UP set to receive over Rs 26,000 cr to boost electronics sector

Claiming that the new IT and electronics policy is attracting investors from all over the country and abroad, the official said, “This feedback was received during recent roadshows in different cities of the country for the Investors Summit.”

Uttar Pradesh is on track to become an electronics hub as more than Rs 26,000 crore investment is expected in the sector during the UP Investors Summit next month, a senior government official said.

“UP will be getting new identity as electronics hub during the Investors Summit. Besides IT companies, electronic manufacturing units have also expressed their desire to invest in the state. We are expecting investment of about Rs 26,000 crore in this sector during the summit,” Additional Chief Secretary IT and Electronics department, Sanjiv Saran told PTI.

“We have signed MoUs for investment worth Rs 14,000 crore with 12 companies. Talks are on with 23 companies, which are expected to sign MoUs worth Rs 13,000 crore during the summit”, he said.

Claiming that the new IT and electronics policy is attracting investors from all over the country and abroad, the official said, “This feedback was received during recent roadshows in different cities of the country for the Investors Summit.”

“Positive change in law and order and decrease in crime rate in UP is also attracting investors,” he said.

According to government officials, companies like Samsung, Vivo, Oppo and LG have already invested in the state.

“After the Investors Summit, Samsung will start a new facility in the state in which 12 lakh mobile phones will be made per month. Besides this, some LED manufacturing plants are also expected to be established in the state. It will not only generate revenue but also create job opportunities,” an official said.

The state government is expecting most of the investments in NCR, but Lucknow has also come as another choice of investors.

Saran stated that many companies had shown interest in IT city being developed in the state capital. In past three years, 106 companies have invested in the country of which 47 are in UP.

“Besides Lucknow, we are also working on making IT hubs in Meerut and Agra. Soon, IT parks will be coming up in Bareilly, Varanasi, Kanpur and Gorakhpur and approval for the same has been given,” he added.

The Investors Summit, scheduled during Feb 21-22, is expected to witness participation from across the country and by several international delegates.

“The event will focus on 14 key areas including textiles, MSME, IT, electronics, dairy, pharma, logistics. The focus will be to generate employment and create a conducive business environment in the state,” said Anup Chandra Pandey, Commissioner, Infrastructure and Industrial Development, Uttar Pradesh.

The state is looking at signing memorandums of understanding to the tune of Rs 1 lakh crore at the upcoming summit.

CEA says India can’t ignore US corporate tax cut: Report

Arvind Subramanian also said it is unlikely that GDP growth will be less than 7 percent in 2018-19.

India will need to respond to the trend of developing countries lowering corporate tax returns, Chef Economic Adviser (CEA) Arvind Subramanian told in an interview.

The United States recently slashed its corporate tax rate to 21 percent from 35 percent.

“Nobody is preventing us from responding to it. If you want to be investor-friendly, you need to have policies to do that,” Subramanian said in response to a question on the impact of the US tax cut on investments in India.

Here are some key takeaways from his interview:

Considering the prevalent prices of crude oil, India’s GDP will grow at 7-7.5 percent next year.

Public sector banks do need more participation from the private sector but how much of it should be domestic and how much should be foreign is another matter.

Protectionism is not a factor at the moment since India’s exports have been growing. Even the proposed restrictions on H-1B visas are being discussed, although no action has been taken as yet.

Even though the size of the formal sector increasing augurs well for the country, we still need to see an increase in employment, particularly employment by the formal sector.

People need to be mindful of asset bubbles, especially when stock prices are so high. They should be extra vigilant and extra careful, and there should more regulatory oversight and better information flow to investors.

The NITI Aayog, the power ministry and others will deliberating on what should be the next step in terms of reforms for the power sector after the Ujjwal Discom Assurance Yojna (UDAY).

Looking at opportunities in health insurance, stressed asset spaces: Keki Mistry

A large part of the fund raised will be invested in HDFC Bank, to the tune of Rs 8500 crore to maintain the stake in the bank, said Keki Mistry, VC & CEO, HDFC.

Housing Development Finance Corporation (HDFC) has posted its highest growth in individual loan book this quarter. The company reported net profit Rs 5,670.2 crore for the December quarter, a whopping growth of 233.3 percent year-on-year due to one-time gain after stake sale in life insurance business.

Loan book at the end of December quarter stood at Rs 3.4 lakh crore, higher by 18.5 percent compared to Rs 2.87 lakh crore in December 2016.

In an interview to CNBC—TV18, Keki Mistry, VC & CEO, HDFC said the company has got approval to raise Rs 13000 crore and out of that they have agreed on doing a private placement of Rs 11,104 crore, which will largely be to overseas institutional investors and one domestic investor.

The funds that will be raised, a large part of that will be invested in HDFC Bank to the tune of Rs 8500 crore to maintain the stake in the bank after all the stock option and dilution takes place, said Mistry.

They would also be looking at using the funds for variety of other purposes. One of that is health insurance because the market growth for this segment is India is very large, he said.

The other thing to look at is stressed assets. However, he said it is not they would buy stressed assets within HDFC but the company has core competence to identify housing projects that are under of stress. So, they would acquire those projects in an incomplete stage and later entrust the completion of the project to a good developer, give it the HDFC brand and therefore be able to sell it at a higher price, said Mistry.

Union Budget 2018: This is what finance minister Arun Jaitley needs to do to reduce farm stress and prevent farmer suicides

So severe and visible was the distress in agriculture sector, which is the source of livelihood for 60% Indians, that it became a rallying point in almost every state election fought last year.

Last year was in many ways the year of the angry farmer. The anger manifested itself in many ways – from protests in more than a dozen states, including Delhi, Rajasthan, Madhya Pradesh, Karnataka and Maharashtra, to voting patterns in Gujarat.

So severe and visible was the distress in agriculture sector, which is the source of livelihood for 60% Indians, that it became a rallying point in almost every state election fought last year.

As official figures suggest – Central Statistics Office has predicted farm sector growth to slow down to 2.1% for the current financial year – this anger is unlikely to subside in the coming days.

It is with this in mind perhaps that Finance Minister Arun Jaitley, who will deliver the final full Budget of the present Union government on February 1, announced agriculture to be “the top priority” in the Budget.

So what could Jaitley do to arrest the slump in agriculture sector (between 2016 and 2017 the sector grew at more than twice the rate – 4.9%) and reduce the number of farmer suicides?

News18 spoke to a number of people in the sector – former government consultants, thinktank chiefs, international experts, lawmakers, farmer leaders and union leaders, and farmers – to understand the crisis unfolding in the farm sector and to seek their suggestions.

These are the five subjects, broadly speaking, that they talked about.

Loan waivers

There are clearly two schools of thought on this subject. One set of experts think loan waivers are ineffective and populist measures that only cripple farmers further. The other school claims this to be the departure point for farm sector reforms. Under the burden of mounting loans farmer suicides will only increase is the argument.

“I am absolutely against loan waivers. There should be no further announcement on this. What we do through loan waivers is take away the dignity of the famer, who works to earn his bread just like you and I do. Loan waiver policy should not be encouraged under any circumstance,” says RB Singh, a Padma Bhushan awardee and the current chancellor of Central Agricultural University in Imphal. Singh is also a former Assistant Director General of Food and Agriculture Organisation of the United Nations.

On the other hand, Surjit Singh, a farmer based in Punjab, thinks that farm loan waiver is his most urgent necessity.

“I was looking forward to the loan waiver scheme when our Chief Minister announced it. Farming under growing debt is crushing. But the loan wavier scheme has turned out to be just a formality. We haven’t got anything so far. We want all our loans waived off immediately.”

This sentiment was echoed by Shiv Kumar Sharma, popularly known as Kakkaji, who led farmer protests in Madhya Pradesh in June last year during which five farmers were shot dead by police in Mandsaur.

“Most of the anger against government is about the pending loans. No reform in this sector is worth mentioning unless the government waives off all the loans of farmers in this country. After all farmers have been burdened with these loans because of the faulty initiatives of the government.”

Fixed monthly income

Experts in this sector have often argued that farmers’ incomes often are subject to several variables including market fluctuations and weather. This is why all measures to bolster farming – through expanding irrigation canals to providing credit – will fail unless farmers are assured a minimum monthly income.

“The crisis really has been of farmer incomes. Over last two years we have seen prices of all commodities falling. And this has happened across the board. The challenge therefore is how to get farmers a fixed working capital and source of sustenance. I have written to the Finance Minister, who himself has said that GDP growth is unjustifiable unless benefits reach farmers, recommending setting up of a commission to set fixed wages for farmers,” said Devinder Sharma, a food and trade policy analyst.

He has recommended that an existing commission ‘Commission for Agricultural Costs and Prices’ be renamed to ‘Commission of Farmers’ Income and Welfare’ to find out ways of providing the minimum wage of Rs 18,000 to farmers.

Raju Shetty, an MP from Maharashtra, who recently broke ties with NDA claiming that NDA had not implemented the MS Swaminathan Commission report as promised, also spoke in favour of a fixed monthly income.

“One time loan waivers will not work. What we need to do for our farmers is provide them with fixed incomes. Unless they know that a fixed amount of money is getting credited to their accounts in following months, why should a farmer work under huge debts today?”

NSE to auction investment limits for Rs 4,500 cr govt bonds

The auction will be conducted on NSE’s e-bid platform from 1530 hrs to 1730 hrs after the market hours, the exchange said in a circular.

Leading bourse NSE today said it will auction investment limits on Monday, enabling foreign investors to purchase government bonds worth over Rs 4,500 crore.

The auction will be conducted on NSE’s e-bid platform from 1530 hrs to 1730 hrs after the market hours, the exchange said in a circular.

The auction quota gives overseas investors the right to invest in debt up to the stipulated limit. Till yesterday, the total investment in the governmentdebt category reached Rs 1,86,731 crore, which is 97.61 percent of the total permitted threshold of Rs 1,91,300 crore, according to the latest update with depositories.

Consequently, the exchange has decided to conduct an auction for the allocation of unutilised debt limits to the tune of Rs 4,569 crore on Monday, January 29.

To make trading members accustomed to the bidding platform, the exchange would be conducting a mock bidding session today.

In an auction conducted earlier this month, investment limits for government bonds had attracted bids to the tune of a staggering Rs 11,988 crore by foreign portfolio investors (FPIs) against Rs 6,666 crore put on offer.

Ramrajya is governance sans fear, corruption, discrimination: VP Naidu

Advocating Ramrajya, Vice President M Venkaiah Naidu said that the name of Lord Ram should not be associated with religion as governance minus fear, corruption and discrimination is Ramrajya and for this everyone should unite transcending caste, religious and political barriers.

Advocating Ramrajya, Vice President M Venkaiah Naidu said that the name of Lord Ram should not be associated with religion as governance minus fear, corruption and discrimination is Ramrajya and for this everyone should unite transcending caste, religious and political barriers.

“The name of Lord Ram should not be related with any particular religion. He should be seen as an ideal person. Hinduism is not a religion but a life style and that is why India is named Hindustan,” Naidu said at the first UP Diwas programme in the presence of Governor Ram Naik and Chief Minister Yogi Adityanath, among other dignitaries.

“Ramrajya is the governance minus fear, corruption and discrimination and for this everyone should come above caste, religion and politics and unite. All those living in the country are brothers irrespective of their belief and religion. Attacking anyone on the basis of caste and religion is not good,” he said. Noting that the concept of Ramrajya was given by Mahatma Gandhi, he said for this everyone should shed politics of caste and religion.

“For making the country developed, we need a stable government and good atmosphere. For this, we all should shed narrow politics of caste, religion and money. The GDP before British rule was 27 per cent and presently we are talking about 7-7.5 per cent. This situation has arisen due to internal disputes. We have to maintain Indianness and follow ‘Sarve Bhavintu Sukhinah’ (Happiness to all).”

He said, “We should follow our traditions and the priority of the country should be good governance and development. Everyone should be taken along for this.

Accountable government can address problems in growing world: MoS PMO Jitendra Singh

The Union Minister said that more than 239 cities in the world were classified as “fragile” due to pollution, conflict, terrorism, unemployment and lack of electricity, besides other factors.

An accountable government and citizen participation can address maximum problems arising in a growing world, Union Minister Jitendra Singh has said.

Addressing a session on “From Fragile Cities to Renewal” at World Economic Forum here, he said that it might not be possible to easily visualise the local perspective in different countries because of their diverse characteristics.

“For example, the population of Switzerland is only 8 million which is less than the population of Delhi, but nevertheless, with an accountable government and citizen participation, maximum problems arising in a growing world could be addressed,” Singh said yesterday.

He said that more than 239 cities in the world were classified as “fragile” due to pollution, conflict, terrorism, unemployment and lack of electricity, besides other factors.

What was needed, Singh said, was to upgrade the urban space and offer better facilities to the population.

When asked to narrate his experience of fragile cities in the context of insurgency in the north eastern region of India, he said, in the last three and half years of the Modi government, a lot of stability in the region has been established.

Singh, Minister of State in the Prime Minister’s Office, asserted that insurgency and fragility also have a correlation with lack of development and ineffective political leadership.

He said, corruption not only leads to loss of moral authority of the state leadership but also causes a huge pilferage of the state exchequer, which would otherwise be gainfully utilised to address the fragility.

Singh said that with the growing aspirations among the youth, which is a welcome development, there will always be a certain amount of fragility noticeable even in the most ideal situations because fragility itself is a relative term and what was fragile yesterday may not be fragile today, and what is fragile today may not fragile tomorrow, according to an official release issued today.

He said the world is looking for a new global roadmap with uniform parameters, in spite of the diversity and heterogeneity.

Other panelists included David Cameron, former Prime Minister of United Kingdom and Alain Berset, President of Switzerland.

India’s automated ocean pollution system to begin this year

According S S C Shenoi, director, Indian National Centre for Ocean Information Services (INCOIS), the system will become functional by April this year and the cost of the project is estimated to be at Rs 100 crore.

India is all set to have its own automated ocean pollution observation system this year which will help keep a tab on ocean pollution levels apart from offering insights on how the marine system is changing, a top scientist has said.

According S S C Shenoi, director, Indian National Centre for Ocean Information Services (INCOIS), the system will become functional by April this year and the cost of the project is estimated to be at Rs 100 crore.

INCOIS is an autonomous body under the Ministry of Earth Sciences.

Shenoi said that the new ocean data acquisition system, called automated moorings, will do away with the present practice of collecting water samples from sea and studying their pollution levels thereafter.

“This is for the first time India will have such kind of system. In the US you will find it. This is a very effective system in getting the data about the ocean pollution. We will use those data to understand the quality of water,” Shenoi told PTI.

He added that the new system will be foolproof.

The project will begin from April once it gets a final nod from the government, he said.

Shenoi said it will help in monitoring the pollution level of the ocean water and the impact of climate change.

“There are reports that the water is becoming anoxic and it could change the marine sytem. These are suspicions and there is nothing concrete. So, this will give us a clear picture of what actually is happening and help us in the long run to take up preventive measures,” he said.

Anoxic waters are areas of sea water that are depleted of dissolved oxygen.

It will also provide data that will help scientists to understand how the marine system is changing.

Shenoi said sensor-equipped buoys will be placed in six coastal areas of the country. The sensors, placed at the bottom of the buoys, will be attached to the sea bed so that they are not washed away.

The moored ocean buoys will be placed in coastal areas of Digha (West Bengal), Goa, Mumbai, Kochi, Vishakapatanam and Chennai, he said.

“We have already completed our background work. We hope to deploy two buoys by December 2018. We will monitor the reading and functioning and then will place other buoys,” he said adding the reading will be observed and decoded using a mathematical model.

It is estimated that more than 80 per cent of the pollution in the ocean is from lands with marine debris, especially plastics, killing thousands of seabirds, mammals and sea turtles every year.

Income Tax Department asks Flipkart to reclassify discounts as capex

According to the report, Flipkart and Amazon could have to pay 30 percent annually in tax when this move comes into effect.

Flipkart has lost an appeal against the Income Tax Department after it was asked to reclassify marketing expenditure and discounts as capital expenditure, according to a report in The Economic Times.

This ruling was made in December but has not been made public, according to the report. The report also said that a senior official has confirmed the development and said that the company will challenge the order at the  Income Tax Appellate Tribunal (ITAT) in the next few days.

Last year, the I-T Department asked e-commerce companies to restructure their marketing expenses under capital expenditure. E-commerce companies deduct discounts and marketing expenditure from their revenue, which leads to losses.

But the I-T Department says that money spent on marketing is not a cost but capital expenditure because it creates intangibles and potentially generates revenue.

This change in the way ecommerce companies are taxed could help them become profitable by increasing revenue.

According to the report, Flipkart and Amazon could have to pay 30 percent annually in tax when this move comes into effect.

Benefit from GST probably won’t show up next year: Poll

Economic growth is probably at its weakest pace this fiscal year since before a new calculation methodology was introduced in 2014-15, the Jan. 10-18 poll of about 30 economists found.

India’s economy won’t significantly benefit from a goods and services tax until after next fiscal year, according to a slim majority of economists polled by Reuters, but almost half said rewards might come sooner.

Economic growth is probably at its weakest pace this fiscal year since before a new calculation methodology was introduced in 2014-15, the Jan. 10-18 poll of about 30 economists found.

Disruptions from the goods and services tax and a ban on high currency notes in November 2016 curtailed growth and manufacturing, services and consumer spending. Consequently, 15 of 28 economists said benefits from the tax wouldn’t be felt until at least the fiscal year starting April 2019.

But signs of a recovery in activity are appearing, and 13 of the 28 said benefits may show up next year.

The poll also forecast the economy would grow 6.6 percent this fiscal year and 7.3 percent next year.

“Disruptions from the GST and demonetization are expected to start receding from Q218 (April-June quarter) and a pick-up in consumption, investment and growth shall commence,” said KK Mital, investment advisor at Venus India.

The latest consensus was lower than the forecast three months ago.

An early realisation of the benefits would bring some relief to the Reserve Bank of India, which will need to deal with higher inflation over the coming years, the poll showed.

After averaging 3.7 percent this fiscal year, consumer price inflation is now expected to exceed the RBI’s medium-term target of 4 percent each quarter through mid-2019, the end of the forecast horizon. It is expected to average 4.6 percent next year.

“Upside risks (to inflation) stem from higher oil and food prices, currency depreciation, an accelerating economy and fiscal slippage,” said Arjen van Dijkhuizen, senior economist at ABN AMRO.

Even so, the RBI is forecast to leave interest rates unchanged until at least the middle of next year. At its last meeting in December, the central bank said inflation risks were “evenly balanced”.

However, high growth and inflation numbers might prompt a change in the RBI’s neutral policy stance. The consensus forecast among 24 economists was that an inflation level of 5.5 percent would prompt the central bank to consider raising rates.

“As long as various gauges of underlying inflation track sub-5 percent, the RBI should stay pat,” said Abhishek Upadhyay, economist at ICICI Securities PD. “A worsening of other macro stability indicators on account of higher crude prices can make the RBI cautious.”