01, May 2017

1.India goes for e-ride, eyes all-electric car fleet by 2030

Source: Indian Express

India is looking at having an all-electric car fleet by 2030 with an express objective of lowering the fuel import bill and running cost of vehicles.

  • The idea is that by 2030, not a single petrol or diesel car should be sold in the country,” Power Minister.
  • The Ministry of Heavy Industries and the NITI Aayog are working on a policy for promotion of electric vehicles. The minister pointed to the cost factor, saying people would like to buy electric vehicle when they find it cost effective.

FAME Scheme (National Mission on Electric Mobility) : National Automotive Board- Under Department of Heavy Industries

  • Government of India has notified FAME India Scheme [Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India] for implementation with effect from 1st April 2015, with the objective to support hybrid/electric vehicles market development and Manufacturing eco-system.
  • The scheme has 4 focus areas i.e. Technology development, Demand Creation, Pilot Projects and Charging Infrastructure.
  • The FAME India Scheme is aimed at incentivising all vehicle segmentse. 2 Wheeler, 3 Wheeler Auto, Passenger 4 Wheeler Vehicle, Light Commercial Vehicles and Buses.
  • The scheme covers Hybrid & Electric technologies like Mild Hybrid, Strong Hybrid, Plug in Hybrid & Battery Electric Vehicles.

2.SAARC satellite to be launched on May 5

Source: The Hindu

The “South Asia satellite” being built by India for use by countries of the South Asian Association for Regional Cooperation (SAARC) region will be launched on May 5.

  • The capacities of the satellite and the facilities it provides “will go a long way in addressing South Asia’s economic and developmental priorities.”
  • SAS is part of Modi’s ‘Neighbourhood First’ policy focusing on India’s South Asian neighbours. It has been called the ‘Satellite for SAARC’ earlier and the ‘SAARC Satellite’ before that.
  • The total cost of launching the satellite is put at Rs. 235 crore, and it will be met by the Government of India, Minister of State for Atomic Energy and Space.

Salient features:

  • The satellite was announced by Mr. Modi during the 2014 SAARC summit in Nepal and all SAARC countries have since joined it except Pakistan.
  • The satellite called GSAT-09 enables full range of applications and services in the areas of telecommunication and broadcasting applications viz. Television, Direct-to-Home (DTH), Very Small Aperture Terminals (VSATs), Tele-education, Telemedicine and Disaster Management Support.
  • The 2,230 kg satellite was built by the Indian Space Research Organisation (ISRO) and has 12 Ku-band transponders. It is cuboid in shape and built around a central cylinder has a mission life of over 12 years.
  • It will be launched from Satish Dhawan Space Centre in Sriharikota using a Geostationary Launch Vehicle (GSLV) Mk-II launch vehicle.
  • The GSLV-F09 is about 50m tall and is the 11th flight of the GSLV. It is also the its fourth consecutive flight with the indigenous Cryogenic Upper Stage (CUS) engine.

Participating countries:

Nepal, Bhutan, Maldives, Bangladesh and Sri Lanka are already on board of the mission. Afghanistan is in the process of inking the deal. That means seven out of eight SAARC countries are a part of the project except Pakistan, which opted out of the program.

ISROJPG

3.SEBI finalises norms for listing of green bonds

Source: The Hindu

Securities and Exchange Board of India has finalised norms for issuance and listing of green bonds, which will help in raising funds from capital markets for investment in the renewable energy space.

The rules have been finalised by the SEBI after taking into account inputs from the Finance and Environment ministries, as also from the Ministry of New and Renewable Energy.

Green Bond: Green bonds are like any other debt instrument but the funds raised from such a bond sale are used exclusively for renewable energy projects.

  • Green bonds have opened a new finance flow that will be essential to confronting climate change. They are providing green investment opportunity for an ever wider investor group, including those who wish to divest and diversify from fossil fuel-intensive portfolios, and they have proven that a stream of investor capital exists for green assets.

Green bond-supported projects yield multiple benefits

  • World Bank and IFC green bonds have supported solar and wind power installations, the reduction of methane emissions, more efficient transportation in cities, reforestation, flood protection, and building climate-resilience in developing countries.
  • The benefits of these projects can be measured both in the benefits to society and in the reduction of carbon dioxide and other greenhouse gases.

Why are green bonds important for India?

India has embarked on an ambitious target of building 175 gigawatt of renewable energy capacity by 2022. This requires a massive $200 billion in funding. However, higher interest rates and unattractive terms under which debt is available in India raise the cost of renewable energy by 24-32% compared to the U.S. and Europe. Budget allocations have also been insufficient and the market is also very limited. Therefore, green bonds help raise funds for the projects in this sector.

4.What you need to know about Infrastructure Investment Trusts

Source: The Hindu

The initial public offering (IPO) for IRB InvIT, India’s first infrastructure investment trust fund will open for subscription. Sponsored by road developer IRB Infrastructure Developers Ltd., the trust aims to raise up to ₹4,035 crore.

What are InvITs?

InvITs are similar to mutual funds. While mutual funds provide an opportunity to invest in equity stocks, an InvIT allows one to invest in infrastructure projects such as road and power.

How do InvITs work?

  • InvITs raise funds from a large number of investors and directly invest in infrastructure projects or through a special purpose vehicle.
  • Two types of InvITs have been allowed: one, which invests in completed and revenue generation infrastructure projects;
  • The other, which has the flexibility to invest in completed or under-construction projects.
  • InvITs which invest in completed projects take the route of public offer of its units, while those investing in under construction projects take the route of private placement of units. Both forms are required to be listed on stock exchanges.

What is the structure of InvITs?

  • InvITs are registered as trusts with SEBI and there are four parties — trustee, sponsors, investment manager and project manager.
  • As per present regulations, InvIT investments are not open for small and retail investors.
  • The minimum application size for InvIT units is ₹10 lakh. The main investors could be foreign institutional investors, insurance and pension funds and domestic institutional investors (like mutual funds, banks) and also super-rich individuals.

What do InvITs mean for investors?

  • According to SEBI rules, at least 90% of funds collected, after paying for expenses, taxes and repayment of external debt, should be passed on to investors every six months.
  • IRB InvIT is expected to pay about 12% as returns to investors. Dividend income received by unit holders is tax exempt. Short-term capital gain on sale of units is taxed at 15%, while long-term capital gains are tax exempt. Interest distributed to unit holders is taxed.

Significance of InvITs:

  • Infrastructure projects suffer from lack of availability of long-term capital and have depended on bank finance which typically has a short tenure.
  • InvITs are designed to attract low-cost, long term capital and the underlying focus is to reduce the funding pressure on the banking system as well as generating fresh equity capital for infrastructure projects.
  • InvITs allow developers of infrastructure assets to monetise their assets by pooling multiple projects under a single entity (trust structure).

What are the potential investment risks?

  • InvITs are listed on and are subjected to the vagaries of the stock exchanges, resulting in negative or lower returns than expected.
  • An economic downturn or project delays may hit infrastructure projects and result in lower returns. As in mutual funds, investors in InvITs have no control over investments and exits being made by the trust.

5.Real estate Act will come into force

Source: The Hindu

Law promises to protect rights of home buyers

  • The much-awaited Real Estate Regulatory Act, which promises to protect the rights of homebuyers and bring in transparency to the sector.
  • All Sections of the Act will come into force from May 1 and become operational. The clock now begins to tick for registration of ongoing and new housing projects with regulatory authorities within three months,” said a senior official of the Ministry of Housing and Urban Poverty Alleviation.

Real Estate Act:

  • Depositing 70% of the funds collected from buyers in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects; The law is likely to stabilise housing prices. It will lead to enhanced activity in the sector, leading to more housing units supplied to the market.
  • It makes it mandatory for all builders – developing a project where the land exceeds 500 square metre – to register with RERA before launching or even advertising their project. Developers have been given time until July 31 to register.
  • Developers will have to submit as well as upload project details, including approved layout plan, timeline, cost, and the sale agreement, that prospective buyers will have to sign to the proposed regulator.
  • Only developers who fulfil this disclosure clause would be permitted to advertise their project to prospective buyers.
  • Liability of developers for structural defects for five years.
  • Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
  • Real Estate Appellate Tribunals to be set up in every state.
  • As of now, the real estate sector was largely unregulated in India. If a consumer had a complaint against a developer, they had to make rounds of consumer or civil courts. Now, in case of any grievance, the consumer can go to the real estate regulator for redressal.
  • It will weed out fly-by-night operators from the sector and channelise investment into it.
  • Builders will also benefit as the law has penal provisions for allottees who do not pay dues on time. The builder can also approach the regulator in case there is any issue with the buyer.

6.Himalayan rocks may up flood risk, finds study

Source: The Hindu

Scientists have shown how earthquakes and storms in the Himalaya can increase the impact of deadly floods in one of Earth’s most densely populated areas.

Impact

  • Large volumes of hard rock dumped into rivers by landslides can increase flood risk up to hundreds of kilometres downstream, potentially affecting millions of people.
  • The findings could help researchers improve flood risk maps for the Ganga Plain, a low-lying region covering parts of India, Nepal and Pakistan. They could also provide fresh insight into the long-term impacts of earthquakes and storms in the region.
  • They found that large landslides in the southern, lower elevation ranges of the Himalaya are more likely to increase flood risk than those in the high mountains further north.
  • Rocks in the south are extremely hard and travel only a short distance—less than 20 km—to reach the Plain. This means much of this rock—such as quartzite—reaches the Plain as gravel or pebbles, which can build up in rivers, altering the natural path of the water.
  • Rocks from more northerly regions of the Himalaya tend to be softer, and the team found they often travel at least 100 km to reach the Plain. These types of rock—including limestone and gneiss – are gradually broken down into sand which, unlike gravel and pebbles, is dispersed widely as it travels downstream.
  • Understanding whether landslides will produce vast quantities of gravel or sand is crucial for predicting how rivers on the Ganga Plain will be affected.

7.NITI Aayog urges labour reforms

Source: The Hindu

NITI Aayog has pressed for ‘substantive’ reforms in labour laws to take the country out of the current low-productivity and low-wage jobs situation.

  • It has also said that unifying the existing large number of labour laws into four codes without reforming them will serve little purpose.
  • A panel, headed by Finance Minister(wages), is mulling converting 44 labour laws into four simplified codes. They relate to industrial relations, wages, social security and safety.

These (labour) reforms must begin as soon as possible even though their completion may take some years.

Labour reforms:

  • Reforms in labour laws are an ongoing process to update legislative system to address the need of the hour and to make them more effective and contemporary to the emerging economic and industrial scenario.
  • The Second National Commission on Labour has recommended that the existing Labour Laws should be broadly grouped into four or five Labour Codes on functional basis.
  • Accordingly, the Ministry has taken steps for drafting four Labour Codes on Wages; Industrial Relations; Social Security & Welfare; and Safety and Working Conditions respectively, by simplifying, amalgamating and rationalizing the relevant provisions of the existing Central Labour Laws.
  • Similarly, the Ministry has taken steps to draft Small Factories Bill, a special legislation for the small manufacturing units, based on the recommendations of 2nd National Commission of Labour.
  • Ministry has also taken steps for amendment of individual Labour Acts.
  • The process of Legislative reforms includes consultation with stakeholders including Central Trade Unions, Employers’ Association and State Governments in the form of tripartite consultation.
  • Further, amendments in individual Labour Act viz. Child Labour (Prohibition and Regulation) Act 1986, Payment of Wages Act 1936, Payment of Bonus Act 1965, Maternity Benefit Act 1961 have also been carried out. These legislative initiatives will improve the wage security, job security and social security of the workers.



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