India Current Affairs 2017

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Investment target for DFC revised to Rs 80,000 crore: Government

Government has revised investment target for Dedicated Freight Corridor (DFC) from Rs 27,000 crore to Rs 80,000 crore. As per the government, expenditure on land acquisition has multiplied several times leading to hike in investment target.

Government will construct more corridors and more investment which will reduce the cost and improve the technological levels in Railways.

India needs to urgently act on developing connectivity to ports, mines and power plants by expediting DFC which will provide a booster to the economy. As per experts, timely execution of projects will boost manufacturing output to 25% of GDP by 2025 and result in job creation.

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Banks barred from trading in bonds for infrastructure lending: RBI

According to the Reserve Bank of India, banks will not be permitted to trade bonds issued by other lenders for infrastructure lending that would be exempted from mandatory reserve requirements under the new guidelines issued by the RBI.

The RBI recently allowed banks to issue bonds for infrastructure lending, but forbade them from holding each other’s bonds. Now the central bank has clarified that the restrictions on cross holding also applies to trading. The RBI wants these bonds for infrastructure lending attract investors from outside the banking sector. The idea is funds to come from outside the banking system. 

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Government sets up Suresh Prabhu Panel to review Gas Pricing Formula

Union government will appoint Suresh Prabhu Committee to review the gas pricing formula. Suresh Prabhu is a former Union Power Minister under National Democratic Alliance (NDA) government led by Atal Bihari Vajpayee. The other members on the panel will be Pratap Bhanu Mehta, President and Chief Executive of Centre for Policy Research and Bibek Debroy of the same institute.

The decision to set up Suresh Prabhu Committee comes close on the heels of the Union government decision to put stay on the revision of natural gas price. The Union Cabinet had recently postponed the implementation of the C Rangarajan Committee’s pricing formula till September 30, 2014 for conducting a comprehensive review of the whole issue.

The implementation of the Rangrajan pricing formula would have doubled current gas rates to at least $8.4 dollars/mbtu resulting in increasing power cost by over Rs 2/unit, urea production cost by Rs 6,228/tonne and piped gas by Rs 8.50/kg.

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