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July 2018 Economic Affairs

  • Insolvency and Bankruptcy Code (IBC): UN model eyed for cross-border normsThe government is looking at the possibility of adopting a United Nations legal model for cross-border insolvency cases as it works on strengthening the insolvency resolution framework. 

    The Insolvency and Bankruptcy Code (IBC) has sections pertaining to cross-border insolvency matters but are yet to be made operational. 

    The Insolvency Law Committee, headed by Corporate Affairs Secretary Injeti Srinivas, is studying the feasibility of introducing cross-border insolvency provisions. 

    The committee is looking at the adoption of the United Nations Commission on International Trade Law model on dealing with cross border insolvency. 

    The existing Code provides for two sections — 234 and 235 — relating to cross-border insolvency, which allows the Centre to enter into an agreement with a foreign country for enforcing the provisions of the Code, which is considered insufficient and time-taking. 

    In case the UN model is adopted for cross-border insolvency matters, then sections 234 and 235 could be dropped from the Code as they pertain to only bilateral pacts. 
  • India updates World Trade Organization (WTO) on food subsidies for 2nd time in 3 monthsIndia has updated data on its food subsidies to the World Trade Organization (WTO) for the second time in three months, submitting details for the financial year 2016-17. 

    India insists its public procurement of rice which increased to $2.5 billion in 2016-17 from $2 billion a year ago is well within its WTO commitments, countries like the US claim India may have already breached its permissible limit of food subsidies.
    • US has raised doubts about India’s calculations, arguing it may have already breached the 10% limit.
    • India is till within 6% for rice. It will take another two to three years for us to reach 10%.
    • The US alleged that India’s minimum support price (MSP) programmes for wheat and rice breached New Delhi’s permissible levels of trade- distorting domestic support at the WTO.

  • Thermal coal imports surge 19%India’s top 12 major ports reported a 19.32% surge in imports of thermal coal to 28.28 million tonnes during April-June this year, latest report from the Indian Ports Association (IPA). 

    The Centre-owned ports had handled 23.70 million tonnes (MT) of the thermal coal in the corresponding period of the previous financial year. 

    Since Thermal coal is the mainstay of India’s energy programme, these imports are important but affects our fiscal deficit. 
  • Consolidation of Regional Rural Banks (RRB’s) With a view to enable Regional Rural Banks (RRB’s) to minimize their overhead expenses, optimize the use of technology, enhance the capital base and area of operation and increase their exposure, the Government has sought comments of respective State Governments and Sponsor Banks on a roadmap for Amalgamation of RRBs within a State. 

    The roadmap has been prepared in consultation with NABARD and proposes to bring down the number of RRBs to 38 from the present 56. 

    It is expected that the proposed amalgamation of RRBs will bring about better scale-efficiency, higher productivity, robust financial health of RRBs, improved financial inclusion and greater credit flow to rural areas. 
  • Indian Money in Swiss Bank fell 34.5% in the year 2017: Piyush GoyalSwiss authorities have shared the following information regarding the Swiss National Bank (SNB) figures quoted in the media

    To analyze Indian residents’ deposits held in Switzerland, another data source should be used. This is the so-called “locational banking statistics”, which the SNB collects in collaboration with the Bank for International Settlements (BIS).” 

    The data collected by Swiss National Bank in collaboration with Bank for International Settlements (BIS) shows that the loans and deposits of Indians, other than Banks, in the Swiss banks decreased by 34.5% in the year 2017 as compared to 2016. Further, there has been significant reduction in Swiss non-bank loans and deposits of Indians by 80.2% between 2013 and 2017. 
  • US GDP growth hits 4.1%, fastest since 2014, in win for Donald TrumpConsumer spending propelled US economic growth to a 4.1% pace in the second quarter, the fastest since 2014. 

    Net exports contributed 1.06 percentage point to the pace of growth, the most since 2013, partly on a surge in soybean shipments ahead of retaliatory tariffs. 

    Economists’ forecasts for second-quarter GDP, the value of all goods and services produced in the nation, ranged from 3% to 5%.

    They showed a higher household-saving rate than previously reported, as well as faster growth in the first quarter of recent years, though the overall narrative of the economy’s performance over the last decade wasn’t much different. 

    The revisions also showed the economy surpassed $20 trillion in nominal dollars in the first quarter. 
  • U.S. team begins audit of DGCAUnited States aviation regulator, Federal Aviation Administration (FAA), has started a four-day audit of its Indian counterpart, the Directorate General of Civil Aviation (DGCA). 

    The main objective is to verify if Indian aviation sector is on par with International rules and norms. 

    Background: The FAA audit comes months after a comprehensive safety oversight audit by the International Civil Aviation Organization in November last year (2017). 

    This is the third audit by the FAA since 2013, when the American regulator downgraded the safety ranking of the Indian aviation sector for failure to meet international norms. 
  • The Directorate General of Civil Aviation (DGCA) The Directorate General of Civil Aviation (DGCA) is the Indian governmental regulatory body for civil aviation under the Ministry of Civil Aviation. 

    This directorate investigates aviation accidents and incidents. 

    It is headquartered along Sri Aurobindo Marg, opposite Safdarjung Airport, in New Delhi. 

    The Government of India is planning to replace the organization with a Civil Aviation Authority (CAA), modelled on the lines of the American Federal Aviation Administration (FAA). 
  • India Approves Accession to WIPO Internet TreatiesThe Indian cabinet led by Prime Minister Narendra Modi has approved India’s accession to the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty (collectively known as the WIPO Internet Treaties). 

    What is WIPO Internet Treaties? The WIPO Internet Treaties lay down an international framework for preventing the unauthorized access to and use of creative works on the internet and other digital networks. 

    It was concluded in 1996 and came into force in 2002. 

    In 2012, India amended its copyright law to comply with the WIPO Internet Treaties, but strangely never acceded to it, because of which it has drawn considerable international criticism, especially from the US. 

    Special 301 report and its connection to WIPO 
    The United States Trade Representative (USTR) has recurrently placed India as a priority watch list country under its annual Special 301 Report. 

    Since 2003, one of the primary reasons for India’s designation as a priority watch list country under the Special 301 Report has been its non-accession to the WIPO Internet Treaties. 

    Even the US Chambers of Commerce’s International IP Index has ranked India in the bottom rung of countries because of its non-accession to the Treaties, apart from other reasons. 

    Why India suddenly gave its accession? 
    According to IP chapter of the Regional Comprehensive Economic Partnership (RCEP) agreement, acceding to the Treaties is a prerequisite for signing the RCEP. 

    The RCEP is a proposed mega-regional free trade agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) and six other countries with which ASEAN has free trade agreements. The RCEP is decisive for India to execute its Act East Policy, a strategic initiative to boost its hegemony in Southeast Asia. It is perhaps because of this that the government has finally decided to accede to the Treaties after a six-year inexplicable delay since the enactment of the Copyright (Amendment) Act, 2012. 
  • IMF cuts India growth forecast for 2018 by a notch to 7.3%The International Monetary Fund (IMF) projected a growth rate of 7.3% in 2018 and 7.5% in 2019 for India as against 6.7% in 2017, making it the fastest growing country among major economies. 

    The latest growth rate projection for India is slightly less — 0.1 percentage point in 2018 and 0.3 percentage points in 2019 — than its April projections. 

    Growth in China is projected to moderate from 6.9% in 2017 to 6.6% in 2018 and 6.4% in 2019. 

    Why cutdown in India’s growth projection? Negative effects of higher oil prices on domestic demand Faster than-anticipated monetary policy tightening due to higher expected inflation. 
  • Government working on another version of UDANThe Civil Aviation Ministry on Wednesday said it had started work on another version of regional air connectivity scheme for tourist destinations. 

    The existing scheme, known as UdeDeshkaAamNagrik (UDAN), seeks to connect unserved and under-served airports in different parts of the country. 

    Under the scheme as many as 56 unserved and 17 under-served airports and 31 heliports would be connected. 

    So far, 30 state governments/ Union Territories have signed Memorandums of Understanding (MoUs) with the Civil Aviation Ministry for participating in UDAN and providing various concessions to the airline operators. 

    UDAN is a demand-driven scheme where airline operator assesses the feasibility of operation on a particular route and bids under the scheme from time to time. 
  • Fugitive offenders Bill passedThe Lok Sabha on Wednesday passed the Fugitive Economic Offenders Bill, which will now replace the Ordinance by the same name promulgated by the President in April. 

    The Bill empowers special courts to direct the Central government to confiscate all the assets belonging to a fugitive economic offender, including those assets that are proceeds of the crime and that do not belong to the offender. 

    The legislation gains importance against the background of high-profile cases where individuals such as Vijay Mallya and Nirav Modi escaped the country. 
  • Cryptocurrencies will boost illegal transactions: RBI to SCThe Reserve Bank of India (RBI) said dealing in cryptocurrency will encourage illegal transactions. The RBI has already issued a circular prohibiting use of these virtual currencies. 

    Cryptocurrencies are “a stateless digital currency” in which encryption techniques are used for trading and these ‘currencies’ operate independently of a Central bank like the RBI. 

    A Bench, led by Chief Justice Dipak Misra, was informed by senior advocate Shyam Divan, appearing for the RBI, that a committee has been set up by the Centre to deal with issues relating to cryptocurrencies. 

    The petitioners has sought a direction to the Centre to take steps to restrain sale and purchase of illegal cryptocurrencies like Bitcoins, which were being traded openly for “illegal activities” like funding terrorism and insurgency. 
  • Ministry of Housing and Urban Affairs Launched ISCF and ISCI ProgramMr Hardeep S Puri, Minister of State (I/C), Ministry of Housing and Urban Affairs has launched India Smart Cities Fellowship (ISCF) and Internship (ISCI) program that will provide the youth with an opportunity to experience the aspects of Urban planning and governance. 

    'Smart Cities Digital Payments Awards 2018' was also launched which is intended to promote ‘Digital India’ and ease of living for India’s urban residents by promoting digital payments and encouraging Smart Cities to adopt innovative digital payments initiatives. 
  • Government may launch 7 Greenfield projects under Bharatmala schemeThe central government is expected to launch seven Greenfield projects to construct 3,000km of expressways under the Rs.5.35 trillion Bharatmala scheme. 

    In the first phase, the road network is set to connect Delhi-Vadodara, Chennai-Salem in Tamil Nadu, Kharagpur-Siliguri in West Bengal, Delhi-Bilaspur, Durg-Aurang in Chhattisgarh, Mangaluru-Chitradurga in Karnataka and Ambala-Kathputli in Haryana. 

    The longest stretch of 1,000km will be built between Delhi and Vadodara. 

    Why Greenfield projects? The Greenfield projects would cost 40-60% less than expansion of brownfield projects, given that land prices in brownfield projects are over twice the cost of land elsewhere. 
  • ADB accords approval for lining project of the Son canal in Shahabad – Bhojpur region of BiharADB and Finance Ministry to review the progress of lining project of the Son canal in Shahabad – Bhojpur region of Bihar. 

    During the meeting ADB representatives informed that ADB had accorded approval for this project

    It may be noted that the estimated cost of this project is USD 503 million (Rs 3272.49 crore) out of which USD 352 million is being provided by ADB. This project will bring immense benefits to the agriculture sector of Shahabad – Bhojpur region of Bihar. 
  • RBI Cancels Licence of Alwar Urban Co-Operative BankThe Reserve Bank of India has announced that the license of Alwar Urban Co-operative Bank in Alwar, Rajasthan has been cancelled as it is not in a position to pay its depositors in full as and when their claims accrue, among other reasons. 

    The reasons for the cancellation of the license were, the bank does not have adequate capital and earning prospects, and hence does not comply with the relevant provisions of the Banking Regulation Act, 1949. 
  • Government deliberates with travel and tourism industry, formulates action plan for boosting cruise tourism To formulate an action plan for realizing the full potential of Cruise Tourism in the country, an interactive session was conducted among various stake holders. 

    The Action Plan that has emerged from these deliberations focusses on developing identified sites as attractive tourist destinations and generating awareness about them both within the country and abroad; ensuring cleanliness and operational efficiency. 

    Mumbai would be the hub of Cruise Tourism in the country, it was decided in the meeting that areas like Sassoon Dock and Sewree Fort in the city, and nearby areas like KanhojiAngre Island, Mandwa, Alibaug and Vijaydurg, would be developed as attractive tourist destinations. 

    Government of India has taken several steps to promote Cruise Tourism in the country. These include

    Certainty of berth to cruise ships. 

    Ousting charges have been removed – this has reduced overall cost Discount of 42-66 % allowed in Port Charges

    Simplified SOPs issued for processes to be observed by multiple agencies like port authorities, Customs, Immigration, Security, State Govt, Ship Agents, Tour Operators etc

    E-Landing card system is ready for ease of travelling among Indian ports

    E- visa introduced for online and on arrival visa facilities

    Cabotage waived for foreign cruise vessels on Indian shores enabling passengers to board the vessel at Indian Ports for voyage along Indian shores. 

    Cruise terminals upgraded with more passenger amenities

    New cruise terminals to be constructed

    Reputed consultant appointed by Shipping Ministry to draw up a road map for Cruise Tourism in India. They have projected that the number of tourists is likely to go up to 4.5 million by 2042-43. 
  • 4th National Conclave on Mines and Minerals will strengthen mineral auction regime: Narendra Singh TomarThe 4th National Conclave on Mines & Minerals will be held on 13th July, 2018 at Indore for showcasing blocks which will be auctioned by the states in FY 2018-19 to the potential investors. 

    Purpose and benefits: It will carry forward the efforts of the Government for strengthening the mineral auction regime as well as help in expediting auctions and bring in greater participation from the stakeholders. 

    Central and State Governments have been working in coordination with each other to further strengthen the auction regime, and to identify more and more mineral blocks for auction to increase domestic mineral production. 

    Presentations on the different stages in auctioning of a mineral block and its operationalization such as identification and preparation of a mineral block for auction, steps involved in approval of mining plan and grant of statutory clearances, will also be organized. 

    History: The Ministry of Mines organized the 1st National Conclave on Mines & Minerals on 4-5 July, 2016 at Raipur, 2nd National Conclave on Mines & Minerals on 15th Feb, 2017 at New Delhi and 3rd National Conclave on Mines & Minerals on 20th March, 2018 at New Delhi. 
  • India imposes anti-dumping duty on Chinese polyester yarnIndia has imposed anti-dumping duty of up to USD 528 per tonne for 5 years on a Chinese polyester yarn used in automobile and other industries. 

    The move will provide a level playing field to domestic players and guard them against below-cost imports. 

    The finance ministry has imposed the duty on the product after considering the recommendations of Directorate General of Anti-dumping and Allied Duties (DGAD). 
    Why Anti-dumping duty? The duty is also aimed at ensuring fair trading practices and creating a level-playing field for domestic producers with regard to foreign producers and exporters. 

    India has already imposed anti-dumping duty on several products to check cheap imports from countries including China, with which India has a major concern of widening trade deficit. 
  • Major Steps taken for Reducing Tax LitigationsIn order to reduce the long pending grievances of taxpayers and to minimize litigations pertaining to tax matters and to facilitate the Ease of Doing Business, Government of India has decided to increase the threshold monetary limits for filing Departmental Appeals at various levels, be it Appellate Tribunals, High Courts and the Supreme Court in the following manner :- 
    Sl. No.
    Appeal Fora
    Present limit for filing appeal 
    (In Rs.)
    Enhanced limit 
    (In Rs.)
    10 lakhs
    20 lakhs
    High Courts
    20 lakhs
    50 lakhs
    Supreme Court
    25 lakhs
    1 Crore
    This is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigations and help the Department to focus on high value litigations. 

    How it benefits? In case of CBDT, out of total cases filed by the Department in ITAT, 34% of cases will be withdrawn. 

    In case of High Courts, 48% of cases will be withdrawn and in case of Supreme Court 54% of cases will be withdrawn. The total percentage of reduction of litigation from Department’s side will get reduced by 41%. However, this will not apply in such cases where substantial point of law is involved. 

    Similarly, in case of CBIC, out of total cases filed by the Department in CESTAT, 16% of cases will be withdrawn. 

    In case of High Courts, 22% of cases will be withdrawn and in case of Supreme Court 21% of cases will be withdrawn. 

    The total percentage of reduction of litigation from Department’s side will get reduced by 18%. However, this will not apply in such cases where substantial point of law is involved. 
  • India’s genetically modified crop area fifth largest in worldIndia has the world’s fifth largest cultivated area under genetically modified (GM) crops, at 11.4 million hectares (mh) in 2017

    Unlike other big growers, India’s entire GM crop area is under a single crop — cotton — incorporating genes from the Bacillus thuringiensis or Bt soil bacterium coding for resistance against heliothis bollworm insect pests. 

    The country with the highest area under transgenic crops, at 75 mh, is the United States. 

    Brazil’s total 50.2 mh GM crop area

    GM crops in India: In India, the GM crops that are under regulatory consideration — apart from the already commercialisedBt/insect-resistant cotton — include glyphosate-tolerant cotton and biotech hybrid mustard. 

    Both the Bollgard II-Roundup Ready Flex (BGII-RRF) cotton event of Monsanto (incorporating Bt as well as glyphosate-tolerant genes) and transgenic mustard developed by Delhi University’s Centre for Genetic Manipulation of Crop Plants (harbouring three alien genes that enable higher yields through hybridisation) have undergone all the mandated bio-safety research and open field trials. 

    Their commercial release has, however, been stuck due to opposition from environmental activists. 

    In the case of BG II-RRF cotton, the developer (Monsanto) itself has withdrawn its regulatory applications, following disputes with the government over intellectual property protection on GM technologies. 

    But that has come even as a high-level expert panel constituted by the Prime Minister’s Office has found 15 per cent of cotton area planted across Andhra Pradesh, Telangana, Maharashtra and Gujarat in the 2017 season — and about five per cent in Punjab — to be under hybrids containing the “unapproved” BG II-RRF event. 

    This is, of course, an indication of demand for GM technology among Indian farmers — whether or not the government and green NGOs like it. 
  • India replaces France as world’s 6th biggest economyIndia has become the world’s sixth-biggest economy, pushing France into seventh place, according to updated World Bank figures for 2017. 

    India’s gross domestic product (GDP) amounted to $2.597 trillion at the end of last year (2017), against $2.582 trillion for France. 

    India, with around 1.34 billion inhabitants, is poised to become the world’s most populous nation, whereas the French population stands at 67 million. 

    According to the International Monetary Fund, India is projected to generate growth of 7.4% this year (2018) and 7.8% in 2019, boosted by household spending and a tax reform. This compares to the world’s expected average growth of 3.9%.

    India had a good chance to become the world’s third-biggest economy by 2032. 

    At the end of 2017, Britain was still the world’s fifth-biggest economy with a GDP of $2.622 trillion. The US is the world’s top economy, followed by China, Japan and Germany. 

    Reasons for increase: Manufacturing output
    Consumer growth
    Implementation of a new harmonized goods and service tax regime. 
  • Union Government celebrates 1st GST DayGovernment of India celebrated the 1st GST Day on July 1st. The event saw an address on the eventful 1st year journey of GST over a live video link by Union Minister, Arun Jaitley. 

    Arun Jaitley recalled the pre-GST taxation system in India was one of the most complicated tax systems in the world. Multiple taxes, multiple returns to be filed by assesees, interface with multiple tax authorities, cascading effect of taxes, rising inflation, no free flow of goods across the country, fragmented markets across the country, inter alia, were some of the tenuous issues plaguing the indirect taxation system in India. GST has persuaded people to do businesses in a transparent manner without evading taxes, Shri Jaitley added. 

    Listing out the remarkable successes that the GST has achieved in a short span of 1 year, Jaitley said that this reform has created a unified market, the cascading of taxes has been eliminated, the weighted average of total taxation basket has come down, the GST Council is working upon continuous rationalisation of tax slabs, advance direct tax payments increased as result of successful implementation of GST, among others. The Minister informed that the total indirect tax collection for 9 month period in previous financial year post implementation of GST is about Rs. 8.2 lakh crores, which if extrapolated for the whole year comes to about Rs. 11 lakh crores, an 11.9% increase in indirect tax collections. 
  • Central Govt forms Ravindra H Dholakia panel to upgrade norms for state, district level economic data collectionThe government has set up a 13-member committee to upgrade the norms for computation of economic data at states and districts level in the backdrop of plans to revise the base year for National Accounts or GDP calculation. 

    The Ministry of Statistics and Programme Implementation (MOSPI) will change the base year to 2017-18 for the calculation of GDP and IIP numbers from the current 2011-12 with an aim to capture changes in the economy. 

    The Committee for Sub-National Accounts will be headed by Ravindra H Dholakia, a retired professor of IIM Ahmedabad. 

    The panel has been asked to "review the concepts, definitions, classifications, data conventions, data sources and data requirements for preparation of State Domestic Product (SDP) and District Domestic Product (DDP) and to lay down revised guidelines".

    It will also suggest measures for improving SDP and DDP in the country taking into consideration availability of data and requirements of the Centre and states/union territories. 

    As per the Terms of Reference of the Committee, it will also "suggest state level annual/benchmark surveys keeping in view the needs of the System of National Accounts especially in view of the next base year revision".

    The notification said that the panel would submit its report within one year and may also submit interim reports, as necessary. 

    The Central Statistics Office (CSO), MOSOPI, revises the base year of the macroeconomic indicators, as a regular exercise, to capture structural changes in the economy and improve the quality and representativeness of the indices. 

    The CSO had last updated base year for GDP calculation to 2011-12 from January 2015, replacing the old series base year of 2004-05. 
  • 2021 census data to be stored digitallyThe Registrar-General of India (RGI) on June 19 issued the notification as the process for the 2021 Census kicks in. The enumerators would start house listing in 2020, and the headcount would begin in February 2021. 

    The data collected during the 2021 Census will be stored digitally, the first time since the decennial exercise was conducted in 1951 in Independent India. 

    According to the notification released by The Registrar-General of India (RGI), the schedules and other connected papers shall be disposed of totally or in part by the Director of Census Operations, after creating an electronic record of such documents. Any tampering with the data will invite punishment under the Information Technology Act, 2000. 
  • Mehta panel submits 5-point plan to fight NPAsThe high-level committee on restructuring stressed assets and creating more value for public sector banks (PSBs) headed by Sunil Mehta, Non-Executive Chairman of Punjab National Bank, has suggested a transparent market-based solution with a focus on asset turnaround to ensure job protection and creation. 

    The five-pronged resolution route — outlining an SME resolution approach, bank-led resolution approach, AMC/AIF led resolution approach, NCLT/IBC approach, and asset-trading platform — envisaged by the committee will be applicable to smaller assets with exposure up to Rs.50 crore, mid-size assets between Rs.50 crore and Rs.crore, and large assets with exposure of Rs.500 crore and more which have a potential for turnaround. 

    The resolution route is also applicable to larger assets already before the National Company Law Tribunal (NCLT) and any other asset whose resolution is still pending. 

    The process will cover both performing and non-performing assets. 

    For the resolution of SMEs, the committee suggested the setting up of a steering committee by banks for formulating and validating the schemes, with a provision for additional funds. Stating that the resolution should be complete within 90 days, the committee suggested that the resolution of these assets be under a single bank’s control, with the bank having the liberty to customise it. 

    For loans between Rs.50 crore and Rs.500 crore, the committee called for a bank-led resolution approach, with the resolution being achieved in 180 days. The resolution plan has to be approved by lenders holding at least 66 per cent of the debt, it added. 

    The independent steering committee appointed by the Indian Banks Association (IBA) has to validate the process within 30 days. 

    For loans above Rs.500 crore, an independent asset management company (AMC) will be set up. 

    The committee also said an alternative investment fund (AIF) would raise funds from institutional investors. Banks would be given an option to invest in this fund if they wish. AIFs can also bid for assets in NCLT, it said. 

    The lead bank can discover price discovery through the open auction route. Security receipts have to be redeemed within 60 days, the committee said. 
  • NITI Aayog to organise India’s First Global Mobility Summit in New DelhiNITI Aayog, in collaboration with various ministries and industry partners, is organising ‘MOVE: Global Mobility Summit’ in New Delhi on 7th and 8th September, 2018. This Summit will help drive Government’s goals for vehicle electrification, renewable energy integration and job growth and also speed up India’s transition to a clean energy economy. 

    Prime Minister Narendra Modi will be inaugurating the Summit, which will be the first Global Mobility Summit of its kind, with over 1,200 expected participants from across the world including Government leadership, Industry leaders, Research Organizations, Academia,Think Tanks and Civil Society Organisations. 

    MOVE Summit aims to bring together and engage with key stakeholders within the rapidly transforming global mobility landscape and to evolve a public interest framework for a shared, connected, zero emission and inclusive mobility agenda for the future. 
  • KVIC launches e-marketing systemThe Khadi and Village Industries Commission (KVIC) on 3rd July launched its, in-house developed, single-umbrella e-marketing system named Khadi Institution Management and Information System (KIMIS) in New Delhi. The system can be accessed from anywhere in the country for the sale and purchase of Khadi and Village Industries products. 

    KVIC Chairman, Vinai Kumar Saxena, while inaugurating the KIMIS, said that it was the need of the hour to develop an in-house single umbrella billing software for sale and purchase that could be monitored, round-the-clock, from any part of India. 

    He said that KVIC IT team has developed a foolproof software, which may have cost millions of rupees if purchased from a third party. This software will give real-time data of sales and will also give the updated status of stocks of khadi bhawans and godowns, allowing better planning and control of inventory of the KVIC. He added that 480 Khadi institutions and showrooms are linked with this billing software and it will be useful in raising demand and supply of goods in high demand. 
  • In the 50th year of its incorporation WAPCOS achieves highest ever gross income of Rs 1110 CroreWAPCOS Ltd, a Mini Ratna-I Public Sector Enterprise under the Ministry of Water Resources, River Development and Ganga Rejuvenation entered its 50th Foundation Day. WAPCOS has achieved the highest ever gross income of Rs 1110 crore during the year 2017-18. 

    The company’s profitability has grown over 75 percent, from Rs.102.52 Crore in 2013-14 to Rs.180 Crore in 2017-18. 
  • Union Cabinet hikes MSP for paddy by Rs. 200Union Cabinet has approved a hike in minimum support prices (MSPs) for kharif crops so that they are 50% higher than the cost of production, not including land costs. 

    This includes a Rs. 200 per quintal increase in the MSP for paddy, which is likely to inflate the food subsidy bill by over Rs. 15,000 crore. 

    The decision was taken by the Cabinet Committee on Economic Affairs headed by Prime Minister Narendra Modi. 
  • Oil prices as the main risk to India’s economy: Moody’s SurveyOil prices, pace of banks’ balance sheet clean-up and investment remain the key credit risks in India, according to an investor survey by Moody’s Investors Service. 

    While market participants in Singapore and Mumbai were unanimous in pegging high crude price as the main risk to India’s economy, views varied on the second biggest risk, according to the ratings agency. 

    “When asked about the top risks facing the Indian economy, most of the respondents highlighted high oil prices as the top risk, while 30.3% of those in Singapore picked rising interest rates as the next top risk, and 23.1% of those in Mumbai picked domestic political risks as the second top risk,” Joy Rankothge, a vice president and senior analyst at Moody’s, said. 
  • Initial Reserve Bank of India (RBI) approval for Bank of ChinaBank of China — one of the four biggest state-run Chinese lenders — has received in-principle approval from the Reserve Bank of India (RBI) to open branches in India, banking industry sources said. 

    The approval marks only the first step for a foreign bank seeking to start business in India. The lender would now need to identify preferred branch locations and seek regulatory approval separately for the branches. The RBI, typically, grants permission to open one branch to start with, though there have been exceptions. 
  • Three lakh CSC VLEs to be engaged as Banking Correspondents of HDFC BankCSC SPV, a Special Purpose Vehicle under the Ministry of Electronics & IT, has entered into agreement with HDFC Bank to enable its three lakh Village Level Entrepreneurs (VLEs) managing the Common Services Centers (CSC) operate as Banking Correspondents of HDFC Bank. The agreement was signed between Chairman and Managing Director, HDFC Mr. Aditya Puri and CEO, CSC SPV Dr. Dinesh Kumar Tyagi in the presence of Minister of Electronics & IT Ravi Shankar Prasad on 4th July at the Ministry of Electronics & IT, New Delhi. 

    Under the agreement, VLEs of CSC will work as Banking Correspondent of HDFC Bank and support the Government initiative to promote financial inclusion and make banking services more accessible in rural areas. This agreement is expected to be a game changer as it would significantly contribute to Government’s objectives of enabling Direct Benefit Transfer (DBT) of various schemes. Women, senior citizens and persons with disability will especially get benefitted through this initiative. This will facilitate withdrawal and deposit of government entitlements such as payments under MGNREGA as well as various social welfare schemes like widow pension, handicapped and old age pension, etc. 

    The HDFC BC (CSC) under this arrangement will also function as Business Facilitator (BF). Apart from this, HDFC Bank will support CSC SPV in converting 1000 identified villages into Digi Gaon (Digital Villages) within this financial year. CSC SPV is implementing Digi Gaon initiative in rural and remote villages of the country, with the mandate of the Ministry of Electronics & IT, where citizens can avail various online services of the central and State government. In the pilot project, CSC SPV has adopted six villages in the country. The Digi Gaons are positioned to promote rural entrepreneurship and building rural capacities and livelihoods through community participation and collective action for engendering social change through a bottom-up approach with key focus on the rural citizen. 

    Under its’ commitment to enhancing women’s health and hygiene, HDFC Bank will also support CSC SPV by funding Stree Swabhiman Sanitary Napkin Manufacturing Units. CSC SPV, through its initiative ‘Stree Swabhiman’ is striving to create a sustainable model for providing affordable and accessible sanitary products close to the homes of adolescent girls and women in rural areas. So far 204 sanitary pad manufacturing units have become operational across the country. 

    The Common Service Center (CSC) Scheme is an integral part of “Digital India” initiative of Ministry of Electronics and Information Technology (MeitY), Government of India. Currently, close to three lakh VLEs are operational across the country, of which 2.10 lakh are at Gram Panchayat level. 
  • CCEA Approves Rs 1 lakh Crore for Research in Higher EducationThe Cabinet Committee on Economic Affairs (CCEA) has approved the proposal to expand the scope of the Higher Education Funding Agency (HEFA) to mobilize Rs 1 lakh crore for research and academic infrastructure for higher education institutions by 2022. 

    In a first, KendriyaVidyalayas /NavodayaVidyalayas will also get funding from HEFA. IITs, NITs, IISERs and other Central universities as well as AIIMS and other medical colleges will also get funds from HEFA. 

    The International Finance Corporation is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in developing countries. 
  • Cabinet Approved Extension of Scheme of Recapitalization of Regional Rural Bank (RRB) The government has approved extension of recapitalization scheme for Regional Rural Banks (RRBs) for next three years up to 2019-20 with an aim to strengthen their lending capacity. 

    A total of Rs 1,107.20 crore, as government’s share, out of Rs 1,450 crore, has been released to RRBs till March last year (2017). 

    The scheme started in 2010-11 and was extended twice in 2012-13 and 2015-16. The last extension was up to March, 2017. 

    The remaining Rs 342.80 crore will be utilized to provide recapitalization support to RRBs whose Capital to Risk Weighted Assets Ratio (CRAR) is below 9 per cent, during 2017-18, 2018-19 and 2019-20.


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