Weekend Economic News 30-31 December 2016

Site Administrator

Editorial Team

01 Jan, 2017

276 Times Read.


RSS Feeds RSS Feed for this Article

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.


Direct tax mop-up at 13% till Dec 19: FM

Business Standard:  December 30, 2016

Finance Minister Arun Jaitley said on Thursday that for the period between April 1 and December 19, direct tax collections grew at a net rate of 13.6% year-on-year (y-o-y). This is lower than the net y-o-y growth of 15.1% for April 1 to November 30, the data for which were released earlier this month.

There were fears with the announcement of demonetisation by Prime Minister Narendra Modi on November 8 the move would lead to a substantial fall in direct tax collections. Jaitley said all the data available, including that of indirect taxes and rabi crop sowing, showed the situation was better than what the critics of demonetisation feared.

Jaitley was addressing journalists on the government’s demonetisation drive in New Delhi on Thursday, a day before the December 30 deadline for depositing old Rs 500 and Rs 1,000 notes in banks.

“Direct tax figures of income tax till December 19 are now available. If one factors in very large quantum of refunds — because these days refunds are also made immediately — the net increase is 13.6% till December 19,” Jaitley said.

Rubbishing critics, the finance minister said the effects of demonetisation were not as adverse as was predicted. He said the remonetisation process has substantially advanced, without a single incident of unrest anywhere in the country.

Jaitley said a large part of the Rs 15.4 lakh crore of old high-denomination notes in circulation on November 8 have already been replaced and the Reserve Bank of India (RBI) has a very large amount of currency available to support any liquidity need.

“Already, a large part of benefits of this historic move are visible. A lot more money has come into the banking system,” he said.

However, according to data released by RBI till December 19, only about Rs 5.9 lakh crore has been remonetised – 29% of the amount demonetised. Economic Affairs Secretary Shaktikanta Das had said earlier this month that the Centre expects 50% remonetisation by December-end.

Jaitley said that indirect tax collections soared 26.2% between April 1 and November 30, with revenue from excise jumping 43.5%, that from service tax by 25.7% and customs by 5.6%.

Replying to questions on when customers can see easing of curbs on cash withdrawals, Jaitley said: “That is a decision the central bank will take in consultation with everyone.”

Asked about fears expressed by critics that the note ban decision will hit the economy and the GDP growth, he said: “I think one is clear there could have been some adverse impact for a quarter or so. It doesn’t appear to be as adverse as it was being predicted… But, you have to plan the economy in the long term, the changes in the system which are coming about will certainly mean more money in the banks, more money with the revenue and probably a much larger and cleaner GDP.”



1.5 crore LPG connections issued to BPL households under PM Ujjwala Yojana

Press Information Bureau:  December 30, 2016

New Delhi: Target of 1.5 crore connections fixed for the current financial year for Pradhan Mantri Ujjwala Yojana (PMUY) has been achieved within a span of less than 8 months and the scheme is being implemented now across 35 States/UTs.

Vision of Hon’ble Prime Minister, Shri Narendra  Modi to provide  clean cooking fuel to poor households in the country has been  taken forward through implementation of Pradhan Mantri Ujjwala Yojana (PMUY).  An adult woman member of BPL family identified through Socio-Economic Caste Census (SECC)  data is given a deposit free LPG connection with financial assistance  of  Rs. 1600/- per connection by Government of India.  The announcement of releasing 5 crore LPG connections to BPL families over a period of three years was made with allocation of Rs 8000 crore in the Union Budget on 29.2.2016. Hon’ble  Prime Minister, Shri Narendra  Modi launched PMUY on 01.05.2016 from Balia, Uttar Pradesh.

14 States/UTs having LPG coverage less than the national average, hilly states of J&K, Uttarakhand, Himachal Pradesh and all North-East States are identified as priority states for implementing the scheme.

The top five States with maximum connections are UP (46 lakh), West Bengal (19 lakh), Bihar (19 lakh), Madhya Pradesh (17 lakh) and Rajasthan (14 lakh).  These States constitutes nearly 75% of the total connections released.  The households belonging to SC/ST constitute large chunk of beneficiaries with 35% of the connections being released to them.

It is also noteworthy that with the implementation of PMUY, the national LPG coverage  has increased from 61% (as on 1.1.2016) to 70% (as on 01.12.2016).


20 major stations set for revamp, auction in January

Economic Times:  December 30, 2016

New Delhi: Indian Railways is readying to auction 20 major stations for redevelopment next month, hoping to attract private investment in creating world class railway stations that will cost an estimated `15,000 crore in the first phase and to earn revenue without putting further pressure on its strained finances.

The stations will be awarded to private developers under the so-called Swiss challenge method, which involves inviting a proposal online and allowing rival bidders to beat that proposal.

The developers, along with revamping infrastructure at the stations including platforms and lounges, will be able to build hotels, malls, multiplexes and other commercial units at the land that will be earmarked by the railways.

They will get the rights to commercially exploit the land of the station owned by the railways for about 40 years. The Swiss challenge method cuts down on the long-drawn tendering process being used by the railways.

The Railway Board had appointed Boston Consultancy Group as the strategic advisor for this project. “Based on the research, discussions and analysis done by BCG and several rounds of discussions held between the zonal railways and other stakeholders, the scheme is now ready for launch by bidding out 20 stations,” a senior Railway Board official said on condition of anonymity.

“These are the stations where investors will get a very good return on their investment.”

The stations for which bids will be invited include Lokmanya Tilak (T), Pune, Thane, Visakhapatnam, Howrah, Allahabad, Kamakhya, Faridabad, Jammu Tawi, Udaipur City, Secunderabad, Vijaywada, Ranchi, Kozhikode, Yesvantpur, Bangalore Cantt, Bhopal, Mumbai Central (Main), Borivali and Indore. Under the Swiss challenge method, a company can submit a development proposal to the railway ministry and any other company can give suggestions to improve and beat that proposal or submit a fresh proposal.

An expert committee appointed by the Indian Railways will accept the best proposal and the original proposer will get an opportunity to accept it if it is an improvement on the original proposal.

ET VIEW: Make Clear Rules

We need clear-cut norms in the bidding process. If investors suspect procedural opacity, they may not go ahead with their bids. Achange of norms and other parameters post-bidding needs to be avoided. It would give rise to allegations of give-and-take and attendant corrupt practices. A model PPP agreement needs to be put out in the public domain.


RBI introduces Interest Rate Option, effective from New Year

Economic Times:  December 30, 2016

Mumbai: In the new year, traders will have a new toy to play with as the Reserve Bank of India has introduced Interest Rate Option (IRO) effective from January 31 amid a bit of uncertainty over rate cuts in coming months.

With this banks, bond houses should be able to manage their interest rate risk better than earliar. Traders can also gain from it by speculating on interest rates. Nearly three years ago, Raghuram Rajan, former governor had introduced interest rate futures in the exchange traded platform, which has attained some maturity over a period of time.

“Eligible market participants are permitted to take positions in Interest Rate Options for their own balance sheet management and for market making purposes,” RBI said in a notification on Thursday.

“Banks and Primary Dealers (PDs) may act as market makers. Other regulated institutional entities can participate as market makers subject to the approval of their respective regulators.”

An option is a contract betting on future rate movement. But, there is a difference between Interest Rate Futures and IRO although both are based on rate action/expectation.

Under IRO, an option buyer’s losses are limited to the extent of premium paid while an option seller’s profits too are capped to the extent of premium.

“This will provide another avenue to market participants to hedge and speculate on interest rate risk,” said Naveen Singh, senior vice president at ICICI Securities. “This market too will evolve over a period of time in line with IRF market, which will too be impacted positively.”

Option writers often hedge their positions in futures market as well. In market parlance, it is called delta hedging, which helps get more maturity to the IRF market.

Exchanges may soon launch IRO platforms tapping business opportunities.

“Interest Rate Options are permitted on exchanges authorized by SEBI as well as in the Over-the-Counter (OTC) market,” RBI said.

“Exchanges shall obtain prior approval of the Reserve Bank before introducing any Interest Rate Option.”


Business giants bring in investments worth over Rs 3.30L-crore in telecom space

Economic Times:  December 30, 2016

New Delhi: Prime Minister Narendra Modi-led NDA government has received more than Rs 3.30 lakh crore, or 70%, of the proposed investments in less than two years of the commitments, led by country’s top business houses including Mukesh Ambani’s Reliance Industries and Kumar Mangalam Birla-driven Aditya Birla Group.

“Rs 3.30 lakh crore has already come in with a large part in the telecom sector from the companies like Aditya Birla group and Reliance Industries. Companies have also made investments in the manufacturing segment,” Aruna Sundararajan, secretary at the Ministry of Electronics and Information Technology (MeitY), told ET.

She however didn’t provide any break ups.

In July 2015, during the Digital India week, India’s top industrialists including Reliance Industries’ Mukesh Ambani, Aditya Birla group’s Kumar Mangalam Birla, Wipro’s Azim Premji, Bharti Airtel’s Sunil Mittal and Reliance group’s Anil Ambani had collectively pledged investments worth Rs 4.5 lakh crores over the next few years.

Sundararajan said that investments so far are mainly to expand telecom networks and accelerate local electronics production.

She added that the current investment pace could also open up as many as 1.5 crore potential job opportunities over the next five years.

Reliance Industries had committed the highest spend of Rs 2.50 lakh crore, followed by Bharti Group’s Sunil Mittal, at Rs 1 lakh crore, and Kumar Mangalam Birla, with nearly Rs 45,000 crore ($7 billion).

Oil-to-telecom conglomerate RIL’s outlay encompasses its telecom foray through Reliance Jio Infocomm which is involved in an aggressive mobile network rollout. Ambani has said that the company

An Idea Cellular spokesperson said the company has invested close to Rs 29,000 crore, after the Digital India pledge, that also included capital expenditure and spectrum buyouts.

Sunil Mittal, chairman of India’s top carrier Bharti Airtel, had committed a majority of investments for network rollouts in less-penetrated areas over a period of five years, and had added that the investments would also help in growing the electronics ecosystem.

In addition to the Rs3.30 lakh crore investment in telecom networks, investments in electronics manufacturing has seen a huge leg up segment, the top government official said, with more than 50 mobile device companies and accessories makers setting up shop.

Investments which were at Rs13,000 crore in 2014 have seen a 10-fold jump – to Rs1,32,000 crore at last count – from mid and large-sized companies, Sundararajan said.

“India has the potential to actually grow into a significant manufacturing destination,” the top MeitY official added.

Both, Bharti Airtel and Reliance Jio, however, did not respond to ET’s query asking for investment breakup.


Apple plans to make iPhones in Bengaluru from April

Times of India:  December 30, 2016

Bengaluru: Apple plans to make iPhones for the Indian market in Bengaluru. Wistron, a Taiwanese OEM maker for Apple, is setting up a facility in Peenya, the city’s industrial hub, to manufacture the iPhones. The facility will start production from next April, according to industry sources.

Top sources in the company confirmed to TOI that Apple is “very serious” about beginning assembly operations —and thereafter full manufacture — in India by the end of next year. “Bangalore is being looked at seriously,” said multiple sources within the company. Local manufacture will help Apple price its phones competitively as full imports attract 12.5% additional duty.

Foxconn, Apple’s largest Taiwan-based OEM, earlier committed to setting up a manufacturing plant in Maharashtra. The assumption was the plant would make only Apple products. But sources say Foxconn has tied up with other players like Xiaomi and OnePlus for local manufacture and not necessarily to only make Apple products there.

This will be Apple’s second big announcement for Bengaluru. In May, Apple announced a design and development accelerator in the city to grow the iOS developer community and also to guide Indian developers to leverage Apple’s programming language Swift and build apps for Apple TV and Apple Watch. The facility will open early next year.

The Bengaluru manufacturing facility underscores India’s importance for the Cupertino-based company. Apple CEO Tim Cook’s multi-city India tour earlier this year signalled the growing importance of India powered by the demand for Apple products by a burgeoning middle class. Data from Hong Kong-based Counterpoint Technology Market Research showed that Apple sold 2.5 million iPhones in India from October 2015 to September 2016, a rise of more than 50% over the year-ago period.

The revenue numbers speak for themselves. Apple India clocked robust sales touching Rs 9,997 crore in the 2016 financial year, up 56% from Rs 6,472 crore, previously. The company’s net profit grew 21% to Rs 294 crore during the same period with deeper retail penetration and lower prices for older iPhone models that garnered a huge user base. An email sent to Apple didn’t elicit a response till the time of going to press.

Apple has published job openings on its portal for a few positions at its OEM’s factory in Bengaluru like operations program manager and product quality manager. Faisal Kawoosa, principal analyst (telecom) at CyberMedia Research, said, “Apple coming to India is a big booster for the make in India initiative.”

Stay updated on the go with Times of India News App. Click here to download it for your device.




Bollywood in 2016: A year of ferment

It was a tempestuous year for the Hindi film industry, marked by bans, closures, foreign invasions and the odd Cinderella story


Like every year, the Hindi film industry took a couple of steps back and a couple of steps forward in 2016. It seems likely that some of the year’s upheavals—studios shutting down production, the Central Board of Film Certification (CBFC) being taken to court, a Hollywood film out-earning nearly everyone—will have far-reaching consequences. Here are four trends that marked the cinematic year.

Studios that couldn’t, the little independent film that could

UTV Motion Pictures has been ubiquitous on the Hindi film scene for 12 years, producing and co-producing films such as Oye Lucky! Lucky Oye!, Dev.D, PK and Haider. Formed in 2004, it merged with Disney India in 2012. In August, however, Disney announced that it was withdrawing from film production in India. This wasn’t entirely out of the blue—the studio had suffered big losses on Fitoor and Mohenjo Daro this year—but when it was announced that Siddharth Roy Kapur, who had been with UTV since 2005, was stepping down as managing director, rumours started flying.

Firms like Fox Star and Balaji Telefilms were rumoured to be shutting down (the latter has put a freeze on film production until the release of Half Girlfriend in May). Op-eds for an ailing industry appeared across publications, offering advice, dire predictions and cold comfort.

At the other end of the spectrum, a Marathi film-maker named Nagraj Manjule, director of the well-received Fandry, made a little indie called Sairat. The budget was a modest Rs4 crore, but the reaction to the film’s trailers and music suggested that it might go on to do a little business. No one, least of all Manjule, could have expected Sairat to go on to earn over Rs100 crore worldwide, a first for a Marathi film.

India, repackaged

Jon Favreau’s The Jungle Book presented Disney India with a great opportunity: Not only was the story set here, but viewers had an emotional connection to it—not the Disney feature of 1967, but the dubbed anime series telecast on Doordarshan in the 1990s. So they decided—wisely, it turned out—to throw some money at the project: publicizing the film, hiring a stellar voice cast (Nana Patekar, Irrfan Khan, Om Puri, Priyanka Chopra) and re-recording the Gulzar-penned, Vishal Bhardwaj-composed Jungle Jungle Baat Chali Hai number from the TV series. In a clear sign of intent, it was released here, in English and dubbed in Hindi, Telugu and Tamil, a week before it opened in the US.

The Jungle Book went on to net earnings of Rs175 crore (gross Rs250 crore), a record for any Hollywood release in India. Though estimates vary, there is roughly a 50/50 split in earnings between the dubbed and English versions. At one point, it was the highest-earning film of the year in the country, before it was overtaken by SultanThe Conjuring 2 (Rs61.78 crore) and Captain America: Civil War (Rs58.33 crore) also made the top 20 earners’ list this year.

Bollywood will have to get used to big-budget Hollywood movies invading year-end box-office lists. Last year, two franchise films—Jurassic World and Furious 7—netted over Rs100 crore. Already, we have seen local studios talking the language of franchises and a slate of Indian superhero films are planned.

Dealing with feelings

This was the year the male stars of Bollywood decided to get in touch with their feelings. Thus, you had the unusual sight of Salman Khan looking in disgust at his bloated reflection in the mirror and breaking down in Sultan. Aamir Khan, to no one’s surprise, cried in Dangal. A scene in Airlift had Akshay Kumar absolutely bawling his eyes out. Ranbir Kapoor wept, or seemed on the verge of it, through much of Ae Dil Hai Mushkil. Shah Rukh Khan was swoon-inducingly sensitive (or so I’m told) in Dear Zindagi, and even Ranveer Singh paused in the midst of his macho posturing in Befikre to admit that he was being an idiot because of his own insecurities.

In contrast, there were several films that centred on female leads bringing their emotions under control and getting the job done: Sonam Kapoor, initially panicked but finding courage in Neerja; Swara Bhaskar, battling her daughter’s disgust in Nil Battey Sannata; the central trio in Pink, forced to relive a nightmare in court and not seem hysterical while doing so. Alia Bhatt clamped down on her emotions in Kapoor & Sons (Since 1921) and Dear Zindagi; Anushka Sharma did the same in Sultan. Vidya Balan overcame panic in Kahaani 2, Radhika Apte her deep-seated psychological fears in Phobia.

Protecting from within and without

When Pahlaj Nihalani took over the position of chairman of the CBFC in January 2015, it didn’t seem likely that he would be calling the shots for too long. Yet, two years on, that’s where matters stand. There were several contentious instances of censorship in 2016; Udta Punjab, especially, became a cause célèbre after the CBFC reportedly demanded 89 cuts. The makers moved the Mumbai high court and the film was passed with one cut.

As a result of the criticism the CBFC received last year, a committee headed by director Shyam Benegal was appointed at the start of 2016. It submitted its report in April, recommending, among other things, a hands-off approach and clearer categorization of films. Despite some hopeful reports about the “revamping” of the board, nothing has come of it yet. And one shouldn’t forget that in 2013, the Mukul Mudgal committee had submitted a report that made similar recommendations, which were entirely ignored.

A bull-headed determination to protect some ideal of India in its cinema surfaced in another, more politically volatile form. After the attacks on Indian soldiers in Pathankot and Uri, the Indian Motion Pictures Producers Association announced a ban on Pakistani artists working in Hindi films. This was followed by the Cinema Owners and Exhibitors Association of India asking its members not to screen films with Pakistani artists in their theatres. The Maharashtra Navnirman Sena threatened violence. Sadly, it worked: A shaken Karan Johar appeared in a video saying that he wouldn’t work with Pakistani talent again (the film’s producers also donated Rs5 crore to the Army Welfare Fund—a demand that MNS made of all films with artists from across the border). And recently, Shah Rukh Khan met MNS president Raj Thackeray—some reports maintained it was to discuss the impending release of his film Raees, though this was denied.

What we’d like to see in 2017

■Better action films

There are fewer Hindi action films in theatres than there used to be, and for good reason: They can’t compete with the superior fight choreography of foreign films. Sultan broke box-office records, but its bouts were repetitive. Baaghi stole from Gareth Evans’ The Raid, Shivaay from Liam Neeson thrillers, though these were preferable to John Abraham vehicles and the cut-rate effects of A Flying Jatt. But Dangal was a late stunner—a lesson in coherent, believable, home-grown fight choreography.

■Fewer male saviours

2016 was a fruitful year for films in which women were—or took—the lead. To build on these gains, Bollywood directors should try and resist placing a male star in the role of saviour—Amitabh Bachchan in Pink, Aamir Khan in Dangal—especially when the crux of the film is women’s rights.

■Smarter endings

There’s something about final acts that rattles even the best Indian directors. The endings this year ranged from unconvincing (Kahaani 2: Durga Rani Singh) to derivative (A Flying Jatt) to blatantly manipulative (Ae Dil Hai Mushkil). There’s hardly a film that releases here that doesn’t have second-half problems, but there’s no reason why the more talented screenwriters and directors can’t iron these out.

■More non-fiction

Year after year, an entire subsection of Indian cinema remains unrepresented on the big screen. Only one homegrown documentary, Chandrasekhar Reddy’s Fireflies In The Abyss, released in theatres in 2016. With Netflix acquiring several non-fiction Indian titles, it’s time for adventurous distributors and exhibitors to figure out a way to bring more Indian documentaries to the big screen in 2017.

The Swedish newspaper was recently asked it to delete the reference made by President Pranab Mukherjee to the Bofors scam in an interview to it, as a claim protested by the Indian Government on 27 May 2015. India has expressed disappointment over the disrespect shown to the President, the newspaper has defended its right to publish what was said during the interview.

Know, who is Vijay Kelkar and what is PPP !

Vijay Kelkar is a renowned economist and a former Finance Secretary. He was appointed head of newly constituted committee to give recommendations to recast the model of Public-Private-Partnership (PPP) model in India. India is one of the largest PPP market with over 900 projects. The Kelkar committee will review the PPP policy, suggest a better risk-sharing mechanism between private developers and the government after analysing such projects.

Know, who is Yaduveer Krishnadatta Chamaraja Wadiyar !

Yaduveer Krishnadatta Chamaraja Wadiyar was crowned as the new Maharaja of of Mysuru (Mysore) royal family. He is the 23-year old grandson of Princess Gayathri Devi, who was the eldest daughter of the last Maharaja of Mysore, Sri Jayachamarajendra Wadiyar. The coronation was held at Mysuru’s famous Amba Vilas Palace, which was decked up for the occasion.

Know about Sepp Blatter!

Swpp Blatter, was re-elected as FIFA president for a fifth term at the 65th Annual Congress of FIFA held at Zurich for four year term.

Prince Ali bin al-Hussein of Jordan stood against Blatter in this election. It is worth mentioning that FIFA is going through a major controversy regarding corruption in the organisation with two FIFA vice presidents and a recently elected FIFA executive committee member still in custody.


Responses on This Article

Template Design © VibeThemes. All rights reserved.