Economy News Notes

the Commerce and Industry Ministry has moved the Cabinet note for the $90 billion Delhi-Mumbai Industrial Corridor (DMIC) project for the approval of Union Council of Ministers.
The project, being implemented in collaboration with Japan, was conceived some five years ago and envisages setting up of industrial corridor along the Delhi-Mumbai stretch. It will comprise seven new cities, nine industrial parks, three ports, six airports and a 1,483 km high-speed rail and road line will be developed as a trading hub
The States covered by the project include Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.
The government has 49 per cent stake in the DMIC project, while Infrastructure Leasing and Financial Services has 41 per cent and Infrastructure Development Finance Company 10 per cent.

With frequent hikes in key rates by the Reserve Bank of India and subsequent upward revisions in interest rates by banks and financial institutions, personal loans have become costlier.
Small traders and borrowers in the middle income group prefer taking loans by pledging their gold jewellery with banks to meet their funding requirements.
As pawn-brokers charge exorbitant rates of interest, people seeking loan turn their attention to banks and finance companies in the organised sector to meet their funding needs.
With Indian households possessing a significant amount of gold in the form of ornaments and jewellery, finance companies find gold loan business lucrative.
The gold loan market is largely concentrated between two categories of lenders, namely, the south-based NBFCs specialised in gold loans accounting for 32 per cent of total market and scheduled commercial banks holding 58 per cent
They also feel safe to keep the ornaments with such loan companies to save charges if these are kept in safe deposit lockers of banks.
While banks offer up to Rs.10 lakh as gold loan, non-banking finance companies offer even upto Rs. 1 crore depending on the creditworthiness of borrowers. The interest rate depends on the loan-to-weight ratio. For example, for 60 per cent of the value of gold, NBFCs charge 12-13.5 per cent per annum.
non-banking finance companies such as Muthoot Finance, Manappuram Finance play a key role in disbursing loans against gold jewellery.

An over-arching challenge that requires much greater attention in the Twelfth Plan is that of ensuring better implementation and improved accountability.
There are four aspects of governance that are important.
First, better governance is crucial for translating the large outlays of our flagship programmes into enduring outcomes on the ground.
Implementation of programmes can be improved through a multi-faceted approach relying on professionalisation of public service delivery, Total Quality Management, innovative use of IT and other technologies which improve monitoring and supervision.
Second, implementation in many areas, particularly in infrastructure development, involving large projects, is held up for a variety of reasons.
Project management, to deliver on time and within cost, is a learnable capability that can be institutionalised, as demonstrated by the development experiences of Japan, Korea, Singapore and China
Third, is the broader issue of how to rid the system of corruption, which is, morally abhorrent and imposes economic costs.
These include the establishment of an effective Lokpal, introduction of a law on public procurement to transparency
Finally, to combat corruption, it is imperative to ensure speedy prosecution and trial in corruption cases. The long delays in the judicial process are an important factor behind the growing cynicism about the rule of law in our system