IT-ITeS sector leased 10% more office space in 2016, says JLL

Mumbai: Office space absorption by the information technology (IT) and IT-enabled services (ITeS) companies rose by 10% to 16.81 million square feet (sq ft) in 2016 over the previous year, with Bengaluru and Hyderabad together accounting for more than 50% of this space take-up, according to a report by JLL India.
Office space demand from these companies had increased from 1.4 million sq ft in 2001 to 15.2 million sq ft in 2015.
The transaction sizes, however, are becoming smaller — the average area leased was slightly over 31,200 sq ft in 2015, which went below 27,000 sq ft in 2016. ”In percentage terms, this is a reduction of 14% (year-on-year) and implies that developers need to be ready for designing business parks for smaller requirements. Their focus should change from quantity to quality of tenants,” said Ramesh Nair, country head & CEO, JLL India.
The number of lease transactions saw a 52% growth year-on-year, going up from 414 in 2015 to 628 in 2016. Back in 2001, there were only 19 IT leasing transactions. Last year, most of the transactions were recorded in the tech hubs of Bengaluru and Hyderabad, while micro-markets preferred by IT players across Delhi-NCR, Chennai, Mumbai and Pune also saw a good number of transactions.
“The growing transaction numbers indicate that IT companies, which previously preferred built-to-suit office complexes, increasingly prefer to lease offices that offer flexibility. Earlier, many Indian IT firms, especially the bigger ones like Infosys and TCS, preferred constructing their own campuses. Now, as the client contracts of many of these companies get shorter, they prefer to lease,” Nair said.
Many IT firms in India follow the principle of ‘one dollar real estate cost' and lease quality spaces that charge rents below Rs 65 ($1) per sq ft per month. The top seven cities in the country have been providing spaces to accommodate this strategy. Industry body Nasscom forecasts that the IT-BPO sector will account for 10% of India’s GDP by 2020 and create Rs 30 million direct and indirect jobs, he said.
“Last year, however, the pace of growth of top technology firms was in single digits due to global uncertainty and technological disruption. The office space requirements of technology and outsourcing firms - particularly those engaged in software development - also slowed down,” Nair said.

'DigiYatra'- A new digital experience for air travellers

New Delhi: The Ministry of Civil Aviation is adding a Digital experience for Air Travellers through DigiYatra Platform. The ‘DigiYatra’ is an industry-led initiative co-ordinated by the Ministry in line with the Prime Minister Shri Narendra Modi’s Digital India’s vision to transform the nation into a digitally empowered society. This follows Air Sewa which brings together all the stakeholders on a common platform for handling customer grievances and disseminating real-time data.
The Union Minister for Civil Aviation, Shri P Ashok Gajapathi Raju expressed hope that ‘DigiYatra’ initiative will transform the flying experience for passengers and position Indian Aviation amongst the most innovative air networks in the world.
The Minister of State for Civil Aviation, Shri Jayant Sinha today launched the report on ‘DigiYatra’. Shri Sinha also briefed the media about the ‘DigiYatra’ initiative of the Ministry. He said that ‘DigiYatra’ initiative aims to bring together entire industry to develop a digital ecosystem that will deliver Indian customers a seamless, consistent and paperless service experience at every touch point of their journey.
The Minister of State for Civil Aviation, Shri Sinha informed that the Ministry created a Technical Committee comprising industry stakeholders which will submit its recommendations in 30 days. These propositions would be open for public comments and discussions for another 30 days. These would then be translated into a time-bound action plan.
Shri Sinha said that the DigiYatra initiative envisages providing airline travellers in India, a pioneering ‘digitally unified flying experience’ across all stages of their journey. All aviation stakeholders – airlines, airport operators, security and immigration agencies, cab operators, retail establishment and others are working to devise digital standards which can enable seamless exchange of data and information. He said that these standards can power unique applications which can deliver a delightful experience for air travellers.
Shri Sinha further informed that the platform will be built on 4 key pillars, like Connected Passengers, Connected Airports, Connected Flying and Connected Systems which can make it possible over a period of time for passengers to:
Plan their trips efficiently by identifying price trends and estimate future airfares at the time of ticket booking,
Optionally link their Aadhaar to airlines and other ecosystem players at the time of booking for faster airport entry and automated check-ins without requiring any paper-based interventions,
Walk-through security scanners swiftly owing to advanced biometric security solutions,
Receive relevant information pertaining to various facilities, protocols, airline timings, queue lengths at airports etc.,
Engage in customised digital offerings at experience zones,
Get real time notifications about congestion and delays to have greater visibility on the next step of journey,
Conveniently navigate through the airport using digital guidance systems, interactive kiosks and augmented reality apps,
Stay connected during flights and indulge in immersive experiences. Also book in-flight services and destination based offerings digitally,
Get a prompt when their luggage reaches the baggage claim belt , and
Submit grievances, share experiences and provide feedback.
The Digitising data would help the aviation industry gather meaningful insights for continuous improvement and innovation. This initiative has emerged after six months of comprehensive discourse with various ecosystem players.

India 'bright spot' for global steel output growth: report

New Delhi: India is being seen as a bright spot for the growth in global steel production, supported by government’s push to augment capacity and demand from the construction, automotive and infrastructure sectors. Tata Steel Ltd and Steel Authority of India Ltd (SAIL) would drive the steel output growth, according to a report by BMI Research. India's steel output grew by 7.4 per cent year-on-year in 2016, and is expected to reach an average annual growth of 8.9 per cent between 2017-2021.The steel output has been estimated to grow to 128.6 million tonnes (MT) in 2021 from 88.4 MTs in 2017 and the share in global output would rise to 7.7 per cent by 2021 from 5.4 per cent in 2017.

Daily consumer goods being used by the common man among others to become cheaper after GST .

New Delhi: Implementation of Goods and Services Tax (GST) on the following items will have zero rate after the GST Law comes into force on 1st July, 2017.
As a result of which these items will be available at cheaper rates to the common man at large:
1) Foodgrains and flours
a. Cereals
b. Pulses
c. Atta
d. Maida
e. Besan
Except branded ones with registered trade mark in whose case GST will be charged at the rate of 5 %.
2) Fresh milk
3) Fresh vegetables and fresh fruits
4) Puffed rice (muri)
5) Common salt
6) Animal feed
7) Organic manure
8) Fire wood
9) Raw silk/raw wool/jute
10) Hand operated agriculture equipments.
Due to no GST on these items, most of them are expected to become cheaper in the range of approximately 4-5% as compared to their existing prices.

India announces mounting of a National Mission on advanced ultra supercritical technologies for cleaner coal utilization

India announces two MI-centric Funding Opportunities in Smart Grid and Offgrid Access at US $ 5 million each
Dr. Harshvardhan led Indian Delegation at 2nd Mission Innovation Ministerial and 8thClean Energy Ministerial at Beijing
New Delhi: India announces mounting a National Mission on advanced ultra supercritical technologies for cleaner coal utilisation at a total cost of US $ 238 million and setting up of two Centres of Excellence on Clean Coal Technologies at US $5 million each. In its quest for cleaner fuels, a National Mission on methanol and di-methyl ether is being mounted. A new centre on solar photovoltaic, thermal storage and solar fuels research has been approved ~ US $ 5 million. Funding opportunities have been announced in the area of energy storage, clean coal, waste water treatment amounting to US $ 10 million. This announcement was made at the 2nd Mission Innovation Ministerial and 8th Clean Energy Ministerial at Beijing, China.
India also announced two MI-centric Funding Opportunities in Smart Grid and Offgrid Access at US $ 5 million each. Joint virtual Clean Energy Centre with UK and Indian Government funding of UK £ 5 million each has been initiated. Under the Indo – USJoint Clean Energy Research (PACE – R) the new collaborative public – private programme on Smart Grids & Energy Storage has been approved. India has also embarked upon a joint programme on renewable energy with Norway
Energy Ministers from 23 Nations with 80% of Clean Energy Investments and 75% of GHG Emission met on June 6-8, 2017 at Beijing, China to focus on Advancing Clean Energy Cooperation and Implementing Paris Agreement Commitments
The Indian delegation was led by Union Minister for Science & Technology, Earth Science and Environment, Forests & Climate Change, Dr. Harshvardhan.
Dr. Harsh Vardhan also participated alongwith 4 other Ministers in a roundtable on “Accelerating innovation via public-private synergies, “Getting to the Future Faster: Accelerating Innovation in Clean Energy Technology through Public and Private Collaboration”, which considered the roles of the private and public sectors in the innovation ecosystem, synergies between the two, and successful models for feeding the innovation pipeline and accelerating outcomes.
The Minister held a successful bilateral meeting with US Secretary Rick Perry. Joint collaboration in clean energy was discussed to widen new areas of research cooperation in clean coal, carbon capture and accessible and affordable water. These areas will be in addition to strengthening ongoing partnerships under PACE-R. A new partnership in india-US clean energy was also discussed,
Dr. Harsh Vardhan also led bilateral meeting with Maros Sefcovic, Vice President for European Union, European Commission. Successful ongoing collaborations were discussed on water technology, research& innovation, clean biofuels solar energy etc) . New partnership in clean technologies such as smart grids, water and waste water treatment were also discussed.
Eighteen months ago on 30th November 2015, leaders of 20 countries came together to launch Mission Innovation (MI), a landmark 5-year commitment to accelerate the pace of innovation and make clean energy widely affordable and accessible worldwide. MI now comprises 22 economies and the European Commission, representing the European Union, and collectively accounts for more than 80 percent of the world’s total public financing of clean energy R&D.
Mission Innovation developed and launched 7 Innovation Challenges in November 2016. These Innovation Challenges focus on selected technical area where MI members believe increased international attention would make a significant impact. India is Co-leading three Challenges – Smart Grid, Off Grid Access and Sustainable Biofuels. Minister Harsh Vardhan released the India Action Plan for next 3 years
This week, energy ministers and other high-level delegates from 22 countries and the European Union convened at the Chinese National Convention Center in Beijing for the second Mission Innovation Ministerial (MI-2) from 6-8 June. Indian delegation was led by Dr. Harshvardhan.
Energy ministers and other high-level delegates from all MI member governments participated in a business meeting on June 7 to discuss plans, progress, country highlights, and preview a series of public announcements on selected areas of joint cooperation.
Ministers and delegates gave their encouragement to carrying out an MI Action Plan. This Plan highlights a number of priority areas for cooperative work, as identified by MI members who have opted-in, in joint research, business and investor engagement and information sharing.
India informed that two MI-India Workshops were organized on 22-23 May, 2017 on Innovation Challenge (IC#1) on Smart Grids and Innovation Challenge ( IC#2) Offgrid access to electricity at New Delhi., India which identified possible topics of co-operation with MI countries. India also launched MI-India funding opportunity of US $ 5 million each for achieving objectives envisaged in both these Innovation Challenges.
India announced its plan for hosting a MI Sustainable Biofuel Innovation Challenge Workshop in December, 2017 in New Delhi, India in collaboration with Biofuture platform.
The increased focus on Innovation by both public and private sectors is expected to give rise to new and advanced technologies, performance breakthroughs, and significant cost reductions. These, in turn, will create opportunities for new industries and jobs and expand markets for reliable and clean energy – for both production and demand. The lower costs will spur economic growth and accelerate market uptake, enabling the realization of the benefits of accessible, reliable and affordable clean energy worldwide.

Indian media, entertainment industry to grow at 10.6%: PwC

Mumbai: The Indian media and entertainment industry is expected to grow much faster than the global M&E industry according to the PwC's 2017 Global E&M Outlook. The report pegs the global entertainment and media industry to clock 4.2 per cent CAGR from 2016-21 while India is expected to grow at 10.6 per cent. The Indian M&E industry is expected to exceed Rs 291,000 crore by 2021.
The key takeaways from the report are in line with major industry trends: TV advertising will continue to command a huge share of the advertising pie, though internet advertising will emerge as the fastest growing advertising platform. Also in line with current trends, the report predicts India to be among the largest and fastest growing newspaper markets in the world, owing to the popularity of vernacular publications, and increasing literacy rates.
Growth forecast: India vs Global for 2016-21
Sector India CAGR (%) Global CAGR (%)
TV Advertising 11.1 2.8
Cinema 10.4 4.4
Internet Advertising 18.6 9.8
Newspapers 1.1 -2.7
Internet video 22.4 11.6
TV subscription 11.6 1.3
Total M&E* 10.6 4.2
Source: PwC’s 2017 Global E&M Outlook *Total M&E not a sum of sectors listed. Radio, books, magazines, music, gaming also considered in total revenue

Frank D'Souza, Partner & Leader-Entertainment & Media, PwC India, comments, "Unlike the global economy, which will see a shrinking contribution from the Entertainment and Media sector over the Outlook period, in India the sector's growth rate will outpace the overall GDP growth rate. Being a relatively under-developed market in terms of per capita spend on entertainment and media, will allow India to grow at 10.57 per cent over the next five years to an overall size of Rs 2,90,539 crore."
He adds, "Also, being the least digitised market, will allow the traditional media to grow without being disrupted by digital competition. Whereas one may be tempted to conclude that India's growth in this sector is divergent from the world's, it will do well for Indian players to keep their eyes on changing landscape globally and prepare for its eventual impact on the Indian market."
Television (TV) subscription revenue is expected to grow at 11.6 per cent (global - 1.3 per cent) CAGR from Rs 52,755 crore in 2016 to Rs 90,713 crore in 2021. Though subscriber numbers are still growing, the report predicts that the explosive growth levels of the recent past will not be replicated in the future. While cable market is approaching a saturation point it will continue to account for over 55 per cent of the total pay-TV market in 2021. TV advertising will continue to hold the larger share of the pie from Rs 21,874 crore in 2016 to Rs 37,315 crore in 2021, growing at 11.1 per cent. Globally, TV advertising is expected to grow at 2.1 per cent for the forecast period.
India is ranked eighth in the Asia Pacific region in the internet advertising market. While the segment is growing faster than any other advertising platform at 18.6 CAGR it is still an immature online ad market due to lack of Internet access among Indians. Fixed broadband penetration remains low at 6.9 per cent in 2016. However, this is double the global growth, estimated at 9.8 per cent. Currently mobile Internet advertising comprises 27.6 per cent of total online spending, marking a clear gap between Indians with mobile access and brands reaching out to the mobile audience.
India's internet video segment revenue in 2016 was Rs 560 crore in 2016 and will grow at 22.4 per cent CAGR (global - 11.6 per cent)to reach Rs 1540 crore in 2021 according to the report. Going forward, transactional video-on-demand is expected to account for over 61 per cent of total Internet video revenues in 2021, with many households not wanting to commit to the regular payments of subscription video-on-demand. In other words, the content providers will see more traction by breaking content into snackable segments and charge only for those, rather than give only long format content. For example, people would be more willing to pay for the highlights of a cricket match than watch the whole match on a paid platform.
Box office revenue is expected from INR 10,957 Cr in 2016 to Rs 18,047 crore in 2021, at a healthy CAGR of 10.4 per cent. Globally, it is estimated that box office revenues will grow by 4.4 per cent CAGR with mature markets like the US already facing challenges while attracting footfalls to the cinema halls. In India, admissions will rise from an estimated 200 crore in 2016 to 230 Cr in 2021 (at a CAGR of 2.4 per cent) and ticket prices will rise at a CAGR of 7.9 per cent in the same period. This is one of the few major cinema markets in which 100 per cent digitisation of screens has not yet been achieved - and it is not expected to occur over the forecast period.
Publishing in India is expected to grow from Rs 38,601 crore in 2016 to Rs 44,391 crore in 2021 at a CAGR of 3.1 per cent. Book publishing is projected to grow at 6.1 per cent CAGR over 2017-2021 whereas magazines are expected to grow at a CAGR of 3.3 per cent for the same period. The Indian newspaper industry continues to grow from Rs 23,161 crore in 2016 to Rs 24,447 crore (1.1 per cent) in 2021, distinctly positive when compared to the segment's degrowth globally (2.7 per cent) predicted by PwC for the forecast period.

83% currency remonetised so far: RBI

Mumbai: Mr B P Kanungo, Deputy Governor of the RBI, has verified that over 82.7 per cent of the currency has already been remonetised so far, which is around 108 per cent in volume terms. The Government of India had demonetised old Rs 500 (US$ 7.76) and Rs 1,000 (US$ 15.51) notes on November 9, 2016, scrapping around 87 per cent of the currency in circulation. Mr Kanungo further stated that it would be wrong to assume that there is any shortage of currency in the system as RBI is monitoring the situation on a regular basis and has made enough arrangements to replenish cash. There were 17,165 million pieces of Rs 500 (US$ 7.76) notes and 6,858 million pieces of Rs 1,000 (US$ 15.51) notes in circulation in the country before the announcement of demonetisation in the country.

Home loans set to get cheaper as RBI eases norms for banks

Mumbai: The Reserve Bank of India (RBI) on Wednesday made it possible for banks to lend more to home buyers, and at lower interest rates, in a move that should benefit customers as well as real estate developers.
The central bank did this by reducing the amount of money banks have to set aside (as security) on home loans. Previously, they had to set aside 0.4%, or Rs400 per lakh. This has now been reduced to 0.25%, or Rs250 per lakh.
Combined with the cut in the statutory liquidity ratio (the portion of deposits which banks have to invest in government securities) by 50 basis points, or 0.5 percentage point, this means banks now have that much more capital to lend. The reduction in the amount banks have to set aside (also called a provision) also mean lower home loan rates.
The central bank also reduced the so-called risk weightage on home loans of between Rs30 lakh and Rs75 lakh to 35% from 50%, and over Rs75 lakh to 50% from 75%.
Risk weights are used to calculate the minimum amount of capital that must be held by banks to reduce the risk of insolvency.
This could make bigger home loans less expensive. (Typically, loans above Rs75 lakh were up to 0.5 percentage points more expensive, in terms of interest than other loans.)
“When risk weightage drops it means the banks have that much more money to lend. If it has dropped by one third it means the cost of doing business comes down which makes it possible for banks to then cut interest rate and pass it on to the borrowers,” said Rajeev Ahuja, chief operating officer, RBL Bank Ltd.
The reduction in rates will be higher for bigger ticket size loans which are already more expensive when compared to loans of lower value. Currently, the interest rate on home loans above Rs75 lakh is higher. For instance, State Bank of India offers an interest rate of 8.35% for loan amount below Rs30 lakh while for loan above Rs75 lakh the interest rate is at 8.65%.
RBI’s decision was prompted by an understanding of the multiplier effect of home loans, according to RBI deputy governor N.S. Vishwanathan. His reference is to the fact that an increase in home loans means more home sales, which will benefit real estate developers—and companies in the construction, cement and steel businesses at one end, and companies in the furniture and appliance businesses at another.
“Delinquencies (are) generally among the lowest in home loan segment....It has been decided to reduce risk weight on certain categories on home loans and also the standard asset provisioning,” Vishwanathan added.
According to Vishwanathan, reduction of statutory liquidity ratio (SLR) by 50 basis points will help banks in achieving 100% liquidity coverage ratio by January 2019. These two factors together will bring buoyancy to the home loan segment.
Credit to the housing segment has increased by 13.4% year-on-year at the end of April.
Banks are focusing on affordable housing as demand from other sectors of the economy has dried up and to take advantage of incentives offered by the government to home buyers. Many banks have reduced their home loan rates. The government on 31 December announced the Credit Linked Subsidy Scheme for Middle Income Groups, where interest subsidy of 4% was granted on housing loans of up to Rs 9 lakh and 3% on housing loans of up to Rs 12 lakh.
According to a report by CLSA India Pvt., housing sales could rise from Rs7 trillion in financial year 2017 to Rs17 trillion by fiscal 2024 on the back of market growth and impetus to affordable housing.
“The decision to reduce the risk weights for home loans over Rs30 lakh category will release capital for the banking industry and is a positive move,” said SBI chairman Arundhati Bhattacharya.
Banks have already been aggressively cutting home loan rates. SBI, for instance, has already cut its one-year marginal cost of funds based lending rate (MCLR) —the rate linked to its home loans—to 8% currently from 9.20% in April 2016.
Vivina Vishwanathan contributed to this story.

GO BACK Cabinet approves development of four laning from end of Pandoh bypass to Takoli section of National Highway (NH) - 21 in Himachal Pradesh

New Delhi: The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for development of four laning from 'end of Pandoh Bypass to Takoli' section of National Highway (NH)-21 in Himachal Pradesh.
The cost is estimated to be Rs.2775.93 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road to be developed is approximately 19 kms.
This work will be done under National Highways Development Project (NHDP) Phase IV B on Hybrid Annuity Mode.
The project will help in expediting the improvement of infrastructure in Himachal Pradesh and in reducing the time and cost of travel for traffic, particularly heavy traffic, plying between ‘end of Pandoh Bypass to Takoli' section. The development of this stretch will also help in uplifting the socio-economic condition of this region in the State.
It would also increase employment potential for local labourers for project activities. It has been estimated that a total number of 4,076 mandays are required for construction of one kilometre of highway. As such, employment potential of 77,000 (approx.) mandays will be generated locally during the construction period of this stretch.

Cabinet approves MoU between India and Korea for export credit of USD 9 billion

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposed Memorandum of Understanding (MoU) between Export-Import Bank of India (EXIM Bank) and Export-Import Bank of Korea (KEXIM) for export credit of USD 9 billion for infrastructural development in India and for the supply of goods and services as part of projects in third countries.
The MoU is proposed to be signed between the two banks during the forthcoming visit of the Finance Minister Shri Arun Jaitley, to Seoul, Korea during 14-15 June 2017 for the Annual Financial Bilateral Dialogue. The decision is expected to promote the country’s international exports, and deepen political and financial ties between India and Korea. The export credit will be utilized through lending by EXIM Bank for promoting projects for priority sectors, including smart cities, railways, power generation and transmission etc., in India and for the supply of goods and services from India and Korea as part of projects in third countries.
Implementation Strategy
Under the implementation strategy, the parties to the MoU will hold mutual consultations to structure the financial assistance, review the existing arrangements and related procedures. EXIM Bank will identify viable projects in India. For projects in third countries, both parties will jointly identify viable projects. It is understood from EXIM Bank that the USD 9 billion would be extended by KEXIM by way of Investment Credit (typically export credit facility to finance projects with a certain level of Korean import content and interest rates as per OECD export credit guidelines). This amount may also be utilized by KEXIM as the financier without the participation of EXIM Bank subject to satisfaction of the purpose.
The supply of goods and services from India and Korea as part of projects in third countries will be an additional avenue which this MoU will enable. It will help in exchanging mutual experience, sharing information on financing export and import operations, project assessment and knowledge generated in respective fields of activities.
Background
The Joint Statement issued in 2015 during the visit of the Prime Minister to the Republic of Korea stated that Korea intends to offer USD 10 billion of infrastructural development in India. The package was subsequently prepared to comprise of USD 1 billion from the South Korean Economic Development Cooperation Fund (EDCF) as government to government funding and USD 9 billion as export credit from KEXIM. The credit of USD 9 billion from KEDIM is to be through a formal MoU to be signed between KEXIM and EXIM Bank.