By TIOL News Service

NEW DELHI, DEC 30, 2012: TO contain fiscal deficit at 5.3% the Finance Minister, in the Union Budget, had set a target of Rs 30,000 Cr from disinvestment but has so far garnered only Rs 6905.20 crore.

However, to speed up the process of investment, the Cabinet has approved to set up the Cabinet Committee on Investments (CCI) with the Prime Minister as the Chairman to expedite decisions on approvals/clearances for implementation of projects. The CCI will monitor and review the implementation of major projects to ensure accelerated and time-bound grant of various licenses, permissions and approvals. The CCI is likely to bring in transparency, efficiency and accountability in accordance of various approvals and sanctions by the respective Ministries / Departments.

In order to give a boost to infrastructure development, several PSU entities have been authorized to raise tax free bonds worth Rs. 53500 crore during the year 2012-13.

Some of the mega policy steps taken by the Govt during 2012 are as follows:

Government has permitted CPSEs to use surplus cash available with them (i) to buy back its shares as per SEBI rules: and (ii) to purchase shares of others CPSEs from Department of Disinvestment. Department of Disinvestment has also been enabled to respond to such proposal received from CPSEs.

With a view to achieve financial turnaround of debt-ridden State Distribution Companies (Discoms), CCEA has approved the scheme for their Financial Restructuring. The Scheme contains measures to be taken by the State Discoms and State Governments for achieving turnaround by restructuring their debt with support through a Transitional Finance Mechanism by the Central Government. The scheme provides for taking over 50% of outstanding short term liabilities of the Discoms by the State Government and restructuring of remaining 50% by the banks.

Opening of one Bank Account per family

In order to ensure electronic transfer of cash subsidies under the various Schemes of GOI and State Governments, banks have been advised to open at least one bank account for each household. Governments has now decided to ensure Aadhaar based Direct Cash Transfer into the account of beneficiaries of 34 Centrally Sponsored /Central Sector Schemes w.e.f 1 January 2013, in 51 Districts in the country.

Women SHG's Development Fund Scheme

In 2011-12, GOI had created the “Women SHGs Development Fund to empower women and promote their Self Help Groups (SHGs). The fund will also empower women SHGs to access bank credit. The WSHG programme has been extended to 150 most backward districts including the Left wing extremism (LWE) districts. So far (up to 7 th December , 2012) 13075 SHGs have been promoted and savings linked and a grant assistance of Rs. 10.19 crore has been released by NABARD.

Rural Infrastructure Development Fund (RIDF):

During 2012-13, an amount of Rs.20,000 crore was provided in RIDF under the Union Budget, of which Rs.5,000 crore shall be exclusively earmarked for Rural Warehousing scheme.

Recovery of Bad Loans

The Government and RBI have taken several steps that have resulted in improvement in recovery of NPAs. The recovery of NPA by Public Sector Banks have increased from Rs. 10,237 crore (March 2010) to Rs. 14,650 crore (March 2011) and Rs. 17,202 crore (March 2012). Following initiatives have been taken in 2012 to deal with the rising NPAs:-

· Appointment of Nodal officers for recovery at the Head Office/Zonal Office/for each DRT;

· Thrust on recovery of loss Assets – assigning loss assets to Assets Reconstruction Companies (ARCs) on commission basis;

· Finalising strategy for NPA management by each bank;

· SLBCs to be proactive to sort out issues with the State Governments.

· RBI has announced that provision for restructured standard accounts is to be raised from existing 2 per cent to 2.75 per cent.

· Sanction of fresh loans/ ad-hoc loans from 1st January 2013 will be made on the basis of sharing of information among the banks.

Domestic Bonds

During 2012-13, IIFCL raised Rs 1100 crore through domestic bond issue. For the first time in the country in the infrastructure sector, a financial institution (IIFCL) has raised bonds of tenure more than 25 years without sovereign guarantee. In February 2012, IIFCL established a subsidiary, IIFCL Projects Limited, to provide varied advisory services from the point of identification and conception of infrastructure project and gauging their feasibility, securing regulatory approvals, pre bidding and even to the point of monitoring and supervision.

Interest subvention scheme for housing loans

The Scheme for interest subvention of 1% on housing loan up to Rs.15 lakh where the cost of the house does not exceed Rs. 25 lakh has been further extended for FY 2012-13 . Further the limit of indirect finance for housing under the priority sector lending has been enhanced from Rs. 5 lakh to Rs. 10 lakh

Credit Risk Guarantee Fund Trust for Low Income Housing

The Credit Risk Guarantee Fund Trust for Low Income Housing was set up & registered by the GOI on 1st May, 2012 through the Ministry of Housing and Urban Poverty Alleviation (MoHUPA). The scheme came into effect on June 21, 2012. Under the Scheme, the Fund will provide credit risk guarantee to the lending institutions against their housing loans in urban areas upto Rs 5 lakh for new borrowers in the EWS/LIG categories without any guarantee. The extent of Guarantee Cover to be provided under the Scheme is 90% of the amount in default.

Education Loan Scheme

Widening the scope of Education Loan Scheme, the Indian Banks' Association has formulated and circulated a Model Loan Scheme for Vocational Education and Training on 31st May, 2012. The scheme aims at providing financial support from the banking system to those students who want to pursue employment oriented skill development courses offered by recognized institutions.

Customer Service In Public Sector Banks

In order to bring customer centricity in the services provided by the Public Sector Banks (PSBs), guidelines have been issued to all the PSBs to adopt a Standardised Public Grievance Redress System (SPGRS) on the lines of Complaint Management System (CMS) of State Bank of India to make a uniform, robust, cost-effective and expeditious grievance redressal system to resolve the grievances within 21 days timeline.

Insurance Sector

Industry Performance Outlook

Life insurers underwrote premium of Rs.53814.09 crore during April-October 2012 as against Rs.55737.84 crore in the corresponding period of previous year exhibiting a decline of 3.45%. During the year 2012-13, the non-life insurers underwrote premium of Rs.39453.11 crore during April-October 2012 as against Rs.33041.93 crore in the corresponding period of previous year exhibiting a growth of 19.4%.

In the current fiscal, against the Budget Estimate of Rs. 5,03,558 crore, an amount of Rs. 2,92,108 crore has been realized upto November, 2012, recording a growth of nearly 17% over the corresponding period of last fiscal. 58% of the BE for the year 2012-13 stands realized upto November, 2012

Revenue

Indirect Tax Revenue Trends in 2012-13

(Amount in Rs. crore)

*Exclusive of cesses (Rs. 1486 crore) not administered by D/o Revenue.

National Policy on NDPS released

Narcotic Drugs and Psychotropic Substances have several medical and scientific uses.  However, they can be and are also abused and trafficked. Government has approved a ‘National Policy on Narcotic Drugs and Psychotropic Substances', covering all four major dimensions of the subject, with the following objectives:

· To spell out the policy of India towards narcotic drugs and psychotropic substances;

· To serve as a guide to various Ministries and organisations in the Government of India and to the State Governments as well as International Organisations, NGOs, etc.; and

· Re-assert India's commitment to combat the drug menace in a holistic manner.

DEPARTMENT OF EXPENDITURE

As austerity measure, 10% cut on non-plan expenditure (excluding interest payments, salaries, Defence capital, pension, etc.) has been imposed. Other measures include restrictions on holding seminars and conferences, foreign travel, ban on purchase of vehicles and creation of posts, observance of discipline in fiscal transfers and on balanced pace of expenditure.

Plan grants of Rs.70080.43 cr. and Rs.40589.93 cr. have been released in 2011-12 and 2012-13 (till date) as against the respective provision of Rs.71741.62 cr. and Rs.86803.00 cr. Under Non-Plan grants, Rs. 24851.14 cr were released for 2012-13 ( Upto 11.12.2012 ) as against the allocation of Rs. 58357.46 cr.

To provide immediate relief to people affected by natural calamities like drought, flood, earthquake, Rs.3153.81 cr. have been released under National Disaster Relief Fund (NDRF) to 11 States.

State Borrowing ceilings

During 2012-13 (till 13-12-2012), the States have been permitted to raise Open Market Borrowings (OMBs) to the tune of Rs.132126 cr. and Negotiated Loans (NL) of Rs.23175 cr. Further, the National Small Savings Fund (NSSF) loans and Externally Aided Projects (EAP) loans to States amounting to Rs.2007 cr. and Rs.5195 cr. respectively have been extended so far during 2012-13.

Direct Transfer of Subsidies

Recognizing the urgent need to rationalize the outgo on subsidies, the Government decided to constitute a task force in February last year, work out a system of direct transfer of subsidy using the Aadhar number.

The process for rolling out an Aadhaar-based payment system has been taken up as a pilot in 43 districts across the country. Various entitlements and subsidy disbursals would start flowing from this platform to each of these districts. These are being used for streamlining PDS, NREGA, pension and scholarship payments, and a host of other welfare schemes.

An electronic payment system through Government electronic Payment Gateway (GePG) has been implemented by the office of Controller General of Accounts with great success. Under this system all payments in Government could be directly credited into the bank accounts of beneficiaries thus greatly reducing their dependency on Government offices and officials to receive their dues/payments.

The registration of all the implementing agencies (who receive grants from Govt. of India) on Central Plan Scheme Monitoring System (CPSMS) Portal has been made mandatory for the release of funds.

Central Public Procurement Portal & e-Procurement

Pursuant to the recommendations of the Committee on Public Procurement (CoPP), a Central Public Procurement Portal (CPP Portal) has been set up for providing comprehensive information and data relating to public procurement and is accessible at www.eprocure.gov.in . It is being used at present by various Ministries/ Departments, CPSEs and autonomous/ statutory bodies. e-Publishing of tender enquiries, corrigenda thereto and details of contracts awarded thereon, on the Portal, has been made mandatory in a phased manner w.e.f 1st January 2012.

Further, instructions have been issued to all Central Government Ministries/Departments to commence e-procurement in respect of all procurements with estimated value of Rs.10 lakh or more in a phased manner. Use of e-procurement would enhance transparency and accountability and make procurement more efficient. This would also help in monitoring delays and reducing the procurement cycle.