Government IT spending in 2017 to grow 9.5% to US$ 7.8 billion: Gartner

New Delhi: The government in India is forecast to spend $7.8 billion on information technology (IT) in 2017, an increase of 9.5% over 2016, according to IT researcher Gartner Inc. This forecast includes spending on internal services, software, IT services, data centre systems, devices and telecom services. Government comprises state and local governments and the central government.
The software segment includes enterprise resource planning , supply chain management, customer resource management, desktop, infrastructure, vertical specific software and other application tools. The software segment is expected to grow 15.7% in 2017 to reach $1 billion. Desktop will be the fastest growing segment with 16% growth in this category.
IT services (which includes consulting, software support, business process outsourcing, IT outsourcing, implementation, and hardware support) is expected to grow 14.6% in 2017 to reach $2 billion, making it the largest segment within the IT spending category.
“Government spending on IT services will total $2,093 million in 2017, a 15% increase from 2016,” said Moutusi Sau, principal research analyst at Gartner. “The IT services market is led by growth in business process outsourcing.”

For Suzuki, India revenues beat Japan's

New Delhi: The strong double-digit ride is set to make India a bigger market for Suzuki Motor Corporation (SMC) in value than Japan, its home market. SMC’s Indian subsidiary, Maruti Suzuki, already sells more vehicles than SMC in Japan, and enjoys a greater market capitalisation over its parent. SMC is faced with a declining market in Japan, whereas its Indian subsidiary is seeing a capacity constraint, leading to a waiting period of several months for some of its best-selling models.
On overtaking SMC’s Japan revenue in the near future, Maruti Suzuki chairman R C Bhargava said, “This is not something that will come as a surprise to us. The home market of Suzuki (Japan) is stagnant. Our numbers will continue to grow faster.”
The sales revenue gap between Suzuki’s Japan and India operations narrowed down to $600 million in FY16, from $2.55 billion in FY15. In these two years, SMC’s Japan revenue grew 2 per cent to $9.29 billion, while Suzuki’s India net sales went up 33 per cent from $6.55 billion to $8.69 billion, data from SMC showed. This reduced the gap in revenue between Japan and India. Both SMC and Maruti Suzuki follow the April-March financial year.
SMC’s Japan revenue and India revenue also include its two-wheeler business, though Maruti Suzuki only operates the passenger vehicle business and the two-wheeler business is a separate subsidiary. The two-wheeler business is much smaller in India and accounts for annual revenue of about Rs 1,900 crore or about $280 million.
In the first quarter of the current financial year, SMC’s Japan revenue grew by a mere 1.1 per cent to 250 billion yen. This translates to Rs 15,625 crore. Maruti Suzuki’s net sales in the same quarter rose 12 per cent to Rs 14,654 crore. If we include the quarterly two-wheeler revenue of Rs 500 crore (approximately), the India revenue exceeds Rs 15,000 crore in Q1.
The Indian subsidiary’s net sales in the first half (H1) increased 21 per cent to Rs 32,280 crore as it sold 10.4 per cent more vehicles than the previous year. Other than the volume increase, a better product mix and lower discounts improved Maruti’s average realisation per vehicle in H1, FY17 to Rs 4,21,000, up 9.64 per cent from FY16, and contributed to higher sales revenue.
While SMC is yet to announce its Q2 results, Maruti Suzuki’s Q2 net sales have surged over 29 per cent to Rs 17,594 crore. SMC’s production in Japan declined 10.6 per cent during H1, due to declining sales in both domestic and export markets. With this decline, the H1 revenue from Japan is estimated to be at par or even lower to the India.
The H2 of the year will be more interesting and Maruti Suzuki’s capacity constraint will get eased with the commencement of production at its Gujarat unit in January next year. The new plant, in the first phase, will add an annual capacity of 250,000 units to the existing capacity of 1.5 million units between the company’s two plants at Gurgaon and Manesar in Haryana. The third plant will further expand Maruti’s volume and sales revenue.

Sundaram Clayton to invest in US plant; expand in India too

Chennai: Automotive castings company, Sundaram Clayton, part of the TVS group, on Thursday said it was investing $50 million to set up a greenfield factory in the US, in sync with Trump administration's call to set up factories in America. In addition, the company has announced a Rs 400 crore expansion plan for its Indian operations.
"This is our first overseas venture," said Lakshmi Venu, joint MD of Sundaram Clayton. The plant will come up in Dorchester county in South Carolina across 50 acres. It will make high pressure die cast and gravity cast parts. Construction at the site is expected to begin by April and first production would be ready for roll out by end of 2018.
She denied it was after US president Trump's protectionist policies. "We have been planning for the past two years, We are following our clients who want changes to our existing supply chain," she said. Changing automotive dynamics are forcing companies to shorten supply chains. There will also be benefits on carbon footprint for the company.
Sundaram Clayton will also expand its capacities across its four plants in India. "We will invest nearly Rs 400 crore in the next three years for our Indian operations,' Venu said.
She said all the funding required for both projects would be through a mix of equity and debt. Upon completion of expansion, the Indian operations can make 70,000 tonnes of aluminum castings, up from 60,000 tonnes. "We are very bullish on India story. Between 2011-12 and 2015-16, we have completed an investment of Rs 408 crore in adding capacities across the three Chennai plants and one Hosur plant," she added.
The company, which ended March 2016 with revenues of Rs 1,523 crore said its export basket contributed to 40% of total revenues of which 60% of the exports were to the US.
Sundaram-Clayton is a manufacturer of aluminum die cast products catering to the automotive industry.
It is part of $7 billion TVS group, one of the largest automotive and automotive component manufacturing and distribution groups in India, besides being the holding company for two wheeler maker TVS Motor.

January sees 3-fold growth in M&A deals: report

New Delhi: Merger and Acquisitions (M&A) activity in January 2017 witnessed deals of around US$ 2.3 billion, which is nearly three times the deals signed in January 2016. The rise was seen in both deal value and volumes with 45 M&A deals worth US$ 2,364 million in January 2017, compared to 42 transactions amounting to US$ 827 million in January 2016 heavily backed by big ticket consolidation in the domestic deal activity with 23 transactions worth US$ 1.6 billion announced in January 2017. Over 55 per cent of the total deal value was led by energy and natural resources sector, while 22 per cent of the total deal volumes was led by start-ups.

Draft rules for digital payment to be released soon for public consultation: Ravi Shankar Prasad

New Delhi: With the increasing rise in the digital payments especially new age methods such as wallets, the ministry of electronics and IT is working on draft rules for digital payments which will deal with "consumer interests" and "security concerns." Ravi Shankar Prasad, union minister for electronics and IT said on Friday that the paper will be put up for public consultation soon.
Currently, digital payment companies are governed by Reserve Bank of India and these rules will be formed in consultation with the Central Bank. "The idea is that the consumer interest is protected and we should grow this business in an orderly manner," Aruna Sundararajan, secretary, ministry of electronics and IT said. She added that three rounds of workshop has already happened by the wallet companies and other stakeholders and some "gaps" have been identified. "If wallets have to grow as an instrument, issues such as what is the liability of the service provider, how the data is being protected, what the grievance redressal means have to be addressed," she added.
The government's demonitisation exercise announced on November 8 has given a huge push to digital payments in the country. Prasad also said that electronic payments saw an increase of 195% in terms of volume and 54% by value between October-January. Aadhaar-enabled payments, which would require just a person's biometric would be started later this month.
"Two years ago, the Narendra Modi government promised that this government will be known for building digital highways, we are clearly moving in that direction," said Prasad. India is becoming a hub of mobile manufacturing with a total of 72 manufacturers making their presence in the country. Till date, 42 mobile phones and 30 components makers have commenced manufacturing operations in the country. “India is changing from consumer of electronics to a manufacturer of electronics,” Prasad said.
On recent concerns raised by Donald Trump-led US government about the use of H-1B visa by Indian IT companies, Prasad said that the ministry was closely coordinating with the Ministry of External Affairs, which has communicated its stand to their counterparts in the US administration.
We are coordinating with the companies together with Nasscom and we need to take a coordinated approach on the visa issue, he added. “IT companies and entrepreneurs have done a tremendous job. Indian companies in the US pay $20 billion in tax to the US government,” Prasad said. Companies have created more than 4,00,000 employment opportunities in America while providing high quality services Fortune 500 companies. “Hence, it can be expected the problems will be resolved soon,” Prasad said.

Govt to double income of farmers by 2021-22

New Delhi: The government might ask the National Sample Survey Office (NSSO) to assess farmers’ income once every five years, instead of the current practice of every 10 years.
This is part of the stated objective of doubling farmers’ income by 2021-22. A senior official said the Centre is aiming at the real income of farmers, adjusted for inflation. The base year would be the 2016-17 financial year, ending next month.
The earlier such NSSO study was in 2012-13. This showed the nominal (not adjusted for inflation) income of farmers usually doubles every six years. It pegged the income at Rs 6,426 a month in 2012-13 as against Rs 2,115 a month in 2002-03, annual increase of 11.7 per cent.
For real incomes of farmers’ to double by 2021-22, agriculture and allied activities need to grow at a much faster rate than the current average.
The official clarified that when the government talked of doubling agriculture income, it does not mean only from the crop sector but the gamut of economic activities in which farmers are engaged, including masonry, during their off-season. “We (mean) joining a whole lot of economic activities and processes like providing a proper market for agricultural commodities, proper utilisation of fallow land, horticulture and so on,” the official explained.
He said Gross Domestic Product data on agriculture and allied activity also gives a fair idea of farmer income and could be used to track the rise or change. The sector’s size was Rs 16.7 lakh crore in 2016-17, according to advance estimates from the Central Statistics Office.
To achieve all this, the Centre has constituted a committee under the chairmanship of an additional secretary in the ministry of agriculture. It will determine the growth rate needed to double farmers’ or agricultural labourers’ income in five years. “We are working on various aspects and will come out with a full-fledged strategy to accomplish the objective,” the official added. He said sub-groups were working on issues like ways to improve the cold chain network, crop productivity, how to expand horticulture, other crops, animal husbandry, etc.
“The report, which can be expected in the next few months, will have implementable strategies on all aspects of agriculture, which together will double farmers’ income,” he added.

Passenger vehicle sales recover from demonetisation jitters

New Delhi: Sales of passenger vehicles grew the fastest in four months in January with consumers appearing to have shrugged off the impact of demonetisation. Sales of two- and three-wheelers, however, continued to decline.
Sales of passenger vehicles, including vans, cars and utility vehicles, in January grew 14.4% from a year ago to 265,000 units, according to data compiled by Society of Indian Automobile Manufacturers (Siam). The segment grew 19.9% in September.
Sales declined across all other segments for the second month in a row. Two- and three-wheeler sales, which happen mostly through cash transactions, continued to reel from the impact of the invalidation of older high value currency notes in early November.
Two-wheeler sales declined 7.39% to 1.26 million while those of three-wheelers declined 28.2% to 31,345 units. Sales of commercial vehicles fell 0.72% to 61,239 units.
Siam expressed hope that the impact of demonetisation would be over in a couple of months.
“Demonetisation impact is over in the passenger vehicle segment at least. It has the potential to reach double digit growth this fiscal,” said Vishnu Mathur, director general, Siam, adding that same may not be true for the overall industry. In the 10 months to 31 January, sales of passenger vehicles have grown 9.17% to 2.5 million units over the same period in 2015-16.
“For the overall industry to grow at 10%, two-wheeler industry will have to pick up,” Mathur said.
To be sure, the numbers are wholesale figures—company dispatches to dealerships—and not sales to end-users.
Abdul Majeed, partner and national auto practice leader, PwC attributed the increase in passenger vehicle sales in January to increase in dispatches to dealers of new models that have a waiting period. “The two wheeler and commercial vehicles segment has reduced growth due to the impact of demonetisation, especially in the rural markets,” he added.
Majeed said customers are still cautious about buying new vehicles given uncertainties over economic growth.
“This quarter will be challenging for the overall growth of the automotive industry, but growth is expected to pick up in the third quarter of 2017,” he added.

India-UK Deal to Allow More Flights to Boost Tourism and Trade for Global India & Britain

New Delhi: India and the UK signed a MoU to ease restrictions on the number of scheduled flights between the two countries, following successful talks in India this week. Limits on flights from key Indian cities including Chennai and Kolkata have been scrapped, allowing for a greater range of flights for passengers while providing a boost to trade and tourism for the UK and India. Building new links with important trading partners is a key part of the government’s plans for a Global Britain, opening up new export markets and creating jobs and economic growth. The agreement also opened all destinations in the UK for Indian carriers for code share flights, and reciprocally the UK carriers can also operate code share flights to any International Airport in India, through domestic code share arrangements.
The agreement was formally signed by Minister of Civil Aviation, Shri Pusapati Ashok Gajapathi Raju, on behalf of India and Lord Ahmad of U.K. during a visit to India where he led a delegation of British companies for the 2017 CAPA India Aviation Summit.
Indian Civil Aviation Minister Pusapati Ashok Gajapathi Raju, said “The increase in number of flights between the UK and India is encouraging news for our businesses and tourists. We already enjoy strong ties with the UK and we welcome such continued association which in the long run will not only encourage business activity, but also people-to-people contact. I am sure that this agreement will bring direct and indirect benefits to many sectors of the economies of our two countries”.
Tourism from India makes an important contribution to the UK economy. In 2015, there were 422,000 visits from India to the UK, bringing more than £433 million to the economy.
Aviation Minister of U.K., Lord Ahmad said: “India is one of our closest allies and key trading partners and this new agreement will only serve to strengthen this crucial relationship. We are unlocking new trade and tourism opportunities which will boost our economies, create new jobs and open up new business links. This is great news for both the UK and India and is yet another sign that we are open for business and ready to build and strengthen our trade links.”
India is a rapidly expanding and important market for aviation and the agreement signed today will allow airlines to develop new services and air routes. The final decision on additional flights between the UK and India is a commercial one for airlines.

EU, India keen to deepen strategic partnership

Brussels: The European Union and India underlined their desire on Thursday to strengthen strategic partnership and to boost cooperation in many sectors, including political, security, trade, economy, human rights and environment.
"India is one of our four strategic partners in Asia. We want to build our relationship further to reflect the strategic nature of this partnership. We have had some difficult years behind us," said Gunnar Wiegand, Managing Director, Asia and Pacific, in the EU foreign service, known as the European External Action Service.
He was speaking at a debate on EU-India relations, hosted by the Foreign Affairs Committee of the European Parliament in Brussels.
"The strategic partnership is currently being shaped in a very tangible and complex global and European environment," he said referring to the Brexit referendum and to the new US administration.
"...We have agreed on an ambitious EU-India Action Plan 2020 on a broad range of common issues," said Wiegand.
He called for more EU-India cooperation on key global issues in the Middle East, Asia and Africa, and to strengthen trade and investment partnership, adding that the EU remains committed to a broad and comprehensive Free Trade Agreement.
The top EU diplomat also called for more high-level visits from India to Brussels.
Addressing the debate, India's ambassador to the EU, Manjeev Singh Puri, said: "The EU and India are the largest bastions of democracy. We need to come together and work to make things better for ourselves and the world. I believe we have a vested interests with each other.
"The European Union and India have a joint and shared interest in multipolarity and have a shared and joint interest in discharging global responsibility," he stated.
Puri noted that the EU and India agreed on a strategic partnership in 2004 and underlined that the two sides are cooperating in several areas, including security and counter-terrorism.
The last EU-India summit was held in Brussels in March 2016, just a week after the horrendous terror attacks in the Belgian capital.
Puri said that the visit of Indian Prime Minister Narendra Modi to Brussels last March was a very important sign to stress India's solidarity in the fight against terrorism.
He said the EU and India have been negotiating a broad-based trade and investment agreement for several years and recently high-level talks were held to re-launch these negotiations.
An EU-India summit is planned to be held in New Delhi later this year.
On his part, Geoffrey Van Orden, the chair of the European Parliament's delegation for ties with India, argued that "India, in spite of the fine words and cliches that we hear, is a much neglected country in terms of our EU relationship.
"Although there are strong bilateral relations, it is also neglected in terms of bilateral relations. There is so much more to be done."
He said talks are continuing to establish an EU-India friendship group in the Lok Sabha and said that members of the delegation will be visiting India shortly. Members of the Foreign Affairs Committee of the European Parliament are also expected to visit India later this month.
Two British Members of the European Parliament of Pakistani origin, Afzal Khan and Amjad Bashir, raised the issue of Kashmir during the debate. In reply, the Indian ambassador stressed that "Jammu and Kashmir is an integral part of India".
"My suggestion to you would be to tell the country of your birth to stop fomenting terror, stop being an epicentre of global terrorism and stop trying to export it across," added Puri.

Horticulture output to exceed foodgrain yield

New Delhi: India’s horticulture production, at around 287.32 million tonnes, will continue to outstrip that of foodgrain by a good margin in 2016-17 also, even as vegetables might see just a marginal decline.
Foodgrain production is projected to be more than 270 million tonnes.
Under horticulture, fruit production in 2016-17 is expected to be 91.72 million tonnes, against 90.18 million tonnes last year.
Vegetables production in 2016-17, according to the first advanced estimates, is expected to touch 168.59 million tonnes, against 169.06 million tonnes in 2015-16, a fall of less one per cent.
The other items include plantation crops, spices and flowers.
Horticulture production has been more than foodgrain output for the past few years even when the country faced back-to-back droughts in 2014 and 2015.
Kharif grain production, according to the first advanced estimates, was around 135.03 million tonnes, the highest ever, while rabi output could also be good on the back of a record rise in the wheat and pulses area.
Though India’s horticulture output has been growing steadily for the last few years, it is much less than that of China.
That apart, the processing of horticulture produce is low in India as compared to China.
A study by YES Bank a few years ago showed that India has only two per cent of the products in temperature-controlled conditions, while in China the corresponding figure is 15 per cent. In Europe and North America it is 85 per cent.
Cold storage facilities are available for just around 10 per cent of horticulture production in the country and 30-40 per cent of the annual production is wasted before consumption.
In 2009, China processed around 30 per cent of the food (fruit and vegetables), while in India it is far less.