Prime Minister Modi and Prime Minister Costa launch unique Start-up portal

New Delhi: Prime Minister Modi and Prime Minister Costa today launched a unique startup Portal - the India-Portugal International StartUp Hub (IPISH) - in Lisbon.
This is a platform initiated by Startup India and supported by Commerce & Industry Ministry and Startup Portugal to create a mutually supportive entrepreneurial partnership.
IPISH hosts a range of tools and will provide information on the start-up hotspots of Bangalore, Delhi and Lisbon; and on associated subjects, such as policy, taxation, and visa options. It will develop a Go-To-Market Guide to support start-ups.
IPISH is expected to help in mutual capacity building, and enable connections between start-ups, investors, and incubators from relevant sectors. It is also expected to establish a network of honorary ambassadors based in India and Portugal to guide start-ups from both countries.
Background:
There are strong complementarities between India and Portugal in the start-up sector. Portugal has one of the highest rates of business creation in Europe and has emerged as one of the most vibrant European eco-systems for entrepreneurship. Lisbon is hosting the Web Summit - a key annual international technology conference - for 3 years from 2016 onwards. The last Web Summit had 700 participants from India, and the number is expected to go up further this year. The governments of both India and Portugal are focusing on promoting Start-ups.

MFs get record monthly SIP inflows

New Delhi: Inflows into mutual fund schemes through the so-called systematic investment plan (SIP) route hit a record high of Rs 4,584 crore in May. SIP inflows were 44 per cent higher compared to the corresponding month of last year and 20 per cent more than one-year average.
SIP is an option wherein an investor makes a recurring commitment to put in a fixed income periodically. SIPs, as opposed to lump sum investments, help mitigate risk, particularly when the markets are trading at near record levels.
Even the mutual fund industry benefits from SIPs flows as they are consistent in nature. The industry has been creating a lot of awareness investing through this route. Market players say inflows through the SIP route will only increase from current levels. Broking firm Geojit Financial Services in a recent note said SIP flows could double to Rs 10,000 crore in next two years. “Investors are increasingly coming to equity markets through SIP route, leading to a sudden spike in SIP folios in the past one year and the trend is likely to gather more speed over the next couple of years,” the brokerage says.

Indian renewable market to witness strong growth: Moody's

Mumbai: As India is moving towards meeting its commitments under the Paris agreement on climate change, its renewable energy market is likely to witness a strong growth over many years, says Moody's Investors Service.

"However, renewable energy projects face challenges related to the weak credit quality of offtakers, an evolving regulatory framework, as well as financing and execution risks," Moody's vice-president and senior analyst Abhishek Tyagi said in a statement issued here.

According to the rating agency, India's emission reduction commitments under the Paris agreement will lead to a sharp rise in renewable energy capacity.

India aims to achieve 40 per cent of cumulative installed capacity through non-fossil fuel sources by 2030 from the current 30 per cent and also plans to grow its renewable energy capacity to 175 GW by 2022 from the current 57GW.

"Such growth will be driven by the public and private sector. However, the key offtakers for most renewable projects are state-owned distribution companies, and these firms typically demonstrate weak financial profiles.

"This situation poses a key challenge for developers.

And, while there is no history of defaults under power purchase agreements, payment delays are quite common," he said.

Moody's also points out that the evolving policy framework for renewables presents a risk for renewable projects.

"Adherence to renewable purchase obligations has been limited, leading to lower demand for renewable energy.

Nevertheless, the feed-in-tariff and competitive bidding guidelines for wind and solar projects are well established and improve revenue visibility over the life of purchase power agreements," the agency noted.

It further said the rise in renewable energy capacity will bring execution challenges, including land acquisition, establishing resource quality, grid connectivity and availability.

On the financing of renewable energy projects, India will need to invest close to USD 150 billion to meet its 2022 renewable energy targets.

Since domestic banks are constrained in their lending to renewable projects, foreign capital will play an important role. However, foreign currency financing is constrained by the limited hedging products available to fully cover the rupee currency risk of purchase power agreements, it said. PTI PSK

LPG sales jump by record 9.8 pc on Ujjwala push

New Delhi: LPG sales have jumped by 9.8 per cent in the fiscal year ended March 31 after the government gave a record number of cooking gas connections, most of them to poor households.
Public sector fuel retailers sold 18.9 million tons of packed domestic LPG -- the fuel that is sold to consumers in cylinders -- during 2016-17.
"Packed LPG growth in 2015-16 was 7.1 per cent and in 2016-17 it was 9.8 per cent," a senior oil ministry official said.
The growth rate assumes significance considering that petroleum product sales have stagnated at 4-6 per cent.
India consumed 5.2 per cent more petroleum products like petrol, diesel, LPG and jet fuel, in 2016-17 at 194.2 million tons.
"LPG is the highest grosser. As many as 111.3 crore cylinders were sold in 2016-17," the official said.
State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) together have 23.71 crore LPG customers registered with them out of which 23.46 crore customers are domestic users. Of these only 19.88 crore are active users.
The official said about 3.32 crore new domestic LPG connections were issued during 2016-17, including two crore under Pradhan Mantri Ujjwala Yojana (PMUY).
Under the PMUY, the government is giving free LPG connections to poor households with a view to weave them away from polluting fuel like firewood.
The PMUY has helped increase LPG coverage to 72.8 per cent of the population, up from around 50 per cent three years ago.
The official said there may be few states where the LPG refil purchase has been below the national average of 4-5 cylinders a year but overall there has been a tremendous growth in LPG consumption.
"Bihar recorded the highest growth at 22.7 per cent, followed by Chattisgarh at 17.6 per cent, Jharkhand at 16.7 per cent, West Bengal at 15.9 per cent and Uttar Pradesh with 15 per cent growth rate," he said.
States which do not have abandunt alternate cooking fuel like forest wood, have shown greater ease in switching over to LPG usage.

25 Ministries/ Departments to turn into e-office by end of June, says Dr. Jitendra Singh

25 Ministries/ Departments to turn into e-office by end of June, says Dr. Jitendra Singh
E-files increased from 8,000 to 4,62,000, says MoS (PP)
The Union Minister of State (Independent Charge) Development of North-Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances & Pensions, Atomic Energy and Space, Dr Jitendra Singh visited the office premises of Department of Administrative Reforms and Public Grievances (DARPG) here today, to review the implementation of the Swachhta Action Plan. The DARPG and Department of Pension and Pensioners’ Welfare are observing the Swachhta Pakhwada from 16th-30th June, 2017.
On the occasion, Dr. Jitendra Singh complimented both the Departments for undertaking various Swachhta related activities during this Pakhwada and also expressed happiness that the two Departments are working together as one team. He said that the habit of cleanliness should be practised by all and it should be the responsibility of everyone to keep their surroundings clean. Highlighting the steps taken by DARPG, he said that 25 Ministries/ Departments will be turned into e-office by the end of this month. He also said that there has been an increase of a whopping 6000%, in the number of e-files with 4,62,000 e-files generated in 2017, compared to 8,000 e-files last year.
Dr Jitendra Singh said under the guidance of Prime Minister Shri Narendra Modi, the Departments are committed to provide maximum Governance to the public. He said that the process involved in the Civil Services Day has been completely transformed by DARPG in the last three years, as the participation and involvement of stakeholders has increased many folds. He said that DARPG is seen as the HR department of the Government of India. All good practices originate from this Department, he added. The Minister said that an MoU between India and Portugal on Cooperation in the field of Public Administration and Governance Reforms has been recently approved by the Cabinet. Dr Jitendra Singh expressed happiness over the fact that there has been near 100% disposal of grievances under Centralized Public Grievance Redress and Monitoring System (CPGRAMS) and 50% of the feedbacks received under Centralized Pension Grievance Redressal and Monitoring System (CPENGRAMS), have expressed satisfaction on their grievance redressal.
Secretary, DARPG Shri C Viswanath said that Modernisation and Swachhta go hand in hand and the allocation for DAPRG Modernisation has been doubled compared to last year. He said that the Department has implemented 100% e-office with digitisation of records. He also said that 58 Central Ministries/Departments and 33 States and UTs have abolished affidavits and attestation. He highlighted the various activities being undertaken by the Department during the Swachhta Pakhwada.
The DARPG is undertaking various activities like recording, reviewing and weeding out of old records, digitization of records, disposal of old and obsolete items etc. A poster(s)/ slogan competition has also been organised on the theme of Swachha Bharat. The best workstation will also be declared in the Department and appreciation certificate will be awarded to the winner. The Department has also planned to utilise Rs 10 lakhs for Swachhta related activities in the department during the current financial year. The Department of Pension & Pensioners' Welfare is also undertaking similar activities during this Pakhwada.

Cruise Tourism to be a growth driver for India's economy, says Shri Nitin Gadkari

Cruise Tourism to be a growth driver for India’s economy, says Shri Nitin Gadkari
Clear Action Plan drawn to revitalise Cruise Tourism in India
The Minister of Shipping and Road Transport and Highways Shri Nitin Gadkari has said that Cruise Tourism is one of the fastest growing components of the leisure industry worldwide, and can be a major growth driver for the Indian economy by generating huge employment opportunities. Shri Gadkari was speaking at the National Workshop on “Action Plan for Development of Cruise Tourism in India”, in New Delhi today. The workshop was also attended by Minister of State for Culture and Tourism (I/C) Dr Mahesh Sharma, and representatives of all stakeholder organizations – both from the government and the private sector – including regulatory agencies which deal with issues impacting cruise tourism.
Pointing out that tourism has the highest investment to employment multiplier Shri Gadkari said that on an average, employment generation on a cruise ship is 1 job for 3-4 passengers. With India having the potential to cater to 700 cruise ships per year as against 158 handled this year, the cruise industry can generate more than 2.5 lakh jobs for ten lakh cruise passengers, giving a big boost to the country’s economy. He further informed that cruise terminals are being developed at five major ports – Mumbai, Goa, Cochin, Mangalore and Chennai. In addition, the transport potential of 111 inland waterways will also be tapped. Work will start for developing ten inland waterways by the end of this year. This includes the rivers Ganga and Brahmaputra on which work is already in progress, he informed.
Shri Gadkari called upon state governments also to play an active role in promoting cruise tourism by developing, packaging and marketing their tourists attractions to draw more and more tourists.
The Ministry of Shipping has been working actively with all relevant ministries and organizations of the government to promote cruise tourism in the country. A joint task force headed by Secretary Shipping and Secretary Tourism was constituted for the purpose, and a global consultant was engaged for drawing up an Action Plan. The objective of today’s workshop was to discuss this Action Plan which requires various arms of the Government to take action for creating an enabling business eco-system for growth of cruise tourism in the country.
Speaking on the occasion Dr Mahesh Sharma said that India is fast growing as an attractive tourist destination. To realize the full potential for cruise tourism in the country there was a need for all stakeholders to work together, in cooperation with each other, and create a favourable ecosystem for growth.
Highlighting the efforts of the Shipping Ministry for promoting cruise tourism, Dr Alok Srivastava, Special Secretary (Shipping), informed that e visa, e-landing and incentives like minimum rebate of 30% on all cruise vessel related charges and additional rebate of 25% for coastal cruise movement have already been implemented. Further to this, a joint task force has been set up by the Ministry of Shipping & the Ministry of Tourism and an action plan for deriving standard operating procedure has been drawn, which would be implemented in a time bound manner after discussion with various stakeholders.
Secretary Tourism Smt Rashmi Verma said that the coming together of the Shipping and Tourism ministries to promote cruise tourism in the country would help maximize the benefits that the sector has to offer.
Stakeholders discussed several regulatory issues pertaining to various aspects of cruise port operations namely security, immigration, customs, ports in the workshop. They worked towards drawing up Standard Operating Procedures for all govt. organizations for cruise vessel handling.
Please click here for Backgrounder on Cruise Tourism

Cement sector to see 5-6% CAGR for next 3 fiscals: Crisil

New Delhi: The cement sector will witness 5 to 6 per cent CAGR over the next three fiscals on account of recovery in demand, rating agency Crisil said.
Primarily, the demand would be driven by government's focus on affordable housing and increased spending on infrastructure like roads, railways and urban development, it added.
According to Crisil, the demand of cement will double to 48 million tonnes (MT) over the next three fiscals as compared to the past three financial years.
It, however, said supply would be down to 31 MT from 39 MT.
"We foresee a sharp recovery in demand this fiscal after demonetisation dealt a major blow leading to a 1.2 per cent de-growth last fiscal," said Crisil Ratings Senior Director Sachin Gupta.
He further added: "The industry should be able to rack up 5-6 per cent compound annual growth rate between this fiscal and 2020, or nearly twice as fast as between fiscals 2015 and 2017."
According to the rating agency, the surge in demand would also improve the operating metrics of cement makers.
The cement segment, which is witnessing consolidation - last fiscal, had signed acquisitions of Rs 32,000 crore last fiscal.
It was financed through debt of Rs 25,000 crore.
"The acquisitions totalled 42 MT of capacity, tantamount to the capacity addition seen in the past 2.5 years," said Crisil, adding that once these transactions are completed, acquirers will increase their installed capacity significantly to 37 per cent from 28 per.
However, it also warned: "Their share of industry debt will increase from 17 per cent now to 45 per cent." PTI KRH

Tractor industry may record volume growth of 10% in FY18:ICRA

Mumbai: The Indian tractor industry is expected to record a volume growth of 9-10 per cent in the current financial year, mainly supported by healthy monsoon, according to rating agency ICRA.
"Healthy monsoon expectation, coupled with good reservoir levels, augurs well for farm output in the current fiscal. This, coupled with an expectation of improvement in non-farm income, aided by the government's focus on rural spending, infrastructure creation and irrigation spending, is likely to drive the demand for tractors, which is expected to record a volume growth of 9-10 per cent this fiscal," ICRA said in a report here.
"Over the long term, we continue to maintain an annual growth estimate of 8-9 per cent for the industry. The long term industry drivers for the industry continue to remain intact. The government remains committed towards rural development and agro-mechanisation, a critical component in improving the state of agriculture in the country," ICRA Senior Group Vice President Subrata Ray said.
Also, he said, continued support towards enhancing irrigation penetration through fresh allocations would reduce rainfall dependence.
"This, coupled with other factors such as increasing rural wages and scarcity of farm labour, is likely to aid growth in industry volumes," he added.
Tractor volumes reported a healthy growth during FY17, boosted by improving farm sentiments following healthy southwest monsoon and expectations of better cash flows in the backdrop of strong growth in kharif and rabi crop production.
Additionally, ICRA said, government support programmes in various states also supported demand to an extent.
The volumes suffered a blip in November 2016 following demonetisation. However, domestic volumes recovered quickly to a moderate to healthy growth in volumes during December 2016-March 2017, it added.
In April and May, 2017 also, leading tractor Original Equipment Manufacturers (OEMs) have reported robust double digit growth rates in domestic volumes.
However, tractor exports market remained weak during FY17, with the weak demand in the global markets attributable to high supplies of commodities and accompanying fall in crop prices across various markets, ICRA said.

Textiles Ministry undertakes cleanliness drive

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ew Delhi: The Union Textiles Ministry has organised a fortnight-long cleanliness drive dubbed Swachhtha Pakhwada to drive home the government's Clean India campaign.
All 17 bodies under the Ministry, apart from jute mills and residential colonies of workers in the textile sector, undertook various activities towards cleanliness during the drive organised between May 1 and 15.
Besides, students of various National Institutes of Fashion Technology centres across the country worked closely with various sections of the society and cleaned public places and decorated walls with mural paintings containing messages of cleanliness.
An exhibition on waste management and organic farming was organised by Central Silk Board. Plantation drives, awareness campaigns, health and cleanliness camps, debate competitions, slogan-writing competitions, street plays, human chain, Padayatras and painting competitions were also held in various locations as part of the Pakhwada.
Addressing reporters here, Minister of State for Textiles, Ajay Tamta said there is a need for the message of Swachhtha (cleanliness) to reach every citizen of the country.
He said everyone needs to realise that Swachh Bharat Abhiyan (Clean India campaign) can become a success only if each one participates actively in it.

Commerce & Industry Minister launches the Startup India Hub

New Delhi: The Commerce & Industry Minister Smt. Nirmala Sitharaman today launched theStartup India Virtual Hub, an online platform for all stakeholders of the entrepreneurial ecosystem in India to discover, connect and engage with each other.
Speaking about the need to bring the entire ecosystem together on one platform, Smt. Nirmala Sitharaman mentioned that Startup India Virtual Hub is an effort to create a marketplace where all the stakeholders can interact, exchange knowledge, and enable each other to grow. It will streamline the lifecycle of existing and potential startups, helping them access the right resources at the right time. She also encouraged all entrepreneurs in India to utilize this portal and all enabling stakeholders to contribute to the platform as much as possible. The Minister also announced a new initiative, wherein a Startup exchange program amongst the SAARC nations would be organized.
The portal will host startups, investors, funds, mentors, academia, incubators, accelerators, corporates, Government bodies and more. The Hub attempts to solve the problem of information asymmetry and lack of access to knowledge, tools, &experts, especially in the nascent ecosystems across Tier II and III towns.
The Virtual Hub is a dynamic & interactive platform that will facilitate learning & development, networking, mentorship, funding,etc. for startups. The basic principle behind developing this platform is to aggregate different offerings of theecosystem and enable discovery by the right audience. Startup India Hub has partnered with various organizations to on-board entrepreneurs & investors, as well as build knowledge modules. To ensure accessibility across various platforms, dedicated Apps are also available on both Android and iOS.
India is the third largest startup ecosystem around the globe, with 3-4 startups commencing every day. The Hub will act as a nodal platform and will enable users to connect with ecosystem stakeholders, access free learning resources, tools & templates on legal, HR, accounting & regulatory issues and discussion forums. The Hub has also aggregated over 50 relevant Govt schemes/programs. In the next phase, the platform will also aggregate schemes available across various state governments. To provide a better user experience, the platform has been enabled to build smart intelligence along with Chatbots to automatically collate, update information and respond to queries.
The launch event of the Hub was kick-started by a panel discussion on ‘Navigating the Startup Landscape’ with a representative from each of the startup, investor, incubator, accelerator, and mentor communities. The discussion was followed by an address by Shri Ramesh Abhishek Secretary, Department of Industrial Policy and Promotion who made a presentation on various initiatives taken up under the Startup India Initiative.
In his closing remarks, Joint Secretary Shri Rajiv Aggarwal requested all the members of the ecosystem to register on the Hub.

IT export to grow at 7-8%; 1.5L jobs to be created in FY18'

Hyderabad: Indian IT exports will grow by 7-8 per cent, unchanged from previous year's growth, despite protectionist voices in major markets like the US, industry body Nasscom said today.
The USD 156 billion Indian industry -- the biggest job creator in the organised sector -- is also projected to add 1.3-1.5 lakh new jobs during 2017-18 compared to a net hiring of 1.7 lakh in the previous fiscal.
In a first, the industry body had deferred giving the growth forecast in February and had instead postponed the same to April-June quarter.
Speaking to reporters, Nasscom president R Chandrashekhar exuded confidence that the outlook is positive despite the political and economic uncertainties in key overseas markets that may impact client spending.
"We expect export revenues to grow by 7-8 per cent, not hugely different from last year (7.5 per cent), notwithstanding the headwinds we talked about (H1-B visa curbs in the US, protectionism and Brexit)," he added.
The domestic infotech industry is expected to grow at faster pace of 10-11 per cent (in dollar terms) in 2017-18.
"We definitely see the industry to be net hirer of as many as 1.3 to 1.5 lakh people in the year ahead. This industry continues to be a substantial hirer and a substantial creator of new jobs. At the same time, there is a churn in the industry too," Chandrashekhar said.
He said as the industry is currently driven by the digital revolution, Nasscom has decided to re-skill about 1.5 to 2 million IT professionals to equip them for future requirements.
"Nasscom is working with its partners, members to establish a comprehensive digital platform. You will be hearing about this more during the months ahead. We expect 1.5 to 2 million people amongst the workforce to be re-skilled in the next 4-5 years."
The size of the Indian IT industry is pegged at USD 154 billion, including USD 11 billion incremental revenues added in the previous fiscal, according to Nasscom.
"Uncertainty impacted the businesses. Whether it is BFSI segment or healthcare, all segments confronted by the uncertainty delayed the decision-making in the quest for stability. That translated into low opportunities for IT industry," the Nasscom chief explained.
Chandrashekhar, however, was optimistic about growth of the domestic IT industry, backed by some of the Centre's initiatives such as aiming for one trillion dollar digital economy.
Replying to a query, he said the Indian IT industry is all set to move beyond the markets it is heavily dependent on and expand footprints to newer geographies such as Continental Europe, Japan, China and Africa.
The US and the UK account for almost 80 per cent of the country's IT export revenues.
Compared to Nasscom's guidance of 7-8 per cent growth, Infosys expects its revenues to rise 6.5-8.5 per cent in constant currency (and 6.1-8.1 per cent in USD terms), while Cognizant has guided for 8-10 per cent rise in topline in constant currency terms.
Keshab Panda, MD and CEO, L&T Technology Services, said he is confident of double-digit growth.

India-Australia to boost collaboration in clothing, fashion

New Delhi: India and Australia will intensify cooperation in the field of textiles, clothing, handloom and fashion, with the government approving an agreement between the two nations in this regard.
The Memorandum of Understanding between the Ministry of Textiles and the Department of Foreign Affairs and Trade, Australia will benefit weavers.
The Union Cabinet chaired by Prime Minister Narendra Modi approved the pact at a meeting here.
As per the agreement, the participants will jointly identify appropriate measures to connect the Australian and Indian textile and fashion sectors; promote collaboration and international engagement between those sectors.
They will also nurture the skills and talents; promote economic opportunities and encourage professional engagement, training, skill development and public exhibition of products derived from these sectors in the two countries.
However, Intellectual Property Rights of either side will stand protected.
"The MoU will facilitate cooperation in relation to matters within the textiles and fashion sectors that may be of mutual interest and benefit to the participants," an official statement said.
"The weavers including ancillary workers will be benefited from activities to be taken under MoU," it added.
The initiative also aims to increase the handloom fabric production by establishing market linkages, encourage innovation in designs and techniques for improvement in design capability, diversification of product lines and value addition and provide better access to domestic and export markets so that weavers are able to get continuous employment and improve their living standards.
According to the statement, Australian fashion designers producing garments using Indian woven and other textiles for Indian and Australian market have evinced interest to work with stakeholders in India which includes cooperation with textiles, handloom sector with a view to provide state-of- the-art designing of textiles and handloom products and market them in India as well as international market.
The Department of Foreign Affairs and Trade (Government of Australia) had proposed to sign an MoU with the Ministry of Textiles in this regard.

Govt banks devise three-tier plan for bad loan resolution

Mumbai: A three-tier strategy is being evolved internally, according to four bankers who spoke on condition of anonymity.
Relatively smaller stressed accounts of less than Rs1,000 crore will be sold to asset reconstruction companies (ARCs), mid-sized cases of Rs1,000-5,000 crore will be resolved through the various RBI restructuring schemes and larger cases will be tried at the National Company Law Tribunal (NCLT) in accordance with RBI rules, according to the plan.
The need for a 360-degree approach to resolving the stressed asset cases comes as lenders want to ensure faster recovery from the stock of Rs10 trillion of stressed assets choking the banking system.
Earlier this month, RBI identified 12 large stressed accounts with outstanding debt of more than Rs5,000 crore to be referred to the NCLT. In other cases, the central bank asked banks to finalize a resolution plan within the next six months, failing which it will be filed for bankruptcy proceedings.
On Thursday, it announced the members of its oversight committee on bad loans and said this panel will also oversee stressed loans greater than at least Rs500 crore.
While RBI has kick-started the process, industry watchers say this is going to be a long-drawn process. Meanwhile, banks are keen on continuing the resolution process by referring eligible cases to various schemes such as strategic debt restructuring and scheme for sustainable structuring of stressed assets. Bankers said the involvement of the oversight panel would ensure that they can take higher haircuts, or sacrifice of the loan amount, without the fear of investigating agencies.
For other smaller cases, lenders have intensified their resolution efforts in the current quarter by clearing the old stock of non-performing assets (NPAs), a phenomenon which is usually seen in the fourth quarter of the fiscal year. Banks including State Bank of India, Andhra Bank, Allahabad Bank, and United Bank of India have already put on the block NPAs worth at least Rs8,500 crore, a majority of which are outstanding balance of less than Rs100 crore.
The final outcome of these sales will also help gauge whether the revised norms of the RBI, in effect since 1 April, are a deterrent for using the ARC route for bad loan resolution.
From the beginning of this fiscal, if a bank invests in more than 50% of security receipts created against the sale of its own stressed assets, it has to set aside more money as provisions. From 2018-19, this threshold of 50% will be reduced to 10%.
“Over a period of time, the redemption of these security receipts falls to nil as there is very little realization from the underlying assets of the company. Until then, banks have to keep higher provisions. So it’s best to sell smaller loans to ARCs,” said the executive director of a public sector bank, who is one of the four bankers cited above.
Given their capital position, most ARCs would also prefer smaller deals as they cannot afford an upfront cash payment of 50% for the underlying asset.
“If ARCs have no capital, then banks will have to look at bifurcating the NPA cases and selling the small accounts to ARCs while addressing the larger ones through the NCLT,” said Eshwar Karra, chief executive officer, Phoenix ARC, which manages Rs6,000 crore of stressed assets primarily in the small and medium enterprises.
According to a 2016 report by EY, the capitalization of all ARCs put together adds up to around Rs3,000 crore.

UP gets 70,784 more houses for urban poor under PMAY (Urban)

Karnataka gets 56,281 more; Andaman & Nicobar Islands get 609 first time
Ministry of HUPA approves 1,27,674 more houses with an investment of Rs.6,532 cr
Central assistance of Rs.1,915 cr approved for these new sanctions
New Delhi: Ministry of Housing and Urban Poverty Alleviation has approved construction of 70,784 affordable houses for the benefit of urban poor in Uttar Pradesh under the Pradhan Mantri Awas Yojana (Urban) with an investment of Rs.3,528 cr for which central assistance of Rs.1,062 cr has been approved.
Further to the discussion Minister of HUPA Shri M.Venkaiah Naidu held with the Chief Minister of Uttar Pradesh Shri Yogi Adityanath soon after assumption of office, the State Government sent affordable housing proposals for 145 cities and the same have been approved. Earlier, Uttar Pradesh has been sanctioned 41,954 houses including those approved under Rajiv Awas Yojana, which has been now subsumed under PMAY(Urban). With these latest approvals, the total number of houses sanctioned for Uttar Pradesh has increased to 1,12,738.
Of the 70,784 houses approved, 56,839 will be constructed under the Affordable Housing in Partnership component and 13,945 houses under Beneficiary Led Construction component of PMAY(Urban). Under these two components, central assistance of Rs.1.50 lakh is given to each beneficiary.
Under the latest approvals, Lucknow has got 1,525 houses, Gorakhpur-501, Ayodhya-500, Iltifatganj-903, Faizabad-769, Dudhi-765, Rudauli-713, Singahi Bhiraura-821, Chatra-783, Purdhinagar-674, Kanpur Dehat-442, Daurala-505, Sikandra-447, Akbarpur-449, Aliganj-511, Bareily-139 and Azamgarh-119.
Karnataka has been sanctioned 56,281 more affordable houses for 93 cities and towns with an investment of Rs.2,950 cr and Central assistance of Rs.844 cr.
Bengaluru has been sanctioned 8,291 houses, Bellary-1,613, Shivamogga-1,500, Chennapatna-1,450, Hubbali-1,300, Dharwar-1,292, Challakere-1,127, Kanakpur-1,163 and Sira-1,008.
For the first time, Andaman & Nicobar Islands has been sanctioned 609 houses for Port Blair with an investment of Rs.54 cr and central assistance of Rs.9.00 cr.
With these latest approvals, the total number of affordable houses approved for construction under PMAY(Urban) has increased to 20,95,718.

Govt to launch National Data Repository on June 28

New Delhi: The government will next week launch India's maiden National Data Repository (NDR) that will assimilate, preserve and upkeep country's vast sedimentary data for future use in oil and gas exploration and production.
Finance Minister Arun Jaitley and Oil Minister Dharmendra Pradhan will on June 28 launch the NDR, which will aid India to switch over to an open acreage licensing regime where companies can choose areas they want to explore.
At present, the government selects and demarcates areas it feels can be offered for bidding in an exploration licensing round.
Under the open acreage licensing (OAL), companies can visit NDR and look at vast seismic data of currently producing fields and explored areas as also those of unexplored areas, official sources said.
From the areas that are not under any licensee, they can then carve out an area suitable to them and evince interest in doing exploration and production.
Once an area is selected, the government will put it up for bidding and any firm offering the maximum share of oil or gas produced from the area would be awarded the block.
Sources said already a vast amount of data has been populated - over 9.3 lakh line kilometres of 2D seismic, 2.8 lakh square km of 3D seismic and 1,717 well data.
The NDR will be wholly funded by the government of India and housed with the Directorate General of Hydrocarbons (DGH).
It will have the ability to store data online, near line and offline, and provide independent web-based access.
The DGH, they said, has already begun sale of geophysical data of speculative surveys in east and west coast of India in 2005 and 2008.
The mammoth volume of data collected by E&P companies and other agencies over more than six decades of activities was hitherto lying scattered at different work centres of ONGC, Oil India and DGH or held by the operating companies.
This necessitated an establishment of a system at national level that could assimilate, preserve and upkeep the vast amount of data which could be organised and regulated for use in future exploration and development, besides use by R&D and other educational Institutes.
With this objective, the government initiated the establishment of the NDR.
The NDR is a government sponsored project with state-of- the-art facilities and infrastructure to create E&P data bank for preservation, upkeep and dissemination of data so as to enable its systematic use for future exploration and development.
The DGH being the agency of the central government will be responsible for creation, setting up and operation of the NDR.
Sources said the OAL will be beginning of a new era in oil and gas exploration and production.
Till now, the government has awarded 254 exploration blocks under nine rounds of bidding between 2000 and 2012.
Prior to that, 29 discovered fields were awarded to private and foreign companies.
Of the 254 blocks awarded under the New Exploration Licensing Policy (NELP) between 2000 and 2012, 156 have already been relinquished due to poor prospectivity.

FIEO sets export target of US$ 325 bn for this fiscal

New Delhi: With exports recording continuous growth, exporters body FIEO expects that the country's merchandise shipments would reach USD 325 billion this fiscal.
Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta also said while India is showing a positive trend on exports since the last nine months, there is a bit of anxiety in the business with regard to the Goods and Services Tax (GST).
"Indian exports have been on an upward trend in last few months with export of USD 275 billion in last fiscal and a target of USD 325 billion to achieve in 2017-18," FIEO said in a statement.
Further, it has organised an interactive session with Commerce Secretary Rita Teaotia in Kolkata.
Quoting the secretary, FIEO said, "GST is a well needed reform and the transition will require some time, and calibrated process of foreign trade policy will be continuous".
With regard to shipping lines overcharging, she stated that the Director General Shipping has been informed and they are waiting for a response from them.

Digital commerce in India to reach Rs 2.20 lakh cr by Dec'

New Delhi: The digital commerce market in India is pegged to grow to Rs 2,20,330 crore by December 2017, an industry report said today.
According to a report by Internet and Mobile Association of India and IMRB Kantar, digital commerce in India has grown at a CAGR of 30 per cent to reach Rs 1,68,891 crore by the end of December 2016.
"It is estimated to reach Rs 2,20,330 crore by December 2017," it added. This translates into a growth of 30.4 per cent.
The online travel market, which would continue to account for over half of India's digital commerce, is expected to touch Rs 1,18,598 crore by December 2017. This is over 24 per cent higher than Rs 95,198 crore registered last year.
The e-Tailing segment is expected to reach around Rs 94,964 crore by the end of this year, growing at about 59 per cent from Rs 59,876 crore in December 2016.
The report also stated that online utility payment (for services like DTH/telephone and electricity bills) would reach Rs 7,532 crore this year from Rs 6,277 crore last year.
Other online service market that includes online bookings done for entertainment, online grocery and online food delivery, is expected to reach Rs 4,587 crore in the said period.

Bank credit grows at 6.02%, deposits at 11.19%

Mumbai: Banks' credit growth grew at 6.02 per cent to Rs 76,58,212 crore in the fortnight ended June 9 from Rs 72,22,939 crore in the same period of fiscal 2016, according to the data released by RBI.
The growth in advances in the reporting period was slightly higher than the previous fortnight ended May 26, 2017, RBI data showed.
In the fortnight ended May 26, advances had grown by 5.08 per cent with an outstanding loans at Rs 75,93,546 crore.
In the fiscal ended March 31, 2017, credit growth had plunged to a multi-year low of 5.08 per cent with an outstanding loan at Rs 78.81 trillion as against Rs 75.01 trillion on April 1, 2016.
In the reporting fortnight, bank deposits grew at 11.19 per cent to Rs 105,77,947 crore from Rs 95,13,148 crore in the fortnight ended June 10, 2016.
Deposits in the fortnight ended May 26 had grown by 10.9 per cent to Rs 105,51,182 crore from Rs 95,14,087 crore in the period ended May 27, 2016, the data showed.

Sebi eases M&A norms for distressed firms

Mumbai: The Securities and Exchange Board of India (Sebi) relaxed some rules on Wednesday to hasten the resolution of stressed assets in bank balance sheets.
The regulator has exempted buyers of shares in distressed companies from the requirement of making an open offer even if the purchase triggers such an event under the takeover code, Sebi announced after its board meeting on Wednesday.
Under Sebi’s takeover norms, one of the triggers for an open offer is when an entity acquires 25% or more in a listed company. The entity then has to make an offer to buy an additional 26% stake in the company from the public shareholders.
Sebi said it has come across cases where lenders acquired shares in a distressed company but could not sell the stake to a new investor because the takeover norms proved restrictive and reduced the funds available for investment in the stressed firm.
This has triggered the need for additional relaxation, which is at present available only to financial creditors under the Reserve Bank of India’s (RBI’s) strategic debt restructuring (SDR) scheme. Indian banks are currently sitting on stressed assets of Rs10 trillion and last week, RBI identified 12 large accounts where it directed banks to initiate bankruptcy proceedings.
These exemptions, however, will need to be approved by a special resolution (at least 75% shareholders voting in favour). Secondly, the shares bought by the new investor will also be locked in for at least three years, Sebi said.
The regulator said it will grant similar exemptions for those firms which have got their resolution plans approved by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code.
“The new insolvency law allows insolvency professionals a lot of latitude to try different permutations and combinations to unlock the maximum value of a stressed company,” said Sandeep Parekh, founder of law firm Finsec Law Advisors. These would range “from a wipeout of existing equity and issue of new equity to banks to sale of a substantial stake to a strategic investor to a listed spin-off. If each stage of a multi-stage action plan triggers open offers and other Sebi regulatory costs, the unlocking of value to banks of their already distressed assets would come down”.
Secondly, the regulator also relaxed laws which will make it easier for private equity-backed firms to raise funds through new share sales. It has exempted category II alternative investment funds (AIFs) such as private equity and real estate funds from the mandatory one-year lock-in of shares when a company they have invested in goes for an initial public offering. Currently, category I AIFs such as venture capital and infrastructure funds are granted that exemption.
“This would bring about uniformity, ease of doing business and expand the investor base available for capital raising,” the regulator said in a statement.
A third set of announcements were related to proposals that will allow foreign portfolio investors (FPIs) easier access. The regulator said it was planning to allow more regions to grant FPI registration by including countries that have a diplomatic tie-up with India, simplify so-called broad-based requirements and relax ‘fit and proper’ rules.
An FPI is considered to be broad-based if it has at least 20 investors, with none of them holding more than 49%. However, if the broad-based fund has institutional investors, it is not necessary for the fund to have 20 investors, according to existing Sebi norms.
Sebi will soon float a discussion paper to introduce the new FPI norms, said chairman Ajay Tyagi.
However, the regulator continued to be tough on investments through participatory notes (P-notes). On Wednesday, it formalized its proposal (made in a discussion paper in May) to levy a fee of $1,000 on subscribers of offshore derivative investments (which typically involve P-notes).
The regulator said it is also in the process of reviewing norms for the equity derivatives market and plans to release a discussion paper.
“Retail investors are not fully aware of the risks involved in derivatives investment,” said Tyagi.
In the ongoing case of alleged violation of algorithmic trading norms by the National Stock Exchange of India Ltd, the markets regulator said it has issued show-cause notices to 14 key managerial persons of the bourse and will do its own investigation with the help of forensic auditors.
“We have also started an investigation to look into issues of possible connivance between NSE employees and brokers and unfair gains for brokers,” said Tyagi.
EY, which was appointed as the forensic auditor to prepare a report on NSE, will submit its report to Sebi in two weeks, said Tyagi.
Separately, in a circular, Sebi said it has allowed hedge funds to trade in the commodity derivatives market, subject to certain safeguards.

India's clean energy sector could create 300,000 new jobs by 2020: Study

New Delhi: More than 300,000 new workers can be employed in wind and solar jobs and more than one million total employment opportunities can be created in achieving India’s ambitious clean energy goals to install 175 gigawatts (GW) of renewable power by 2022, said a study released on Wednesday.
It highlighted that the solar and wind energy sectors employed more than 21,000 additional people across India in 2016-17 while an additional 25,000 people will be employed over the coming year.
The study also said that labour-intensive rooftop solar segment will employ 70% of the new workforce, creating seven times more jobs than large-scale projects such as solar farms.
India’s clean energy workforce comprises solar installers, maintenance workers, engineers, technicians and performance data monitors.
The study Greening India’s Workforce: Gearing Up For Expansion of Solar and Wind Power in India published by Delhi-based think tank, Council on Energy, Environment and Water (CEEW), and the Natural Resources Defense Council (NRDC) also stressed that strong growth in the domestic solar manufacturing industry could provide full time employment for an additional 45,000 people in India.
Just before 2015 Paris Climate summit, Prime Minister Narendra Modi led National Democratic Alliance (NDA) government had announced an ambitious target of 175 GW renewable power which included 100 GW Solar power and 60 GW wind power.
At present, India’s installed wind power capacity is 32.2GW and solar is 12.2GW.
According to the CEEW analysis, India’s clean energy goals have the potential to put 34,600 people to work in wind power, 58,600 in utility solar and 238,000 in rooftop solar jobs over the next five years.
“Solar jobs will be well distributed across India with Maharashtra and Uttar Pradesh leading in job creation. Wind jobs are likely to be concentrated in a few states that have high wind potential, as has been the case with wind capacity,” said the study.
“80% of the new clean energy workforce will be employed during the construction phase. However, despite these being contractual jobs, the large pipeline of renewable energy projects creates enough opportunities for workers to stay employed. Additionally, since most of these jobs are in the rooftop solar PV segment, central and state governments must provide greater policy support to the rooftop sector,” said Neeraj Kuldeep, Programme Associate at CEEW.
Nehmat Kaur, consultant and development economist at NRDC said, “Clean energy expansion is generating thousands of new jobs while meeting India’s climate and economic goals. With this tremendous opportunity, India is stepping up as a global leader in demonstrating how a growing economy can scale up renewables, generate employment and provide access in the face of rising energy demands.”
The study recommended to central government and state governments to provide policy priority to rooftop solar to create renewable energy jobs.
It also recommended the governments to support development of training centres led by the private sector to source construction jobs locally since solar jobs are well distributed among states.

PE investment shoots up 64% to US$ 963 million in May: Thornton

New Delhi: Private equity investment in May jumped 64 per cent in value terms with deals worth USD 963 million, mainly driven by big ticket investments, says a report.
According to assurance, tax and advisory firm Grant Thornton, there were 67 PE deals worth USD 963 million in May this year, while in the same month last year, there were 74 such transactions worth USD 587 million.
For the January-May period, though the number of PE deals declined, but investment values have shown an improvement, indicative of investors beginning to take bigger bets on the Indian economy, more specifically in IT & ITeS and retail and consumer sector.
During the first five months of this year, there were 349 PE deals worth USD 6,402 million, while in January-May period last year, there were 421 such deals worth USD 5,487 million.
The month of May was dominated by investments in startups which contributed to 58 per cent of total investment volumes.
Startups in sectors such as enterprise application and infrastructure, travel, transport and logistics, and FinTech attracted significant attention from investors and constituted over 51 per cent of startup investment volumes.
According to industry reports, May this year witnessed one of the largest FDI in the real estate this year with Xander Group's acquisition of Shriram properties Gateway IT SEZ in Chennai for USD 350 million.
Other sectors such as IT & ITeS, e-commerce and agriculture sectors also attracted large investments of over USD 50 million during the month.
In terms of sector spread, real estate seems to be gaining interest and contributed more than 40 per cent in terms of deal value. The remaining 60 per cent was mostly contributed by the technology sector.
"All eyes seem to be now on GST implementation and its impact on not only trade and economy, but more importantly on investor interest. Since there is now clear visibility on this, we should see good traction in both M&A and PE," Grant Thornton India LLP Partner Prashant Mehra said.
Mehra further noted that with India continuing to be favoured destination among foreign investors, we should hopefully see more in-bound action going forward.

Fruit & vegetable exports to Qatar rise 15% in 2 weeks

Mumbai: India’s exports of fresh fruit and vegetables to Qatar have jumped by 15 per cent in the past two weeks because of an increase in demand, owing to disruptions in supply to the country from Saudi Arabia and other neighbouring nations.
The supply to Qatar has received a boost since early this month after Saudi Arabia, the United Arab Emirates, Egypt, Bahrain, and Yemen severed diplomatic ties with Qatar and blocked access to Doha, Qatar’s capital, by land, sea, and air.
Maldives and Libya later joined the countries that have isolated Qatar. Consequently, importers in Qatar have been buying more from India.
To meet their immediate needs, importers in Doha have started transporting by air. Many cargo airlines have delivered goods in large quantities to Qatar in the past two weeks.
Confirming the development, a senior official of the Agricultural and Processed Food Products Export Development Authority (Apeda) said: “India’s fruit and vegetables exports to Qatar have increased in the last two weeks probably due to halt in their exports from Doha’s neighbouring countries.”
India’s exports of fresh fruits and vegetables are rising for the past three years owing to local producers turning quality-conscious.
Also, Indian exporters have stepped up marketing, which has helped in price competitiveness in overseas markets.
The data compiled by Apeda show India’s exports of fresh fruit and vegetables at Rs 10,369.93 crore in the financial year 2016-17 compared to Rs 8,391.36 crore for the corresponding period last year. In terms of volumes, however, exports jumped to 4.1 million tonnes in FY17 versus 2.4 million tonnes in the previous fiscal year. West Asia contributes a major portion of India’s fruit and vegetables exports. A large quantity exported to West Asia goes to Qatar via other countries. But Doha has started importing from India directly.
The Apeda data show India’s direct exports to Qatar to be Rs 220 crore for FY17, an increase of 14 per cent from the previous year’s level of Rs 193 crore. “While fruit and vegetables exports to Qatar have increased in the past two weeks, the demand has not reached its limit due to Ramadan. Once this festival is over next week, new orders would start pouring in from Qatar,” said Anil Patil, proprietor, Incoexcofarms, a Pune-based fruit exporter.

Niti Aayog OKs Rs 18,000 cr project to increase train speeds

New Delhi: The ambitious Rs 18,000 crore project for increasing train speeds on the Delhi-Mumbai and Delhi-Howrah rail corridors has got the Niti Aayog's approval, paving the way for being put up for Cabinet clearance.
The mega project is meant to bring about a paradigm shift in rail operations enabling trains to run at 160 km per hour on the busiest routes on the Indian railway network.
Aiming at reducing travel time between the three metropolises, the project envisages fencing off the entire 3,000 kms on both routes, upgradation of signalling system, elimination of all level crossings and installing train protection warning system (TPWS), among other works to make trains run at an increased speed of 160 kmh.
"Any project more than Rs 1,000 crore in worth will have to get the Niti Aayog clearance. So now after getting the Niti Aayog clearance yesterday, the proposal will now be examined by the expanded railway board," said a senior railway ministry official involved with the project.
The expanded railway board is comprised of senior representatives from department of expenditure, department of programme implementation and Niti Aayog, besides the board members.
The Railways will submit the proposal for cabinet clearance after getting the proposal approved by the expanded railway board.
The 1,483-km long New Delhi-Mumbai rail route will also include the Baroda-Ahmedabad sector, and is estimated to cost Rs 11,189 crore.
The 1,525-km long New Delhi-Howrah route, which also includes the Kanpur-Lucknow section, is estimated to cost Rs 6,974 crore.
The work on both sections will be given to a single agency through global bidding for effective implementation of the project.

Daily revision of fuel prices structurally positive for OMCs

New Delhi: The shift to daily revision in prices of petrol and diesel from fortnightly revision starting 16 June is structurally positive for Indian oil marketing companies (OMCs)—Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL) and Indian Oil Corp. Ltd (IOC). With this, India joins countries such as the US and Australia where fuel prices are revised on a daily basis.
This means OMCs will be able to pass on daily changes in product prices and exchange rate fluctuations without delays.
IOC said daily revision of petrol and diesel prices will set new standards of transparency, encourage the automation drive of petrol pumps and lead to better stock management practices.
However, it will probably be a while before OMCs see benefits in the form of higher marketing margins in their financials. Every Re0.1/litre increase in petrol/diesel price adds 1.9-3.5% to OMC earnings per share, according to Credit Suisse Securities (India) Pvt. Ltd.
It’s also worth remembering here that competition from private sector companies will pose a threat to expansion in marketing margins. Already, OMCs have lost market share in the fuel retailing business to private sector firms in fiscal year 2017 (FY17).
Nevertheless, all three stocks have outperformed the Nifty 50 index in the past year, supported by earnings growth. Even so, valuations aren’t expensive.
Kotak Institutional Equities highlights in a report on 19 June that OMCs may look optically inexpensive trading at 10-12 times price-to-earnings multiples or 6-6.7 times EV/Ebitda for FY19. EV is short for enterprise value and Ebitda stands for earnings before interest, tax, depreciation and amortization.
“However, it may be justified as a significant portion of the business is cyclical and it also requires meaningful amount of capex for upgradation and modernization, let alone to raise capacities,” added Kotak.
Share prices of these stocks did not alter dramatically on Tuesday. Note that Kotak’s earnings estimates are 12-15% below consensus for BPCL and HPCL, and around 2% for IOC.
Some analysts believe that OMC earnings peaked in FY17 and see risks for FY18 earnings. Lack of sizeable one-offs from inventory gains is one reason, says Spark Capital Advisors (India) Pvt. Ltd. Another reason would be rising competition in the auto fuels segment, it added.
The sharp appreciation in the last one year and the above mentioned concerns could well limit meaningful upsides for these OMC stocks. On the brighter side, a better refining margin environment and stronger demand for petroleum products will help boost sentiment for these stocks.

NCAER ups India's GDP growth to 7.6% for FY18

New Delhi: The National Council of Applied Economic Research (NCAER) has revised up its projections for the country's economic growth to 7.6 per cent for the current financial year, compared with the earlier forecast of 7.3 per cent.
Similarly, growth in the country's gross value added was scaled up from 7 per cent to 7.3 per cent for the year.
Surprisingly, the think tank projected the wholesale price index-based (WPI) inflation to be 6.7 per cent for 2017-18. The WPI-based inflation stood at 3.85 per cent in April which further declined to 2.17 per cent in May.
India's economy grew 7.1 per cent in 2016-17, lower than 7.6 per cent against 8 per cent a year ago.
NCAER's projections are shade higher than Economic Survey which projected the GDP growth in the range of 6.75 per cent to 7.5 per cent for the current financial year. However, the World Bank has forecast growth to be just 7.2 per cent for the year.

Mobile data consumption rose 142% in last 3 yrs: Kant

New Delhi: Mobile data consumption per subscriber in India has risen by 142 per cent in the last three years, NITI Aayog CEO Amitabh Kant today said.
"Significant progress in digital access: During 2014-17, India has seen a 142 per cent year-on-year increase in mobile data consumption per subscriber," Kant said in a tweet.
He further said, "during 2014-17, India has seen a 17X increase in online banking transactions per internet user & a 200X increase in digital wallet transaction." PTI BKS

Return on equity of Sensex firms hits three-year high in FY17

Mumbai: Return on equity (RoE) of Sensex companies rose to a three-year high of 11.27% in 2016-17, while return on capital employed (RoCE) hit a five-year high of 15.1%, data showed.
The 10-year data, sourced from Capitaline, does not include banks, financial companies and energy companies.
RoE measures a company’s profitability by showing how much profit a company generates with shareholders’ money. RoCE measures the efficiency with which a company employs its capital.
Analysts said RoE recovered due to various factors including falling cost of debt. In FY17, cyclicals also had seen a bit of recovery and overall consumption improved.
Pankaj Pandey, head of research at ICICI Securities Ltd, said RoE expansion was led by last fiscal’s higher demand, recovery in cyclicals and decent profits. He expects RoE to improve further this year, led by Sensex earnings per share (EPS) of 18.5%.“Due to decline in cost of capital and fall in inflation expected in FY18, RoE is likely to improve with increase in profitability of companies. Overall, domestic and consumption-oriented firms should do well. Capex recovery is also seen in this fiscal,” Pandey said.
Automobile and consumer goods companies saw an increase in RoE while technology, pharma, metals and FMCG saw a sharp fall.
RoE of auto companies stood at 233.7%, improving in the last two years after it had started falling from FY11. However, in the last 10 years, its best RoE was at 725.26% in FY08. Consumer goods sector RoE recovered to 9.33% in FY17, from a decline of -0.36% in FY15. For this sector, RoE has been declining since FY08. RoCE for consumer goods in FY17 is at 19.84%, up from 13.19% from the previous year.
Siddhartha Khemka, head, equity research (wealth) at Centrum Broking Ltd said, “RoE expansion is led by improvement in margins in a few sectors due to low material cost, coupled with the increase in capacity utilisation.”
IT and pharma companies did not see any improvement in RoE and RoCE. After a recovery in FY14, RoE for IT companies fell to 17.30% in FY17. In the last 10 years, its best RoE was at 24.39% in FY08. Its RoCE, too, fell to 22.05% in FY17 from 25.64% in FY16. After clocking 18.03% in FY15, RoE in the pharma sector has slipped, touching 16.04% in FY17. In the past 10 years, the sector’s best RoE was in FY11 at 35.29%. RoCE of pharma companies also fell to 17.08% from 19.53% in the last fiscal.
Meanwhile, Ambit Capital Pvt. Ltd said in a 15 June report that the smallest stocks in the BSE500 (ex-BFSI) universe have the worst performance in terms of RoCE and RoE ratios. However, these stocks have seen the sharpest price to earnings (PE) re-rating over the last six years.
“Both for Indian midcaps and largecaps, the actual quarterly earnings have kept disappointing consensus expectations – even the ones built at the end of relevant quarter. When one considers the percentage of stocks in these indices with negative earnings surprise has remained consistently upwards of 50% throughout the last 12 quarters. Further, this number looks to be increasing again for the midcap space,” the brokerage firm said.
However, there is widespread optimism in the markets which is driving the momentum. Analysts still believe that earnings recovery will pick up and see healthy growth in FY18. Emkay Global Financial Services Ltd expects steady-state earnings growth to be around 10% which is somewhat higher than the 10-year average of 4.5% and flat growth of the past three years. It sees consensus earnings growth estimate for FY18 at over 20%, but implementation of GST in July may bring forth inventory correction across various sectors, thereby slowing sales growth temporarily, while recent modest appreciation in Indian rupee could also impact near term outlook on earnings.
Stating that, “this could be the beginning of a new growth cycle”, Ridham Desai, managing director and Sheela Rathi, equity strategist, Morgan Stanley said in 6 June note, “We watch for a turn in earnings revisions in the coming months as earnings surprise positively. Relative to US equities, this is about as attractive as Indian stocks have been in a while. India’s own price to book is at historical average. Versus emerging markets, India looks rich but then RoE is gapping higher.”

Maruti, Honda drive industry growth in FY18

New Delhi: Domestic sales of passenger vehicles (cars, vans and utility vehicles) and two-wheelers witnessed a healthy growth rate of about 12 per cent and 10 per cent, respectively, in the first two months of the financial year 2017-18. However, this is not the real growth of the industry, as it was dominated by just two companies — Maruti Suzuki in the case of passenger vehicles (PV) and Honda in two-wheelers. Both the companies are controlled by Japanese auto majors — Suzuki and Honda, respectively.
If one looks at the performance of the PV industry minus Maruti Suzuki, the growth rate comes down to sub-five per cent from 12 per cent. Maruti grew at 19 per cent in April-May 2017, pushing the industry’s growth. Maruti’s growth helped it reach a market share of almost 52 per cent during this period, for the first time in over a decade. Three products of the company — Baleno, Brezza and Dzire — enjoy a waiting period of at least two months.
The second-biggest player, Hyundai, saw a volume growth of less than four per cent. M&M, which stood third, witnessed a volume decline of over six per cent. A few other players, all with a market share of five per cent or lower, were able to show double-digit growth but on a small base. These included Honda Cars, Tata Motors, Toyota, Ford, and Nissan.
The story is identical in the two-wheeler segment. After a weak phase post demonetisation, the industry clocked a 9.6 per cent growth rate in domestic sales in the April-May period. But, if we were to look at the industry’s growth minus Honda Motorcycle and Scooter India (HMSI), this rate comes down to below three per cent. HMSI, riding on the rising popularity of scooters, witnessed its domestic sales grow by 28 per cent in April-May. Market leader Hero MotoCorp’s domestic sales registered less than three per cent growth, while TVS Motor, the third-biggest player, grew at 10 per cent.
HMSI, the second-biggest player, sold over a million units in the first two months. “This growth is coming on back of demand for both scooters and motorcycle models,” said Y S Guleria, senior vice president (sales and marketing), HMSI.
HMSI’s scooter sales grew 32 per cent, against the industry’s 24 per cent, while motorcycle sales surged 21 per cent as compared to a four per cent growth rate in the industry. Accordingly, HMSI expanded its market share to 31.5 per cent from 27 per cent during April-May last year. Guleria said the company had set an “aggressive” target, to grow domestic sales by 20 per cent in FY18. HMSI’s growth made India the largest contributor to Honda’s global two-wheeler business by volume last year. India sales contributed 28 per cent to Honda’s volume.
Abdul Majeed, partner at PwC India and a sector expert, said both Maruti Suzuki and HMSI had managed to sustain a high double-digit growth by creating successful mass products and backing them with an extensive sales and service network.

Digital economy can reach US$ 4 trn in 4 yrs: Tech sector to govt

New Delhi: Surpassing the government's expectations to make India USD 1-trillion digital economy by 2022, technology companies today said it has potential to grow up to USD 4 trillion during the period.
IT Minister Ravi Shankar Prasad, who chaired a meeting with industry captains to chalk out a growth plan, said the government will formulate a new set of strategies to support growth including a new electronics policy, software product policy and a framework for data security and protection.
"There was unanimity among all the participants that USD 1-trillion digital economy is an understatement. India has the immense potential to go to USD 2 to 3 to 4 trillion digital economy potential," Law and IT Minister Ravi Shankar Prasad told reporters after meeting with top industry leaders.
The meeting was attended by top experts such as Nasscom President R Chandrashekhar, Google India's Rajan Anandan, Wipro's Rishad Premji, Indian Cellular Association National President Pankaj Mohindroo, NIIT Chairman Rajendra Pawar and Hike Messenger CEO Kavin Bharti Mittal, among others.
Notable absentees from the event included Flipkart co- founder Sachin Bansal and Paytm founder Vijay Shekhar Sharma.
The government has projected that Indian digital economy will become USD 1 trillion by 2022 from around USD 450 billion digital economy at present.
As of now, the Indian electronics market is estimated to be around USD 100 billion, IT sector USD 150 billion, telecom USD 150 billion, e-commerce USD 30-40 billion and rest is estimated to be size of shared economy like taxi hailing services, start-ups etc.
"One participant said that BPO alone has potential to reach USD 1 trillion potential. One participant said that electronics manufacturing itself has the potential to reach that in coming in 3-4 years. I asked them specifically that is this the hope shared by all. All of them said we share this," Prasad said.
The Ministry of Electronics and IT has projected IT and ITeS sector to grow to USD 350 billion by 2025 from USD 160 billion, while electronics sector is poised to touch USD 300 billion by the same time (from USD 100 billion currently).
Telecom and e-commerce are projected to grow to USD 150 billion each, while sharing economy and digital skilling each presents a USD 30 billion opportunity.
Digital payments, cyber security and Internet of Things -- all of which are expanding at a significant pace -- are expected to touch USD 50 billion, USD 35 billion and USD 20 billion, respectively.
It was also projected that the digital economy will generate 30 million employment opportunities by 2024-25, which is double than the current scenario.
The ministry has identified digital payments, Make In India, Start-Up India, Skill India among the key drivers of the digital economy.
Highlighting the potential of the "new economy" with avenues like digital payments and e-commerce, Prasad said the focus needs to be on creating technology that is affordable, developmental and digitally inclusive.
Prasad said that deliberations at the meeting had also brought out the need to promote an ecosystem to facilitate more start ups in areas like education, agriculture and healthcare.
"I have decided that we will have a coordinated action with Health, Agriculture and HRD Ministries to promote an ecosystem to facilitate more startups in these areas," he said.
Prasad added that the idea of setting up special innovative zones for start-ups will be explored and a framework for startup cluster policy will be developed.
Besides, digital skilling has a lot of potential as India has a rich talent pool that can be used to meet global demand in emerging technologies like artificial intelligence.
"We need to re-skill and re-purpose ourselves. We have a list of different skills, where we need people... If you re- skill yourself in blockchain or AI, there is no shortage of jobs globally," Tech Mahindra Managing Director and CEO CP Gurnani said.
Citing a Nasscom report, Prasad said that in the last three years, almost six lakh people have been employed in the IT sector, while in 2016-17, the number of people employed was around 1.7 lakh. About 2.5-3 million new jobs are expected to be created by 2025.
He refuted reports of job losses by Indian IT firms, terming them as "motivated".
"There has been a lot of debate, and by any standards of economy, this talk of job decline in the IT sector is motivated," he said.
In terms of challenges, the participants had pointed out the need for setting up a dispute resolution mechanism and liberal regulatory norms.

Relaxation in return filing procedure for first two months of GST implementation

New Delhi: With the objective of ensuring smooth rollout of GST and taking into account the concerns expressed by the trade and industry regarding filing of the returns in GST regime, it has been decided that, for the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month. However, the invoice-wise details in regular GSTR – 1 would have to be filed for the month of July and August, 2017 as per the timelines given below –
Month GSTR – 3B GSTR - 1 GSTR – 2 (auto populated from GSTR-1)
July, 2017 20th August 1st – 5th September* 6th – 10th September
August, 2017 20th September 16th – 20th September 21st – 25th September
Facility for uploading of outward supplies for July, 2017 will be available from 15th July, 2017.
No late fees and penalty would be levied for the interim period. This is intended to provide a sense of comfort to the taxpayers and give them an elbow room to attune themselves with the requirements of the changed system. This not only underlines the government’s commitment towards ensuring that all the stakeholders are on board but also provides an opportunity to the taxpayers to be ready for this historic reform.

RIL-BP to invest USD 6 bn in developing new gas fields

New Delhi: Reliance Industries and its partner BP plc today announced investment of USD 6 billion in developing new gas fields in the KG-D6 block after an eight- year hiatus.
RIL chairman Mukesh Ambani said two firms have also agreed on a strategic cooperation on new opportunities for conventional and unconventional fuel trading and marketing including jointly setting up petrol pumps.
"Changed policies have allowed us to develop new resources," BP CEO Bob Dudley said.
He said BP-RIL has agreed to progress on R-Series gas field development in the KG-D6 block and will invest USD 6 billion. The gas project will reduce India's import dependence by 10 per cent.
Addressing a joint press conference, Ambani said RIL-BP after many years will invest Rs 40,000 crore to bring 30-35 mmscmd of gas.
This "new and historic cooperation" will also explore trading of fuel and carbon emission trading, he said.
With regard to pending arbitration, Ambani said RIL will follow legal course for bringing them to conclusion.
"We don't see pending arbitration hampering our new investments," he added
RIL is locked in four arbitration cases with the government. It is in arbitration against the government disallowing recovery of certain KG-D6 gas field costs as a punishment for gas output lagging targets.
Another arbitration is over deferring of a natural gas price hike due to the company from April 1, 2014. The latest arbitration is against government demanding USD 1.55 billion compensation from RIL and its partners for "unfairly" producing ONGC's gas.

Seafood exports to grow above 20% in FY18

Bhubaneswar: Seafood exports are likely to grow over 20 per cent in 2017-18 after the figures touched an all-time high of $5.78 billion (Rs 37,870.90 crore) in 2016-17.
The exporters are upbeat despite the fact that the major importing countries are taking protectionist measures to safeguard their local industries.
Recently, The American Shrimp Processors’ Association has named India, along with Indonesia, Thailand, Vietnam, Mexico, China, and Malaysia, as seven of the 13 countries with which the US ran a significant overall shrimp trade deficit in 2016. The US trade deficit in shrimp was $4.5 billion in 2016.
Similarly, the International Trade Commission of the United States had unanimously voted to extend the current anti-dumping orders on shrimp from China, India, Thailand and Vietnam for an additional five years.
"With exports to US setting new records and the markets' rising appetite, the industry is confident of a strong growth for the Indian shrimps. By our current estimates, it would be a surprise if Indian exports don't bring in growth in excess of 20 per cent y-o-y (year on year)," said Rahul Kulkarni, director, WestCoast Group, a leading seafood exporter from India.
USA had imported 1,88,617 tonnes of Indian seafood in the last financial year, accounting for 29.98 per cent in dollar terms. The exports have registered a growth of 22.72 per cent, 33 per cent and 29.82 per cent in terms of quantity, value in rupee and the US dollars, respectively.
The exporters are pinning hopes on growth in exports with the adoption of the Vannamei or Pacific White variety of shrimp in recent years over the Black Tiger by new states.
"The areas brought under Vannamei cultivation is on the rise in states like Odisha and West Bengal. There is also emergence of demands from new countries like Canada and Australia", said G Mohanty, an Odisha based exporter.

RERA to boost GDP growth: PHD Chamber

New Delhi: The Real Estate (Regulation and Development) Act, if implemented with a positive approach, can boost the GDP of the country, industry body PHD Chamber said today.
The Real Estate Regulation Act (RERA) came into force from April 1 with a promise of protecting the right of consumers and ushering in transparency.
Today like GST, the RERA is another burning topic and these changes will have a positive impact for decades to come, PHD Chamber Vice-President Rajeev Talwar said at a conference.
"RERA is yet another big step forward ... its implementation in positive manner can boost the GDP of the country which dipped marginally in the previous fiscal," he said.
He appealed the government to come out with a concept of 'kick start loans' for real estate developers, especially for those whose projects are stuck as also make a provisioning of a loan at the rate of 6 per cent for buyers that have invested their hard earned money in such projects so that their re- launch becomes conclusive.