7 mn jobs added between FY11 and FY15, says McKinsey report

New Delhi: The labour market in India is undergoing a structural transformation. A staggering 33 million jobs were created in the non-farm sector between 2010-11 and 2014-15 finds a new study by McKinsey Global Institute. This implies that roughly eight million jobs were created on average each year.
But, with farm employment falling by 26 mn over the same period, the net addition to employment over the entire four year period was a mere 7 mn. Overall employment rose from 456 mn to 463 mn over the period.
At the aggregate level, the increase in non-farm jobs is simply not enough to absorb the millions entering the labour force each year. “At any rate, the movement of workers from farm to non-farm jobs has not been rapid enough to account for growth in the working-age population,” said the report.
The employment estimates in the report are based on employment and unemployment surveys carried out by the National Sample Survey Office as well as the annual surveys of the labour bureau.
Job growth between FY11 and FY12, the years when economic growth slowed down, was minuscule with only 11 mn jobs being created. But, growth rebounded subsequently with 22 mn jobs being created over the next two years. Bulk of these jobs were created in sectors such as trade and hospitality, construction and transportation, while sectors such as mining and manufacturing saw declines.
Overall labour force participation rate actually fell from 55.4 per cent in 2011 to 52.4 per cent in 2015, with much of the fall occurring the initial years of economic slowdown.

Hyderabad tops realty investment destination list in APAC

New Delhi: Led by Hyderabad, six Indian cities including the national capital and Mumbai are among top 10 investment destinations in the realty sector in the Asia Pacific region, owing to growth prospects in commercial office activity, says property consultant Cushman & Wakefield.
While Hyderabad emerged as the number one on destination in the region, Bengaluru and Mumbai were ranked sixth and seventh respectively, as per the report, 'Betting on Asia Pacific's Next Core Cities'.
Pune, Chennai and New Delhi were at eighth, ninth and tenth positions.
Most of the global investments for this year will be made in commercial office assets as markets in Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune are well placed to outperform other cities from emerging economies in Asia Pacific, the report said.
Cushman & Wakefield Senior Director, Research Services, Siddhart Goel said that having learnt many valuable lessons from 2005-08, global investors are now well equipped to take advantage of the potential that Indian real estate markets offer.
"The country is firmly on track to becoming an economic powerhouse with strengthening GDP, better business environment and investor-friendly policies by the central government," he added.
The Cushman & Wakefield report analysed markets that will offer investors the opportunity to tap into their long-term growth fundamentals, which will become increasingly viable due to sustained reforms.
Others cities on the list include Bangkok, which ranked third and Manila at the fourth position.
China's Guangzhou and Shenzhen have been placed at the fifth and sixth position, respectively.
"Sectors such as BFSI (banking, financial services and insurance), healthcare, consulting services and various manufacturing industries are increasingly driving demand for commercial spaces," Goel said.

WPI inflation in May cools to 5-month low of 2.17%

New Delhi: Inflation based on the wholesale price index fell to a five-month low of 2.17 per cent in May, mainly because of a sharp drop in prices of vegetables.
In December, the reading was 2.10 per cent.
WPI inflation was 3.85 per cent in April and (-)0.9 per cent in May 2016.
Pulses and cereals saw a slower growth in prices.
The wholesale price index (WPI) for the month is based on the new base year 2011-12, which was revised last month from 2004-05, with an aim to reflect the macroeconomic picture more accurately.
The slowdown in wholesale inflation comes against the backdrop of retail inflation easing to a multi-year low of 2.18 per cent in May.
Government data showed that prices of food articles shrank by 2.27 per cent in May on an yearly basis.
The inflation print for vegetables read (-)18.51 per cent. While potato saw a deflation of 44.36 per cent, for onion, it came in at 12.86 per cent.
The rate of price increase was 4.15 per cent in cereals, down from 6.67 per cent in May last year. Protein-rich pulses turned cheaper in May as prices fell by 19.73 per cent.
Eggs, meat and fish saw a price decline of 1.02 per cent annually.
The index basket of the new series has a total of 697 items, including 117 for primary articles, 16 for fuel and power and 564 for manufactured products.
There was acceleration in prices of fuel and power (11.69 per cent) and manufactured products (2.55 per cent).
However, the price rise in sugar, which falls under the category of manufactured items, slowed to 12.83 per cent in May, from 23.12 per cent a year earlier.

Cabinet approves proposal to introduce the Financial Resolution and Deposit Insurance Bill 2017

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposal to introduce a Financial Resolution and Deposit Insurance Bill, 2017. The Bill would provide for a comprehensive resolution framework for specified financial sector entities to deal with bankruptcy situation in banks, insurance companies and financial sector entities.
The Financial Resolution and Deposit Insurance, Bill 2017 when enacted, will pave the way for setting up of the Resolution Corporation. It would lead to repeal or amendment of resolution-related provisions in sectoral Acts as listed in Schedules of the Bill. It will also result in the repealing of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 to transfer the deposit insurance powers and responsibilities to the Resolution Corporation.
The Resolution Corporation would protect the stability and resilience of the financial system; protecting the consumers of covered obligations up to a reasonable limit; and protecting public funds, to the extent possible.
The Government has recently enacted the Insolvency and Bankruptcy Code, 2016 ("Code") for the insolvency resolution of non- financial entities. The proposed Bill complements the Code by providing a resolution framework for the financial sector. Once implemented, this Bill together with the Code will provide a comprehensive resolution framework for the economy.
The Financial Resolution and Deposit Insurance Bill, 2017 seeks to give comfort to the consumers of financial service providers in financial distress. It also aims to inculcate discipline among financial service providers in the event of financial crises by limiting the use of public money to bail out distressed entities. It would help in maintaining financial stability in the economy by ensuring adequate preventive measures, while at the same time providing the necessary instruments for dealing with an event of crisis. The Bill aims to strengthen and streamline the current framework of deposit insurance for the benefit of a large number of retail depositors. Further, this Bill seeks to decrease the time and costs involved in resolving distressed financial entities.

At US$ 3.1 bn, PE and VC investments hit 10-year high in May

Chennai: Private equity and venture capital (PE/VC) investments have recorded the highest monthly investments in the past 10 years at $3.1 billion in May 2017. For the third consecutive month in a year, the investment flow crossed the $2-billion mark.
The financial services sector topped the table on account of the $1.4-billion investment by Softbank in Paytm. This deal accounted 46 per cent of aggregate deal value for the month.
According to Ernst & Young (EY) data, the month recorded a 264 per cent increase in terms of value and 23 per cent in volume over May 2016. PE/VCs have invested $3,064 million across 55 deal in May this year as against $843 million across 45 deals in May 2016.
There were five deals of more than $100 million aggregating to $2.3 billion, accounting for 75 per cent of the aggregate deal value in May 2017.
Another important deal during the month was the $500-million investment by Canada Pension Plan Investment Board (CPPIB) in Indospace (a real estate platform for industrial and logistics parks) for a majority stake, thus taking the investments by Canadian pension funds in 2017 close to $2 billion.
Mayank Rastogi, partner and leader for PE, EY said that Indian PE/VC market has significantly matured over time. Five to seven years ago, the classic growth capital was the only meaningful capital pool available with limitations such as investment horizon and return expectations, and could not have suited some specific situations.
There are a variety of capital pools available ranging from angel/VC to buyout funds, family offices, pensions and sovereigns, corporate funds, debt funds, sector-focused funds providing solutions that address specific needs. This is one of the key drivers for continuing buoyancy in the PE/VC investments in India despite slow growth capital investing.
Financial services ($1.6 billion across 11 deals) emerged as the most active sector on account of the Paytm-Softbank deal, the largest deal in the financial services sector till date. The real estate sector bagged four deals worth $709 million, followed by e-commerce sector's six deals worth $211 million in terms of activity.
May 2017 recorded $1 billion in exits and was the second consecutive month with more than $1 billion in exits.
The strong buyout trend established over the past two years continued into 2017 with $2 billion invested across 18 deals till date.
Between January and May, there was a significant increase of over 60 per cent compared to 2016 and over 100 per cent compared to 2015, both, in terms of value and volume.
Debt deals recorded the biggest monthly volume since 2014 with $377 million recorded across 12 deals.
Given the buoyancy in the public markets, open market deals emerged as the preferred mode of exit, accounting for 36 per cent of exits by value and 50 per cent by volume, similar to the trend seen in the previous month.
Till date, open market exits have accounted for 49 per cent of the total value of exits in 2017 compared to 25 per cent for the whole of 2016.
There was one PE-backed initial public offering (IPO) in May 2017 (S Chand, a publishing company, primarily in the education space), which saw Everstone exiting a 13.9 per cent stake for $48 million. Till May 2017, PE-backed IPO tally stands at four compared to eight during the same period in 2016.
Financial services emerged as the leading sector with exits worth $466 million across six deals followed by the healthcare sector with exits worth $260 million across three deals.
May 2017 recorded $90 million in fund raise, a decline of 82 per cent and 76 per cent as compared to May 2016 and April 2017 respectively. The plans for fund raise announced during the month stood at $908 million.

Natural segment in personal care estimated to be Rs 18,500-cr

Mumbai: With consumers increasingly preferring ayurvedic and natural products, the natural segment accounts for 41 per cent of the total Rs 44,790 crore personal care market, according to market research firm Nielsen.
"The pie of natural is increasing over the last few years. Roughly, every given year naturals is eating up a per cent point from the non-naturals in the personal segment. It has become 41 per cent of the total personal care segment in 2016 from 37 per cent four years ago," Nielsen South Asia Executive Director Sameer Shukla told reporters here.
The natural segment in India's personal care market is growing at 6.6 per cent and is estimated to be Rs 18,500 crore in 2016, stated the Nielsen report - 'But Naturally! Going Back to Natural in India's Personal Care Segment'.
The natural segment of personal care is growing at almost 1.7 times that of overall personal care and the value growth of the natural segment is racing ahead at almost 2.2 times that of non-naturals, it added.
The report noted that hair oil is a leading category in the natural personal care space, constituting 34 per cent of the market, followed by toilet soaps (30 per cent), face care (13 per cent), toothpaste (11 per cent), shampoo (7 per cent) and hand and body (6 per cent).
Among these categories, natural segment has been growing in category toothpaste at 20.1 per cent, followed by hand and body (17.5 per cent) and shampoo with 13.2 per cent growth.
According to the report, South, Maharashtra, Madhya Pradesh and Punjab are the primary markets for natural segment in India.
Urban areas are fuelling the rise in the segment with a growth of 6.7 per cent in 2016 as compared to 1.4 per cent in non-natural, it said.
Among the retail channels, chemists and modern trade are boosting growth for natural segment, it observed.
Chemists as a channel registered 19.4 per cent growth in 2016 for the natural segment against 9.8 per cent growth for non-naturals.
In case of modern trade, it was 19.4 per cent for naturals against 2.3 per cent growth for non-naturals.
On the pricing front, it noted that natural variants in personal care are priced almost 17 per cent lower than average non-naturals.
Indian origin companies contribute 79 per cent to the natural segment in the personal care category, while the multi-nationals account for 21 per cent.

Govt to launch City Livability Index on 23 June

New Delhi: To increase accountability in infrastructure development, the central government will launch a City Livability Index on 23 June, union urban development minister M Venkaiah Naidu said on Tuesday.
The government will also announce the names of the next batch of cities which will be included in the smart cities mission. The announcements will be made at a national workshop on urban transformation scheduled to be held in the capital.
“There is a lot of transformation that is taking place. There is a need for behavioural participation… Our version of the City Livability Index will be launched on 23 June,” Naidu said.
Cities will be measured on various parameters including safety, social and physical infrastructure.
Naidu, who was addressing a press conference on the initiatives taken by the ministry in the last three years, said the government has approved a per capita investment of Rs15,475 under new urban missions in the last three years. He said a total investment of Rs4,13,475 crore has been approved for improving basic urban infrastructure in the country.
“322 AMRUT (Atal Mission for Rejuvenation and Urban Transformation) and smart cities have acquired Credit Ratings of which 147 have got investment grade while 163 cities in 18 states and union territories have initiated measures for mobilizing resources through value capture financing tools,” Naidu said.
Under the Smart Cities Mission, the government has so far selected 60 cities through a competition. According to the guidelines of the mission, the government was to select 20 cities in the first phase and 40 in the next two years. 13 more cities were included in the first phase in May last year to expand the representation of states in the mission.
In June 2015, the National Democratic Alliance government launched three flagship schemes including Smart Cities mission, AMRUT and Housing for All mission.

EPFO enrols 82 lakh under Employees' Enrolment Campaign 2017

New Delhi: Retirement fund body EPFO has enrolled over 82 lakh new subscribers under its Employees' Enrolment Campaign 2017 started on January 1 this year.
Under the scheme, the employers got the opportunity to file the declaration of unregistered employees under the EPFO Act, with a nominal fine of Re 1 per annum on account of damages.
According to the Employees' Provident Fund Organisation (EPFO) statement, "82,01,533 workers enrolled as on May 31, 2017 under the Employees' Enrolment Campaign 2017."
"With the enrolment of over 82 lakh subscribers under the scheme, now the total number of contributing members is about 4.5 crore," EPFO Central Provident Fund Commissioner V P Joy told PTI.
Asked about extending the campaign beyond June 30, 2017, Joy said, "There is absolutely no chance to extend it as it was for six months. There is no proposal to extend the scheme also."
The campaign was launched earlier to encourage employers to voluntarily come forward and declare details of all such employees who were entitled for membership between April 1, 2009 and December 31, 2016 under EPF & MP Act 1952, but could not be enrolled.
Initially, the scheme was for three months till March 31, 2017 but later it was extended till June 30, 2017.
Under the scheme, the employees share of contribution, if declared by the employer as not deducted, shall stand waived.
Besides, the damages to be paid by the employer in respect of the employees for whom declaration has been made under this campaign is paid at the rate of Re 1 per annum.
Moreover, no administrative charges is collected from the employer in respect of the contribution made under the declaration.
Under the scheme, a declaration can be made under the campaign for the period till June 2017, for which no enquiry under section 7A is initiated.
The EPFO also said that for the benefit of international workers, new instructions have been issued to all field functionaries regarding COC (Certificate of Coverage).
The employer is advised to submit the application form for COC one month in advance and the COC is issued prior to departure of the employee from India.
Also, the COC period should not exceed 60 months or the specified period in the social security agreement with that country. COC should not be issued for a period which commence much later than date of posting of the Indian worker in the host country for employment, it said.
There should not be any overlapping of the period of coverage. There should not be gaps when more than one COC is issued to the same posted worker as these results in lack of Social Security coverage during the gaps, it added.
It said that the EPFO e-court Management System launched on May 16, 2017 with objective of having a transparent and electronic case management system. All per/evidence/documents can be filed online and the status can also be viewed online.
The body further said that the claim settlement period has been reduced to 10 days from 20 days and grievance redressal period is reduced to 15 days from 20 days.

Shri Suresh Prabhakar Prabhu, Minister of Railways, launches Mission Retro-Fitment to enhance the passenger experience.

New Delhi: To enhance the passengers experience by upgrading existing fleet of coaches with better furnishing, aesthetics & amenities and better safety features with a view to provide a safe and comfortable travel, Minister of Railways Shri Suresh Prabhakar Prabhu has launched MISSION RETRO-FITMENT in Rail Bhavan today. Member Traffic, Railway Board, Mohd Jamshed, Member Rolling Stock, Railway Board, Shri Ravindra Gupta, Member Staff, Railway Board, Shri Pradeep Kumar were among those present on the occasion.
Speaking on the occasion, Minister of Railways Shri Suresh Prabhakar Prabhu said, “ Mission Retro-Fitment is an ambitious program to upgrade the level of furnishing & amenities in the coaches of Indian Railways. This is one of the largest retro fitment project in the world as Indian Railways’ 40,000 coaches will be refurbished and retrofitted in the next five years. This Mission Retrofitment is an endeavour to provide better travel experience as the interiors of the coaches would be refurbished & the retrofitment of Center Buffer Coupler with balanced draft gear would add more to safety of the passengers. By 2020, Indian Railways would provide a new travel experience to the passenger over Indian Railways. This mission is challenging as it will be carried out without affecting the traffic operation. On the occasion, MR Shri Suresh Prabhakar Prabhu also released a booklet giving parameters & guidelines on this mega exercise of retrofitment and refurbishment.
GUIDELINES OF MISSION RETRO-FITMENT
Refurbishing : Upgradation of Coaches with Improved Interiors
It has been planned to induct about 40,000 coaches with upgraded interiors by 2022-23.
RSP sanction for refurbishing of 6,700 coaches are already available.
Approximate Cost : Rs.30 lacs per coach.
Year
No. of Coaches
2017-18
1,000
2018-19
3,000
2019-20
5,000
2020-21
5,500
2021-22
5,500
2022-23
5,000
New manufacture with upgraded interiors (18-19 to 22-23)
15,000
Total
40,000
Strategy
Existing RSP Sanctions
700 Coaches : Allotted to ZRs/PUs (Western Central Railways -411, Integral Coach Factory (ICF)-189, Central Railway-75, Rail Coach Factory Kapurthala-25); these are under different stages of tendering and execution.
57 coaches have been refurbished by Coach Rehabilitation Workshop/ Bhopal.
Refurbished Coaches are running in Varanasi - New Delhi Mahamana Express since 22.01.2016.
6,000 Coaches :
Tender by ICF :3,000
Tender by COFMOW :2,000
Tender by WCR :1,000
Total 6,700 Coaches.
Additional sanctions under RSP shall be sought in due course.
Refurbishing – Salient Points
World class ambience
Panels without visible screws, LED Lights,
Modular toilets with concealed plumbing, Branded fittings, Powered venetian blinds, Anti-Graffiti coating, etc.
Enhanced Passenger Safety
Fire and Smoke Detection System (in newly manufactured AC coaches),
Double acting compartment door (in AC coaches), Rounded edges at most locations for injury-free, etc.
Caring for the Environment
Bio toilets
Use of better materials
Such as Polycarbonate ABS, Advanced Composites, Glass Fibre Reinforced Plastic, GFRE, Stainless Steel, etc.
Enhanced Passenger convenience
Passenger Address & Passenger Information System, Braille Signage, Ergonomic design, increased number of mobile / laptop charging points, etc.
Retro-fitment of Centre Buffer Coupler (CBC) with Balanced Draft Gear
Board has approved the Retro-fitment of about 32,000 Integral Coach Factory coaches (having a minimum residual life of 10 years), with CBC & Balanced Draft Gear.
Sanction under Rolling Stock Programme (RSP) for retrofitment in 16,000 coaches has been obtained vide Pink Book Item No. 1254/17-18.
Approximate Cost : Rs.28 lacs per coach.
Additional Sanctions under RSP shall be obtained in due course.
The work is targeted for completion by 2022-23.
Year

No. of Coaches

2017-18
2,000
2018-19
5,000
2019-20
5,500
2020-21
7,000
2021-22
7,000
2022-23
5,500
Total
32,000
Strategy
In-House
In Mid life Rehabilitation (MLR) and Periodic Overhaul (POH) Workshops.
24 coaches already retrofitted have been running in Train No.15120/19 Manduadih - Rameswaram Express since 23.04.2017.
Work likely to commence in a regular manner from October’17 after CBC with Balanced Draft Gear is made available.
Through Contract :
In Rly. Premises : COFMOW has invited Tenders for 2,500 coaches that are under finalization, Tentative Commencement of Work from October’17.
In Firms’ Premises : COFMOW has invited Tenders for 5,000 coaches, Tender Opening in July 17, Tentative Commencement of Work from November’17.
Additional sanctions under RSP shall be sought in due course
Retrofitment of CBC – A major structural modification
Sequence of Work
Stripping of the lavatories and doorway area.
Gas cutting the End wall stanchions, Headstock assembly and Trough floor
Fabrication of the Head stock compatible with CBC
Tack welding of the new Head Stock with the Stanchions pillars and Sole bar.
Measuring the camber, followed by full welding of the Head stock
Inspection of the critical weld joints using DPT
Painting with high performance anti-corrosive epoxy coating
Replacement of Sole bars of length 2600 mm and 2700 mm on both sides.
Welding of the End wall sheets, Side wall sheets, Turn under and Trough Floor.
Cleaning and Painting.

Jewellery, tractor makers to gain from revised GST

Mumbai: The Goods and Services Tax (GST) Council’s decision to lower rates on 66 items brought cheer to a host of companies in the jewellery, cinema and pharmaceutical sectors.
Take jewellery companies. While a lower than expected rate of three per cent on gold was positive, the earlier decision was to have 18 per cent (from two-three per cent) on making jewellery from plain gold. This would have meant price increases by jewellery makers, which could have impacted the volume. Importantly, it would have further widened the price differential between jewellery sold by organised entities like Titan, PC Jeweller and TBZ from counterparts in the unorganised sector.
With this rate now down to five per cent, the organised sector entities can take calibrated price hikes and still gain market share from the others, who will see elevated compliance-related costs with GST implementation.
Multiplex companies such as PVR and Inox Leisure will not be impacted much from the reduced rates (18 per cent versus the 28 per cent decided earlier) on tickets priced below Rs 100, as those in this category constitute less than seven per cent of their revenue. For Mukta Arts, the impact is larger, as the segment constitutes a fifth of their revenue. Analysts say after including the higher tax on food and beverages, as well as the availability of input tax credit, the impact would be neutral to positive for multiplex companies.
The GST rate on inputs used for tractors has been lowered from 28 per cent to 18 per cent, and will lead to savings on working capital and on cash flow, for tractor makers such as Mahindra & Mahindra or Escorts. While they might have to still raise prices of their end-products, this will be much lower. In its next meeting on June 18, the Council could re-look at the rates on hybrid vehicles
Publishing companies such as Navneet Education and S Chand will have to raise the prices of exercise books, text books and drawing books. While the GST rates on these were lowered to 12 per cent (from 18 per cent earlier), this is more than double the five per cent value added tax rate these attract before GST.
In the pharma space, Biocon, Sanofi and other makers of diabetes drugs stand to gain from the lower rate on insulin, to five per cent from the earlier 12 per cent.
While the GST rate on food items such as salt, ketchups and pickles has also been reduced, these segments form a much smaller part of the revenue of listed consumer staples companies like Hindustan Unilever or Nestle India. They don’t disclose actual revenue share from these segments but analysts estimate it at eight to 10 per cent. Thus, the impact for these companies will not be material, reflected in their flattish stock price performance on Monday.
Stocks of most of the beneficiary companies mentioned above were trading in the green at the start of trading but ended flat, while the benchmark Sensex saw a half per cent fall.
As there is an anti-profiteering clause in GST, analysts believe most of the gains could be passed on to end-consumers and not reflect much in the margins of corporate entities, while possibly pushing up volume growth by a bit.