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RBI modifies rules yet again on deposit of banned notes

Two days after specifying that deposits exceeding Rs. 5000 in demonetised Rs. 500 and Rs. 1000 bank notes can only be made once before December 30, 2016, the Reserve Bank of India on Wednesday modified the rules once again, saying that the restrictions would not apply to those with KYC-compliant accounts.

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Two days after specifying that deposits exceeding Rs. 5000 in demonetised Rs. 500 and Rs. 1000 bank notes can only be made once before December 30, 2016, the Reserve Bank of India (RBI) today modified the rules once again, rsaying that the restrictions would not apply to those with KYC-compliant accounts.
 
In a notification sent to all banks on December 19, the RBI had said that, on a review of the provisions dealing with credit of the value of specified bank notes (SBNs) into bank accounts, it had been decided to place certain restrictions on deposits of SBNs into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.
 
"Tenders of SBNs in excess of Rs. 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed.
 
"Tenders of SBNs up to Rs. 5000 in value received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016. Even when tenders smaller than Rs. 5000 are made in an account and such tenders taken together on cumulative basis exceed Rs. 5000 they may be subject to the procedure to be followed in case of tenders above Rs. 5000, with no more tenders being allowed thereafter until December 30, 2016," the earlier notification had said.
 
In the latest notification sent today to all banks, these provisions would not apply to fully KYC compliant accounts.
 
"Please refer to our circular DCM (Plg) No. 1859/10.27.00/2016-17 dated December 19, 2016. On a review of the above, we advise that the provisions of the above circular at sub para (i) and (ii) will not apply to fully KYC compliant accounts," the notification said.
 
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The Ministry of Finance had, explaining the December 19 decision, said on that date that more than five weeks had elapsed since the November 8 announcement on demonetisation. 
 
"It is expected that, by now, most of the people would have deposited such old notes in their possession," it had said.
 
"Further, an opportunity has been given to the public to make the payments towards tax, penalty, cess/surcharge and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 with the old bank notes of Rs.500 and Rs.1000 denomination upto 30th December, 2016," it had said.
 
The decision had attracted a lot of criticism from Opposition parties as well as people at large in view of the fact that Prime Minister Narendra Modi and Finance Minister Arun Jaitley had said that there was no reason for people to rush to the banks to deposit their old notes because they had time till December 30 to do so.
 
The demonetisation has led to a huge shortage of cash in hand for people across the country and has severely affected businesses. There continue to be long queues outside banks and ATM kiosks all over the country, which have been running out of cash every day.
 
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RBI cuts repo rate by 25 bps to 7.25%, keeps CRR unchanged at 4%

The Reserve Bank of India on Tuesday reduced its policy repo rate by 25 basis points from 7.5 per cent to 7.25 per cent with immediate effect and kept the cash reserve ratio of scheduled banks unchanged at 4.0 per cent, saying there was a case for a cut in the rate.

 
RBI cuts repo rate by 25 bps to 7.25%
The Reserve Bank of India (RBI) today reduced its policy repo rate by 25 basis points (bps) from 7.5 per cent to 7.25 per cent with immediate effect and kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent, saying there was a case for a cut in the key rate.
 
"With low domestic capacity utilization, still mixed indicators of recovery, and subdued investment and credit growth, there is a case for a cut in the policy rate today," RBI Governor Raghuram G. Rajan said in his Second Bi-Monthly Monetary Policy Statement 2015-16 here.
 
He also said that banks should pass through the sequence of rate cuts into lending rates.
 
Dr Rajan said the central bank would continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions.
 
It would also continue with overnight/term variable rate repos and reverse repos to smooth liquidity, he said.
 
Consequently, the reverse repo rate under the LAF stood adjusted to 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 8.25 per cent.
 
Dr Rajan noted that banks had started passing through some of the past rate cuts into their lending rates, headline inflation had evolved along the projected path, the impact of unseasonal rains had been moderate so far, administered price increases remained muted, and the timing of normalisation of US monetary policy seemed to have been pushed back. 
 
"With low domestic capacity utilization, still mixed indicators of recovery, and subdued investment and credit growth, there is a case for a cut in the policy rate today," he said.
 
"Yet, of the risks to inflation identified in April, three still cloud the picture. First, some forecasters, notably the IMD, predict a below-normal southwest monsoon. Astute food management is needed to mitigate possible inflationary effects. 
 
"Second, crude prices have been firming amidst considerable volatility, and geo-political risks are ever present. Third, volatility in the external environment could impact inflation. 
 
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"Therefore, a conservative strategy would be to wait, especially for more certainty on both the monsoon outturn as well as the effects of government responses if it turns out to be weak. With still weak investment and the need to reduce supply constraints over the medium term to stay on the proposed disinflationary path (to 4 per cent in early 2018), however, a more appropriate stance is to front-load a rate cut today and then wait for data that clarify uncertainty," he said.
 
"Assuming reasonable food management, inflation is expected to be pulled down by base effects till August but to start rising thereafter to about 6.0 per cent by January 2016 – slightly higher than the projections in April. Putting more weight on the IMD’s monsoon projections than the more optimistic projections of private forecasters as well as accounting for the possible inflationary effects of the increases in the service tax rate to 14 per cent, the risks to the central trajectory are tilted to the upside," he said.
 
"Reflecting the balance of risks and the downward revision to GVA estimates for 2014-15, the projection for output growth for 2015-16 has been marked down from 7.8 per cent in April to 7.6 per cent with a downward bias to reflect the uncertainties surrounding these various risks," he noted.
 
Dr Rajan said strong food policy and management would be important to help keep inflation and inflationary expectations contained over the near term. 
 
"Furthermore, monetary easing can only create the enabling conditions for a fuller government policy thrust that hinges around a step up in public investment in several areas that can also crowd in private investment. This will be important to relieve supply constraints and aid disinflation over the medium term. A targeted infusion of bank capital into scheduled public sector commercial banks, especially those that implement concerted strategies to clean up stressed assets, is also warranted so that adequate credit flows to the productive sectors as investment picks up," he said.
 
The statement said that, since the first bi-monthly monetary policy statement of 2015-16 issued in April 2015, incoming data suggested that the global recovery was still slow and getting increasingly differentiated across regions. 
 
It said global financial markets had also been volatile, with risk-on risk-off shifts induced by changing perceptions of monetary policies in the advanced economies. Global currency markets continue to be dominated by the strength of the US dollar, with the G3 currencies reflecting the asynchronicity of their monetary policy stances. 
 
The statement noted that, as anticipated, the Central Statistics Office had revised downwards its estimate of India’s gross value added (GVA) at basic prices for 2014-15 by 30 bps from the advance estimates. 
 
"Domestic economic activity remains moderate in Q1 of 2015-16. Agricultural activity was adversely affected by unseasonal rains and hailstorms in north India during March 2015, impinging on an estimated 94 lakh hectares of area sown under the rabi crop. Reflecting this, the third advance estimates of the Ministry of Agriculture indicate a contraction in foodgrains production by more than 5 per cent in relation to the preceding year’s level," it said.
 
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The statement said successive estimates have been pointing to a worsening of the situation, with the damage to crops like pulses and oilseeds – where buffer foodstocks are not available in the central pool – posing an upside risk to food inflation. 
 
It said that, for the kharif season, the outlook is clouded by the first estimates of the India Meteorological Department (IMD), predicting that the southwest monsoon will be 7 per cent below the long period average. This has been exacerbated by the confirmation of the onset of El Nino by the Australian Bureau of Meteorology, it said.
 
"What is clear is that contingency plans for food management, including storage of adequate quantity of seeds and fertilisers for timely supply, crop insurance schemes, credit facilities, timely release of food stocks and the repair of disruptions in food supply chains, including through imports and de-hoarding, need to be in place to manage the impact of low production on inflation. Inflation control will also be helped by limiting the increase in agricultural support prices," it said.
 
The statement said industrial production had been recovering, albeit unevenly. The sustained weakness of consumption spending, especially in rural areas as indicated in the slowdown in sales of two-wheelers and tractors, continued to operate as a drag. Corporate sales have contracted. 
 
"The disappointing earnings performance could have been worse if not for the decline in input costs. Capacity utilisation has been falling in several industries, indicative of the slack in the economy. While an upturn in capital goods production seems underway, clear evidence of a revival in investment demand will need to build on the tentative indications of unclogging of stalled investment projects, stabilising of private new investment intentions and improving sales of commercial vehicles," it said.
 
The statement said that, in April, output from core industries constituting 38 per cent of the index of industrial production declined across the board, barring coal production. 
 
"The sustained revival of coal output augurs well for electricity generation and mining and quarrying, going forward. There is some optimism on gas pricing and availability. The resolution of power purchase processes has to be expedited and power distribution companies’ financial stress has to be addressed on a priority basis. Some public sector banks will need more capital to clean up their balance sheets and support lending as investment revives," it said.
 
The RBI said leading indicators of services sector activity were emitting mixed signals. 
 
"A pick-up in service tax collections, sales of trucks, railway freight, domestic air passenger and air freight traffic could augur well for transport and communication and trade. On the other hand, the slowdown in tourist arrivals, railway traffic and international air passenger and freight traffic could affect hotels, restaurants and some constituents of transportation services adversely. The services PMI declined in April 2015, mainly on account of slowdown in new business orders. Community and personal services are likely to be held back by the ongoing fiscal consolidation," it said.
 
In April, retail inflation measured by the consumer price index (CPI) decelerated for the second month in a row, supported by favourable base effects [of about (-) 0.8 per cent] that moderated the rise in the price index for the fourth successive month. 
 
"Food inflation softened to a contra-seasonal four-month low, with the impact of unseasonal rains yet to show up. Vegetables inflation continued to ease, along with that of other sub-groups such as cereals, oil, sugar and spices. On the other hand, protein items, especially milk and pulses, continued to impart upward inflationary pressures," it said.
 
It also said fuel inflation rose for the fourth successive month to a twelve-month high, driven by prices of electricity and firewood. 
 
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"Inflation in these components was accentuated by base effects – the recent price uptick coming on top of muted increases a year ago. Inflation excluding food and fuel rose marginally. House rent, education, medical and transport expenses were among the major drivers of inflation in this category. Rural wage growth, although still moderate, picked up. Inflation expectations remain in high single digits, although they may adapt further to current low inflation. Yet, both input and output price pressures remain muted as reflected in the Reserve Bank’s industrial outlook survey," it said.
 
The statement said merchandise export growth had weakened steadily since July 2014 and entered into contraction from January 2015 through April, with a recent shrinking of even volumes exported. 
 
"The deterioration in export performance affected economies across Asia as global demand fell and the fall in commodity prices impacted terms of trade for commodity exporters. From December 2014 onwards, merchandise import growth also turned negative, led by a sharp decline in the volume of oil imports as inventory build-up by refineries subsided. 
 
"Gold imports spiked in the month of March and remained elevated in April owing to festival demand and regulatory relaxations. Notably, the volume of imports has been recording increases, despite the value decline. Given these developments, the reduction in the current account deficit resulting from the sharp decline in oil prices has begun to reverse, though the size of the deficit is expected to be contained to about 1.5 per cent of GDP this year. 
 
"Net exports are, therefore, unlikely to contribute as much to growth going forward as they did in the past financial year. Consequently growth will depend more on a strengthening of domestic final demand. While portfolio and direct foreign investment flows were buoyant during 2014-15, with net foreign direct investment to India at US$ 36.6 billion and net portfolio inflows at US$ 41 billion, the year 2015-16 has begun with net portfolio outflows in the wake of a reduction in global portfolio allocations to India. Foreign exchange reserves are around US$ 350 billion, providing a strong second line of defence to good macroeconomic policies if external markets turn significantly volatile," the statement added.
 
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Aruna Shanbaug, in vegetative state for 42 years after being raped in 1973, dies

Aruna Shanbaug, a nurse who remained in a vegetative state for nearly 42 years after being brutally raped in1973, died on Monday morning in Mumbai's KEM Hospital after a bout of pneumonia, hospital sources said.

 
Aruna Shanbaug dies after 42 years in vegetative state
Aruna Shanbaug, a nurse who remained in a vegetative state for nearly 42 years after being brutally raped in1973, died this morning in Mumbai's KEM Hospital after a bout of pneumonia, hospital sources said.
 
Shanbaug, 67, was put on ventilator support in the intensive care unit of the hospital for more than a week, they said.
 
She breathed her last at around 9.30 am today, they said. She would have turned 68 in the first week of June.
 
Shanbaug had been in a semi-comatose condition after the horrific incident of November 23, 1973 in which her assailant, Sohanlal, used a dog chain around her neck to pin her down during the assault, resulting in serious damage to her brain cells.
 
Her colleagues at the KEM Hospital had been caring for her for the past four decades, meeting her every need and ensuring, among other things, that she did not have even a single bedsore during this period.
 
On March 7, 2011, the Supreme Court had, in an important ruling, dismissed a petition filed by Ms Pinki Virani, who claimed to be the next friend of Shanbaug, seeking permission for euthanasia since she was in a vegetative state for more than 37 years at that time.
 
A bench comprising Justices Markendey Katju and Gyansudha Misra  held that active euthanasia is illegal but passive euthanasia is permissible with the permission of the concerned high court in appropriate cases.
 
The bench in its 110-page judgement held that the real next friend of Shanbaug was the staff of the K E M Hospital, Mumbai, who had een looking after her for decades.
 
The apex court while permitting passive euthanasia in appropriate cases with the permission of the concerned high court, however, put a rider that the high court will have to set up a medical court before permitting passive euthanasia and it will be the law of the land till Parliament enacts appropriate law on the issue of mercy killing.
 
The Central Government as well as the KEM Hospital had vehemently opposed the petitioner.
 
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Salman Khan given 5 years in jail in 2002 case, HC extends his bail by two days

Bollywood star Salman Khan was on Wednesday convicted and sentenced to five years in prison by a court in Mumbai for causing the death of a pavement dweller in a 2002 hit-and-run case in which he was accused of driving under the influence of liquor, but got bail for two days from the Bombay High Court a little later.

 
Salman Khan gets five years in jail in 2002 hit-and-run case
 
 
Popular Bollywood actor Salman Khan was today convicted and sentenced to five years in prison by a sessions court here for causing the death of a pavement dweller in a 2002 hit-and-run case in which he was accused of driving under the influence of liquor, but got bail for two days from the Bombay High Court a little later.
 
Sessions judge D W Deshpande held that all the charges against the actor, including culpable homicide not amounting to murder, had been proven.
 
Since the quantum of sentence was more than three years, Khan could not have applied for bail in the sessions court and, therefore, approached the High Court. Khan was already on bail in the case, and the High Court extended it by two more days until Friday, when it will hear his bail application.
 
Khan's lawyers had sought bail on the ground that the detailed order of the sessions judge had not been made available yet.
 
Once the copy of the High Court's order reached the session court, he left for home around 7.15 pm after completing various formalities. Hundreds of his fans and well-wishers had gathered outside his residence in Bandra to greet him on his arrival.
 
The sessions judge accepted the prosecution's case that Khan, 49, was at the wheel at the time of the accident, rejecting the defence plea that it was his driver Ashok Singh who was actually driving the vehicle then.
 
Khan and members of his family present in the court room were visibly upset after hearing the verdict.
 
During the argument on the quantum of sentence, lawyers for the actor pleaded for a lesser term, citing his philanthropic work and the fact that he had paid Rs 19 lakh as compensation to the family of the victim. They also said he was prepared to pay more if ordered to do so. "We are not running away from responsibility," his counsel said.
 
The prosecution, on the other hand, argued for the maximum sentence of 10 years.
 
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The case related to the incident, nearly 13 years ago, on September 28, 2002 when the actor's Land Cruiser went out of control and ran over five persons sleeping on a pavement outside a bakery in the Bandra area of the city. One person died and the four others suffered injuries in the incident.
 
The prosecution said Khan was driving the vehicle when the mishap occurred, that he was driving without a licence and that he was drunk at that time. They also accused him of fleeing from the scene. The actor, on the other hand, said he was not driving, that he was not drunk and that he had not run away from the spot.
 
The prosecution produced eyewitnesses, those who were injured in the accident, employees of the bar where the actor had consumed drinks, doctors who examined his blood samples and forensic experts, among others, as witnesses.
 
In a surprising development, Khan's driver Ashok Singh turned up in court recently, after more than 12 years, and deposed that it was he who was driving the car on that day. He said the front left tyre of the car had burst, leading to the mishap
 
Large crowds of Khan's fans, mediapersons, lawyers and others had gathered outside the court at Kalaghoda to find out about the judgement.
 
The judge pronounced his guilty verdict within minutes after arriving in court and later prounced the quantum of sentence, about two hours later, at 1.10 pm.
 
Khan was charged with culpable homicide not amounting to murder, rash and negligent driving, causing hurt by act endangering life,  causing grievous hurt, causing damage to property, driving vehicle in contravention of rules and driving at great speed after consuming alcohol.
 
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Modi urges RBI to set targets for financial inclusion for banks, FIs

Prime Minister Narendra Modi on Thursday urged the Reserve Bank of India to take the lead in encouraging financial institutions to set concrete targets for financial inclusion over the next 20 years, to help transform the quality of life of the poor.

Prime Minister Narendra Modi addressing the Financial Inclusion Conference organised by the Reserve Bank of India, in Mumbai on April 2, 2015.
Prime Minister Narendra Modi addressing the Financial Inclusion Conference organised by the Reserve Bank of India, in Mumbai on April 2, 2015.
Prime Minister Narendra Modi today urged the Reserve Bank of India (RBI) to take the lead in encouraging financial institutions to set concrete targets for financial inclusion over the next 20 years, to help transform the quality of life of the poor. 
 
"I come as a representative of the poor, underprivileged, marginalized and tribals; I am one among them; I seek on their behalf and trust you will not disappoint me," he said at the RBI Conference on Financial Inclusion here, which also marked the completion of 80 years of the central bank.
 
Mr Modi encouraged RBI to set goals on intermediate targets: of 2019, when the country will celebrate the 150th birth anniversary of Mahatma Gandhi; 2022, 75 years of independence; 2025, 90 years of RBI, and 2035, 100 years of RBI. 
 
He said the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the Direct Benefit Transfer of LPG subsidy (DBTL), had shown the potential of the enormous role that the banking sector can play in ensuring financial inclusion. 
 
Calling for making financial inclusion a "habit", Mr Modi asked banks to take inspiration from the success of women self-help groups. He asked banks to keep in mind the requirement of youth who needed either knowledge or skills. He also gave the example of the soon-to-be-launched Micro Units Development Refinance Agency (MUDRA) Bank in this regard and urged banks to come up with creative financial inclusion instruments to help prevent farmer suicides. 
 
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The Prime Minister said that, along with economic and social parameters, there was need to think of a geographical parameter as well for financial inclusion. He said eastern India had immense economic potential, and the banking sector should recognize and plan for this. 
 
Appreciating the role played by RBI over the last 80 years, the Prime Minister complimented the RBI Governor Raghuram Rajan for his grasp and clarity on economic issues. 
 
As part of the Make in India initiative, the Prime Minister urged RBI to take the lead in ensuring that India starts to manufacture the paper and ink that are used to print currency notes. 
 
Apart from Dr Rajan, Maharashtra Governor C. Vidyasagar Rao, Chief Minister Devendra Fadnavis and Union Finance Minister Arun Jaitley were amongst those present on the occasion.
 
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RBI cuts repo rate by 25 bps to 7.5%, keeps CRR unchanged at 4%

Acting for the second time within two months outside the policy review cycle, the Reserve Bank of India on Wednesday, in a surprise move, reduced the key policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect.

 
Acting for the second time within two months outside the policy review cycle, the Reserve Bank of India (RBI) today, in a surprise move, reduced the key policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points (bps) from 7.75 per cent to 7.5 per cent with immediate effect.
 
RBI Governor Raghuram Rajan said in a statement on monetary policy that the central bank had also decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL).
 
He said the RBI would continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions.
 
He said it would continue with daily variable rate repos and reverse repos to smooth liquidity.
 
Consequently, the reverse repo rate under the LAF stood adjusted to 6.5 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 8.5 per cent with immediate effect, he said.
 
The RBI had, on January 15 this year, reduced the repo rate by 25 basis points to 7.75 per cent, stating then that the momentum of inflation had significantly reduced.
 
However, in its Sixth Bi-Monthly Monetary Policy Statement 2014-15 on February 3, the RBI decided to keep the repo rate unchanged at 7.75 per cent, saying there had been no substantial new developments on the disinflationary process or on the fiscal outlook since January 15.
 
Today's decision has come just four days after Finance Minister Arun Jaitley presented his General Budget for 2015-16 to Parliament on February 28.
 
On February 20, the Central Government and the Reserve Bank of India (RBI) had signed a landmark agreement on Monetary Policy Framework under which the RBI will aim to bring inflation below 6 per cent by January 2016.
 
The target for financial year 2016-17 and all subsequent years shall be 4 per cent, with a band of +/- 2 per cent.
 
The agreement, made public on March 2, is a shift towards inflation targeting that Dr Rajan had been advocating for some time.
 
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Dr Rajan said in his statement today that the need to act outside the policy review cycle was prompted by two factors.
 
"First, while the next bi-monthly policy statement will be issued on April 7, 2015 the still weak state of certain sectors of the economy as well as the global trend towards easing suggests that any policy action should be anticipatory once sufficient data support the policy stance. Second, with the release of the agreement on the monetary policy framework, it is appropriate for the Reserve Bank to offer guidance on how it will implement the mandate," he said.
 
He said that, going forward, the RBI would seek to bring the inflation rate to the mid-point of the band of 4 +/- 2 per cent provided for in the agreement with the Governmnt, that is, to 4 per cent by the end of a two-year period starting fiscal year 2016-17.
 
He said the guidance on policy action given in the fifth-bi-monthly monetary policy statement of December 2014 was largely unchanged. 
 
"Further monetary actions will be conditioned by incoming data, especially on the easing of supply constraints, improved availability of key inputs such as power, land, minerals and infrastructure, continuing progress on high-quality fiscal consolidation, the pass through of past rate cuts into lending rates, the monsoon outturn and developments in the international environment," he said.
 
Dr Rajan recalled that, in its statement on monetary policy of January 15, 2015, the RBI had reduced the policy repo rate by 25 basis points and indicated that “Key to further easing are data that confirm continuing disinflationary pressures. Also critical would be sustained high quality fiscal consolidation…”.
 
"While maintaining the interest rate stance in its sixth bi-monthly monetary policy statement of February 3 in the absence of new developments on inflation or on the fiscal outlook till then, the Reserve Bank indicated that it will keenly monitor the revision in the consumer price index (CPI) with regard to the path of inflation in 2015-16 as well as the Union Budget for 2015-16," he said.
 
The statement said the new CPI, rebased to 2012, was released on February 12. Inflation in January 2015 at 5.1 per cent as measured by the new index was well within the target of 8 per cent for January 2015. 
 
"Prices of vegetables declined and, hearteningly, inflation excluding food and fuel moderated in a broad-based manner to a new low. Thus, disinflation is evolving along the path set out by the Reserve Bank in January 2014 and, in fact, at a faster pace than earlier envisaged," it said.
 
"The uncertainties surrounding any inflation projection are, however, not insignificant. Oil prices have firmed up in recent weeks, and significant further strengthening, perhaps as a result of unanticipated geo-political events, will alter the inflation outlook. Other international commodity prices are expected to remain benign, given still-sluggish global demand conditions. Food prices will be affected by the seasonal upturn that typically occurs ahead of the south-west monsoon and, therefore, steps the government takes on food management will be critical in determining the inflation outlook. Finally, the possible spill over of volatility from international financial markets through exchange rate and asset prices channels is also still a significant risk," it said.
 
The RBI said that, perhaps, the most significant influences on near-term inflation would be the strength of aggregate demand relative to available capacity. Two recent developments pertaining to the demand-supply balance are the recently-released GDP estimates and the Union Budget for 2015-16.
 
"The Central Statistical Organisation is to be commended on the changes it has made to the methodology of estimating GDP, bringing India up to international best practice. Yet the picture it presents of a robust economy, with growth having picked up significantly over the last three years, is at odds with still-low direct measures of growth of production, credit, imports and capacity utilisation as well as with anecdotal evidence on the state of the economic cycle. Nevertheless, the picture of a steadily recovering economy appears right," Dr Rajan said.
 
"The fiscal impulses in the Union Budget then assume importance. There are many important and valuable structural reforms embedded in this Budget, which will help improve supply over the medium term. In the short run, however, the postponement of fiscal consolidation to the 3 per cent target by one year will add to aggregate demand. At a time of accelerating economic recovery, this is, prima facie, a source for concern from the standpoint of aggregate demand management, especially with large borrowings intended for public sector enterprises," he said.
 
"Some factors mitigate the concern. The government has emphasized its desire to clean up legacy issues which gave a misleading picture of the true extent of fiscal rectitude, and has also moderated the optimism in its projections. To this extent, the true quantum of fiscal consolidation may be higher than in the headline numbers. Also, the government is transferring a significantly larger amount to the states, without entirely devolving responsibility for funding central programmes. To the extent that state budget deficits narrow, the general fiscal deficit will be lower. 
 
"Furthermore, supported by lower international energy prices, there is a welcome intent to shift from spending on subsidies to spending on infrastructure, and to better target and further reduce subsidies through direct transfers. Finally, the central government has signed a memorandum with the Reserve Bank setting out clear inflation objectives for the latter. This makes explicit what was implicit before – that the government and the Reserve Bank have common objectives and that fiscal and monetary policy will work in a complementary way. In sum, then, the government intends to compensate for the delay in fiscal consolidation with a commitment to an improvement in the quality of adjustment," he said.
 
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Dr Rajan noted that all these mitigating factors had a fair component of intent. The realised net fiscal impulse will depend on both central and state government actions going forward, he said.
 
"Finally, the rupee has remained strong relative to peer countries. While an excessively strong rupee is undesirable, it too creates disinflationary impulses. It bears repeating here that the Reserve Bank does not target a level for the exchange rate, nor does it have an overall target for foreign exchange reserves. It does intervene on occasion, in both directions, to reduce avoidable volatility in the exchange rate. Any reserve build-up is a residual consequence of such actions rather than a direct objective," he said.
 
The RBI said that softer readings on inflation are expected to come in through the first half of 2015-16 before firming up to below 6 per cent in the second half. 
 
"The fiscal consolidation programme, while delayed, may compensate in quality, especially if state governments are cooperative. Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action to utilise available space for monetary accommodation," it added.
 
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Bollywood personalities take a stand, urge people to vote for "secular party"

In an unprecedented move, a group of well-known people from the film and entertainment industry, including filmmakers such as Vishal Bhardwaj, Mahesh Bhatt, Govind Nihalani and Zoya Akhtar, singer Shubha Mudgal and actor Nandita Das, on Wednesday issued an appeal, urging people to vote for the secular party which is most likely to win in their constituency.

Nandita Das
Nandita Das
In an unprecedented move, a group of well-known people from the film and entertainment industry, including filmmakers such as Vishal Bhardwaj, Mahesh Bhatt, Govind Nihalani and Zoya Akhtar, singer Shubha Mudgal and actor Nandita Das, today issued an appeal, urging people to vote for the secular party which is most likely to win in their constituency.
 
"The best thing about our country is its cultural diversity, its pluralism - the co-existence of a number of religions and ethnicities over centuries, and hence the blooming of multiple streams of intellectual and artistic thought," the appeal said.
 
"And, this has been possible only because Indian society has prided itself on being essentially secular in character, rejecting communal hatred, embracing tolerance," it said.
 
The signatories, who also included filmmakers Imtiaz Ali, Kabir Khan and Vijay Krishna Acharya, writer Anjum Rajabali, and actors Swara Bhaskar, Jyoti Dogra and Joy Sengupta, said that the very sense of India was vulnerable today.
 
"The need of the hour is to protect our country's secular foundation. Undoubtedly, corruption and governance are important issues, but we will have to vigilantly work out ways of holding our government accountable to that. However, one thing is clear: India's secular character is not negotiable! Not now, not ever. 
 
"As Indian citizens who love our motherland, we appeal to you to vote for the secular party, which is most likely to win in your constituency," they added.
 
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Other signatories to the appeal include filmmakers Anand Patwardhan, Kundan Shah, Hansal Mehta, , writer-diector Saket Chaudhary, documentary filmmaker Rakesh Sharma, actor Aditi Rao, writer-director Vinay Shukla, writers Sanjay Chhel, Kamlesh Pandey, Robin Bhatt, Rajesh Dubey, Vinod Ranganath, Imteyaz Husain, 
 
Tabla maestro Aneesh Pradhan, lyricists Sameer Anjan, Kauser Munir and Jalees Sherwani, film editors Amitabh Shukla and Nishant Radhakrishnan, art director Sukant Panigrahi, producer Anusha Khan, sound designer Bishwadeep Chatterjee, screen writers Manasee Palshikar, Rukmini Sen, Priyanka Borpujari and Mazahir Rahim, documentary filmmaker Surabhi Sharma and screen writer Sharad Tripathi also signed the appeal.
 
The signatories also included cinematographers Anil Mehta and C K Muraleedharan, producer Preety Ali, filmmaker Sona Jain, theatre activist Sameera Iyengar, playwright Shivani Tibrewala Chand and activists Tushar Gandhi, Teesta Setalvaad and Javed Anand.
 
This is the first time that Bollywood personalities have come out collectively to take a stand during elections in the country, though many of them have been individually associated with political parties. Many have also contested and won elections and also served as Ministers at the Centre.
 
Writer Rajabali, whose brainchild the appeal is, told mediapersons that he was surprised at the readiness with which the younger lot signed the statement and took a stand at a time when they might justifiably be more obsessed with their careers.
 
Actress Nandita Das, who has been involved in a variety of causes, said that she owed whatever she was today to the secular and pluralist upbringing that she had.
 
Without naming any party, she said there was a couple of them which are playing a divisive role. She said that, by laying emphasis on development and governance, these parties were seeking to underplay their divisive record.
 
According to her, there was enough evidence in the public domain about the role these parties had played. She said it was not just about communalism and Muslims, but about all other religious, linguistic and regional groups. In this context, she pointed out the stand taken by various parties on criminalisation of private and consensual sex between adults of the same sex.
 
"I am what I am because of the varied influences that I have experienced. I want my son to grow up with all these many influences," she said. She said the country could not be reduced to a monolith or a homogenous entity. "In our differences lie our unity," she said.
 
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Nine killed in fire on Mumbai-Dehradun Express near Dahanu in Maharashtra

Nine passengers including a woman, were killed when a fire broke out in the speeding 19019 Mumbai-Dehradun Express near Dahanu in Thane district of Maharashtra in the early hours of Wednesday.

Fire kills nine on Mumbai-Dehradun Express
Nine passengers including a woman, were killed when a fire broke out in the speeding 19019 Mumbai-Dehradun Express near Dahanu in Thane district of Maharashtra in the early hours of today.
 
Western Railway sources said the fire broke out in S3 coach of the train and then spread to the adjoining coaches S2 and S4, taking the passengers, most of whom were asleep, unawares.
 
The cause of the fire, which broke out at around 0235 hours today while the train was running between Dahanu Road and Gholwad stations , could not be ascertained immediately, the sources said.
 
According to them, the fire was noticed by a gateman at a level crossing, and he alerted the station master of Gholwad station, who quickly contacted the driver and asked him to stop the train.
 
Fire tenders and ambulances rushed to the spot and the blaze was brought under control soon. The affected coaches were detached and the rest of the train was later brought to Gholwad station, about 145 km north of Mumbai, on the Maharashtra-Gujarat border, around 0530 hours.
 
Accident and medical relief vans were rushed to the spot from Mumbai and Valsad in Gujarat to assist in the relief efforts.
 
Five persons who felt suffocated due to the smoke were given first aid in the acident relief vans and later discharged, te sources said.
 
The Divisional Railway Manager of Mumbai Central Division and other top railway officials rushed to the spot to supervise the relief operations.
 
Five of the deceased have been identified by the Railways as Ms Deepika Shah , 65, Mr Dev Shankar Upadhyay, 48, Mr Surendra Shah, 68, Mr Nasirkhan Ahmedkhan Pathan, 50, and Mr Feroz Khan, 38. 
 
The bodies of the victims were sent to Civil Hospital, Dahanu Road (Telephone No. 02528 222371) by the Government Railway Police.
 
The  Railways have offered free accommodation in the train to the relatives of the deceased up to Dahanu Road.
 
Railways Minister Mallikarjun Kharge has expressed his grief at the loss of lives and announced an ex-gratia payment of Rs 5 lakh to the next-of-kin of those killed in the fire.
 
He has also announced an inquiry by the Commissioner of Railway Safety, Western Circle, into the incident.
 
Meanwhile, services on the up line resumed at 0640 hours, the sources added.
 
About 500 food packets along with tea and drinking water were arranged for the passengers of the train at Valsad where five more coaches were added to the train before dispatching it for its o­nward journey.
 
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The Railways have opened helplines to provide information to relatives of the passengers.
 
The numbers are:
 
Mumbai: 022 23011853 and 022 23007388
Valsaid: 241903- Valsad; 
Dahanu Road: 022 67649632
Bandra Terminus: 022 26435756
Surat: 0261 2423992
New Delhi: 011 23342954
Dehradun: 0135 2624002, 2624003
 
Just 11 days ago, on December 28, 2013, as many as 26 passengers were killed and eight others suffered injuries when a major fire broke out in an air-conditioned coach of the 16594 Bangalore-Nanded Express shortly after it left the Satya Sai Prasanthi Nilayam station in Anantapur district of Andhra Pradesh.
 
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India's forex reserves dip by $ 360.9 million to $ 362.786 billion

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Reversing a four-week uptrend, India's foreign exchange reserves dipped by $ 360.9 million to $ 362.786 billion in the week ended February 10, the Reserve Bank of India (RBI) said here today.
 
The country's forex reserves had soared by $ 1.589 billion to $ 363.147 billion in the previous week.
 
In its weekly statistical supplement, the central bank said that  foreign currency assets, which constitute a major chunk of the forex reserves, had gone up by $ 347.1 million to $ 339.779 billion during the week.
 
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
 
According to the bulletin, the country’s gold reserves remained unchanged at $ 19.248 billion during the week, while its special drawing rights (SDRs) went down $ 5.3 million to $ 1.442 billion.
 
India’s reserve position in the International Monetary Fund (IMF) decreased by $ 8.5 million to $ 2.316 billion during the week, the bulletin added.
 
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Pop sensation Justin Bieber to bring Purpose tour to India in May

Justin Bieber
Justin Bieber
Global pop sensation and Grammy award winner Justin Bieber will bring his Purpose world tour to India in May this year, the promoters of the event announced here today.
 
"The wait is finally over and Beliebers can rejoice! It is officially confirmed – Grammy award winner and global pop sensation Justin Bieber is making his way to the India sub-continent this summer," a press release from White Fox India said.
 
"This highly anticipated event will be the biggest live music act witnessed in recent times in India and will further strengthen India’s position on the global music map," it said.
 
White Fox, the sole promoters of the tour, confirmed that, after a week of speculation and uncertainty, they would bringing the 22-year-old Canadian megastar's Purpose World Tour to the DY Patil Stadium in Mumbai on May 10.
 
The tour is in support of Bieber's fourth album, the critically acclaimed Purpose, in which he has experimented with more exploratory electronic sounds. Apart from India, the Asia leg of the tour comprises Tel Aviv in Israel and Dubai in the United Arab Emirates (UAE), the release said.
 
Purpose, which is Bieber's fourth studio album, debuted at number 1 in over a hundred countries and has sold over eight million copies worldwide.
 
"Bieber is without a doubt one of the most successful pop stars in the world today with a recent world tour imbibing sold out dates across countries," the release said.
 
The release said concert goers can pre-register for tickets at Book My Show for the event. Tickets will go on sale on February 22 and will be priced at Rs. 4000 upwards, it said.
 
 "Concert goers can look forward to a set list that will surely comprise worldwide smash hits including Where Are Ü Now, Boyfriend, Love Yourself, Company, As Long As You Love Me, What Do You Mean?, Baby, Purpose, Encore: Sorry amongst others," it said.
 
Mr. Arjun Jain, Director, White Fox India said, "Justin Bieber is the biggest artiste of our time and attracts a universal fanbase across all ages. This tour is one of the most successful in the world at the moment and will further enhance India’s current cultural repertoire. Justin Bieber will be bringing an extraordinarily epic show propelled by state-of-the-art production and of a magnitude that the country has not witnessed in recent times. There are few artistes who warrant such a dedicated fan base as Justin Bieber. He enjoys a more than 80% dedicated fan following in India and we envisage one of the biggest live events of the year."
 
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"We are expecting a full house on May 10 with one of the biggest arena tours witnessed in recent times. This tour will place India on the global map and open up avenues for other artists of similar stature who may want to consider India as part of their touring roster," he said.
 
The Purpose World Tour has already mesmerized fans and critics alike across the United States, Canada and Japan last year and will tour throughout Europe before landing in Australia and New Zealand this year. 
 
"With more than 100 huge shows on the tour and close to a million ticket sales globally, there is no doubt that Bieber is at the top of his game with this tour," the release said.
 
Purpose is Justin Bieber's first album in two years. Right after its release, Purpose was the most streamed album on Spotify in one week with What Do You Mean as the most played song. The record sold more than 640,000 copies in less than a week.
 
Justin Bieber also holds the record for the highest most Twitter followers for any male user. He also has the highest number of YouTube subscribers for any male singer and became the first artiste to reach 10 billion views on YouTube in 2016. Bieber released his first album "My World 2.0" co-produced by the rapper Usher in 2009 at the age of 14. His single "Baby’" brought the star worldwide recognition and made him the most viewed artist with 4.1 billion views on YouTube. Earlier this fall, Bieber’s hit "Sorry" grabbed 10 million YouTube views in less than 24 hours. Apart from winning at the Grammy Awards, Justin Bieber also has eight new Guinness world records to his credit.
 
He won the Grammy for Best Dance Recording for Where Are You Now in 2016. He had also made headlines for the first ever singer to have seven songs from a debut album to feature on the Billboard Hot 100. Beiber also recently broke the Beatles' 1964 record by topping the American Billboard 17 times.
 
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L&T, MBDA establish joint venture for development of missile systems

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Infrastructure, engineering and defence major Larsen & Toubro (L&T) today said it had established a joint venture with MBDA, a world leader in missile systems, to develop and supply missiles and missile systems to meet the growing potential requirements of the Indian Armed Forces.
 
The joint venture is in recognition of the "path-breaking initiatives" of the Government of India to promote indigenisation of the defence sector under the Make in India campaign, a press release from the company said.
 
The joint venture company, named ‘L&T MBDA Missile Systems Ltd’, will operate from a dedicated work centre, which will include pyrotechnical integration and final checkout facilities. It is expected to be incorporated in the first half of 2017 after necessary approvals, the release said.
 
The release said L&T would own 51% of the company and MBDA, 49%, fully complying with India’s foreign direct investment (FDI) policy norms. The JV will be registered in India and conduct business as an Indian company, subject to Indian laws, it said.
 
The JV would focus on business opportunities in the Missiles and Missile Systems domain and target prospects under the Buy (Indian – IDDM), Buy (Indian) and Buy & Make (Indian) categories of Defence Procurement.
 
"The decision to formalise this partnership, a key milestone for both L&T and MBDA in their long term relationship, was made after extensive evaluation and identifying the strong synergy between the two organisations. L&T and MBDA have collaborated and partnered on co-development and production of major subsystems involving complex technologies and sophisticated weapon systems such as MICA missile launchers and airframe segments including control actuation units for Indian MoD orders," it said.
 
"Having developed a strong working relationship and built mutual trust, L&T and MBDA are convinced that it is the right time for the relationship to mature in to a JV, given the conducive policy environment in the defence sector in India. Both JV partners have a proven track record as trusted suppliers to the Indian Armed Forces - providing critical weapon systems and defence solutions across land, sea and air domains," it said.
 
The release said that, to begin with, the JV company will look to develop and supply fifth generation Anti-Tank Guided Missiles (ATGM5s), missiles for coastal batteries and high speed target drones.
 
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According to it, L&T has been delivering a range of launch systems, fire control systems and airframes / sub-systems for various indigenous weapon (Missile / Rockets / Torpedo) programmes as development partners and production agency to DRDO and DPSUs. 
 
"By combining our manufacturing and system integration capabilities and track record with MBDA’s technological excellence, we now look forward to delivering complete Missile Systems, hitherto imported, to meet the requirements of the Indian armed forces as required under DPP 2016," it said.
 
Mr. A M Naik, the Group Executive Chairman of L&T, said, “We have been trusted partners to DRDO and the Indian Navy, delivering complete weapon systems and platforms, command control and sensor systems, designed, developed and manufactured in India for over three decades. Over this period, we have worked closely with Ministry of Defence, and its different arms in jointly developing and delivering cutting-edge defence solutions."
 
Mr. Antoine Bouvier, Chief Executive Officer, MBDA, said: “Our business strategy in India has always focused on forming partnerships at the deepest level, not just with the armed forces but also with Indian industry. This has seen us involved in the transfer of technology and the production of products and components with the state-owned DPSUs (Defence Public Sector Undertakings) and also with the establishment of very close partnerships with the Indian private sector including large companies and SMEs. The setting up of this JV is a natural progression of our partnership strategy. With L&T, I am convinced that we have found the ideal Indian partner."
 
MBDA is jointly held by Airbus Group (37.5%), BAE Systems and Leonardo (25%).
 
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Second Gateway of India Geoeconomic Dialogue to be held in Mumbai on February 13-14

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The Ministry of External Affairs (MEA) will co-host the Second Gateway of India Geoeconomic Dialogue with Gateway House on February 13-14 in Mumbai
 
The dialogue is India's premier geoeconomics conference on the theme "Where Geopolitics meets Business" focussed on building synergies between business and foreign policy. 
 
The conference will feature an inaugural dialogue where Minister of State for External Affairs M. J. Akbar will be in conversation with his Bangladesh counterpart Mohammed Shahriar Alam. 
 
There will also be keynote addresses by Mr. Yves Leterme, former Prime Minister of Belgium, and Secretary General, International IDEA; and, by Mr. Ravi Shankar Prasad, Union Minister of Law & Justice and Electronics & Information Technology.
 
On February 14, Dr. S. Jaishankar, Foreign Secretary, will be in conversation with Dr. C. Rajamohan, Director, Carnegie India. Other highlights for that day include a Power Dialogue with Mr. Piyush Goyal, Minister of Power, and panel discussions covering topics like Sovereign Funds, Global Taxation, Digital Economy, Indo-Pacific, India’s Defence-Industrial Base, a press release from the MEA added.
 
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India's forex reserves soar by $ 1.589 billion to $ 363.147 billion

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Continuing an uptrend for the fourth consecutive week, India's foreign exchange reserves soared by $ 1.589 billion to $ 363.147 billion in the week ended February 3, the Reserve Bank of India (RBI) said here today.
 
The country's forex reserves had gone up by $ 782.7 million to $ 361.558 billion in the previous week.
 
In its weekly statistical supplement, the central bank said that  foreign currency assets, which constitute a major chunk of the forex reserves, had gone up by $ 914.7 million to $ 340.126 billion during the week.
 
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
 
According to the bulletin, the country’s gold reserves rose by $ 664.3 million to $ 19.248 billion during the week, while its special drawing rights (SDRs) went up by $ 3.8  million to $ 1.448 billion.
 
India’s reserve position in the International Monetary Fund (IMF) increased by $ 6 million to $ 2.324 billion during the week, the bulletin added.
 
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RBI decides to remove cash withdrawal limits from savings bank accounts in two stages

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The Reserve Bank of India (RBI) today said the restrictions on cash withdrawals from savings bank accounts, including accounts opened under Pradhan Mantra Jan Dhan Yojana (PMJDY) in a two-step process.
 
Effective February 20, 2017, the limits on cash withdrawals from the savings bank accounts will be enhanced to Rs. 50,000 per week (from the current limit of Rs. 24,000 per week, a notification sent by the RBI to all banks today said.
 
Effective March 13, 2017, there will be no limits on cash withdrawals from savings bank accounts, it added.
 
The RBI had placed some restrictions on cash withdrawals from ATMs and banks in the wake of the November 8, 2016 demonetisation of Rs. 500 and Rs. 1000 bank notes. The restrictions have been gradually eased in the past few weeks.
 
The notification said this decision was taken in line with the pace of remonetisation.
 
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Full Text: RBI's Sixth Bi-monthly Monetary Policy Statement, 2016-17

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Following is the text of the Sixth Bi-monthly Monetary Policy Statement, 2016-17 and Resolution of the Monetary Policy Committee (MPC) issued by the Reserve Bank of India (RBI) issued here today:
 
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
 
keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
 
Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
 
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Global growth is projected to pick up modestly in 2017, after slowing down in the year gone by. Advanced economies (AEs) are expected to build upon the slow gathering of momentum that started in the second half of 2016, led by the US and Japan. However, uncertainty surrounds the direction of US macroeconomic policies with potential global spillovers. Growth prospects for emerging market economies (EMEs) are also expected to improve moderately, with recessionary conditions ebbing in Russia and Brazil, and China stabilising on policy stimulus. Inflation is edging up on the back of rising energy prices and a mild firming up of demand. However, global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions. Furthermore, financial conditions are likely to tighten as central banks in AEs normalise exceptional accommodation in monetary policy.
 
3. International financial markets turned volatile from mid-January on concerns regarding the ‘Brexit’ roadmap and materialisation of expectations about economic policies of the new US administration. Within the rising profile of international commodity prices, crude oil prices firmed up with the OPEC’s agreement to curtail production. Prices of base metals have also increased on expectations of fiscal stimulus in the US, strong infrastructure spending in China, and supply reductions. Geopolitical concerns have also hardened commodity prices. More recently, the appetite for risk has returned in AEs, buoying equity markets and hardening bond yields as a response to the growing likelihood of further increases in the Federal Funds rate during the year. Coupled with expectations of fiscal expansion in the US, this has propelled the US dollar to a multi-year high.
 
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4. The Central Statistics Office (CSO) released its advance estimates for 2016-17 on January 6, placing India’s real GVA growth at 7.0 per cent for the year, down from 7.8 per cent (first revised estimates released on January 31) a year ago. Agriculture and allied activities posted a strong pick-up, benefiting from the normal south-west monsoon, robust expansion in rabi acreage (higher by 5.7 per cent over the preceding year) and favourable base effects as well as the continuing resilience of allied activities. In contrast, the industrial sector experienced a sharp deceleration, mainly due to a slowdown in manufacturing and in mining and quarrying. Service sector activity also lost pace, concentrated in trade, hotels, transport and communication services, and construction, cushioned to some extent by public administration and defence.
 
5. Industrial output measured by the index of industrial production (IIP) finally shrugged off the debilitating drag from insulated rubber cables from November and was also pushed up by a favourable base effect. In December, the output of core industries accelerated on a year-on-year as well as on a sequentially seasonally adjusted basis. The drivers of the upturn were steel production and petroleum refinery throughput, the former, inter alia, supported by import tariff safeguards and the latter buoyed by external demand. The acceleration in coal production and thermal electricity generation since November after three consecutive months of contraction augur well for the outlook for power. Reflecting these developments, the manufacturing purchasing managers’ index (PMI) returned to expansion mode in January on the back of growth of new orders and output, and the future output index has risen strongly. On the other hand, the 76th round of the Reserve Bank’s industrial outlook survey suggests that financing conditions facing the manufacturing sector have worsened in Q3 of 2016-17 and are expected to remain tight in Q4. This is corroborated by the sharp slowdown in bank credit to industry and continuing sluggishness in the investment climate in some sectors.
 
6. High frequency indicators point to subdued activity in the services sector, particularly automobile sales across all segments, domestic air cargo, railway freight traffic, and cement production. Nevertheless, some areas stand out as bright spots, having weathered the transient effects of demonetisation – steel consumption; port traffic; international air freight; foreign tourist arrivals; tractor sales; and, cellular telephone subscribers. The services PMI for January 2017 remained in retrenchment, but the fall in output was the least in the current phase of three consecutive months of contraction.
 
7. Marking the fifth consecutive month of softening, retail inflation measured by the headline consumer price index (CPI) turned down sharper than expected in December and reached its lowest reading since November 2014. This outcome was driven by deflation in the prices of vegetables and pulses. Some moderation in the rate of increase in prices of protein-rich items – eggs, meat and fish – also aided the downturn in food inflation.
 
8. Excluding food and fuel, inflation has been unyielding at 4.9 per cent since September. While some part of this inertial behaviour is attributable to the turnaround in international crude prices since October – which fed into prices of petrol and diesel embedded in transport and communication – a broad-based stickiness is discernible in inflation, particularly in housing, health, education, personal care and effects (excluding gold and silver) as well as miscellaneous goods and services consumed by households.
 
9. The large overhang of liquidity consequent upon demonetisation weighed on money markets in December, but from mid-January rebalancing has been underway with expansion of currency in circulation and new bank notes being injected into the system at an accelerated pace. Throughout this period, the Reserve Bank’s market operations have been in liquidity absorption mode. With the abolition of the incremental cash reserve ratio from December 10, liquidity management operations have consisted of variable rate reverse repos under the LAF of tenors ranging from overnight to 91 days and auctions of cash management bills under the market stabilisation scheme (MSS) of tenors ranging from 14 to 63 days. The average daily net absorption under the LAF was Rs. 1.6 trillion in December, Rs. 2.0 trillion in January and Rs. 3.7 trillion in February (up to February 7) while under the MSS, it was Rs. 3.8 trillion, Rs. 5.0 trillion and Rs.  2.9 trillion, respectively. Money market rates remained aligned with the policy repo rate albeit with a soft bias, with the weighted average call money rate (WACR) averaging 18 basis points below the policy rate during December and January.
 
10. Turning to the external sector, export growth remained in the positive zone for the fourth month in succession in December. Imports other than petroleum oil and lubricants (POL) came out of the spike in November and moderated in December. In contrast, there was an increase of over 10 per cent in POL imports, in part reflecting the rise in international crude oil prices. Overall, the trade deficit shrank both sequentially and on a year-on-year basis, being lower for the period April-December by US$ 23.5 billion than its level a year ago. On the whole, the current account deficit is likely to remain muted and below 1 per cent of GDP in 2016-17. While the buoyancy in net foreign direct investment was sustained, there have been portfolio outflows beginning October on uncertainty relating to the direction of US macroeconomic policies and expectations of faster normalisation of US monetary policy in the year ahead. Foreign exchange reserves were at US$ 363.1 billion on February 3, 2017.
 
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Outlook
 
11. In the fifth bi-monthly statement of December, headline inflation was projected at 5 per cent in Q4 of 2016-17 with risks lower than before but still tilted to the upside. The decline in headline CPI inflation in November and December has been larger than expected, but almost exclusively on the back of deflation in vegetables and pulses. While the seasonal ebb in the prices of vegetables that usually occurs with the onset of winter as well as some demand compression may have contributed to this outcome, anecdotal evidence points to some distress sales of perishables having accentuated the decline in vegetable prices, with spillovers into January as well. Looking beyond, prices of pulses are likely to remain soft with comfortable supply conditions, while vegetable prices may potentially rebound as the effects of demonetisation wear off.
 
12. The Committee is of the view that the persistence of inflation excluding food and fuel could set a floor on further downward movements in headline inflation and trigger second-order effects. Nevertheless, headline CPI inflation in Q4 of 2016-17 is likely to be below 5 per cent. Favourable base effects and lagged effects of demand compression may mute headline inflation in Q1 of 2017-18. Thereafter, it is expected to pick up momentum, especially as growth picks up and the output gap narrows. Moreover, base effects will reverse and turn adverse during Q3 and Q4 of 2017-18. Accordingly, inflation is projected in the range of 4.0 to 4.5 per cent in the first half of the financial year and in the range of 4.5 to 5.0 per cent in the second half with risks evenly balanced around this projected path. In this context, it is important to note three significant upside risks that impart some uncertainty to the baseline inflation path – the hardening profile of international crude prices; volatility in the exchange rate on account of global financial market developments, which could impart upside pressures to domestic inflation; and the fuller effects of the house rent allowances under the 7th Central Pay Commission (CPC) award which have not been factored in the baseline inflation path. The focus of the Union budget on growth revival without compromising on fiscal prudence should bode well for limiting upside risks to inflation.
 
13. GVA growth for 2016-17 is projected at 6.9 per cent with risks evenly balanced around it. Growth is expected to recover sharply in 2017-18 on account of several factors. First, discretionary consumer demand held back by demonetisation is expected to bounce back beginning in the closing months of 2016-17. Second, economic activity in cash-intensive sectors such as retail trade, hotels and restaurants, and transportation, as well as in the unorganised sector, is expected to be rapidly restored. Third, demonetisation-induced ease in bank funding conditions has led to a sharp improvement in transmission of past policy rate reductions into marginal cost-based lending rates (MCLRs), and in turn, to lending rates for healthy borrowers, which should spur a pick-up in both consumption and investment demand. Fourth, the emphasis in the Union Budget for 2017-18 on stepping up capital expenditure, and boosting the rural economy and affordable housing should contribute to growth. Accordingly, GVA growth for 2017-18 is projected at 7.4 per cent, with risks evenly balanced.
 
14. The Committee remains committed to bringing headline inflation closer to 4.0 per cent on a durable basis and in a calibrated manner. This requires further significant decline in inflation expectations, especially since the services component of inflation that is sensitive to wage movements has been sticky. The committee decided to change the stance from accommodative to neutral while keeping the policy rate on hold to assess how the transitory effects of demonetisation on inflation and the output gap play out.
 
15. The Reserve Bank has conducted market liquidity operations consistent with the liquidity management framework put in place in April 2016, progressively moving the system level ex ante liquidity conditions to close to neutrality. This stance will continue. Surplus liquidity should decline with progressive remonetisation. Nonetheless, the currently abundant liquidity with banks is likely to persist into the early months of 2017-18. The Reserve Bank is committed to ensuring efficient and appropriate liquidity management with all the instruments at its command to ensure close alignment of the WACR with the policy rate, improved transmission of policy impulses to lending rates, and adequate flow of credit to productive sectors of the economy.
 
16. The Committee believes that the environment for timely transmission of policy rates to banks lending rates will be considerably improved if (i) the banking sector’s non-performing assets (NPAs) are resolved more quickly and efficiently; (ii) recapitalisation of the banking sector is hastened; and, (iii) the formula for adjustments in the interest rates on small savings schemes to changes in yields on government securities of corresponding maturity is fully implemented.
 
17. Six members voted in favour of the monetary policy decision. The minutes of the MPC’s meeting will be published by February 22, 2017.
 
18. The next meeting of the MPC is scheduled on April 5 and 6, 2017.
 
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RBI keeps repo rate unchanged at 6.25%, says committed to bringing inflation closer to 4%

 
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) today decided to keep the key policy repo rate under the liquidity adjustment (LAF) unchanged at 6.25 percent.
 
Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent, a resolution adopted by the MPC at its meeting here today.
 
In its Sixth Bi-monthly Monetary Policy Statement, 2016-17, the RBI said the decision of the MPC was consistent with a neutral stance of monetary  policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth.
 
The resolution said the committee remained committed to bringing headline inflation closer to 4.0 per cent on a durable basis and in a calibrated manner. 
 
"This requires further significant decline in inflation expectations, especially since the services component of inflation that is sensitive to wage movements has been sticky. The committee decided to change the stance from accommodative to neutral while keeping the policy rate on hold to assess how the transitory effects of demonetisation on inflation and the output gap play out," it said.
 
The statement said the RBI had conducted market liquidity operations consistent with the liquidity management framework put in place in April 2016, progressively moving the system level ex ante liquidity conditions to close to neutrality. 
 
"This stance will continue. Surplus liquidity should decline with progressive remonetisation. Nonetheless, the currently abundant liquidity with banks is likely to persist into the early months of 2017-18. The Reserve Bank is committed to ensuring efficient and appropriate liquidity management with all the instruments at its command to ensure close alignment of the WACR with the policy rate, improved transmission of policy impulses to lending rates, and adequate flow of credit to productive sectors of the economy.
 
"The Committee believes that the environment for timely transmission of policy rates to banks lending rates will be considerably improved if (i) the banking sector’s non-performing assets (NPAs) are resolved more quickly and efficiently; (ii) recapitalisation of the banking sector is hastened; and, (iii) the formula for adjustments in the interest rates on small savings schemes to changes in yields on government securities of corresponding maturity is fully implemented," it said.
 
According to the statement, six members voted in favour of the monetary policy decision. The minutes of the MPC’s meeting will be published by February 22, it said.
 
Setting out the main considerations underlying the decision, the statement said global growth was projected to pick up modestly in 2017, after slowing down in the year gone by. 
 
"Advanced economies (AEs) are expected to build upon the slow gathering of momentum that started in the second half of 2016, led by the US and Japan. However, uncertainty surrounds the direction of US macroeconomic policies with potential global spillovers. Growth prospects for emerging market economies (EMEs) are also expected to improve moderately, with recessionary conditions ebbing in Russia and Brazil, and China stabilising on policy stimulus," it said.
 
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The statement said inflation was edging up on the back of rising energy prices and a mild firming up of demand. However, global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions. Furthermore, financial conditions are likely to tighten as central banks in AEs normalise exceptional accommodation in monetary policy.
 
The MPC noted that the Central Statistics Office (CSO), in its advance estimates for 2016-17, placed India’s real GVA growth at 7.0% for the year, down from 7.8% a year ago.
 
"Agriculture and allied activities posted a strong pick-up, benefiting from the normal south-west monsoon, robust expansion in rabi acreage (higher by 5.7% over the preceding year) and favourable base effects as well as the continuing resilience of allied activities. In contrast, the industrial sector experienced a sharp deceleration, mainly due to a slowdown in manufacturing and in mining and quarrying. Service sector activity also lost pace, concentrated in trade, hotels, transport and communication services, and construction, cushioned to some extent by public administration and defence," it said.
 
The statement said that, marking the fifth consecutive month of softening, retail inflation measured by the headline consumer price index (CPI) turned down sharper than expected in December and reached its lowest reading since November 2014. 
 
Excluding food and fuel, inflation has been unyielding at 4.9 per cent since September, it said.
 
"While some part of this inertial behaviour is attributable to the turnaround in international crude prices since October – which fed into prices of petrol and diesel embedded in transport and communication – a broad-based stickiness is discernible in inflation, particularly in housing, health, education, personal care and effects (excluding gold and silver) as well as miscellaneous goods and services consumed by households.
 
"The large overhang of liquidity consequent upon demonetisation weighed on money markets in December, but from mid-January rebalancing has been underway with expansion of currency in circulation and new bank notes being injected into the system at an accelerated pace. Throughout this period, the Reserve Bank’s market operations have been in liquidity absorption mode. With the abolition of the incremental cash reserve ratio from December 10, liquidity management operations have consisted of variable rate reverse repos under the LAF of tenors ranging from overnight to 91 days and auctions of cash management bills under the market stabilisation scheme (MSS) of tenors ranging from 14 to 63 days. 
 
"The average daily net absorption under the LAF was ? 1.6 trillion in December, ? 2.0 trillion in January and ? 3.7 trillion in February (up to February 7) while under the MSS, it was ? 3.8 trillion, ? 5.0 trillion and ? 2.9 trillion, respectively. Money market rates remained aligned with the policy repo rate albeit with a soft bias, with the weighted average call money rate (WACR) averaging 18 basis points below the policy rate during December and January," it said.
 
The resolution said export growth remained in the positive zone for the fourth month in succession in December. Imports other than petroleum oil and lubricants (POL) came out of the spike in November and moderated in December. In contrast, there was an increase of over 10 per cent in POL imports, in part reflecting the rise in international crude oil prices. Overall, the trade deficit shrank both sequentially and on a year-on-year basis, being lower for the period April-December by US$ 23.5 billion than its level a year ago.
 
"On the whole, the current account deficit is likely to remain muted and below 1 per cent of GDP in 2016-17. While the buoyancy in net foreign direct investment was sustained, there have been portfolio outflows beginning October on uncertainty relating to the direction of US macroeconomic policies and expectations of faster normalisation of US monetary policy in the year ahead. Foreign exchange reserves were at US$ 363.1 billion on February 3, 2017," it said.
 
The MPC noted that, in the fifth bi-monthly statement of December, headline inflation was projected at 5% in Q4 of 2016-17 with risks lower than before but still tilted to the upside. 
 
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"The decline in headline CPI inflation in November and December has been larger than expected, but almost exclusively on the back of deflation in vegetables and pulses. While the seasonal ebb in the prices of vegetables that usually occurs with the onset of winter as well as some demand compression may have contributed to this outcome, anecdotal evidence points to some distress sales of perishables having accentuated the decline in vegetable prices, with spillovers into January as well. Looking beyond, prices of pulses are likely to remain soft with comfortable supply conditions, while vegetable prices may potentially rebound as the effects of demonetisation wear off.
 
"The Committee is of the view that the persistence of inflation excluding food and fuel could set a floor on further downward movements in headline inflation and trigger second-order effects. Nevertheless, headline CPI inflation in Q4 of 2016-17 is likely to be below 5 per cent. Favourable base effects and lagged effects of demand compression may mute headline inflation in Q1 of 2017-18. Thereafter, it is expected to pick up momentum, especially as growth picks up and the output gap narrows. Moreover, base effects will reverse and turn adverse during Q3 and Q4 of 2017-18. 
 
"Accordingly, inflation is projected in the range of 4.0 to 4.5 per cent in the first half of the financial year and in the range of 4.5 to 5.0 per cent in the second half with risks evenly balanced around this projected path. 
 
"In this context, it is important to note three significant upside risks that impart some uncertainty to the baseline inflation path – the hardening profile of international crude prices; volatility in the exchange rate on account of global financial market developments, which could impart upside pressures to domestic inflation; and the fuller effects of the house rent allowances under the 7th Central Pay Commission (CPC) award which have not been factored in the baseline inflation path. The focus of the Union budget on growth revival without compromising on fiscal prudence should bode well for limiting upside risks to inflation," it said.
 
The statement said GVA growth for 2016-17 was projected at 6.9% with risks evenly balanced around it. 
 
"Growth is expected to recover sharply in 2017-18 on account of several factors. First, discretionary consumer demand held back by demonetisation is expected to bounce back beginning in the closing months of 2016-17. Second, economic activity in cash-intensive sectors such as retail trade, hotels and restaurants, and transportation, as well as in the unorganised sector, is expected to be rapidly restored. Third, demonetisation-induced ease in bank funding conditions has led to a sharp improvement in transmission of past policy rate reductions into marginal cost-based lending rates (MCLRs), and in turn, to lending rates for healthy borrowers, which should spur a pick-up in both consumption and investment demand. Fourth, the emphasis in the Union Budget for 2017-18 on stepping up capital expenditure, and boosting the rural economy and affordable housing should contribute to growth. Accordingly, GVA growth for 2017-18 is projected at 7.4 per cent, with risks evenly balanced," it added.
 
The next meeting of the MPC is scheduled on April 5 and 6, 2017.
 
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Reliance Jio says Airtel statement on provisioning of POI capacity "misleading"

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Newcomer Reliance Jio Infocomm Limited (RJIL) today described as "malicious and misleading" a statement by telecom services provider Bharti Airtel in which it had said that had provisioned adequate points of interconnect (PoI) capacity to RJIL.
 
"This latest statement is a continuation of Airtel’s ongoing mischievous and motivated campaign to divert attention from its anti-competitive and anti-consumer actions and violations of license conditions which are being investigated by the authorities," a statement from RJIL said.
 
The Mukesh Ambani-led RJIL said more than 2.6 crore NLD calls were still failing daily, amounting to 53.4% call failure (as on January 31) as against the TRAI norm of 0.5%. 
 
Earlier in the day, Airtel said it had provided a total of over 35,000 PoIs to RJIL in a record time of just five months. Of these,  27,719 PoIs - 79% of the total - had been dedicated for incoming calls from Jio customers, which is the highest amongst all operators, the Sunil Bharti Mittal-led company said.
 
Airtel also said the PoIs had been provided well above the customer growth projection provided to it by Jio. "The capacity provided is ideal for serving over 190 million customers on the Jio network and is more than double of the 72.5 million total customers currently claimed by Jio," it said.
 
"More importantly, the above mentioned capacity has been released at a staggering pace, something not seen before in the Indian telecom industry and is much more than comparable capacity provided by Airtel to other operators," it said.
 
Citing its own figures, RJIL, however, said the high NLD call failure rate of 53.4% was inspite of intervention by the authorities and censure proceedings against Airtel.
 
"There has always been a lag in POIs required and POIs provided by Airtel resulting in severe service issues for Indian customers," it said.
 
"There are no technical issues in the RJIL network as evident from the fact that call failures on access network have reduced from 59.1% to 0.6% (as on 31-Jan-2017) after Airtel was compelled to provide POIs post intervention by the authorities. Further, there are no call failures in Jio-to-Jio calls," it said.
 
"Airtel’s claim of having provided 35,000 POIs to Jio is misleading given that, in reality, it has not even done port allocation (first step of implementation) for over 1,100 of these PoIs. Airtel continues to issue demand notes for these PoIs to slow down the process, whereas no payment is due under the Interconnection Agreement. As has been repeatedly pointed out to Airtel, there has been no delay whatsoever in activating PoIs by RJIL. The reasons range from long delay in allocation of PoIs by Airtel, lack of media readiness of Airtel, use of electrical interfaces etc. There has been no delay from RJIL in activating the PoIs," the RJIL statement said.
 
The statement said Airtel had indulged in a "completely arbitrary comparison" of PoIs allocated to other operators as against those allocated to RJIL. 
 
"Traffic from no two operators will be alike and operators must not try to control the traffic from their customers. RJIL has passed on the benefits of a more efficient technology to its customers in the form of free voice services. Airtel did not invest in new technologies and is now trying to prevent customers from enjoying benefits of superior service offered by a new operator, while misleading customers and causing reputational damage to RJIL by claiming that there are technical issues in RJIL network. India’s telecom sector has tended to progress due to disruptive innovation brought in by newcomers, but unfortunately, Airtel is trying to block such initiatives," it said.
 
RJIL said Airtel’s insinuation that RJIL had not complied with TRAI’s tariff orders was "bizarre and defamatory considering that TRAI has already responded to its complaints by stating categorically that RJIL’s tariffs are compliant with the tariff orders of TRAI and other applicable regulations."
 
"Airtel’s statement that IUC regime assumes symmetric traffic is funny to say the least. If the traffic is symmetric, the earnings and payments towards IUC cancel out each other and there need not be any IUC charges. This is what has happened in most of the other markets. Further, Airtel’s cry for higher IUC stems from the inability to retain customers by providing telecom services at cheaper cost. Seemingly, Airtel wants other operators to subsidize its operations," it said.
 
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"Airtel is once again trying to portray that it has done a favour by providing PoIs to RJIL, whereas it may be noted that all operators have a mandatory and unconditional obligation under the license to provide adequate PoIs to all the other operators. This is irrespective of the traffic pattern and is not a favour to any operator," the RJIL statement added.
 
On its part, Airtel said that, ever since the commercial launch of services by Jio in September 2016, it had honoured its regulatory obligations and ensured that there were no capacity constraints from its end and customers were not inconvenienced. In fact, Airtel has been providing PoIs to Jio, well ahead of the commencement of its commercial operations, it said.
 
"It, therefore, appears that the constant rhetoric by Jio with regard to PoIs is aimed at covering up technical issues in their own network or their inability to activate the PoIs given," Airtel said.
 
"On the contrary, due to continued non-compliance of TRAI’s tariff orders by Jio by providing free services for the past 5-6 months, there is a tsunami of incoming voice traffic on the Airtel network, thereby, impacting the service experience of our customers. The huge asymmetry in traffic due to Jio’s free offers has also resulted complete failure of the present IUC regime, which assumes nearly symmetric traffic while fixing the below cost termination charge. The present termination charge of 14 paise is less than half of the actual cost of terminating calls on the network, resulting in huge loss to the company," the statement added.
 
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Maharashtra to become Open Defecation Free by March 2018: State official

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Maharashtra will be declared Open Defecation Free (ODF) by March 2018, State Chief Secretary Swadhin Kshatriya said today.
 
At a meeting with Secretary, Ministry of Drinking Water and Sanitation Parameswaran Iyer, Mr Kshatriya stated that Maharashtra is on track to achieve this goal.
 
The State Government has set up a strong third party-verification system for ODF declarations, Maharashtra was not only aiming for ODF achievement, but also at including hand washing, menstrual hygiene and community toilets as part of Swachh Bharat implementation, he added.
 
Multiple cleanliness campaigns such as Clean Offices, Clean GPs, Clean Schools, are also underway in the State, he said.
 
Mr Iyer assured the State of full support from the Ministry in its efforts. Under the Zilla Swachh Bharat Prerak initiative, a Prerak will be provided at district-level in the State to support SBM(G) activities by the Ministry, in association with the Tata Trusts.
 
The Secretary made a presentation to Managing Directors of all Western Region PSUs in presence of Secretary, Department of Public Enterprises, to encourage them to contribute to the Swachh Bharat Mission.
 
The presentation was well-received, with many PSUs mentioning initiatives currently undertaken by them, including school sanitation, toilets along highways etc., an official press release said.
 
The Secretary, Department of Public Enterprises, stressed at the meeting that the PSUs must train their workers and management trainees as sanitation champions and agents of change.
 
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Navy chief Admiral Sunil Lanba reviews Tropex 2017

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Admiral Sunil Lanba, Chief of the Naval Staff (CNS), has, over the past two days, reviewed the ongoing annual Theatre level Readiness and Operational Exercise (TROPEX) 2017.
 
The exercise has been underway since January 24. The CNS was accompanied by General Bipin Rawat, Chief of the Army Staff and Vice- Admiral Girish Luthra, Flag Officer Commanding-in-Chief, Western Naval Command.
 
The Navy chief, who embarked ships of the Indian Fleet (both Western & Eastern) during the review, witnessed a host of exercises including gunnery shoots, surface-to-air missile engagements, Brahmos firing and operations of the combined fleet in a complex multi-threat environment including sub-surface and air threats.
 
The high-point of the exercise was Large Force Engagement (LFE) by the fleet units against threast simulated by air element from Indian Air Force comprising AWACS, SU 30s, Jaguars and IL 78 (AAR).
 
These threats emanated from different directions and were neutralised by using Beyond Visual Range (BVR) missile capabilities of MiG 29Ks, the integral air arm of the Indian Navy, operating from INS Vikramaditya in coordination with other fleet units.
 
All these exercises validated the combat effectiveness of IN platforms, an official press release said.
 
The Navy Chief, in his address to the fleet, congratulated the men for keeping the fleet combat ready at all times and executing all assigned tasks in a most professional manner. He also mentioned that training during peacetime has to be at par with how the Navy would perform during the war. He stressed the importance of taking bold decisions with due cognisance to risks involved and ensuring safety of men and material.
 
TROPEX 2017 is a month long exercise/ war drill, encompassing all dimensions of maritime warfare. It is witnessing participation of over 60 ships, five submarines and more than 70 naval aircraft.
 
It also includes participation of a large number of assets from the Indian Air Force, such as Su-30 and Jaguar fighters, AWACS, C 130J Hercules and in-flight refuelling aircraft, Infantry amphibious elements from Indian Army and ships/ aircraft from the Indian Coast Guard.
 
The area of operations for TROPEX 2017 exercise spans across the vast expanse of the Arabian Sea and North Central Indian Ocean and serves as an opportunity to validate the Indian Navy’s Concepts of Operation, the release said.
 
As a part of the exercise, niche capabilities of the Marine Commandoes (MARCOs) and Army Special Forces, including Airborne Assault and Combat Free Fall were undertaken from IAF C-130 aircraft.
 
The Naval forces, while enforcing sea and airspace control all around the affected islands, undertook beaching and heli-borne operations for landing of follow-on forces.
 
The exercise culminated with restoration of sovereign control over the affected islands, by the Armed Forces. During debrief of the exercise, CNS and COAS discussed various options to further enhance the effectiveness of the joint exercise.
 
TROPEX 17 assumes special significance in the backdrop of the current security scenario, being aimed at testing combat readiness of the combined fleets of the Indian Navy, and the assets of the Indian Air Force, Indian Army and the Indian Coast Guard.
 
It will also strengthen inter-operability and joint operations in a complex environment, the release added.
 
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India's forex reserves rise by $ 782.7 million to $ 361.558 billion

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Maintaining an uptrend for the third consecutive week, India's foreign exchange reserves rose by $ 782.7 million to $ 361.558 billion in the weeek ended January 27, the Reserve Bank of India (RBI) said here today.
 
The country's forex reserves had soared by $ 932.4 million to $ 360.775 billion in the previous week.
 
In its weekly statistical supplement, the central bank said that  foreign currency assets, which constitute a major chunk of the forex reserves, had gone up by $ 776.9 million to $ 339.211 billion during the week.
 
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
 
According to the bulletin, the country’s gold reserves remained unchanged at $ 18.584 billion during the week, while its special drawing rights (SDRs) went up by $ 2.2  million to $ 1.444 billion.
 
India’s reserve position in the International Monetary Fund (IMF) increased by $ 3.6 million to $ 2.318 billion during the week, the bulletin added.
 
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India experiences 21% drop in consumer gold buying in 2016: WGC

 
Even as global gold demand rose 2% in 2016 to reach 4309 tonnes (t), the highest level since 2013, and inspite of resilient consumer demand in the fourth quarter, India and China, the two leading gold markets, experienced a drop in consumer buying in the year, faling 21% and 7%, respectively.
 
According to the World Gold Council’s (WGC) latest Gold Demand Trends report, Indian demand also faced a raft of challenges throughout the year, including regulatory changes, culminating in the surprise demonetisation policy, which severely hampered demand in both the jewellery and retail investment sectors.
 
“The Indian market faces a challenging time in 2017. We anticipate many of the headwinds that affected demand in 2016 to continue into this year, but we are confident that the Government's move towards a more transparent gold market will ensure that gold remains an important asset class for millions of people in India," Mr. Alistair Hewitt, Head of Market Intelligence at the World Gold Council, said.
 
In China, jewellery demand was dampened due to a high gold price throughout much of the year, coupled with constrained levels of supply in Q4, owing to a tightening of currency controls in the country, the report said.
 
The report said global gold demand was largely driven by inflows into gold-backed Exchange Traded Funds (ETFs) of 532t, the second-highest year on record, as investors responded to concerns over future monetary policy, geopolitical uncertainty and negative interest rates.
 
Continued global economic and political uncertainty, most notably Brexit, the US election and currency weakness in China, helped to boost overall investment demand by 70%, to a four-year high of 1,561t.   The price dip in November led to a strong recovery in the bar and coin market in the final quarter of 2016, although this did not offset weak demand in the first three quarters; annual demand reached 1,029t, down 2% year-on-year.
 
Mr. Hewitt said: “2016 saw an unprecedented degree of political upheaval, which underpinned huge institutional investor flows into gold. Retail investors – having been subdued for most of the year - responded quickly to the price fall in Q4, a fact reflected by a surge in demand in the physical market. With an equally uncertain political and economic environment likely in 2017, we expect investment demand to remain buoyant.”
 
While overall investment demand rose sharply, it was counterbalanced by declines in both jewellery, a 15% fall in 2016 to 2,042t, and central bank purchases. Central banks faced a challenging backdrop, with increased pressure on foreign exchange reserves resulting in demand falling by 33% to 384t for the year. Despite this, 2016 was the seventh consecutive year of net purchases by central banks.
 
The report said total supply reached 4,571t in 2016, an increase of 5% compared with 2015. 
 
Growth in the sector was supported by net producer hedging, which doubled in 2016, as gold producers saw an opportunity to secure cashflow at higher prices. It was also supported by high levels of recycling in Europe and the Middle East, driven by weak currencies and a high gold price. 
 
Mine production remained virtually unchanged from 2015 as a result of industry cost-cutting schemes, however, higher gold prices and lower costs have seen a renewed interest in exploration and increased project development is likely in the years ahead.
 
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The report said overall demand for FY 2016 went up by 2% from 4216t in 2015 to 4309t.  Total consumer demand for FY 2016 fell by 11% to 3,071t, from 3,436t in 2015.  Total investment demand grew by 70% to 1,561t in FY 2016 from 919t in 2015. Global jewellery demand was down 15% at 2,042t, compared with 2,389t in 2015.
 
Central bank demand was 384t, down 33% compared with 577t in 2015.        Demand in the technology sector decreased by 3% to 322t from 332t in 2015. 
 
Total supply grew by 5% to 4,571t this year from 4,363t during 2015. This was largely driven by recycling, which increased 17% to 1,309t from 1,117t in 2015.
 
During the fourth quarter of 2016, overall demand was 994t, a fall of 11% compared with 1,123t in Q4 2015. Total consumer demand increased by 5% to 989t from 940t in Q4 2015. Total investment demand fell 21% to 174t this quarter compared with 220t last year. Global jewellery demand was down 5% at 622t, compared with 653t in Q4 2015.
 
Central bank demand reached 114t this quarter, a fall of 32% from 169t in Q4 2015. Demand in the technology sector increased by 3% year-on-year, up to 84t compared with 82t during Q4 2015.
 
Total supply fell by 4% to 1,036t this quarter from 1,081t during Q4 2015.  Recycling increased by 5% to 250t during the fourth quarter, from 239t during Q4 last year, the report added.
 
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Arjun Dhawan appointed Whole Time Director & Group CEO of HCC

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Infrastructure major Hindustan Construction Company (HCC) today appointed Mr. Arjun Dhawan as its Whole Time Director & Group Chief Executive Officer (CEO) with effect from April 1, 2017.
 
He will succeed Mr. Rajgopal Nogja, who has decided to step down from the Group CEO’s post to pursue his own interests, a press release from the company said.
 
Mr. Nogja will continue in his present role till March 31, 2017. He will, however, continue to be a Delegate of the Board of Steiner AG, Switzerland, a HCC Group Company on a 20% time commitment basis, it said.
 
“Rajgopal’s leadership has made significant contribution to HCC’s success as the country’s premier infrastructure company during a difficult economic period. We understand and support his decision to step down and wish him well. Rajgopal will remain associated with the HCC Group by continuing to oversee Steiner AG, Switzerland,” said Mr. Ajit Gulabchand, Chairman and Managing Director, HCC.
 
Mr. Dhawan will oversee the HCC Group businesses including HCC Limited, HCC Concessions Limited, Lavasa Corporation Limited, Steiner India and Charosa Wineries Limited. Prior to being appointed to this position, Mr. Dhawan has been the President & CEO of the Infrastructure business since November, 2009.
 
“Arjun is deeply familiar with the company's strategy and leadership team. HCC’s growing order backlog and the receipt of over Rs. 2000 crores of arbitration monies post the cabinet decision has poised HCC for success. We are confident the company will grow and deliver robust performance under his stewardship," Mr. Gulabchand said.
 
Mr. Dhawan holds an MBA from Harvard Business School and is a BA in Mathematics and Economics from Middlebury College. Prior to starting his career at HCC, Mr. Dhawan acquired global expertise in the area of investment management across various businesses and industries. As Managing Director with Arya Capital Management (Mumbai) and formerly with Trellus Management Company (New York), Mr. Dhawan oversaw material portfolios comprising equity investments and real estate assets. During an earlier stint with Banc of America Securities, he helped build a proprietary investment group focused on distressed strategic assets. As a former investment banker in New York with Donaldson, Lufkin & Jenrette and Credit Suisse First Boston, Mr. Dhawan has executed large leveraged buyout, high yield, M&A and equity transactions across multiple industries and geographies.
 
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RBI lifts restrictions on ATM withdrawals, retains weekly limit of Rs. 24,000 for savings bank accounts

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The Reserve Bank of India (RBI) today lifted the restrictions on daily withdrawal of cash from ATMs and on current accounts but retained the weekly limit of Rs. 24,000 on savings banks accounts.
 
The central bank had placed these and other restrictions following the November 8, 2016 decision of the Government to demonetise Rs. 1000 and Rs. 500 notes as part of its efforts to fight the evils of black money, corruption, money laundering and terror financing. Some of the restrictions were gradually eased in the weeks that followed.
 
In a circular to all banks today, the RBI said that it had been decided to partially restore status quo ante following a review of the pace of remonetisation.
 
"Limits placed vide the circulars cited above on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with immediate effect.
 
"The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future," the circular said.
 
"Limits ... placed on cash withdrawals from ATMs stand withdrawn from February 01, 2017. However, banks may, at their discretion, have their own operating limits as was the case before November 8, 2016, subject to 2 (ii) above.
 
"Further, banks are urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode," the circular added.
 
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Infosys engineer found dead near her workstation in Pune

 
25-year-old Infosys engineer found dead in her office
A 25-year-old software engineer working for IT services major Infosys was found dead near her workstation on the ninth floor of the company's office in the Rajiv Gandhi Infotech Park in Hinjewadi here last night, police said.
 
Police officials said the woman, K. Rasila Raju, who hailed from Kerala and had come to the office on Sunday afternoon on her day off to work on a project, appeared to have been strangulated with a computer cable in an apparent case of murder.
 
A security guard posted in the building was arrested this morning from Mumbai in connection with the case, and the police will produce him in court where they are expected to seek his remand.
 
Sources said the police zeroed in on the suspect after finding that he was the only one who had accessed the floor during the period she was there.
 
Police officials said Rasila was working on a project along with two of her colleagues in Infosys' Bangalore office. She was in touch with them till around 5 pm after which they did not hear from her.
 
According to them, her manager had tried to call her repeatedly but did not get any response. The manager then contacted the security personnel and requested them to check if Rasila was at her desk.
 
Security guards who went to check on her around 8 pm found her lying on the floor near her workstation, the police said.
 
According to the sources, police think the murder took place  between 5 pm and 6.30 pm, when the guard left the office at the end of his duty hours. He later left for Mumbai, but his movement was tracked through his mobile telephone and he was nabbed at the Chhatrapati Shivaji Terminus in the metropolis, from where he was apparently planning to board a train to his home state, they added.
 
The police have informed Rasila's family in Kerala and they are expected to reach the city later today.
 
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India’s forex reserves soar by $ 932.4 million to $ 360.775 billion

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Rising for the second consecutive week, India’s foreign exchange reserves soared by $ 932.4 million to $ 360.775 billion in the week ended January 20, the Reserve Bank of India (RBI) said here today.
 
The country’s forex reserves had increased by $ 687.9 million to $ 359.843 billion in the previous week.
 
In its weekly statistical supplement, the central bank said that  foreign currency assets, which constitute a major chunk of the forex reserves, had gone up by $ 926.4 million to $ 338.434 billion during the week.
 
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
 
According to the bulletin, the country’s gold reserves remained unchanged at $ 18.584 billion during the week, while its special drawing rights (SDRs) went up by $ 2.3  million to $ 1.442 billion.
 
India’s reserve position in the International Monetary Fund (IMF) increased by $ 3.7 million to $ 2.315 billion during the week, the bulletin added.
 
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