ECONOMY AFFAIRS APRIL 2011

ECONOMY AFFAIRS APRIL 2011

• International Monetary Fund (IMF) has lowered India's economic growth rate forecast to 8.2 per cent for 2011 and warned that boom like conditions could lead to over-heating of the economy.” The challenge for many emerging and some developing economies (is) to ensure that present boom-like conditions do not develop into overheating over the coming year,” the IMF said in its World Economic Outlook report. However, it retained its projection for global economic growth at 4.5 per cent in 2011 and 2012, which is lower than 5 per cent growth it projected for 2010. 
• The Telecom Regulatory Authority of India (TRAI) on 13 April issued important recommendations related to manufacturing, infrastructure and green telecom to promote structured growth of the sector. It has also asked for making green measures as an integral part of the proposed National Telecom Policy 2011 and ensuring energy certification for all telecom products, equipment and services in the telecom network. 
• A cluster of 30 units to manufacture hi-tech defense and space components, apart from a major facility for integration of missile subsystems, would be coming up at the Aerospace and Precision Engineering SEZ at Adibatla, near Hyderabad. 
• The entire 100 acres, earmarked for the SEZ and another 100 acres in the non-SEZ area for developing ancillaries, have been allotted to the units by the co-developer -- SAMUHA Engineering Industries Limited -- formed by six aerospace and defense companies. SAMUHA would develop infrastructure like power, water, sewerage, greenery, and other common facilities along with APIIC. 
• The BRICS nations inked a pact at Sanya (china), to use their own currencies instead of the U.S. dollar in issuing credit or grants among each other. 
• Braving the slow economic growth and declining demand from the western markets, India's exports posted an impressive 37.1 per cent rise at $245.9 billion for the fiscal ending 2010-11. During March shipments posted an impressive 43.9 per cent growth at $29.1 billion. Engineering goods constituted the largest component of the exports entailing considerable domestic value addition and engineering exports crossed $60 billion, a growth of 84.76 per cent. Petroleum products exports were up 50.58 per cent at $42.45 billion. 
• India's food production crossed 235 million tonnes during 2010-11 as per the latest estimates and this is the highest since Independence, S. Ayyappan, Director-General of the Indian Council of Agricultural Research, said on 23 April, on the sidelines of a function held in Mandya to mark the inauguration of a Jaggery Park. In 2010-11, the country produced 30.2 million tonnes of oilseeds, and 17.2 million tonnes of pulses — which had never crossed the 15 million tonne-mark in the past — apart from 94.5 million tonnes of rice and 84 million tonnes of wheat. Agriculture also recorded a 5.4 per cent growth — a first again — compared to the four per cent growth achieved all these years. 
• On April 27, 2011 Oil and Natural Gas Corporation (ONGC) announced two new oil and gas discoveries in Gujarat. ONGC has declared that it has 50 per cent interest in the block that it had won along with the Gujarat State Petroleum Corporation (40 per cent) and Sunterra (10 per cent) in the seventh round of bidding under the New Exploration Licensing Policy (NELP). 
• The pension regulator, PFRDA on April 2011 opposed any form of mandatory investments into infrastructure under the National Pension Scheme (NPS). PFRDA has put forth its opposition stance comes in the wake of the government’s attempt to set up an infrastructure fund with retirement savings. PFRDA reiterated that in pension products the complete market risk is being borne by accountholders, and in such a situation directing investment is not proper on the part of the regulator. 
• The Reserve Bank of India (RBI) issued a notification on 22 April 2011 to put into force the norms on creation of the defence mechanism by banks. The apex bank asked all the banks to create special buffers to be used by banks for making specific provisions for bad loans during system-wide downturns. The RBI expressed that it wants banks to create the counter-cyclical provisioning buffer to be set up out of any surplus available after complying with the stipulated 70% provision of coverage ratio (PCR) of the gross non-performing assets as of September 2010.The new guideline is basically in the context of Basel III requirements. The Basel III requires more aggressive capital provisioning, particularly when the going is good for banks. The RBI is always ahead of the curve when it comes to the implementation of prudential norms. 
• President Pratibha Devisingh Patil on April 11 awarded Standing Conference of Public Enterprises (SCOPE) Meritorious Awards for 2009-10 to IOC, BHEL and HPCL, among others, for specialising in various fields. The (SCOPE) Award for environmental excellence was received by SAIL Chairman C S Verma. A K Datt, CMD, Bharat Electronics Ltd won the award in the category of corporate governance. Hindustan Petroleum Corporation Ltd (HPCL) CMD S Roy Choudhary was rewarded for corporate social responsibility. Petroleum major Indian Oil Corporation (IOC) received gold trophy for being the best among the human resource management category. The country's second largest state-owned Punjab National Bank was merited for Best Managed Bank and Financial Institution, whereas in the sector of R&D and technology BHEL was declared a winner. National Safai Karamcharis Finance Development Corporation (NSKDFC) MD Lalit Kohli was awarded for best managed Section 25 PSE. Felicitation trophies were presented to the chief executives of IOC, NTPC, ONGC and SAIL.