AIMS DARE TO SUCCESS MADE IN INDIA

Friday 22 December 2017

ECONOMY AFFAIRS OCTOBER 2016

ECONOMY AFFAIRS OCTOBER 2016
  • PM for making India global arbitration hub
    Prime Minister Narendra Modi on 23rd October batted for making India a global hub for arbitration, highlighting the need to develop cost-effective and time-bound processes in this regard.

    Addressing a conference on the National Initiative towards Strengthening Arbitration and Enforcement in India, organised by Niti Aayog, Modi said efforts to make India a preferred destination for global arbitration faced challenges in the form of availability of excellent global arbitrators, professional conduct, enforcing neutrality, timely completion of proceedings, and cost effective arbitration process.

    According to Prime Minister:
    India has no dearth of brilliant lawyers and judges and also has a large number of retired judges, engineers and scientists who can function as competent arbitrators in various disputes.

    However, this in turn would require widening the ambit of legal education in India.

    There is need to develop specialised arbiration, bar associations also need to be professionally involved

    Enabling an alternative dispute resolution eco system is a national priority for India needs to promote India as a global arbitration hub.

    Highlighted legal reforms undertaken by government including scrapping of over 1,000 archaic laws, enacting the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, and the Arbitration and Conciliation Act (Amendment) Act, the Bankruptcy and Insolvency Code.

    Under the amendments to the Arbitration and Conciliation Act, 1996, an arbitrator will have to settle a case within 18 months. After the completion of 12 months, certain restrictions will be put in place to ensure that the arbitration case does not linger on.

    The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act enables transfer of all pending suits and applications relating to commercial disputes involving a claim of Rs. 1 crore and above in high courts and civil courts to the relevant commercial division of courts.

    Commercial Divisions are to be set up in those high courts which are already exercising ordinary original civil jurisdiction such as Delhi, Bombay, Calcutta, Madras and Himachal Pradesh high court.
  • Finance Ministry asks PSUs to explore taking over stressed projects
    In a strong message to corporate loan defaulters, the finance ministry on 24th October asked PSUs such as NTPC, Steel Authority of India (SAIL) and Cochin Shipyard to explore taking over some stressed projects in their respective sectors as current promoters are lax or unable to repay debt.

    The Reserve Bank of India has been stressing on improving operational efficiency of companies whose loan accounts have gone sticky through induction of new owners or managers.

    After a meeting with top bankers and government officials, finance ministerArun Jaitley said, that the agenda for present was whether in some cases, is also have management team of successful PSUs in certain sectors to operate, at least in the interim, some of the plants.

    The government’s move would involve banks invoking their powers under loan contracts to convert some part of debt into equity to take over management control from the current owners. Banks have not been able to find alternative promoters under the tools provided by RBI. Once the banks take over the stranded projects, a new management team could be put in place by roping in retired officers of PSUs with relevant expertise.

    The stressed assets (gross NPA and restructured loans) of public sector banks rose from R7.46 lakh crore (14.62% of gross advances) as on March 2016 to R7.83 lakh crore (15.74%) as on June 2016.

    Bulk of the stressed loans is in the infrastructure sectors such as power, steel and shipping. It is estimated that loans of about R1 lakh crore to the power generation firms are under stress. In the power sector, the country added an average of 20,000 MW annually to its thermal power capacity over the last five years. But lower-than-projected growth in demand, fuel shortage and the inability of debt-laden power distribution companies to enter into new long-term power purchase agreements have left a sizeable portion of these new capacities stranded.

    According to an estimate, a total of 25,000 MW capacity — commissioned or under-construction — is lying idle for want of buyers or assured fuel supply agreements. Tenders for just 11,000 MW have been floated by the states since 2011 for new PPAs.
  • India up 21 places in WEF gender gap report
    Current AffairsIndia has climbed 21 spots to rank 87th on the World Economic Forum's Global Gender Gap Report 2016. In 2015, it was ranked 108th. The improvement in ranking, the report says, is driven largely by major improvements in education, where it has managed to close its gap entirely in primary and secondary education.

    With this jump in ranking, India has now overtaken China which is ranked 99th out of 144 countries. Iceland tops the latest rankings followed by Finland, Norway and Sweden.

    The report measures gender gap as progress towards parity between men and women in four areas - educational attainment, health and survival, economic opportunity and political empowerment.

    A troubling finding of the report is that the global march towards parity in the key economic pillar has slowed down dramatically "with the gap - which stands at 59 per cent - now larger than at any point since 2008."As a consequence the report estimates that the "global economic gender gap will now not close until the year 2186.

    On two of these pillars, India has made progress in 2016 over the previous 2015. On education attainment India has made considerable strides moving up from 125th rank in 2015 to 113th in 2016. On economic participation and opportunity too, India has moved up to 136th rank in 2016, from 139th the 2015. But on health and survival, it has made little progress moving up by a mere one place over 2015 to rank 142nd in the world. On political empowerment it continues to be ranked 9th in the world.

    But a rather peculiar aspect of this improvement is in the country's ranking on primary and secondary education. In 2015, India ranked 119th on enrolment in primary education and 118th on secondary education. But in the 2016 report, it moved up spectacularly to rank 1 on both sub-indices.
  • India inches up a notch in WB ease of business ranking
    India improved its position to 130 in the World Bank Ease of Doing Business 2017 report.

    Improving India’s ranking in the report has been a key target of the government headed by Prime Minister Narendra Modi. India which had been ranked 130 in the 2016 report, was placed at 131 according to the revised rankings for 2015 released on 25th October, thus reflecting a marginal improvement.

    India could not improve its ranking better despite reform measures that have been lauded in the report because other countries around it in the ranking list also did well in 2015, World Bank officials who oversaw the report said.

    Augusto Lopez-Claros, Director, Global Indicators Group at the WB, praised the government for the reforms it undertook in 2015 and noted that India had made a noticeable improvement in the distance to frontier (DTF) score — an absolute measure of progress towards best practices.

    Word Bank Doing Business reports, introduced in 2004, review business regulations and their enforcement across countries —190, in 2016. The latest edition takes into account developments in one year up until June 1, 2016.

    India is one of the few economies that was discussed separately for its reform measures in the report. Four reform measures undertaken by India during the 2015 helped the country improve its DTF score, said the World Bank.

    Getting electricity, paying taxes, trading across borders and enforcing contracts have become easier in India in the 2016, the report found. These findings are based on experiences in Delhi and Mumbai. The impact of local factors is limited, but it is relevant, said Rita Ramalho, Manager, Doing Business project at WB. Paying taxes is easier after the introduction of an electronic system for paying employee state insurance contributions, a reform that applies to both Mumbai and Delhi.

    Exporting and importing is easier because of the intorduction of ICEGATE portal and simplification of border and documentary procedures. “ India made enforcing contracts easier by creating dedicated divisions to resolve commercial cases,” the report said.
  • AAI creates new subsidiary for air cargo logistics and allied services
    Airports Authority of India has created a wholly owned subsidiary AAI Cargo Logistics and Allied Services Company Ltd (AAICLAS).

    The new entity has been set up with a vision to become one of the foremost integrated logistics network operators in the country with the primary focus on handling air cargo and allied services.

    The subsidiary, though owned by AAI, will be functionally and administratively independent. It will provide ground handling, documentation, transport services for carriage of bonded and non-bonded cargo and screening services and related value added services at airports in India and abroad, AAICLAS said in a statement. All the activities currently being carried out by the AAI cargo department will be merged with the new entity.

    According to RN Choubey, Secretary, Civil Aviation, the new company hopes to achieve a turnover of around Rs. 380 crore in the next one and half to two years. AAI is a partner in running the airports in major metros which have been given to the private sector in a public-private partnership model.
  • AP Govt. withdraws Swiss Challenge notification
    A Division Bench of the Hyderabad High Court comprising acting Chief Justice Ramesh Ranganathan and Justice Durga Prasada Rao on 26th October was informed by the AP government that it was withdrawing the notification issued on July 17, 2016, inviting competing counter challenging proposals for construction of seed capital area in joint venture with the CRDA in Amaravati.

    AP Advocate-General Dammalapati Srinivas conveyed the government’s decision to the special Bench when it assembled in the afternoon. The Bench then closed the litigation declaring that the issues raised in the writ petition are left open. The Bench was dealing with writ appeals filed by the government and the CRDA challenging the order of single judge who stayed all further proceedings regarding awarding of a contract to build start-up area of Amaravati.

    The single judge granted a stay in two writ petitions filed questioning the Swiss Challenge method adopted by the government based upon a proposal given by a Singapore consortium.

    In May 2015, the AP government declared that the Swiss Challenge method would be adopted. In October 2015, Original Project Proponent (OPP) Ascendas-Singbridge Pvt. Ltd. and Sembcorp Development Ltd. submitted proposals for development of seed capital area of 16.9 sq. km which was revised in March 2016. The AP government approved the proposal for 6.84 sq km within the seed capital area in joint venture with CRDA in the first week of July. An advertisement was issued on July 17, inviting competing counter challenging proposals. This was challenged by Aditya Constructions and another.

    On September 12, the single judge stayed the whole process declaring that the rules were violated and the public interest is affected.
  • Cabinet gives in-principle approval for strategic sale of over dozen PSUs
    The Union Cabinet on 27th October gave in-principle approval to Niti Aayog's proposal for strategic sale of over a dozen public sector undertakings (PSUs). According to Jaitley, Finance Minister of India Arun Jaitley the names of PSUs that are up for strategic stake sale would be made public once they are going to be put up for the auction. The recommendations of the NITI Aayog on disinvestment and strategic sale came up for consideration and the Cabinet in principle approved the recommendations with regard to some of the units. Each case would be considered separately after it has been examined by the Department of Disinvestment and the Ministries concerned. The strategic sale will involve a management control transfer as the shareholding of the government would come down to below 50 per cent.
  • CCEA clears Rs 500-cr special horticulture package for Jammu and Kashmir
    The Cabinet Committee on Economic Affairs, CCEA on 27th October approved the 500-crore rupees special horticulture package to Jammu and Kashmir to help apple growers rejuvenate old orchards and start new ones.

    This is part of the 80 thousand-crore rupees package announced for the state in November 2015 by Prime Minister Narendra Modi to develop infrastructure after the 2014 floods.

    The Centre-state fund sharing norms have been relaxed to 90:10 ratio under the Mission for Integrated Development of Horticulture, MIDH to implement the Prime Minister's special horticulture package in the state.

    The Centre's share will be Rs 450 crore and the rest will be borne by the state government. The package will help in setting up of 329 hectares of new apple orchards and restoration of 3,900 hectares of damaged ones over three years.

    It will benefit about 21 thousand orchardists located in more than 491 villages where horticulture areas of more than 5,200 hectares were severely damaged by floods and landslides in September 2014

    Under the package, apple growers will be given financial help in 90:10 for importing planting material at the maximum rate of Rs 460 per plant while funds in the ratio of 50:50 for importing four wire trellis system at the rate of Rs 9.8 lakh per hectare for new apple orchards.

    The funding norms have been relaxed to encourage apple growers to import special varieties of plants for better survival, early flowering and enhanced fruiting apple planting materials and four wire trellises system which may increase the productivity by 3 to 4 times. The revised funds sharing norms under the package will be valid till 2018-19 and will generate employment for up to 20 thousand people.
  • Centre sanctions 84,460 more affordable houses under PM Awas Yojana
    Centre has sanctioned 84 thousand 460 more affordable houses for five States under Pradhan Mantri Awas Yojana. Over three thousand crore rupees will be invested for these houses and out of this one thousand 256 crore rupees has been approved.

    Over 47 thousand houses has been sanctioned for West Bengal, around 15 thousand for Punjab, 12 thousand for Jharkhand, six thousand for Kerala, While Manipur for the first time has got 3,090 houses.

    Housing and Urban Poverty Alleviation Ministry in a release said, each eligible beneficiary belonging to economically weaker sections in urban areas will be provided one lakh 50 thousand rupees for expansion and upgradation of existing house. With these approvals, 10 lakh 95 thousand 804 affordable houses have been approved during the last one year under Pradhan Mantri Awas Yojana.
  • Startups can raise USD 3 million via ECBs annually: RBI
    The Reserve Bank on 27th October permitted startups to raise external commercial borrowings (ECBs) of up to USD 3 million in a financial year, a move aimed at boosting innovation and promoting job creation. The RBI said while issuing norms for ECB route for startups that the borrowing should be denominated in any freely convertible currency or in Indian Rupees (INR) or a combination thereof.

    In case of borrowing in INR, the non-resident lender, should mobilise INR through swaps/outright sale undertaken through bank in India. AIR correspondent reports, the Reserve Bank of India (RBI) has detailed rules that would apply to startups looking to raise foreign borrowings, keeping restrictions on such funds to a minimum. Under this, Funds can be raised with a minimum maturity of 3 years.

    The regulator has not prescribed any cost-ceiling or restriction on the end use of the funds raised. Such conditions are applicable to borrowings by companies across most other sectors.
  • New ‘benami’ Act to take effect from Nov. 1, 2016
    The Benami Transactions (Prohibition) Amendment Act will come into force on November 1, 2016, the Central Board of Direct Taxes said on 28th October. Following this, the existing Benami Transactions (Prohibition) Act will be renamed as the Prohibition of Benami Property Transactions Act (PBPT Act).

    The PBPT Act defines benami transactions, prohibits them and further provides that violation of the PBPT Act is punishable with imprisonment and fine. The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner. Properties held benami are liable for confiscation by the Government without payment of compensation.

    According to the new law, people caught with 'benami' properties could serve up to seven years of rigorous imprisonment and have to pay a significant fine. Additionally, the properties will be confiscated. Under the Act, a transaction is named ‘benami’ if property is held by one person, but has been provided or paid for by another person.

    A person could also face rigorous imprisonment for up to five years for knowingly giving false information and will have to pay a fine of up to 10 per cent of the market value of the property. The PBPT Act provides for the creation of an appellate mechanism called the Adjudicating Authority and Appellate Tribunal.

    A Joint/Additional Commissioner of Income-tax, an Assistant/Deputy Commissioner of Income-tax and a Tax Recovery Officer… have been notified to perform the functions and exercise the powers of the Approving Authority, Initiating Officer and Administrator, respectively under the PBPT Act.
  • 40% roads in India not metalled, 78% NHs have one or two lanes
    Current Affairs In a stark indication of how far India has to go in developing its highway network, latest official statistics reveal that around 78% of national highways are either one or two-lane affairs. One third are less than two lanes, making the task of four-laning India's economic lifelines a challenging endeavour.

    A report of the road transport and highways ministry also shows that nearly 40%, including rural, intra-district and state highways, are not metalled -outlining the limitations in connectivity but also offering hope that road development in remote areas can be a major employment generator for many years to come.

    According to the report, just five states -Maharashtra, UP, Karnataka, West Bengal and Assam -account for 43% of the road network. The implications are obvious as fixing the imbalance can be key to literally speeding up India's economy through smoother freight movement.

    Over 14 lakh km of road is yet to be surfaced, over 11.5 lakh km being rural and project roads. While rural roads include stretches owned by panchayats and zila parishads in addition to networks under Pradhan Mantri Gram Sadak Yojna, project roads cover stretches built by the forest, irrigation and electricity departments, among others.

    Road length in India increased from 33.73 lakh km in 2000-01to 54.72 lakh km in 2015 and rural roads account for the maximum share of 61% of the entire network. State and national highways, which carry over 60% traffic, have less than 5% share. These are even less than the country's total urban road network.

    A comparative analysis of the report also shows that Assam has the maximum length of non-metalled or unsurfaced roads (nearly 2.67 lakh km) followed by 1.85 lakh km in West Bengal and Maharashtra. Interestingly, Delhi, which ranks fourth in the list of states with maximum urban roads, has nearly 8,700km of non-metalled stretches.
  • BRICS development bank to lend $2.5 billion in 2017
    The development bank set up by the BRICS group of emerging economies will ramp up lending to $2.5 billion in 2017 after making its first loans to back green projects, according to its president KV Kamath The BRICS - Brazil, Russia, India, China and South Africa - agreed to create the New Development Bank (NDB) in July 2014 with initial authorized capital of $100 billion. The lender was officially launched in 2015. With Russia, Brazil and South Africa on the economic skids and China slowing, the initial euphoria has faded, yet Kamath said the BRICS had much to gain by deepening their cooperation.

    The fact is that these countries, collectively, have for the last few years contributed to more than 50 percent of incremental economic wealth that has been generated globally.

    The NDB, headquartered in Shanghai, will expand its staff to 300 over the next three years but run a tight operation that seeks to take quick decisions and transfer experience across all five BRICS member states. It has already approved loans totaling $900 million to green projects in each member state. It has also started a renminbi-denominated borrowing program, issuing a 3 billion yuan ($450 million) bond.

    Kamath, said there was plenty of room for new lenders like the NDB and the Chinese-led Asian Infrastructure Investment Bank (AIIB), in addition to established institutions like the World Bank.

    Infrastructure alone has needs globally of $1-1.5 trillion a year - all the multilateral banks put together can do maybe 15 percent of this.
  • Andhra govt sets GVA target for horticulture sector at Rs 49,845 cr
    Andhra Pradesh government for 2016-17 has set the Gross Value Addition (GVA) target for the horticulture sector at Rs.49,845 crore. The government wants to take the contribution of horticulture to GVA to 25 per cent with the focus on replacing the less remunerative field crops with the likes of mango, sweet orange, acid lime, banana, papaya, pomegranate, guava, oil palm, cocoa, apple berry, Thai guava, and dragon fruit.

    The government in an official release has stated that this has been accomplished in 14,310 hectares of the targeted 32,513 hectares. Rejuvenation and canopy management are being taken up in crops like mango, sweet orange, acid lime, and cashew for improving productivity.

    The government is concentrating on promotion of farm ponds to save plants at critical stages of growth during drought and has been encouraging the cultivation of vegetables.

    The State horticulture department has provided hybrid vegetable seeds for 3,813 hectares at 50 per cent subsidy and also extending technical support in identification of beneficiaries and selection of crops. It has asked farmers to switch over to micro-irrigation to conserve water and bring additional areas under cultivation.
  • PM Modi launches hub for SC/ST entrepreneurs
    Indian Prime Minister, Narendra Modi has launched SC/ST hub at Ludhiana on 18th October for the welfare of SC/ST entrepreneurs.

    He also gave away awards to about 250 MSME entrepreneurs. Modi also launched zero effect zero defect scheme for manufacturers. Prime Minister also distributed 500 spinning wheels to women weaker sections of Punjab.

    Addressing the entrepreneurs on this occasion he stressed the need to give importance to standardization and quality in quality in manufacturing to compete in the world.

    Appreciating the achievements in manufacturing and service sector Mr. Modi said due to this India is growing despite recession in the world since 2008.
  • 3 hydropower projects dedicated to the nation
    Prime Minster Narendra Modi inaugurated three hydropower projects of 1,752 MW capacity in Himachal Pradesh. With this he dedicated to the nation 520 Megawatt generation capacity third phase of Parbati hydro power project, 412 Megawatt Rampur project and 800 Megawatt Kol Dam power project.
  • GST Council decides on compensation for States for any loss of revenue
    The Goods and Services Tax Council in its meeting reached at a consensus on the way the States would be compensated for any loss of revenue after implementation of the new indirect tax regime, GST from 1st of April 2017.

    According to the Union Finance Minister Arun Jaitley that base year for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of the GST. He said, states getting lower revenue than this would be compensated by the Centre.

    The Minister said, the GST Council also discussed the possible Goods and Service Tax rates, including a four-slab structure with lower rates for essential items and highest band for luxury goods. The rate structure should be such which do not lead to further inflation and both the States and Centre have adequate funds to discharge their duties.

    The rate should be revenue-neutral so that there is no need to burden consumers with additional tax. The meeting has reached at a consensus on definition of revenue to compensate states for revenue loss due to GST implementation.

    The GST Council managed to sort out the details of the compensation to the states on account of any loss incurred due to the roll out of the Goods and Services Tax (GST).

    Council discussed the definition of state revenue in the meet.11 Geographically Disadvantaged States including 5 north east states and 3 hilly states-- will be Included in Definition Of 'Revenue'.

    The GST council also discussed tax structure and a detail presentation was made. At least five different rate structures were presented to the GST Council on the first day of the three day deliberations.

    So far all the decisions have been taken with consensus. The GST Council has to decide all issues through a majority vote of at least 75%.

    Centre has one-third vote and states together have two-third vote. The GST council also discussed GST rate and according to revenue secretary Standard rates of 12% and 18% are on anvil.
  • GST talks stumble on cess, administrative control issue
    The Centre’s efforts to finalise the rates for the Goods and Services Tax have been pushed back to November as the States opposed the Finance Ministry’s proposal to levy a cess for compensation, an issue which had been resolved on 18th October.

    The States also called for a fresh discussion on control of assesses. The discussion on these two items is continuing. We have converged towards a consensus, an announcement will be made after the next GST Council meeting.

    The GST Council will now meet on November 3 and 4 to finalise the rate structure and once again on November 9 and 10 to discuss the draft legislation. Despite the delay, the Centre and the States are still hopeful of meeting the rollout date of April 1, 2017.

    Some States have opposed the Centre’s proposal to levy a cess on ultra-luxury goods, tobacco and pan masala and for clean energy; instead, they favoured a higher tax rate on consumer durables. The Centre requires Rs. 50,000 crore to compensate the States for any revenue loss under GST for the next five years and had proposed to fund it through the cess.

    A cess can be levied for clean energy and on sin goods such as tobacco, which will together yield Rs. 44,000 crore. The remaining Rs. 7,000 crore can be financed through various ways such as a higher tax than the proposed rate on consumer durables

    He also called for a review of the proposal to have a lower tax slab of 6 per cent under GST as against the current 5 per cent and said this would impact the common man.

    The Finance Ministry had on 18th October proposed that GST should have a four-rate structure with two standard rates of 12 per cent and 18 per cent. Food items and other necessities would be taxed at 6 per cent while white goods and luxury products would be taxed at 26 per cent.

    Similarly, noting that the power to levy the cess would vest only with the Centre, Tamil Nadu cautioned against a clean energy cess on coal and lignite as it would have an adverse impact on the cost of energy. Meanwhile, the States have also called for a re-opening of the issue of administrative control over small businesses.
  • Foreign VCs can now invest in unlisted firms sans RBI nod
    Foreign venture capital entities can now invest in unlisted Indian companies without Reserve Bank of India approval. The venture capital firm will, however, have to be registered with market regulator SEBI. The investment can be made in an Indian company in 10 specific sectors or in any start-up.

    The central bank on 20th October amended the regulations governing foreign venture capital investors (FVCI) in order to further liberalise and rationalise the investment regime and to give a fillip to foreign investment in start-ups.

    According to the RBI, the 10 sectors in which SEBI-registered FVCIs can invest without its nod are: biotechnology, IT, nanotechnology, seed research and development, discovery of new chemical entities in pharmaceutical sector, dairy industry, poultry industry, production of bio-fuels, hotel-cum-convention centres with over 3,000 seating capacity, and infrastructure sector. FVCIs can also invest in equity, equity-linked instruments or debt instruments issued by an Indian ‘start-up’ irrespective of the sector in which it is engaged.

    The RBI said a start-up will mean an entity (private limited company, registered partnership firm or a limited liability partnership) incorporated or registered in India not prior to five years, with an annual turnover not exceeding Rs. 25 crore in any preceding financial year.

    These start-ups should be working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property and satisfying certain conditions as given in the Foreign Exchange Management Regulations, 2016.

    The RBI also said FVCIs can invest in units of a venture capital fund (VCF) or a Category-I alternative investment fund (AIF) or units of a scheme/fund set up by a VCF or by a Category-I AIF.

    The consideration for all investments by an FVCI can be paid out of inward remittance from abroad through normal banking channels or out of sale/maturity proceeds of or income generated from investment already made. There will be no restriction on transfer of any security/instrument held by the FVCI to any person resident in or outside India.
  • India has seen 'dramatic' improvements in opportunities available to girl child, says UN report
    India has seen "dramatic" improvements in the opportunities available to the girl child, a United Nations report said while showcasing the country as an example to be replicated worldwide for bettering the condition of their youthful populations.

    However, 'The State of World Population 2016' report by the United Nations Population Fund (UNFPA) warned that practices that harm girls and violate their human rights, starting at age 10, prevent them from realising their full potential as adults and more needs to be done the world over.

    It quoted the International Centre for Research on Women to estimate that India loses nearly $56 billion a year in potential earnings because of adolescent pregnancy, high secondary school dropout rates and joblessness among young women.

    It, however, also showcased India among the countries+ whose initiatives can be replicated+ for worldwide improvements.

    In India, there are more than 12 million 10-year-old girls, far more than in any other country. Based on secondary school-progression data, nearly 900,000, about 9 per cent, of these 12 million girls, while already having access to basic education, are at risk of not continuing on to secondary school

    According to estimates, as much as $21 billion a year dividend for developing countries can be unlocked if all 10-year-old girls complete secondary education.

    UNFPA warns that forced marriage, child labour, female genital mutilation and other practices undermining girls' health and rights threaten the world's ambitious development agenda. It noted that of the 125 million 10-year-olds at present, 60 million are girls who are systematically disadvantaged at the global level as they move through adolescence into adulthood.
  • Regional air connectivity scheme launched
    Government on 21st October launched the regional air connectivity scheme UDAN- Ude Desh ka Aam naagrik, which seeks to get more people to fly in the smaller towns.

    Civil Aviation Minister Ashok Gajapathi Raju while launching the scheme in New Delhi said the scheme is expected to be rolled out by January. He said cabinet had taken a decision on civil aviation policy four months back and regional connectivity was a major component of it. Mr Raju said growth rate in civil aviation is encouraging. The scheme will make costs of flying lower to serve underserved and other routes.

    The scheme entails support from central and state Goverments, as well as airport operators. Ministry wants to add 50 more airports and connect them to bigger cities and towns in next four years.

    UDAN aims to increase ticketing volume from 80 million to 300 million by 2022. Under the scheme, airlines will have complete freedom to enter into code sharing with larger airlines for connectivity and they will be exempted from various airport charges. Airlines will get exclusive rights for three years to fly on a particular regional route.

    Airfares will be capped at 2,500 rupees for an hour's flight for regional flights. It is a unique market-based mechanism to develop regional connectivity, under which Airlines will bid for seat subsidies.

    They will bid for up to 40 subsidised seats and minimum seats will be 9. There will be 50 percent seats on market based pricing.
  • Centre approves 4 FDI proposals
    The Centre has approved four foreign direct investment proposals worth Rs.2,060 crore which includes ones from Sharekhan Ltd, IBM India, IFC FIG and Diavikas Capital. The decisions are based on the recommendations of Foreign Investment Promotion Board September 26.

    Of the four proposals, only the one made by Sharekhan Ltd involves infusion of funds into India. The government has approved Sharekhan’s proposal to acquire up to 100 per cent of the share capital in the company other than the shares held by Human Value Developers Private Ltd, BNP Paribas SA France and/or one or more of BNP’s French subsidiaries.

    Approval was also given to IBM India’s proposal to merge its wholly owned subsidiaries — Telelogic India Private Ltd, Unica Softtech Systems India Private Ltd and Bigfix Software (India) Private Ltd (all dormant companies) — into its another wholly-owned-subsidiary, Sterling Commerce Solutions Private Ltd, which is an investing company.

    Post-facto approval was given by the Centre for Telelogic India Private Ltd, a subsidiary of IBM India, to act as an investee company holding investments in IBM Business Consulting Services Private Ltd till its merger into Sterling India.

    IFC FIG Investment Company I’s proposal to purchase 3,646,937 equity shares of Bandhan Financial Services Ltd from International Finance Corporation, constituting 2.85 per cent of the paid up equity share capital of Bandhan Financial Services Ltd was also approved.

    DiaVikas Capital Private Ltd’s proposal for buy-back of all the shares from the resident shareholders thereby increasing the foreign shareholding in the company to 100 per cent also received the government’s approval.
  • Airlines Technology ties up with British Airways
    IT solutions provider Airlines Technology has signed a commercial agreement with British Airways for an interface between the airline and its passengers.

    Airlines Technology (AT), which works on the International Air Transport Association (IATA)’s New Distribution Capability (NDC) platform, will enable the passengers to pre-book and buy on-board services such as Wi-Fi, food, extra legroom, priority boarding, preferred sitting, lounge access and special services like wine, entertainment, wheelchair, and porters.

    Airlines Technology Pvt Ltd, founded in June 2015, recently received funding from Travel Startups Incubator, an investment and advisory firm.

    India is expected to be the third-largest aviation market in the next 10 years, overtaking the UK, as per a forecast of IATA, which represents 265 airlines comprising 83 per cent of global air traffic.
  • Banks recall over 32 lakh debit cards, govt seeks details
    The government has taken swift action to contain the damage from the debit card data security breach crisis. It has ordered a probe and directed Reserve Bank and India and affected banks to submit a report on the breach which compromised nearly 3.25 crore debit cards in the country.

    The government has also assured customers that their stolen money will be returned and there is no need to panic. At a time when the use of plastic money and online transactions is rising in the country, the banking sector has been confronted with a major challenge.

    For the first time at such a large scale, data security of nearly 32 lakh debit and credit cards of 19 banks has been breached. After detection of the data breach, banks have either blocked these cards or asked their owners to change their pin numbers.

    The crisis was apparently triggered off due to security breach in a payment service provider. The govt has taken action after its detection urging people not to panic as the data breach has only affected 0.5% of the cardholders in the country.

    HOW WAS DATA BREACH DISCOVERED? 
    • The breach was apparently discovered when banks received complaints from customers in India that their cards have been used fraudulently in foreign countries like China
    • Till now 19 banks have informed National Payments Corporation of India of fraudulent withdrawals
    • NPCI has oversight over all retail payment systems in the country
    • It says so far 631 customers have complained of fraudulent withdrawals amounting to 1.3 crore rupees

  • Centre provides over Rs 1600 crore to Railways for bio toilets & CCTV cameras
    Railways has received 1655 crore rupees from the government for the installation of CCTVs at stations and bio-toilets in trains across the country. According to the Railway Board Chairman AK Mital, 1155 crore rupees has been given to the railways for installing bio-toilets in trains under Swachh Bharat Mission and 500 crore rupees under Nirbhaya Fund for putting all major stations under CCTV surveilance, for enhancing passenger safety and security.

    The CCTV system will enable the railways to keep a watch on unscrupulous elements at rail premises, including trafficking of children. Railways has set the target of making the entire network as discharge-free zone by September 2019.

    40 thousand bio-toilets are being installed in trains and 30 thousand more will be installed by the end of the current fiscal.
  • IIP contracts for the second straight month
    Industrial production contracted for a second straight month in August, raising doubt over manufacturing recovery and justifying the policy rate cut by the Monetary Policy Committee (MPC). However, a good monsoon and early onset of the festive season have raised hope of revival in demand for consumer durables, on the back of rising farm income.

    The Index of Industrial Production (IIP) fell by 0.7 per cent in August, compared to a decline of 2.5 per cent in July, according to data from the Central Statistics Office.

    The IIP contracted by 0.3 per cent in April-August, first five months of in 2016-17 financial year, versus growth of 4.1 per cent in the corresponding period on 2015.

    Mining and manufacturing dragged down overall IIP for the August, 2016. The mining sector contracted by 5.6 per cent, from 0.9 per cent growth the previous July, 2016. The manufacturing sector, 75 per cent of the index, saw the intensity of decline get lower, to 0.3 per cent from 3.4 per cent in July. Dismal when compared with the 6.6 per cent growth in August last year.

    Only six of the 22 sub-sectors, however, showed a decline in growth, with production of electrical machinery falling the steepest at 49.4 per cent. Radio, television and communication apparatus grew the fastest at 15.2 per cent.

    Electricity barely expanded at 0.1 per cent in August, although it has shown growth of 5.7 per cent in the first five months of 2016-17 financial year.

    The most volatile segment, capital goods, in the series saw production fall for tenth month in a row, by 22.3 per cent in August, against 29.49 per cent fall in July. These had grown 21.3 per cent growth in August last year.
  • India ranks dismal 97 in global hunger index
    India ranked 97th out of 118 countries on the International Food Policy Research Institute’s (IFPRI) Global Hunger Index (GHI) in 2016, behind Nepal, Sri Lanka, Bangladesh, among others, but ahead of Pakistan and three other Asian countries. It was positioned at 80 out of 104 countries the previous year.

    While India has improved its score on various parameters over the past few years, two out of five children below five years of age are stunted in India. Stunting measures chronic malnutrition and affected children’s height would be considerably below the average for their age.

    Besides, the country was still rated with ‘serious’ hunger levels in the 2016 Index. The country had only the fifth highest rank in the whole of Asia, better than only North Korea (98), Pakistan (107), Timor-Leste (110) and Afghanistan (111).

    Nepal (72), Sri Lanka (84), and Bangladesh (90) had higher ranks among 96 countries than India’s. Also, India had the lowest rank among BRICS nations, with Brazil in the top 16, Russia at 24, China at 29 and South Africa at 51.

    If hunger continues to decline at the same rate it has been falling since 1992, around 45 countries, including India, Pakistan, Haiti, Yemen, and Afghanistan will still have ‘moderate’ to ‘alarming’ hunger scores in year 2030, far short of the United Nations’ goal to end hunger by that year.

    In 2013, India’s position was rated as “alarming”, but, it has shown some improvement in recent years, the report noted. In 2016, India scored 28.5 on the GHI index, up from 36 in 2008. Since 2000, the country has reduced its GHI score by a quarter.

    GHI is based on a country’s performance on indicators such as the proportion of the undernourished in the population, prevalence of wasting in children under five years, prevalence of stunting in children under five years and the under-five mortality rate.
  • Govt issues more draft norms under Bankruptcy Code
    Current Affairs The government on 11th October came out with another set of draft rules, including for liquidation of insolvent corporate persons, under the Insolvency and Bankruptcy Code.

    As part of implementing the Code, the government has already constituted the Insolvency and Bankruptcy Board of India (IBBI), while the draft norms will be finalised after taking into consideration the views of the stakeholders.

    Notified by the government in May, the Code seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.

    The latest set of draft regulations relate to liquidation of insolvent corporate persons, insolvency resolution process for corporate persons and application to judicial authority. Views of stakeholders have been sought till October 31 on these draft norms, according to a public notice issued by the corporate affairs ministry.

    In the first week of October, 2016, the ministry issued draft regulations pertaining to registration of insolvency professionals, agencies and model bye-laws. A working group of experts, set up by the ministry, has prepared these regulations.

    Meanwhile, IBBI, chaired by M S Sahoo, will have 10 members. Apart from the chairman, currently there are four government-nominated members and the rest are expected to be appointed in coming months.
  • ICICI Bank first Indian lender to execute Blockchain transaction
    ICICI Bank has become the first Indian lender to complete a banking transaction using Blockchain technology. This remittance transaction has been completed in partnership with Emirates NBD, a lender from the West Asia. India’s largest private sector lender has managed to authenticate remittance transaction messages as well as original international trade documents related to purchase order, invoice, shipping and insurance, etc electronically on Blockchain in real time. Blockchain technology simplifies the process and drastically reduces duration of the transaction to few minutes, compared with few days otherwise.

    Blockchain allows one to change the age-old process of maintaining a ledger that can be accessed only by one party. Blockchain puts in place a distributed ledger that allows a participatory model. A recent PwC survey stated that banks and financial institutions are increasingly looking at adopting and implementing Blockchain to improve efficiency.
  • Andhra inks pact with Russia's JSC United Shipping Corp
    The Economic Development Board of Andhra Pradesh on 12th October signed a pact with Russia's JSC United Shipping Corporation for setting up a ship-building unit in the state. United is expected to invest about Rs 100 crore in the proposed project.

    The EDB signed another memorandum of understanding (MoU) with Russia's TechnoNICOL Corporation for establishing a world-class manufacturing complex in Visakhapatnam district to produce membranes, shingles and other waterproofing and roofing products.

    The MoUs were signed in the presence of visiting Russian Minister for Trade and Industry Denis Menturov and Andhra Pradesh Chief Minister N Chandrababu Naidu.

    United, the largest ship-building company in Russia, and the EDB will jointly explore the "prospects of potential collaboration" for organisation of cargo and passenger transportation as well as design and construction of civil watercraft.

    TechnoNICOL, a leader in manufacture of materials for waterproofing, roofing and insulation, will invest USD 62 million for setting up the world-class manufacturing complex in partnership with SUN Group Enterprises.

    India is the only country to have registered 7.5 per cent economic growth last year and this will continue. AP has grown by 10.99 per cent last year and now our target is to ensure 15 per cent growth in the next 15-20 years.
  • BRICS nations accounts 15% trade: Indian Vice President
    According to Indian Vice-President Hamid Ansari the five BRICS nations together account for 43 percent of world's population, 15 percent of global trade, and 20 percent of world's investment flow. He delivered the inaugural address on 13th October.
    • Growth should lead to inclusive development and called for eradicating poverty and bringing about social inclusion
    • Bring forth the more humane face of globalisation.

    According to the Commerce and Industry Minister Nirmala Sitharaman:
    • BRICS countries can complement each others’ economy.
    • Globalization has altered world’s economy therefore BRICS countries can play positive role in strengthening multi lateral institutions.
    • There is a need to find innovative ways to increase intra-BRICS trade.
    • The establishment of New Development Bank is indicative of urgent need for reform of global financial system.

  • Cabinet approves MoU on General Cooperation with NDB: The Cabinet has given its approval for signing of a Memorandum of Understanding (MoU) on General Cooperation with New Development Bank (NDB) through the BRICS Interbank Cooperation Mechanism. The proposal will enhance trade and economic relations among the BRICS countries and benefit the participating institutions from the BRICS nations.

    Five banks from the BRICS nations had established the BRICS Interbank Co-operation Mechanism to enhance trade and economic relations among the BRICS countries. The Cabinet also gave its nod for signing of a MoU between India and Hungary on cooperation in the field of water management. The MoU will encourage the development of bilateral relations between public and private organizations concerning water resources of both the countries.

    The Cabinet has given its approval for signing the MoU between India and the Russia on Expansion of Bilateral Trade and Economic Cooperation. The MoU would expand more bilateral trade and economic cooperation between the two countries.
  • India, Russia to set up agro irradiation centres
    Expanding their cooperation in civil nuclear energy, India and Russia are collaborating to set up integrated irradiation centres in India to reduce agricultural losses.

    A bilateral agreement for cooperation in the development of a network of integrated infrastructure irradiation centres was signed between the Indian Agricultural Association, Hindustan Agro Co-Op Ltd (HACL) and United Innovation Corporation (UIC), a subsidiary of ROSATOM State Atomic Energy Corporation of Russia, on the sidelines of the BRICS Business Forum in the national capital.

    The agreement is to be implemented through a Joint Venture and aims to set up 25 integrated irradiation centres. It was signed by Bharat Dhokane Pandurang, Chairman of HACL, and Denis Cherednichenko, CEO of UIC.

    In irradiation, food products are subjected to a low dosage of radiation to treat them for germs and insects, increasing their longevity and shelf life.

    In the first phase, seven centres will be set up in Maharashtra, which will begin with the upgradation of the current centre at Rahuri in Ahmednagar district. They added that the irradiation doses are recommended by the International Atomic Energy Agency (IAEA) and the final product is absolutely safe.
  • India has fourth-largest population of HNIs in APAC
    India is home to the fourth-largest population of high net worth individuals (HNIs) in the Asia-Pacific, with total wealth of $797 billion, says a report.

    Asia-Pacific (APAC) is a region consisting of the whole of Asia as well as regions bordering the Pacific Ocean, especially the small nations of East Asia. The most commonly quoted figure for membership in the high net worth club is $1 million in liquid financial assets.

    The number of HNIs in India jumped to 200,000, in 2015 from 180,000 in 2014, while their overall wealth rose by 1.6 per cent during the same period, according to the Asia-Pacific Wealth Report 2016 by Capgemini on13th October.

    Japan has the largest HNI population in the Asia-Pacific at over 2.7 million followed by China at more than a million in 2015 and Australia, 230,000.

    The HNI wealth in Japan rose 11.4 per cent to $6,571 billion, while that in China surged 16.9 per cent to $5,261 billion. One year after recording the highest population of HNIs, the Asia-Pacific now leads the world with the largest amount of HNI wealth, according to the report.

    Asia-Pacific HNI wealth grew 9.9 per cent in 2015 to $17.4 trillion, growing 5.8 times the 1.7 per cent growth rate of Rest of the World (RoW). HNI population grew 9.4 per cent to pass five million, growing 3.5 times the RoW growth rate of 2.7 per cent.
  • RBI allows banks to classify borrowed securities as SLR
    Reserve Bank of India (RBI) has allowed banks to classify government securities borrowed from the central bank in the daily liquidity adjustment facility (LAF) under the statutory liquidity ratio (SLR), making liquidity management for banks easier.

    Banks have to currently invest 20.75% of their deposits into government securities which is called SLR. However, such securities borrowed from the central bank under the daily LAF were not counted as SLR.

    Banks have to also maintain 10% of their SLR requirements in high quality liquid assets which include government securities, cash and some highly rated debt, under the Basel III regime which will fully kick in by April 2019. With borrowed SLR securities also being considered as SLR this burden on banks will also lessen.
  • BRICS trade with world grows 5.8%, India leading: Maersk
    The five-memberBRICS bloc saw a 5.8 per cent growth in containerised trade with the world in the first half of 2016 on the back of a strong showing by India, says Maersk Line, the world's largest container shipping company.

    BRICS export-import (exim) containerised trade with the world registered a growth of 5.8 per cent in the first half of 2016 as against de-growth of 2.2 per cent in the same period last year.

    Volumes should improve as GDP for BRICS is expected to increase to 5.7 per cent in 2017, an improvement over the previous forecast of 5.3 per cent.

    China is expected to grow more than 6 per cent in 2017, India at 8 per cent, Brazil at more than 0.5 pr cent and Russia at above 1 per cent.

    Economic uncertainty has been a deterrent to investments in infrastructure, which is critically important to help countries lower their supply chain cost and consequently boost exports as well as improve competitiveness.

    According to Maersk Line, if a country is able to lower trade costs by 10 per cent, exports can increase by more than 20 per cent.

    While 2016 did not start positively for the world, India paced up in the first half of 2016. This growth was on the back of a strong US economy and recovery in the European market. Maersk said, China remains India's strongest trading partner followed by Russia and Brazil. India's exim trade with BRICS nations was strong at 6.5 per cent and 7.8 per cent, respectively, in 2015 and 2016.
  • Current Affairs
    Centre sets up Insolvency and Bankruptcy Board
    The Centre has constituted a four-member Insolvency and Bankruptcy Board of India (IBBI), under the Chairmanship of MS Sahoo. Sahoo was till recently a Competition Commission of India (CCI) Member, assumed charge as Chairman of IBBI on 1st October.
  • Panama Papers: India asks other countries for details on tax evaders, accounts
    India has made as many as 250 references to other countries asking for details about tax evaders and bank accounts related to the Panama cases, according to Finance Minister Arun Jaitley.

    This is significant as at least 500 Indians are reportedly said to have held offshore accounts in tax havens, leaked documents of financial records in April 2016, dubbed ‘Panama Papers’, had showed. In April, Jaitley had said that the income-tax department had sent notices to every Indian whose name had appeared in the Panama Papers expose.

    Panama, after British Virgin Islands, has been the most popular domicile for the anonymous shell companies controlled by the rich and famous around the world, including national leaders and celebrities. Panama is the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities.

    Jaitley said that tax department has made assessment of Rs. 8,000 crore in HSBC cases as well as filed 164 prosecution complaints in 175 HSBC cases. Also, Rs. 5,000 crore of undisclosed deposits in foreign accounts have been detected out of International Consortium of Investigative Journalists (ICIJ) cases.

    Jaitley said that the quantum jump in searches and survey has resulted in seizure of Rs. 1,986 crore as well as undisclosed income of Rs. 56,378 crore in the last two-and-a-half years. The upgradation of IT capabilities has led to non-intrusive methods of detection of tax evasion. As much as Rs. 16,000 crore has been received as tax out of one such system of non-filers of monitoring system. The 3,626 cases of prosecution and compounding in the last two and half years is more than double as compared to previous two years, Jaitley added.
  • Jharkhand becomes first state to implement Direct Benefit Transfer in Kerosene
    Jharkhand has become the first state in the country to implement Direct Benefit Transfer (DBT) in Kerosene. The scheme is being implemented in four identified districts of the State from 1st of October. These districts are Chatra, Hazaribagh, Khunti and Jamtara.

    In a statement, Petroleum and Natural Gas Ministry said that under the DBT Scheme, PDS kerosene is being sold at non-subsidised price and the subsidy is being transferred to consumers directly into their bank accounts. This initiative is aimed at rationalising subsidy and plugging the leakages.
  • Current Affairs
    Nearly 69 percent of jobs in India threatened by automation: World Bank
    A World Bank research has said, automation threatens 69 per cent of jobs in India, while 77 per cent in China. It said, technology could fundamentally disrupt the pattern of traditional economic path in developing countries.

    World Bank President Jim Yong Kim said, as the Bank continues to encourage more investment in infrastructure to promote growth, there is also need to think about the kinds of infrastructure that countries will need in the economy of the future.

    Mr Kim in response to a question at the Brookings Institute also said that in Ethiopia, the percentage of jobs threatened by automation is 85 per cent.

    He said mechanisation and technology have disrupted traditional industrial production, upended manual jobs and call time on the work that has been done by generations of families. He said the trend is not isolated to the US, in fact, it is affecting people everywhere.
  • Current Affairs
    India's GDP growth to remain strong at 7.6% in 2016, 7.7% in 2017, says World Bank
    The World Bank has said, India's GDP growth will remain strong at 7.6 percent in 2016 and 7.7 percent in 2017. In its latest report 'South Asia Economic Focus' released on 3rd October in Washington, it said India's economic growth remained robust, and is expected to support continued poverty reduction.

    It further said that the current year is expected to see some convergence in rural and urban economies, supported by stimulating policies, such as passage of GST and civil service pay revisions.

    However the report said, India faces the challenge of further accelerating the responsiveness of poverty reduction to growth, promoting inclusion, and extending gains to a broader range of human development outcomes related to health, nutrition, education and gender.
  • RBI cuts repo rate by 25 bps, fall in EMIs expected
    The Reserve Bank of India has slashed its key lending rate by a quarter of a percent. At the same time, inflation targeting is also being kept in mind to ensure it stays at 5% till March next year.

    The central bank has slashed key policy rates which are likely to make loans cheaper and provide greater liquidity in the market. Repo rate has been reduced by a quarter of a percent. Now banks can borrow from RBI at 6.25%. But it remains to be seen how much of this will be passed on to consumers. Post January 2015, RBI has reduced interest rates 6 times but banks have passed on little benefit to consumers.

    RBI in its review has made it clear that the focus is on growth. As banks can avail money at a reduced rate they may consider reducing interest rates on loans. Apart from this, banks are enjoying increased liquidity after the recent reduction in rates of interest on savings and deposits.

    RBI says this year GDP is expected to grow at 7.6 percent. Amidst a lack lustre performance by global economies, India still hopes to post a growth of 7.9 percent next financial year.

    RBI's policy announcements hold significance for many reasons. Alongside major policy decisions to curb inflation, a new procedure to decide policy rates has also been adopted. An act was passed in the parliament which called for keeping the retail price inflation between 2-6 percent.

    A committee has been formed comprising of representatives from both RBI and centre which now makes the call on key policy rates of the central bank. It was for the first time that a six member committee took the decision to reduce the repo rate and this decision was a unanimous one.
  • Union Finance Ministry sets up debt management cell; to become PDMA in 2 years
    Union Finance Ministry has set up a Public Debt Management Cell (PDMC) to streamline government borrowings and better cash management with the overall objective of deepening bond markets.

    The PDMC, to be housed at the RBI's Delhi office, is an interim arrangement and will be upgraded to a statutory Public Debt Management Agency (PDMA) in about two years.

    According to the Ministry, the interim arrangement will allow separation of debt management functions from RBI to PDMA in a gradual and seamless manner, without causing market disruptions.

    Finance Minister Arun Jaitley had proposed to set up a PDMA to deepen Indian Bond market. It added that PDMC will have only advisory functions to avoid any conflict with the statutory functions of RBI. PDMC has been tasked to plan government borrowings, including market borrowings and other borrowings, like Sovereign Gold Bond issuance.

    It will also advise government on matters related to investment, capital market operations, administration of interest rates on small savings among others. The circular also said, the middle office of the Budget Division will be subsumed into PDMC with immediate effect.
  • World's $152-trillion debt pile: IMF
    Eight years after the financial crisis, the world is suffering from a debt hangover of unprecedented proportions. Gross debt in the non-financial sector has more than doubled in nominal terms since the turn of the century, reaching $152 trillion last year, and it's still rising, the International Monetary Fund said. The figure includes debt held by governments, non-financial firms and households.

    Current debt levels now sit at a record 225 per cent of world gross domestic product, the IMF said on 5th October in its semi-annual Fiscal Monitor, noting that about two-thirds of the liabilities reside in the private sector. The rest of it is public debt, which has increased to 85 per cent of GDP last year from below 70 per cent.
    The massive debt load complicates the task for global policy makers, who have been urged to use fiscal policy to boost growth amid the waning ability of central banks to stimulate the economy.

    Much of the borrowing dates back to the boom in private debt that preceded the 2008 financial crisis, according to the IMF. While households and companies in advanced economies started to retrench following the crisis, the deleveraging has been uneven and in some instances debts kept rising, Gaspar said. Bad debts have ended up on government balance sheets.

    Meanwhile, low interest rates drove a surge in corporate debt in emerging markets. Levels of private debt are now high in both advanced nations and a few large emerging markets such as China and Brazil that are considered systemically important to the global financial system.

    There's no consensus on what levels of debt-to-GDP should be the considered alarming, the IMF said. However, financial crises tend to be associated with excessive private debt in both advanced and emerging economies, the fund said. In addition, research has shown that high debt is linked with lower growth, even when a crisis is avoided. The IMF flagged the euro area and China as economies where it's particularly important for deleveraging to occur.
  • 250 mandis linked to e-NAM
    A total of 250 mandis have been linked to the e-trading platform under the National Agriculture Market (e-NAM) in the first phase.

    E-NAM is a pan India electronic portal for sale and purchase of agricultural produce so that farmers get better prices of their produce. The first phase of the e-NAM was launched on 14th of April, 2016.

    According to the Agriculture Minister Radha Mohan Singh, government has exceeded the target of linking 200 mandis by the end of September, 2016.
    67 mandis of Uttar Pradesh have been brought under the e-NAM portal, it is highest in country while in Telangana 44, 40 in Gujarat, 36 in Haryana and 20 in Madhya Pradesh. Government has approved proposals of 14 states for integrating around 400 mandis under the portal.

    So far over one lakh 53 thousand tonnes of agriculture produce amounting to 421 crore rupees has been transacted through e-NAM platform.
    According to the Minister over one lakh 60 thousand farmers and over 46 thousand traders have been registered on the platform. A total of 585 markets are targeted to be integrated with e-NAM by March 2018.
  • RBI issues guidelines for small and payments banks
    The Reserve Bank of India on 6th October issued separate operating guidelines for payments banks and small finance banks in view of their differentiated nature of business and focus on financial inclusion. The
    RBI has granted in-principle approvals to 11 payments banks (August 2015) and 10 small finance bank in September 2015.

    Given the financial inclusion focus of these banks, the minimum capital requirement of 15 per cent will be suitably calibrated.

    The RBI said small finance banks will be allowed exemption from the existing regulatory ceiling on inter-bank borrowings till the existing loans mature or up to three years, whichever is earlier. Afterwards, it will be on par with scheduled commercial banks.

    The exemption is only applicable to legacy borrowings migrated to the opening balance sheet on the day of commencement of operations. The small finance banks will be permitted to participate in the securitisation market only as originators and providers of associated credit enhancements and liquidity support. They will be encouraged to lend to self-help groups.

    The central bank said it will have no objection to payments banks making arrangements with other scheduled commercial bank / small finance bank, whereby amounts in excess of the prescribed limit of Rs.1 lakh can be swept into an account opened for the customer with the latter. This arrangement should be activated with the prior written consent of the customer.

    Annual plans for opening of physical access points by the payments bank for the initial five years would need RBI’s prior approval.

    The first of such plans should be submitted to the RBI before commencement of business. After the initial stabilisation period of five years, and after a review, the RBI may liberalise the requirement of prior approval.
  • BRICS Contingent Reserve Arrangement operational
    Finance Minister Arun Jaitley has said that BRICS' "Contingent reserve arrangement" (CRA) is now operational to address any short-term balance of payments pressures the grouping's member nations face. CRA, established in 2015 by BRICS member nations Brazil, Russia, India, China and South Africa, is a framework for the provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures.

    In his address to the meeting of BRICS Finance Ministers and heads of central banks, Jaitley announced that the central banks of the grouping's members are "fully ready to carry out" the transactions. Jaitley and his BRICS counterparts are in Washington to attend the annual fall meeting of the International Monetary Fund and the World Bank.
  • International Arbitration Centre opened
    Maharashtra Chief Minister Devendra Fadnavis on 8th October inaugurated the Mumbai Centre for International Arbitration (MCIA), which is being seen as a major step towards making Mumbai an International Financial Services Centre (IFSC) and providing an arbitration platform to Indian business houses to negotiate commercial disputes.
  • China’s poorest getting richer 3 times faster than India's poorest
    India’s economy might be growing at a faster rate than many developed nations, but at per capita level, its growth rate of income is the lowest among emerging economies. A recent report by the World Bank shows that between 2008 and 2013, per capita income in China grew at 8.23% for overall population and 8.87% for the poorest 40%. India, however, not only witnessed a slower overall growth in comparison, but also a 2.7 times slower growth among the bottom 40%, indicating slugging closing of the inequality gap.
  • Over Rs 65,000 cr declared in Income Disclosure Scheme so far: FM
    Finance Minister Arun Jaitley on October 1st said 65 thousand 250 crore rupees have been declared in the Income Disclosure Scheme, IDS, so far.

    Some disclosures have not been tabulated yet and the figure could increase after the final tabulation. He said 64 thousand 275 declarations were made under the IDS. Mr Jaitley said the disclosures are significant, given the average disclosure is of one crore rupees.

    Mr Jaitley said, the tax collected from the the Income Declaration Scheme will go into the Consolidated Fund of India and will be used for the welfare of the people.

    The Minister also informed that 56,378 crore rupees worth of undetected income was uncovered through search operations which resulted in an actual seizure of 1986 crore rupees in the last two-and -half years.

    With regard to the cases of black money allegedly stashed overseas in HSBC bank accounts, Mr Jaitley said, assessment of sum of 8000 crore rupees has been completed and 164 prosecutions have been filed. He said government has taken various steps to increase tax compliance and check tax avoidance.

    The scheme was announced by the government in June this year with an aim to bring out black money from the domestic economy. Those disclosing assets under the IDS will have to pay 45 per cent tax with penalty.

    The payments can be made in three installments till September 2017. The first installment of 25 per cent under the scheme will have to be paid by November this year followed by another installment of 25 per cent by 31st March next year. The remaining amount will have to be paid by September, 2017.
  • Centre to add 50 more farm commodities to e-NAM
    Current AffairsAs the electronic National Agriculture Market (e-NAM) is about to complete six months, the Centre has decided to add 50 more farm commodities to the already existing 25, which could be traded through this portal. Prime Minister Narendra Modi had launched e-NAM on April 14 this year.

    In its six-month journey, the number of mandis, which have joined the portal, has also reached over 236, as against just 21 when the project was launched.

    Of this, around 63 mandis have joined the e-NAM portal in Uttar Pradesh, followed by 41 in Telangana, 40 in Gujarat and 20 in Madhya Pradesh among others.

    The Centre claims till date around 90,073 metric tonnes of farm goods worth Rs 290 crore have been transacted through e-NAM. Almost 38,425 traders have registered themselves on e-NAM and over a lakh farmers have also joined the national market. More than 20,000 commission agents have also availed the services of e-NAM, the Centre claims.

    The Centre plans to add over 500 mandis in e-NAM, by the end of 2018, of which 200 were to be joined by the end of September. The e-NAM is one of the many initiatives through which the Centre plans to double farmers income by 2018.

    India has 2,477 principal mandis and 4,843 sub-markets created by the APMCs (Agricultural Produce Market Committees). With a corpus of Rs 200 crore to be spent over three years, the plan is to link nearly 585 major mandis in the first phase.

    According to the guidelines, those mandis, which want to participate in the electronic platform and avail the Centre’s grant of over Rs 30 lakh, need to fulfill three criteria, which are: put in place e-auction platform for price discovery of agricultural produce, provide a single licence that is valid across the state and a single point levy of market fee.

    A major objective of the common market is to iron out the price differentials that exist across the country by curbing the tendency to hoard, which in the final analysis could lead to a moderation of food inflation. The integration, as many experts and people working in the field believe, will usher in a new era in agriculture marketing in the country and could be a permanent solution against the dreaded APMC Act, the legislation through which state governments exercise their control over the wholesale markets.

    The APMCs were first established to provide an organised marketplace to farmers and to ensure that they are not exploited at the hands of unscrupulous buyers. Ironically, in the last 15-20 years, the APMCs have played a role, which is just opposite to their stated objective.

    Moreover, as the levies collected by APMCs do not go to the state exchequer and also any spending does not require legislature approval, their operations are more often than not hidden from scrutiny.

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