Minister of Railways Suresh Prabhakar Prabhu on 28 September 2015 launched Indian Railway Knowledge Portal for dissemination of detailed information on Indian Railways.
It is an initiative of the National Academy of Indian Railways (NAIR) which allows the user to access most of the available knowledge about Indian Railways at one location due to linkage of websites, documents and much more.
The portal was launched through video-conferencing established between Ministry of Railways, Rail Bhawan and NAIR Headquarters at Vadodara.
The portal has made it easier for users to access information about Indian Railways, Railway Research and Development, use of ICT in Indian Railways, major International Railway Journals, existing Indian Railway Libraries and World Railways from a single web page.
Indian Railway Knowledge Portal also provides e-access to existing libraries of Railways. Also, National Informatics Centre (NIC) has clustered all the libraries to a single interface via e-Granthalaya. Besides, information regarding fan clubs, heritage, and rail museums across the world can also be accessed from the portal.
NSSO released 68th Round data on Status of Education and Vocational Training in India
National Sample Survey Office (NSSO) on 22 September 2015 released the data of 68th Round on Status of Education and Vocational Training in India.
This report is based on the employment and unemployment survey conducted in the 68th round of NSS during July 2011 to June 2012. The survey was spread over 12737 FSUs (7469 villages and 5268 urban blocks) covering 101724 households (59700 in rural areas and 42024 in urban areas) and enumerating 456999 persons (280763 in rural areas and 176236 in urban areas).
• 18.2 percent of households in rural areas and 5.9 percent in urban areas do not have a single literate member in the age-group 15 years and above who could read and write a simple message with understanding.
• Literacy rate among persons of age 7 years and above was 74.7 percent in 2011-12 of which 70 percent were in rural areas and 86 percent in urban areas.
• The male and female literacy rate in rural areas was 79.1 percent and 60.6 percent respectively. In urban areas, the literacy rates were 91.1 percent for males and 80.3 percent for females.
• Among persons of age 15 years and above, only 2.4 percent had technical degrees or diplomas or certificates. The proportion was 1.1 percent in rural areas and 5.5 percent in urban areas.
Current attendance in educational institution among persons of age 5-29 years
• About 57.7 percent of people in the age group 5-29 years were estimated as ‘currently attending’ educational institutions.
• In rural areas, 57.4 percent of the persons of age 5-29 years currently attended educational institutions compared to 58.5 percent in urban areas.
• Among persons of age 5-29 years, about 64.5percent were currently attending ‘Government and local body educational institutions’, 22.5 percent were currently attending private unaided institutions and 12.3 percent were currently attending private aided institutions.
• ‘To supplement household income’ was the main reason for more than 70 percent of males for currently not attending any educational institution.
• ‘To attend domestic chores’ was the single reason for more than half of females not attending any educational institution.
• About 27 percent in rural areas and 26.4 percent in urban areas reported that they never attended any educational institution as ‘education not considered necessary’.
• About 3.6 percent in rural areas and 3.4 percent in urban areas reported that they never attended any educational institution as the schools were too far.
• In rural areas 24.7 percent of males and 28.4 per cent of females and in urban areas, 22.9 percent of males and 29 percent of females reported the reason ‘education not considered necessary’ for never attending educational institution.
• Among males, nearly 25 per cent in rural areas and 33.2 per cent in urban areas reported the reason ‘to supplement household income’
• Among females, nearly 29.3 percent in rural areas and 28.1 percent in urban areas reported the reason ‘to attend domestic chores’ for never attending educational institution.
Vocational Training among persons of age 15-59 years
• Among persons of age 15-59 years, about 2.2 percent reported to have received formal vocational training and 8.6 percent reported to have received non-formal vocational training.
• In rural areas, nearly 1.6 percent of males compared to 0.9 percent of females and in urban areas, nearly 5 percent of males compared to 3.3 percent of females reported to have received formal vocational training.
• In rural areas, nearly 11.1 percent of males compared to 5.5 percent of females and in urban areas, nearly 13.7 percent of males compared to 4.3 percent of females reported to have received non-formal vocational training.
• Among rural males who received/were receiving formal vocational training, the share was the highest (22.3 percent) for field of training ‘driving and motor mechanic work’ while among urban males it was the highest for ‘computer trades’ (26.3 percent).
• Among rural females, who received/were receiving formal vocational training the share was the highest for ‘textile related work’ (32.2 percent) while among the urban females it was the highest for computer trades’ (30.4 percent).
The data on vocational education is worrisome as the rate of vocational training had barely increased between 2004-05 when the data was last collected and 2011-12.
This was despite former UPA government led by Manmohan Singh had announced an ambitious National Skill Policy in 2009 and created a National Skill Development Coordination Board earlier.
The data poses a serious challenge for the Skill India Mission of Prime Minister Narendra Modi-led NDA government which aims to train about 40 crore people by 2022.
Census 2011 data on Households with or without Educational level of matriculation and above released
The Registrar General & Census Commissioner of India on 24 September 2015 released the Census 2011 data on Households with at least one member aged 15 years and above with or without educational level of matriculation and above by Household Size.
The released data showed an increase of 10 percent in the decade 2001-2011 over the decade 1991-2001.
Key Findings from all over India
Around 122.9 million, which is 49.5 percent of the total households in India, with at least one member of age 15 years and above, had one matriculate or more in the decade 2001-2011. During the decade 1991-2001, there were 39.4 per cent of households in India with at least one matriculate and above.
The number of households with at least one graduate and above was 41.4 million (16.7 per cent) in India in 2011. There were around 23.6 million (12.2 per cent) households with at least one graduate and above in 2001.
There are 21.9 million (8.8%) households with at least one female graduate and about 33.2 million (13.4%) households with at least one male graduate and above.
CANBANK Venture Capital Fund Ltd appointed as implementation agency of EDF Policy
The CANBANK Venture Capital Fund Ltd (CVCFL) was on 21 September 2015 appointed as the implementation agency of the Electronics Development Fund (EDF) policy.
The Electronic Development Fund (EDF) is set up as a Fund of Funds to participate in Daughter Funds which in turn will provide risk capital to companies developing new technologies in the area of electronics, nano-electronics and Information Technology (IT).
With appointment of CVCFL as the agency to implement EDF, the EDF is now operational and will start receiving requests for participation from Seed Funds, Angel Funds and Daughter Funds.
Highlights of Electronics Development Fund (EDF) policy
• The EDF would take minority participation in Seed Funds, Angel Funds and Venture Funds.
• It will invite requests from professionally managed private/public funds for its participation.
• EDF participation in a fund may vary depending on the nature of the fund and risk involved.
• It will support both Indian and foreign funds which are registered in India and comply with SEBI and other regulations in this regard.
Target Beneficiaries of EDF Policy
Any Daughter Fund which is registered in India and abides with relevant rules and regulations applicable to such Funds, including SEBI regulations on Venture Funds will be eligible for support from the EDF.
Government to provide additional 50 days work to farmers under MGNREGA in drought-hit areas
Union Government on 14 September 2015 decided to provide additional 50 days of unskilled manual work in the financial year 2015-16 in drought-hit areas under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme. The additional days will be provided to bring relief to farmers in view of deficit monsoon in various parts of the country.
At present, 100 days of work is provided to rural job card holders under the MGNREGA, in such rural areas where drought or natural calamities has been notified. The drought areas will be notified in consultation with states.
The decision was taken after monsoon deficit reached 16 percent across the country, which could affect kharif crops and rural income.
The move of the Union Government will allow state governments to provide additional wage employment to rural poor in the drought affected areas.
Earlier, Government had announced diesel subsidy scheme for farmers to help save standing crops. It has also announced appropriate input support measures to rejuvenate water-stressed horticulture crops in drought-hit areas.
It has also decided to provide assistance for additional interventions for production of fodder for mitigating adverse impact of drought on livestock in drought-hit blocks.
Apart from this, the Union Government has made flexible allocation under Rashtriya Krishi Vikas Yojana and other centrally sponsored schemes. It has put in place crop contingency plan for 600 districts.
Union cabinet approved guidelines for spectrum trading between service providers
The Union Cabinet on 9 September 2015 approved guidelines for spectrum trading between two telecom service providers.
Under the approved norms, spectrum trading will be allowed between two access service providers in 800 MHz/1800 MHz band. Till now, a licensee had the sole authority to use spectrum as it was not tradable.
As per the DoT norms, spectrum assignment is made for a period of 20 years to a licensee. During this period, some operators are able to acquire subscribers and grow at a faster rate as compared to other operators.
This results in the spectrum lying unutilised with some of the players while other operators face spectrum crunch as spectrum is a scare resource.
Hence, the decision to allow spectrum trading is expected to result in the improvement of the quality of services and also helps in addressing the issue of call drops (calls that are cut off due to technical reasons).
Union Cabinet approved 100 percent FDI in white label ATMs through automatic route
The Union Cabinet on 9 September 2015 approved 100 percent Foreign Direct Investment (FDI) in white label Automated Teller Machines (WLAs). White label ATMs are those that are being set up by non-bank entities.
In contrast to the earlier norm of going through the approval route, this decision by the cabinet allows foreign investments through the automatic route.
However, any non-bank entity intending to set up WLAs should have a minimum net worth of 100 crore rupees as per the latest financial year's audited balance sheet, which is to be maintained at all times.
The change in the policy guidelines is primarily aimed at extending the financial inclusion principal even to the Tier III to VI cities across the country.
The extended reach of ATMs will allow beneficiaries of the Pradhan Mantri Jan Dhan Yojana to avail a wide variety of banking services like accessing their accounts for dispensing cash and non-financial services without the need for actually visiting their bank branch.
Union Cabinet approved introduction of Gold Monetization Schemes
The Union Cabinet on 9 September 2015 approved introduction of Gold Monetization Schemes that were announced by the Union Finance Minister Arun Jaitley in his 2015-16 budget speech.
Under this initiative, revamped Gold Deposit Scheme (GDS) and the Gold Metal Loan (GML) Scheme will be implemented.These revamped schemes are in addition to the Sovereign Gold Bond Scheme as approved by the Cabinet.
Revamped Gold Deposit Scheme
• To mobilize the gold held by households and institutions in the country.
• To provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from banks.
• To reduce reliance on import of gold to meet the domestic demand.
Process of Gold Monetization by customers/Gold Mobilisation by Banks
Stage1: Customer willing to monetize gold, which is in the form of bullion or jewellary, will approach Purity Testing Centre (PTC). In a PTC, a preliminary XRF machine-test (Preliminary Test) will be conducted to assess the approximate amount of pure gold.
The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams and around 350 Hallmarking Centres that are certified by the Bureau of Indian Standards (BIS) will act as PTCs to test the gold.
Stage2: After the preliminary assessment, if the customer gives his consent for melting the gold, a further test of purity (Fire Assay Test) will be conducted at the same PTC. The test will melt the gold and net weight of gold will be estimated.
Stage3: After the result of the Fire Assay Test, if the customer willing to deposit the gold he will be given a certificate by the collection centre certifying the amount and purity of the deposited gold; Otherwise he can take back the melted gold in the form of gold bars after paying a nominal fee.
Stage4: The depositor produces the certificate at the bank and the bank in turn will open a Gold Savings Account for the depositor and credit the quantity of gold into the depositor’s account. Simultaneously, the PTC will also inform the bank about the deposit made.
Stage5: The bank will pay interest to the depositor after 30/60 days of opening of the account. The amount of interest rate to be given is proposed to be left to the banks todecide.
Both principal and interest to be paid to the depositors will be valued in gold. For example if a customer deposits 100 gms of gold and gets 1 per cent interest, then, on maturity he has a credit of 101 gms.
The deposits can be made for a short-term period of 1-3 years (with a roll out in multiples of one year); a medium-term period of 5-7 years and a long-term period, of 12-15 years (as decided from time to time).
The depositor will have the option of redemption either in cash or in gold, which will have to be exercised at the time of deposit.
Similar to the Gold Deposit Scheme (1999), in which the customers received Capital Gains Tax, Wealth tax and Income Tax exemptions, the depositors of GMS also will receive similar benefits.
Gold Reserve Fund: The difference between the current borrowing cost for the Government and the interest rate paid by the Government under the medium/long term deposit will be credited to the Gold Reserve Fund.
The deposits will be utilized for Auctioning, Replenishment of RBIs Gold Reserves, Coins and lending to jewelers.
To make the process of lending to jewelers smooth and efficient, jewellers will be allowed to open Gold Loan Account as part of the revamped Gold Metal Loan Scheme.
For implementation of these revamped schemes, the banks will enter into a tripartite Memorandum of Understanding (MoU) with refiners and PTCs.
Union Cabinet approved Sovereign Gold Bonds Scheme to reduce dependence on physical gold
The Union Cabinet on 9 September 2015 gave its approval for the Sovereign Gold Bonds Scheme.
The purpose of the scheme is to reduce the demand for physical gold and to shift part of the estimated 300 tons of physical bars and coins purchased every year for investment into Demat (Dematerialised) gold bonds.
Features of Sovereign Gold Bonds Scheme
• Bonds will be issued on payment of money and would be linked to the price of gold.
• The sell would be restricted to resident Indian entities and each entity cannot buy more than 500 grams per person per year.
• The bonds will be issued in denominations of 2, 5 and 10 grams of gold or other denominations.
• The cap on bonds that may be bought by an entity would be at a suitable level, not more than 500 grams per person per year.
• The bonds will be issued with a nominal rate of interest (which will be linked to international rate for gold borrowing) as decided by the government.
• The rate of interest on the bonds will be payable in terms of grams of gold. The interest will be calculated on 10000 at a certain per cent say 2 or 3 percent.
• On maturity, the investor receives the equivalent of the face value of gold in rupee terms.
• Bonds will be issued on behalf of the Government of India by the Reserve Bank of India (RBI).
• The bond will be marketed through post offices and by various brokers/agents who may need to be paid a commission (like for Kisan Vikas Patra).
• The price of gold may be taken from National Commodity and Derivatives Exchange (NCDEX) / London Bullion Market Association/RBI and the rupee equivalent amount may be converted at the RBI reference rate on issue and redemption.
• Banks/ Non-bank financial companies (NBFCs)/Post Offices may collect money / redeem bonds on behalf of government (for a fee, the amount would be as decided).
• Capital gains tax treatment will be the same as for physical gold. This will ensure that an investor is indifferent in terms of investing in these bonds and in physical gold- as far as the tax treatment is concerned.
• The tenor of the bond could be for a minimum of 5 to 7 years so that it would protect investors from medium term volatility in the gold prices.
• These Bonds will be easily sold and traded on commodity exchanges
• Bonds can be used as collateral for loans. The Loan to Value ratio can be set equal to ordinary gold loan mandated by RBI from time to time.
• During 2015-16 financial year gold bonds equivalent of 50 tonnes of gold would be issued. Since the amount, around 13500 crore rupees, is not very high, it can be accommodated within the market borrowing programme for 2015-16.
• Since these bonds are part of the sovereign borrowing, they will be within the fiscal deficit target for 2015-16 and onwards.
• The amount received from the bonds will be used in lieu of government borrowing and the notional interest saved on this amount would be credited in an account Gold Reserve Fund.
• Gold Reserve Fund will be utilised to take care of the risk of increase in gold price that will be borne by the government.
The cabinet approval to the scheme is in tune with the Union Finance Minister Arun Jaitley’s 2015-16 budget speech.
Jaitley, on 28 Februay 2015, announced three major initiatives viz., Gold Monetisation Scheme, Sovereign Gold Bond Scheme and Indian Gold Coin to curb demand for physical gold.
Since most of the domestic demand for gold is met through imports, this scheme will, ultimately help in maintaining the country's Current Account Deficit (CAD) within sustainable limits.
Gold Monetisation Scheme (GMS) is intended to replace both the gold deposit and gold metal loan scheme and to allow depositors to earn interest on their gold metal accounts jewelers to obtain loans.
Indian Gold Coin, which will carry the Ashok Chakra on its face, would help reduce the demand for gold coins and also help recycle the gold available in the country.
Forward Markets Commission to be merged with SEBI with effect from 28 Sept 2015
Union Government on 28 August 2015 notified the merger of commodities market regulator Forward Markets Commission (FMC) with Securities and Exchange Board of India (SEBI). Its merging will be effective from 28 September 2015.
For this purpose, the government repealed the Forward Contracts Regulation Act (FCRA) 1952 and made a way to shift the Regulation of Commodity Derivatives Market to SEBI under Securities Contracts Regulation Act (SCRA) 1956.
An official press release said, Finance Minister Arun Jaitley, in his Budget speech, had announced the merger of FMC with the capital market regulator SEBI to strengthen the regulation of commodity futures market.
A unified regulator for commodities and capital markets will help streamline monitoring of commodity futures trading and curb wild speculations.
RBI declared SBI and ICICI Bank as Domestic Systemically Important Banks
The Reserve Bank of India (RBI) on 31 August 2015 declared State Bank of India (SBI) and ICICI Bank as Domestic Systemically Important Banks (D-SIBs) in line with the D-SIB Framework released by the RBI on 22 July 2014.
These banks have been identified as D-SIBs based on the methodology provided in the D-SIB Framework and data collected from banks as on 31 March 2015.
Further, these banks have been put under associated bucket structure as required under the D-SIB Framework and each bucket corresponds to the higher loss absorbency requirements that they would be required to hold from January 2016.
As a result, SBI has been put under Bucket 3 with additional Common Equity Tier 1 (CET1) requirements as a percentage of Risk Weighted Assets (RWAs) placed at 0.6percent.
On the other hand, ICICI Bank has been put under Bucket 1 with additional CET1 requirements as a percentage of RWAs placed at 0.2 percent.
Framework for dealing with D-SIB
Framework for dealing with D-SIB was issued by the RBI on 22 July 2014 as required under the October 2010 recommendations of the Financial Stability Board (FSB) following the 2008 global financial crisis. In its recommendation FSB called all member countries to put in place a framework to reduce risks attributable to Systemically Important Financial Institutions (SIFIs) in their jurisdictions.
As part of the framework, D-SIBs were placed in four buckets depending upon their Systemic Importance Scores (SISs) in ascending order and will be required to have additional Common Equity Tier 1 capital requirement ranging from 0.20% to 0.80% of risk weighted assets.
The additional CET1 requirements applicable to D-SIBs will become effective from 1 April 2016 in a phased manner and would become fully effective from 1 April 2019. The additional CET1 requirement will be in addition to the capital conservation buffer.
In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its RWAs in India.
How to identify a D-SIB?
In order to identify a D-SIB, the D-SIB Framework specifies a two-step process of identification of D-SIBs. In the first step, the sample of banks to be assessed for systemic importance has to be decided. The selection of banks in the sample for computation of SIS is based on analysis of their size as a percentage of annual GDP.
In line with this, RBI adopted an assessment methodology primarily based on the Basel Committee on Banking Supervision (BCBS) methodology for identifying the G-SIBs with suitable modifications to capture domestic importance of a bank.
The indicators used for assessment are: size, interconnectedness, substitutability and complexity. Based on the sample of banks chosen for computation of their systemic importance, a relative composite systemic importance score of the banks will be computed.