MISCELLANEOUS
ECONOMY
Economic Growth/Reforms
India’s economy likely to grow 8% next fiscal: Fitch
The country’s economy is likely to clock growth of 8 per cent in the next financial year and 8.3 per cent in 201617, says a report.
“India is the only BRIC country where growth will accelerate to 8 per cent in FY16 and 8.3 per cent in FY17,
based on revised data series,” Fitch said in its report on Global Economic Outlook.
The forecast has been made taking in reference the revised GDP data series. The agency’s earlier forecasts were
6.5 per cent for 2015-16 and 6.8 per cent for 2016-17, based on the old series.
The Central Statistical Office (CSO) has recently changed the base year for calculation of GDP to 2011-12 from
2004-05 earlier. This has resulted in an increase in the official real GDP growth number for FY14 to 6.9 per cent
(at market prices) from 4.7 per cent (at factor costs).
The CSO estimates the country’s real GDP growth at 7.4 per cent in the current financial year. Recently,
International Monetary Fund Managing Director Christine Laggard had said the country’s economy is likely
grow at 7.2 per cent in FY 15 and will exceed combined growth of Jap[an and Germany by 2019.
“Using India’s new GDP series, the IMF expects growth to pick up to 7.2 per cent this fiscal year and accelerate
further to 7.5 per cent next year – making India the fastest growing large economy in the world,” Lagarde, who
was on a two-day visit to the country last week, said.
The rating agency praised the government’s effort to produce GDP data in line with international standards. It,
however, said these new GDP growth levels and the pickup from mid-2013 are difficult to reconcile with
indicators and anecdotal evidence that show low investment levels, weak corporate balance sheets and a rise in
banks non-performing loans.
The Hindu Business Line
Mumbai, 23.03.2015
India will grow at 7.8% in FY16 & 8.2% in FY17, surpass China, says ADB
Indian economy will grow 7.8% in FY16 to lead Asia's growth as China slows down, before accelerating further
to 8.2% in FY17, said Asian Development Bank on Tuesday.
In its Asian Development Outlook, ADB said progress in the government's structural reform agenda and
improved external demand will help the economy expand from 7.4% inFY15. The government's estimate for
FY15 growth is 7.4% and for FY16, it is 8-8.5%.
The ADB projection that India would grow faster than China, comes two weeks after the International Monetary
Fund made a similar forecast. IMF projects India's economy to grow 7.2% in FY15, lower than the government
and ADB's projection of 7.4%, before accelerating to 7.5% in FY16. The Fund projects China’s growth to slow
to 6.8% in 2015 from 7.4% in 2014.
ADB expects the retail inflation to decline to 5% in FY16 and 5.5% in FY17 as global oil prices firm up and
improved economic, prospects lift demand. A benign inflation outlook would help monetary policy support
growth, it added.
The Financial Express
New Delhi, 25.03.2015
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Inflation/Recession
Inflation down, but the two indices tell different stories
Sharmilla Dar, a government schoolteacher in east Delhi, is irritated about a sudden surge in vegetable prices in
the last week after they had cooled considerably since a year ago. "Why can't the government keep things
affordable?" she asks.
For middle-class consumers, food inflation worries are creeping back in. The farm sector is hurting badly after a
full year of unprecedented weather havocs - from a partial drought last summer to a turbulent winter of
hailstorms and unseasonal rain that devastated ripening winter-sown crops and delayed harvests.
As a result, the country looks headed for its sharpest drop in output in five years with farm ministry projections
showing foodgrain output will be trimmed by 3.2% to 257.07 million tonne, compared to the previous year's
265.57 million tonne. Pulses are expected to come down 6-8%.
In 2009-10, after India's worst drought in three decades, food output had fallen 7.5%, roiling prices. But the next
two years had yielded bumper harvests.
"We have to be more careful in food management and the government has repeatedly said it is looking at food
prices ... It needs greater vigilance," Reserve Bank governor Raghuram Rajan told reporters.
A steady rise in household end expenditures has been less noticeable, masked by falling wholesale prices.
Households, such as Dar's, are already contending with “high personal expenditure inflation". This is because of
a skewed divergence between wholesale and consumer prices. The wholesale inflation rate fell for the fourth
month in a row in February by 2.06 % from a year earlier, after declining 0.39% in January. Contrast this with
retail prices: the combined Consumer Price Index (CPI) edged up 5% in February from a year ago, just as it had
in January and December.
"The fall in wholesale prices isn't helping consumers because it only captures 40% of the consumption basket,"
said NR Bhanumurthy; an "economist at the National Institute of Public Finance and Policy.
To be sure, fuel expenses for the Dar family - they spend R1,500 less on their monthly car fuel than a year agohave come down, as captured by the CPI.
"But a large segment of the CPI - such as processed food, leather goods and shampoos - that are demand-driven
are pushing up retail prices," Bhanumurthy said.
Even at the wholesale level, food prices are spooking middle-income and poorer families. Vegetable prices
dropped 6% in December to rise 15% in February.
Onions rose 26% from a 1% fall in January. According to the Food and Agricultural Organization, in developing
economies, a 10% rise in prices relatively hits the social welfare of both rural and urban households. High retail
prices could mean traders may not be passing on the full benefits of lower fates to consumers.
The Hindustan Times
New Delhi, 25.03.2015
Public Finance And Duties
CM: Maha Budget Will Boost Rural Infrastructure
Describing the maiden budget of the new NJP-led government in Maharashtra as “daring”, Chief Minister
Devendra Fadnavis said it will boost rural infrastructure in the state. “Finance Minister Sudhir Mungantiwar has
provided enough funds for rural infrastructure, specially roads,” the CM told reporters at Vidhan Bhawan here.
“This is a daring budget,” he said.
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“We have significantly increased allocation for essential schemes, compared to what was done during the earlier
(Congress-NCP) regime,” Fadnavis said. “We were handed an economy in crisis. This budget has taken a
quantum jump in capital expenditure. We will try to take the expenditure to 40,000 crore. This will help boost
the state economy and turn it around,” he added.
Fifty per cent of the state populace is under 25 years age and the skill development scheme will provide relief to
a big section of society, he said. The budget will provide relief to the common man. We not only made a poll
promise but have given a date August 1- to scrap local body tax (LBT), he said.
The government will get around 4000-5000 crore from premium charged on additional floor space index availed
by developers for construction, Fadnavis said.
After LBT is scrapped on August 1, we will ensure that there won’t be double taxation in Mumbai, he said. On
the over 3 lakh crore debt burden under which the state is reeling, the chief minister said, “Now the loans taken
will be deployed (used) properly.”
The Statesman
Mumbai, 19.03.2015
INDUSTRY
Infrastructure Projects Financing
FM promises to step up public funding to boost infrastructure
Concerned over slow growth of manufacturing sector, finance minister Arun Jaitley on Wednesday promised to
step up public spending on Infrastructure, ease entry barriers for overseas investors and push Goods and Services
Tax (GST) to boost economic expansion.
He also pitched for a low interest rate regime and defended the land acquisition bill saying it would benefit the
rural India by promoting industrial activity in non-urban centres.
"Historic opportunity has revisited (us) and we have to use it to the maximum," Jaitley said while addressing
investors at 'The Growth Net' conference.
The minister expressed the hope that the constitutional amendment bill to roll out the GST, new indirect tax
regime, would be passed in the next leg of the budget session beginning on April 20. Once approved by
Parliament, GST will subsume various indirect tax levies like excise, service tax and octroi.
Answering questions on the land acquisition bill, which is stuck in the Rajya Sabha, Jaitley said that the Union
Cabinet would take a call on the issue as the Ordinance promulgated by the President on the subject is set to
automatically lapse on April 5.
The minister said that while the agriculture and services sectors have been doing well, "manufacturing is a
challenge" and the government is trying to resolve the "legacy" issues hampering development of infrastructure
sector.
"Our manufacturing sector is challenging and it is here that we have to actually invent the key engine of growth.
This is an area where countries which overtook US. China is an obvious example...
"Our concentration therefore is on 'Make in India', ability to try and device various methods of financing
infrastructure ... this is one are where we need to seriously concentrate on," he said. The finance minister said he
reviewed the progress of highway projects this morning.
The Financial Express
New Delhi, 26.03.2015
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CEMENT INDUSTRY
Growth/Marketing/Demand/Takeover
Revival in economy will boost cement demand: ACC
ACC expects a modest recovery in the economy this year to have a positive impact on infrastructure, housing
and construction sectors, thus increasing the demand for cement.
Addressing shareholders on Friday, NS Sekhsaria, Chairman of ACC, said starting with a sluggish industrial
production last year the economy got a boost with a new stable government, which has helped improve overall
business sentiments. With the inflation slowing down, the economic environment looks better in the year ahead,
he added.
The company would continue to focus on cost reduction, increasing the sale of premium products and other
customer excellence initiative to improve the company's performance, he said.
ACC expects to commission the new grinding unit at Jamul in Chhattisgarh this year and another one coming up,
at Sindri in Jharkhand will be completed by first quarter of next year.
Holcim-Lafarge merger
Answering investors query on the proposed merger of Holcim and Lafarge impact in India, Harish Badami,
Managing Director, ACC, said the proposal is pending for regulatory approval in the US, Canada and India.
Incidentally, the merger deal, which was stuck on valuation and other issues, was renegotiated and put back on
track with both the companies agreeing on new terms on Friday.
Badami further added the Holcim plan to restructure its holding in India under Ambuja Cement is waiting for
Foreign Investment Proposal Board approval.
The Hindu Business Line
Mumbai, 21.03.2015
Housing & Building Construction
Affordable housing a long way off
‘Affordable housing’ aims at making sue of residential real estate in urban areas at cheaper rates, to bring it
within reach of those in lower and limited income range.
In the recent Budget, the Government had given a mandate to the national housing bank by increasing the
allocation for the Rural Housing Fund and had earmarked 4000 crore for providing cheaper credit to the urban
poor opting for affordable housing. But things may not change soon for people looking for affordable homes.
One, low-cost housing is an area where private developers generally do not show much interest because of then
low margins. For instance, in July 2014, the RBI announced earing financing options for affordable housing
projects.
But so far, there have been only a few takers. Brands like Mahindra have launched their Mahindra Life spaces
affordable housing projects in Mumbai, under their vertical ‘Happiest’, ranging from 9.1 lakh to 17.5 lakh.
Although local builders are using the affordable tag, in many cases, they may just be bringing down additional
charges like for car parking and club fee.
Two, the Government has not announced any direct measure in the budget to increase the real estate industry’s
access to cheaper finance. What all this means for low-cost home buyers is that only those who can demonstrate
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some form of documented income are likely to benefit. When it comes to home loans, post the Budget, banks
have been allowed to add registration fees, stamp duty and other charges to the total cost of a house if it is valued
up to 10 lakh.
This effectively relaxes the loan to value (LTV) ration and will enable borrowers to get higher amounts
sanctioned.
Some banks are operating home loan schemes under the label of affordable housing. For instance, Axis Bank
runs a fixed rate home loan under the lable, “loan for the affordable housing”, with 10.4 per cent rate for loans
under 50 lakh. Muthoot Housing Finance Company is concentrating on small ticket housing loans at around 10.1
per cent in Tier 3 and 4 cities.
Such home loan rates are actually quite steep for the poor and lower middle class. These apart, no major steps
have been taken by banks to fund affordable home buyers. Some PSBs like Union bank have schemes for
affordable housing, but the concession is only in the higher LTV (upto 95 per cent). So while the “Housing for
all by 2022” vision seems to be well intentioned, some key enablers are missing.
The Hindu Business Line
New Delhi, 23.03.2015
ENERGY, FUEL & POWER
Coal
CIL’s production target for FY16 to be fixed at 550 MT
The government is likely to set production target of 550 million tonne (MT) for Coal India for next financial year
even as it is likely to miss the goal for the current fiscal.
"For the next fiscal, it is likely that the government may set a production target of 550 MT," a source said. The
production target for the next fiscal is almost final, however, memorandum of understanding (MoU) between the
government and Coal India (CIL) on the same is likely to be signed shortly.
The state-owned miner may miss its output target of 507 MT by over 10 MT in the ongoing fiscal on account of
various delays at the level of states in operationalising mines. The target shortfall comes against the backdrop of
the government's ambitious plan to augment coal production to one billion tonne by 2020.
Coal India's output for the April-February period was 436.96 MT against the target of 450.14 MT. CIL chairman
and managing director S Bhattacharya had earlier said that ramping-Up output and improving profitability would
be among top priorities for the company; although he admitted that production target of 925 MT by 2019-20 is a
huge challenge.
CIL, which accounts for over 80% of the domestic production of the fuel, had to achieve production of 507 MT
in the ongoing fiscal. The company had missed its output target of 482 MT in the last fiscal by producing 462
MT of coal.
The Financial Express
New Delhi, 25.03.2015
Acche din for mining sector
Those despairing of the legislative logjam in recent months have reason to rejoice. While the land Bill continues
to be stuck, the government has got three key pieces of legislation through – on insurance, coal mining as well as
one for other minerals.
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The latter two are historic since no government can ever again give out mines through an opaque committee
process; mines will have to be given out only through auctions and they can be given to merchant miners as well.
Parliament passing two Bills in one day is historic enough, but what is notworthy is the government’s backchannel work that ensured this while, at the same time, conceding the Opposition’s demand to send the bills to a
select committee for a quick examination.
Perhaps why, when the votes for the coal Bill were flashing on Parliament’s screen, Rajya Sabha deputy
chairman PJ Kurien joked that he was seeing ‘some conversion’, a reference to how some Opposition’s members
had voted for the Bill –the Bill was supported by the AIADMK, the Biju Janata Dal, the Telugu Desam Party
and the Trinamool Congress.
This is hardly surprising since, as part of its philosophy of cooperative federalism, the government’s attempt has
been to provide more funds and autonomy to the states –whether this translates into support for the land
ordinance remains to be seen, though coal and power minister Piyuesh Goyal suggested this in his briefing.
Apart from the massive increase in tax devolution due to the Finance Commission’s recommendations, the
government had raised royalty rates in August and now, under the Mines and Minerals Development and
Regulation (MMDR) Bill, existing miners will have to pay 100% more to a District Mineral Foundation (DMF)
while new miners will have to pay a third of royalties to this fund –the fund, to be set up by the state
governments, is to be used for development in the districts affected by the mines.
In addition to the funds states will get from the current round of coal auctions, this means a sizeable amount of
money for states that have large mineral reserves. And, under the MMDR law, the Centre will no longer need to
grant prior approval to the states before mines are auctioned.
There is some reservation about how the current auctions are being held –a Crisil report talks of how, for just the
power plants, the costs of the current auctions that cannot be passed on to consumers will be 4500 crore per year.
But if state governments keep the imposts to the minimum since they decide the DMF imposts, and miners are
auctioned on a revenue share basis as is done for oil and gas, there is no reason why this shouldn’t trigger off a
mining boom –the current system of bidding per tonne of coal is unlikely to yield the same results.
There are some grey areas that need to be ironed out –since the royalties on Coal India’s coal will double, these
will have to be passed on to consumers and it remains to be seen how state ele4ctricity boards and regulators
respond to this. India may just be on the cusp of a mining revolution.
The Financial Express
New Delhi, 21.03.2015
TRANSPORT
Highways/Roads/Bridges
ADB lends India $300 million to improve road connectivity
The Asian Development Bank (ADB) will lend $300 million to India for improving regional road connectivity.
India on Thursday signed an agreement with ADB for developing 500 km of roads under this programme, along
the north Bengal-north eastern region (NER) the government said in a statement.
The funds provided by the multilateral bank are aimed at improving road connectivity and increasing the
domestic and regional trade along the north-east.
ADB had shown interest in funding road projects in the country’s northeastern region to establish transport
linkages with India’s neighbouring countries for greater intra-regional trade in South Asia and could provide
more than $300 million for the same under ADB’s South Asia Sub-regional Economic Cooperation (SASEC)
programme, Mint had reported on 20 February last year.
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“The loan is the first tranche under a $500 million multi-tranche South Asian Sub-regional Economic
Cooperation (SASEC) road connectivity investment programme. Under this programme, about 500 km of road
swill be constructed,” the statement said.
ADB’s loan of $300 million makes-up nearly 71% of the total project cost of about $425 million, with the
central and state governments providing counter-part finance of about $125 million, the statement said.
The statement also cited Tarun Bajaj, the joint secretary at the department of economic affairs in the finance
ministry who signed the agreement on behalf of the government, as saying that the project will improve road
connectivity and efficiency of the global trade corridors by expanding roads in north Bengal and the northeastern
states.
“The tranche 1 project will construct two national highways totaling about 150 km in West Bengal, and state
roads totaling about 180 km in Manipur, extending to Myanmar. The project is expected to be completed by 31
December 2021,” the statement said.
SASEC is an initiative to promote economic cooperation between Bangladesh, Bhutan, India and Nepal. In
1996, these four South Asian neighbours formed the South Asian Growth Quadrangle (SAGQ) with the
primary objective of accelerating sustainable economic development among them.
This sub regional initiative was endorsed at the South Asian Association for Regional Cooper ation, or
SAARC, summit in Male in 1997.
Subsequently, these four countries requested ADB's aid in facilitating their economic coop eration
initiative. This request led to the implementation of the SASEC programme.
Intra-regional trade in South Asia is only 2% of the total trade, as compared with 25% in the Association
of Southeast Asian nations, or Asean, and 40% in North American free trade agreement countries and
63% in the European Union.
The Mint
New Delhi, 27.03.2015
MSRDC will take up projects in other states
The Maharashtra State Road Development Corporation Ltd (MSRDC) is all set to build flyovers and roads in
other states in the country, and even outside India.
Chief Minister Devendra Fadnavis has given his go-ahead to the MSRDC International initiative, and the body
will start on assignments in Uttarakhand, Telangana, Jharkhand, Afghanistan and Myanmar after a formal
approval from the state government.
"Once we get the government's nod, construction of roads and flyovers in these stats will begin. The proposals
for work in the two countries are in preliminary stages," said SM Ramchandani, MSRDC's joint managing
director. The proposals are being scrutinised by the law and judiciary department, sources said.
The state's road development body was approached by Afghanistan and Myanmar around two years ago, but the
previous government did not take the matter forward, purportedly owing to differences between the Congress
and its ally the Nationalist Congress Party (NCP).
Several projects in the city, including the Worli-Haji Ali Sea Link, Bandra- Versova sea link (BVSL), among
others, were also stuck from 2012 because of the tussle between the Congress and NCP, sources said. However,
many of them are back on the track after the new BJP-led government under Devendra Fadnavis assured
MSRDC of help.
The Hindustan Times
Mumbai, 26.03.2015
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Inland Waterways & Irrigation Canals
Bill on converting 101 rivers to inland waterways soon
Union Minister for Shipping, Road Transport and Highways, Nitin Gadkari has expressed hope that the
government's ambitious target to convert 101 rivers across the nation into waterways would get a parliamentary
nod during the current Budget session of Parliament.
"We have submitted a Bill in Parliament to convert 101 important rivers to inland waterways and hopefully it
would be passed in the current session," Mr Gadkari said at an Assocham event here today. He said his ministry
was committed to reducing the traffic burden on roads and promote water transportation where the cost is barely
30 paise a km in comparison to Re 1 by railways and Rs 1.5 a km through roads.
Inland waterways comprising rivers, lakes, canals, creeks and backwaters extend to about 14,500 km across the
country. However, the potential of this mode of transport has not been fully exploited so far.
Mr Gadkari said the 10member Mohandas Pai Committee formed by the government for carrying out technology
initiatives for roads, highways and ports sectors would submit its preliminary report within a month.
"We have assigned Mr Mohandas Pai the work to see how e-governance mechanism can lead to good
governance in both our departments and what will be the e-solutions and e-recommendations for the same," said
Mr Gadkari.
The Statesman
New Delhi, 19.03.2015
Govt to Bring 101 Waterways under National Network
Clearing the decks for port development and water transport, the Cabinet on Wednesday approved inclusion of
101 inland waterways to the national waterways network and gave in-principle nod to the Sagarmala project.
The Cabinet also approved setting up of a special purpose vehicle to provide efficient rail evacuation systems to
major ports to enhance their handling capacity and efficiency.
Government wants to utilise the vast waterways network of the country to build a fuel-efficient and cost-saving
mode of transportation and build an intermodal logistic supply chain. The development of waterways for
navigation will also decongest rail and road network. The cabinet decision to "enact the central legislation" with
respect to the 101 inland waterways would give the Centre the authority to develop these rivers for navigation
through dredging, terminal and barge construction etc. these rivers came under the jurisdiction of the respective
state governments. “It would positively contribute to the GDP by opening up business opportunities.
Detailed business development studies are being carried out under the Jal Marg Vikas Project for identifying all
business opportunities and quantifying anticipated investments and employment opportunities,” a press
statement said.
In the past 30 years, only five waterways have been declared as National Waterways. Besides, the Cabinet
approved SPV funded by the 12 major ports (with 90% equity) and the Rail Vikas Nigam would have an initial
authorized capital of `500 crore. The initial subscribed share capital would be `100 crore.
The company will also raise resources from multilateral funding agencies and other financial institutions to
finance port connectivity projects. The SPV will be manned by professionals with expertise on rail transport and
port logistics.
The Economic Times
New Delhi, 26.03.2015
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Legislation for more national waterways approved
The Union Cabinet, on Wednesday, approved enactment of a Central legislation for declaring 101 additional
inland waterways as National Waterways (NW) for navigation. This is aimed at creating a logistic supply chain
with intermodal - rail, road and waterways - connectivity. At present, the country has just five National
Waterways.
The Cabinet also gave its 'in principle' approval for the concept and institutional framework of Sagarmala Project
to promote port-led direct and indirect development and to provide infrastructure to transport "goods to and
from ports quickly, efficiently and cost-effectively.
The Cabinet Committee on Economic Affair (CCEA), which also met on Wednesday, approved the launch of the
National Supercomputing Mission under which India will install 73 super, computers all across the country, all
of which would be connected by a grid, to enhance research work. The CCEA also approved the norms of the
expenditure and pattern of central sharing on Central assistance to States/Union Territories under the National
Food Security Act, 2013 (NFSA).
The Hindu Business Line
New Delhi, 26.03.2015
Gadkari Gets Cracking on Nat’l Waterways Plan
The government will seek Parliament's approval to declare 101 rivers as part of the national waterways
network in the ongoing Budget session, following the Cabinet nod to the proposal on Wednesday.
Shipping minister Nitin Gadkari said that at least a dozen smart cities and several coastal economic zones will
come up under the ambitious Sagarmala project, lifting India's GDP growth by 2%. Gadkari has also asked
finance minister Arun Jaitley to give infrastructure status to shipbuilding.
The government approved the Sagarmala project, which envisages port-led development at 12 major ports as
well as 1,208 islands identified for development as part of the project.
“An allocation of `4000 crore has been made for special economic zone at Jawaharlal Nehru Port Trust, while
coastal economic zone is in the offing at Kandla port, which has two lakh acres of land in its possession,”
Gadkari told the media on Thursday.
The minister also said that no barrages will be built on the 620 km Varanasi-Haldia stretch as has been “wrongly
projected”. He said advance technology will be used to make sure the river is navigable.
The World Bank, which has been advising the shipping ministry on the development of inland waterways and
the Clean Ganga Mission, has approved an assistance of `4200 crore for the development of the existing five
national waterways.
“Waterways have a meager share of 0.3% in India as compared to 42% in the Netherlands, 16% in China and
over 7% in the US. This is a great economic opportunity loss to India,” Gadkari said.
For 55 of the 101 rivers, the shipping ministry has appointed consultants and detailed project reports will be
formulated once necessary approvals are in place.
A senior shipping ministry official said that work may not begin on all the 101 rivers. The central government
can undertake development of an inland waterway for navigation only when it is declared a national waterway
by Parliament.
The Economic Times
New Delhi, 27.03.2015
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LABOUR
General
Labour ministry won’t scrap medical colleges
Eight months after it dismissed the running of medical colleges under the Employees' State Insurance
Corporation (ESIC) as a "huge mistake'; the labour ministry has decided not to pull the plug on them.
While ESIC will run the four functional ones (three medical colleges and a dental college), the remaining
nine, which are not yet fully operational, will be either handed over to state governments or run with
private partners, Bandaru Dattatreya, minister of state with the independent charge of labour and
employment, said on Monday.
Of the nine, four will be divested if they don't get good partners. On 31 July, Dattatreya's predecessor
Narendra Singh Tomar had said medical colleges were high-cost projects that are not good for ESIC's
health. The corporation, he had said, should focus on providing medical service to insured persons (IPs)
and not venture into medical education. ESIC's board had decided to venture into medical education in
2008-09.
However, Dattatreya on Monday said several parliamentarians and ministers had urged him to continue
with the functional medical colleges for workers' benefit. Students and staff, too, had appealed to him not
to shut these institutions as it will their careers.
Dattatreya said his ministry would like the medical colleges-for which `12,000 crore has been invested-to
benefit workers. "We held wide consultations and reviewed our decision,” he told reporters in New Delhi.
However, he said the ministry won't open new medical colleges as ESIC's “core function is to provide
social security, i.e., cash benefits and medical benefits to the IPs under ESI scheme':
ESIC has more than 19.5 million IPs and benefits 76 million people. There are 36 hospitals under ESIC
and 115 hospitals under states helping ESIC in medical service delivery to IPs or organized sector workers
who are clients of ESIC.
Every month, eligible employees contribute 1.75% of their salary and employers contribute 4.75% to the
ESI corpus. ESIC provides services from outpatient services to tertiary care through either its own
hospitals or empanelled ones, though the quality of its service has been a concern on occasion.
The labour minister said four 500-bed medical colleges-in Rajajinagar (Bengaluru), K.K. Nagar
(Chennai), Joka (KoIkata) and Rohini (Delhi)-will continue to function under the ministry via ESIC. The
one in Rohini is a dental college. Around 400,000 IPs live around each of these medical colleges.
Three others-at Faridabad, Sanathnagar (Telangana) and Coimbatore-with sufficient IPs (400,000 and
above) will be handed over to state governments. "If states are not willing to run (them), then ESIC will
run (them) on public-private partnership (PPP) mode or on its own;' said Dattatreya.
Three others-at Alwar (Rajasthan), Paripally (Kerala) and Bihta (Bihar)-without enough IPs around will
either be handed over to the states concerned or run through private players. "If state governments are not
willing, they will be run by ESIC on PPP mode or (we will) divest the property;' the minister said.
The medical college in Gulbarga, the home constituency of Mallikarjun Kharge, a former labour minister
and leader of the Congress party in Lok Sabha, shall be handed over to the Karnataka government as it is
not fit to run a 500-bed hospital. Two others-medical colleges planned in Delhi arid Bhubaneswar-will not
be pursued.
Replying to a question on why states would be interested to take up these medical colleges now, given that
they have not expressed any desire to do so in the last eight months, labour secretary Shankar Agarwal
said the government has now liberalized the terms and condition -of such transfers. ESIC will be ready to
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21 – 27 March 2015
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MISCELLANEOUS
pump in `300-400 crore to complete each unfinished medical college, but states have to share revenues, he
said.
Michael Dias, secretary of the Employers’ Association in Delhi, called it a political decision that will help
neither' ESIC nor the workers. "It's not a good idea at all and medical colleges are white elephants for the
labour ministry, and the ministry too did not have core competency,” he said. "Even the ministry has not
taken the formal approval of the ESIC board for this decision, though it was briefly discussed in the last
meeting," said Dias, who sits on ESIC’s board.
The Mint
New Delhi, 24.03.2015
MISCELLANEOUS
India overtakes US to be third biggest steel producer
India has overtaken the US to become the third-largest steel producer in the world with a production of 1456
million tonnes (mt) in first two months of the year.
India has been the fourth-largest steel producer for the past five years, behind China, Japan and the US. The data
compiled by the World Steel Association (WSA) showed that the country's production growth was the highest
during the January-February period at 7.6 per cent against the global average of just 0.6 per cent at 127.6 mt.
Production in China, which accounts for nearly half of the global steel production, fell during the period by 1.5
per cent. It produced 65 mt during the period.
Japan, the second-largest producer, reported a total output of 17.4 mt, but production fell 22 per cent. The US,
which was the third largest steel producer since 2010, produced 13.52 MT during the January-February period,
giving away its position to India. On a yearly basis, India may retain the position given the fact that a lot of
capacities are set to be commissioned during the year from its present installed manufacturing capacity of a little
over 100 mt.
Production in the US, on the other hand, is heading for a stagnation with no signs of growth in the immediate
future. Output in the US has been hovering between 86 mt and 88 mt for the last four years. The gap of
production between the two countries was just 5 mt last year. Interestingly, the US snatched the third slot from
India in 2009.
The Hindu Business Line
New Delhi, 23.03.2015
FinMin yet to approve allocation for foreign trade policy
The Finance Ministry is yet to approve allocation for foreign trade policy (FTP) for the coming fiscal even as
exporters, battling a global demand crunch, are pitching for a timely announcement.
We have had several rounds of meeting on the FTP with Finance Ministry officials over the past few months, but
the final amount has not been approved yet. Without knowing how much funds we will get, we are not able to
finalise the incentive schemes," an official from the Directorate General of Foreign Trade (DGFT) told Business
Line.
“The Narendra Modi-led government, which came to power last May was supposed to come out with a five-year
FTP soon after, but has not done so till date. With a new fiscal beginning in less than a week, exporters are
hoping that there would be no further delay.
"A sharp drop in exports by over 15 per. cent in February is a dear reflection of the global headwinds which the
Indian products 'are facing in the international market. The much-delayed FTP must be unveiled immediately
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with liberal fiscal incentives," Engineering Export Promotion Council Chairman Anupam Shah said in a
recent press communication.
Commerce & Industry Minister Nirmala Sitharaman, in an interaction with the media on Monday, said that
the FTP would be announced soon, but did not specify the date.
Although exports have dipped in the past three months, and growth for 2014-15 is likely to be flat, the
government is not in a desperate mode because of the comfortable current account situation. "With India's
current account deficit narrowing to 1.6 per cent of the GDP in the previous quarter, boosting exports with
incentives is not the priority for the government right now," the official said.
The allocation for schemes may not be significantly more than what was given in the previous FTP, he
added. Exporters, however, are hopeful that there would be an increase in the products and markets covered
under the incentive schemes linked to exports of particular items and to specified markets. “the CAD
situation may be comfortable at the moment due to fall in oil prices, but the moment there is a disturbance
in the external situation, it could worsen,” Rafeeque Ahmed of the Federation of Indian Export
Organizations, pointed out adding that growth in exports was a more sure way of containing CAD.
FIEO has urged the government to announce the FTP immediately and make it effective from April 1, so as
to provide a long-term stable regime for exports. Exports in April-February 2014-15 at 286.5 billion were a
meager 0.88 per cent higher than exports worth 284 billion in April-February 2013-14.
The Hindu Business Line
New Delhi, 25.03.2015
‘Urban homes bigger polluters than industry’
Pollution could well begin at home, reports Vinayashree Jagadeesh. A recently published study by the
Centre for Ecological Sciences of the Indian Institute of Science, Bengaluru, found that energy
consumption in the domestic sector was the highest contributor to greenhouse gases in Chennai,
Ahmedabad, Kolkata and Mumbai and the second highest contributor in Delhi, Hyderabad and Bengaluru,
where transport sector emissions dominated.
The Times of India
Chennai, 23.03.2015
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