News Highlights : 28 September 2016

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Anil swaroop

CURRENT AFFAIRS SEP 28, 2016

01. IMF warns central banks could lose deflation fight:

The International Monetary Fund warned that central banks are struggling to beat back deflationary forces and that governments need to spend to help them succeed. In a new assessment of global economic conditions, the IMF said many countries worldwide are battling disinflation – low and slowing inflation – due to weak global economic growth. If central banks around the world cannot halt this stall, and if companies and people increasingly believe they can’t halt it, their economies risk sinking into a deflationary spiral – where prices generally start to fall and companies and consumers hold back spending and investment, stalling the economy. In this case, “countries can’t afford to be complacent,” the Fund warned. The report said deflationary pressures in many countries are coming from abroad, in the form of sinking prices of both commodities and manufactured goods. Weak inflation challenges central banks’ ability to use monetary policy to stimulate demand, the IMF notes, because interest rates are likely to already be very low, giving them little room to cut further. That has been the case with top central banks including the Federal Reserve, the European Central Bank and the Bank of Japan, with the latter two already having taken some interest rates negative.

02. Why are banks dithering on loans for road sector, asks Nitin Gadkari :

Chiding bankers for delaying loan proposals for road projects, Union Transport Minister Nitin Gadkari wondered why they did not exercise the same caution earlier when the sector was facing difficulties. “I have some reservations with the bankers. When everything is clear, we are taking 8-10 months for financial closure. But when there was a bad situation, they financed,” the minister said at the third edition of the SBI Banking and Economic Conclave. Giving details of how his ministry had worked to reduce the number of pending projects, Gadkari said he had saved the banks from billions of rupees of bad loans by faster clearances. When he took the office in May 2014, there were 403 stuck projects with an underlying investment of Rs 3.86 trillion, which had now come down to just eight projects, Gadkari said. “I would request all of you to invest in the road sector. We’ve a lot of potential, we’ve increased the road length, economic viability is good, internal rate of return is good,” he said. The minister said unlike in the past, there are no major issues regarding land acquisition now. “There is no problem, even with utilities there’s no problem in acquiring land. I know there was bad history,” he said. The length of the national highways has been increased to 1.62 lakh km from 96,000 km in two years, he said, adding that his ministry has more aggressive plans to increase the road network.

03. India to invest $2 billion in Sri Lanka in next four years: Nirmala Sitharaman

India will invest up to $2 billion in Sri Lanka over the next four years in a range of sectors including real estate, energy and infrastructure, its Commerce and Industry Minister Nirmala Sitharaman said. India is Sri Lanka's largest trading partner and the South Asian neighbours are considering a broader trade agreement as President Maithripala Sirisena's government tilts towards New Delhi after his predecessor pursued a pro-China policy. "In the next two to four years, the total investment interests will rise to $2 billion," Sitharaman told reporters in Colombo at the end of her visit. "India has investment interests in a wide range of areas." Her visit comes as China, India's regional rival, presses ahead with a $1.4 billion real estate project next to Colombo's main port after the Sirisena government, in power since January 2015, briefly suspended it over suspected irregularities.

04. WTO cuts 2016 world trade growth forecast to 1.7%:

Global trade volumes are set to grow by just 1.7 per cent this year, the first time in 15 years that international commerce has grown more slowly than the world economy, the World Trade Organization (WTO) said. The forecast, much lower than the WTO's previous estimate of 2.8 per cent in April, reflects a slowdown in China and Brazil and also decelerating imports in the United States. The WTO also expects slower 2017 trade growth than its previous forecast, with a rise of 1.8-3.1 per cent rather than the 3.6 per cent it had estimated in April.

05. More farmers covered under crop insurance scheme:

The Centre appears to have scored some points on the success of the recently-launched Pradhan Mantri Fasal Bima Yojana — the flagship insurance scheme for farmers. Going by the latest estimates of coverage and the sum insured it has seen a marginal increase vis-a-vis last year. “We are still compiling the numbers, but the latest number we have got is that about 3.15 crore farmers have been insured this kharif season as opposed to 3.08 crore last year. The sum insured has also increased and nearly doubled for some states. It is a big achievement as last year was a drought year and insurance was being sold till the end of the sowing season (September 30) by which time farmers knew that they would need it,” an Agriculture Ministry official told BusinessLine.

06. Coal Ministry to go ‘totally digital’ from Nov 1: Anil Swarup

In line with the Centre’s ambitious ‘Digital India’ initiative, the Coal Ministry has decided to move all papers and documents into digital format from November 1 onwards, a move aimed at bringing efficiency and transparency. Coal Secretary Anil Swarup said in a tweet, “For timely disposal of papers & transparency, Coal Ministry to go totally digital by November 1.” He also added that “All files & papers to move in digital format.” Among other ministries, the HRD Ministry had also said it is working to ensure that degrees and certificates are given to students in digital format from the 2017 academic session onwards. HRD Minister Prakash Javadekar had said the government wants to make the whole apparatus as digital. Besides, receiving certificates in digital format, students would also be able to upload their other certificates and awards in digital format, he had said. The government had launched the Digital India Programme last year with an aim to transform the country into a digitally empowered and knowledge economy.

07. Centre to utilise waterways to tansport logistics: Union Minister Nitin Gadkari

Looking to bring down the cost of logistics, government would utilise waterways in the country to transport goods including fertiliser, cement and steel, Union Minister Nitin Gadkari said. Gadkari said this hailing the arrival of car carrier ship MV Dresdan with 500 cars at Coachin Port. This is a successful experiment and effective utilisation of this (waterways) system will help increase water transport in the country, Gadkari, Minister for Road Transport and Highways said here. “We want to diversify road traffic to water transport,” he said adding goods transportation through water costs barely 20 paise per km in comparison to Rs 1.5 a km through road and Re 1 per km through railways. The logistics cost in India is 18 per cent, which is higher than China (8-10 per cent), Japan (10-12 per cent) and European Union (8-12 per cent), he noted. The car carrier ship, is of Cyprus registration, which has obtained licence for coastal run between the ports in India. It has the circuit of Ennore-Cochin-Kandla-Cochin-Ennore, connecting the automobile production hubs in Tamil Nadu in the East coast and Gujarat and Haryana in the West coast of India. The ship has 13 decks with the capacity to carry 4,300 cars

08. Monthly returns to be mandatory under GST:

Moving at a fast pace, the tax department came up with two more draft rules and their

formats on GST returns and refunds requiring assessees to file monthly returns and specifying procedure for claiming refunds of taxes, interest and fees. The stakeholders have been given time till 28th Sep 2016 to give their comments on the two draft rules which, along with other rules, will be finalised at the second meeting of the Goods and Services Tax (GST) Council on September 30. The Central Board of Excise and Customs (CBEC) unveiled three draft rules and their formats relating to registration, invoice and payments for public comments. The government aims to implement the new indirect tax regime GST from April 1, 2017. As per the rules for refund, every registered taxable person will be required to furnish a monthly return in specified form (GSTR-3). There is also a provision for electronic furnishing of annual return by every registered taxable person and composition supplier. The rules further said that every taxable person whose aggregate turnover during a financial year exceed Rs 1 crore will be required to submit annually a duly certified audited statement.

09. Access to life saving medicines will be maintained: Govt

The deletion of several medicines from the latest National List of Essential Medicines (NLEM) will not affect access to important medicines required to treat life-threatening diseases, the government said in a statement. Most of these medicines were removed because they were banned, ineffective, unsafe or irrelevant, according to the ministry of chemicals and fertilisers. The ministry, in its statement, dismissed arguments that prices of 100 drugs—including those to treat chronic conditions like cancer and hypertension—may increase by 10% now that they are out of the essential medicines list. According to the ministry, 70 medicines were deleted from NLEM, while 106 medicines were added to the latest list. The price caps imposed so far on NLEM 2015 medicines has saved consumers nearly Rs2,300 crore due to reduced prices, according to the ministry.

10. After India, Bangladesh pulls out of SAARC summit in Islamabad:

As a major blow to the state of Pakistan post Uri attack, Bangladesh has confirmed that it will not participate in the SAARC summit which is scheduled in November 2016 at Islamabad. The statement comes officially from the Bangladesh foreign ministry which has conveyed to the current SAARC Chair Nepal that Pakistan’s increasing interference in the domestic affairs is inmical to the interest of Bangladesh and under such circumstances it is not possible to participate in the summit at Islamabad. MEA spokesperson Vikas Swarup while addressing the question said, “India has conveyed to current SAARC Chair Nepal that increasing cross-border terrorist attacks in the region and growing interference in the internal affairs of member-states by one country have created an environment that is not conducive to the successful holding of the 19th SAARC Summit in Islamabad in November 2016.” “In the prevailing circumstances, the government of India is unable to participate in the proposed summit in Islamabad”, said Swarup. However Swarup maintained that India’s committment to regional cooperation, connectivity and contacts can only remain steadfast only in an atmosphere of free terror.After the attack at an army camp at Uri on September 18, Pakistan has been facing diplomatic and international pressure from all over the world. Sources have confirmed that Afghanistan and Bhutan are reconsidering their positions whether to attend the SAARC summit or not. (The member states are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. SAARC was founded in 1985)