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October 2019 - Economy News

  • The Reserve Bank of India (RBI) has imposed a fine of Rs 1 crore on Pune-based Janata Sahakari Bank and Rs 25 lakh on Jalgaon Peoples Co-operative Bank for violating income recognition, advances management and asset classification norms. The penalty has been imposed in exercise of powers vested in the RBI under the provisions of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by the RBI. The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

  • TRAI fixes ring timings for mobiles, landlines. Mobile phone users will get 30 seconds to answer or reject a call, before it is considered a missed call. In a new regulation, the Telecom Authority of India (TRAI), has fixed the ring time for calls made to mobiles at 30 seconds, and those made to landlines at 60 seconds. The notification is likely to impact interconnect usage charges between operators.

    The new rules, which will come into effect after 15 days, bring to an end a face-off between two major operators — Reliance Jio and Bharti Airtel — over the issue. Last month, Bharti Airtel had cut the ringing time for calls made by its subscribers to 25 seconds from about 45 seconds, in retaliation to a similar move by rival Reliance Jio. Authority felt that appropriate value of duration of alert is to be 30 seconds for Cellular Mobile Telephone Service and 60 seconds for Basic Telephone Service.

  • Government e-Marketplace (GeM) signed MoU with Indian Bank and Canara Bank for payment- related services. The MoU will provide a paperless, cashless, and transparent payment system on the GeM portal. Ministry of Commerce launched the GeM initiative to offer a one-stop platform that provides an online procurement of common use goods and services.

  • Foreign portfolio investors (FPIs), have infused a net sum of 5,072 crore rupees into the Indian capital markets in October, 2019 so far amid the government's efforts to revive domestic demand. As per the latest depositories data, foreign investors put in a net sum of 4,970 crore rupees in the equities and a net 102 crore rupees in the debt market during 1st to 18th October, 2019. In the preceding month, FPIs had invested about 6,558 crore rupees in the domestic capital markets (both equity and debt). This came following net outflows in July and August.

  • India Post launches mobile banking facility. The Department of Post announced that it has launched mobile banking for its savings account customers. The facility will be available on all the post office savings account holders of the CBS (core banking solutions) post offices. The launch of the mobile banking facility comes almost a year after the Department of Post launched Internet banking facility for its savings account holders.

  • The World Bank released its latest Doing Business Report (DBR, 2020). India has recorded a jump of 14 positions against its rank of 77 in 2019 to be placed now at 63rd rank among 190 countries assessed by the World Bank. As a result of continued efforts by the Government, India has improved its rank by 79 positions in last five years (2014-19).

    India has improved its rank in seven out of 10 indicators and has moved closer to international best practices (Distance to Frontier score). Significant improvements have been registered in ‘Resolving Insolvency’, 'Dealing with Construction Permits', ‘Registering Property’, ‘Trading across Boards’ and ‘Paying Taxes’ indicators. The changes in seven indicators where India improved its rank are as follows:

    The important features of India's performance this year are :
    • The World Bank has recognized India as one of the top 10 improvers for the third consecutive year.
    • Recovery rate under resolving insolvency has improved significantly from 26.5% to 71.6%.
    • The time taken for resolving insolvency has also come down significantly from 4.3 years to 1.6 years.
    • India has reduced the number of procedures in granting construction permits.
    • India continues to maintain its first position among South Asian countries. It was sixth in 2014.

  • The Government e-Marketplace (GeM) signed a MoU with Federal Bank to offer a number of services including transfer of funds through GeM Pool Accounts (GPA), advising of Performance Bank Guarantees (e-PBG) and Earnest Money Deposit (EMD) to the registered users on the portal. The MoU will facilitate a cashless, paperless and transparent payment system on the portal.

  • The Government of India, Government of Odisha and the World Bank signed a US$165 million loan agreement to support smallholder farmers strengthen the resilience of their production systems. The Odisha Integrated Irrigation Project for Climate Resilient Agriculture will be implemented in rural areas vulnerable to droughts and largely dependent on rain fed agriculture.

  • Bangladesh has become the second-fastest growing economy in South Asia after Bhutan. World Bank in its report 'South Asia Economic Focus, Making (De) Centralization Work' released on 13 October, 2019 projected GDP growth rate from moderate to 7.2 per cent this fiscal year and 7.3 per cent in 2020 in Bangladesh.

    The report points out that its economy is likely to maintain growth above 7 per cent, supported by a robust macroeconomic framework, political stability, and strong public investments. Bangladesh has reduced the current account deficit due to rising export and remittances which was above dollar 15.5 billion in 2018.

    However, the report says financial sector vulnerability, fiscal pressures and loss of external competitiveness pose challenges to its growth rate. Indicating vulnerability in the financial sector, World Bank report says, low deposit growth rate and rising bad loans along with low credibility of Letter of credit guarantees in the international market remain causes of worry for Bangladesh.

    The report points out that despite slowdown in industrial growth rate, the industrial sector remains strong as the country’s garment industry benefited from the trade tensions between the United States and China. Bangladesh need to address key structural challenges such as reducing the infrastructure deficit, enhancing human capital, improving urban management and managing climate change risks.

  • The World Trade Organization, WTO, has formally given the go-ahead for the United States to impose trade sanctions on up to 7.5 billion dollars worth of European Union goods. This follows a ruling that European planemaker Airbus received illegal subsidies.

    The move by the WTO's dispute settlement body was largely a formality after the long-awaited ruling by a WTO arbitration panel on the 2nd of October, 2019. The ruling found that the European bloc and member States Britain, France, Germany and Spain failed to remove improper subsidies for Airbus that hindered sales by US rival Boeing.

  • The government is probing WalMart-owned Flipkart and Amazon over the alleged predatory pricing. Stating that e-commerce companies have no right to sell products at discounts that will result in retail sector incurring major loss, these platforms are only allowed to connect potential sellers and buyers.

  • India on course to be 5 trillion economy by 2024. Prime Minister Narendra Modi has asserted that his government is on course to make India a five-trillion dollar economy in the next five years despite apprehensions being expressed by experts and the opposition. It is the government's resolve to make India a 5 trillion dollar economy by 2024.

    Indian economy is full of opportunities for the youth and the recent policy decisions will further boost its growth. The government is also planning to pump in over 100 lakh crore rupees in infrastructure projects. The nature of employment is changing and skill upgradation is the key. That inclusive society brings investment and investment brings innovation. That steps like abrogation of Article 370 will lead us towards inclusive society and it will not only benefit Kashmir but change the atmosphere of the entire country.

  • Home Credit India (HCIN), has tied-up with Karur Vysya Bank (KVB) for joint lending using end-to- end automated processing which will help the customer get real-time approval and disbursement. Under the agreement, HCIN and KVB will disburse loans in a single amount to customers. With this partnership, Home Credit India will be able to reach out to a new segment of customer.

  • Bandhan Bank and Gruh Finance will merge, with the National Company Law Tribunal (NCLT) clearing the scheme of amalgamation. The scheme has been approved by NCLT's Kolkata and Ahmedabad benches. October 17, 2019, has been fixed as the record date following the effectiveness of scheme for determining shareholders of the merged entity.

  • Finance Minister Nirmala Sitharaman will inaugurate National e-Assessment Centre (NeAC) for better taxpayer service and promotion of ease of doing business in New Delhi. Income Tax Department's NeAC, will avoid face-to-face interaction between taxpayers and tax officials. The finance ministry said in a statement that setting up of NeAC is a step to reduce taxpayer grievances in line with the prime minister's vision of 'Digital India'.

    The new initiative shall impart greater efficiency, transparency and accountability in the assessment process. Under the new system, taxpayers have received notices on their registered e-mails as well as on registered accounts on the web portal with real-time by way of SMS. The notice specifies the issues for which their cases have been selected for scrutiny. Replies to the notices can be prepared at ease by tax payers and sent by email to the NeAC by uploading the same on the designated web portal.

  • The World Trade Organization (WTO) trimmed by more than a half its 2019 global trade growth forecast to just 1.2%. The WTO had in April projected a 2.6% rise in the volume of merchandise trade for 2019. It also cut its forecast for 2020 to 2.7% from 3% predicted in April. World merchandise trade volume grew 3% in 2018.

  • National Fertilizers Limited on 10 October, 2019 presented dividend of over 28 Crore Rupees to the Government of India for the year 2018-19. Chairman and Managing Director of National Fertilizers Limited Manoj Mishra presented Dividend Cheque of 28.22 crore rupees to the Union Minister for Chemicals and Fertilizers D.V. Sadananda Gowda in the presence of Fertilizers Secretary Chhabilendra Roul. National Fertilizers Limited has presented a cumulative dividend of around 1157 crore rupees to the Government till date against paid up equity of 490.58 crore rupees.

  • The U.K. government has decided to issue a commemorative coin to mark the 150th birthday anniversary of Mahatma Gandhi. The Pakistani-origin British finance minister said he had asked the UK’s Royal Mint to work on the coin so that the world never forgot what Gandhi taught it. Announced this on 10 October, 2019 at the annual GG2 ceremony in London to celebrate the British Asian success. Mr. Javid has topped the power list released annually by the Asian Media Group (AMG), UK-based publishers behind the GG2.

    Awards celebrate the 150th birthday of Gandhi — a fitting time to announce that I’ve asked the Royal Mint of the UK to propose a new commemorative coin in his honour. We should never forget what Gandhi taught the world. Gandhi taught us that power doesn’t just come from wealth or high office. We must always remember the values he lived his life by and that our parents brought with them when they arrived here all those years ago.

  • India will extend a Line of Credit of over 60 million US Dollars to Comoros in the field of energy and maritime defence cooperation. Both the countries have signed some important agreements including cooperation in defence and energy sectors. India will extend a Line of Credit of over 41.6 million US Dollars for setting up of 18 MW Power Plant in Moroni and another 20 million US Dollars for the procurement of High-Speed Interceptor Boats. The Vice President M Venkaiah Naidu was given 'The Order of the Green Crescent', the highest Civilian Honour of Comoros, by Azali Assoumani, President of Comoros in Moroni.

  • Industrial output declines by 1.1% in August due to poor performance by manufacturing, power generation and mining sectors. The Index of Industrial Production (IIP) had expanded by 4.8 per cent in August 2018. The overall IIP growth during April-August period was 2.4 per cent, down from 5.3 per cent in the corresponding period of the last fiscal.

  • Government e-Marketplace (GeM) signed a MoU with Union Bank of India (UBI) in New Delhi on October 10, 2019. Through this partnership, UBI will be able to offer an array of services including transfer of funds through GeM Pool Accounts (GPA), advising of Performance Bank Guarantees (e-PBG). The MoU will facilitate a cashless, paperless and transparent payment system on the portal.

  • Mumbai is the 12th wealthiest city in the world. According to 'The Wealthiest Cities Worldwide in 2019 list' by New World Health, Mumbai is the 12th richest city in the world with a total wealth of $960 billion. It is the only Indian city to feature in the top 20 list of wealthiest cities in the world. Delhi is the second Indian city with 22nd position on the list. NewYork City topped the list with a total wealth of $3.0 trillion.

  • Moody, the rating agency has lowered its 2019-20 GDP growth forecast for India to 5.8% from 6.2%. It stated that the Indian economy is experiencing a pronounced slowdown partly due to long- lasting factors. It expects growth to pick up to 6.6% in FY21 and around 7% over the medium term. India’s economic growth slumped to a six-year low of 5% in the April-June quarter.

  • The 16th Global SME Business Summit 2019 was held in New Delhi on 24 September 2019. The Summit is organized every year by the Ministry of MSME and Confederation of Indian Industries (CII). The theme this year is 'Making Indian MSMEs Globally Competitive'. The summit was attended by more than 500 delegates from more than 15 countries.

  • Public sector telecom firm ITI Limited launched its cloud services and solutions platform for central and State government entities, banks, public sector undertakings, small and medium enterprises and Start-ups in India. The services, which include Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS) and Storage as a Service (STaaS) will be offered through a partnership with Connectivity IT Solutions, which is a data center provider.

    ITI claimed that its cloud facility is expected to achieve optimum utilization of the infrastructure and speed up the development and deployment of various ICT-IOT based applications for customers help government and non-government enterprises to procure ICT services on demand. The data will be stored in Connectivity IT Solutions’ data center facility while the systems integration firm will also support ITI with Cloud infrastructure, R&D capabilities and technical manpower. The new cloud service offered by ITI Data Center are expected to provide end-to-end IT infrastructure. They including new age cloud services to all its customers in the coming years. The initiative also exhibits ITI’s commitment to the Government of India’s flagship initiatives like Digital India.

    The ITI cloud initiative is one of the outcomes of the guidelines recommended by Government of India in 2017 on setting up of IT infrastructure by government departments using cloud computing technology with a clause mandating that all data must be stored within the country. The cloud services of ITI Data Center will enable PSU Banks, Central, and State Government undertakings, MNCs, corporate and large enterprises to have their data located within the country.

  • State Bank of India opened its Melbourne office to become the first Indian bank to have a branch in the Australian state of Victoria. The Melbourne office will assist the growing trade and investment relations between Victoria and India and is the outcome of the state's 10-year India Strategy our shared future. This investment by India's largest commercial bank is a testament to our thriving financial services sector and our highly skilled workforce. The two-way merchandise trade between Victoria and India was to the tune of 1.76 billion Australian dollars in 2018.

  • The Reserve Bank of India (RBI) has slashed the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.15 per cent from 5.40 per cent with immediate effect. Consequently, the reverse repo rate under the LAF stands reduced to 4.90 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 5.40 per cent.

    Announcing its fourth bi-monthly monetary policy statement in Mumbai, RBI has revised the GDP outlook for 2019-20 to 6.1%, from 6.9% in previous Monetary Policy committee meet. For 2020-21, RBI has revised the GDP outlook to 7.2%. The Monetary Policy Committee (MPC) also decided to continue with an accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.

    The repo rate, at which it lends to the system, has been brought down to help reduce borrowing costs for home and auto loans, which are now directly linked to this benchmark. Reverse repo rate is the rate at which the RBI borrows money from commercial banks within the country. This is the fifth straight cut in rates by the Reserve Bank in its key rates in as much policy reviews in 2019, and takes the total quantum of reductions to 1.35 per cent.

  • The Cabinet has approved a new process of strategic disinvestment with a view to expediting privatization of select PSUs. The Cabinet approved the new policy under which the Department of Investment and Public Asset Management, DIPAM under the Ministry of Finance has been made the nodal department for the strategic stake sale. DIPAM and NITI Aayog will now jointly identify PSUs for strategic disinvestment. The decision has been taken with a view to streamlining and speeding up the process.

    Finance Minister Nirmala Sitharaman during the presentation of the Budget had announced about increasing the divestment target from 90 thousand crore rupees to 1.05 lakh crore rupees for the current fiscal year, focusing on consolidation of public sector undertakings and strategic disinvestment.



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