ADB sees India growing 7.4% in 2017-18, says GST, bankruptcy law big positives

Yokohama: The Indian economy will grow by 7.4 per cent in FY 2017-18 and by 7.6 per cent in FY 2018-19 on the back of an improving business environment created by reforms like the Goods and Services Tax (GST) and the new bankruptcy law, stated Mr Yasuyuki Sawada, Chief Economist, Asian Development Bank (ADB). A growth of more than 7 per cent is high compared to other emerging economies, including China. He further stated that the impact of demonetisation was short-term, and the Indian economy's growth will accelerate over the medium-term. He was also of the opinion that the appreciation of rupee against the dollar will not have a negative impact on exports and that India's overall export performance is positive.

World's highest railway bridge is coming up over the Chenab in J&K

New Delhi: The Ministry of Railways is working on building the world’s highest railway bridge over the Chenab river in Jammu and Kashmir at a cost of around Rs 1,100 crore (US$ 171.5 million), which is expected to be 359 meters (m) above the river bed, 35 m taller than the Eiffel Tower. The construction of 1.3-kilometer(km)-long bridge is expected to use over 24,000 tonnes of steel, and is expected to be completed by 2019. The bridge is designed to withstand wind speeds of up to 260 km per hour, and explosion as it will be made of thick special blast-proof steel. The bridge would connect the 111 km stretch between Katra and Banihal, which is part of the Udhampur- Srinagar-Baramulla rail link project, and would likely become a tourist attraction in the region.

Cabinet approves National Steel Policy 2017

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for National Steel Policy (NSP) 2017.
The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
Key features of the NSP 2017:
1. Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs
2. Encourage adequate capacity additions,
3. Development of globally competitive steel manufacturing capabilities,
4. Cost-efficient production
5. Domestic availability of iron ore, coking coal & natural gas,
6. Facilitating foreign investment
7. Asset acquisitions of raw materials &
8. Enhancing the domestic steel demand.
The policy projects crude steel capacity of 300 million tonnes (MT), production of 255 MT and a robust finished steel per capita consumption of 158 Kgs by 2030 - 31, as against the current consumption of 61 Kgs. The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
Some highlights of New Steel Policy
The Indian steel sector has grown rapidly over the past few years and presently it is the third largest steel producer globally, contributing to about 2% of the country's GDP. India has also crossed 100 MT mark for production for sale in 2016-17.
The New Steel Policy, 2017 aspires to achieve 300MT of steel-making capacity by 2030. This would translate into additional investment of Rs. 10 lakh Crore by 2030-31.
The Policy seeks to increase consumption of steel and major segments are infrastructure, automobiles and housing. New Steel Policy seeks to increase per capita steel consumption to the level of 160 Kgs by 2030 from existing level of around 60 Kg.
Potential of MSME steel sector has been recognised. Policy stipulates that adoption of energy efficient technologies in the MSME steel sector will be encouraged to improve the overall productivity & reduce energy intensity.
Steel Ministry will facilitate R&D in the sector through the establishment of Steel Research and Technology Mission of India (SRTMI). The initiative is aimed to spearhead R&D of national importance in iron & steel sector utilizing tripartite synergy amongst industry, national R&D laboratories and academic institutes.
Ministry through policy measures will ensure availability of raw materials like Iron ore, Coking coal and non-coking coal, Natural gas etc. at competitive rates.
With the roll out of the National Steel Policy-2017, it is envisaged that the industry will be steered in creating an environment for promoting domestic steel and thereby ensuring a scenario where production meets the anticipated pace of growth in consumption, through a technologically advanced and globally competitive steel industry. This will be facilitated by Ministry of Steel, in coordination with relevant Ministries, as may be required.
Background:
Steel is one of the most important products in the modern world and forms the backbone to any industrial economy. India being one of the fastest growing economies in the world, and steel finding its extensive application right from construction, infrastructure, power, aerospace and industrial machinery to consumer products, the sector is of strategic importance to the country. The Indian steel sector has grown exponentially over the past few years to be the third largest producer of steel globally, contributing to about 2% of the country's GDP and employing about 5 lakh people directly and about 20 lakh people indirectly.
Untapped potential with a strong policy support becomes the ideal platform for growth. Owing to the strategic importance of the sector along with the need to have a robust and restructured policy in present scenario, the new NSP, 2017 became imminent. Though, National Steel Policy 2005 (NSP 2005) sought to indicate ways and means of consolidating the gains flowing out of the then economic order and charted out a road map for sustained and efficient growth of the Indian steel industry, it required adaptation in view of the recent developments unfolding in India and also worldwide, both on the demand and supply sides of the steel market.

Actis to invest US$ 500 million in green energy platform Solenergi

New Delhi: Private equity fund Actis LLP plans to invest around $500 million in its second green energy platform in India, Solenergi Power Pvt. Ltd, two people aware of the development said.
Solenergi is among the successful bidders for the Rewa solar power project in Madhya Pradesh.
“Actis recently completed the fund round for its fourth fund. Of this, it plans to deploy around $500 million for Solenergi Power,” said one of the two people cited above, requesting anonymity. A second person who also asked not to be identified confirmed this.
A spokesperson for Actis declined to comment.
Actis aims to take advantage of the country’s growing green economy which, in turn, is fuelled by the government’s ambitious clean energy goals. India plans to generate 175 giga watts (GW) of renewable energy by 2022. Of this, 100GW is to come from solar power projects.
Actis invests exclusively in emerging markets with a focus on investments in energy and real estate. Its fourth energy fund, Actis Energy 4 (AE4), raised $2.75 billion in commitments and will invest the funds in Latin America, Africa and Asia. Its earlier energy fund, Actis Energy 3, raised $1.15 billion in 2013. Of the $7.8 billion deployed by Actis, 26% is in the energy sector.
Solenergi Power had placed a aggressive bid of Rs3.30 per kilo-watt hour to win a contract to build 250MW capacity at Rewa. The other successful bidders are Mahindra Renewables Pvt. Ltd and Acme Solar Holdings Pvt. Ltd.
Experts say financial heft helps in placing competitive bids. “The cost of capital is the principal differentiator in determining the viability of solar project bids. Then comes the question about how patient is the capital for returns? Also, the structuring of a project will make a big difference in terms of effective cost of capital. And then is the issue of the type of business model a developer or asset owner has,” said Anish De, partner at the infrastructure and government practice at consulting firm KPMG in India.
Actis was encouraged by the success of its existing Indian renewable energy platform, Ostro Energy, and looking to launch another, Mint reported in January.
“AE4 already has an extremely strong pipeline with $2 billion of deal equity either completed or in late stage including four large scale regional platforms,” Actis said in a 6 March statement.
Ostro Energy and Solenergi are among the energy platforms that Actis has created globally, following Globeleq Meso America in Central America, Zuma Energia in Mexico, Aela Energia in Chile and Atlantic Renovaveis in Brazil.
“Demand for electricity and quality infrastructure in growth markets is high and rising. Energy services are crucial to a country’s economic development. An estimated $10 trillion of investment is required by 2035 across non-OECD (Organisation for Economic Co-operation and Development) countries to meet future demand,” the Actis statement added.
India’s demand for green energy is expected to grow sevenfold in 2035, according to the latest BP Energy Outlook released in January.

Cement price hikes in April indicative of better volume and profitability

,” the report said.
An Edelweiss survey showed cement offtake was robust in the East, stable in the North, and marginally weak in Uttar Pradesh due to sand shortage. Cement demand will rise 5-6% as the government awards more road projects, said K.K. Maheshwari, managing director of UltraTech Cement Ltd, India’s largest cement maker.
For the first time since 2001, cement production declined year on year in FY2017, following the government’s demonetisation exercise. Prices fell as well. Prices have now rebounded to pre-demonetization levels in April after being negatively impacted in the West, East and South regions, rating agency ICRA Ratings said.
With the impact of demonetization gradually subsiding, cement prices have reached the pre-demonetization levels in April 2017 in most markets,” said Sabyasachi Majumdar, senior vice-president and group head at ICRA Ratings. “Going forward, we expect prices to be supported by a marginal improvement in capacity utilisation. The slowdown in new capacity addition and improvement in the supply-demand scenario in FY18 should support capacity utilization levels and thereby cement prices.”
The cement sector is seeing early signs of increase in demand after a short-lived decline and prices of the commodity are likely to rise, Mint had reported on 23 March.
Despite assuming flat volume growth for the sector, first quarter earnings are likely to surprise positively driven by price hikes, PhillipCapital India said in a 27 April report.
“Given a favourable demand scenario, we understand cement prices have been raised across pockets by about 10% and further price hikes of 3-5% cannot be ruled out in May 2017. After the monsoon arrives, cement prices are unlikely to be increased until the end of H1FY18,” the report said. Even if prices were to drop, they would still be 5-6% above March prices, it said.
With the current cement prices, first quarter (April-June) sector Ebitda (earnings before interest, taxes, depreciation and amortization) per tonne is likely to improve by 20-40% quarter-on-quarter and by 15-20% year-on-year, PhillipCapital said.
Most dealers are hopeful that demand will pick up and eventually drive up prices further prior to monsoon, according to the Edelweiss report. “Overall, higher cement prices year-on-year at the outset of FY18 suggest positive price/volume trade-off and better profitability for players in upcoming interims, it said.

Sale of Khadi products rises 33% to Rs 2,005 crore in FY17

New Delhi: The sale of khadi products rose 33 per cent year-on-year to Rs 2,005 crore (US$ 312 million) in 2016-17, as against a sale of Rs 1,510 crore (US$ 235.2 million) a year ago. The Khadi and Village Industries Commission (KVIC) expects the sales to exceed its target of Rs 5,000 crore (US$ 779 million) in 2018-19. The KVIC is setting up export cells to promote overseas sales of the products. The overall sales of khadi and village industries grew 24 per cent to around Rs51,996 crore (US$ 8.1 billion) in 2016-17, and the production increased by 23 per cent to Rs 42,506 crore (US$ 6.62 billion) during the year.

Govt explores buy and lease strategy to boost electric vehicle usage

New Delhi: The government is exploring a strategy to task a company with buying electric vehicles (EVs) in bulk and then leasing them to companies such as taxi aggregators, in an attempt to bring down the cost of such vehicles.
The strategy is to encourage more manufacturers to make electric vehicles. The number of electric vehicle purchases may range between 200,000 and 1 million.
The government has been exploring the leasing model for electric vehicles, Mint reported on 15 April.
“There is a lot of interest in this plan. At least two companies each from the private sector and public sector space have evinced interest,” said a person involved with the government’s electric vehicles push. He declined to name the firms.
SoftBank Group Corp. chairman Masayoshi Son said in a statement in December that ANI Technologies Pvt. Ltd, which runs cab-hailing service Ola, in which the Japanese firm is an investor, may introduce a fleet of 1 million electric cars in partnership with an electric vehicle maker and the government.
“Volumes help in reducing costs. We are also looking at improving km per kilowatt hour (kWh) and efficiency of electric vehicles in terms of motor, tyres, aero dynamics and lightweight material,” said the person quoted above.
The National Democratic Alliance (NDA) government is exploring measures ranging from leasing of electric vehicles to transferring technology to firms for commercial production of lithium-ion batteries developed by the Vikram Sarabhai Space Centre for use in automobiles. It is also exploring a strategy that involves reducing the battery size to bring down electric vehicle prices.
According to the business plan for electric autos and buses reviewed by Mint, the battery cost is expected to be Rs18 per km, with the charging cost per km being Rs0.99.
Abdul Majeed, partner and national auto practice leader, PricewaterhouseCoopers, said, “It sounds like a good step aimed in the direction of bringing some momentum to the sales of electric vehicles. It will help build scale. Once scale gets build, rest of the issues such as infrastructure challenges, etc., will be taken care of.”
Shifting to electric vehicles will check pollution and reduce fuel imports. India’s energy import bill is expected to rise from around $150 billion currently to $300 billion by 2030. The centre has set a target of 6 million electric vehicle sales by 2020.
Queries emailed to the spokespersons for NITI Aayog, department of heavy industry; and ministries of road transport and highways, and new and renewable energy on Sunday evening remained unanswered.
The electric vehicle programme is slowly coming together. The Economic Times newspaper on 25 April reported that Indian Institute of Technology-Madras professor Ashok Jhunjhunwala will spearhead the government’s electric vehicle programme.
While Bharat Heavy Electricals Ltd (Bhel), India’s largest power generation equipment maker, wants to manufacture electric vehicles such as buses, cars, two-wheelers and boats, Power Grid Corp. of India Ltd, the power transmission utility responsible for establishing green energy transmission corridors, is considering setting up charging stations for electric vehicles.

Commerce and Industry Minister Smt. Nirmala Sitharaman has said that India should take lead in making quality products available to world at an affordable price

New Delhi: Commerce and Industry Minister Smt. Nirmala Sitharaman has said that India should take lead in making quality products available to world at an affordable price. Inaugurating the 4th National Standards Conclave organized by the Department of Commerce in association with CII, BIS, EIC, FSSAI, APEDA and NABCB she emphasized while standards as signifying quality are important but they also need to be affordable for manufacturers to comply and consumers to buy. She said Prime Minister’s ‘Zero Effect Zero Defect’ idea aims at exactly this. She cited The Mangalyan launch costing and worldclass quality is a prime example of quality with affordability.
Commerce and Industry Minister appreciated that a ‘standards strategy document’ is going to be the possible outcome of this conclave however, she emphasised that long term strategy should not lose sight of immediate challenges. Smt. Sitharaman stated that any national strategy for standards should be able to factor in technology to disseminate any change in import requirements in foreign countries so that our exporters are well prepared to overcome those barriers. This dissemination has to be in regional languages. She said this has become critical as number of notifications in WTO have increased and many deal with standards .
The Minister highlighted the issues confronting agriculture sector, where the nature of standards set in international bodies often militate against the Indian varieties. She stressed that International standards especially in food produce must value variety over homogeneity and India must participate actively in such Standards setting. When Sanitary and Phyto-Sanitary (SPS) controls are put on agro products, like mango or grapes unilaterally, they hurt our farmers. Similarly, the Maximum Residue Limits (MRLs) of certain pesticides or biocides are altered too quickly in the foreign markets and farmers are taken by surprise. So, efforts must be put to create quick information system for such farmers and exporters. She hoped that the proposed strategy would provide a guide or a kind of framework so that we avoid such crises at negotiation stage it self.
The Minister also launched the India Standards Portal – a one stop portal for all information on Standards, Technical Regulations, conformity assessment & accreditation practices, and the related bodies in India and adivsed that portal should also help exporters to identify regulations in various countries abroad.
In his address, Mr. R V Deshpande, Minister for Large and Medium Industries and Infrastructure Development, Government of Karnataka, highlighted the strategy adopted by his state to put in place a robust standards eco system. These include besides providing incentives to the industrial units adopting standards, insistience on procurement of products and services which conform to the standards, ensuring infrastructure is available in the state and focus on Research and Development.
Ms. Rita Teaotia, Secretary, Department of Commerce highlighted the legislative reforms that have been happening as a result of series of national and regional Conclaves. She stated that since the last edition of the Conclave, the new BIS Act had been passed and the Consumer Protection Act is also proposed to include a new chapter on Product Liability. This would help strengthen the standards ecosystem in the country. She also noted that for the first time, standards in the services sector were getting attention. She suggested that there was a need to develop a National Strategy for Standards as well as Vision Document for the same.
Ms. Alka Panda, Director General, Bureau of Indian Standards (BIS) highlighted the role that the BIS was playing in the development of standards in the country. Mr. Adil Zainulbhai, Chairman, Quality Council of India stated that there was a need to work with Small and Medium Enterprises (SMEs) to help improve their standards. He also spoke of the need to create a standards compliance system which was easy to comply with and emphasized that standards should be seen as an opportunity rather than as a threat.
Mr. Rakesh Bharti Mittal, President Designate, and Mr. Chandrajit Banerjee, Director General of CII also spoke in the inaugral affirming Industries’ commitment to graduate to a high Standards regieme in the country.
Mr. Sudhanshu Pandey, Joint Secretary, Department of Commerce, Ministry of Commerce and Industry proposed the Vote of Thanks.

Organic product export expected to surge

New Delhi: Export of organically made products, both food and nonfood, is likely to grow threefold in the four years to 2020, following the government's relaxation on quota limits.
According to the Agricultural & Processed Food Products Export Development Authority (Apeda), Indian farmers produced around 1.35 million tonnes (mt) of certified organic products in 2015-16 which include all varieties of food products namely sugarcane. Of this, export was 263,687 tonnes, worth $298 million (~1,900 crore).
Through a notification dated April 19, the Directorate General of Foreign Trade liberalised the quantitative restrictions on export of such products.
“Perhaps the government had imposed such restrictions for ensuring food security at home. But, these were only discouraging farmers from intensifying work on organic products. We, therefore, had urged the government to liberalise the restrictions,” said Manoj Menon, executive director of Indian Competence Centre for Organic Agriculture, a Bengalurubased network.
It believes the overall market of ~4,000 crore under the organic value chain would hit ~10,000 to 12,000 crore by 2020, with similar increase in export.
While export of organic wheat, non-basmati rice, edible oils and sugar have been exempted from all annual quantitative ceilings with immediate effect, those on pulses and lentils has been increased from 10,000 tonnes to 50,000 tonnes.
Farmer export is largely to Europe, Canada and West Asia. Oilseeds were half of India’s overall organic export, followed by processed food products at 25 per cent.
“Farmers tend to see low productivity and thereby low income for at least three years if they switch, from conventional or hybrid farming. Since organic farming does not use chemicals and fertiliser, the only way farmers can be compensated is through premiums for their produce. In fact, Indian organic products like tea, vegetables and pulses fetch much higher premium from markets abroad than conventional and hybrid products there,” said a senior industry official. The difference is up to 100 per cent.
With around 50 per cent of market share, America is the biggest market for global organic produce, worth $80 billion. The area under organic certification in India was 5.71 million hectares in 201516. Of this, about a fourth (1.49 million hectares) was cultivated area and the rest (4.22 million hectares) came under forest and wild areas, used for collection of minor forest produce.

Indian companies in UK reach annual growth rate of 31%

London: Nearly 800 Indian companies based in the UK have a combined revenue of £47.5 billion, are the second-largest employers, and 55 of the fastest growing companies achieved an average annual growth rate of 31%, a new analysis released Wednesday said.
The analysis, titled ‘India Meets Britain Tracker 2017: The Latest Trends on Indian Investment in the UK’ by London-based consultants Grant Thornton and CII revealed the scale of contribution of Indian companies to the British economy.
Anuj Chande, head of South Asia at Grant Thornton, said at the release: “The UK remains a highly attractive destination for Indian investors. The Modi government’s pro-business agenda is creating the right environment for Indian businesses to pursue and realise growth at home and overseas.”
The report monitors Indian businesses here with an annual revenue growth of 10% or more. Of the 55 that made the list of fastest growing companies, 23 are new entrants while 32 featured in last year’s list.
According to the report, just under half of the companies included in this year’s tracker recorded a 25% growth rate or above.
Datamatics Infotech Ltd topped this year’s list with a growth rate of 103%.
Companies from the technology and telecoms, and pharmaceuticals and chemicals sectors make up 31% and 24% of the list respectively. These are sectors where businesses are continuing to find growth opportunities by diversifying into new spheres of activity.
The business services sector entered the top three for the first time with an 11% growth rate, up from 6% in 2016 and just 3% in 2015. London continues to strengthen its dominance as the leading destination for Indian investment in the UK. Of the fastest-growing Indian companies, 44% are now based in the capital, up from 39% last year and 25% in 2015, the report said.
The UK has long been the preferred European destination for FDI from India. Out of the 845 FDI projects made by Indian companies in 16 European countries since 2003, over 45% have been in the UK.
Shuchita Sonalika, head of CII UK, said: “The report identifies £4.25 billion of new investment last year by Indian companies, and further jobs being created as part of their continued investment programmes.