News highlights : 19 September 2016

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Ashok Lavasa

CURRENT AFFAIRS SEP 19, 2016

01.RBI Adhere to timeline on EMV chip based cards: RBI to banks

RBI asked banks to replace existing magnetic stripe only cards to EMV Chip and PIN cards by the deadline of December 2018 and no extension will be given. EMV chip and PIN based cards enhance security and risk mitigation in card transactions. In August 2015, RBI had extended time for banks to issue cards under the Prime Minister Jan Dhan Yojana (PMJDY)/ Basic Savings Bank Deposit Account (BSBDA)/ other government schemes to September 30, 2016, and for other cards the deadline was January 31, 2016. Despite the extension of time given to banks, RBI said that some banks have approached it seeking further extension of the timeline for complying with the instructions. “Keeping in the mind the objective to further enhance the security and risk mitigation in card present transactions, and also the impact it may have on achieving the timeline for complete migration of all existing magstripe cards, it has been decided not to grant any further extension beyond the respective timeline…for new issuances and full migration to EMV Chip and PIN cards,” it said.

02. Jaitley to attend IMF-WB annual meet in US next month:

Finance Minister Arun Jaitley will be leaving for the US early next month to attend the annual meeting of IMF-World Bank, where issues like the global economic situation will be discussed. The three-day annual meeting of the International Monetary Fund and the World Bank will begin on October 7 in Washington. The new Reserve Bank Governor Urjit Patel is also likely to attend the Fund Bank meeting, sources said. Besides Jaitley and Patel, Economic Affairs Secretary Shaktikanta Das will attend the annual meet, they added. In addition to taking stock of the global economic situation, the annual meetings are also likely to discuss IMF quota reforms, exchange rate fluctuation, infrastructure financing, fall out of Britain’s exit from the EU and the role of trade in supporting global growth. Finance Ministers of BRICs countries are also likely to deliberate on the economic issues on the sidelines of the Fund Bank meeting. Ahead of the meeting, IMF will come out with its World Economic Outlook, which will provide analysis of the current global economic situation. Besides, a Global Financial Stability Report will also be unveiled.

03. Govt to treble grant under rural housing scheme :

To enable people in rural areas build bigger houses under the newly launched Pradhan Mantri Awas Yojana (PMAY), the government has initiated discussions with banks, financial institutions and the Reserve Bank of India to facilitate loans of up to Rs 75,000 over and above the sanctioned amount. In the earlier Indira Awas Yojana, a central grant of Rs 70,000 was being given for rural houses per unit in plains, while for hilly areas, this sum was around Rs 75,000.This will push up the total grant facilitated by the Centre for the construction of houses in rural areas to Rs 2,25,000 per unit, both through direct and indirect methods. Of this, an amount of Rs 1,20,000 is granted directly for construction of the house, while Rs 18,000 is provided by way of labour under Mahatma Gandhi National Rural Employment Guarantee Act. An additional sum of Rs 12,000 is given to each house constructed under the scheme for building toilets under the Swachh Mission, making the total grant given by the government under various heads in rural areas to Rs 150,000 per units. The remaining Rs 75,000 will be facilitated through loans from banks. In hilly areas, a sum of Rs 160,000 is being arranged as grants through various schemes. The new scheme seeks to subsume the Indira Awas Yojana, under which so far around 35.1 million houses have been constructed.

04. Mauritian firms invest $300-mn in India from Jan 2003-July16 :

Mauritius is the largest single investor in India. “Indigenous Mauritian companies have invested close to $300 million during January 2003 and July 2016 – a truly amazing figure,” CII quoted Pravind Kumar Jugnauth, Minister of Finance and Economic Development, Mauritius, as saying. He said smart cities and port development are the current focus areas in Mauritius. The minister also invited Indian companies to take advantage of new industrial parks in his country. India has also made significant investments in Mauritius with eight Indian public sector enterprises currently functioning in the country, CII said.

05. Global players keen on EMU/MEMU coach factory at Kanchrapara:

Bombardier from Canada and Siemens from Germany are among the major global players who have evinced an interest in the manufacture of EMU/MEMU coaches at the proposed Kanchrapara facility in West Bengal under the ambitious Rs 20,000 crore joint venture project of the Railways. Railways had sought requests for qualification (RFQ) in June for manufacture of 5,000 modern Electric Multiple Unit/Mainline Electric Multiple Unit coaches over the next 10 years at the proposed JV facility. The RFQ has got good response as Bombardier (Canada), Siemens (Germany) consortium, Alstom (France), CRRC Corporation (China) consortium, Stadler (Switzerland), Medha (India) consortium and BHEL, an Indian PSU, have made the cut to qualify for the bidding, a senior Railway Ministry official said.

06. Highway across nations: India approves $1 bn connetivity project:

India has approved an ambitious $1.04-billion project for constructing and upgrading 558 km of roads to link it with Bangladesh, Bhutan and Nepal and ease the movement of passengers and cargo, as part of the larger effort to increase inter-regional trade by 60 per cent. The new project has been given an official nod by India’s Department of Economic Affairs with 50 per cent funding from the Asian Development Bank (ADB), officials told IANS, adding that the road project will cover West Bengal and Manipur on the Indian side, as of now. “The mandate is for completing the project within the next two years,” a senior official said. “The primary idea behind the Bangladesh-Bhutan-India-Nepal (BBIN) road initiative is to improve ground connectivity in the region,” said Leena Nandan, Joint Secretary, Ministry of Road Transport and Highways.

07. Government plans Rs 4,000-crore overhaul of 80 check posts for GST :

Road Transport and Highways Ministry is considering a Rs 4,000 crore overhaul of around 80 border check posts across the country to ensure seamless flow of goods ahead of the implementation of GST. An app to link check posts under state governments as well as the Centre is also in the works, the government has said. "The Ministry would be one of the biggest contributors towards the GST regime. There are check posts under the state government as well as the Central government. We are going to link them and are developing an app for it," Road Transport and Highways Minster Nitin Gadkari told PTI The government is keen to implement the biggest tax reform since Independence from April 1 next year and the Goods and Services Tax (GST) aims to iron out a multi-layered indirect tax system, subsume all other indirect taxes and usher in an uniform tax structure. It was conceptualised in 2006 under the United Progressive Alliance-1 government. The Minister said that once the GST is rolled out, it will facilitate the inter-state movement of goods and therefore, the need has been felt to augment border check posts. State border check posts, which scrutinise material and location-based tax compliance, often stretch the transit time of goods by hours.

08. Government to expand DBT to 147 schemes by next March: Finance Secretary Ashok Lavasa

Buoyed by the initial success of Direct Benefit Transfer, government plans to double the number of schemes under DBT to 147 by March and has launched pilots for paying subsidy on food, kerosene and fertiliser directly via bank accounts of beneficiaries, a top official has said. Benefits and subsidies in as many as 74 schemes of 17 government departments and ministries are paid directly to beneficiaries under DBT, said Finance Secretary Ashok Lavasa. The government, he said, has implemented 30 per cent of the recommendations of the expenditure management commission that was set up to suggest reforms to overhaul the subsidy regime and lower fiscal deficit. "We plan to extend DBT to 147 schemes by March 2017. Right now there are 74. By and large, it is the food subsidy where we have been able to rationalise and bring it down. Similarly, in case of fertiliser subsidy, non urea subsidy there has been a reduction," Lavasa told PTI.

09. Recommendations to raise tax holiday sent to Fin Min: Nirmala Sitharaman

Union Minister Nirmala Sitharaman said her Ministry has recommended the Ministry of Finance to raise tax holiday for start-ups from three years to seven with a sense of constructive and positive approach, and was awaiting a response. On May 30, Sitharaman had said lots of recommendations were made to the Finance Ministry for extending the three-year tax holiday to seven, after several start-ups pitched for increasing the same, as it would provide certainty on taxation matter. The government in June relaxed FDI norms by giving a three—year exemption from local sourcing to foreign players in single-brand retail and a further five-year relaxation for ’state-of-the-art’ and ‘cutting-edge’ technology.

10. Global tender for buying 300 aluminium coaches shortly :

Buoyed by the successful Talgo train trial, the railways is firming up an acquisition plan to procure 300 light-weight aluminium coaches from the market to be used for reducing inter-city travel time. With the over-saturated main trunk routes posing a serious challenge for the railways’ ‘Raftaar’ mission, the national transporter is looking towards light-weight aluminium coaches as an easy option to increase train speed on existing lines in shortest possible time. Railways Minister Suresh Prabhu has launched the Raftaar Mission to increase the speed of passenger and freight services significantly. “Instead of steel coaches, use of aluminium coaches seems to be the future now as the railways will gradually go for the light-weight material for faster journey on existing tracks,” said a senior Railway Ministry official, adding, “A global tender will be floated shortly for this.” The light-weight aluminium coaches manufactured by Spanish Talgo and hauled by an Indian locomotive covered the 1,384km distance between Delhi and Mumbai in less than 12 hours as against the travel time of 16 hours taken by Mumbai Rajdhani, the fastest train at present between the two metropolises. “We are proposing to acquire 300 aluminium coaches to begin with which means about 15 trains with 20 coaches each can be pressed on inter-city routes such as Delhi-Kanpur and Delhi-Lucknow,” said the official