HSBC PMI: January 2015

Factory activity slowed marginally in January , while core sector growth moderated to a three-month low, posing some fresh concerns about the strength of the industrial recovery .
The HSBC India Purchasing Manager's Index, a key indicator to gauge manufacturing operating conditions, slowed to 52.9 in January from two-year high of 54.5 in December. The 50-point mark separates contraction from expansion.
Amid reports of improving demand, latest data indicated that new orders increased for the fifteenth successive month in January , albeit at a slower rate compared to December. The December survey results had sparked hopes of a sharp turnaround in the sector.
Separate data showed the eight core sectors spanning coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and cement slowed to 2.4% in December compared to the 4% expansion in the same period previous year and slower 6.7% posted in November. The expansion in the April-December period was estimated at 4.4% compared to a growth of 4.1% in the year earlier period.
Decline in crude oil, natural gas, fertilizers and steel sectors hurt expansion, while a slowdown in the electricity segment output hurt the overall number. The core sector accounts for 38% of the index of industrial production and the moderation could impact the industrial output numbers, which are expected to be released later in the month.
Economists expressed surprise over the core sector data outcome for December. They said the data was based on the old base year of 2004-05, which is surprising, considering that GDP numbers to be used from January 30 onwards would be based on 2011-12 base year.

AMRUT to replace JNNURM

After conferring the highest civilian honour, Bharat Ratna to Atal Bihari Vajpayee, the Narendra Modi government is all set to name its scheme to rejuvenate 500 cities and towns after the first BJP prime minister.
This new avatar of JNNURM, named after first PM Jawaharlal Nehru will now be known as Atal Mission for Rejuvenation and Urban Transformation (AMRUT). It will be a 10-year programme with total investment of about Rs.2 lakh crore.
Though UPA-II had done preparatory work to approve phase-II of JNNURM, it could not clear the scheme. The extended tenure of JNNURM-I ended last year. Soon after the BJP came to power, urban development minister M Venkaiah Naidu had announced to launch the new scheme.
Sources said the yet to be launched AMRUT will rely primarily on earlier components of the plan such as augmentation of water supply , collection and treatment of sewage and garbage, building roads and flyovers. The new additions be ing introduced include digitization and wi-fi zones in cities, which are also the main focus of the PM to improve urban governance.
“However, since over 200 projects under JNNURM are still undergoing or have been stalled due to lack of funds, the new scheme will have allocation of about Rs.7,000-8,000 crore to complete these projects,“ said a government source.
He added there will be major emphasis on monitoring the scheme and tendering projects only after completing preparatory work.

TaMo's Bolt

Of Payment Banks....

India's largest corporate house, Reliance Industries, has managed to rope in the country's largest lender, State Bank of India, as its minority partner to head the list of applicants seeking a licence to set up a specialized bank. Over 70 applicants including Aditya Birla Group, Vodafone and Airtel have shown interest in setting up either a `payments bank' or a `small finance bank'. Monday was the last date for applications.
The specialized banks are expected to change the banking landscape by promoting digital payments, both for money transfers and for payments. Although digital payment products are available, new entrants are expected to speed up adoption by making these available to low-value customers on the mobile platform.Other applicants range from Future Group and Idea (along with AV Birla Nuvo) to microfinance companies such as SKS and technology compani es such as Vakarangee Software and Fino Paytech.
Gold loan companies such as Muthoot and new generation digital payment companies PayTm, Citrus Payments, MobiKwik and early pre-paid issuers Oxigen and ItzCash are also aiming to turn themselves into banks. Specialized `payment banks' and `small finance banks' are the brainchild of RBI governor Raghuram Rajan.
The payment banks will open savings accounts like regular banks. However, they will be extremely low cost in their operations with a minimum branch presence. Their account opening process is expected to be similar to low-value pre-paid phone connections. They will not provide loans or investment schemes and all their deposits must be invested in government securities.Being high on technology , they are expected to reduce the public's dependence on cash as they promote person-to-person electronic remittances. Similarly , small finance banks will be driven by new technology and at least half their advances will have to constitute loans and advances of up to Rs.25 lakh.
Some public sector giants such as IndiaPost and BSNL had earlier shown interest in investing in a payment bank. However, there was no confirmation from RBI on the list of applicants.
The RIL-SBI joint venture will be promoted by RIL with the bank picking up a 30% stake. A joint statement said, “The payments bank will leverage SBI's nationwide distribution network and risk management capabilities along with the substantial investments made by RIL in its retail and telecom businesses. It will deploy state-of-the art technology, build scalable infrastructure and create extensive branch and business correspondent network in order to provide last-mile access and intuitive user experience to all sections of society.“
The central bank has not indicated how many bank licences it is willing to issue. Central bankers only say that they expect the number of successful applicants to be definitely more than the two licences that it issued for universal banking last year. Besides SBI, other banks too have entered into partnerships. Kotak Bank will pick up one fifth of a stake in Airtel MCommerce which al ready has built a brand in mobile money . RBL (erstwhile Ratnakar Bank) has said that it would partner Oxigen and pick up a stake ranging from 15-30%. Sources said that ICICI Bank may pick up stake if Fino Paytech--a banking technology company promoted by ICICI--gets a licence.

AAP's manifesto for Delhi 2015

The Aam Aadmi Party (AAP) released its manifesto packed with promises such as full statehood for Delhi, pro-farmer land acquisition norms as well as an old assurance of enacting a new anti-corruption law, many of which could again set the stage for showdowns between the central and state governments if its convenor Arvind Kejriwal returns to power. The difference this time, Kejriwal hinted, would be that the AAP government may not resort to agitations should it win the election.
During his 49-day stint as Delhi chief minister, Kejriwal was at odds with the central government over the introduction of the Delhi Jan Lokpal Bill in the state assembly and the matter of full statehood.
The AAP manifesto makes 70 promises in a bid to stitch up an unusual coalition of support from the rich, middle class and the poor. The promises to the voters of Delhi include affordable healthcare and education, free water and cheaper power, creation of new jobs as well as ‘One Rank, One Pension’, the last aimed at government officials.
AAP’s agenda covers swaraj (making the government directly responsible to the people), clean water, cleaner Delhi, women’s safety, empowerment of rural and village areas, making Delhi a drug-free city, connecting villages by metro, reducing unemployment and cleaning Yamuna, among others. Unlike the last time, the party has not set a deadline for fulfilling any of the promise.

Confined field trials for GM crops in Maharashtra

Just over a year after it cleared one set of trials for genetically modified (GM) crops, the state government has allowed five companies to conduct confined field trials on 11 transgenic varieties of rice, cotton and chickpeas. Confined trials are conducted in a restricted area under supervision to prevent the contamination of external crops by those of the GM variety .
Clearances have been given to Pioneer Overseas Corporation to conduct trials on two varieties of rice, Sungro Seeds for two varieties of chickpeas and Mahyco for two strains of cotton and rice. The BASF has been allowed to conduct trials on one rice strain and Devgen Seeds on two varieties of rice, state government sources said.
In 2013, the then state government had cleared confined field trials for genetically modified strains of rice, maize, brinjal and cotton. As many as 28 applications had been cleared from companies including Monsanto, Bayer and Syngenta. Several of these trials are already on at agricultural universities in the state, officials said.
State officials said that the trials had been cleared on the basis of a report from a committee headed by eminent nuclear scientist Anil Kakodkar. Confined field trials have to be conducted within a state-owned agricultural university , under its supervision. The trials also have to follow conditions set by the Genetic Engineering Appraisal Committee.
Permitting field trials for GM crops has long been a contentious issue. Those in favour argue that transgenic crops boost yield and food security . Opponents say they could irreversibly impact health and the environment and that trials are poorly regulated. Since 2005, a petition against GM crops is being heard in the Supreme Court.In 2012, the Parliamentary Standing Committee on GM crops had asked for a halt to field trials in different states, saying the impact of transgenic crops on bio-diversity was not yet clear.
Arun Rodrigues, the lead petitioner in a Supreme Court case against GM crops, said confined field trials are a misnomer.“There is no real distinction between confined and open field trials. Once the seed is in a field, it cannot be controlled from contaminating other species. There is no regulation of bio-safety ,“ Rodrigues said.

Agni-V testfired

India's first intercontinental ballistic missile has become deadlier. The over 5,000-km Agni-V was on Saturday successfully tested for the first time in its canister launch version, which will give the armed forces the requisite operational flexibility to swiftly transport and fire the ballistic missile from anywhere they want.
“It's a game changer...a new milestone, a giant leap in our strategic deterrence. With the canister version, our soldiers can stop and launch it even from a roadside,“ said DRDO chief Avinash Chander, said from Wheeler Island off the Odisha coast following the test.
The canister test was also a swansong for the 64 year-old Chander, who later in the day demitted office as DRDO chief in line with his contract being abruptly terminated by the Modi government earlier this month. The country's most formidable nuclear missile till now, since it brings the whole of China and much more within its strike envelope, the three-stage Agni-V was earlier tested in “an open configuration“ in April 2012 and September 2013. The third test on Saturday was from a hermeticallysealed canister mounted on a Tatra launcher truck in “a deliverable configuration“.
The missile vertically blasted off at 8.09 am, zoomed to a height of over 600-km in its parabolic trajectory and then splashed down into the Indian Ocean towards Australia 20 minutes later.
The road mobile canisterversion ensures the 50-tonne missile can be fired within minutes. “With India having a policy of no first use of nuclear weapons, it is highly survivable,“ Chander said.