General Affairs
After Delhi fights for air, BEST launches 4 electric buses to counter pollution in Mumbai
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The Brihanmumbai Electric Supply and Transport (BEST) introduced four new electric buses with an objective to reduce air pollution in Mumbai. This comes in even as Delhi, which has been under a thick blanket of smog for the last three days, is figuring out measures to combat pollution.
BEST is the transport wing of the Brihanmumbai Municipal Corporation (BMC). The four BEST buses will initially ply between Chhatrapati Shivaji Terminus (CST), Churchgate and Nariman Point.
These buses are different from the hybrid buses as they will run completely on batteries. There are 4 batteries in each bus and it takes at least 3 to 3-and-a-half hour for the batteries to be fully charged. Once fully charged, a bus can run for 200km.
"It is a good initiative by BEST. We were working on this since the last one year. I thank BMC for allocating fund for this. Our aim is to induct more such buses in fleet," said Yuva Sena chief Aditya Thackery.
These buses are engineless and gearless, which will help curb the pollution and save fuel as well. They create zero noise which is a win-win situation. BEST spends Rs 20/km and Rs 15/km for CNG buses, but these electric buses will cost only Rs 8 per/km. BEST is hence confident that it can slowly reduce its losses by inducting many more such buses in its fleet.
A normal diesel bus usually costs around Rs 50 lakh but these electric buses are double the price of diesel buses. The buses which got indicted in BEST's fleet cost them Rs 1 crore each.
With the introduction of electric buses, Mumbai will become the second city in Maharashtra to experiment with it after Nagpur. Meanwhile, Himachal Pradesh has also introduced these buses which travel between Kullu-Manali-Rohtang pass.
"These are 32-seater buses and there are 6 USB charging points for travellers. There is good ventilation in the bus," said Anil Kokil, chairman, BEST.
The Brihanmumbai Electric Supply and Transport (BEST) introduced four new electric buses with an objective to reduce air pollution in Mumbai. This comes in even as Delhi, which has been under a thick blanket of smog for the last three days, is figuring out measures to combat pollution.
BEST is the transport wing of the Brihanmumbai Municipal Corporation (BMC). The four BEST buses will initially ply between Chhatrapati Shivaji Terminus (CST), Churchgate and Nariman Point.
These buses are different from the hybrid buses as they will run completely on batteries. There are 4 batteries in each bus and it takes at least 3 to 3-and-a-half hour for the batteries to be fully charged. Once fully charged, a bus can run for 200km.
"It is a good initiative by BEST. We were working on this since the last one year. I thank BMC for allocating fund for this. Our aim is to induct more such buses in fleet," said Yuva Sena chief Aditya Thackery.
These buses are engineless and gearless, which will help curb the pollution and save fuel as well. They create zero noise which is a win-win situation. BEST spends Rs 20/km and Rs 15/km for CNG buses, but these electric buses will cost only Rs 8 per/km. BEST is hence confident that it can slowly reduce its losses by inducting many more such buses in its fleet.
A normal diesel bus usually costs around Rs 50 lakh but these electric buses are double the price of diesel buses. The buses which got indicted in BEST's fleet cost them Rs 1 crore each.
With the introduction of electric buses, Mumbai will become the second city in Maharashtra to experiment with it after Nagpur. Meanwhile, Himachal Pradesh has also introduced these buses which travel between Kullu-Manali-Rohtang pass.
"These are 32-seater buses and there are 6 USB charging points for travellers. There is good ventilation in the bus," said Anil Kokil, chairman, BEST.
Govt made changes in GST after we put pressure, says Rahul Gandhi in Gujarat
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Congress vice-president Rahul Gandhi started his fourth 3-day tour of poll-bound Gujarat from Gandhinagar today by launching a scathing attack on the Modi government over the Goods and Services Tax (GST) issue.
Addressing a rally in Gandhinagar's Chiloda Circle, Rahul said, "Gabbar Singh Tax is required neither by the government nor the entire country."
Congress had told BJP that a simple and good tax should be implemented but the latter rolled out GST at midnight without asking anyone. The country and Congress put pressure on the government, after which they (Centre) rolled it back, Rahul said.
"We will stop only when Gujarat and the entire country is free of Gabbar Singh Tax and the government gets the real GST in place. We don't want 5 different tax slabs, but just one tax slab. Structural changes are required in GST. We don't want 28 per cent GST, but only 18 per cent. We will not stop till they do so. If they don't change, we will come (to power) and do the same", the Congress leader said.
'DEMONETISATION, GST LEFT MANY UNEMPLOYED'
Slamming GST and demonetisation, Rahul said that these two decisions by the Modi government had left millions unemployed across the country."
He added, "Congress will ensure that women candidates are given more tickets. We will fight for 33 per cent reservation for women."
The Congress vice-president also visited the famous Akshardham temple in Gandhinagar and later left for Banaskantha. He will also go to the famous Ambaji Temple in Banaskantha on this tour.
Congress vice-president Rahul Gandhi started his fourth 3-day tour of poll-bound Gujarat from Gandhinagar today by launching a scathing attack on the Modi government over the Goods and Services Tax (GST) issue.
Addressing a rally in Gandhinagar's Chiloda Circle, Rahul said, "Gabbar Singh Tax is required neither by the government nor the entire country."
Congress had told BJP that a simple and good tax should be implemented but the latter rolled out GST at midnight without asking anyone. The country and Congress put pressure on the government, after which they (Centre) rolled it back, Rahul said.
"We will stop only when Gujarat and the entire country is free of Gabbar Singh Tax and the government gets the real GST in place. We don't want 5 different tax slabs, but just one tax slab. Structural changes are required in GST. We don't want 28 per cent GST, but only 18 per cent. We will not stop till they do so. If they don't change, we will come (to power) and do the same", the Congress leader said.
'DEMONETISATION, GST LEFT MANY UNEMPLOYED'
Slamming GST and demonetisation, Rahul said that these two decisions by the Modi government had left millions unemployed across the country."
He added, "Congress will ensure that women candidates are given more tickets. We will fight for 33 per cent reservation for women."
The Congress vice-president also visited the famous Akshardham temple in Gandhinagar and later left for Banaskantha. He will also go to the famous Ambaji Temple in Banaskantha on this tour.
NGT slams AAP government over mishandling of smog menace
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The National Green Tribunal issued stern directions to the Delhi government and other neighbouring states on Friday.
The green court pulled up the Delhi government on the nitty-gritties on the implementation of various measures to curb pollution. A bench headed by NGT chairperson justice Swatanter Kumar also directed the city government to submit the comparative ratio of the emission caused by diesel and petrol vehicles and asked it to clearly enumerate the contribution of small petrol cars in pollution.
However, the NGT also noted that the Delhi government has been taking steps in the interest of environment and public health and these were laudable. The court also directed the Delhi government and all public authorities to strictly implement its order, banning construction activity in the wake of the alarming pollution levels in the capital.
It also asked the neighbouring states to strictly prevent stubble burning, saying there were reports of large-scale residue burning from some parts.
The green panel ordered that if any violation of its order was found at the construction sites by the inspecting teams in Delhi and the National Capital Region, an environment compensation of Rs 1 lakh would be levied for each such fault.
While addressing the issue of crop burning, the court said if any instance of crop burning comes on record, the tribunal will recover exemplary fine from the defaulting officer's salary.
Regarding the AAP government's plea to allow industries dealing with essential services, it said, "It has been pointed out before us that some industries, which are non-polluting, are providing essential goods like food items or medical facilities. These units may be permitted to operate subject to reasonable conditions."
It also directed that essential services like food and medical facilities could be allowed if the authorities find that their emissions are controlled and non-polluting.
The tribunal asked the officials to show which colony has been picked up for sprinkling of water and observed that treated water for sewage treatment plants can be used for this purpose.
With the deadly smog blanketing Delhi and the neighbouring states, the NGT had Thursday banned construction and industrial activities and entry of trucks.
The CPCB has recorded "severe" air quality, meaning that the intensity of pollution was extreme.
The National Green Tribunal issued stern directions to the Delhi government and other neighbouring states on Friday.
The green court pulled up the Delhi government on the nitty-gritties on the implementation of various measures to curb pollution. A bench headed by NGT chairperson justice Swatanter Kumar also directed the city government to submit the comparative ratio of the emission caused by diesel and petrol vehicles and asked it to clearly enumerate the contribution of small petrol cars in pollution.
However, the NGT also noted that the Delhi government has been taking steps in the interest of environment and public health and these were laudable. The court also directed the Delhi government and all public authorities to strictly implement its order, banning construction activity in the wake of the alarming pollution levels in the capital.
It also asked the neighbouring states to strictly prevent stubble burning, saying there were reports of large-scale residue burning from some parts.
The green panel ordered that if any violation of its order was found at the construction sites by the inspecting teams in Delhi and the National Capital Region, an environment compensation of Rs 1 lakh would be levied for each such fault.
While addressing the issue of crop burning, the court said if any instance of crop burning comes on record, the tribunal will recover exemplary fine from the defaulting officer's salary.
Regarding the AAP government's plea to allow industries dealing with essential services, it said, "It has been pointed out before us that some industries, which are non-polluting, are providing essential goods like food items or medical facilities. These units may be permitted to operate subject to reasonable conditions."
It also directed that essential services like food and medical facilities could be allowed if the authorities find that their emissions are controlled and non-polluting.
The tribunal asked the officials to show which colony has been picked up for sprinkling of water and observed that treated water for sewage treatment plants can be used for this purpose.
With the deadly smog blanketing Delhi and the neighbouring states, the NGT had Thursday banned construction and industrial activities and entry of trucks.
The CPCB has recorded "severe" air quality, meaning that the intensity of pollution was extreme.
Modi government likely to give voting rights to 2.5 crore NRIs
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In a big leap towards allowing a 25 million-strong NRI population to cast their franchise in Assembly and Lok Sabha polls, the Modi government on Friday said they will soon be given proxy voting rights.
The government told the bench headed by Chief Justice Dipak Misra that it proposes to amend the Representation Of People Act (RPA) for this purpose and intends to introduce a Bill in the ensuing winter session of Parliament.
The government has in principle approved changes in the RPA which deals with elections to permit NRI to cast their vote. If the proposal passes political muster in Parliament, NRIs will be able to exercise their voting rights through proxy. Currently, only service personnel are permitted to vote through proxy.
However, the facility for NRIs will not be the same as that enjoyed by service personnel.
For instance, voters in the Armed Forces can nominate their relatives as permanent proxy to vote on their behalf. But the Union Cabinet's approval for proxy voting by NRIs carries a caveat - they cannot nominate one proxy for all polls.
According to the proposal, NRI voters will have to appoint a nominee afresh for each election - one person can act as proxy for only one overseas voter.
Until now, due to the high cost of travel and time involved, only a minuscule population of NRIs came to India to cast vote. The court was hearing PILs filed by two NRIs -Shamsheer V P, an NRI from Kerala, and Nagender Chindam, chairman of the UK-based
Pravasi Bharat - seeking the voting rights. "The US lets you vote from space. Texas laws have allowed astronauts the right to vote when on a space mission.
Here, NRIs are pleading for it," Chindam had said earlier. After the government's assurance, he said, "This is great news and is one of the key milestones in the path of our longterm campaign for NRI voting. Enabling remote voting rights in a such a large scale would be the first of its kind in the world. We are proud of our democracy."
In December 2016, the Centre had said it accepted the EC's proposal in this regard, claimed it formulated a draft Bill, and told the court that steps are being taken to get the Representation of People Act, 1951 amended. But things have not moved since. According to rough estimates, there are about 25 million NRIs of eligible voting age.
They could hold considerable sway in election results, especially in states such as Punjab, Gujarat and Kerala, where a number of expats hail from. The move to grant proxy voting rights to overseas electors is significant against the backdrop of BJP's claims of enjoying high goodwill among NRIs.
The party sought to deepen its electoral appeal among them through Prime Minister Narendra Modi's outreach programmes during his foreign visits after coming to power in 2014.
In a big leap towards allowing a 25 million-strong NRI population to cast their franchise in Assembly and Lok Sabha polls, the Modi government on Friday said they will soon be given proxy voting rights.
The government told the bench headed by Chief Justice Dipak Misra that it proposes to amend the Representation Of People Act (RPA) for this purpose and intends to introduce a Bill in the ensuing winter session of Parliament.
The government has in principle approved changes in the RPA which deals with elections to permit NRI to cast their vote. If the proposal passes political muster in Parliament, NRIs will be able to exercise their voting rights through proxy. Currently, only service personnel are permitted to vote through proxy.
However, the facility for NRIs will not be the same as that enjoyed by service personnel.
For instance, voters in the Armed Forces can nominate their relatives as permanent proxy to vote on their behalf. But the Union Cabinet's approval for proxy voting by NRIs carries a caveat - they cannot nominate one proxy for all polls.
According to the proposal, NRI voters will have to appoint a nominee afresh for each election - one person can act as proxy for only one overseas voter.
Until now, due to the high cost of travel and time involved, only a minuscule population of NRIs came to India to cast vote. The court was hearing PILs filed by two NRIs -Shamsheer V P, an NRI from Kerala, and Nagender Chindam, chairman of the UK-based
Pravasi Bharat - seeking the voting rights. "The US lets you vote from space. Texas laws have allowed astronauts the right to vote when on a space mission.
Here, NRIs are pleading for it," Chindam had said earlier. After the government's assurance, he said, "This is great news and is one of the key milestones in the path of our longterm campaign for NRI voting. Enabling remote voting rights in a such a large scale would be the first of its kind in the world. We are proud of our democracy."
In December 2016, the Centre had said it accepted the EC's proposal in this regard, claimed it formulated a draft Bill, and told the court that steps are being taken to get the Representation of People Act, 1951 amended. But things have not moved since. According to rough estimates, there are about 25 million NRIs of eligible voting age.
They could hold considerable sway in election results, especially in states such as Punjab, Gujarat and Kerala, where a number of expats hail from. The move to grant proxy voting rights to overseas electors is significant against the backdrop of BJP's claims of enjoying high goodwill among NRIs.
The party sought to deepen its electoral appeal among them through Prime Minister Narendra Modi's outreach programmes during his foreign visits after coming to power in 2014.
Rajasthan: Doctors on strike leave thousands of patients in a fix
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Doctors across government hospitals in Rajasthan are on strike which has left thousands of patients in a fix.
The demands of service doctors on strike are correction in salary discrepancies, Rs 10,000 as grade pay benefit, improvement in service conditions, safety inside hospitals, separate cadre and housing facility.
The doctors on strike in Rajasthan have been joined by residents and senior residents which has severely crippled the medical service in the state.
"All the necessary arrangements have been made and our senior faculty, they are too working around the clock. And we are focusing basically on the emergency services, ICU and the indoor patients," Dr DS Meena, Superintendent, Sawai Man Singh (SMS) Hospital, mentioned.
"The work for the indoor patients, for the ICU and for the emergency will not suffer. Our faculty is working there. The effect of the strike can be felt but all the emergency services are still operational," she added.
The Out Patient Department (OPDs) at government hospitals in the state wear a deserted look as doctors remain on strike.
Some of the patients, left with few options, have been seeking treatment at private hospitals while others were seen hoping for the doctors to return from their strike.
The talks with the doctors on strike have been of no use even after five days of the strike. Rajasthan government seems to be in a mood to a act against the doctors on strike.
Rajasthan Essential Services Maintenance Act (RESMA) has been imposed in Rajasthan and at several places, the police has arrested several doctors on strike.
At the SMS Hospital, the biggest government medical facility in Rajasthan, some of the aggrieved patients' relatives shared their ordeal with India Today.
Himanshu Soni, a patient's relative mentioned, "Doctors have not been coming here for three days. Father is admitted and needs a dialysis. Everyone is talking rudely. Someone is saying that the doctor is not there and that is making us do rounds for the past three days. We need a substance called Fluid HD. The Government has made that free and even that is not available here."
"We have gone to about 20 shops outside. Even then, we could not get it. The authorities ask us to either get Fluid HD or take the patient elsewhere," he added.
According to several relatives of patients, the staff is behaving rudely and the medical attention is not being given.
Doctors across government hospitals in Rajasthan are on strike which has left thousands of patients in a fix.
The demands of service doctors on strike are correction in salary discrepancies, Rs 10,000 as grade pay benefit, improvement in service conditions, safety inside hospitals, separate cadre and housing facility.
The doctors on strike in Rajasthan have been joined by residents and senior residents which has severely crippled the medical service in the state.
"All the necessary arrangements have been made and our senior faculty, they are too working around the clock. And we are focusing basically on the emergency services, ICU and the indoor patients," Dr DS Meena, Superintendent, Sawai Man Singh (SMS) Hospital, mentioned.
"The work for the indoor patients, for the ICU and for the emergency will not suffer. Our faculty is working there. The effect of the strike can be felt but all the emergency services are still operational," she added.
The Out Patient Department (OPDs) at government hospitals in the state wear a deserted look as doctors remain on strike.
Some of the patients, left with few options, have been seeking treatment at private hospitals while others were seen hoping for the doctors to return from their strike.
The talks with the doctors on strike have been of no use even after five days of the strike. Rajasthan government seems to be in a mood to a act against the doctors on strike.
Rajasthan Essential Services Maintenance Act (RESMA) has been imposed in Rajasthan and at several places, the police has arrested several doctors on strike.
At the SMS Hospital, the biggest government medical facility in Rajasthan, some of the aggrieved patients' relatives shared their ordeal with India Today.
Himanshu Soni, a patient's relative mentioned, "Doctors have not been coming here for three days. Father is admitted and needs a dialysis. Everyone is talking rudely. Someone is saying that the doctor is not there and that is making us do rounds for the past three days. We need a substance called Fluid HD. The Government has made that free and even that is not available here."
"We have gone to about 20 shops outside. Even then, we could not get it. The authorities ask us to either get Fluid HD or take the patient elsewhere," he added.
According to several relatives of patients, the staff is behaving rudely and the medical attention is not being given.
Business Affairs
GST Council cuts 10 per cent tax on over 200 daily use goods, only 50 items left in top tax slab
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In a major rejig of GST rates, Finance Minister Arun Jaitley on Friday announced a 10 per cent cut in tax on over 200 goods ranging from chocolates to cosmetics to artificial fur coats and wrist watches, a move that is expected to spur consumer demand and rev up industrial production in a slowing economy.
As many as 178 items of daily use were shifted from the highest tax bracket of 28 per cent to 18 per cent. In the services segment, the tax rate was reduced to 5 per cent for all restaurants, both air- conditioned and non-AC while food bills in restaurants of starred hotels will be taxed at a higher rate , Finance Minister Arun Jaitley said after the GST Council meeting in Guwahati.
The new tax slabs will come into effect from November 15. The all-powerful GST Council reduced the number of items in the top 28 per cent Goods and Services Tax (GST) slab to just 50 from 228 that were put on the list until now. Only luxury and sin goods such as cigarettes and sugary drinks remain in the highest tax bracket and items of daily use of the middle-class have been shifted to the 18 per cent slab.
Jaitley also said that the tax on wet grinders and armoured vehicles has been cut from 28 per cent to 12 per cent while the tax rate on six items has been reduced from 18 per cent to 5 per cent, on 8 items from 12 per cent to 5 per cent and on six items from 5 per cent to nil.
Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut from 28 per cent to 18 per cent.
The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machines, washing machines, refrigerators, vacuum cleaners, cars and two-wheelers, aircrafts and yachts.
The cut in tax will cost Rs 20,000 crore in revenues annually, Bihar Deputy Chief Minister Sushil Kumar Modi said. Launched on July 1, the GST weaved 29 states into a single market with one tax rate but while traders and small business complained of increased compliance burden, voices of dissent rose on high tax rate on some common use goods. The Modi government has been facing criticism for the economic disruption caused by the GST roll-out and last year's shock demonetization. As a result, India's economy is expected to grow at its slowest pace in four years.
The government is worried on the political front as well because of the assembly elections in key states including Gujarat. It has taken on board complaints of small and medium businesses and announced an easing of GST norms to make compliance easier. To ease the compliance burden, the Council relaxed the return filing criteria and also lowered the penalties for late filing.
REACTIONS
Panic-stricken govt has no option but to concede to demands for change. Thanks to Gujarat elections, government forced to heed advice of Opposition and experts on flaws in implementation of GST: P Chidambaram
The increase in the composition scheme threshold will make life much easier for the small business entities. The impact of these changes will be positively felt in the next few months: Assocham
If traders are taken into confidence and various procedures are eased, the trading community will ensure the compensation of losses that the government is likely to suffer because of this move by making all efforts to widen the tax net base: Traders body CAIT
In a major rejig of GST rates, Finance Minister Arun Jaitley on Friday announced a 10 per cent cut in tax on over 200 goods ranging from chocolates to cosmetics to artificial fur coats and wrist watches, a move that is expected to spur consumer demand and rev up industrial production in a slowing economy.
As many as 178 items of daily use were shifted from the highest tax bracket of 28 per cent to 18 per cent. In the services segment, the tax rate was reduced to 5 per cent for all restaurants, both air- conditioned and non-AC while food bills in restaurants of starred hotels will be taxed at a higher rate , Finance Minister Arun Jaitley said after the GST Council meeting in Guwahati.
The new tax slabs will come into effect from November 15. The all-powerful GST Council reduced the number of items in the top 28 per cent Goods and Services Tax (GST) slab to just 50 from 228 that were put on the list until now. Only luxury and sin goods such as cigarettes and sugary drinks remain in the highest tax bracket and items of daily use of the middle-class have been shifted to the 18 per cent slab.
Jaitley also said that the tax on wet grinders and armoured vehicles has been cut from 28 per cent to 12 per cent while the tax rate on six items has been reduced from 18 per cent to 5 per cent, on 8 items from 12 per cent to 5 per cent and on six items from 5 per cent to nil.
Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut from 28 per cent to 18 per cent.
The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machines, washing machines, refrigerators, vacuum cleaners, cars and two-wheelers, aircrafts and yachts.
The cut in tax will cost Rs 20,000 crore in revenues annually, Bihar Deputy Chief Minister Sushil Kumar Modi said. Launched on July 1, the GST weaved 29 states into a single market with one tax rate but while traders and small business complained of increased compliance burden, voices of dissent rose on high tax rate on some common use goods. The Modi government has been facing criticism for the economic disruption caused by the GST roll-out and last year's shock demonetization. As a result, India's economy is expected to grow at its slowest pace in four years.
The government is worried on the political front as well because of the assembly elections in key states including Gujarat. It has taken on board complaints of small and medium businesses and announced an easing of GST norms to make compliance easier. To ease the compliance burden, the Council relaxed the return filing criteria and also lowered the penalties for late filing.
REACTIONS
Panic-stricken govt has no option but to concede to demands for change. Thanks to Gujarat elections, government forced to heed advice of Opposition and experts on flaws in implementation of GST: P Chidambaram
REACTIONS
Panic-stricken govt has no option but to concede to demands for change. Thanks to Gujarat elections, government forced to heed advice of Opposition and experts on flaws in implementation of GST: P Chidambaram
The increase in the composition scheme threshold will make life much easier for the small business entities. The impact of these changes will be positively felt in the next few months: Assocham
If traders are taken into confidence and various procedures are eased, the trading community will ensure the compensation of losses that the government is likely to suffer because of this move by making all efforts to widen the tax net base: Traders body CAIT
Govt plans lending reforms as bankers fear new bad debt crisis
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Weeks after the government unveiled a $32 billion bailout of state-run banks, top finance ministry officials and bankers will meet this weekend to discuss lending reforms designed to prevent another bad loans crisis. Bankers and policymakers fear India could be throwing good money after bad with the capital injection announced last month, unless it tightens lending rules and institutes governance reforms to insulate banks from political pressure.
"After bailing out the banks with taxpayer money, the government wants to ensure that such a problem doesn't happen again," said a senior finance ministry official with direct knowledge of the matter, who declined to share details.
Finance Minister Arun Jaitley has vowed the recapitalisation will be accompanied by not only bank reform, but also mergers of weak banks with stronger rivals. But the government has not commented on the issue of tackling political interference in lending, which bankers say is still one of the biggest problems.
India's near $147 billion pile of soured loans is replete with examples of powerful and politically connected businesses who are accused of undermining rules to secure credit and then defaulting on loans.
In one of the most high-profile cases, Vijay Mallya, owner of the now-defunct Kingfisher Airlines and former member of parliament, and several former officials of IDBI Bank, have been charged with suspected conspiracy and fraud in relation to a loan of 9 billion rupees ($138 million). Mallya, who is the head of the Force India Formula One team, has dismissed the charges and fled to Britain.
"There's a risk of a rise in stressed assets unless bank corporate governance improves," said N. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a think-tank funded by the finance ministry.
"CORRUPTION AND KICKBACKS"
A dozen of the country's largest defaulters, with nearly a quarter of the total bad loans, have already been pushed into insolvency at the command of India's central bank, but none of these cases are likely to be resolved in the next six months. A new bankruptcy law allows for an additional three months to reach a resolution, but insolvency professionals say it could take even longer in some cases as the process is untested and could face legal hurdles if the companies do not agree with the proposal.
Steelmaker Bhushan Steel which defaulted on a loan of nearly $7 billion, was given repeated extensions by a consortium of banks, even after its vice chairman was arrested on alleged corruption charges in 2014 before the bankruptcy law came in. "Corruption and kick-backs are a big issue at public sector banks," said a Mumbai-based banker at a global lender, adding that the government needed to overhaul credit rules, including those for consortium lending.
Typically consortium lending in India is led by a large bank with as many as 30 others participating, but smaller banks, who are less able to absorb losses, have been faulted for tagging along and not having done their own due diligence in such cases. India must also tackle due diligence undertaken by banks to avoid repeat defaulters getting access to new loans, said the banker, speaking on condition of anonymity.
Earlier this week, the government approved amendments to the bankruptcy law, barring "wilful" defaulters - defined by the central bank as debtors who are able but unwilling to pay - from bidding for companies.
ELEPHANT IN THE ROOM
Bankers say despite the high-profile blow-ups, pressure from politicians continues to influence lending decisions. P. Mohan, manager of a local branch of State Bank of India, the country's top lender, said lending committees that include government-appointed nominees should be made accountable for all the sanctioned loans. "That will also curb politicians from putting undue influence on bankers," said Mohan.
A spokesman for the finance ministry declined to comment.
Corporate defaults make up the bulk of banks' total bad loans, and adding to that is growing stress in loans worth 4 trillion rupees given to more than 70 million small enterprises over the last three years under Modi's flagship programme to create jobs.
"We are scared about these risky loans, 50 percent of which may become stressed assets soon," said D. Franco, a manager at State Bank of India's branch in Chennai and general secretary of the All India Bank Officers' Confederation.
Guidelines by India's central bank also mandate 40 percent of all loans must be to priority sectors such as agriculture, manufacturing and small businesses - many of which are turning sour. "Public sector banks keep renewing these facilities whereas in normal business banking they would have been written off long ago," said the banker with the global bank. "That's the elephant in the room."
Weeks after the government unveiled a $32 billion bailout of state-run banks, top finance ministry officials and bankers will meet this weekend to discuss lending reforms designed to prevent another bad loans crisis. Bankers and policymakers fear India could be throwing good money after bad with the capital injection announced last month, unless it tightens lending rules and institutes governance reforms to insulate banks from political pressure.
"After bailing out the banks with taxpayer money, the government wants to ensure that such a problem doesn't happen again," said a senior finance ministry official with direct knowledge of the matter, who declined to share details.
Finance Minister Arun Jaitley has vowed the recapitalisation will be accompanied by not only bank reform, but also mergers of weak banks with stronger rivals. But the government has not commented on the issue of tackling political interference in lending, which bankers say is still one of the biggest problems.
India's near $147 billion pile of soured loans is replete with examples of powerful and politically connected businesses who are accused of undermining rules to secure credit and then defaulting on loans.
In one of the most high-profile cases, Vijay Mallya, owner of the now-defunct Kingfisher Airlines and former member of parliament, and several former officials of IDBI Bank, have been charged with suspected conspiracy and fraud in relation to a loan of 9 billion rupees ($138 million). Mallya, who is the head of the Force India Formula One team, has dismissed the charges and fled to Britain.
"There's a risk of a rise in stressed assets unless bank corporate governance improves," said N. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a think-tank funded by the finance ministry.
"CORRUPTION AND KICKBACKS"
"CORRUPTION AND KICKBACKS"
A dozen of the country's largest defaulters, with nearly a quarter of the total bad loans, have already been pushed into insolvency at the command of India's central bank, but none of these cases are likely to be resolved in the next six months. A new bankruptcy law allows for an additional three months to reach a resolution, but insolvency professionals say it could take even longer in some cases as the process is untested and could face legal hurdles if the companies do not agree with the proposal.
Steelmaker Bhushan Steel which defaulted on a loan of nearly $7 billion, was given repeated extensions by a consortium of banks, even after its vice chairman was arrested on alleged corruption charges in 2014 before the bankruptcy law came in. "Corruption and kick-backs are a big issue at public sector banks," said a Mumbai-based banker at a global lender, adding that the government needed to overhaul credit rules, including those for consortium lending.
Typically consortium lending in India is led by a large bank with as many as 30 others participating, but smaller banks, who are less able to absorb losses, have been faulted for tagging along and not having done their own due diligence in such cases. India must also tackle due diligence undertaken by banks to avoid repeat defaulters getting access to new loans, said the banker, speaking on condition of anonymity.
Earlier this week, the government approved amendments to the bankruptcy law, barring "wilful" defaulters - defined by the central bank as debtors who are able but unwilling to pay - from bidding for companies.
ELEPHANT IN THE ROOM
Bankers say despite the high-profile blow-ups, pressure from politicians continues to influence lending decisions. P. Mohan, manager of a local branch of State Bank of India, the country's top lender, said lending committees that include government-appointed nominees should be made accountable for all the sanctioned loans. "That will also curb politicians from putting undue influence on bankers," said Mohan.
Bankers say despite the high-profile blow-ups, pressure from politicians continues to influence lending decisions. P. Mohan, manager of a local branch of State Bank of India, the country's top lender, said lending committees that include government-appointed nominees should be made accountable for all the sanctioned loans. "That will also curb politicians from putting undue influence on bankers," said Mohan.
A spokesman for the finance ministry declined to comment.
Corporate defaults make up the bulk of banks' total bad loans, and adding to that is growing stress in loans worth 4 trillion rupees given to more than 70 million small enterprises over the last three years under Modi's flagship programme to create jobs.
"We are scared about these risky loans, 50 percent of which may become stressed assets soon," said D. Franco, a manager at State Bank of India's branch in Chennai and general secretary of the All India Bank Officers' Confederation.
Guidelines by India's central bank also mandate 40 percent of all loans must be to priority sectors such as agriculture, manufacturing and small businesses - many of which are turning sour. "Public sector banks keep renewing these facilities whereas in normal business banking they would have been written off long ago," said the banker with the global bank. "That's the elephant in the room."
Manufacturing, consumer durables pull down India's industrial output to 3.8% in September
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Poor showing by the manufacturing sector coupled with decline in consumer durables output pulled down the Index of Industrial Production (IIP) to 3.8 per cent in September. Factory output rose 5 per cent in September 2016 and 4.5 per cent in August this year, data released by the Central Statistics Office (CSO) showed today. According to the data, IIP grew at a meagre 2.5 per cent in April-September this fiscal compared to 5.8 per cent in the first half of 2016-17.
In September, growth in the manufacturing sector, which accounts for 77.63 per cent of the index, slowed to 3.4 per cent, from 5.8 per cent a year earlier. During April- September, manufacturing grew at 1.9 per cent, down from 6.1 per cent in the same period last fiscal.
Consumer durable goods output contracted by 4.8 per cent in September as against a growth of 10.3 per cent in the previous year. During the first half of this fiscal, the output of these goods declined by 1.5 per cent as against a growth of 6.9 per cent last year.
Electricity generation growth slipped to 3.4 per cent in September compared to 5.1 per cent a year before. However, mining recorded a growth of 7.9 per cent in the month under review as against a contraction of 1.2 per cent a year ago.
According to the use-based classification, growth rates in September 2017 came in at 6.6 per cent for primary goods, 7.4 per cent for capital goods, 1.9 per cent for intermediate goods and 0.5 per cent for infrastructure/construction goods compared to the previous year. The consumer non-durable segment has recorded a growth of 10 per cent.
Rating agency Crisil said that although capital goods grew by 7.4 per cent in September, "it is on a very low base, so it may be premature to suggest a revival in investment activity. "Consumer non-durables continued to march ahead, growing 10 per cent, which suggests buoyant rural demand. Durables, on the other hand, de-grew (-4.8 per cent), reflecting to some extent still fragile urban demand."
In terms of industries, 11 out of 23 industry groups in the manufacturing sector have shown positive growth in September 2017 as against the previous year. According to another rating agency Icra, the momentum of post-GST restocking recorded in August 2017 did not sustain in the subsequent month despite the impending festive season.
Poor showing by the manufacturing sector coupled with decline in consumer durables output pulled down the Index of Industrial Production (IIP) to 3.8 per cent in September. Factory output rose 5 per cent in September 2016 and 4.5 per cent in August this year, data released by the Central Statistics Office (CSO) showed today. According to the data, IIP grew at a meagre 2.5 per cent in April-September this fiscal compared to 5.8 per cent in the first half of 2016-17.
In September, growth in the manufacturing sector, which accounts for 77.63 per cent of the index, slowed to 3.4 per cent, from 5.8 per cent a year earlier. During April- September, manufacturing grew at 1.9 per cent, down from 6.1 per cent in the same period last fiscal.
Consumer durable goods output contracted by 4.8 per cent in September as against a growth of 10.3 per cent in the previous year. During the first half of this fiscal, the output of these goods declined by 1.5 per cent as against a growth of 6.9 per cent last year.
Electricity generation growth slipped to 3.4 per cent in September compared to 5.1 per cent a year before. However, mining recorded a growth of 7.9 per cent in the month under review as against a contraction of 1.2 per cent a year ago.
According to the use-based classification, growth rates in September 2017 came in at 6.6 per cent for primary goods, 7.4 per cent for capital goods, 1.9 per cent for intermediate goods and 0.5 per cent for infrastructure/construction goods compared to the previous year. The consumer non-durable segment has recorded a growth of 10 per cent.
Rating agency Crisil said that although capital goods grew by 7.4 per cent in September, "it is on a very low base, so it may be premature to suggest a revival in investment activity. "Consumer non-durables continued to march ahead, growing 10 per cent, which suggests buoyant rural demand. Durables, on the other hand, de-grew (-4.8 per cent), reflecting to some extent still fragile urban demand."
In terms of industries, 11 out of 23 industry groups in the manufacturing sector have shown positive growth in September 2017 as against the previous year. According to another rating agency Icra, the momentum of post-GST restocking recorded in August 2017 did not sustain in the subsequent month despite the impending festive season.
Local value addition key to growth of Indian consumer electronics: PwC study
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The booming Indian appliances and consumer electronics (ACE) industry has the potential to create 1.5 to 2 times more jobs than it does today with enabling policies to promote local value addition, says a PwC report. The Indian ACE sector has skipped the overall growth blues in the manufacturing sector and was worth Rs 64,752 crore in 2016/17 as against Rs 55,765 crore in the previous year.
The study, done in association with the Consumer Electronics and Appliances Manufacturers Association (CEAMA), points out that while over 75 percent of the ACE products sold in India are locally manufactured or assembled, less than 50 percent value addition happens domestically.
According to the study, domestic cumulative value addition in the production cycle has been less than 40 per cent for most new age ACE products and 7 per cent for smart phones, far lower than the global average. Further, nearly 84 per cent of the participants surveyed for the report stated that their overall domestic value addition in production was less than 50 per cent. Limited domestic component ecosystem, high cost of finance and power, and inefficient infrastructure were highlighted as the key impediments.
"With the support from the government, the Indian ACE industry aspires to increase the local value added by 2x - 3x. With a boost to domestic value addition, the number of jobs can increase by more than 1.5-2x as compared to the base case growth of 1x", the study points out. It adds that -- based on inputs from over 40 C-suite executives of leading ACE players in India -- creation of large scale demand, tapping export opportunities, making domestic manufacturing cost-competitive and easy, are the key interventions needed to promote the local ACE sector.
"The government's efforts coupled with positive transformation of consumer behaviour and desire to adopt more modern technologies are likely to create a significant increase in demand for ACE products. However, to unlock the full potential of the ACE industry, we need to build an ecosystem of supportive regulations around technology enablement and a strong domestic R&D backbone supported with manufacturing competitiveness," says Sandeep Ladda, PwC India Partner, Global TMT Tax Leader and Technology Sector Leader. The study, titled "Championing change in the Indian appliance and consumer industry", predicted that the Indian ACE would grow at a CAGR of about 10 per cent by 2022.
The booming Indian appliances and consumer electronics (ACE) industry has the potential to create 1.5 to 2 times more jobs than it does today with enabling policies to promote local value addition, says a PwC report. The Indian ACE sector has skipped the overall growth blues in the manufacturing sector and was worth Rs 64,752 crore in 2016/17 as against Rs 55,765 crore in the previous year.
The study, done in association with the Consumer Electronics and Appliances Manufacturers Association (CEAMA), points out that while over 75 percent of the ACE products sold in India are locally manufactured or assembled, less than 50 percent value addition happens domestically.
According to the study, domestic cumulative value addition in the production cycle has been less than 40 per cent for most new age ACE products and 7 per cent for smart phones, far lower than the global average. Further, nearly 84 per cent of the participants surveyed for the report stated that their overall domestic value addition in production was less than 50 per cent. Limited domestic component ecosystem, high cost of finance and power, and inefficient infrastructure were highlighted as the key impediments.
"With the support from the government, the Indian ACE industry aspires to increase the local value added by 2x - 3x. With a boost to domestic value addition, the number of jobs can increase by more than 1.5-2x as compared to the base case growth of 1x", the study points out. It adds that -- based on inputs from over 40 C-suite executives of leading ACE players in India -- creation of large scale demand, tapping export opportunities, making domestic manufacturing cost-competitive and easy, are the key interventions needed to promote the local ACE sector.
"The government's efforts coupled with positive transformation of consumer behaviour and desire to adopt more modern technologies are likely to create a significant increase in demand for ACE products. However, to unlock the full potential of the ACE industry, we need to build an ecosystem of supportive regulations around technology enablement and a strong domestic R&D backbone supported with manufacturing competitiveness," says Sandeep Ladda, PwC India Partner, Global TMT Tax Leader and Technology Sector Leader. The study, titled "Championing change in the Indian appliance and consumer industry", predicted that the Indian ACE would grow at a CAGR of about 10 per cent by 2022.
SBI's results signal banks' record bad loans peaking
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State Bank of India (SBI) posted quarterly results that indicated the nation's lenders may see a slower build-up of bad loans, but questions remain on how quickly and smoothly they can get rid of $146 billion of such debt that has already piled up. SBI, the nation's top lender with a share of more than fifth of the banking assets, reported on Friday a lower-than-expected profit, but its bad loan additions during the three months to end-September slowed sharply and pushed the overall bad-loan ratio down.
Its stock surged more than 6 percent after the results.
Helped by a stake sale in its life insurance arm, SBI said its second-quarter net profit was 15.82 billion rupees ($243.3 million), compared with a restated net loss of 5.57 billion rupees a year earlier. The profit was lower than analysts' estimates of 26.96 billion rupees, marred by a rise in provisions.
Newly appointed SBI Chairman Rajnish Kumar, who took over last month, said they used the cushion from the insurance stake sale to bolster provisions and improve the coverage ratio by 431 basis points in a quarter to 65.1 percent. "The idea is that we enhance our loss absorption capacity," he told reporters on a conference call, adding they aimed to further improve the provision coverage ratio as the banking sector moves towards international accounting standards.
State-run lenders account for the bulk of Indian banks' soured loans which were at a record 9.5 trillion rupees as of June. The surge in bad loans has choked new lending in an economy which needs revival in investment to help spur growth.
Given the grim situation, the Indian government last month announced a $32 billion recapitalisation of state lenders to help resolve bad loans and kick-start lending growth.
SBI, which has the biggest share of the soured loans, merged its five subsidiary banks with itself earlier this year, driving a jump in its non-performing loans as of June to almost 10 percent. That ratio eased to 9.83 percent at end-September, while the additions to bad loans during the quarter was nearly a third of the rise in the previous three months.
"The results were comforting to see and is probably the best set of numbers from SBI that we've seen in the recent past especially when there is still uncertainty over non performing loans issue," said Aalok Shah, a banking sector analyst at Mumbai's Centrum Broking.
Bank of India, the market's sixth-biggest lender by assets which also reported on Friday, posted a better-than-expected 41 percent rise in second-quarter profit and a narrower bad-loan ratio.
The banking sector faces a rise in provisions for loan losses after a central bank order to cover at least 50 percent of the loans to companies being sent to bankruptcy court. A dozen of the biggest loan defaulters are already at the bankruptcy court, while nearly 30 more could be headed there after December.
SBI said it has more than 50 percent provision coverage for the bankruptcy cases.
SBI shares closed 6.3 percent higher in a Mumbai market that ended up 0.12 percent on Friday. The stock has gained about 30 percent in the past one month to be the second-best performer among the constituents in the main market index.
State Bank of India (SBI) posted quarterly results that indicated the nation's lenders may see a slower build-up of bad loans, but questions remain on how quickly and smoothly they can get rid of $146 billion of such debt that has already piled up. SBI, the nation's top lender with a share of more than fifth of the banking assets, reported on Friday a lower-than-expected profit, but its bad loan additions during the three months to end-September slowed sharply and pushed the overall bad-loan ratio down.
Its stock surged more than 6 percent after the results.
Helped by a stake sale in its life insurance arm, SBI said its second-quarter net profit was 15.82 billion rupees ($243.3 million), compared with a restated net loss of 5.57 billion rupees a year earlier. The profit was lower than analysts' estimates of 26.96 billion rupees, marred by a rise in provisions.
Newly appointed SBI Chairman Rajnish Kumar, who took over last month, said they used the cushion from the insurance stake sale to bolster provisions and improve the coverage ratio by 431 basis points in a quarter to 65.1 percent. "The idea is that we enhance our loss absorption capacity," he told reporters on a conference call, adding they aimed to further improve the provision coverage ratio as the banking sector moves towards international accounting standards.
State-run lenders account for the bulk of Indian banks' soured loans which were at a record 9.5 trillion rupees as of June. The surge in bad loans has choked new lending in an economy which needs revival in investment to help spur growth.
Given the grim situation, the Indian government last month announced a $32 billion recapitalisation of state lenders to help resolve bad loans and kick-start lending growth.
SBI, which has the biggest share of the soured loans, merged its five subsidiary banks with itself earlier this year, driving a jump in its non-performing loans as of June to almost 10 percent. That ratio eased to 9.83 percent at end-September, while the additions to bad loans during the quarter was nearly a third of the rise in the previous three months.
"The results were comforting to see and is probably the best set of numbers from SBI that we've seen in the recent past especially when there is still uncertainty over non performing loans issue," said Aalok Shah, a banking sector analyst at Mumbai's Centrum Broking.
Bank of India, the market's sixth-biggest lender by assets which also reported on Friday, posted a better-than-expected 41 percent rise in second-quarter profit and a narrower bad-loan ratio.
The banking sector faces a rise in provisions for loan losses after a central bank order to cover at least 50 percent of the loans to companies being sent to bankruptcy court. A dozen of the biggest loan defaulters are already at the bankruptcy court, while nearly 30 more could be headed there after December.
SBI said it has more than 50 percent provision coverage for the bankruptcy cases.
SBI shares closed 6.3 percent higher in a Mumbai market that ended up 0.12 percent on Friday. The stock has gained about 30 percent in the past one month to be the second-best performer among the constituents in the main market index.
General Awareness
Bengaluru outranks San Francisco in Confidence to Go Digital
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According to a report based on a survey by Economist Intelligence Unit (EIU), published on November 7, 2017, India’s Silicon Valley – Bengaluru has been adjudged as the best city among 45 cities for the confidence of its businesses in their ability to go digital.
About Economist Intelligence Unit’s ‘Confidence to go Digital’ survey:
EIU conducted this survey to check which cities across the world provide the best environment for their businesses to go digital.
- Confidence of businesses within the cities was assessed in four categories viz. innovation and entrepreneurship, development of new technologies, financial environment, Information and communications technology (ICT) infrastructure and people/skills.
- 2620 executives in 45 cities participated in this survey which was conducted in June and July 2017.
- EIU conducted this survey in partnership with telecommunications firm Telstra Corp.
Highlights of Economist Intelligence Unit’s ‘Confidence to go Digital’ survey:
Bengaluru ranked at the top, ahead of San Francisco as business leaders in Bengaluru expressed the highest confidence in their digital environment in all four categories.
- San Francisco, US ranked at No. 2, followed by other two Indian cities, Mumbai (No.3) and New Delhi (No.4).
- Almost 48% of executives who participated in this survey expressed that their firms can consider relocating operations to a city with a more favourable external environment.
- As reflected from the rankings, seven of the 10 highest confidence levels were recorded in emerging Asian cities, whereas eight of the 10 lowest ranking cities fall in the developed cities definition.
Economist Intelligence Unit’s ‘Confidence to go Digital’ survey – Top 10 cities
1 Bengaluru, India 2 San Francisco, US 3 Mumbai, India 4 New Delhi, India 5 Beijing, China 6 Manila, Philippines 7 Shanghai, China 8 Jakarta, Indonesia 9 London, UK 10 Madrid, Spain
According to a report based on a survey by Economist Intelligence Unit (EIU), published on November 7, 2017, India’s Silicon Valley – Bengaluru has been adjudged as the best city among 45 cities for the confidence of its businesses in their ability to go digital.
About Economist Intelligence Unit’s ‘Confidence to go Digital’ survey:
EIU conducted this survey to check which cities across the world provide the best environment for their businesses to go digital.
- Confidence of businesses within the cities was assessed in four categories viz. innovation and entrepreneurship, development of new technologies, financial environment, Information and communications technology (ICT) infrastructure and people/skills.
- 2620 executives in 45 cities participated in this survey which was conducted in June and July 2017.
- EIU conducted this survey in partnership with telecommunications firm Telstra Corp.
Highlights of Economist Intelligence Unit’s ‘Confidence to go Digital’ survey:
Bengaluru ranked at the top, ahead of San Francisco as business leaders in Bengaluru expressed the highest confidence in their digital environment in all four categories.
- San Francisco, US ranked at No. 2, followed by other two Indian cities, Mumbai (No.3) and New Delhi (No.4).
- Almost 48% of executives who participated in this survey expressed that their firms can consider relocating operations to a city with a more favourable external environment.
- As reflected from the rankings, seven of the 10 highest confidence levels were recorded in emerging Asian cities, whereas eight of the 10 lowest ranking cities fall in the developed cities definition.
Economist Intelligence Unit’s ‘Confidence to go Digital’ survey – Top 10 cities
| 1 | Bengaluru, India |
| 2 | San Francisco, US |
| 3 | Mumbai, India |
| 4 | New Delhi, India |
| 5 | Beijing, China |
| 6 | Manila, Philippines |
| 7 | Shanghai, China |
| 8 | Jakarta, Indonesia |
| 9 | London, UK |
| 10 | Madrid, Spain |
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