Daily Economic News - 21 August 2014

IFC to raise Rs. 15,000 crore in next 5 years for India investment
International Finance Corporation (IFC), an arm of the World Bank, said on Wednesday that it will raise Rs.15, 000 crore over the next five years from the local markets to invest in Indian infrastructure. The proceeds, roughly amounting to $2.5 billion, will be raised using a combination of rupee-denominated bonds and swaps. Last year, IFC completed a $1 billion offshore global bond program linked to the rupee exchange rate. In fiscal 2014, IFC invested $1.2 billion in India.
(Source: Livemint)

India’s market cap gain best barring Cyprus in 2014
Country’s market capitalization has risen 34% since the beginning of the year, the most among all markets, with the exception of Cyprus, one of the smaller markets. While the 30-share BSE’s Sensex has risen 24.3%, the broader market has outperformed, with foreign institutional investors (FIIs) pumping in a net of $12.5 billion in the asset class. India ranks 10th in the world in terms of market capitalization, which stands at $1.52 trillion, surpassing Australia and South Korea, but it is still at only around 40% of China’s. Among the 30 Sensex stocks, Maruti Suzuki India Ltd and Axis Bank Ltd saw their market capitalization rise by more than 50% so far in 2014, while Wipro Ltd was the only Sensex stock to see a decline in market capitalization. Its market capitalization eroded by 1.3%.
(Source: Livemint)

Cabinet Policy Decisions:
The cabinet approved the minimum export price ( MEP) of onions from $500 per tonne to $350 per tonne, citing improved supplies and announced a hike in the mining royalty rates for about 55 minerals including ore and bauxite, a move that would please the 11 mineral-rich states in the country that have been demanding higher royalties.
The Cabinet Committee on Economic Affairs also decided that the country's mineral allocation policy would be decided by the institution that succeeds the Planning Commission. Mining royalties were last revised by the Centre in 2009 and though the UPA government had set up a panel to examine the issue, there was no change made in the rates. Under the Mines and Minerals (Development and Regulations) Act of 1957, the royalties from mining operations go to states but the royalty rates are set by the Centre. The royalties are charged on an ad valorem basis which means they are linked to the prevailing price of the mineral.
The Cabinet Committee on Economic Affairs has approved Rs 1,555 crore as the government's contribution to the project in the form of equity and sub-ordinate debt.
(Source: Economic Times)

North Eastern Council agrees to provide viability gap funding to Alliance Air:
The seven sister states of India, having arguably one of the worst road links in the country and a doddering air network, can finally expect better air connectivity between them, as the northeastern states have agreed to fund Alliance Air's losses in operating these flights. Alliance Air operates around 45 flights a day with a fleet of 8 small aircraft and currently connects 4 out of 11 airports in the seven states. Alliance Air made losses of over Rs 100 crore in the 2013-14 fiscal year and a large part of them were due to loss-making operations in the north-east.
(Source: Economic Times)

India lags behind its BRICS peers in notifying subsidies before WTO:
India lags far behind its BRICS peers and even other comparable economies such as Indonesia, Korea and Malaysia when it comes to notifying annually before the WTO all its domestic support to agriculture producers in terms of subsidies in a year with their monetary values. India has submitted domestic support notifications only for the years from 1995 to 2003.
Commerce ministry sources here said India will soon submit notifications for the years from 2003 till 2011, adding that some technical difficulties in calculating the domestic support were holding up the compliance.
As per WTO norms, domestic support notification must include exempt and non-exempt support. Exempt support includes those with nil or minimal trade distortive effect such as government provided agricultural research or training and food security stock. The non-exempt category is the trade-distorting support including “government buying-in at a guaranteed price (market price support)”.
(Source: The Financial Express)

Thaiindianet. Team

21 August 2014