Daily Economic News 28-29 December 2016

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Indian Economy News

December 28-29, 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.

–  9.3% Growth in Foreign Tourist Arrivals in November 2016 Over the Same Period in 2015

–  PM focuses on tourism, skills to boost jobs

– Govt plans to launch digital payment platforms in new avatars

– RBI allows bulk issue of prepaid cards

– An inspired EPFO to step up its equity investment strategy

9.3% Growth in Foreign Tourist Arrivals in November 2016

Over the Same Period in 2015

Press Information Bureau:  December 28, 2016

9.3% growth in Foreign Tourist Arrivals (FTAs) in November 2016 over the same period in 2015. USA accounts for highest share of tourist arrivals followed by UK and Bangladesh in November 2016. Rs. 14, 474/- crore Foreign Exchange earned through tourism in November 2016.

Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) on the basis of Nationality-wise, Port-wise data received from Bureau of Immigration (BOI) and Foreign Exchange Earnings (FEEs) from tourism on the basis of data available from Reserve Bank of India. The following are the important highlights regarding FTAs and FEEs from tourism during the month of November, 2016.

Foreign Tourist Arrivals (FTAs):

  • FTAs during the Month of November, 2016 were 8.91 lakh as compared to FTAs of 8.16 lakh during the month of November, 2015 and 7.65 lakh in November, 2014. There has been a growth of 9.3% in November, 2016 over November, 2015.
  • FTAs during the period January- November, 2016 were 78.53 lakh with a growth of 10.4% as compared to the FTAs of 71.14 lakh with a growth of 4.7% in January- November, 2015 over January- November, 2014.
  • The Percentage share of Foreign Tourist Arrivals (FTAs) in India during November, 2016 among the top 15 source countries was highest from USA (15.53%) followed by UK (11.21%), Bangladesh (10.72%), Canada (4.66%), Russian Fed (4.53%), Australia (4.04%), Malaysia (3.65%), Germany (3.53%),  China (3.14%), France (2.88%),      Sri Lanka (2.49%), Japan (2.49%), Singapore (2.16%), Nepal (1.46%) and Thailand (1.37%).
  • The Percentage share of  Foreign Tourist Arrivals (FTAs) in India during November 2016 among the top 15 ports was highest at Delhi Airport (32.71%) followed by Mumbai Airport (18.51%), Chennai Airport (6.83%), Bengaluru Airport (5.89%), Haridaspur Land check post (5.87%), Goa Airport (5.63%), Kolkata Airport (3.90%), Cochin Airport (3.29%), Hyderabad Airport (3.14%),  Ahmadabad Airport (2.76%), Trivandrum Airport (1.54%), Trichy Airport (1.53%), Gede Rail (1.16%), Amritsar Airport (1.15%), and Ghojadanga land check post (0.82%)

Foreign Exchange Earnings (FEEs) from Tourism in India in Rs. terms and in US$ terms

  • FEEs during the month of November, 2016 were Rs. 14,474 crore as compared to                       Rs. 12,649 crore in November, 2015 and Rs. 11,431 crore in November, 2014.
  • The growth rate in FEEs in rupee terms during November, 2016 over November, 2015 was 14.4% as compared to the growth of 10.7% in November, 2015 over November, 2014.
  • FEEs from tourism in rupee terms during January- November, 2016 were Rs. 1,38,845  crore with a growth of 14.7% as compared to the FEE of Rs. 1,21,041 crore with a growth of 9.7% during January- November, 2015 over January- November, 2014.
  • FEEs in US$ terms during the month of November, 2016 were US$ 2.141 billion as compared to FEEs of US$ 1.912 billion during the month of November, 2015 and US$ 1.853 billion in November, 2014.
  • The growth rate in FEEs in US$ terms in November, 2016 over November, 2015 was 12.0% compared to the negative growth of 3.2% in November, 2015 over November, 2014.
  • FEE from tourism in US$ terms during January- November, 2016 were US$ 20.671 billion with a growth of 9.1% as compared to the US$ 18.945 billion with a growth 4.3% during January- November, 2015 over January- November,  2014.

PM focuses on tourism, skills to boost jobs

Business Standard:  December 28, 2016

New Delhi: Prime Minister Narendra Modi on Tuesday laid emphasis on innovation in the tourism sector and skill development to boost employment generation.

The dominant view at a day-long brainstorming session for top policy makers and economists at the National Institution for Transforming India (NITI) Aayog was the Budget for 2017-18 should be friendly to citizens and taxpayers.

Modi said Indians, in general, don’t want to evade taxes but they want proper utilisation of their hard-earned money given to the government as taxes.

He said people talk of demographic dividends but he wanted to understand from economists as to how could that be reaped when automation was happening.

“We need skills, scale and scope to realise our demographic dividend,” Modi said.

He said tourism, both international and domestic, needed to be focused on creating jobs. Besides, skills would have to be developed to make people employable, he added.

Defending the government’s decision to bring the Budget presentation ahead by almost a month, Modi said authorisation of expenditure came with the onset of the monsoon in the existing Budget calendar. This, he said, resulted in government programmes being relatively inactive in the productive pre-monsoon months.

Advancing the Budget presentation by a month would allow expenditure to be authorised by the time the new financial year began. Budget is likely to be tabled in Parliament on February one against the usual practice of February 28.

Later, briefing reporters about the meeting, NITI Aayog Vice-chairman Arvind Panagariya said the Prime Minister also underlined the need for greater cooperation among different wings of the government.

Modi said the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) should not work in silos but share data.

pay tax, but when expenditure is not properly done, then people want to evade,” Panagariya said, summarising Modi’s intervention.

Asked whether the issue of demonetisation figured in the meeting, Panagariya said it was mentioned only as part of formalisation of economy.

The prime minister also sought views on agriculture, taxation, tariff-related matters, education, digital technology, housing, banking, governance reforms, data-driven policy and future steps for growth.

Finance Minister Arun Jaitley said the government was open to out-of-the-box suggestions on the Budget.

Some economists suggested a flat rate of income tax and said the Budget should focus on the organised sector, which had been hit by demonetisation. They advised the government that the Budget should emphasise on capital gains tax but not on listed securities.

Economists also favoured cut in income tax rate and harmonisation custom rate.

“Tax simplification figured quite a lot… on the direct taxation, both corporate and personal income tax on simplifying, reducing exemptions, bringing down tax rate and aligning tax system to make India competitive with international destination,” Panagariya said.

Jaitley had already announced in the Budget for 2015-15 a roadmap to cut the corporation tax rate to 25% from the existing 30% in four years till 2018-19. However, it was not cut in the Budget for 2016-17.

The finance minister recently hinted at lower level of taxation. “What you need is a broad base of the economy, for which you need a lower level of taxation,” he had said.

Besides, a suggestion was made for listing of PSUs and increase use of Direct Benefit Transfer (DBT) to subsidy expenditure.

Farm sector experts suggested incentivising states to undertake market reforms, create corpus fund for promoting farm mechanisation and micro-irrigation, and provide interest subvention for term loans so that income of farmers are doubled by 2022.

Experts also suggested that there is a need to invest in the tourism sector which has potential to generate high paying job and making Indian universities world class.

The economists and experts who were present include Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Govinda Rao, Madhav Chavan, N K Singh, Vivek Dehejia, Pramath Sinha, and Sumit Bose.

Govt plans to launch digital payment platforms in new avatars

Economic Times:  December 28, 2016

New Delhi: The Centre plans to breathe new life into two key initiatives that can help further its aim of transforming India into a digital economy. The United Payment Interface (UPI) and Align | Delete Unstructured Supplementary Service Data (USSD) will soon be launched in new avatars that will make it easier for consumers to transact digitally either with or without an Internet connection.

In a week’s time, a new strippeddown, easier-to-use application for UPI will be launched, that among other things will feature a single app that users can download to transact across multiple banks. Also being launched is an upgraded, feature-rich version of USSD platform, which enables banking through feature phones.

Since the demonetisation drive announced on November 8, the number of daily transactions on the UPI platform has “doubled to 70,000 with 4.2 million registered users”, according to AP Hota, MD of NPCI which hosts the two platforms and handles all retail payments in the country.mob copy

“But we are not very happy. 70,000 is not really a number to be satisfied with. We believe that in the days ahead, further improvement can happen,” National Payments Corporation of India MD AP Hota told ET.

The adoption of UPI, launched in August, has been hamstrung, among other things, by the lack of a common application. So far, about 33 banks have signed up on the platform and each has its own application, which users can download individually off the Google Play Store or the Apple App Store. The new version will provide a common application that will simplify the use of the platform.

“In due course, when more functionalities are added, we hope that instead of upgrading their individual apps, banks may switch over to the common app,” said Hota.

The new app, however, won’t replace the existing ones. It will be in the form of a skeletal version of the apps already present, with basic features such as ability to send or receive money, linking of accounts, saving profile of the user, changing the language, recording beneficiary details and providing balance enquiry. Banks can either endorse the common app or only allow their customers to use the in-house app which may be loaded with more features.

Industry watchers argue that while a common UPI app will increase convenience, a lot more needs to be done to popularise the platform. “It needs to be opened for prepaid instruments firms authorised by RBI, since banks are not exactly the best examples of marketing,” said Vishwas Patel, chief executive officer of CCAvenues, a payment gateway.


To further bolster the USSD platform, NPCI is mooting its integration with UPI. Currently, around 51banks support USSD and the number of transactions has jumped from 1.5 lakh per day before demonetisation to 6.5 lakh per day now.

One of the biggest challenges that NPCI faces with the platform is that the bulk of transactions, about 98%, involve no transfer of money. For instance, by dialing *99# from their bank-registered mobile numbers, users can check their balance. Hota said that now around 5,000 transactions are happening per day on USSD that involve transfer of money.

“The new platform will integrate much more deeply with the feature phone where it can not only send money but initiate a collect money request from a person or agency along with saving beneficiary details and the preferred language, so that users do not have to select it each time they operate USSD,” said Hota. USSD is currently available in 12 Indian languages apart from Hindi and English.

The pricing of UPI-based transactions should also be made transparent, say industry members.”Currently, each payment gateway has its own pricing, but that has to be standardised and made transparent,” said Nitin Gupta, who cofounded PayU Money, adding that this will significantly help in making the platform more mainstream.

RBI allows bulk issue of prepaid cards

Times of India:  December 28, 2016

Mumbai: Banks and other issuers of prepaid instruments have been allowed to issue such cards in bulk to corporates and other employers to replace cash salaries with electronic payments. Prepaid cards are aimed at helping those employers who have a large number of workers without bank accounts. They can be used just like plastic cards.

The RBI has said that the relaxation has been provided to “facilitate greater adoption of digital payments”. Until now, such bulk cards could be issued to only listed corporates. Under the relaxed norms, the central bank has allowed unlisted corporates, partnership firms, sole proprietorship, public organisations like municipal corporations, and urban local bodies to buy these cards in bulk for onward issue to their staff.

“Banks shall extend this facility only to those employers that have a bank account with them and after obtaining an undertaking that they are not availing of this facility from any other bank,” the RBI said in a circular on Tuesday.

While the bank will issue blank cards, verification of the identity of the staff/employees or contract workers will be the responsibility of the ’employer’, the RBI said. “The bank should put in place proper systems to capture and maintain details of the employees to whom the cards are issued by the ’employer’ along with copies of photograph and identity proof of such employees,” said the RBI.

An inspired EPFO to step up its equity investment strategy

Livemint:  December 28, 2016

New Delhi: After doubling equity exposure to 10% of its incremental corpus, the Employees’ Provident Fund Organization (EPFO) is now looking to take its equity investment strategy to the next level.

It is planning to invest in blue-chip stocks outside of the Nifty 50 and Sensex 30 stocks, but within the top 100 stocks in terms of market capitalization and in quality mid caps.

With increase in equity exposure, the government believes that EPFO needs to diversify the investment basket, at least two government officials said on condition of anonymity.

“A combination of blue chips and mid caps has the potential to give better returns and expanding the equity basket will be a logical next move,” one of the two officials said. The official, however, said that the investment vehicle will remain the same—exchange-traded funds (ETFs) and not direct stock investments.

An ETF comprises a clutch of stocks that reflect the composition of an index, such as the Nifty or the Sensex, and are traded on stock exchanges like company stocks.

EPFO entered the Indian equities market in August 2015, channelling its investments through two ETFs. The two chosen by the EPFO were SBI-ETF Nifty and SBI Sensex ETF. While 75% of the corpus went to SBI Nifty, the rest was invested in SBI Sensex. Both ETFs mimic the Nifty 50 and Sensex 30 index.

“In the pipeline are alternative ETFs other than Nifty 50 and Sensex 30 in order to optimize return with minimum risk,” said the second official.

“The initial investment outside SBI-ETF Nifty and SBI Sensex ETF may be to the tune of 25% of the incremental corpus,” the second official said, adding that a final decision will be taken “at an appropriate time”. The new equity investment pattern may come into force in a couple of months after the budget session of Parliament. The budget is slated to be presented on 1 February.

To begin with, EPFO may invest in the “top 100 stocks by market capitalization”, said the first official. The official said that an expert group has suggested to the finance and investment committee of EPFO that indices such as Nifty Next 50 and S&P BSE Midcap Select can be considered for increasing EPFO’s equity investments.

“The group recommends that investments can be considered in these indices at the earliest possible. A combination of these four index strategies has the potential to deliver better returns over a longer period with greater diversification,” said the first official.

EPFO invested Rs6,577 crore in 2015-16 and will pump in over Rs13,000 crore in equities in 2016-17 after the labour ministry-controlled retirement fund manager decided to double its equity exposure from 5% of its incremental corpus to 10%.

In 2017-18, EPFO is expected to invest more than Rs13,000 crore in equities as it believes that its active subscriber base will increase gradually, leading to more incremental deposits. By the end of August 2016, when the labour ministry last reported its equity returns, its equity investments had earned 13.24% returns.

Earlier this month, EPFO fixed 8.65% interest rate for its subscribers, down from 8.8% the previous fiscal. Though the rate is the lowest in four years, it’s still better than many other investments, including fixed deposits and public provident fund.

When asked about the possible opposition it may face for investing in potentially more volatile indices, the first official said, “There are fund managers who take care of such decision and they know the market better. You have to be practical about returns than oppose a move emotionally. Once the final decision is taken, we shall explain to the central board trustees of the EPFO.”

EPFO manages a corpus of over Rs8.5 trillion with some 40 million subscribers contributing to the fund every month.

“For long-term returns, diversification is a good idea. Any organization seeking long-term return is now looking at investing for five years or more in the stock market. That may be the reason for EPFO to explore diversification. But they have to keep in mind the annual stability as EPFO declares interest earnings every year,” said Amarpal S. Chadha, partner, human capital services, at consulting and auditing firm EY.

After Jharkhand, Carnival Cinemas joins hands with Odisha government for expansion

Economic Times:  December 28, 2016

Mumbai: The latest entrant in the Indian multiplex business, Carnival Cinemas, has devised an unusual, low capex strategy to expand its footprint across the tier II and III cities and hinterland.

The company, which has become the third largest cinema chain in India on the back of multiple acquisitions, most notably Anil Ambani-owned Big Cinemas, is now partnering state governments and real estate developers to come up with entertainment zones.

Carnival has signed a memorandum of understanding (MoU) with the Odisha government, wherein the company will get 1-1.5 acres of land in each of the districts to build these zones with two-three screen multiplexes, food courts and some retail outfits.

“We will be building 150 screens in Odisha under this partnership with the state government. This is our capex light institutional programme, wherein we plan to partner with states and get into joint ventures with investors or real estate developers to build these zones,” Shrikant Bhasi, chairman of the Carnival Group, told ET.

In August this year, Carnival had entered into an agreement with the Jharkhand government for setting up minimum 75 theatres-cum-recreation zones in 18 out of 24 districts.

It has now signed a similar deal with Odisha to build these centres across all the 30 centres. “We are also in talks with Madhya Pradesh and Rajasthan state governments to expand footprint there,” Bhasi added.
As per Bhasi, the company will be looking at upto three partners per state for the development of these zones. “We are approaching the multiplex game differently. We are very clear that we want to play in the tier II and III cities where people are deprived of these and are hungry for entertainment.

We will keep ticket prices low so that more people can come. Our estimate is that these zones will get over 2,000 footfalls daily,” he added.

Bhasi claims that Carnival has a blueprint for over 5,250 screens ready and even as inorganic growth phase is over, there is organic expansion and institutional expansion. At present, Carnival is operating 365 screens, while 300 more signed and under construction.

Bhasi says the company will be opening 20-30 new screens every month going forward. Carnival has secured a long term loan from Yes Bank, which Bhasi claims is enough for the company’s 1,000 screens milestone, but for its expansion beyond 1,000 screens, the company has already initiated talks.

Urban infrastructure spending likely to increase: Venkaiah Naidu

Times of India:  December 29, 2016

Chennai: Urban infrastructure spending will be increasing in the next five months.”The government will be announcing a lot of welfare measures for poverty alleviation and urban development,” said Union Minister of Urban Development, Housing and Urban Poverty Alleviation and Information & Broadcasting Venkaiah Naidu in the city on Tuesday.

Union Minister of Urban Development said, “Mahatma Gandhi gave two pieces of pertinent advice, which India has ignored. One was India should go back to the villages. Instead of which we have turned our back on villages. With lack of opportunities everyone has migrated to cities. Why even I have gone from rural development minister under A B Vajpayee to urban development minister under Narendra Modi”

“The second piece of advice Mahatma Gandhi gave was disband the Congress, soon after we got freedom. A very relevant piece of advice today for our Opposition,” said the Union Minister.

The Minister launched a postal stamp in memory of the late KCP chairman V Ramakrishna at the event marking 75 years of KCP Ltd. “I am very critical about dynasty in politics. It is nasty. But dynasty in business is to be applauded as evinced by groups like KCP, which today celebrate 75 years of business cohesiveness, ethics and family values,” said the Minister.

On demonetisation, the Minister observed, “Everyone is asking “Where are the results? It’s 40 days! 50 days of demonetisation! I don’t blame them for asking. But the effects will be felt 5 months and even 5 years from now,” said the Minister.

Demonetisation he said has helped cleanse India, “created a parallel digital economy, completely eradicated terror attacks and Pakistan’s inflow of counterfeit currencies in the borders, stopped drug and women trafficking and corruption at certain political parties.”

On questioned about demonetisation deaths and inconveniences faced by the common man, the Minister said, “Demonetisation a bitter pill. People must swallow it for short-term pain, which will result in long-term gain. Why talk of 50 days? Talk of 69 years of misrule. The Congress looted, cheated and plundered. They talk of unity. But no Opposition party in its senses will join hands with Congress.

On the cancellation of FCRA licenses of 20,000 NGOs, the Minister choose not to comment. On former Tamil Nadu Chief Secretary Ram Mohan Rao’s comment that he would have been protected under former Chief Minister J Jayalalithaa, the Minister said that there has been “no political interference.”

“This is a matter for the IT department. And from the Centre’s end there has been absolutely no political interference.”


India is at top of my list… next year will be better: Brian Jacobson, Wells Fargo

Economic Times:  December 29, 2016

New Delhi: The year 2017 could see emerging markets outperform developed markets, and India would be the top pick, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. The dollar strength that is worrying emerging markets currently might reverse as the US Federal Reserve could be more patient in raising rates than what is being expected right now, said Wisconsin-based Jacobsen in an interview to Sanam Mirchandani.

Edited Excerpts:

Do you think the US Federal Reserve will be able to carry out the three projected rate hikes in 2017?

The Fed is may be getting a little too excited about the prospect of fiscal stimulus in the US fuelling a further rise in inflation. I don’t think any fiscal stimulus that we might get in 2017 is going to move the needle too much on inflation. The Fed might have to bring that (rate hike projection) down to two times in 2017.

If the dollar continues to strengthen, will the outflows from EMs to the US accelerate?

The dollar is likely to strengthen in the near term as people try to grapple with how aggressive the Fed might actually be in 2017.But for all of the next year we could see a bit of dollar weakness. The dollar strength should likely reverse as the Fed proves to be more patient than what they are initially letting on. In the short term, EMs could come under some pressure. Also, commodity prices seem to have stabilised at slightly higher level and that should support many EMs (emerging markets). The valuations in EMs are still quite attractive. In 2017, we could see EMs outperform developed markets.

Is India still among the top emerging market destinations for you?

India is at the top of my list. Mexico is second, followed by China. The next year will be better for India. This year has been pretty much a washout. By the end of 2017, we will perhaps quip the 9,100 mark, if not move towards 9,400 on the BSE 100. India is going to continue to benefit from improved economic growth in the US and Europe. Prime Minister Narendra Modi is going to continue to push his Make in India programme which should be beneficial to domestic manufacturers and the domestic economy.

What are your thoughts on the government’s demonetisation move?

For the overall economy, it is likely going to have a transitory effect, most likely to be felt in the fourth quarter of 2016. One of the things I am somewhat cautious about is what the RBI’s response is going to be. I was expecting that the RBI will cut rates to try to provide monetary stimulus to offset the monetary contraction from the demonetisation, but it decided not to do that. If we see the economic data continues to contract, and the RBI doesn’t take action, then I would change my outlook on India pretty quickly.

What are the key risks for Indian markets going ahead?

If the economic data deteriorates further and the RBI isn’t providing some additional monetary stimulus, I would see that as a negative signal.

What are the key investment bets that you would look at in India and what would you avoid?

The demonetisation has had a big impact but it was temporary and we should see a rebound in the consumption spending. That’s probably where I would look for immediate rebound. In the longer term, I am more interested in looking at improvement in infrastructure, and also improvement in the manufacturing sector. I am wary of investing in financials in EMs mainly because of the states’ involvement. There are also non-performing loan issues. I am not sure if there has actually been a coherent plan laid out to deal with them and I don’t think they are going away any time soon.

Will the outperformance of metals and mining companies continue in 2017?

We have seen a huge rebound in the metals and mining space but it has rebounded much further and faster than expected. I cannot help but think that they have overshot on the upside. There has been a lot of speculative money going in there and I am just not comfortable with that type of set-up going into 2017. Just as quickly as they rose, they can fall.

Could we see any political or economic risks from Europe in 2017?

There are elections scheduled in France and Germany. There are a number of others as well. So, there is that political risk. But these are all well priced into the markets. The fact that even though the no vote came through in the Italian referendum and the market rebounded from there suggests that a lot of these risks do not really represent that much of a market risk any more. Also, even if we did see an adverse move in the French election, like Marine Le Pen’s party win or Alternative for Deutschland doing well in the German elections, I do not the market is going to react all that negatively to those events. A lot of people are going into all this assuming the worst. If things don’t turn out that badly, you could see a decent rebound in the market.


Move over 4G, Internet of Things and 5G will be the flavour of 2017: Trai chairman

Livemint:  December 29, 2016

New Delhi: In what could herald a new era in telecom technology in India, the industry watchdog will soon release consultation papers ahead of framing regulations and standards for the rollout of 5G networks and Internet of Things (IoT).

5G is the next generation of wireless networks, which are expected to offer lightening speed and also possess the capacity to connect billions of devices.

IoT is defined as a worldwide network of “things” that include identifiable devices, appliances, equipment, machinery of all forms and sizes with the intelligence to seamlessly connect, communicate and control or manage each other to perform a set of tasks with minimum intervention.

“For next year, we are preparing a timetable by mid-January of a broad list of things (that we want to do),” Telecom Regulatory Authority of India (Trai) chairman R.S. Sharma said in an interview on Tuesday. “It has not been decided entirely but one of the things in mind is that new technologies need a push. How can we incentivize upcoming, cutting-edge technologies such as IoT and 5G? We will do consultation about that.”

The move may also provide an opportunity to the government to attempt afresh to sell 700 mega hertz (MHz) airwaves which are ideally suited for 5G services. There were no takers for this spectrum band in the last auction of airwaves.

“We would like to understand from the stakeholders… whether there are any regulatory or legal barriers to growth of such a sector. These would not necessarily be just laying frameworks but also to understand if there are any regulatory issues. This will bring regulatory predictability to the sector,” Sharma added.

Sharma, who courted controversy because of his stand on issues such as net neutrality and call drops, has one more year left in office. Like his counterparts in the UK, Canada and Korea, he has readied a to-do list, which has IoT and 5G at the top.

“Like we have a paper out on cloud, M2M, we want to understand standards, interconnection frameworks for those (5G and IoT),” he added.

India has largely played a catch-up game with the world when it comes to rolling out technologies such as 2G, 3G and 4G. The government wants to change this.

“Why should India remain behind? If 5G has come somewhere, why should it not come to India before others?,” Sharma asked.

5G trials are being rolled out across the world. Companies such as Ericsson AB, Orange SA, Verizon Communications, Google and Samsung Electronics have shown interest in or conducted field 5G trials.

The Economic Times newspaper on 20 October reported that a research team commissioned by the government to work on 5G technology has already filed 100 patents so far—of which around 10 have already been granted.

Typically, Trai does consultations with stakeholders and, based on its observations, sends its recommendations to the government. The government also seeks the sector regulator’s recommendations on various issues.

“I don’t think that these newer technologies can be entirely left for market forces to decide,” said Mahesh Uppal, telecom consultant and director at ComFirst. “However, they need to be regulated with a clear sense of cost and benefit. It needs to be regulated by exception, which means you don’t regulate as a rule but only when you see abuse. The government should seek to promote, not regulate. We will need a far more creative approach to prevent abuse of this technology.”

He added: “Secondly, these technologies involve considerable use of the Internet. They would have little value if there are controls on flow of data across borders.”


After Demonetization, Steps Taken by Government to Ensure That no Hardship is Faced by the Tourists

Press Information Bureau:  December 29, 2016

New Delhi: After demonetization, the Government has taken a number of steps to ensure that no hardship is faced by the tourists and the industry is not affected. Archaeological Survey of India (ASI) smoothly transitioned to cashless mode of payment by simplifying process of e – tickets. Government efforts have paid dividend as there has been a notable growth in the comparative figures of Foreign Tourists Arrival (FTA), Foreign Exchange Earnings (FEEs) and online sale of e – tickets after demonetization. The figures for the same are as follows:

Particulars November, 2015 November, 2016 Growth in Percentage
FTA 8.16 Lakh 8.91 Lakh 9.3%
FEE 11,431 Crore 14,474 Crore 14.4%


It can thus be observed that demonization did not have any impact on the Foreign Tourist Arrival and Foreign Exchange Earnings which have shown robust growth over the comparative period last year. It may also be noted that the number of e-tickets sold during 09-11-2016 to 08-12-2016 increase to 28,176 from 2807 during 09-10-2016 to 08-11-2016 with corresponding amount being Rs. 181.49 lakh and Rs. 3.10 lakh respectively. It can therefore be seen that sale of e–tickets and earnings from have increased significantly by 10 and 58 times respectively as people are buying tickets for ASI monuments online through cashless payments.


Cadila Healthcare arm acquires six brands from MSD Pharma

Livemint:  December 29, 2016

Mumbai: Cadila Healthcare on Wednesday said its subsidiary Zydus Healthcare Ltd has bought six brands from MSD Pharmaceuticals India Pvt. Ltd, the local arm of US-based Merck & Co. Inc., for distribution in the Indian market. The value of acquisition was not disclosed.

The brands—Deca-Durabolin, Durabolin, Sustanon, Multiload, Sicastat and Axeten—belong to therapeutic areas of men’s health, women’s health, wound management and cardiovascular diseases and had combined sales of Rs84 crore in 2015, Cadila Healthcare said in a stock exchange filing.

MSD Pharma has transferred distribution and commercialization rights and assigned trademarks of all the six brands to Zydus Healthcare for the India market, the statement said. The company has also got distribution rights of Deca-Durabolin and Durabolin for Nepal.

“We have a longstanding association with MSD in India. The brands with their strong equity are a perfect addition and complement our core business and brands. We look at this as a great opportunity to strengthen our core offerings to create value and growth,” Sharvil Patel, chairman of Zydus Healthcare was quoted as saying in the stock exchange filing.

On 17 November, Cadila Healthcare said it would transfer its India human formulations business to Zydus Healthcare Ltd on a slump sale basis for Rs69.3 crore.

As per the deal, the India human formulations business, including a manufacturing plant at GIDC, Ahmedabad and pharmaceutical technology centre in Ahmedabad, will be transferred to Zydus Healthcare, Cadila Healthcare had said.

Cadila Healthcare’s India human formulations business had turnover of Rs1,371.2 crore in 2015-16, accounting for 21% of the company’s total turnover.


Alibaba to soon open its first India office

Business Standard:  December 29, 2016

Mumbai/Bengaluru: Alibaba, largest e-commerce entity in China, is setting up its first India office in Mumbai, apparently an indication that it would step up investment in the country in the coming year, to capture a pie of the growing e-commerce market here.

So far, the Jack Ma-founded enterprise has been a preferred platform for small businesses in India to source industrial goods from China. And, for vendors selling their products to customers globally. Alibaba has invested in Indian e-commerce company Snapdeal, and in Paytm, the mobile payments service platform, through Ant Financials, its payment arm.

It has, though, kept its plan to enter e-commerce in India under wraps. By setting up a office at Platina in the Bandra-Kurla Complex (BKC) in Mumbai, closer to that of US rival Amazon,it appears to now be signalling the intent that it is serious on entering.

“Given the kind of merchant network they have, India is definitely a potential market for them,” says Devangshu Dutta, chief executive of Third Eyesight, a consultancy for e-commerce firms. “There needs to be significant investment from Alibaba because Amazon is on a high and though Flipkart and Snapdeal are on a low, they’ve invested significant money in the delivery network.”

A mail to Alibaba did not elicit a response. Girish Shah, a director at The Wadhwa Group which owns the Platina building, confirmed the development.

“They are one of the most exciting and thriving e-commerce companies that have come to India, and we’re glad to provide them with 3,221 sq ft of a highly professional set-up, at a competitive rental rate, here in BKC,” he said.

Alibaba will pay rent of Rs 275 a sq ft monthly or a little over Rs 1 crore. This is in line with rents in the area, between Rs 250 to Rs 325 a sq ft. US-based Amazon has a 30,000 sq ft head office in the same BKC area.

India’s business to business (B2B) online retail market is estimated to grow by 2.5 times to Rs 45 lakh crore by 2020. In comparison, B2C (business to consumer) e-commerce is estimated to be only Rs 1.86 lakh crore by 2020.

“With Kotak Mahindra Bank, IDFC Bank and Aditya Birla Finance as Alibaba.com’s new partners in India, it was expected that they’d need an office in Mumbai sooner than later. Among other things, these partners will provide banking, transactional services and lending to Alibaba.com’s members. We expect the battle for market share to get more fierce between these firms,” said Raja Seetharaman, director at commercial property analytics firm Propstack.

India’s $17-20 billion e-commerce market, expected to grow to $34 bn next year, is dominated by local giant Flipkart, followed by Amazon, which has committed at least $5 bn to bridge the gap. Snapdeal is a distant third.

Analysts say Alibaba might not get a walkover in India’s e-commerce market, due to entrenched competition from Amazon and its Indian rivals. “It depends a lot on what strategy they adopt, what money they’re willing to pour in. India is a very different market from China,” says Dutta.



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