News highlights : 18 September 2016

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Hasmukh Adhia

CURRENT AFFAIRS SEP 18, 2016

01. Government notifies Aadhaar Act:

The Centre has notified the new Aadhaar Act which gives the numbers assigned by it a statutory backing for transfer of subsidies and benefits to people eligible for them. The Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016 will provide for "efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals", said the notification dated March 26. It will be used for all benefit that will linked to consolidated fund of India.The Aadhaar Bill for this act was approved by Parliament on March 16. It was tabled in Parliament as money bill. However, those individuals to whom Aadhaar number has not been assigned, the Act said that they "shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service".

02. Vijaya Bank gets award:

Vijaya Bank has bagged the second prize under Rajbhasha Kirti Puraskar (Region C) for the year 2015-16. The prize was accepted by Kishore Sansi, Managing Director & CEO Vijaya Bank, from President Pranab Mukherjee at Rashtrapati Bhavan Auditorium, New Delhi.Union Home Minister Rajnath Singh, MoS for Home Affairs Kiren Rijiju and others also took part in the function.

03. Government unveils new policy for marble imports, domestic industry cheers on low MIP, no licensing :

Much to the relief of domestic marble industry, the government on 17th Sept 2016 came out with a new policy for marble and travertine imports in which it has put an end to quantitative restriction on the imports and the restrictive import licensing system. As per the Directorate General of Foreign Trade, the policy, which comes into effect from October 1, has lowered minimum import price (MIP) distortion and given tariff protection. Under the new policy, MIP for marble and travertine blocks has been reduced to $200 per tonne from $325 per tonne, that on imports of marble slabs has been reduced to $40 per sq metre and MIP granite slabs imports has been reduced to $50 per sq. On import of marble and travertine blocks, the government increased the basic customs duty to 40% from 10% at present. Similarly, the basic customs duty on import of marble slabs and granite slabs has been doubled from 10% to 20% in the new policy. "It is fair to consumer, producer and processor," DGFT said. "By abolishing licensing on raw marble, the government has given a push to Make in India and a level playing field and equal opportunity to all," said Parveen Goel, chairperson, import committee of Delhi Marble Dealers Association.

04. China sets up council to promote investments with India :

China has permitted setting up of a new trade body to promote and coordinate Chinese investments and businesses with India, a first such official initiative taken by the Communist trading giant. The council was set up by China Council for the Promotion of International Trade (CCPIT) and will be based in China's Hunan province. CCPIT has approved the formation of the Council under its Hunan provincial unit for a period of two years. Announcing formation of the council, He Jian, Chairman of Hunan Sub-Council of CCPIT in a communication to the media said "My first important job on arriving at my new post is to establish China India Business Council". The Council will be based in the office of the CCPIT in Changsha, provincial capital of the Hunan province, he said. The Council also plans to open offices in New Delhi and Hyderabad to promote and coordinate Chinese investments in India which are on the rise in recent years.

05. SBI diktat to affect credit to small, medium-sized firms :

The directive of the State Bank of India (SBI) to all associate banks that any credit proposal for above Rs.10 crore has to receive an approval of the Mumbai office of the SBI is likely to impact flow of funds to Micro, Small and Medium Enterprises (MSMEs). This has been sent as an advisory to all associate banks, including State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad. The Union Cabinet had earlier decided to merge all 5 associate banks with SBI, the central board of SBI had approved the schemes of acquisition of all these five banks last month. Industry sources said that most MSME units, enjoying credit limit of Rs.10 crore and above, either do not have an external credit rating or have managed to get only a rating that is below investment grade. Investment grade rating would typically mean a rating of ‘BBB’ or higher by RBI-approved credit rating agencies such as CRISIL, ICRA and CARE. However, many such borrowers offer collateral securities that provide risk cover against the loan.These MSME units would be hit the hardest under the present credit curbs, said industry watchers.

06. Government notifies GST Council :

Government has formally notified the GST Council, which will decide on the tax rate, exempted goods and the threshold under the new taxation regime. The council will be chaired by Union Finance Minister and have Minister in charge of Finance or Taxation or any other Minister nominated by each State Government as its member. Also Minister of State in charge of Revenue or Finance at the Centre would be a member. “In exercise of the powers conferred by article 279A of the Constitution, the President hereby constitutes the Goods and Services Tax Council…,” said a government notification. Earlier this week, the Union Cabinet had approved setting up of all powerful GST Council, which is expected to thrash out a decision on all major aspects of GST roll out by November 22. The first meeting of the GST Council will be held on September 22-23.

07. GST may have multiple rates initially, no RNR too: Hasmukh Adhia :

The goods and services tax (GST) may have multiple rates on the lines of some European countries and a revenue neutral rate (RNR) will not be possible initially, Revenue Secretary Hasmukh Adhia said. The uniform indirect tax is expected to be rolled out from April next year. Adhia, however, said the final decision on this will be taken by the just-constituted GST Council comprising the Union finance minister and state finance ministers. “Instead of a single GST rate, there are multiple GST rates in some European countries. We too may have to begin with multiple rates and this is required to protect the poor and the middle class,” Adhia reasoned, adding that a revenue neutral rate (RNR) will not be possible initially. Addressing the Gujarat Chamber of Commerce and Industry, he further said the rate structure will be such that “the overall burden of tax will come down in most commodities. But a final decision on this will be taken by the GST Council”.

08. India loses WTO appeal in US solar dispute :

India lost its appeal at the World Trade Organization in a dispute over solar power, failing to overturn a U.S. complaint that New Delhi had discriminated against importers in the Indian solar power sector. The WTO’s appeals judges upheld an earlier ruling that found India had broken WTO rules by requiring solar power developers to use Indian-made cells and modules. The appeal ruling is final and India will be expected to bring its laws into compliance with the WTO rules. “This report is a clear victory for American solar manufacturers and workers, and another step forward in the fight against climate change,” U.S. Trade Representative Michael Froman said in a statement. Indian officials made no immediate comment on the appeal outcome. U.S. solar exports to India have fallen by more than 90 percent since India brought in the rules, the statement said. As in the earlier ruling, which was issued in February this year, the judges said India could not claim exemptions on the basis of that its national solar power sector was included in government procurement, nor on the basis that solar goods were in short supply. There was also no justification on the grounds of ensuring ecologically sustainable growth or combatting climate change. The dispute, which the United States first launched in February 2013, involved an increasingly common target of trade disputes – solar power, with an increasingly common complaint – local content requirements.

09. Used car market witnesses steady growth as new car sales hit a speed bump :

Unlike the new car market, which has traversed some rough patches of late, India's used car market has had a relatively stable growth. From 1.6 million units (worth Rs 38,500 crore) in 2011, it is today pegged at 3.3 million units (Rs 96,000 crore). According to Nagendra Palle, MD, Mahindra First Choice Wheels Ltd, the used car or pre-owned car market will continue to grow at a steady pace of 15% to touch Rs 2,50,000 crore or 6.6 million units by 2021. Four factors are fuelling the growth in used cars. Ownership cycles are shortening — from 6-7 years five years back, it today hovers around four years and is likely to dip further to 3.5 years by 2021. This is helping grow the available pool in the used car market. Two, car quality in India is improving, boosting reliability even when driven over longer periods. Three, the emergence of organised players is bringing in credibility and consumer confidence. And, finally, there is a growing societal acceptance of people buying used cars. As the industry grows, it is also evolving structurally. For long, dominated by small car dealers, slowly but steadily the industry is getting organised.

10. Gujarat is India's growth engine: USIBC :

Gearing up to participate in the next years Vibrant Gujarat Summit as a partner country, the US India Business Council has termed Gujarat as India's "growth engine". "The state of Gujarat is one of the leading states in India for industries and is recognised as India's growth engine," USIBC president Mukesh Aghi said in an interaction with a delegation of senior official and business leaders from Gujarat. "Vibrant Gujarat Summit is one of the most notable efforts in India's attempts to place itself as the topmost investment destination," he said, adding that USIBC is delighted to partner with the Vibrant Gujarat Summit. Aghi said the summit is also timely as it will be held during a critical phase of the GST roll-out. Led by Bharat Lal, Resident Commissioner of Gujarat, the Gujarat delegation concluded its multi-city road show in the US. The multi-city industry roundtables aim to provide an opportunity for the delegation to present Gujarat as the leading investment destination in India.

11. UCC, PAN must for transaction on commodity bourses: SEBI

Markets regulator SEBI made Unique Client Code (UCC) and Permanent Account Number (PAN) mandatory for all the persons transacting on commodity exchanges. “It shall be mandatory for the members of the commodity derivatives exchanges to use UCC for all clients transacting on the commodity derivatives exchanges,” Securities and Exchange Board of India (SEBI) said in a circular. It said PAN would be sole identification number and mandatory for all entities/persons who are desirous of transacting on the exchanges. However, investors residing in Sikkim are exempted from the mandatory requirement of PAN. The exchanges should, however, ensure a system of proper verification to verify that such investors are residents of Sikkim. The exchanges would have to ensure that the members upload details of PAN so collected to the exchanges as part of UCC and verify the documents. Member would also be required to furnish the documents of their clients to the commodity exchanges and the same would be updated on a monthly basis. Such information for a specific month should reach the exchange within seven working days of the following month.