El Nino weakens, monsoon expected before schedule

New Delhi: As of now, the southwest monsoon is expected to arrive before the usual time over the mainland. And, to progress steadily thereafter over the western parts, delivering above-normal rain in June, first month of the four-month season.
Normal rain in June is 164 mm. In July and August, respectively 289 mm and 269 mm. “After its onset on May 29-30, the southwest monsoon is expected to make steady progress over the west coast, southern peninsular India and even the east and northeast,” says Mahesh Palawat, chief meteorologist at private weather forecasting agency Skymet.
He said Chhattisgarh and Vidarbha were expected to get a good amount of pre-monsoon showers during June, where the usual onset date is late June or early July.
D S Pai, director of long-range forecasts at the government’s India Meteorological Department (IMD) agrees. He says after the monsoon’s onset around May 30, the rains are expected to progress quickly over the west coast, due to formation of a low pressure area, aiding its push into the mainland. As of now, said Pai, distribution of rain across the country looks fairly well. IMD is to issue regional and month-wise predictions early next month.
As of now, it feels the monsoon could be even more than its initial forecast of 96 per cent of the Long Period Average. This is the average rain India got in the 50 years from 1951, around 890 mm.
One reason for its optimism is weakening of the adverse El Niño weather condition. The Australian Weather Bureau, considered among the authentic voices on El Niño, has said there is a 50 per cent chance of it this year but most of its models are suggesting this would be a weak one.
IMD’s first forecast had said a weak El Niño, coupled with a neutral to positive Indian Ocean Dipole, should greatly benefit the southwest monsoon.
And, that the rains in 2017 could be very evenly spread, a critical element for India. That and a timely southwest monsoon would ensure a good kharif harvest, following the record production in 2016-17.

Environment ministry planning to ease coastal regulation norms

New Delhi: The environment ministry is planning to revamp India’s coastal regulation norms, a move that could open up India’s 7,500km-long coastline for developmental activities.
Environmentalists say that the proposed norms would have serious implications for the marine environment and are weaker compared with the current Coastal Regulation Zone (CRZ) notification, 2011.
The draft of the new coastal norms, accessed by environmentalists using the right to information (RTI) law, reveals that it would open the coastline for activities such as tourism and real estate.
The draft Marine and Coastal Regulation Zone (MCRZ) notification 2017 was accessed by Meenakshi Kapoor, who works at the Delhi-based think tank Centre for Policy Research, using the RTI Act 2005, on Tuesday. Kapoor criticized the environment ministry for not releasing the draft to the public for wider consultations.
“Since 2014, the entire process of reviewing and revising the CRZ notification, 2011 has been a closed-door exercise, she said.
“Instead of the environment ministry inviting suggestions and feedback from coastal communities, researchers, urban planners and legal experts on the implementation of the CRZ Notification and proposals for reform, there has been a reluctance to share the details of this review.”
The draft, reviewed by Mint, is currently under inter-ministerial consultation.
An environment ministry official, requesting anonymity, said the draft is expected to be finalized soon. The draft has already been discussed with the Union ministries of tourism, shipping and urban development.
“Once views of the ministries are included, it would be put online for views and suggestions from all stakeholders including public and experts,” the official said.
An analysis of the draft reveals that it proposes to shrink the no-development zone in rural coastal areas from 200m from the high tide line now to merely 50m, where temporary tourism facilities will be permitted.
The draft proposes to also allow temporary tourism facilities in ecologically sensitive areas.
The proposed notification also states that state and Union territory governments are to prepare tourism plans for their respective MCRZ areas.
According to the draft, housing and basic infrastructure for local inhabitants will also be allowed after 50m from the high tide line in rural areas, compared with the 2011 notification which permitted houses for coastal communities after 100m.
The draft also proposes to reduce the coastal protection zone for islands from the present 500m from the high tide line to just 20m.
The proposed draft also proposes to give powers to state authorities to decide the extent of developmental activities.
The draft, however, clarifies that activities related to Defence Research and Development Organization, Indian Space Research Organisation, exploration and extraction of oil and natural gas and extraction of minerals will continue to require clearances from the environment ministry.
India’s first CRZ notification was issued in 1991, under the Environment Protection Act, 1986, empowering the central government to restrict industrial activities and processes to protect the coastline. It was amended 25 times before being comprehensively revised in 2011.
In June 2014, the National Democratic Alliance government constituted a committee under Shailesh Nayak, then secretary in the ministry of earth sciences, to look into issues raised by states regarding the 2011 CRZ notification. In January 2015, the Nayak panel submitted the report. That report has also not
been made public by the ministry.

Start Up -Definition changes

New Delhi: Startup India was launched by the Government of India on 16th January, 2016 to build a strong eco-system for nurturing innovation and Startups in the country to drive economic growth and generate large scale employment opportunities.

In order to promote entrepreneurship in the country, the Government of India has amended the definition of a Startup. The following significant changes have been made to the definition of Startups –

a) Age of Startup increased: Taking into account the long gestation period by Startups to establish, an entity shall be considered as a Startup up to seven years from the date of its incorporation/ registration (from earlier 5 years). However, in the case of Startups in the Biotechnology sector, the period shall be up to ten years from the date of incorporation/ registration.

b) No Letter of Recommendation required: No letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits
c) Potential of Job and Wealth Creation: The scope of definition has been broadened to include scalability of business model with potential of employment generation or wealth creation.

As a constant endeavour to facilitate the Startup ecosystem, the Department of Industrial Policy and Promotion (DIPP) has been holding extensive consultations with stakeholders. The above changes are an effort to ensure ease of starting up new businesses to promote the Startup ecosystem and build a nation of job creators instead of job seekers.

GDP to grow at 7.1% in Q4 FY17, says Icra

New Delhi: India’s economy is expected to grow at 7.1 per cent in the fourth quarter of FY17, as remonetisation has gained steam, according to Icra.
Gross domestic product (GDP) had grown marginally lower, at 7 per cent, in the third quarter of FY17, down from 7.4 per cent in the second quarter.
Principal Economist of Icra, Aditi Nayar, said: “Benefitting from gradual remonetisation, GVA (gross value added) growth is likely to improve to 6.9 per cent in Q4 FY17 from the initial estimate of 6.6 per cent for Q3 FY17, while remaining weaker than the robust 8.1 per cent in Q4 FY16. Our forecast of a 6.9 per cent GVA expansion in Q4 FY17 builds in a healthy 8.8 per cent year-on-year- growth in services, and moderate rise of 5.4 per cent and 4 per cent, respectively, in industry and agriculture, forestry and fishing.”
The Central Statistics Office is expected to release its estimate of fourth quarter growth on May 31.
Higher growth of the services sector was likely on account of robust growth in air cargo traffic, bank deposits as well as central government non-interest, non-subsidy revenue expenditure, the report said. Construction activity, though, would continue to fare poorly as the effects of the note ban linger.
The Icra estimated agriculture to grow at 4 per cent in the fourth quarter, based on the third advance estimates of crop production which showed healthy growth of rabi output of pulses, oilseeds, wheat and coarse cereals. Agriculture had grown by
6 per cent in the previous quarter.
But the CSO might revise the GDP estimate in light of the release of the new Wholesale Price Index (WPI) and the Index Of Industrial Production (IIP) series.
The new IIP series shows higher industrial growth than was estimated under the earlier IIP series. And with the WPI series showing lower inflation, which would impact the deflators, it is likely that the revised estimates may well show higher growth.
“The new WPI and IIP data could lead to revisions in GDP and GVA levels and growth rates from FY13 onward, at constant prices. In particular, the FY17 growth rates may differ materially from the second advance estimates released by the CSO in February 2017. Some additional data on the impact of the note ban on the informal sectors may result in a sharper dip in growth in H2 FY17, relative to the revised levels for H1 FY17,” added Nayar.

USFDA lifts import alert from Sun Pharma's Mohali plant

Mumbai: Sun Pharma said the US FDA will lift the import alert imposed on the Mohali (Punjab) manufacturing facility and remove the facility from official action initiated (OAI) status. This proposed action will clear the path for Sun Pharma to supply approved products from the Mohali facility to the US market, subject to normal US FDA regulatory requirements, the company said in a BSE filing on Tuesday. Sun Pharma scrip jumped by over 5% on the BSE.
The Mohali facility was inherited by Sun Pharma as part of its acquisition of Ranbaxy in 2015. The US FDA had taken action against the facility in 2013 when it ordered it to be fully subject to Ranbaxy's Consent Decree of Permanent Injunction. Certain conditions of the consent decree will continue to be applicable to the Mohali facility, the company added.

India, China to propel global oil demand in 2017, OPEC says

New Delhi: India and China will propel demand for crude oil in 2017, the OPEC said on Tuesday even as it forecast subdued global demand.
World oil demand will grow 1.26 million barrels per day or 1.26% in 2017 from 1.38 mb/d in 2016, OPEC said in its monthly report.
In 2017, world oil demand is expected to stand at 96.31 mb/d, showing a growth of 1.26 mb/d, higher by about 70,000 b/d from previous month’s projections.
“Most of the oil demand growth is anticipated to originate from Other Asia, led by India, followed by China, then OECD America. The OECD Asia Pacific is the only region anticipated to reduce its oil requirements in 2017 y-o-y,” it said.
Indian economy is expected to gather momentum in 2017-18 and grow by as much as 7.5%, according to the government’s Economic Survey. India’s stats office estimated the GDP growth to slow to 7.1% in 2016-17, from 7.9% in 2015-16, as demonetisation crimped consumption and investment demand.
India’s oil demand is estimated to grow by 0.14 mb/d or 3.25% to 4.53 mb/d in 2017, after growing 8.2% in 2016.
In case of China, the oil demand is estimated to grow by 0.28 mb/d or 2.45% to 11.79 mb/d.
In January, India’s crude imports dropped by 132,000 b/d, or 3%, from the previous month to average 4.1 mb/d, showing an annual drop of 161,000 b/d, or 4%.
On the product side, India’s imports in January went down by 66,000 b/d, or 8%, m-o-m to average 777,000 b/d. The imports were down by 13,000 b/d, or 2% year-on-year. The drop seen in the monthly product imports came mainly as a result of lower imports of LPG.
India’s fuel product exports dropped in January by 34,000 b/d, or 3%, to average 3 mb/d. The exports were down by 113,000 b/d, or 8% from last year. “The drop in the monthly product exports came mainly as a result of lower diesel exports,” OPEC said.

TRAI to promote ease of doing business in telecom sector

New Delhi: The Telecom Regulatory Authority of India (TRAI) is trying to identify the obstacles that create difficulties to perform telecom business with ease in India. TRAI plans to review its existing processes of licence acquisition, spectrum allotment and mergers in order to simplify them to the extent possible to economise on efforts on part of the Telecom Service Providers (TSPs) as well as the government. The procedures related to unified licence, acquisition of licence, compliance with commercial, financial, technical conditions, and compliance with roll-out obligations, payment of licence fee, financial bank guarantee and performance bank guarantee, adding and surrendering authorisations under the licence, are expected to be reviewed as a part of the process.

M&A interest may grow as buyers get more confident about India: Barclays India MD

Mumbai: Merger and acquisition (M&A) activity in India rose to a record $69.75 billion across 1,195 transactions in 2016, fuelled by a wave of consolidation across sectors. Consolidation as a driver for M&A activity is expected to continue in the near- to mid-term as available dry powder, both foreign and domestic, steadily accumulates. Barclays Capital was at the forefront of some of the largest deals in India last year.
In an interview, Pramod Kumar, Barclays India managing director and co-head of banking, talks about the various factors that are likely to drive M&A deals in the coming quarters. Edited excerpts:
Going ahead, what are the trends you are observing that will drive M&A activity in India?
I think what we will see, and what has been evident from the activity in the past year as well, is the continued consolidation and rationalization of businesses. This will lead to some of the existing players selling off parts of their businesses or monetizing them at attractive valuations. We will see that accentuated in a large way by strong private equity interest in these businesses and the willingness and ability (of private equity funds) to own these businesses with large stakes.
These are businesses which are fundamentally not bad, but which have been either under-invested in or haven’t got the attention they deserve and can show significant improvement. There are several instances of that if you look back at the past 12-24 months.
For example, Crompton Greaves’s consumer business falling out of leverage issues that the group was facing. We have seen several other industrial assets being divested, a lot of cement assets get sold, primarily a result of leverage issues that the owners have faced.
More corporates are taking a view around rationalization of their businesses. All that has led to M&A activity.
What is the level of interest you are seeing from strategics, especially foreign strategics?
Surprisingly, in all of this, we may not have seen a large amount of foreign strategic action yet, with the exception of a few such as American Towers, Yokohama and Fosun. This is something that will change going forward. I am hoping that you will see more interest from them, and that would be primarily on account of them becoming more and more comfortable about India. It has certainly improved from what you saw say two years ago or going back to the previous government’s last two years. But I think more can happen.
Any particular sectors where strategic interest is higher?
There is interest in financial services, there is interest in renewables, interest in some areas of industrials; even in health-care services, we are seeing some conversations.
In private equity, the general feeling is that the interest is more around buyouts. How do you think PE activity will pan out this year?
Private equity feels more comfortable, and increasingly so now, of being able to own the business and then control it, change management, bring about improvements, etc., which wasn’t the case a few years ago.
In a way, they have also felt that owning a minority stake in an environment where there is no huge earnings growth, their ability to really do much with the business is limited and I would say that in many situations a lack of trust factor is also playing. Some of the experiences of private equity with the existing promoters hasn’t really been great, so they would prefer to have a larger stake and then the ability to bring about improvement where they can.
What impact will some of the geopolitical situations such as Trump coming to power in US and all the noise around changes in policies for sectors like IT and pharma, have on deal making in these sectors?
For pharma, the US is still the largest market. Several Indian firms will continue to look to consolidate their positions in the US. So I don’t rule out activity on that front, though it may be a little more cautious around what policy changes the Trump government implements. There will be some bit of caution.
As far as M&A is concerned, tech companies were not doing very big acquisitions. Pharma in the US will be more cautious until they get clarity around the policies.
We saw several overseas bond issuances and refinancing activity last year. How is that market looking like in 2017?
The markets are quite liquid. Everyone’s counting on two rate hikes this year in the US. So, people are certainly taking advantage of the high amount of liquidity that is there in the market and that the credit spreads have compressed. People do see this as an opportunity where they can refinance their existing debt and term out the maturity.
Interestingly, we also have some other companies which are looking to access the bond market to replace their rupee funding—we have seen Renew Power do such a bond and earlier Greenko had done that.
The driver there is again strong liquidity in the market, ability to get good pricing, coupled with the fact there is a huge growth opportunity here in the renewables space, and that this frees up their bank lines, allowing them to go and borrow incrementally from the banks to grow their portfolio.

Govt readies multi-modal transport play to reduce logistics costs

New Delhi: India has firmed up the contours of its ambitious multi-modal programme to reduce logistics costs and make the economy competitive.
The strategy involves a reset of India’s logistics sector from a “point-to-point” model to a “hub-and-spoke” model and involves railways, highways, inland waterways and airports to put in place an effective transportation grid.
This includes setting up 35 multi-modal logistics parks at an investment of Rs50,000 crore, development of 50 economic corridors and an investment template which involves roping in the states and the private sector for setting up special vehicles for implementation.
To implement this, the government plans to host a multi-modal summit—India Integrated Transport and Logistics Summit—in May, on the lines of the maritime summit to pitch project opportunities to the investors.
From Mumbai, it’s easier to send stuff to UK than Delhi: Nitin Gadkari
“It is for the first time that we have taken an integrated approach for the country’s transportation. This will increase India’s exports, provide employment opportunities, will be cost effective, and will make goods cheaper in the country,” said Nitin Gadkari, minister for road transport and highways, shipping and ports in an interview.
Sites for the proposed 35 logistics parks have been identified and they will be set up on railways, highways, inland waterways and airports transportation grid. Fifteen such logistics parks will be constructed in the next five years, and 20 more over the next 10 years. They will act as hubs for freight movement enabling freight aggregation and distribution with modern mechanized warehousing space.
The government’s intent was articulated by Union finance minister Arun Jaitley in his budget speech this year.
It will work like this: a joint venture will be set up between National Highways Authority of India (49% share) and the partner (51%) for the project which may be a state government or a private entity. Of the land acquired for the project, 40% will be developed and returned to the land owner. While 20% of the land will be sold to finance the project, the profit from the rest 40% of the land will go to National Highway Authority of India. The road transport and highways ministry has also sought an infrastructure status for these logistics parks.
“This model will ensure that there will be no need for us to make investments,” said Gadkari.
“We will build pre-cooling plants, cold storages, storage facilities for agricultural produce, food grains, hardware, cement, steel, fertilizer and will create a transport nagar (city) and logistic park. It will have fuel pumps and also truck maintenance shops. All of this will be at one place outside the city. Its first impact will be that it will reduce pollution, traffic jam, create new employment opportunities and contribute towards increasing exports,” the minister added.
According to the ministry of road transport and highways, several state governments want to partner with the ministry for the multi-modal logistics parks.
A pre-feasibility study will be conducted in Chennai and Vijayawada shortly.
“I have personally written to the chief ministers of states to make sure that these projects progress and have also invited them to the summit,” Gadkari added.

Delhi, Mumbai airports get top World Airport Awards

New Delhi: Delhi and Mumbai airport today said that they have secured top awards at World Airport Awards organised by Skytrax.
GMR-led consortium, which runs Delhi International Airport, said that its Indira Gandhi International Airport (IGIA) has been adjudged as the "Best Airport in India and Central Asia" by Skytrax at the World Airport Awards.
GVK Mumbai International Airport (MIAL), the company that administers Mumbai's Chhatrapati Shivaji International Airport, said that it secured the top award for the 'Best Airport Staff Service' in India & Central Asia at the World Airport Awards organized by Skytrax.
The World Airport Awards are the most prestigious accolades for the airport industry, voted by customers in the largest, annual global airport customer satisfaction survey. The Skytrax World Airport Awards are a global benchmark of airport excellence and widely known as the Passengers Choice Awards, the release from the airport operator added.