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Naidu says Government Earmarked Rs. 50,000 for Developing 100 Smart Cities

Union Urban Development minister, M. Venkaiah Naidu, during an international seminar said that Rs.50,000 crore fund has been earmarked by Union Government for developing 100 smart cities across India, as initial step of infrastructure development. The concerned seminar was organized by Department of Urban and Regional Planning of the University of Florida, Institute for Human Development (IHD), and NITI Aayog. Naidu stressed upon improving lives of urban populace, enhancing participation of people during development of smart cities, and assisting Rs. 100 crore per year assistance for 5 years. While vouching for large scale reform, minister said that inclusive and sustainable urban development is their main focus.

Finance Minister seeks Plan Approval for Providing Rs. 70,000 Crore to Debt-Ridden PSU Banks

Finance Minister Arun Jaitley yesterday placed a plan in the parliament for approval of Rs. 70,000 crore to be given to the public sector banks, which are suffering from insurmountable debt due to stacking up of Non Performing Assets (NPAs). A Finance Ministry statement said that according to the plan Rs 25,000 crore will be provided to debt-laden public banks during 2015-16 and 2016-17 each. In fact, a fund of Rs. 20,000 crore will be provided during following fiscal years – 2017-18 and 2018-19. Reports say that the banks that will get Rs. 10,262 crore of the funds include SBI, Bank of Baroda, PNB, BoI, IDBI, and Canara Bank.

Moody's Analytics criticises FSLRC's Draft Proposal of Curbing RBI's Independence to determine Interest Rates

Analytical unit of Moody's Corporation, Moody's Analytics, has strongly criticised Financial Sector Legislative Reforms Council’s revised draft proposal where the latter proposed doing away of veto power of the RBI Governor on interest rate determination (determined by a 7-member committee) and many other controversial ones. As per Moody’s these moves are equivalent to undermining the apex court’s independence of setting key rates. The rating agency’s analytical wing has also backed RBI Governor Raghuram Rajan’s efforts of restricting inflation within a certain level.  The report says that during Rajan’s on-going tenure inflation has come down from 2-digit figure, followed by improvement in external accounts.

Report says Uber Technologies Inc. Planning to Invest US$ 1 Billion in India

President of Uber India, Amit Jain, said that the company “has grown exponentially in India” and is currently mulling the idea of investing around US$ 1 Billion in the Indian market, especially because of its bullish outlook on India. He also said that India is soon going to become the largest market for Uber, outside the USA. While giving details, Jain said $1 Billion will be invested for expanding their operation in newer cities, improve their operation, and also develop new payment solutions/new products. Uber’s additional investment announcement comes after a Delhi court revoked ban on the company’s operations.   

Standard Chartered Private Equity, IFC, and ADB commit Rs 1,280 crore to Shapoorji Pallonji for Affordable Housing

Mumbai-based conglomerate Shapoorji Pallonji Group (SPG) has entered into an joint venture for developing affordable housing, where it attracted fund commitments of US$ 200 (equivalent to Rs. 1,280 crore) from Standard Chartered Private Equity, IFC (a member of World Bank), and Asian Development Bank (ADB). Reports say that $50 million (equivalent to Rs. 320 crore) fund will be provided by the multilateral funding agencies. The concerned SPG-led joint venture will develop affordable housing in coming eight years in many cities including Mumbai, Ahmedabad, Bengaluru, Kolkata, Chennai, Pune, and NCR. The total area on which they will develop the housing is around 20 million sq ft.

General Motors Plans to Invest US $1 Billion to revive its Struggling Indian Operations

General Motors plans of reviving its struggling Indian operations by making fresh investment to the tune of US$1 billion, equivalent to Rs 6,400 crore. Reports say that the company is planning shutting down its Halol plant in Gujarat and in turn expand the plant in Maharashtra’s Talegaon. It is learnt that the expanded Talegaon plant will be used for producing automobiles for supplying to domestic as well as emerging markets. CEO of General Motors, Mary Barra, has said that their first concern is to recover their company’s image, which got dented due to frequent recall of cars from the market.  

HDFC announces plans of Raising up to Rs 5,000 crore through NCDs to boost its Business Operations

HDFC, largest mortgage lender of India, has announced that they are all set to raise funds to the tune of Rs. 5,000 crore, through non-convertible debentures (NCDs), for boosting their lending operations, on one hand, and meet future needs of capital, on the other. In the “Updates on Outcome of AGM”, the company has said that its Board of Directors have been exploring multiple fund raising options for augmenting Corporation’s long term resources. Reports say that the Corporations have planned issuing NCDs as well as warrants under QIP route. The concerned statement has been published during the announcement of HDFC’s first quarterly result of 2015-16.

Finance Ministry clears Foreign Investment Proposal worth Rs. 981.15 Crore

Reports say that investment proposals, to the tune of Rs. 981.15 crore, by foreign investors have been cleared by the Union Government. Reports say that following Foreign Investment Promotion Board’s (FIPB) recommendations Finance Ministry has cleared 7 foreign investment proposals including the one by Hathway Cable and Data Com Ltd. (HCDC). GCDC will now be able to raise its foreign investment limit 74 per cent from current 49 per cent of its issued and fully paid up share capital. Finance Ministry has said that foreign investment proposals approved in the telecom and broadcasting sector alone amounts to Rs. 963 crore.

FICCI CASCADE Report says Exchequer Loss in 2014 due to Illicit Trade is Rs 39,239 crore

FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) report titled “Illicit Market: A Threat to Our National Interest” said that exchequer loss in 2014 in comparison to 2014 has increased from Rs. 26,190 crore to Rs. 39,239 crore due to illicit trade. The report points out that among the total exchequer loss in 2014, Rs. 34,020 crore accounts for indirect tax loss and Rs. 5,218 crore accounts for direct tax loss. While calculating the loss, the concerned report considered 9 sectors including media and entertainment, tobacco and alcohol, mobile phones, automobiles, computer hardware, packaged foods and personal goods, and FMCG.

SEBI Cancels Registration of Sahara Mutual Fund

Securities watchdog SEBI has yet again came down heavily on Sahara Group by cancelling Sahara Mutual Fund’s registration, after 6 months. In its report, SEBI has said that the group is neither fit nor proper in carrying out the mutual fund business and consequently ordered transfer of all its operations to another fund management company. The move comes soon after SEBI cancelled Sahara firm’s Portfolio Management license. Sahara Asset Management Company, as well as Sahara Mutual Fund, has been ordered by SEBI to stop accepting subscription with immediate effect from all investors (new as well as existing).  

Net Profit of Maruti Suzuki during April-June Quarter increases by 56 Per Cent

First quarter report of Maruti Suzuki India Ltd. for 2015-16 shows that the company’s net profit increased by 56 per cent to a whooping Rs. 1,190 crore. During Q1 of 2014-15, net profit of the company was just Rs 760 crore. Analysts believe that the top three factors that contributed to this roaring success of India’s top selling automobile company are higher sales, favourable foreign exchange rates, and comparatively lower costs of the cars. In spite of such a good performance, reports say that achieved net profit missed analysts’ expectation of Rs. 1,235 crore. During Q1 of 2015-16, net sales increased by 18 per cent to Rs. 13,080 crore.

Government to Raise Rs. 1,600 crore from 5 Per Cent Stake Sale of Power Finance Corporation

Union Government has received bids for 15.4 crore shares for Power Finance Corporation (PFC) in place of 6.6 crore shares offered for sale, during an auction that was attended by both institutional and retail investors. With 5 per cent stake sale of PFC, government intends raising Rs 1,600 crore, which is expected to lessen pressure on policymakers of raising Rs 69,500 crore (per 2015-16 Union Budget) through PSU stake sale. Reports say that till now bids worth of Rs. 3,747 crore have been received, out of which Rs 2,414 crore has come from institutional investors and Rs. 1,510 crore from retail investors.

Finance Minister says Government will take a view on Controversial Revised Draft Indian Financial Code

Union Finance Minister Arun Jaitley said that they will take a final view on the controversial revised draft of Indian Financial Code (recommended by FSLRC) after comments are received from all stakeholders. The second draft has proposed diluting independence of RBI by taking away apex bank governor’s veto power on monetary policy committee determined interest rate. Another controversial recommendation is lesser representation (three) from RBI compared to government’s representation (four) in the committee. The draft says the committee will be represented by “RBI Chairperson” instead of current RBI Governor. The policy rate is recommended to require majority vote instead of current optional consulting clause with Technical Advisory Committee.

World's Largest Gold Refining Company Valcambi bought by Rajesh Exports for Rs. 2,560 Crore

India’s Rajesh Exports (a Bengaluru-based jewellery company) has bought Valcambi SA, largest gold refining company of the world based in Switzerland, from Newmont Mining Corporation (a US based mining company) at US$ 400 million (equivalent to Rs. 2,560 crore). Reports say that 65 per cent of Rajesh Exports’ acquisition cost will be financed through internal accruals. In addition, the company has taken a loan of US$ 140-million (equivalent to Rs. 880-crore) by tying up with Credit Suisse. It is learnt that the total capacity of gold and other precious metals in Valcambi are 1,600 tonnes and 400 tonnes respectively.

Concerns on MAT and Government Move on P-Note for curbing Black Money Pulls Indian Bourses Down by 582 Points

BSE Sensex nose dived 582 points today to close at 27561 points. NSE Nifty also dipped 160 points to close at 8,361. Analysts believe bloodbath in the Indian stock market happened due to two reasons – recommendation of stiff norms for Participatory Notes (P-notes) by a special investigation team (SIT) and biggest stock market crash (to the extent of 8 per cent) in China. After the severe bloodbath, Finance Minister Arun Jaitley has to chip in and assure the market that government will not undertake any knee-jerk reaction to SIT recommendation so that it adversely affects investment climate of India.       

ONGC Plans Investing $8.8 Billion to Bring KG-Basin Oil and Gas Discoveries for Production by 2018-19

Reports say that Oil and Natural Gas Corporation (ONGC) has planned of investing more than $8.8 billion to start production in KG-basin oil and gas discoveries by 2018-19. A senior ONGC official has said that the twelve oil and gas finds (KG-DWN-98/2 or KG-D5 and G-4) in the block has been divided into 3 clusters so that production can be started there at the earliest. $8.843 billion investment will be done by ONGC in 11 oil finds along 3,800.6sqkm stretch of KG-D5 block’s Northern Discovery Area and 1 gas find in 3,494sqkm of Southern Discovery Area. 45 development wells will be drilled with this investment.

CAG Report points out release of Rs. 44,000 Crore Funds without Proper Grant Accounts or Utilisation Certificates

Report submitted by Comptroller and Auditor General has pointed out that the ministries released funds of around Rs. 44,000 crore in the last few years without getting accounts of grants or utilisation certificates to statutory organisations or bodies. This practice has led to spending without evidence of profits going to beneficiaries. Sources say that the amount is expected to escalate as similar information has not been shared with the federal authority by over 13 ministries. Pending utilisation certificates by some ministries at March 2014-end are Rs. 10,046 crore by Social Justice & Empowerment, Rs. 7,100 crore by Youth Affairs & Sports, Rs. 6,724 crore by health, etc.

Union MoS for Commerce and Industry Nirmala Sitharaman says Differences on GST Bill Ironed Out

Nirmala Sitharaman, Union Minister of State for Commerce and Industry, has said yesterday that the differences over Goods and Services Tax (GST) Bill has been ironed out after prolonged discussion. She also hoped that the concerned bill will get passed in the Rajya Sabha during ongoing Monsoon session of the parliament. Sitharaman’s reaction comes after the Rajya Sabha committee, examining the proposed GST bill, submitted its report. The minister also said that her government is currently working on FTAs (Free Trade agreements) with European Union, Canada, and Australia. She went on to add that possibilities of FTAs with Eurasia and Latin American countries are also explored.

After Market rattles on Concerns of RBI's Loss of Independence, CEA says Revised IFC Draft not Government View

Revised Indian Financial Code draft by a government panel that recommended no veto power by RBI Governor on decision taken by Monetary Policy Committee on interest rate raised both domestic and international concerns on loss of apex bank’s independence on interest rate determination. This concern led to rattling of the market yesterday. RBI Governor Raghuram Rajan called the report "schizophrenic" and went on to say that its implementation will convert RBI into a “paper tiger. After widespread criticism of the report, Chief Economic Adviser Arvind Subramanian briefed media that the second IFC draft is a “report of FSLRC” and doesn’t reflect government’s views.

Lupin buys US Generics Company GAVIS Pharmaceuticals and Novel Laboratories at US$ 880 Million

Lupin, third largest drug company of India, has bought GAVIS Pharmaceuticals and Novel Laboratories (Gavis), a privately-held US generics company, for US$880 million. This move will strengthen Lupin’s market presence in the US as it will help the Indian drug giant access various specialty generic drugs and niche products, especially in the gastro-intestinal, dermatological, and injectable categories. It is the largest ever overseas acquisition in the pharmaceutical industry by any Indian company in recent years, where the purchase is nine times above the FY2014’s market capitalisation/sales (US$96 million). Lupin CEO Vinita Gupta justified the steep valuation to its access to "scale and calibre of the Gavis pipeline".