Search your Topic HERE....

September 04, 2012

Current Affairs - Economy - August

Leave a Comment

sponsored links

Indian Commerce Minister Anand Sharma said in Colombo on 3 August, India will help Sri Lanka establish a special economic zone to manufacture auto components in Trincomalee. The SEZ would promote exports to the production chains in India.A Joint Task Force on the SEZ would be set up and submit its report within 90 days. Anand Sharma also announced the setting up of a pharmaceutical manufacturing hub in Sri Lanka.

The Reserve Bank of India, on 1 August, constituted a committee to suggest ways to strengthen the rural co-operative credit structure. The panel, headed by Nabard Chairman Prakash Bakshi, will review the existing short-term co-operative credit structure (STCCS), focussing on structural constraints in the rural credit delivery system. It will also explore ways to strengthen the rural co-operative credit architecture. The seven-member panel will make an in-depth analysis of the STCCS, and examine various alternatives with a view to reducing the cost of credit. It will also look at the feasibility of setting up of a two-tier STCCS as against the existing three-tier structure. The STCCS targets the credit requirement of the small and marginal farmers in the country. The panel will submit its report within three months from the date of its first meeting. It will mainly assess the role played by State and district cooperative banks in fulfilling the requirement of agriculture credit. 


The Reserve Bank of India (RBI) permitted banks to lend to telecom companies for the upcoming auction for spectrum, subject to conditions such as mortgaging the spectrum to the lenders. The RBI had laid down a few pre-conditions for financing of telecom firms for the auction of airwaves to protect banks against potential defaults. The Union cabinet on 3 August 2012 approved a proposal that allows telecom companies bidding for airwaves to mortgage spectrum to raise funds from banks. The government set a reserve or base price of Rs 14000 crore for the auction. 

India Post on 9 August has chosen Infosys as its technology and consulting partnerto integrate its delivery of financial products across its network of 1.5 lakh post offices in the country. The “transformational” project, part of the “India Post 2012” initiative, would cost the postal service Rs.700 crore.

Moody's Analytics cut India's growth forecast to 5.5 percent for the fiscal year 2012-13. It blamed the government and RBI of inaction despite slowing economy, as well as a poor monsoon. The research unit of ratings agency Moody's Investors Service becomes the latest to cut India's growth forecasts this week. Earlier CLSA and Citigroup had cut their growth outlooks for India to 5.4 percent and 5.5 percent, respectively for the fiscal year ending in March 2013.


As per the latest global ranking compiled and published by the World Federation of Exchanges (WFE) in August 2012, the National Stock Exchange of India (NSE) became the world’s largest bourse in terms of the number of trades in equity segment for the first six months of 2012. A total of 735474 trades took place in the equity segment of NSE in the January-June period of 2012, making it the world’s largest exchange on this parameter. NSE was followed by NYSE Euronext and Nasdaq OMX at the second and the third positions. NSE is the second largest exchange globally after Korea Exchange for index options. Eurex was the third largest exchange worldwide in terms of total number of index options traded during the first six months of 2012.BSE recorded 187824 trades during this period in its equity segment. The total number of listed companies is much larger in case of the BSE, the exchange however lags behind NSE significantly in terms of volume and value of trades.

Securities and Exchange Board of India (SEBI) inaugurated their local office in Jaipur on 4 August. It was inaugurated by Rajeev Kumar Agarwal, the member of SEBI. The office will be responsible to look after all the regulatory aspects of investor protection, investor education and all the other responsibilities within Rajasthan state.Securities and Exchange Board of India (SEBI) inaugurated their local office in Jaipur on 4 August. It was inaugurated by Rajeev Kumar Agarwal, the member of SEBI. The office will be responsible to look after all the regulatory aspects of investor protection, investor education and all the other responsibilities within Rajasthan state.


The Andhra Pradesh government has decided to extend equity support up to Rs.4,000 crore to AP Genco during the next four years to facilitate early completion of its upcoming power projects. This government response followed consistent Opposition criticism that the Genco is being neglected by it vis-à-vis private developers. The undertaking which meets over 40 per cent of the power demand in the State through its various thermal, hydel and other stations, has taken up new projects with installed capacity of 21,000 MW at a huge cost of over Rs.36,000 crore. The Chief Minister of A.P ,N. Kiran Kumar Reddy cleared a slew of measures to improve the electricity availability to consumers in the State and ensure seven-hour supply to farmers. These included a decision to give boost to renewable energy sources by facilitating establishment/completion of new projects based on wind and solar energy on fast track mode as they were expected to add 1,000 MW to the grid (over 20 million units).

In yet another indication of slowdown, the Prime Minister's Economic Advisory Council(PMEAC) on 18 August, revised downwards its economic growth projections for the current fiscal to 6.7% from an earlier 7.5-8%. The PMEAC also raised its inflation forecast to 6.5-7% from an earlier estimate of 5-6% for the current fiscal. PMEAC Chairman C Rangarajan said , Food inflation is expected to remain high in the coming months.


The United States administration has announced setting up of an institute for manufacturing innovations, which will help prevent jobs going to India and China. President Barack Obama said in a statement that,this institute would help make sure that manufacturing jobs of tomorrow take root not in places such as China or India, but right here in the United States of America. The National Additive Manufacturing Innovation Institute (NAMII), which will be based in Ohio, will be a public-private partnership initiative and has received $70 million as initial financial assistance.On March 9, Mr. Obama had announced plans to invest $1 billion to catalyze a network of up to 15 manufacturing innovation institutes around the country that would serve as regional hubs of manufacturing excellence and help to make manufacturers more competitive and encourage investment in the U.S. According to the White House, the NAMII will provide the innovation infrastructure needed to support new additive manufacturing technology and products to become a global centre of excellence in this field. Additive manufacturing, often referred to as 3D printing, is a new way of making products and components from a digital model, and will have implications in a wide range of industries, including defence, aerospace, automotive, and metals manufacturing.

India’s leading car maker Maruti Suzuki India, on 16 august, announced termination of services of 500 regular workers and resumption of normal operations from August 21 at its violence-hit plant at Manesar, Haryana. Maruti Suzuki India (MSI) Chairman R. C. Bhargava told that, they had issued termination notices to 500 regular worker and they had plan to lift the lock-out from August 21 and resume operations at the facility in phases. The company said termination notices had been issued to regular workers who were allegedly involved in the July 18 violent incidents that led to the death of a senior MSI executive, Ashwani Kumar, and left nearly 100 others injured. Maruti Suzuki India had declared a lockout at the Manesar plant on July 21, stating the safety and well-being of its employees were paramount to the company.

The Comptroller and Auditor General (CAG) of India in its audit report noted that India’s exchequer suffered a massive loss of 1.86 lakh crore due to the distribution of coal blocks without bidding. The CAG report was tabled in the parliament on 17 August 2012.The CAG in its report stated that 57 coal blocks that were allocated to private companies during 2004-2009, extended them a windfall gain of 1.86 lakh crore rupees. The CAG report has also brought Prime Minister Manmohan Singh under scrutiny as he was holding the charge of Coal Ministry from 2006 to 2009. Besides, the CAG report also raised serious allegations against the PMO which delayed the fair bidding process for coal blocks despite the clearance from Law and Justice Ministry. Tata Group, Reliance Power, Jindal Power and Steel, Abhijit Group, Bhushan Group, Electro Steel, OP Jindal Group were some of the major beneficiaries of the coal blocks distribution. The government has distributed about 150 coal blocks over the past eight years. During this period Prime Minister Manmohan Singh, Shibu Soren and Prakash Jaiswal have been charged the Coal Ministry. The 1.86 lakh rupees scam is the biggest in the history of India as it surpassed the 1.7 lakh crore 2G spectrum scam.

Parliament's Public Accounts Committee on 23 August 2012 decided to bring the three latest CAG reports on coal allocations, GMR-run Delhi airport and Reliance Power, onto its agenda for the year 2012. The Public Accounts Committee (PAC) in its meeting on 23 August 2012 called for deterrent penal provisions against units in Special Economic Zones which default duty payments to the exchequer. PAC in a report adopted in the meeting recommended an oversight mechanism which would ensure no misuse of the SEZ policy. The PAC panel based its findings on a sample of 22 SEZ units. The panel found that out of an overall export of Rs 7149.23 crore made by 22 SEZ units, the actual export content was only Rs 1999.27 crore (28%) and the remaining Rs 5149.96 crores (72%) related to Domestic Tariff Area earnings. The committee recommended that all SEZs undertake physical export of at least 51% of their product, and even import tax waivers raw material for goods falling under the Domestic Tariff Area (DTA) is to be considered on the credit account of the SEZ firms. It was noted that SEZ units could sell their goods, including by products, and services in DTA on payment of applicable duty including at nil rate with no requirement to payback the duty foregone on inputs used in the clearance of products. This policy will put SEZ units at a distinctly advantageous position compared to similar units in the DTA.


The Finance Ministry has approved foreign direct investment in insurance and pension sectors up to 49%. The Insurance and Pension Bills will now need Cabinet approval before coming up before Parliament. These Bills have already made one trip to the Cabinet, but at the time it was for 26% FDI. When Pranab Mukherjee was the Finance Minister, they had gone to the Cabinet but they had deferred the decision. With P Chidambaram now headed the finance portfolio, these bills were relooked and now the FDI limit stands at 49%. Whether the bills will come up for Cabinet approval or not, or what decision the Cabinet takes will be a political decision. Both these bills have seen strong opposition from the Mamata Banerjee led Trinamool Congress. But if the Cabinet clears these two bills, they will be introduced in the winter session of Parliament.


India on 26 August, extended the ban on milk and milk products from China for another year till June 2013. The Directorate General of Foreign Trade (DGFT) said in a notification that, Prohibition on import of milk and milk products (including chocolates and chocolate products and candies/confectionary/ food preparations with milk or milk solids as an ingredient) from China is further extended till June 2013, or until further orders. The ban had ended on June 24 this year. Imports of milk and milk products from China have been prohibited since September 24, 2008. Though the DGFT has not cited any reason for the ban, it is understood it was over fears of Chinese milk containing melamine, a deadly chemical. 

SEBI has allowed seven Alternative Investment Funds (AIF) to set up shop in the country under a newly formulated route, which allows pooling of funds for investments in areas such as real estate, private equity and hedge funds. The approval has been given to all the seven AIFs by the Securities and Exchange Board of India in a period of less than one month, as per the information available with the market regulator. SEBI had notified its guidelines in May for AIFs, which are funds established or incorporated in India for the purpose of pooling in of capital from Indian and foreign investors for investing as per a pre-decided policy. As per SEBI data, six AIFs registered with the regulator during August 2012, while one was granted registration on July 23. 

Finance Minister P. Chidambaram has been appointed as India's Governor on the Board of Governors of the African Development Bank and African Development Fund in place of Pranab Mukherjee.Likewise, Department of Economic Affairs Secretary Arvind Mayaram has been appointed as India's alternate Governor. 

0 Responses:

Post a Comment

Related Posts Plugin for WordPress, Blogger...