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ECONOMY
Approach Paper for the 12th FYP (2 012 -17 ) App rov ed The Union Government approved the Approach Paper for the 12th FYP(2012-17) on 15 September 2011, which seeks to attain second generation economic reforms, improving governance and raise annual economic growth rate to 9 per cent during impending five-year period. The Paper would be placed before the National Development Council (NDC) for its final approval in October 2011.The Approach Paper provides a broad framework of the government policy to be pursued in the fiveyear plan period to achieve the desired growth rate of 9 per cent was cleared by the Planning Commission on 20 August 2011. The theme of the Approach Paper to the 12th Five Year Plan is faster, sustainable and more inclusive growth. Health, education and skill development, environment and natural resources and infrastructure development was pinted to be focus areas in the next Plan. The paper lay emphasis on inclusive growth. For the first time in the history of the Five Year Plans the Approach Paper has a chapter on governance and corruption. The approach paper key components are following: State Portal Including Applications & e-forms The functionality of the State Portal including Applications & eforms are as follows: 8 The portal will provide information about government departments, line ministries, and web links to the various departments. It will also provide information about government structure in the state, service offerings, budget, key notifications, government schemes etc to the business and citizen community. 8 The portal would primarily be available in English but in due course itll also need to be available in Hindi and regional language. 8 The State portal will be single window to the Government to business (G2B) and Government to citizen (G2C) services. The service delivery would happen in integrated fashion using NeGps core infrastructure components SWAN, SDC, CSC and SSDG 8 The paper suggested that the state proposals should include e-forms for respective departments. 8 Content personalization and
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content management should be a part of the proposal component and links to departmental websites should be included.

need to put least effort for web enabled of their legacy applications. 8 The gateway as the middleware will facilitate

Data Centre, will help in better centralized Administration, Monitoring, over all maintenance work and deployment of hardware of Web Site at optimal level. 8 Gateway has the capability to add additional functionality to support shared common services like Authentication, payment gateway interface, etc CDAC would provide the SSDG executables, centrally version control and provide technical assistance to the States in Proposal preparation (SSDG component), subsequent implementation and necessary. Gap Infrastructure Identification of Gaps in Connectivity The functionality of Gap Infrastructure - Identification of gaps in connectivity the are as follows: GoI funding will include funding for minimal gap infrastructure for the departments which would enable interaction to get the printout of service requests from the central infrastructure. The State may need to prioritize the departments and services by taking into account following-High Volume Services Services having high volumes of transaction so that there is maximum impact. IMMP Services Services already identified under State MMPs where work is yet to start and which are not covered under High Volumes Services. Any other services which the State wants to include because of their high Citizen Relevance.

8 A complete application for e-receipt of forms by the destination office, MIS, printing, accounting, status reporting, query service and payment handling should be provided. State Service Delivery Gateway (SSDG) The functionality of the State Service Delivery Gateway (SSDG) are as follows: 8 SSDG will enable audit management & time stamping which would result in better tracking (auditing) and security of each transaction. 8 With Gateway Server, legacy applications can be Internet enabled as Gateway server can act as a Web layer around them so Government Departments
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easy inter-departmental data exchange. 8 The Gateway will also help the Departments backend workflow evolve gradually as the Gateway acts as a middleware de-linking the backends from the front end. Departments, which do not have the complete automation or work, flow at the back can still deliver eService to the citizens in a limited manner. 8 The placement of constellation of Gateway Servers at State Level will facilitate getting information and doing transactions by citizens of one State with Government Department of other States seamlessly. 8 The positioning of Gateway Server and building portal of all the departments at Central location, i.e., in State

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Training The Approached paper talks of training 2 employees of the destination departments for processing of e-Forms, SSDG & Portal. Employees from each department whose service will be deployed on the portal, SSDG and e-form processing would have to be selected. Training would encompass State Portal Framework & website Design Guidelines, SSDG understanding and e-form processing. Manpower The Approach Paper states that provision should be built for technical Advice / Consultation from NIC State Unit as well as CDAC during implementation & Operation phase of the project. This can be built in consultation with State representatives of NIC & CDAC. The states would have to build internal capacities to support the department on on-going basis for e-Forms, new application integration, Service registration on SSDG and continuity when the Implementing Agency exits. Content Service Provider (C SP ) The paper proposed that the States extend the arrangement with the existing CSPs under India Portal for content support under this project. If the contract period was getting over in States where the CSPs are not in place, an Agency can be identified if

required to support the State for Contents. NIC would be responsible for Standardization of the Content Framework, State Portal Framework and Website Design Guidelines and provide technical guidance to the State for State Proposal preparation (State Portal component & application) and its development. India will have Growth Rate of 8.1 Per cent: UNCTAD The United Nations Conference on Trade and Development (UNCTAD) projected an economic growth of 8.1 per cent for India, the fastest rate of expansion in the world after China in midst of an anticipated global slowdown to 3 per cent in 2011.

investment as well as on the positive contribution of net exports. The report mentioned that slow down of global economy to 3.1 per cent from 4 per cent in 2010, would impact developing economies which would get affected by recession in the developed world. Even as the developing countries were expected to regain the pre-crisis growth rate of 6 per cent in 2011, economic expansion in the developed economies was likely to be only about 1.5-2 per cent. The South Asia region was likely to be among the best performers globally, with a growth of seven per cent in 2011. On the other hand, growth in the U.S. was to remain low on account of low domestic demand, stagnating wages. The European debt crisis is expected to act as a drag on the global growth. Lohia Panel Suggestions Panel headed by S.K. Lohia suggested an increment in the excise duty and registration costs on diesel-powered private vehicles. It also suggested a ban on hoardings on pedestrian walkways and cut down the taxes on buses and other public transport vehicles as part of measures to make cities and towns more socially and environmentally sustainable. The panel was formed to work out the parameters for the urban transport segment under the recently launched National Mission on Sustainable Habitat. It suggested an increase in the excise duty at the national level and registration costs at the State and city-levels
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According to the report, despite the slowdown in developed countries, the Indian economy is set to grow by 8.1 per cent in 2011 as against to 8.6 per cent in 2010. Surpassing India during the year would be China with a growth rate of 9.4 per, slightly lower than the 10.3 per cent posted in 2010.India, the report mentioned continues to pursue rapid economic growth (close to 8 per cent), based mainly on strong domestic consumption and

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for diesel-propelled private vehicles. It argued that increased use of diesel vehicles was only adding to the burden of particulate matter and nitrogen oxides, key pollutants of concerns in Indian cities, even while defeating the objective of improving the countrys energy security.

State and city governments could go in for cascade registration tax for owning more than one private vehicle. National Manufacturing Competitiveness Council NMCC was set up by the government as an inter-

The panel pointed out that hoardings on pedestrian walkways were posing major safety hazards. The State and city governments could, instead, earn their revenues by going for advertising on public service amenities such as buses, metro trains, commercial passenger vehicles, bus shelters, metro shelters, public toilets and public garbage facilities.The panel pointed that the total tax burden per vehicle km is 2.6 times higher for public transport buses than cars in India. It suggested that the
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disciplinary body at the highest level to serve as a policy forum for credible and coherent policy initiatives in the manufacturing sector. The Union Government announced the reconstitution of the National Manufacturing Competitiveness Council (NMCC) under the chairmanship of V. Krishnamurthy on 26 September 2011. The council is to energise and sustain the growth of manufacturing industries and help in the implementation of strategies by the government. Following the reconstitution, the council will comprise the Planning Commission

Member (Industry), Department of Industrial Policy and Promotion Secretary, Finance Secretary, Heavy Industry Secretary, Micro, Small and Medium Enterprises Secretary and the DirectorGeneral of the Council for Scientific and Industrial Research from the government side, the President of the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) President and Associated Chambers of Commerce and Industry of India (ASSOCHAM) President will represent the apex industry organisations in the 28-member body. Finance Ministry Chief Economic Advisor Kaushik Basu and Indian Council for Research in International Economic Relations Isher Judge Ahluwalia are the two economists in the reconstituted body.The representatives of various industrial sectors included in the NMCC are Tata Group Chairman Ratan Tata, TVS Motor Company CMD Venu Srinivasan, S Kumars Group Chairman Mukul Kasliwal, Larsen & Toubro CMD A M Naik, ITC Ltd CMD Y C Deveshwar, Godrej & Boyce Ltd CMD Jamshyd Godrej, BHEL CMD B P Rao and HCL Infosystems Chairman and CEO Ajai Chowdhry. PMEAC revised GDP Growth to 8 Per cent in 2011-12 The Prime Ministers Economic Advisory Council (PMEAC) lowered its forecast for GDP growth to around 8 per cent in 2011-12, from its earlier estimate of 8.2 per cent on 29 September 2011.The eastimate was lowered on account of persistently high inflation, slowing industrial

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expansion and global uncertainties posing a challenge to economic growth.C Rangarajan, chairman of PMEAC mentioned while speaking at a golden jubilee function of the Indian Economic Service the need for for reducing the countrys reliance on capital flows as a means to bridge the current account deficit (CAD), as well as the need to ensure that the CAD does not exceed 2.5 per cent of GDP.PMEAC cautioned on the perils of growing beyond 9 per cent as it would trigger inflationary pressures. It pointed out that if the country continues to grow in the range of 8-9 per cent, as projected in the 12th Five Year Plan, then a current account of deficit of 2.5per cent of the GDP will be created. The CAD is expected to exceed 2.5 per cent by the end of the 2011-12 fiscal. Highlighting the footloose nature of global capital, Rangarajan stressed on the need to contain CAD while lowering its dependence upon capital flows as a means of finance. India received dismally low capital inflows of about half-a-billion ($0.488 billion) till August-end in 2011-12 fiscal. Rangaranjan pointed out that there existed short-term concerns and medium-term constraints which would come in the way of achieving 9 per cent growth. There are three shortterm constraints- one is inflation, the second is balance of payment and the third area is fiscal consolidation. Indias GDP Growth will be 7.5-8% According to Mo od y s

Global rating agency Moodys projected Indias GDP (gross domestic product) growth for the 2011-12 fiscal at 7.5-8 per cent on 5 September 2011. It also cited high domestic interest rates coupled with the current global uncertainties as the near-term factors that could affect its economic expansion.

foreign currency government bond rating remained stable with a Ba1 rating on the countrys local currency debt. The gap between the Baa3 foreign currency debt and Ba1 local currency debt ratings reflects the potential likelihood that the government could prioritise its external obligations over its domestic obligations.

Moodys noted in its annual sovereign credit update on India that the cyclical slowdown was unlikely to alter its credit outlook. The rating agency is of the opinion that rising domestic interest rates and an uncertain global economic environment would possibly dampen Indias near term GDP growth. However, the report mentioned that a cyclical slowdown is unlikely to alter its credit outlook. Moodys report pointed to the limited room for further fiscal stimulus, given the fact that the government targeted to cap the fiscal deficit at 4.6 per cent of GDP in 2011-12, down from 4.7 per cent last fiscal. Moodys noted that its outlook on Indias Baa3

Export of Endosulfan allowed The Supreme Court of India allowed the export of more than one million tons of controversial insecticide Endosulfan on 30 September 2011, subject to strict monitoring and supervision by the Customs and Environment Ministry officials. The SC bench comprising Chief Justice S.H. Kapadia, Justice K.S. Radhakrishnan and Justice Swatanter Kumar opined that 1090.596 metric tons of Endosulfan could be exported to those countries from whom export orders have been received by the manufacturers in India.The SC decided on the issue after
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hearing a plea seeking a complete ban on production, sale, distribution and use of the agriculture insecticide accused of causing ailments in human beings. Railway Revenue Jumps up by 8.52% The total approximate earnings of Indian Railways on originating basis during the period from 11th to 20th September 2011 were Rs. 2495.07 crore compared to Rs. 2299.20 crore during the same period last year, registering an increase of 8.52 per cent. The total goods earnings have gone up from Rs. 1497.40 crore during the period from 11th to 20th September 2010 to Rs. 1614.48 crore during 11th September 20th September 2011, showing an increase of 7.82 per cent. The total passenger revenue earnings during the period 11th to 20th September 2011 were Rs. 780.38 crore compared to Rs. 713.47 crore during the same period last year, reflecting an increase of 9.38 per cent. The revenue earning from other coaching amounted to Rs. 71.15 crore during this period compared to Rs. 59.63 crore during the same period last year, showing an increase of 19.32 per cent. The total approximate number of passengers booked during the period 11th to 20th September 2011 were 240.40 million compared to 232.30 million during the same period last year, showing an increase of 3.49 per cent. In the suburban and nonsuburban sectors, the number of passengers booked during 11th to 20th September, 2011 were 130.27 million and 110.13 million
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compared to 127.59 million and 104.71 million during the same period last year, registering an increase of 2.10 per cent and 5.18 per cent respectively. MOU between India Post & NSE for Financial Awareness

common public visiting post offices. This step will bring the financial market place closer to the people considering the importance and footfall at post offices. Besides publicizing products available in post offices, India Post will use the facility to train the postal staff. Showcasing information about market will help people develop live skills about finances and people will be able to manage their finances better. Additional Production of Pulses in Rabi 2011-12

Government has prepared a contingency plan for additional production of pulses in Rabi 201112 through area expansion and India post signed a Memorandum productivity enhancement. Pulses of Understanding (MOU) with covered under the scheme are National Stock Exchange (NSE) pigeon pea, gram, pea and lentil. here today for deploying LCD TV It is targeted to achieve an screens in selected post offices additional production of Rs. 2.78 across the country.This MOU is MT during the ensuing Rabi aimed at creating financial season and offset the loss of awareness among the public. To Kharif season. Additional begin with LCD TV screens will allocation of Rs. 80 crore has be deployed in 50 post offices been made for this purpose under across the country. These LCD NFSM- Pulses programme. StateTV screens shall be utilized for wise allocation of additional funds disseminating financial awareness for increasing crop production and and awareness on various postal productivity of pulses are as products and services for the under: S ta t e Additional allocation(in Rs. crore)
A.P. Assam Bihar Chhattisgarh Haryana Jharkhand Karnataka MP Maharashtra Orissa Punjab U.P. 8.23 3.78 3.20 8.80 5.32 4.55 8.88 7.56 7.83 7.20 2.73 11.92

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Gujarat and Tamil Nadu will meet the expenses of additional area expansion from their normal allocation under NFSM-Pulses. As per the current coverage of area under pulses during Kharif 2011, there is a shortfall of 10.89 lakh hectare as against area coverage during last Kharif season. Less acreage during Kharif 2011 may lead to shortfall of 0.70 MT as per 1 st Advance Estimates of Production. The production and productivity of pulses have increased during last three-four years from 14.20 MT in 2006-07 to 14.66 MT during 2009-10. Likewise the productivity of pulses has also increased from 612kg/ha during 2006-07 to 630 kg/ha during 2009-10. As per 4th Advance Estimates of Crop Production, the production of pulses has increased from 14.66 MT (2009-10) to 18.09 MT during 2010-11. Productivity of pulses has also increased from 630 kg/ha during 2009-10 to 689 kg/ha during 2010-11. Cropped Area Acreaged up As per data received from States, rice has been sown in 381.32 lakh hectare as on today. It represents an increase of 33.54 lakh hectare over last years acreage on this date. Higher area coverage has been reported from West Bengal, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh and Tamil Nadu. Oilseeds have been sown in 178.60 lakh hectare, 5.58 lakh hectare more than last year. Higher area coverage has been reported in Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh. The cropped areas as on today are as follows:

Crop Rice Maize Jowar Bajra Total of coarse cereals Arhar Moong Urad Soyabean Groundnut Total oilseeds Sugarcane Cotton

This years area [as on 23 rd September] 381.32 75.36 26.28 80.82 200.19 38.64 23.93 23.37 109.41 103.36 43.28 178.60 50.93 120.03

Last years area [as on23 rd September] 347.78 75.19 30.50 86.30 210.89 45.54 27.95 24.86 120.30 93.20 49.46 173.02 49.44 109.92

Mines and Minerals (Development and Regulation) Bill, 2011 The Government constituted a High Level Committee (HLC) in 2006, which suggested for evolving a mining code adapted to the best international practices, streamlining and simplifying procedures for grant of mineral concessions to reduce delays, etc. Based on the HLC recommendations, the Government had announced National Mineral Policy (NMP) on 13 March 2008. To give effect to the policy directions in NMP, the Government has now evolved a new Mines and Minerals (Development and Regulation) Bill, 2011, after several rounds of consultations with the stakeholders including State Governments, concerned Ministries and Departments of Central Government, Industry and Civil Society. The MMDR Bill, 2011 was referred to a Group of Ministers (GoM) on 14 June 2010 and which has now, after five

rounds of discussion, had recommended the draft Bill to the Cabinet. The GoM in its meeting held on 7 July, 2011 has recommended the draft MMDR Bill, 2011 for introduction in Parliament. The Union Cabinet approved the proposal to introduce the Mines and Minerals (Development and Regulation) Bill (MMDR Bill), 2011, in terms of National Mineral Policy, 2008 in Parliament and to repeal the existing Mines and Minerals (Development and Regulation) Act, 1957. The Key Features of New MMDR Bill, 2011, are the Following: 8 States may call for applications in notified areas of known mineralization for prospecting based on technical knowledge, value addition, end-use proposed ore -linkage etc. and to invite financial bid; 8 States may grant of direct mining concessions through
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bidding based on a prospecting report and feasibility study in notified areas where data of minerals is adequate for the purpose; 8 State Government may set up a minimum floor price for competitive bidding; 8 Special provisions for allowing mining of small deposits in cluster, where cooperatives can apply; 8 National Mining Regulatory Authority for major minerals - State Governments may set up similar Authority at State level for minor minerals; 8 Imposition of a Central cess and a State cess, and setting up of Mineral Funds at National and State Level for capacity creation; 8 For the purpose of sharing the benefits of mining with persons or families having occupation, usufruct or traditional rights in mining areas, and for local area infrastructure, creation an amount equal to royalty in case of mineral other than coal, and 26% of net profits, in the case of coal, has been proposed to be credited each year to district Level Mineral Foundation; 8 Sustainable and scientific mining through provision for a Sustainable Development Framework; 8 Consultation with local community before notifying an area for grant of concession, and for approval of Mine Closure Plans;
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8 Enhanced penalties for violation of provisions of the Act, including debarment of person convicted of illegal mining for future grants and termination of all mineral concessions held by such person; and 8 Establishment of Special Courts at the State level for speedier disposal of the cases of illegal mining. The new draft MMDR Act would have financial implications in the creation of an independent National Mining Tribunal and National Mining Regulatory Authority at the Central Level, and the expenditure involved in the capacity building of the Indian Bureau of Mines. The funds for this expenditure are likely to be met from levy of cess at the rate of 2.5% on the basis of Customs/ Excise Duty. YH Malegam Panels Suggestions YH Malegam panel in September 2011 proposed that the existing well managed co-operative credit societies meeting certain financial criteria like profits, capital adequacy and NPA proportion be given priority for granting licences as urban co-operative banks (UCBs) particularly in unbanked or inadequately banked centres.

suggested that new entrants should be encouraged to open banks and branches in unbanked or inadequately banked area. UCBs play a useful role and the panel felt a need for a greater presence of UCBs in unbanked districts and in centres having population less than 5 lakh. It was also considered necessary to discourage new entrants from opening branches in districts and population centres which are already adequately banked. As far as capital requirement is concerned, the panel suggested minimum paid up capital of from Rs 50 lakh to Rs 5 crore depending on the area of operation. The panel has recommended a minimum paid-up capital of Rs 5 crore for UCBs that wish to operate in more than one state after five years of successful operations. It also suggested that there should be segregation of the ownership of the UCB as a cooperative society from its functioning as a bank.The RBI had announced in the Annual Policy Statement 2010-11 its intention to set up a committee comprising all stakeholders for studying the advisability of granting new urban co-operative banking licences. Agro Advisory Services The agro advisory services continue to serve 50 Agro Advisory Services units against the largest of 600 during the month of last July. The services have been extended to 21, 00,000 users through mobile services.During this period, an

The panel acknowledged the importance of urban co-operative banks for financial inclusion and

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exclusive ocean state forecast service for the southern districts of Kerala state (Trivandrum, Kollam and Alapuzha) has been inaugurated this month.

Review of Mineral Concession Regime in India The quarterly meeting of the Central Coordination-cumEmpowered Committee (CEC) on monitoring and minimizing delays in grant of approvals for mineral concessions was held under the chairmanship of Shri S. Vijay Kumar, Secretary, Ministry of Mines.The Committee reviewed the position regarding various important aspects of the mineral concession regime in the country, and took decisions aimed at bringing about more efficiency and transparency in the system. Some of the important issues that came up for discussions and review in the meeting were: action taken to curb illegal mining including use of satellite imagery; improving monitoring of the mineral system through a State Empowered Committee and District level Task Forces; plugging loopholes in the royalty collection system; strengthening governance by gearing up the State Mining Directorates; expediting approval including forest clearance cases to clear long pending mineral concession applications. Maj or d ecis ions included: tak en

8 Core Infrastructure Industries registered 3.5 % Growth As per the provisional data released on 27 September 2011 by the Commerce Ministry, the 8 core infrastructure industries registered an output growth of 3.5 per cent in August 2011 lower than the 4.4 per cent growth witnessed in the corresponding period in 2010. The eight core industries includecrude oil, petroleum refinery products, natural gas, fertilizers, coal, electricity, cement and finished steel. The eight core industries have a total weight of 37.90 per cent in the Index of Industrial Production (IIP).The cumulative growth rate of the eight industries during the AprilAugust period of 2011-12 stood at 5.3 per cent, down from the 6.1 per cent in April-August period of 2010. RBI hiked Repo Rate by 25 basis points The Reserve Bank of India (RBI) in a move to contain persisting inflationary pressure, hiked the short-term policy rate (repo rate) by 25 basis points from 8 per cent to 8.25 per cent on 16 September 2011. The reverse repo rate as a result got automatically adjusted to 7.25 per cent and the marginal standing facility (MSF) rate to 9.25 per cent.Repo rate is the rate at which banks borrow from the central bank and reverse repo is the rate at which banks park their funds with the RBI. The central bank raised rates for the 12th time since March 2010.
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The forecasts are disseminated in local language , i.e. Malayalam through website of Indian National Centre for Ocean Information Services, Hyderabad. An electronic display board also has been installed at the harbour. The system provides 3-day forecasts of wave, wind, tide and currents characteristics for the coastal waters of Kerala as well as location specific forecasts for the harbours/fishing harbours in the state. Digital Current Weather Indicating System (DCWIS ) has been upgraded at Gondia Airport ( Maharashtra) to report surface pressure and temperature for altimeter setting for safe landing of aircraft. High Wind Speed Recorder (HWSR) has been installed at Veraval & Dwarka for cyclone monitoring.Under the Numerical Weather Prediction & Data Assimilation system, the radar data (radial wind and reflectivity) from nine radar stations received through Global Telecommunication System (GTS) are included in the high resolution (9 km) WRF-VAR assimilation system over Indian region. The utilization of ASCAT scattero-meter winds have been developed.

(i) Action Plan to be prepared to increase capacity of State Mining Directorates. (ii) End-to-end accounting system for mineral transaction to prevent and detect illegal mining through an All Indian Online System. (iii) Ensuring proper exploration in leasehold areas in a timebound way to enable execution of Mining Plans in a scientific manner.

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FDI Limit for FM radio up to 26% The Union government increased the foreign direct investment limit for FM radio from 20 per cent to 26 per cent on 30 September 2011.The government also exempted the education sector and old-age homes from the conditions imposed in the construction sector.The FDI limit in terrestrial broadcasting and FM radio was approved by the Cabinet in July 2011. TRAI in 2010 had made necessary recommendations arguing that increasing the limit will help the third-phase for FM radio, which will see 806 FM stations across 217 cities.FDI into construction activities in the education sector and old-age homes has been exempted from the conditionalities imposed on FDI in the construction development sector. This would mean that schools, universities and colleges would not have to meet minimum area and built-up area requirement, minimum capital requirement, minimum capitalisation requirement and lock-in period. The Department of Industrial Policy and Promotion (DIPP) mentioned that the educational institute and old-age homes have their own special requirements which do not fit these conditionalities. Ban on the Export of Onions Lifted The Government has decided to lift the ban on the export of onions.Onions can now be exported subject to a Minimum
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Export Price (MEP) of US$ 475 per tonne.

need to migrate to Euro pay MasterCard Visa (EMV) chip and

This is exactly the position that was prevailing on 8th September 2011, immediately before the ban on the export of onions was imposed on 9th September 2011. The MEP will be reviewed every fortnight and a close watch would be kept on domestic arrivals, total exports, overall domestic availability and domestic prices. Fraud Risk Management Practices will be Implemented The Reserve Bank of India (RBI) directed banks to implement various safety measures related to credit card and debit card usage over a period of next two years in order to eliminate cases of fraud and ensure security of transactions on 22 September 2011.The RBI emphasised on the

PIN based cards from the present magnetic strip cards as the magnetic strip card is vulnerable to skimming and cloning. The need for a complete migration to EMV chip and PIN based cards could be considered based on the progress of Aadhar (Unique Identification Card) in 18 months time frame. The RBI directed banks to strengthen the existing payment infrastructure and future proofing system along with adoption of fraud risk management practices within a period of next 12-24 months. An imperative need was felt to secure card based transactions as well to protect the interests of the card holders. In the circular issued in this repect the central bank directed banks to implement improved fraud risk management

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practices by 30 September 2012 and secure the technology set up by 30 September 2013. MOU between IIFCL, LIC and IDFC for TFS A MoU was signed in Mumbai between IIFCL, LIC and IDFC in Mumbai.The Union Finance Minister Shri Mukherjee said that in this Scheme,IIFCL can take out debt up to 20% of the Total Project Cost after the COD of the project with certain limitations.He said that there was felt need for higher take out. MoU between IIFCL and LIC & IDFC will provide for takeout upto 50% of the Total Project Cost in the ratio of 20:20:10 by these institutions respectively.Shri Mukherjee said that he expects this mechanism will help financing to the tune of 30,000 crore under the Scheme.Take out finance is essentially a mechanism designed to enable Banks/ Lenders to avoid asset liability mismatch that may arise out of extending long tenor loans to infrastructure projects. Under this arrangement, Banks that extend credit facility to infrastructure projects enter into an arrangement with a financial institution for transferring the loan outstanding in the Banks books to the books of the financial institution who take out the loan.Subsequent to the announcement in the FY 2010-11 general budget, Government of India (GoI) entrusted India Infrastructure Finance Company Ltd. (IIFCL) with the task of introducing the Takeout Finance Scheme (TFS).

This will facilitate banks to take more exposure in new projects, which in turn will help in bridging the gap in infrastructure financing to a great extent the Finance Minster added. Details of the MOU are: 1. Identified project Lender(s) will offer eligible infrastructure projects for availing takeout financing to IIFCL in respect of mutually agreed accounts in accordance with IIFCLs Takeout Finance Scheme. 2. In respect of aforesaid mutually agreed accounts of infrastructure financing LIC, IDFC and IIFCL will agree to give takeout finance (a) enter into a quadripartite agree-ment, which will be the Takeout Agreement as mutually agreed between the Parties, (b) LIC, IIFCL and IDFC will take out/ buy-out in the ratio of 20:20:10 respectively and take out debt upto 50% of the project cost. 3. Earlier IIFCL could take out debt upto 20% of the Total Project Cost. With this MoU in place, the take out of debt upto 50% of the Total Project Cost will be possible. This will facilitate banks to take more exposure in new projects, which in turn will help in bridging the gap in infrastructure financing to a great extent. Sa lien t Fe atur es advantages of TFS : a nd

infrastructure projects 2. It enables availability of cheaper cost of finance available for the borrower 3. Addresses sectoral / group / single party exposure issues of Banks/ Lenders who are providing long term debt financing to infrastructure projects. 4. Addresses Asset-Liability mismatch (ALM) of Banks arising out of financing infrastructure projects and also to free up capital for financing new projects. Terms of Reference extended of the Nilekani Panel The Union government extended the terms of reference of the Nilekani task force on direct transfer of subsidies on 20 September 2011.The extended terms of reference is to include an Aadhaar-enabled unified payment infrastructure. Considering the expansion the government enlarged the task force by adding five new members.The new members is to include a representative from the Reserve Bank of India, a representative from the Indian Banks Association, Director of the National Informatics Centre, the Controller-General of Accounts in the Finance Ministry or one of his representatives and the CEO of the National Payments Corporation of India. Set up by the Union Finance Ministry under the chairmanship of Unique Identification Authority of India (UIDAI) chief Nandan
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1. Enhances the availability of long tenor debt finance for

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Nilekani in February2011, the task force was asked to recommend and implement a solution for direct transfer of subsidies on kerosene, LPG and fertiliser to the intended beneficiaries.In tune with the decision to expand the terms of reference the panel was asked to recommend an architecture for ebanking through inter-operable business correspondents and examine the alignment of current standards for devices that will be deployed by them. The panel was also asked to suggest one to align the recommendations of the InterMinisterial Group (IMG) on a Framework for the Delivery of Basic Financial Services using mobile phones with Aadhaarenabled payments infrastructure. The panel is to recommend: 8 A solution that incorporates a robust customer support and grievance redress mechanism 8 The feasibility of extending the solution architecture to include payment instruments apart from bank accounts and post office savings bank accounts to facilitate the fostering of e-commerce oversee and evaluate the implementation of the solution proposed on a pilot basis. 8 A common framework to adopt it for all government welfare schemes involving disbursements to individual beneficiaries. Solutions devised by the panel should ensure that the entire country can leverage the same payments platforms. while recommending an approach to
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harmonise various exercises related to opening bank accounts for financial inclusion and electronic benefit transfers, the panel should also identify and recommend amendments which it felt was required required to enable direct subsidy transfers.The task force is to submit its final report on the extended Terms of Reference within 3 months of the extension of the Terms of Reference.The task force had submitted its interim report on 5 July 2011 and the suggestions therein were taken up by Ministries on a pilot basis under its supervision of the task force.The interim report had suggested direct cash transfers through banks, ATMs or even mobile banking to beneficiaries of kerosene, LPG and fertiliser subsidies. $1 Billion ECBs in Yuan allowed

China on 15 September 2011.For the first time yuan, (equivalent of $1 billion) was allowed as an acceptable currency under the ECB. So far, the government had allowed firms to raise external commercial borrowings (ECBs) only in US dollar, Japanese yen, euro and British pound. The decision to allow companies to raise ECBs in yuan is expected to benefit infrastructure firms such as ADAG Group company Reliance Power and Lanco Infratech.The Cabinet Committee on Economic Affairs did not raise the overall ceiling of ECB, which is now at $30 billion.The decision would help companies across all segments to access higher quantum of overseas funds. For the services sector, the ECB limit under the automatic route had been doubled to $200 million and for NGOs from $5 million to $10 million.

The Union Government decided to allow corporates to raise External Commercial Borrowings (ECBs) in yuan (Renminbi) equivalent to $1 billion to help companies who are trading with

Post Offices to Provide Visa Related Services India Post has signed a Memorandum of Understanding

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(MOU) with M/s VFS Global to provide visa related services for different countries through Post Offices. Memorandum of Understanding between India Post and M/s VFS Global was signed in Delhi on 30 August 2011. The MOU sets out broad understandings and intentions of both the parties to provide visa related services at places where they are not currently available.Post Office counters will be used for fee collections, providing visa applications forms, dissemination of visa information, biometric enrollment and other visa application process related services. India Post and VFS are also planning to cooperate in utilizing India Posts courier service, Speed Post for movements of passports to VFS offices and concerned embassies, and their delivery back to the applicants. Both the parties will also explore to provide any other service that India Post may want to provide through VFS global network on mutually accepted terms.M/s VFS Global is in the business of visa application services and is working with 35 governments across the world with over 450 offices in 50 countries. Fiscal Deficit Surged to Rs 2.73 lakh crore According to Comptroller General of Accounts data released on 30 September, the governments fiscal deficit surged nearly twofold to Rs 2.73 lakh crore during the first five months (AprilAugust) of the current fiscal 2011-12 due to low revenue

realisation.Deficit was Rs 1.5 lakh crore in April-August period of 2010.The higher deficit in the April-August, 2011 was attributed to slowdown in net revenue collection following higher refunds and moderation in economic growth rate. The government decided to increase 2011s borrowing target by an additional Rs 53,000 crore anticipating slower tax collections and lower disinvestment proceeds.The deficit in the AprilAugust period was 66.3 per cent of the target originally estimated at the beginning of the 2011-12 fiscal for the whole year.Prime Ministers Economic Advisory Council (PMEAC) chairman C Rangarajan pointed out that the target to cut fiscal deficit to at 4. per cent of the GDP for the current financial year would be missed.Finance Minister Pranab Mukherjee had lowered the fiscal deficit target to Rs 412,817 crore or 4.6 per cent of the gross domestic product from 4.7 per cent achieved during 2010-11. Public Private Partnership for Infrastructure Projects The finance ministry released the draft national public-private partnership (PPP) policy aimed at creating a framework for implementing infrastructure projects across sectors on 27 September 2011.The development follows the announcement made by the Finance Minister Pranab Mukherjee in the Budget. The draft of PPP policy was released in pursuance of governments commitment to improve the level and quality of economic and social

infrastructure service.The Policy seeks to expand the scope of the PPP scheme. It aims to develop governance structures to facilitate competitiveness, fairness and transparency in procurement and attaining appropriate public oversight and monitoring of PPP projects. Indias Spending on Green IT & Sustainability Initiatives to Double to $70 billion in 2015 According to a report H ype cycle for green IT and sustainability in India, 2011 by leading IT research and advisory company Gartner, Indias spending on green IT and sustainability initiatives will double from $35 billion in 2010 to $70 billion in 2015.The report pointed out that Indias information and communication technology (ICT) industry will be an early adopter of green IT and sustainability solutions as India is one of the fastest-growing markets in terms of IT hardware and communications infrastructure consumption. Apart from the ICT industry, the banking and financial services, hospitality, manufacturing (such as automobiles), pharma, and other industries that have significant exposure to the export markets, will join the green IT and sustainability trend early in India.As per the report awareness of green IT and sustainability issues is low in Indian organisations. However the increasing global focus on energy efficiency, energy security and green IT and sustainability issues is will not only raise awareness
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but also cause the executive leadership in the technology sector to track, report and manage sustainable and resource-efficient business practices.

spectrum in 2008 to be between Rs 5500 crore and Rs 9500 crore. It complained that the auction route not being taken by the government proved to be a stumbling block in its inquiry.

domestic and international participants. Over 200 exhibitors from 22 countries are participating in Indias largest railway show.IREE-2011 is also hosting an international rail with the theme Rail Transportation in India: Moving to the Next Orbit will focus mainly on future of rail transportation in India, rolling stock- emerging trends and technologies including diesel and electric locomotives, high speed trains, system components, rail infrastructure including Track modernization, Integrated Rail management, Advances in Signaling and Telecom, Dedicated Freight Corridor, Upgradation of Railway Bridges, Propulsion technology, PPP, finance, investment, Operations, Maintenance, logistics and the changing face of urban transportation in India. The obj ecti ves conference are: of t he

Committee Set up by TRAI Submitted Report A three-member expert committee, set up by the Telecom Regulatory Authority of India and meant to determine the precise value of spectrum during 20012008 submitted a report In the report the committee compalined of a tricky exercise plagued by data deficit.The panel stressed on the importance of adequate and good quality data in an estimation of the loss.The task of estimating the data become further complicated because it involved going back in time during which there was unexpected and unprecedented growth of the telecom industry.The report recommended auction of spectrum as the ideal method.The report estimated the value of
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The International Railway Equipment Exhibition -2011 The International Railway Equipment Exhibition (IREE) organised by the Confederation of Indian Industry (CII) in association with the Ministry of Railways, Government of India, is the only international event in India for the Railway industry and its allied sectors.IREE has always been organized in association with the Indian Railways and they participate in a big way, displaying their capabilities and future requirements.We are presently staging the 9th Edition from 28-30 September 2011. The first edition of IREE was held in 1990 in Kolkata. The exhibition turned biennial in 2003.The 9th IREE 2011 received an overwhelming response from both

8 To showcase the large-scale business opportunity in Indias railway sector, 8 To discuss the Indian Railways vision in adopting next- generation policy, procedural and regulatory initiatives needed to attract investments in the sector, 8 To provide a platform for exchange of views, ideas and business opportunities among the global / domestic industry and Indian railways, 8 To discuss the state of development and trends in benchmarking for the Indian railways in operation parameters and to highlight the railways vision in freight management and passenger services.

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