A hotter Summer forecast

State Banks' Merger

The merger of State Bank of India's five associate banks with the parent will become effective in the new fiscal year. In gazette notifications published on Thursday , the government said the entire undertakings of these five banks shall stand transferred to and vested in State Bank of India from April 1, 2017. Separately, SBI informed stock exchanges about the effective date of the merger.

The Union Cabinet earlier this month approved the merger of State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad with SBI.

The merger will create a bigger SBI that will account for nearly a quarter of all outstanding loans in the country . The combined entity will have a network of nearly 23,000 branches, further increasing the dominance of the country's largest bank.

Two of the five associate banks, State Bank of Patiala and State Bank of Hyderabad, are unlisted. Among the listed ones, SBI holds a 75% stake in State Bank of Bikaner & Jaipur, 90% in State Bank of Mysore and 79% in State Bank of Travancore.

The government had earlier said the SBI-associate merger was an important step towards strengthening the banking sector through consolidation of public sector banks.

The merger is likely to result in recurring savings, estimated at more than Rs.1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds, the government had earlier said.

Officers and employees of the associate banks, with the exception of board members and executive trustees, will become employees of SBI after the merger.

BJP sweeps Maharashtra Civic Polls

The Bharatiya Janata Party won eight out of 10 municipal corporations across Maharashtra and almost ended rival Shiv Sena's stronghold over capital Mumbai as chief minister Devendra Fadnavis' strategy of going it alone in the civic elections paid off handsomely . A wave of support for the BJP and Fadnavis across urban Maharashtra sunk the Congress and the NCP, with the BJP emerging victorious on its own in many civic bodies for the first time in many years.

The Sena's hold over Asia's richest civic body , the BMC, and India's financial capital Mumbai, built assiduously over the years by the late Bal Thackeray, was threatened by a late, spectacular BJP surge, which more than doubled the party's seat tally to 82 from 31 in 2012. The Sena captured 84 seats of the 227, while the Congress came a poor third with just 31 seats. Both the BJP and the Sena are now trying to cobble together numbers to cross the majority mark. The BJP has already announced that it has the support of four independents.

Fadnavis credited the party's performance to Prime Minister Narendra Modi's “clean image“. He said the people had voted for the “transparency agenda“ of the BJP. Fadnavis hinted that the BJP and Sena could come together for a post-poll arrangement.

In Pune, where results for 124 of the 172 seats were declared, the BJP managed to get 77 seats and in Pimpri-Chinchwad, it emerged as the single-biggest party with 61 of the 101 seats declared (total seats: 128). Both Pune and Pimpri-Chinchwad are considered the stronghold of the NCP and the drubbing that the party received in spite of campaigning by its leaders like Ajit Pawar will lead to tough questions within the party.

In Ulhasnagar, too, the BJP has become the single-biggest party there with 34 seats. The Sena got 25 seats and the NCP, 4. The BJP was the single-biggest party in In Akola, Amravati and Nashik also. The Congress was at the helm in Amravati.

The Congress lost power in Solapur, the domain of former Union Home Minister Sushil Kumar Shinde. The BJP managed to emerge as the single-largest party with 39 seats.

The results are significant for two reasons.One, the elections were seen as a referendum on Fadnavis's rule. Secondly, the BJP was contesting all the polls on its own without allying with the Shiv Sena.

Thane is the only municipality that doesn't seem to have come under the BJP effect with the Sena coming up trumps.


Bharti Airtel to buy Telenor India

In further consolidation in the Indian telecom sector post the entry of Reliance Jio, Bharti Airtel said that it will acquire rival Telenor India to further augment its customer base and network.
The acquisition will add about 44 million subscribers to Bharti Airtel’s existing 266 million, taking the total to 310 million. It will still be behind the possible Vodafone-Idea combine, which will have 390 million users.

As part of the agreement, Airtel – India’s largest telecom service provider – will acquire Telenor India’s operations in seven circles, namely Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.

Solar park capacity to double to 40GW

The government approved a plan to double the capacity of solar parks and ultra-mega solar power projects to 40,000 MW from 20,000 MW. The decision was taken by the Cabinet's panel on economic affairs. A roadmap would be finalised shortly to set up at least 50 solar parks, each with a capacity of 500MW except in hilly areas where adequate land is not available.

Smaller parks in Himalayan and other hilly states, where contiguous land may be difficult to acquire in view of difficult terrain, will also be considered under the scheme.

These solar parks will be set up by 2019-20 with an aid of Rs.8,100 crore from the Centre. After completion, the total capacity of all solar parks will generate 64 billion units of electricity per year, saving 55 million tonnes of carbon dioxide emission a year over their life cycle.

State governments will first nominate solar power park developer and identify land for the project. They will then send the proposal to the ministry of new and renewable energy for approval.

The renewable energy ministry is implementing a scheme for development of at least 25 solar parks with an aggregate capacity of 20,000 MW , which was launched in December 2014.

Note Ban hampers growth : IMF

Cash shortage and payment disruptions caused by demonetisation have undermined consumption and business activity and poses a new challenge to sustain the growth momentum in India, the International Monetary Fund has said and called for quick restoration of availability of cash to avoid further disruptions.

Growth is projected to slow to 6.6% in 2016-17 and then rebound to 7.2% in 2017-18 due to temporary disruptions, primarily to private consumption caused by cash shortage. The government and RBI expect growth to be about 7.1% in 2016-17.

IMF has supported government's efforts to clamp down on illicit financial flows, but noted the strains that have emerged from the currency exchange initiative. It called for prudent monitoring of potential side-effects of demonetisation on financial stability and growth.

It said supply of new banknotes in the first month after the demonetisation initiative was insufficient, even as authorities took multiple steps to ease the currency situation.

IMF mission chief for India Paul Cashin said the demonetization initiative presents an opportunity to increase size of the formal economy and broaden financial intermediation in the long term and can also support widening of the tax base, help reduce fiscal deficit, enhance bank liquidity , and give a fillip to government's efforts to promote greater financial inclusion.

He said the government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. Cashin said implementation of GST, which has been in the making for over a decade, will help raise India's medium-term growth to above 8%, as it will enhance efficiency of production and movement of goods and services across states.

Antyodaya Express set for launch

Antyodaya Express, the new superfast train service for the common man with specially designed colourful coaches and comfortable seats, is ready for launch. The fully unreserved train is ready to be pressed into service on busy routes. The first Antyodaya Express will be launched between Mumbai and Tatanagar, and the second will be between Ernakulam and Howrah, shortly . The general class coaches with new colour schemes are equipped with facilities like LED lights, water purifiers, cellphone charging points and fire extinguishers.

The fare structure will be between 10-15% more than the regular fare as railways have maintained that manufacturing cost of these coaches is high. Provided with bio-toilets, Antyodaya coaches will have toilet occupation indication lights provided at each end near the doorway .