News Highlights : 9 September 2016

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Highlights

01. RBI cancels registration certificate of 5 NBFCs :

The Reserve Bank said registration certificates of five non-banking financial companies (NBFCs) have been cancelled while two surrendered their certificate to the central bank. The seven entities, RBI said, “cannot transact the business of a non-banking financial institution”. The entities whose certificates were cancelled are Simco Consultants, Lunkad Securities, Rajvir Marketing and Investment, Crystal Investments, and Shri Jaya Investments Agency. The NBFCs which surrendered the certificate are Texas Resources and Vivek Vyapar. The registration certificates of the two Kolkatta based entities stands cancelled.

02. No bank privatisation, GST implementation on target: FM Arun Jaitley

Finance minister Arun Jaitley said the government will attempt to press ahead with implementation of the goods and services tax (GST) from April 1, 2017, pitching the proposed tax reform as a key priority for the government. He said restoring banks' health was a priority but ruled out privatisation of public sector banks for now. "...If we look ahead, its (April 1, 2017) a very stiff target we are running against time. I would certainly like to give it a try," Jaitley said, when asked about the timeframe for rolling out GST at the India Summit organised by The Economist on 7th Sep 2016. He said the procedural formalities for the Presidential assent are on and once the assent is granted the constitution amendment bill will be notified. Parliament has already given nod to the bill that has been ratified by the requisite number of states. He admitted that there were some pending issues, which the GST council, to be constituted after Presidential assent, will have to resolve.

03. Closure & asset sale of sick PSUs Within 15 months of Cabinet approval :

The government has come out with guidelines to help sick and loss-making state-run enterprises dispose of their assets, including land, in a bid to expedite their shutdown. Under the new framework, the administrative ministries will be required to achieve closure and sale of assets of identified firms within 15 months of Cabinet approval. "The timelines will be suitably modified in individual cases requiring parliamentary approval," said the guidelines issued by the Department of Public Enterprises. ET had last month reported that such rules were being prepared. In its first report, the government's think tank Niti Aayog had identified 26 of 74 loss-making companies for closure or winding up, five companies for long-term lease or management contract and three for merging with parent company while two were identified for maintaining status quo. On Tuesday, Niti Aayog vice-chairman Arvind Panagariya said that the body was preparing a second list on dis-investment. The guidelines state that within three months of initiating a Cabinet proposal to close a central public sector enterprise (CPSE), the firm will have to present an estimate on all dues including liabilities towards secured creditors and the budgetary support required for such closure.

04. RBI will not interfere with independence of banks: Urjit tells PAC

Getting down straight to business, RBI Governor Urjit Patel told the Public Accounts Committee of Parliament 8th Sept 2016 that the central bank will not interfere in the independence of banks and said the regulator’s effort is not to create a unitary system for public banks. Patel appeared before the panel to brief about the public debt management, based on a Comptroller & Auditor General of India report, and the RBI’s role in it. Secretary, Department of Economic Affairs was also present during the interaction. Responding to queries from PAC members that why there is no uniform rate of interest even in public sector banks, Patel, according to a member in the panel, said: “Each bank has its own pluses and minuses. Each bank has a different lending and investment pattern.” “He said the RBI will not interfere in this right for uniqueness for each bank,” a member told Business Line. Another member said Patel sounded more like a “practical” person.

05. 12 merchant banks apply to manage SUUTI stake sale :

As many as 12 merchant banks have bid for stake sale by the government in various companies held through the Specified Undertaking of UTI (SUUTI). The department of investment and public asset management will invite these to make presentations and then select up to six for managing the sale, sources said. The selected merchant bankers will manage SUUTI stake sale for three years or till the last stake sale is completed, whichever is earlier. According to the recently relaxed norms, merchant banks managing the sale of government stake in Axis Bank, Larsen & Toubro (L&T) and ITC, held through SUUTI, may enter into a competing transaction with a private company, provided they notify SUUTI as and when they enter into any such potential conflict of interest. However, for that phase, the bankers will not be considered for managing the sale in these three companies. Earlier, merchant banks were not permitted to enter into any competing transaction for the entire three years for which they are being hired. Banks had approached the department to modify this and the rules were loosened for banks that would manage the sale of government stake in the three ‘Group A’ companies — Axis Bank, L&T and ITC.

06. No need to carry physical copy of Driving license, just install DigiLocker mobile app :

The government on 7th Sep 2016, launched a new service through which a user can access their driving licence and registration certificate digitally and need not carry a physical copy all the time. The service was launched by Union Minister Nitin Gadkari and Ravi Shankar Prasad in New Delhi. This will help in integration of mobile application DigiLocker with the driving licence and vehicle registration certificate. As per a press release issued by the government: “Driving Licenses and Vehicle Registration documents can now be issued directly to the DigiLockers of individuals in digital formats.” The digital copies of driving license and registration certificate can also be shared with other departments for verification purpose. Minister of Electronics & Information Technology and Law & Justice, Ravi Shankar Prasad, said: “the integration will bring a paradigm shift in the vision of paperless governance. It will serve to bring agility and efficiency to the entire process of issuance of driving licenses and vehicle registration certificates through IT enablement.” The DigiLocker mobile app was launched by Prime Minister Narendra Modi in July, 2015.

07. Bengaluru hosts first edition of IoT India Congress:

The first edition of ‘IoT India Congress, 2016’ began here on 7th Sept 2016. The congress aims to bring together key stakeholders across the value chain and verticals to collaborate, ideate and share a common roadmap for Internet of Things (IoT) implementation. Besides tech start-ups, the congress brought top executives from multinational companies such as Philips, GE, and IBM on one platform. Union Minister for Electronics and IT Ravi Shankar Prasad, who gave a video address to the ‘IoT India Congress’, said that IoT was likely to generate economic benefits of almost $2 trillion to India. “We are sitting on the cusp of a big revolution,” he said.

08.Test pilots at HAL complete successful flight of indigenous light utility helicopter :

Hindustan Aeronautics Limited, (HAL) the public sector strong arm of India's aviation hardware crossed yet another significant milestone. Engineers at HAL conducted a technical flight of the new indigenous Light Utility Helicopter (LUH) in Bengaluru. The helicopter lifted at 1210 hours and was in the air for 15 minutes inside the HAL complex. Engineers and technicians unanimously declared the flight to be flawless. The test pilots who had been conducting the flight on the new aircraft agreed with the outcome. HAL has already developed four highly popular models of helicopters under its belt. Its product range includes, the Dhruv Advanced Light Helicopter (ALH), the multi-role seven seater Chetak, the HAL version of Aerospatiale Lama SA 315 better known as the light combat helicopter (LCH) Cheetah and the anti-insurgency, close air support chopper known as the Lancer. Meanwhile, the test flight of the HAL LUH marks an important and significant beginning for prototype testing of this model.

09. Cabinet readies for listing of PSU insurance firms:

The government's plan to list public sector general insurers is gaining momentum with additional details such as business numbers and financial projections being sought from these insurers. A note is currently being prepared for the listing proposal to be presented before the Cabinet.In his Budget speech, Finance Minister Arun Jaitley said the general insurance companies owned by the government would be listed on stock exchanges. He had said public share-holding in government-owned firms was a means of ensuring higher levels of transparency and accountability. Apart from the sole domestic reinsurer General InsuranceCorporation of India (GIC Re), the four public-sector insurers are New India Assurance, United India Insurance, Oriental India Insurance, and National Insurance.Details on our financial performances, business growth as well as future expectations from business have been sought by the ministry officials. They have also asked for information on any future areas of growth," said a senior public-sector general insurance official. Sources said the listing process and timeline would be finalised over the next few weeks. It is expected that the process will reach its advanced stages by the end of this financial year. New India Assurance could become one of the first candidates for listing, based on financial performance.

10. Indians travelling more, spending more on trips :

Indian travellers are getting increasingly younger. They are also travelling and spending more than ever before, according to a survey by MakeMyTrip. Sample this: 30% of new travellers are in the age group of 18 to 24 years, compared to 24% last year and both spending and average vacation time period is up by 10%. Data collated from bookings on MakeMyTrip scanning over 400 cities travellers shows that on an average Indians holidayed from 7-9 days last year which has increased from 12-14 days this year with people clubbing multiple destinations in their itinerary. Spending has increased to Rs 50,000 for short haul destinations and a lakh for long haul trips.