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Thursday, January 28, 2016

France to manufacture 800 locos in Bihar: Reports

The French Government has said that its top company Alstom will manufacture 800 electric locomotives of horse power double than the existing ones in India, involving foreign investment of Rs 1300 crore. As per reports, two significant pacts, marking stepped up cooperation in the rail sector, were signed after talks between Prime Minister Narendra Modi and French President Francois Hollande. As per the agreement, the Madhepura factory will produce 800 electric locomotives with horse power of 12,000 each over a period of 11 years. The existing strength of electric locomotives is 6,000 horse power (HP). The project will involve foreign investment of Rs 1300 crore, considered to be substantial in rail sector. Alstom will be responsible for setting of the factory, manufacturing of the locomotives as well as maintenance. As per reports, Railways had decided in November to award the contract to Alstom for Madhepura electric locomotive project.

Cabinet okays hybrid annuity model for implementing highway projects

The government of India has given its approval for the hybrid annuity model as one of the modes of delivery for implementing the highway projects. “Adopting such a model for projects not found viable on BOT (Toll) mode shall be more effective in terms of maximizing the quantum of kilometers implemented within the available financial resources of the government,” according to a Cabinet statement. The main object of the approval is to revive highway projects in the country by making one more mode of delivery of highway projects. By adopting the model as the mode of delivery, all major stakeholders in the PPP arrangement - the Authority, lender and the developer, concessionaire would have an increased comfort level resulting in revival of the sector through renewed interest of private developers in highway projects and this will bring relief thereby to travelers in the area of a respective project. It will facilitate uplifting the socio-economic condition of the entire nation due to increased connectivity across the length and breadth of the country leading to enhanced economic activity, it added.

Power Ministry seeks cabinet approval for UMPPs bid document

The Power Ministry has said that it will seek cabinet approval for revised bidding documents for Ultra Mega Power Projects (UMPPs), paving the way for auctioning three plants entailing an investment of over Rs 80,000 crore by March-end.

Commenting on the issue, Power Minister Piyush Goel told the media, "We shall shortly be putting to the Cabinet, a draft bid document for UMPP (domestic coal-based) duly revised taking into account all the concerns of all stakeholders."

"It will take some time to finalise the bid document for imported coal-based UMPPs. The discussion on it is on," he added.

As per reports, the investment for a UMPP of 4,000 MW has been revised from Rs 20,000 crore to about Rs 27,000 crore recently on the basis of rise in prices of coal and land. Thus, the auction of three UMPPs will entail an investment of over Rs 80,000 crore.

As per reports, once approved by the Cabinet, the auction for domestic coal-based UMPPs will be conducted. The government has planned to auction three UMPPs by March-end.

India’s energy demand to double in 25 yrs: Reports

US oil major ExxonMobil has said that India's energy demand is likely to double in next 25 years as the economy is estimated to expand to USD 9 trillion by 2040.

Commenting on the issue, an ExxonMobil Official told the media, "Through 2040, we see China, India and other non-OECD countries - home to seven-eighth of the world's population - needing much more energy to fuel economic development and rising living standards. On the other hand, the US, Europe and other OECD nations will see declines in overall energy demand and emissions, even as their economic output continues to grow."

"We anticipate some developed economies to see net declines in overall energy demand through 2040. By 2040, India will have passed China as the world's most populous nation, with 1.6 billion people,” he added.

As per reports, India's energy demand is likely to rise from 34 quadrillion British thermal units (BTU) to 47 quadrillion BTUs in 2025 and 63 quadrillion BTUs in 2040.

Rajan to wait for Budget roadmap before next rate cut: HSBC

Even though the fall in oil prices has created some space to ease rates, HSBC said it expects RBI Governor Raghuram Rajan to maintain status quo in the forthcoming policy review and wait for the fiscal roadmap presented in the Budget.

"We do not think RBI will cut rates on February 2," it said in a note.

The foreign brokerage said even though oil has "opened some space", the exact quantum of the benefit will only be determined once the markets stabilise, and also by the stance of the Central government, which has till now let pass only half of the benefit by raising duties on oil products.

"The Budget on February 29 should show how this extra space will be shared between monetary and fiscal policies," the report noted.

The RBI will also be closely watching the Budget fine print, it said, adding its effect on inflation and financial stability will be closely watched.

Additionally, there are other factors governing inflation which will play out in the next few weeks, like the arrival of the Rabi crop, it said.

"The current instability in markets and insufficient transmission (by banks) are further reasons why the RBI may not rush to cut the rate on February 2," HSBC said.

The RBI is most likely to achieve its January 2016 target of having inflation under the 6 per cent mark, but is committed to getting the headline number down to 4 per cent in two years from now.

"While the tone (of the policy) is likely to be dovish, the RBI, in our view, will also take a moment to remind markets of its medium-term 4 per cent CPI target, suggesting that any additional space that does open up will be measured," HSBC said.

The RBI cut rates by a total of 1.25 per cent in 2015, including one within a week of the last Budget, after switching the stance of the policy to be accommodative and address sagging growth.

HSBC said Rajan will reiterate the accommodative stance on February 2 and will be in a position to deliver a cut at the April review, provided the Budget meets his expectations.

"We continue to forecast a 0.25 per cent rate cut in the April policy meeting under the assumption that the Budget will be responsible. Thereafter, if oil stabilises at around USD 40 a barrel for FY17, space for a further 0.25 per cent rate cut could open up," it added.

Jaitley, Gadkari to meet top bankers, road developers today

Finance Minister Arun Jaitley and Road Minister Nitin Gadkari will meet road developers and bankers to sort out key issues to put back on track 20 stalled highway projects of worth Rs 20,000 crore, reported PTI.

The meeting assumes significance as the government after a series of meetings with bankers and developers had resolved issues pertaining to 58 projects but 20 projects worth over Rs 20,000 crore are still stuck.

Running out of patience for stalemate over these 20 projects, the government has warned non-serious developers and bankers of terminating these contracts.

The projects relate to key national highways in Andhra Pradesh, Bihar, Haryana, Rajasthan, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, Uttarakhand and West Bengal.

The stuck projects belong to players like Larsen & Toubro, HCC, Gammon, Madhucon, Soma and Essel Ifra, among others, while the list of lenders includes top names like State Bank of India, Punjab National Bank and Bank of India.

A top official last month had said that the government was "reaching a stage of impatience" over the stalled projects.

"The concessionaires and bankers are not realising that we are reaching a stage of impatience, and people who are users of these roads are not going to be waiting any more," the then Road Transport and Highways Secretary Vijay Chhibber had said.

"If developers and bankers fail to mend their ways and initiate correctives to roll out projects by January-end, the government will start terminating contracts in PPP mode and repackage them," he had said before his retirement.

The government recently "offered a full package", which among other steps extends the concession period of projects where delays are not attributable to developers.

RBI shortlists 5 cos for audit and risk monitoring mechanism

The Reserve Bank plans to procure an Audit Management and Risk Monitoring System (AMRMS) for the central bank from five "potential shortlisted" solution providers, including PwC and Quadrant 4 Software Solutions, reported PTI.

The RBI said it has decided to implement AMRMS to carry out various audit and risk monitoring related activities efficiently in a seamlessly integrated fashion, thereby replacing the existing system which is partially computerised.

The AMRMS will be a comprehensive package to facilitate Internal Audit and Risk Monitoring functions of the central bank.

"Reserve Bank of India desires to procure an Audit Management and Risk Monitoring System (AMRMS) for the Bank from potential shortlisted solution providers," it said in the Request for Proposal (RFP).

AMRMS should also enable achieving the objective of paperless office environment, it added.

The five short-listed bidders based on Expression of Interest (EOI) evaluation are: Auditime Information Systems Pvt Ltd, Mumbai; NCSSoft Solutions Pvt Ltd, Chennai; PWC Pvt Ltd, Mumbai; Quadrant 4 Software Solutions Pvt Ltd, Chennai; and Thomson Reuters Pvt Ltd Mumbai.

The envisioned AMRMS, the RFP should be capable of providing an end-to-end solution from audit planning to final closure of the report.

It envisages a centralised web-based application which is browser independent (preferably), which would be hosted at Data Centre and seamlessly connect all stakeholders for its usage.

The AMRMS would cater to the requirements of primarily two Departments - Inspection Department and Risk Monitoring Department.

As per the RFP, AMRMS would be an online web based application with a centralized database and browser independent (preferably). The system should be flexible and configurable to the user requirements dynamically.

Apple's Tim Cook bets on economic reforms in India

Applauding the economic reforms unveiled by India, tech giant Apple's CEO Tim Cook said the world's third largest smartphone market presents a "very good business environment" going ahead.

Apple, maker of the iconic iPhone, has been sharpening its focus on the the world's largest democracy as it sees India "quickly becoming the fastest growing BRIC (Brazil, Russia, India and China) country".

Describing India as a rapidly expanding market, Cook said revenues from the country were up 38 per cent and in constant currency, the growth was 48 per cent.

"So it's a very rapidly expanding country. And I think the government in India is very interested in economic reforms and so forth that I think all speak to a really good business environment for the future," Cook said on an investor call.

Recently, Apple has sent an application to the Department of Industrial Policy and Promotion (DIPP) for approval for setting up retail outlets in India.

Cook said the company is "putting increasingly more energy in India" and will continue to invest here for the long-term.

"India's growth, as you know, is very good. It's quickly becoming the fastest growing BRIC country. It's the third largest smartphone market in the world, behind China and the US," Cook said.

After years of rocketing growth, Apple reported the slowest sales ever of its market-leading iPhone for the quarter ended December 26.

It sold a record 74.8 million iPhones, but only fractionally higher than the 74.5 million in the same period last year and the slowest growth since the iconic handsets were introduced in 2007.

In India, the total iPhone sales grew 76 per cent, Cook said.

Comparing India with the Chinese market, Cook said the population of India is incredibly young.

"I think of the China age being young, at 36, 37 and so 27 (median age in India) is unbelievable. Almost half the people in India are below 25. And so I see the demographics there also being incredibly great for a consumer brand and for people who really want the best products," he said.

Cook said revenues from India were up 38 per cent and in constant currency, the growth was 48 per cent.

Apple posted a record quarterly profit with net income growing 2 per cent year-on-year at USD 18.4 billion, while revenue was also up at USD 75.9 billion.

India is one of fastest growing handset markets globally and is poised to overtake the US soon.

According to research firm IDC, shipments in India grew 21.4 per cent year-on-year to 28.3 million units in the July-September 2015 quarter.

Samsung led the tally with 24 per cent share, followed by Micromax (16.7 per cent), Intex (10.8 per cent), Lenovo Group - Len

Indian economy needs strong medicine to ward off Chinese flu: ASSOCHAM

As the world looks up to India to provide a leadership role in pushing global economic growth, the government has no option but to make some big bang announcements in the forthcoming Budget to resurrect investment in the public projects, or else the Indian economy can soon catch up the Chinese flu with serious consequences, apex industry body ASSOCHAM said on Wednesday. “With major multilateral institutions like the IMF and big economies such as the US, Japan, Germany and the UK all betting high on India being saviour of the international economy, stakes are too high for us not to let them and ourselves down,” said Sunil Kanoria, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) while addressing a press conference along with chamber’s national secretary general, D.S. Rawat in Kolkata. “While we are surely reaping the benefit of a big fall in oil prices, as much as 75 per cent in the last 18-20 months, we have enough challenges in terms of checking capital outflows from the stock market, grappling with deflationary trends with a number of areas and a huge setback to the exports,” said Kanoria. He said that although an ASSOCHAM Bizcon Survey has polled corporate India's views which expect things to improve in the next two quarters, “We cannot take it for granted and need to work really hard on all fronts.” Besides, all-out efforts should be made to get the Goods and Services Tax Constitutional Amendment Bill passed in the Parliament, Kanoria said, appealing to the Congress President Ms Sonia Gandhi to support the important reforms measure, which alone can make a huge difference to the business sentiment. He said as the entire global economy is on the edge and India may also get a big hit like other emerging economies, the government should certainly not implement the seventh Pay Commission because it would not only ruin the health of the Central fiscal structure but also the states which require large allocations for Planned development. The ASSOCHAM President said, “Given the perilous state of financial markets, raising money through disinvestment would be quite difficult for the government, which then is also expecting banks to get some re-capitalisation from the market which is going through one of the most tumultuous times.” “With the nominal GDP likely to stay muted next year as well, the tax revenue targets cannot be set at ambitious level, while there would be lot more demand for pushing investment. That is why off-Budget innovative financial models like the Railways have to be found,” he added.