News Highlights : 21 September 2016

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Three Gorges Dam

CURRENT AFFAIRS SEP 21, 2016

01. ADB approves $631 m loan for Vizag-Chennai industrial corridor :

The Asian Development Bank (ADB) has approved $631 million in loans and grants to develop the 800-km section of a planned 2,500-km-long East Coast Economic Corridor. The Indian government will provide extra funding of $215 million to the $846 million project. The industrial corridor is expected to spur development on India’s eastern coast and create seamless trade links with other parts of South and Southeast Asia. The Visakhapatnam-Chennai Industrial Corridor section of the East Coast Economic Corridor, connecting four economic hubs and nine industrial clusters, will mark the first industrial corridor developed along India’s coast. The East Coast Economic Corridor will ultimately extend from Kolkata in West Bengal in the north-east of India to Tuticorin in Tamil Nadu near the southern-most point of the country. “By combining state-of-the-art industrial clusters, efficient transport, and reliable water and power supplies with a skilled workforce and good business policies, we expect the Visakhapatnam-Chennai industrial corridor to become a favoured investment destination,” Manoj Sharma, Principal Urban Development Specialist, in ADB’s South Asia Department, said.

02. GST Council to decide on cess treatment :

Cess, including the Krishi Kalyan Cess and the Swachh Bharat Cess, might not be subsumed under the goods and services tax (GST).The proposed indirect tax regime would subsume several taxes such as central excise duty, services tax, additional customs duty and state-level value added tax. But, finance ministry officials said, the Constitution amendment Act on GST does not state how a cess is to be treated under the new regime. The Act leaves it to the GST Council to decide which cess may be subsumed in GST.“While certain taxes like entry tax, Octroi and others will be automatically subsumed under the GST, the Constitution amendment Bill does not mention treatment of cesses,” said a government official. “So, there is a possibility that Krishi Kalyan and Swachh Bharat cess are not subsumed, unless the GST Council decides to discontinue these. The call will have to be taken up by the GST Council now.”

03. Pay Commission effect: Banks sweeten car loan terms for govt employees

It is not only the car and two-wheeler makers who are trying to lure government employees after a salary revision under the Seventh Pay Commission. Leading banks- SBI,HDFC and Axis- have rolled out attractive car financing schemes for the government employees and pensioners. The highlights include up to 100 per cent financing, lower interest rates and processing charges among other benefits. Country's biggest bank, SBI, is doing a 100 per cent financing of on road cost of cars for government employees compared to 90 per cent earlier. The bank's interest rate for male government employees is now 9.7 per cent and 9.65 per cent for female employees. This is lower than the earlier uniform rate of 9.75 per cent. The foreclosure charge has also been waived. The move comes after enhanced pay packages under the Seventh Pay Commission came into effect in August this year. Since then, arrears of the preceding months (since January 2016) have also been disbursed. There are 4.8 million central government employees and 5.5 million pensioners, who will benefit from the increase. Car loans form a significant chunk of the retail loan business of banks.

04. Banks want promoters' guarantee for new loans :

To ring-fence risk, Indian banks are increasingly asking promoters of companies with high debt to give personal guarantees on fresh loans or during rescheduling of loans. This is to force promoters to repay loans as corporate guarantees are not enough for recovering from defaulters, say bankers. A senior executive with State Bank of India said while restructuring loans, additional funding is provided, but a personal guarantee is also asked for as additional security so that promoters stand by commitments. “Personal guarantees are a way of ensuring promoters have skin in the game and implement the turnaround plan and repay loans,” the SBI official said, asking not to be named. The sale of Lanco’s assets and Electrosteel Steels by banks is stuck as bidders refused to give personal guarantees, said a banker close to the development. Promoters of large but highly indebted groups are also being asked to give such guarantees when seeking to reschedule loans. But, the response has been poor with many refusing to do so, leading to a stalemate. Last week, Union Finance Minister Arun Jaitley acknowledged that public sector banks (PSBs) were finding it hard to get buyers for stressed assets.

05. Railways launches Yatri Mitra Sewa for elderly, differently-abled:

In a move to make rail travel comfortable for elderly, differently-abled and ailing travelers, Railways has launched 'Yatri Mitra Sewa' to facilitate access to wheelchairs, battery operated cars and porter services. 'Yatri Mitra' or 'Passenger Friend' can be a "Sahayak (assistant)" or any other person nominated for the purpose. The service will be available at major railway stations across the country. The service can be availed at the time of online booking of tickets, calling or messaging '139', accessing an app to be developed by the Centre for Railway Information Systems (CRIS), or by simply dialling a dedicated mobile phone number to be activated for the purpose.

06. Smart Cities: 27 new names announced in third list; Amritsar tops

Urban Development Minister M Venkaiah Naidu announced the next set of 27 cities for financing under the Government flagship Smart City Mission. As per the Misison guidelines, as many as 40 cities have to be announced during this financial year, as the government had already announced 13 cities in May. 63 cities participated in three rounds of competition, said Venkaiah Naidu. Poll-bound Uttar Pradesh has three cities in the list. Vadodara, Agra, Nagpur, Ajmer, Amritsar, Gwalior, Thane and Thanjavur are some of the other cities that have been named to be developed as smart cities. The 27 cities will require investment of Rs 66,883 crore. Here is the list of the 27 cities on the basis of the score they obtained: Amritsar (Punjab) Kalyan (Maharashtra) Ujjain (MadhyaPradesh)Tirupati (AndhraPradesh)Nagpur (Maharashtra) Bangalore (Karnataka) Vellore (Tamil Nadu) Thane (Maharashtra) Gwalior (Madhya Pradesh) Agra (UttarPradesh) Nashik (Maharashtra) Rourkela (Odisha) Kanpur (UttarPradesh) Madurai (Tamil Nadu) Kota (Rajasthan) Tumkur (Karnataka) Thanjavur (Tamil Nadu) Namchi (Sikkim) Jalandhar (Punjab) Shimoga (Karnataka) Salem (Tamil Nadu) Ajmer (Rajasthan) Varanasi (UttarPradesh) Kohima (Nagaland) Hubli-Darvad (Karnataka) Aurangabad (Maharashtra) Vadodara (Gujarat)

07. After GST law, can government still levy excise on goods?

Has the government lost the power to impose central excise duty on all goods barring petroleum products and tobacco? And has it been levying the tax illegally for the last three days? Massive confusion has arisen after the Centre notified certain provisions in the constitution amendment law for goods and services tax (GST) with effect from September 16. The notification says the government will not levy excise duty on goods other than petroleum products from this date. The notification also binds states to accept GST within a year or they will lose power to tax. Experts ET spoke to say situation needs to be corrected as it is obviously not the intent. ET learnt that senior revenue officials spent the Sunday brainstorming to look into the issue and if it was required to be rectified. Government officials also claimed a transitional provision provided in the constitution amendment will allow them to continue to collect excise duty on all goods. Plain reading of the notification shows that after September 16, central excise is leviable only on petroleum products and tobacco products.. This cannot be the intent... This needs to be corrected immediately as it could lead to litigation," said S D Mazumder, former chairman, Central Board of Excise and Customs.

08. India down to 112th spot on World Economic Freedom Index :

India has slipped by 10 positions to 112th, out of 159 countries and territories, as it "fared badly" across categories including legal system and regulation, according to the Economic Freedom of the World: 2016 Annual Report. Although China, Bangladesh and Pakistan lagged behind India at 113th, 121st and 133th ranks respectively, Bhutan (78), Nepal (108) and Sri Lanka (111) were better placed on the World Economic Freedom Index. "India has fared badly in all categories i.e. legal system and property rights (86), sound money (130), freedom to trade internationally (144) and regulation (132) except the size of the government (8)," the report said. According to the report, Hong Kong has the highest level of economic freedom worldwide, followed by Singapore, New Zealand, Switzerland, Canada, Georgia, Ireland, Mauritius, the UAE, Australia, and the UK. The 10 lowest-ranked countries are: Iran, Algeria, Chad, Guinea, Angola, Central African Republic, Argentina, Republic of Congo, Libya and lastly Venezuela. India's leading public policy think tank, Centre for Civil Society, has published the report in collaboration with Canada's Fraser Institute.

09. 20 airports ready for regional flights, says AAI chief:

As the Centre finalises the contours for the ambitious 'Regional Air Connectivity' scheme, the Airports Authority of India said as many as 20 un-utilised airports were ready to start operations for regional flights. Another 30 airports can be made ready for operations under the Regional Connectivity Scheme (RCS) by making "some investments", AAI Chairman Guruprasad Mohapatra said. Under the scheme, announced in the new civil aviation policy, the ministry has proposed capping fares at Rs 2,500 for one-hour flights on un-served and under-served routes besides various financial concessions for airlines. Speaking to reporters here, Mohapatra said 20 unutilised airports owned by AAI were ready from where flights under RCS can take off. He said the government plans to have no-frills airports for regional air services and AAI was studying the design parameters for such aerodromes.

10. World's largest shiplift begins trial run in China :

The trial operation of a world's largest permanent shiplift designed by Chinese and German engineers on China's Three Gorges Dam began on 18th Sept 2016. The shiplift, is the largest and most sophisticated in the world, according to Three Gorges Corp, a state-owned company responsible for the construction of the project, state-run Xinhua news reported. Three Gorges Dam in central China's Hubei province is the world's biggest water project. The beginning of its trial operation marks the completion of the Three Gorges project, 22 years after construction on the mammoth project began, Zhang Shuguang, assistant general manager of the corporation said. The vertical-hoisting elevator is designed to help small and medium-sized ships, with a maximum displacement of about 3,000 tonnes, to traverse the dam. The water-level behind the dam is up to 113 meters higher than the downstream river.