The document provides a monthly report on key developments in India that impact the economy and business environment. It includes information on recent economic indicators, major policy decisions by the government, updates on prominent bills in parliament, and key rulings from the judiciary. Specifically, it discusses India's industrial growth in February 2015, impending labor reforms, the Smart Cities Mission, net neutrality consultations, and a Supreme Court ruling backing a vehicle age limit in Delhi. The report aims to help readers gauge the direction of government policy and make informed business decisions.

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Dear Reader,
We are pleased to present to you the revamped "Eye on India". Beginning this month,
you will receive a monthly report on key policy decisions and developments in India that
impact economic growth, investment climate and the business environment you operate
in. A month­on­month view of this data and information will help you gauge the direction
in which the government and policy is moving and take informed decisions. Besides
economic indicators and measures announced by the government, this month report will
also provide you information about some of the key bills that are being deliberated by the
parliament as well as parliamentary committees. In light of the impact that observations
and decisions taken by the judiciary have on policy matters, it is important to be abreast
of these and we have incorporated it in this report. Finally, since the policy formulation
process is dynamic and the government invites suggestions from stakeholders on
proposed policies, we will be sharing those as well. We sincerely hope that you find this
report useful. We look forward to your feedback. Please do write to us at
medha.girotra@bm.com
Economic Indicators
Industrial Activity & Growth
Index of Industrial Production (IIP) recorded a 5 per cent increase in factory output in the month of
February 2015 (over corresponding figure in Feb’14). Manufacturing, which accounts for two­third
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weightage in the IIP, grew by 5.2 per cent, while mining and electricity sectors saw 2.5 per cent and 5.9
per cent growth in the same period. The capital goods have recorded an 8 per cent growth.
Infrastructure
While overall industrial activity appears to be gathering momentum, infrastructure, especially, oil & gas,
cement and steel are dragging. According to figures for February, the growth in 8 core industries of the
IIP recorded their slowest growth of 1.4 per cent. This further dipped to a negative 0.1 per cent in March,
as per provisional data released by the government.
Inflation
The annual rate of inflation, based on monthly WPI, stood at ­2.33% (provisional) for the month of March,
2015 (over March, 2014) as compared to ­2.06% (provisional) for the previous month and 6.00% during
the corresponding month of the previous year.
FDI
FDI inflows into services sector grew by about 47 per cent to $2.64 billion in April­January last fiscal. The
sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had
received foreign direct investment (FDI) worth $1.80 billion during April­January 2013­14.
India’s foreign exchange reserves have increased from $2.78 billion to $343.20 billion in April 2015.
Update on major decision taken by government
Impending Labor Reforms
The Union labour ministry will integrate three laws — the Trade Unions Act, the Industrial Disputes Act
and the Industrial Employment (Standing Orders) Act — into a single code for industrial relations. It will
allow companies to hire up to 300 workers to lay them off without seeking official sanction. Currently,
industries with up to 100 workers were allowed to do this. (Business Standard)
Smart Cities
The Union Cabinet has cleared the Smart Cities Mission — under which 100 smart cities would be built
— and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for 500 cities with outlays
of Rs 48,000 crore and Rs 50,000 crore, respectively. This amount will be spent over the next 5 years.
Under ‘Smart Cities Mission’ each ‘selected’ city will get Rs. 100 crore every year. The aim of the
mission is to more efficiently utilise available assets, resources and infrastructure to enhance quality of
urban life and provide a clean and sustainable environment.
Trade in Services Agreement
The Department of Commerce is pushing all ministries to ease the rules on services. India is keen to
enter Trade in Services Agreement, currently being negotiated among 23 countries, besides members of
the World Trade Organization. The Agreement will open the floodgates of services export across sectors
such as banking, telecom and construction, among others.
India Voices Concern on Mega Regional Trade Pacts
Regional trade agreements such as the Trans­Pacific Partnership (TPP) and Transatlantic Trade and
Investment Partnership (TTIP) have raised concerns in India, which is not a part of these pact. It has

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urged member countries not to set standards beyond the realm of trade. Currently all trade bilateral
trade pacts are being reviewed and revamped to ensure balance of trade and safeguard domestic
interests.
Government Cancels Licences of Nearly 9,000 NGOs over Foreign Funds
In a major crackdown on foreign funded non­government organisations, the government has cancelled
the registration of nearly 9,000 charities for failing to declare details of donations from abroad. The
crackdown comes days after the government suspended the licence of Greenpeace India and put US­
based Ford Foundation.
Coal Ministry May Alter Coal Block Auction II
In the next round of auctions, the Coal Ministry may cap the number of bids a corporate can make for a
mine. If multiple bids are made, the best one will be counted. In the previous round of auctions, one
group could not only put in more than bids but all or many could make it to the final list. Now, it will be
just one bid from one group.
States May Lose Power to Centre in New Transport Law
The Road Transport and Safety Bill will allow the Centre to prevail over state governments in case of a
dispute. The new law on public transport will override the Motor Vehicles Act and bring in road safety
provisions. It recommends creation of a National Transport Authority and a Road Safety Authority to
equip states in dealing with transport issues.
Net Neutrality
Indian government has adopted a cautious approach towards internet neutrality issue. An independent
committee comprising six officials from the Department of Telecommunications (DoT) was up in January
to expedite consultations on the issue and submit recommendations in May.
Government Planning Assured Tenures for Senior Bureaucrats
With an eye on introducing accountability and consistency in policymaking ensuring job security, the
government is altering appointments norms for senior bureaucrats. At the central government level,
Cabinet Secretary, Foreign Secretary, Home Secretary, Defence Secretary and the directors of India's
intelligence agencies (IB and RAW) get an assured tenure of at least two years.
Restrictions on Import of Industrial Urea Lifted
Ministry of Commerce has removed restrictions on imports of industrial and technical grade urea. The
country, which is among the world’s top three consumers of urea, had imported 70.88 MT of the fertiliser
in 2013­14. India produces about 22 million tonnes (MT) of urea as against the annual domestic
demand of 30 metric tonnes.
Update on prominent Bills and activities of Parliamentary
Standing Committees
Government shows intent to pass GST Bill this session
The government has listed the goods and services tax (GST) constitutional amendment Bill as part of its
legislative agenda for the Lok Sabha (Lower House). The fate of the GST constitutional amendment Bill
seems uncertain in face of opposition from Congress and some other parties. Together, these parties

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have 146 members in the Lok Sabha.
Parliamentary Panel Recommends Price Caps for All Drugs
Standing Committee on Chemicals and Fertilisers, a panel of 31 lawmakers, noted in a report that all
medicines should be available in the market at an affordable price. Currently National Pharmaceutical
Pricing Authority (NPPA) is empowered to fix prices of drugs on a list of essential medicine. Price
controls have impacted foreign drug makers.
Companies may come under Prevention of Corruption Act
The government plans to bring commercial organisations responsible in case persons associated with
them bribe public servants. The Union Cabinet has approved the amendment of Prevention of
Corruption Act, 1988, by pursuing the Prevention of Corruption (Amendment) Bill, 2013, currently
pending before the Rajya Sabha (Upper House).
New Bill for Setting up Courts for Commercial Disputes
Union Cabinet has approved the introduction of The Commercial Division and Commercial Appellate
Division of High Courts and Commercial Courts Bill, 2015. The new law will help in establishing courts
that will deal exclusively with commercial disputes, ensuring their speedy disposal and making it easier
to do business in India.
Update on major decisions taken by court that impact policy &
economy
Supreme Court backs NGT Ban on Cars Older than 15 Years
The Supreme Court has endorsed the National Green Tribunal (NGT) while dismissing an appeal
against a tribunal order issued in November last year that banned cars older than 15 years from plying
on Delhi roads. The apex court said NGT was following principles set by constitutional courts and should
be encouraged. In a 26 November order, the tribunal had barred cars older than 15 years from plying in
the capital.
No Scope for Arbitration in Gas Pricing
The government has firmly told Supreme Court that there is no scope for arbitration in its dispute with
Reliance Industries over gas pricing from the company’s KG­D6 block. Government maintained that
guidelines issued in October 2014 ruled out arbitration over pricing of natural gas produced in India. It
argued that natural resources like gas belonged to the people and could not be distributed for private
profit.
Window into Draft Legislations: Update on crucial draft
legislations inviting public comments
Draft Waste Guidelines
Ministry of Environment and Forests has released draft of The E­Waste (Management) Rules, 2015 for e­
waste management and revised draft rules for bio­waste, solid waste and plastic waste. The move is
aimed at putting in place a strong waste management policy to curb pollution in the country. The draft
guidelines are open for public comments till June 9, 2015.

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Consultation Paper on Regulatory Framework for Over­the­top (OTT) Services
The Telecom Regulatory Authority of India (TRAI) has circulated “Consultation Paper on Regulatory
Framework for Over­the­top (OTT) services” seeking comments of all stakeholders. Written comments on
the Consultation Paper are invited from the stakeholders by 24th April, 2015 and counter comments by
8th May, 2015.
The economic data has been taken from government sources such as CSO. The information and
updates have been selected from official government releases and news website. While due care has
been taken in compiling the data and information presented in the document, the authors do not take
responsibility for factual accuracy of the same.
Genesis Burson­Marsteller, South Asia
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