Economy
New DPP industry friendly: CII
New Delhi : Lauding the new "industry friendly" provisions of the Defence Procurement Procedure (DPP), industry lobby CII noted that its recommendations, including a level playing field, fast-tracking of procurement and preference in procurement from indigenous sources have been accepted and included in the revised document
 
"These provisions include clearly stated goals like giving a boost to Make in India initiative, enhance the involvement of the private sector, build indigenous design and development capabilities, promote absorption of world-class technologies, provide premium consideration to high quality products, promote the growth of the MSME sector, reduce time lines across various stages of procurement, among other procedural refinements effected to enhance efficiency and effectiveness of the defence procurement process," the Confederation of Indian Industry (CII) said.
 
"The long standing demands and aspirations of the Indian defence industry have been duly addressed. (Defence Minister Manohar Parrikar's) vision of accelerating indigenous manufacturing in defence can be seen through the introduction of Buy Indian (IDDM) category, to promote indigenous design, development and manufacturing. This will specially benefit the MSMEs who have enormous capabilities," CII director general Chandrajit Banerjee said.
 
According to Ashok Atluri, managing director of Zen Technologies, one of India's largest manufactgurers of simulators, "the new category of Buy Indigenously Designed, Developed and Manufacturing (IDDM) is ingenious. This changes everything. The impact will be far-reaching and will have cascading effect."
 
"This will change India from being a destination for low-cost manufacturing, to being a starting place for cutting-edge innovation; from being a consumer of out-dated equipment to being a producer of trail-blazing technology; from being the world’s largest importer to being a leader in export of defence equipment,” Atluri added.
 
The IDDM has been introduced as a new procurement category in addition to the existing ones. Under this category 40 percent indigenous content (IC) would be mandatory for indigenously designed equipment, or 60 perccent IC for other equipment. 
 
Moving a step ahead from DPP 2013, the IDDM category will be given the first preference. The previous DPP had Buy Indian as the most preferred acquisition category.
 
Whilst indigenous content requirement for Buy (Indian) cases has been raised to 40 percent from 30 percent, Buy and Make (Indian) and Buy and Make categories will require 50 percent indigenous content. The new DPP will also address the users’ requirement of having a wide vendor base. 
 
Selected companies dealing with specific projects can further work on the improvement of the product based on mutually agreed parameters. Companies meeting the requirements of enhanced performance parameters will get additional credit scores while evaluation of their product cost. 
 
New provisions for the private sector’s involvement as production agencies (PAs) and TOT (Transfer of Technology) partners have also been introduced. 
 
The rules for the retraction of Request for Proposals will be made more stringent. Even single vendor cases are going to see light of the day, however, with due justification. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex on track for more gains – Wednesday closing report
Nifty will head higher as long it closes above 7,600
 
We had mentioned in Tuesday’s closing report that Nifty, Sensex are likely to put in a small rally and that Nifty may head higher if it stays above 7,500. The major indices of the Indian stock markets put in a small rally, apart from touching a 52-week low, and the gains at close of trading were 0.69%-0.87%. The trends of the major indices during the course of Wednesday’s trading are given in the table below:
 
 
Positive European indices, coupled with short-covering and attractive prices, buoyed the Indian equity markets on Wednesday. This led to the S& P BSE Sensex to close the day's trade with a gain of 149 points. However, the indices soon ceded all their gains. Anxiety was stoked by the third quarter (Q3) results season that started on Tuesday.  Long-liquidation positions and sliding Chinese markets, too, dented investors' sentiments on Wednesday.
 
The Supreme Court on Wednesday asked Mysuru-based CFTRI lab to get more samples of Maggi to test the lead and Mono Sodium Glucomate (MSG) contents in its taste makers. The apex court bench of Justice Dipak Misra and Justice N.V. Ramana also asked the Central Food Technological Research Institute (CFTRI) to tell if the lead content found in its tests of Maggi carried out in October, in pursuance to the order of NCDRC, was within the limit prescribed under the food safety law and rules framed under it. Giving the lab two months-time to carry out the tests and submit its report, the court said if the lab needed more samples, it should ask for them. The next hearing of the matter is on April 5. Nestle India shares closed at Rs5,501.95, up 1.06% on the BSE.
 
In a fillip to Prime Minister Narendra Modi's ambitious ‘Make in India’ initiative, over 100 top Chinese handset and component manufacturers gathered here on Wednesday in what could bring $2-$3 billion investment in Indian mobile manufacturing operations in the next two years. Top officials from major Chinese companies such as Techno, Gionee, Coolpad, Holitech, Wingtech, Camera King, Galaxy Core, Poxiao, Vivo and Sprocomm participated in the first-ever summit titled “China-India Mobile Phone & Component Manufacturing Summit,” in the Capital to explore avenues to tap the existing and emerging opportunities.  Leading Indian mobile companies such as Micromax, Lava, Karbonn, Spice, Vodafone and Intex also participated in the day-long event. “Going by the encouraging response of Chinese companies and definitive joint collaboration talks between the Indian and Chinese mobile and handset manufacturers, Chinese investment of $2-3 billion over the next two years looks like a real possibility along with employment for one-two lakh people”, said Pankaj Mohindroo, national president, Indian Cellular Association (ICA). The representatives of the Chinese companies also plan to visit offices and factories of Indian mobile brands like Micromax and Lava to understand their operations.
 
Chinese stocks closed lower on Wednesday, with the benchmark Shanghai Composite Index down 2.42%, at 2,949.6 points. The smaller Shenzhen index lost 3.06% to close at 9,978.82 points, Xinhua news agency reported. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, tumbled 4.09% to close at 2,059.78 points.
 
Tokyo shares ended the morning session sharply higher after a six-day decline as the sentiment was boosted by gains in the overnight US stocks market and a weaker yen. The 225-issue Nikkei Stock Average skyrocketed 463.37 points, or 2.7%, from Tuesday to 17,682.33, Xinhua news agency reported. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 39.44 points, or 2.8%, to 1,441.39.
 
The US dollar gained on Tuesday as market expected the Federal Reserve to continue the interest rate hike in 2016. Given the considerable improvement in labour market, traders believed that the US central bank will continue the rate hike, while central banks in Japan and Europe were expected to unleash further stimulus. On the economic front, the number of job openings was little changed at 5.4 million on the last business day of November, the US Labour Department reported on Tuesday. The US dollar index, which measures the greenback against six other major currencies, was up 0.24% at 98.981 in late trading. In late New York trading, the euro fell to $1.0856 from $1.0875 of the previous session, and the British pound decreased to $1.4430 from $1.4548.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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November's negative IIP, December's 15-month high CPI inflation shocking
The sharp decline in IIP number in November and retail inflation during December to a 15-month high, have got investors deeply worried
 
After an impressive 9.87% growth in October that triggered hopes of a recovery, India's factory output declined by 3.19% in the following month into the negative territory, due to a (-) 4.4% drop in manufacturing activity. In addition, the 15-month high consumer price index (CPI) inflation in December have come as a shocker, says a research report.
 
According to a research note from Religare Capital Markets Ltd, the IIP number for November 2015 surprised on the downside at -3.2% as against its consensus estimate or 0.4%/2.5%. "While a slower growth was largely expected on account of a shift in festive season to November this year from October last year, a decline in production was completely unanticipated. This is the steepest fall in IIP since October 2011," it said.
 
 
During November, manufacturing output tanked by 4.4%, registering the sharpest decline in past 12 months. The decline was broad-based; output of 16 of the 22 manufacturing industries contracted. Manufacturing output usually contracts by about 5% in the festive month on a month-on-month (MoM) basis owing to fewer working days. However, the MoM decline in November 2015 was much steeper at 8.6%, suggesting that non-seasonal factors may be at play.
 
According to Nomura, the sharp contraction in IIP is an aberration, as underlying industrial growth is still positive, though this growth appears to have lost some momentum towards the end of 2015.
 
Inflation
 
According to the numbers on CPI released by the Central Statistics Office (CSO), the annual rate of inflation, moved further to 5.61% in December from 5.41% a month earlier. The official data further showed that prices of pulses were up 45.92% over those prevailing during the past year. This is the third consecutive month, in which, inflation in pulsed remained over 40%.
 
 
"The rise in food inflation is worrisome given that Rabi sowing continues to lag and Rabi output is likely to decline on productivity concerns. Besides, core, excluding food and fuel and power, inflation also edged up to 5% in November from 4.9% in previous month, as inflation across the health and transport and communication segments firmed up," Religare said in the report.
 
On monetary policy, Nomura says it expect the Reserve Bank of India (RBI) to deliver a 25 basic points (bps) repo rate cut to 6.50% against status quo earlier, owing to lower commodity prices and slower industrial momentum. "Although an inter-meeting cut cannot be ruled out, our base case is for an April cut. Beyond that, we expect the RBI to stay on hold as there are upside risks to its medium-term inflation target," it concluded.

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