ECONOMY AFFAIRS MAY 2014

ECONOMY AFFAIRS MAY 2014

• In view of the mounting bad loans of banks, FICCI on 27th May suggested setting up of a National Asset Management Company (NAMCO) to take over stressed assets from the banking system for effective recovery and rehabilitation. As per FICCI's suggestion, NAMCO should be established as a 'special purpose' asset reconstruction company (ARC) with sponsorship of the government, with initial capitalisation of up to Rs 5,000 crore that will allow it to build up a sizeable portfolio of stressed assets, said FICCI President Sidharth Birla.
  
• Reserve Bank of India (RBI) data released on 26 May says that, Foreign exchange reserves in India increased by USD 15.5 billion in the financial year that ended March 2014. As per the release, the foreign exchange reserves stood at 303.67 billion US dollar in the financial year ended on March 2014. In terms of total foreign investments, foreign direct investment marginally increased by 21.6 billion US dollar in 2014 as against 19.8 billion US dollar in the 2013. Investment from foreign institutional investors (FII) dropped to 5 billion US dollar as compared to 27.6 billion US dollar in 2012-13. During 2014, external commercial borrowings increased to 11.8 billion US dollar compared with 8.5 billion US dollar.
  
• Chairman and Chief Executive Officer of Amway India William S Pinckney was on 26 May arrested by Andhra Pradesh police. The arrested Chairman and CEO of Amway India has been remanded to custody for 14 days by the Judicial Magistrate in Kurnool on 27 May. The Amway Chief, who was taken into custody by a team of Kurnool Police from the company headquarters in Gurgoan on 26 May, was brought to Kurnool and produced before the magistrate. William Pinckney faces charges under section 420 of IPC (cheating) and violations under the Prize Chits and Money Circulation Schemes (Banning) Act 1978.A case was registered in December 2013 following a complaint by an advocate Jagannatha Reddy on allegations of cheating and financial fraud.
  
• The aviation company Boeing has delivered the fourth P-8I maritime patrol aircraft to India. The latest state-of-the-art maritime patrol aircraft departed from Boeing Field in Seattle and arrived May 21 at Naval Air Station Rajali. Based on the Boeing Company’s Next-Generation 737 commercial airplane, the P-8I is the Indian Navy variant of the P-8A Poseidon that Boeing has developed for the US Navy. India has placed orders for eight P-8I maritime aircraft.
  
• State-owned power equipment company BHEL, on 19th May, said it had signed an initial agreement with PT Star Vyobros, Indonesia, for setting up a 200-MW coal-fired plant in Indonesia. It has signed a memorandum of understanding (MoU) with PT Star Vyobros, Indonesia for setting up a 200-MW coal-fired power plant in Sulawesi region in Indonesia. The MoU was signed at a ceremony held in Jakartaby P. K. Uppal Executive Director, (International Operations) BHEL, and Edi Yosfi, President Director, PT Star Vyobros.
  
• Narendra Kumar Verma was on 21st May, selected as M.D for the ONGC Videsh Ltd. (OVL). Mr. Verma is currently Director for Exploration in Oil and Natural Gas Corporation (ONGC). Public Enterprises Selection Board (PESB) selected him. He succeeded Dinesh K Sarraf who was elevated as Chairman and Managing Director of Oil and Natural Gas Corporation (ONGC) in March 2014.
  • ONGC Videsh Ltd. (OVL) is a Miniratna Schedule “A” Central Public Sector Enterprise (CPSE) of the Government of India under the administrative control of the Ministry of Petroleum & Natural Gas.
  • It is a wholly owned subsidiary and overseas arm of Oil and Natural Gas Corporation Limited (ONGC).
    
• The Task Force on Waste to Energy led by Dr.K.Kasturirangan has submitted its report on 14th May 2014 to the Planning Commission. The Task Force was constituted under the Chairmanship of Dr. K. Kasturirangan to identify technically feasible, financially affordable and environmentally sound processing and disposal technologies for Municipal Solid Waste (MSW). 
  • The report strongly recommended Public Private Partnership (PPP) as a mode of service delivery to achieve the target set for Sustainable Waste Management. A model scheme was also detailed for setting up Waste to Energy projects through PPP mode, including a viability gap funding up to 40%.
  • The report highlighted the need for an integrated approach towards Municipal Solid Waste (MSW) management. It stressed reduction and segregation of waste at source and also efficient utilization of various components of the waste.
  • It stressed the need for setting up centralised or decentralised waste processing facilities keeping in view the quantity and quality of waste generated and financial viability of the processing technology.
  • The report suggests for the selection of appropriate technology and clearly indicates technologies that could be adopted by various classes of cities.
    
• Reserve Bank of India (RBI) governor, Raghuram Rajan said on 15th May that, Plastic currency notes would be launched in the country in 2015 after field trials. The government in February had informed Parliament that one billion plastic notes of Rs.10 denomination will be introduced in a field trial in five cities selected for their geographical and climatic diversity. The other four selected cities are Kochi, Mysore, Jaipur, and Bhubaneswar. The field trial is expected to be launched in the second half of 2014. 
  • Plastic notes have an average life span of about five years and are difficult to imitate. Currency notes made of plastic are cleaner than paper notes.
  • Plastic notes were first introduced in Australia to safeguard against counterfeiting of currency. Several countries in the West have introduced plastic notes for their advantage over normal notes.
    
• The Reserve Bank on 6th May issued the guidelines allowing minors to operate bank accounts independently with a view to promote financial inclusion and bring uniformity in opening of such accounts in banks. Minors higher than 10 years of age can open and operate independently savings bank tab and use additional facilities like ATM and cheque books.RBI had before allowed minors to open fixed and savings deposit bank tab with mothers as guardian. Modifying the guidelines, the RBI said that all minors can now open a savings/fixed/recurring bank deposit tab owing to either his/her untreated guardian or legally appointed guardian. The minors who have attained 10 years of age, would be allowable to open and operate savings bank accounts independently. The banks can also choose on the minimum documents which are required for opening of accounts by minors.
  
• The government has been decided to extend supply of Euro-IV (Bharath Stage-IV) grade petrol and diesel to 50 more cities by March 2015.This is in an attempt to cut the vehicular pollution in major towns. Presently, Euro-IV or Bharat Stage-IV petrol and diesel are being supplied in 26 cities including Delhi, Mumbai, Chennai, Ahmedabad and Lucknow. In rest of the country, Euro-III or BS-III grade fuel was being supplied. Ultra-low sulphur petrol and diesel, meeting Euro-IV emission norms, began selling in 13 cities like Delhi, Mumbai, Chennai, Kolkata, Bangalore, Kanpur, Agra, Pune, Surat, Ahmedabad, Hyderabad, Lucknow and Sholapur from April 1st, 2010.It was expanded to seven cities of Puducherry, Mathura, Vapi, Jamnagar, Ankleshwar, Hissar and Bharatpur in 2011-12. In the following year, 10 more cities were added Silvassa, Daman, Diu, Aligarh, Rae Bareli, Unnao, Karnal, Kurukshetra, Yamunanagar and Valsad. Three more cities of Medak, Nizamabad and Mahbubnagar were added on July 5th, 2013. In January 2014, Euro-IV fuel supply was started in Vrindavan, Kosi Kalan, Hindaun city, Dholpur, Ahmednagar and Mahabaleshwer. 
  • Bharat stage emission standards are instituted by the Government of India to regulate the output of air pollutants from internal combustion engine equipment, including motor vehicles. The standards and the timeline for implementation are set by the Central Pollution Control Board under the Ministry of Environment & Forests.
  • The standards, based on European regulations were first introduced in 2000. Progressively stringent norms have been rolled out since then. Since October 2010, Bharat stage III norms have been enforced across the country. In 13 major cities, Bharat stage IV emission norms have been in place since April 2010.
    
• Oil and Natural Gas Corporation (ONGC) said on 6th May that its huge gas field in Mozambique holds 50 to 70 trillion cubic feet (Tcf) of recoverable reserves. Official sources said it is 43% more than the minimum estimated resources when it invested. In ONGC Videsh Ltd, the overseas wing of state-owned ONGC, bought a 16% stake in the offshore Rovuma Area-1 over the past one year. Oil India has a 4% stake and a unit of Bharat Petroleum Corp (BPCL) owns 10% in the block. The appraisal drilling activities in the Orca field increased the total estimated recoverable resources in Offshore Area-1 to a range of 50 to 70-plus Tcf of natural gas, which the resource estimation is higher than 45 to 70 Tcf range than the previous estimations. An estimated $18.4 billion will be required to bring the first set of discoveries to production and convert the gas into liquid (liquefied natural gas or LNG) so that it can be shipped to consuming nations such as India. The Area 1 consortium's 2014 programme is focused on advancing the development towards first LNG cargo in 2018, Anadarko said. The project, with a capacity to produce 20 million tonnes of LNG annually, would be the world's largest LNG export site after ExxonMobil-run Ras Laffan in Qatar. So far, seven gas fields have been discovered in the block.
  
• The Organisation for Economic Cooperation and Development (OECD) latest economic outlook report said on 6th may that India's economic growth may be at 4.9% in 2014. The estimate by the OECD for 2014 is higher than 4.5% growth projected for 2013.India's GDP is expected to pick up further momentum and grow 5.9% in 2015.The Indian economy has slowed and growth declined to a decade-low of 4.5% in 2012-13.
  • The Organisation for Economic Co-operation and Development (OECD) is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. The OECD originated in 1948 as the Organisation for European Economic Co-operation (OEEC).
  • The OECD's headquarters are at the in Paris, France.
  • In 1961, the OEEC was reformed into the Organisation for Economic Co-operation and Development by the Convention on the Organisation for Economic Co-operation and Development and membership was extended to non-European states. Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries.
    
• Beverages giant Coca-Cola India on May tied up with TERI University to establish an academic department for studies in water management. Under the partnership, TERI University will establish Coca-Cola Department of Regional Water Studies, which will offer post-graduate courses on water management. The courses will start this year. The professionals, who pass out of the University, can have the choice of working with NGOs, government and semi-government organisations.
  • TERI University was established on 19th August 1998 and recognized by the University Grants Commission (UGC) as a deemed University in 1999. Set-up as the TERI School of Advanced Studies in 1998, the institution was subsequently renamed the TERI University.
  • TERI University is the first of its kind in India to dedicate itself to the study of environment, energy and natural sciences for sustainable development.
  • TERI location is in New Delhi.
    
• Well known US retail company Wal-Mart announced on 7th May it would spend more than 109 million USD in 2014 financial year to enhance its global anti-corruption compliance programme and added personnel for the same in many countries, including India. Between December 2011 and January 2014, the company delivered anti-corruption training to more than 1, 00,000 personnel from all levels around the world, including key senior executives and officers who interact directly or indirectly with government officials. In its annual report for the financial year ended January 31st, 2014, Wal-Mart said compliance with the US Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws remained a key priority. Wal-Mart, based in Bentonville in Arkansas, hired several anti-corruption directors and staffers at its global headquarters and international retail markets during the year. Wal-Mart has about 11,000 stores under 71 banners in 27 countries and posted sales of over USD 473 billion in fiscal 2014.