or dissolution of companies under the code. These regulations come into force with immediate effect.

The rules require an insolvency professional to be independent of the corporate debtor in order to act as a liquidator for the company. They prohibit “partners or directors of an insolvency professional entity of which the insolvency professional is a partner or director from representing other stakeholders in the same liquidation process”.

They also mandate disclosure of any existing relationship of the liquidator with any of the stakeholders entitled to distribution of assets.

The rules require the liquidator to prepare and submit a preliminary report, asset memorandum, sale report, progress report, and final report prior to liquidation to the adjudicating authority, which is the NCLT.

The regulations specify the manner and contents of public announcements, receipt and verification of claims of stakeholders/creditors, the manner of realization of assets and security interest, and distribution of proceeds to stakeholders. They also specify the process of remuneration of a liquidator under the code.

According to the rules, the liquidator should ordinarily sell the assets through auctions, unless the asset is perishable in nature or is likely to deteriorate in value significantly if not sold immediately.

The government made IBBI operational from 1 December. Chaired by M.S. Sahoo, the board will act as the regulator of an ecosystem including insolvency professionals, agencies and information utilities. The 10-member board, which at present has four ex officio members other than the chairman, will soon have five more members, of which three will be full-time.

However, experts point out certain challenges that lie ahead after implementation of the insolvency code.

According to Sumant Batra, chairman of a New Delhi-based law firm Kesar Dass B. & Associates, there are three key challenges which are likely to arise. “The first challenge is attracting high quality insolvency professionals to setup the institution, build the standards and best practices and in the process assist the board for effective implementation of the bankruptcy code. The IBBI has REGISTERED  three government bodies to function as insolvency professional agencies, not giving the time and space for the market to come forward and participate, which is a big challenge.”

“The second challenge will come for the judges and professionals to honour the timeline of 180 days for implementation of the code as ambiguities may arise in the process. And the third challenge that may arise in the future is the issue of government over-driving this process. As a result, the government may end up controlling and monitoring the entire system, making private players uncomfortable,” Batra added.

What remain unaddressed are the provisions of the insolvency code pertaining to individual insolvency resolution, which will be under the jurisdiction of debt recovery tribunals. The government is yet to notify regulations related to personal insolvency.


MAN Truck & Bus expects India to be one of its top 5 non-European markets by 2020

Economic Times:  December 19, 2016

New Delhi: India has the potential to grow into one of the top five non-European markets for MAN Truck & Bus AG by 2020, says the company’s global CEO Joachim Drees. In an interview to Sharmistha Mukherjee, he says demonetisation has hit sales, but the situation should improve by the second half of 2017. Edited excerpts:

How important is the Indian market for MAN Truck & Bus? 

India is a key market and I come here often to focus on operations. We strengthened our management team here. Joerg Mommertz (appointed India CMD earlier this year) has been with MAN for years. He knows MAN really well, but more importantly, he knows the customer and the needs of the market. We put one of our most experienced managers here to increase volumes and also to improve exports out of India.

What has kept overseas firms from dislodging domestic players in India’s commercial vehicle market? 

Indian competitors have the right products and are very strong in the budget segment, which is big. But as the market becomes more sophisticated, there will be more opportunities for global truck makers to grow. Efficiency has to grow, total cost of ownership has to go down, tonnage has to go up. We will see similar behaviour in the Indian market; it is just a question of time.

We were just discussing the regulations coming into place such as the new law that all trucks have to be provided with air-conditioning. Then the new regime on GST, the demonetisation drive, all these measures will lead to changes in business models. And we have localised our trucks and are very well prepared to meet the changes in the market here. We know that our competition is very strong but we can gain volumes and improve our market share in India.

You started operations in India through a joint venture that you terminated in 2012. How has the solo journey been for the company? 

I think it was the right move. We are now in the process of increasing our footprint in the market by bringing in new products. We unveiled the CLA EVO range of trucks, offering our customers the benchmark in fuel efficiency. These trucks are close to 100% localised and designed at our R&D centre in Pune.

What role does the R&D team here play in the company’s global operations? 

Globally, we have two hubs in Germany for engines and truck development. For buses, we have some engineers in Turkey and Poland. And then, we have the centre in Pune, India. They develop trucks for the local market and also for exports. Besides, sales responsibility is also split region-wise. Some products are built only in India, so Mommertz and his team also have the responsibility to drive exports out of India, in collaboration with local partners and importers.

There are countries where we import both European-made premium trucks and trucks from India, so we have to streamline processes.

How has demonetisation impacted the company? 

This year, we have to take a little bit of a downturn in November and December because of the demonetisation. But for us, India is one of the markets which are growing the most right now. I think the initiatives taken by the government will enhance growth further, maybe not in the very short term. These are very bold steps, but right steps which the government is taking.

When do you expect the Indian market to revive? What kind of growth are you expecting in 2017? 

We are more ambitious for 2017. The market should pick up in the second half of next year. Four weeks ago, I could have given you the numbers, but given all the changes to predict market trend in 2017 is a bit challenging.

Does India have the potential to emerge as one of your key production bases? 

We look at Europe as one market and then we look at markets out of Europe and there India can break into top five, domestic market plus exports, by 2020.

What to expect from Budget 2017

Demonetisation is certain to feature prominently in budget announcements, as will GST and Uttar Pradesh elections

Business will begin early for the Indian Parliament next year. With the winter session proving a washout, and the deadline for the goods and services tax (GST) looming, the government could convene the budget session of Parliament as early as the second week of January. The Union Budget itself will be presented on 1 February.

I expect a rash of people-friendly announcements in the budget. The narrative around demonetisation—the government’s move on 8 November to render invalid all old Rs500 and Rs1,000 denomination currency notes, 86% of the cash in the system—is turning negative in parts, although it is a measure of the goodwill Prime Minister Narendra Modi still enjoys that most Indians continue to put up with the fallout because they think it is well-intentioned. The move has hit business in the second part of the third quarter (October-December) and could affect business in the next quarter (January-March) too. The government needs to address this and the budget is a good platform to do so. Elections in India’s largest state, Uttar Pradesh, may happen as early as February. Modi’s Bharatiya Janata Party (BJP) is up against the governing Samajwadi Party, the resurgent Bahujan Samaj Party, and the Congress, which may or may not forge an alliance with the second. A year ago, the BJP seemed to be gaining a lot of momentum in the state where it swept the parliamentary elections in 2014 (although people have been known to vote differently in state elections). That’s changed, not the least because of demonetisation, and the budget is, again, a good platform for the BJP-led National Democratic Alliance government to regain its mojo.

If the elections in Uttar Pradesh have to happen in February, they will have to be announced sometime in early January. The so-called model code of conduct will come into effect immediately, preventing any populist measures from being announced by both central and state governments. This restriction, though, is unlikely to apply to the Union Budget, another reason why it will have to serve as the platform for such measures.

There have already been murmurs within the BJP—they are all you will hear in a party led by Narendra Modi and Amit Shah —about how the fallout of demonetisation is hurting the party, and some people- and business-friendly measures will, no doubt, quell these too. Industry will cheer even a watered-down GST and the government will try its best to finalize the fine-print of one in January. The government will likely announce wide-ranging cuts in income tax, both personal and corporate. That should boost both consumer and business sentiment. The tax cuts may be announced in the budget. With an eye on the rural economy, and Uttar Pradesh, the government is also likely to announce a farm package in the budget.

What else can we expect in the budget?

With the rail budget anyway being integrated with it, the Union Budget already comes with a built-in emphasis (and a big one) on infrastructure. With private investment still not kicking in, the government probably recognizes the importance of spending on infrastructure. The focus on solar and wind power, and highways and inland waterways could continue.

Digital and cashless are perhaps the two most used words by anyone in government since 8 November, when Prime Minister Modi announced the invalidation of old high-denomination currency notes. Both will get a fair share of attention (and money) in the budget too. I expect more sops and incentives for cashless transactions and the makers of hardware required to power such transactions.

Other (perennial) favourites of the government, schemes such as Make in India, Skill India, and Start-up India will likely get a look-in too.

It is important to recognize the kind of budget India needs at this point in time. There are times when a country needs a budget that can spur growth. There are other times when a country needs a budget that can cut expenditure. There are still other times when a country can get by with a middle-of-the-road budget that maintains the status quo. Then, there are times when a budget has to focus on a specific sector—agriculture, for instance. The budget which finance minister Arun Jaitley will present on 1 February needs to have a different and singular objective. Demonetisation has left people feeling low and tired. While it is effecting one kind of behaviour change, towards cashless transactions, it is also encouraging the hoarding of cash and forcing people to defer expenditure. Consumer, business, and investor sentiment are all down. The budget needs to change all that. We need one that is, in letter and spirit, true to that cliché popularized by headline writers—a feel-good budget.

We will probably (and hopefully) get one.

by Sukumar editor, Mint.


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