Bank credit growth falls below 10% after 5 yearsFor the fortnight ended September 5, annual credit growth in the banking system fell to 9.68 per cent, data released by the Reserve Bank of India (RBI) showed. This was the first time since October 2009 (9.01 per cent) that growth in bank credit fell below 10 per cent.
Gas panel submits report, recommends less than disputed priceA Committee of Secretaries (CoS) looking at the new gas pricing guidelines has submitted its report to the petroleum ministry. The exact recommendations of the panel on pricing have been kept under wraps. However, official sources said it has suggested a price less than what the Rangarajan panel had recommended — $8.4 per unit. The panel was constituted last month to review gas pricing guidelines of January 2014.
As per the guidelines, based on the recommendations of an earlier panel, headed by former chairman of Prime Minister’s Economic Advisory Council C Rangarajan, new doubled gas prices were to come into effect beginning April. But the implementation was postponed owing to the general elections in May. The government later deferred the announcement of the new price till September-end. However, a final decision on pricing might be delayed further due to Assembly polls in Maharashtra and Haryana in mid-October
Every dollar increase in gas price would raise urea production cost by Rs 1,370 per tonne, electricity tariff by 45 paise per unit, compressed natural gas prices by Rs 2.8 per kg and piped natural gas rates by Rs 1.8 per standard cubic meter.
As per the guidelines, based on the recommendations of an earlier panel, headed by former chairman of Prime Minister’s Economic Advisory Council C Rangarajan, new doubled gas prices were to come into effect beginning April. But the implementation was postponed owing to the general elections in May. The government later deferred the announcement of the new price till September-end. However, a final decision on pricing might be delayed further due to Assembly polls in Maharashtra and Haryana in mid-October
Every dollar increase in gas price would raise urea production cost by Rs 1,370 per tonne, electricity tariff by 45 paise per unit, compressed natural gas prices by Rs 2.8 per kg and piped natural gas rates by Rs 1.8 per standard cubic meter.
Panel on accounting norms set upThe Corporate Affairs Ministry has constituted a National Advisory Committee on Accounting Standards under the chairmanship of Amarjit Chopra to advise the Central Government on the formulation and laying down of accounting policies and accounting standards. Besides Chopra, who is a former CA Institute President, the committee will have 12-other members including nominees of industry bodies — CII, FICCI and Assocham — and regulatory bodies such as RBI and SEBI. The panel Chairman and members will have a term of one year from September 18 or till the constitution of the National Financial Reporting Authority, whichever is earlier.
Tourism Ministry eyes 1% share in world tourist arrivalsThe Ministry of Tourism aims to get 1 per cent share of world tourist arrivals, as against the current 0.64 per cent. In 2013, India received 69.7 lakh tourists and this year expectation is it to cross 73 lakh. The country witnessed 16.9 per cent growth in foreign tourist arrivals in August 2014 compared to the same month last year.
The Ministry has launched ‘Culinary Survey of India’ for identification, documentation and archiving of recipes across the country. It recently laid the foundation stone for the Indian Culinary Institute in Tirupati. The Ministry will soon launch a Cleanliness Index which will rank all tourist destinations in the country.
The Ministry has launched ‘Culinary Survey of India’ for identification, documentation and archiving of recipes across the country. It recently laid the foundation stone for the Indian Culinary Institute in Tirupati. The Ministry will soon launch a Cleanliness Index which will rank all tourist destinations in the country.
PFRDA panel to assess investment normsPension fund regulator PFRDA has set up an expert committee under the chairmanship of former Sebi chairman G N Bajpai to review investment guidelines for pension system, other than for government employees, and suggest changes to make the scheme more attractive.
The panel will, among other things, "review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes," PFRDA said in a notification.
The six-member panel would also make recommendations on any other related issue which has a bearing on the investment pattern of New Pension System and will affect the interest of subscribers to the NPS such as active and passive management.
The penal which is expected to submit its report in six weeks would also look into the monitoring and supervision mechanism over pension fund manager investment portfolio.
Members of the panel are Deepak Satwalekar, former CEO and Managing Director at HDFC Standard Life Insurance Company; S B Mathur, former LIC Chairman; C R Murlidharan, former IRDA Member and Madhavi Das, Executive Director, PFRDA.
In 2010, the PFRDA had set up a committee headed by G N Bajpai and entrusted it with the task of analysing the fee structure and suggesting changes to the National Pension System (NPS).
The central government had introduced the New Pension System (NPS) in January 2004.
Initially, the New Pension System covered new entrants to central government services (excluding Armed Forces) and some state government services. From May 1, 2009, PFRDA has extended NPS to all citizens of India, including workers of the unorganised sector. NPS has garnered a total of 71 lakh subscribers by July 31, 2014 and is managing above Rs 58,000 crore of funds.
The panel will, among other things, "review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes," PFRDA said in a notification.
The six-member panel would also make recommendations on any other related issue which has a bearing on the investment pattern of New Pension System and will affect the interest of subscribers to the NPS such as active and passive management.
The penal which is expected to submit its report in six weeks would also look into the monitoring and supervision mechanism over pension fund manager investment portfolio.
Members of the panel are Deepak Satwalekar, former CEO and Managing Director at HDFC Standard Life Insurance Company; S B Mathur, former LIC Chairman; C R Murlidharan, former IRDA Member and Madhavi Das, Executive Director, PFRDA.
In 2010, the PFRDA had set up a committee headed by G N Bajpai and entrusted it with the task of analysing the fee structure and suggesting changes to the National Pension System (NPS).
The central government had introduced the New Pension System (NPS) in January 2004.
Initially, the New Pension System covered new entrants to central government services (excluding Armed Forces) and some state government services. From May 1, 2009, PFRDA has extended NPS to all citizens of India, including workers of the unorganised sector. NPS has garnered a total of 71 lakh subscribers by July 31, 2014 and is managing above Rs 58,000 crore of funds.
Power supply: Prabhu panel for state-specific models
The central government’s advisory group on power distribution reforms favors state-specific plans, instead of one model for the country. It has also pushed debt recovery, rate rationalization and addressing of distribution losses, which, in some states, are 45-80 per cent.
The Prabhu panel has already given reports on the coal sector and thermal power projects. It has asked the Union ministry of power, Power Finance Corporation and Rural Electrification Corporation to work out state-specific action plans.
According to panel, distribution reforms meant loss reduction, improving the reliability of supply and rate rationalizing. He said five states — Andhra Pradesh, Rajasthan, Madhya Pradesh, Tamil Nadu and Haryana — constituted 80 per cent of the total annual loss (of Rs 80,000 crore as on date)
The central government’s advisory group on power distribution reforms favors state-specific plans, instead of one model for the country. It has also pushed debt recovery, rate rationalization and addressing of distribution losses, which, in some states, are 45-80 per cent.
The Prabhu panel has already given reports on the coal sector and thermal power projects. It has asked the Union ministry of power, Power Finance Corporation and Rural Electrification Corporation to work out state-specific action plans.
According to panel, distribution reforms meant loss reduction, improving the reliability of supply and rate rationalizing. He said five states — Andhra Pradesh, Rajasthan, Madhya Pradesh, Tamil Nadu and Haryana — constituted 80 per cent of the total annual loss (of Rs 80,000 crore as on date)
Panel suggests eight mines be allocated to power sector
A government panel has recommended the Coal Ministry may consider allocating eight mines to the power sector under government dispensation route, amid Power Minister Piyush Goyal promising 24x7 power to all. The eight coal blocks are in the states like West Bengal, Odisha and Maharashtra, a source close to the development said.
The coal blocks includes, Burapahar mine in Ib valley of Odisha, Palasbani East and Dip side of Palasbani East mines in Talcher coalfields of Odisha, Kapasdanga-Bharkata mine in Birbhum coalfields of West Bengal and Hiwardhara-Sinwadona mine in Wardha valley coalfields in Maharashtra, source said.
Goyal had 8th September said the government is committed to bring about a transformative change in the power sector and ensure 24X7 power for all homes, industrial and commercial establishments and adequate power for all. He also said the government is striving to ensure adequate coal for power plants by targeting production of 1 billion tonnes by 2019.
The coal-based electricity generation from in the past three months grew by 21% over the corresponding period of last year. The coal production also grew by 9% in the last month as compared to August in 2013. The government is also consider auctioning 8 captive coal mines which have reserves of 1,773 million tones.
The Supreme Court had earlier held that all coal blocks since 1993 have been allocated illegally and arbitrarily, bringing uncertainty to the fate of 218 block allocations.
A government panel has recommended the Coal Ministry may consider allocating eight mines to the power sector under government dispensation route, amid Power Minister Piyush Goyal promising 24x7 power to all. The eight coal blocks are in the states like West Bengal, Odisha and Maharashtra, a source close to the development said.
The coal blocks includes, Burapahar mine in Ib valley of Odisha, Palasbani East and Dip side of Palasbani East mines in Talcher coalfields of Odisha, Kapasdanga-Bharkata mine in Birbhum coalfields of West Bengal and Hiwardhara-Sinwadona mine in Wardha valley coalfields in Maharashtra, source said.
Goyal had 8th September said the government is committed to bring about a transformative change in the power sector and ensure 24X7 power for all homes, industrial and commercial establishments and adequate power for all. He also said the government is striving to ensure adequate coal for power plants by targeting production of 1 billion tonnes by 2019.
The coal-based electricity generation from in the past three months grew by 21% over the corresponding period of last year. The coal production also grew by 9% in the last month as compared to August in 2013. The government is also consider auctioning 8 captive coal mines which have reserves of 1,773 million tones.
The Supreme Court had earlier held that all coal blocks since 1993 have been allocated illegally and arbitrarily, bringing uncertainty to the fate of 218 block allocations.
Jalan Panel suggests levy of user charges on govt servicesThe Union Government has asked Bimal Jalan headed Expenditure Management Commission to suggest an effective strategy for meeting reasonable proportion of expenditure on services through user charges. It has also asked the Jalan Panel to review the fiscal responsibility and budget management (FRBM) rules to suggest improvements for enforcing better fiscal discipline.
Also, the newly set up commission will have to review the major areas of Central Government expenditure and suggest ways for creating fiscal space required to meet developmental expenditure needs. This has to be done without comprising the commitment to fiscal discipline, the terms of reference of the Commission said.
Bimal Jalan, who has been conferred with the status of a Union Cabinet Minister, has been asked to design a framework to improve the operational efficiency of expenditures through focus on utilisation, targets and outcomes. The Jalan panel has also been asked to suggest measures to achieve reduction in financial costs through better cash management system.
Besides asking the Commission to suggest greater use of IT tools for expenditure management, the panel has also been asked to recommend improved financial reporting systems in terms of accounting and budgeting etc. The Commission, which will be headquartered in New Delhi, will have to submit an interim report before Budget 2015-16.
Also, the newly set up commission will have to review the major areas of Central Government expenditure and suggest ways for creating fiscal space required to meet developmental expenditure needs. This has to be done without comprising the commitment to fiscal discipline, the terms of reference of the Commission said.
Bimal Jalan, who has been conferred with the status of a Union Cabinet Minister, has been asked to design a framework to improve the operational efficiency of expenditures through focus on utilisation, targets and outcomes. The Jalan panel has also been asked to suggest measures to achieve reduction in financial costs through better cash management system.
Besides asking the Commission to suggest greater use of IT tools for expenditure management, the panel has also been asked to recommend improved financial reporting systems in terms of accounting and budgeting etc. The Commission, which will be headquartered in New Delhi, will have to submit an interim report before Budget 2015-16.
State Bank launches new travel card
State Bank of India (SBI) and MasterCard, on 8th September, announced the launch of Multi-Currency Foreign Travel Card through 100 selected branches of Mumbai, Delhi, Chennai and Bangalore circles.
The card, which is available in retail and corporate variants, will help consumers pay in dollar, pound settling, Euro and Singapore dollar initially and eventually be made available in all major currencies.
State Bank of India (SBI) and MasterCard, on 8th September, announced the launch of Multi-Currency Foreign Travel Card through 100 selected branches of Mumbai, Delhi, Chennai and Bangalore circles.
The card, which is available in retail and corporate variants, will help consumers pay in dollar, pound settling, Euro and Singapore dollar initially and eventually be made available in all major currencies.
Centre set to revise GDP measurement next year
The Centre will soon revise the way it measures the gross domestic product to reflect under-represented and informal economic sectors, two government sources said, in an initiative that is expected to show the economy is larger than previously thought.
The government usually revises the method of calculating national accounts and other macro data every five years, bringing in a newer base year and adjusting for changes in the economy.
The Ministry now takes 2004-05 as the base. India’s informal economy and service sector accounts for over three-fifths of its $1.8 trillion economy. But precise data are unavailable for these segments, and the government relies on surveys and samples to calculate their growth. This is combined with actual output numbers for mainstream industry to produce the GDP data.
In March, 2010, when the government last revised the national accounts, annual economic growth estimates were upwardly adjusted by 0.8 to 1.7 percentage points for four years, allowing the previous government to take credit for the country’s highest-ever stretch of economic growth.
What is GDP?
The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year.
Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total.
The income approach, which is sometimes referred to as GDP(I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes less any subsidies. The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending and net exports.
The Centre will soon revise the way it measures the gross domestic product to reflect under-represented and informal economic sectors, two government sources said, in an initiative that is expected to show the economy is larger than previously thought.
The government usually revises the method of calculating national accounts and other macro data every five years, bringing in a newer base year and adjusting for changes in the economy.
The Ministry now takes 2004-05 as the base. India’s informal economy and service sector accounts for over three-fifths of its $1.8 trillion economy. But precise data are unavailable for these segments, and the government relies on surveys and samples to calculate their growth. This is combined with actual output numbers for mainstream industry to produce the GDP data.
In March, 2010, when the government last revised the national accounts, annual economic growth estimates were upwardly adjusted by 0.8 to 1.7 percentage points for four years, allowing the previous government to take credit for the country’s highest-ever stretch of economic growth.
What is GDP?
The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year.
Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total.
The income approach, which is sometimes referred to as GDP(I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes less any subsidies. The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending and net exports.
Upper age limit set for MDs and CEOs of Private Banks
The Reserve Bank of India (RBI) has allowed managing directors and chief executive officers of private banks (and any other whole-time director on the board) to hold office till the age of 70 (and not beyond). The move will erase doubts on the eligibility of Aditya Puri (HDFC Bank’s MD) and Romesh Sobti (IndusInd Bank’s MD and CEO) for re-appointments.
So far, a maximum age of 70 was stipulated for appointment or re-appointment of part-time directors in banks. For whole-time directors, including the MD and CEO, no maximum age was specified and decisions were taken case by case. The P J Nayak committee proposed a maximum age of 65 for bank CEOs.
The Reserve Bank of India (RBI) has allowed managing directors and chief executive officers of private banks (and any other whole-time director on the board) to hold office till the age of 70 (and not beyond). The move will erase doubts on the eligibility of Aditya Puri (HDFC Bank’s MD) and Romesh Sobti (IndusInd Bank’s MD and CEO) for re-appointments.
So far, a maximum age of 70 was stipulated for appointment or re-appointment of part-time directors in banks. For whole-time directors, including the MD and CEO, no maximum age was specified and decisions were taken case by case. The P J Nayak committee proposed a maximum age of 65 for bank CEOs.
Cabinet mooted disinvestment
The Union Cabinet on 10th September cleared a dilution of the government's stake in Oil and Natural Gas Corporation (ONGC), Coal India Ltd (CIL) and NHPC Ltd. At current market valuations, the amount of its holdings the Centre wants to offload in these companies could fetch it as much as Rs 45,796 crore - more than the Budget target of raising Rs 39,925 crore through disinvestment in public-sector undertakings.
The Cabinet Committee on Economic Affairs approved selling 10 per cent of the government's stake in CIL, five per cent in ONGC and 11.38 per cent in NHPC. By Wednesday's market value, these are worth Rs 23,613 crore, Rs 19,048 crore and Rs 3,135 crore, respectively.
The Centre's fiscal deficit in the first four months of the financial year has already exceeded 60 per cent of Budget estimates for full year. The stake sales are likely to help the government meet the Budget target of reining in fiscal deficit at 4.1 per cent of gross domestic product in 2014-15.
In addition to state-run companies, the government also plans to sell its residual stake in Hindustan Zinc and Balco which is expected to fetch Rs 15,000 crore. Also, Specified Undertaking of Unit Trust of India could bring the exchequer another Rs 6,500 crore. These together take the total disinvestment target for 2014-15 to Rs 58,425 crore - 269 per cent higher than the previous year's actual proceeds of Rs 15,819 crore.
The Cabinet had earlier given its approval to sale of five per cent stake in Steel Authority of India Ltd which might raise another Rs 1,700 crore. The steel company is likely to be the first state-run company to go for disinvestment later this month. All of these issues are likely to tap the market through the offer-for-sale (OFS) route, which is considered more convenient and less time-consuming than follow-on offerings.
What is disinvestment?
Disinvestment means to sell off certain assets such as a manufacturing plant, a division or subsidiary, or product line. Disinvestment is sometimes described as the opposite of capital expenditures. Some people use the term divestiture, or to divest when discussing disinvestment.
Government adopted the 'Disinvestment Policy'. This was identified as an active tool to reduce the burden of financing the PSUs. The following main objectives of disinvestment were outlined:
The Union Cabinet on 10th September cleared a dilution of the government's stake in Oil and Natural Gas Corporation (ONGC), Coal India Ltd (CIL) and NHPC Ltd. At current market valuations, the amount of its holdings the Centre wants to offload in these companies could fetch it as much as Rs 45,796 crore - more than the Budget target of raising Rs 39,925 crore through disinvestment in public-sector undertakings.
The Cabinet Committee on Economic Affairs approved selling 10 per cent of the government's stake in CIL, five per cent in ONGC and 11.38 per cent in NHPC. By Wednesday's market value, these are worth Rs 23,613 crore, Rs 19,048 crore and Rs 3,135 crore, respectively.
The Centre's fiscal deficit in the first four months of the financial year has already exceeded 60 per cent of Budget estimates for full year. The stake sales are likely to help the government meet the Budget target of reining in fiscal deficit at 4.1 per cent of gross domestic product in 2014-15.
In addition to state-run companies, the government also plans to sell its residual stake in Hindustan Zinc and Balco which is expected to fetch Rs 15,000 crore. Also, Specified Undertaking of Unit Trust of India could bring the exchequer another Rs 6,500 crore. These together take the total disinvestment target for 2014-15 to Rs 58,425 crore - 269 per cent higher than the previous year's actual proceeds of Rs 15,819 crore.
The Cabinet had earlier given its approval to sale of five per cent stake in Steel Authority of India Ltd which might raise another Rs 1,700 crore. The steel company is likely to be the first state-run company to go for disinvestment later this month. All of these issues are likely to tap the market through the offer-for-sale (OFS) route, which is considered more convenient and less time-consuming than follow-on offerings.
What is disinvestment?
Disinvestment means to sell off certain assets such as a manufacturing plant, a division or subsidiary, or product line. Disinvestment is sometimes described as the opposite of capital expenditures. Some people use the term divestiture, or to divest when discussing disinvestment.
Government adopted the 'Disinvestment Policy'. This was identified as an active tool to reduce the burden of financing the PSUs. The following main objectives of disinvestment were outlined:
To reduce the financial burden on the Government
To improve public finances
To introduce, competition and market discipline
To fund growth
To encourage wider share of ownership
To depoliticise non-essential services
The importance of disinvestment lies in utilisation of funds for:
Financing the increasing fiscal deficit
Financing large-scale infrastructure development
For investing in the economy to encourage spending
For social programs like health and education
Disinvestment also assumes significance due to the prevalence of an increasingly competitive environment, which makes it difficult for many PSUs to operate profitably. This leads to a rapid erosion of value of the public assets making it critical to disinvest early to realize a high value.
India notified WTO of $56-bn farm support
India spent $56.1 billion on support for farmers in 2010-2011, it said in Report submitted to World Trade Organization (WTO) on 10th September, a document that will be pored over for evidence that it breached agreed limits on agricultural subsidies. The United States and other WTO members have strongly criticized saying India is almost a decade behind with notifications on farm support and for vetoing a WTO agreement; as it wanted more attention paid to its demand to be allowed to store food grains to ensure food security.
India spent $56.1 billion on support for farmers in 2010-2011, it said in Report submitted to World Trade Organization (WTO) on 10th September, a document that will be pored over for evidence that it breached agreed limits on agricultural subsidies. The United States and other WTO members have strongly criticized saying India is almost a decade behind with notifications on farm support and for vetoing a WTO agreement; as it wanted more attention paid to its demand to be allowed to store food grains to ensure food security.
Overseas investments by India Inc. down 49% in August
Overseas direct investments by Indian firms declined 49% year-on-year to USD 1.25 billion in last month, as per RBI data. Investments abroad had amounted to USD 2.47 billion in August 2013. As for month-on-month, in July this year the Indian companies had spent USD 1.12 billion in overseas markets. The investments were a mix of issuance of guarantees (USD 742.80 million), loans (USD 303.48 million) and of equity (USD 207.39 million).
Overseas direct investments by Indian firms declined 49% year-on-year to USD 1.25 billion in last month, as per RBI data. Investments abroad had amounted to USD 2.47 billion in August 2013. As for month-on-month, in July this year the Indian companies had spent USD 1.12 billion in overseas markets. The investments were a mix of issuance of guarantees (USD 742.80 million), loans (USD 303.48 million) and of equity (USD 207.39 million).
NABARD launches Rs. 5,000-cr fund
The National Bank of Agriculture and Rural Development (NABARD) on 11th September launched a Rs 5,000-crore rural credit fund aimed at increasing long-term credit in agriculture. Under the facility, first announced in the budget by Finance Minister Arun Jaitley, NABARD will be refinancing agricultural term loans extended by the cooperative banks and regions rural banks (RRB) to agriculturists.
The ultimate aim of the scheme will be to make credit for investment purposes cheaper and through that, motivate those engaged in agricultural activities to invest more. NABARD will provide refinance to the cooperatives and RRBs at an interest of 7.85 per cent with a repayment period of five years so that the borrowers can benefit.
NABARDNational Bank for Agriculture and Rural Development (NABARD) is the apex agricultural development bank in India headquartered in Mumbai and branches are all over the country. The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for Agriculture and Rural Development (NABARD). It was established on 12 July 1982 by a special act by the parliament and its main focus was to uplift rural India by increasing the credit flow for elevation of agriculture & rural non farm sector
The National Bank of Agriculture and Rural Development (NABARD) on 11th September launched a Rs 5,000-crore rural credit fund aimed at increasing long-term credit in agriculture. Under the facility, first announced in the budget by Finance Minister Arun Jaitley, NABARD will be refinancing agricultural term loans extended by the cooperative banks and regions rural banks (RRB) to agriculturists.
The ultimate aim of the scheme will be to make credit for investment purposes cheaper and through that, motivate those engaged in agricultural activities to invest more. NABARD will provide refinance to the cooperatives and RRBs at an interest of 7.85 per cent with a repayment period of five years so that the borrowers can benefit.
NABARDNational Bank for Agriculture and Rural Development (NABARD) is the apex agricultural development bank in India headquartered in Mumbai and branches are all over the country. The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for Agriculture and Rural Development (NABARD). It was established on 12 July 1982 by a special act by the parliament and its main focus was to uplift rural India by increasing the credit flow for elevation of agriculture & rural non farm sector
India 14th among 22 Asia-Pacific economies
India ranked 14th on a list of 24 economies on Creative Productivity Index, being launched on 12th September by the Asian Development Bank and Economist Intelligence Unit. The report carrying the ADB-EIU index said regulatory hurdles, red tape and corruption provide little incentive for the private sector to invest in innovation in India. The index is designed to give policymakers a tool to measure progress in fostering creativity and innovation in 22 Asia-Pacific economies (plus those of the US and Finland, for comparison purposes).
India ranked 14th on a list of 24 economies on Creative Productivity Index, being launched on 12th September by the Asian Development Bank and Economist Intelligence Unit. The report carrying the ADB-EIU index said regulatory hurdles, red tape and corruption provide little incentive for the private sector to invest in innovation in India. The index is designed to give policymakers a tool to measure progress in fostering creativity and innovation in 22 Asia-Pacific economies (plus those of the US and Finland, for comparison purposes).
It measures the innovative and creative capacity of economies by relating creative inputs to outputs.
On the input side, creative productivity is measured on three dimensions - the capacity to innovate, incentives to innovate and how conducive the environment is for innovation.
The output side measures innovations by considering both conventional indicators such as the number of patents filed, as well as a broader set of measures on knowledge creation.
While India is ranked lower on the input side at 15, compared to its overall rank, it has a relatively better score at 13 on the output side. This implies India is able to get a bit better of an output compared to its inputs.
A commentary carried with the index says despite recent productivity gains, India still lags in terms of output, with a low score on agricultural productivity, showing the need for rural innovations.
On the input side, India lags in the knowledge-skill base, showing the need for further investments in physical infrastructure and human capital, the report said.
India is in 21st place for both competition and human capital. For human capital, the country scores well for the number of top-500 global universities but the overall ranking is dragged down by its low scores for rate of urbanization, mean years of schooling, and technical and vocational enrolment of students in secondary school.
Nevertheless, on the whole, India has a solid pool of skilled, English-speaking graduates. This will continue to aid in expansion of the services sector, such as in information communication and technology. Elsewhere, larger productivity gains are needed in the agricultural sector.
Though the country was ranked sixth in the index for ease of labor turnover, our labor laws are overlapping and cumbersome, and employers face difficulties in making workers redundant, the report said. Companies with more than 100 employees, for instance, are obliged to obtain government authorization to lay off workers or to close unprofitable business units.
The report said, nevertheless, most of India's labour laws apply only to the (less productive) organized sector, which does not include small-scale manufacturing and services, agriculture and most construction work.
It said establishment of the National Innovation Council in 2010 had shifted the policy focus towards "a decade of innovation" but India lagged emerging countries such as China.
Recently, India's position had slipped 11 notches to 71 in the Global Competitiveness Index of the World Economic Forum for 2014-15, compared to a year earlier. And, India came 134th among 189 countries ranked by the World Bank on the ease of doing business, for 2014.
IMF data on real estate sectorAccording to International Monetary Fund's data in the real estate India is falling. IMF's calculation on the annual percentage change in property prices shows that prices in India fell by 9.1 per cent, the highest among major real estate markets.
The data shows that there is an overall improvement in the global real estate market as prices are going up in a majority of countries. Of the 52 countries for which data is available, 33 have witnessed increase in prices, while property has become cheaper in 19.
Among advanced economies, the US, Germany and UK witnessed an increase in prices whereas the property market seems to be slumping in France, Japan and Italy. Among larger emerging economies, China, Brazil and South Africa saw a rise in prices, while India and Russia face a sinking realty sector.
India's own National Housing Bank (NHB) Residex index shows a mixed trend in Q1 2014, with 13 of the 26 cities for which property price data was available witnessing an increase in prices and 13 registering declines. Global Property Guide's analysis of India says that because of high inflation, a comparison of house prices at nominal rates might give a misleading result. At inflation-adjusted rates prices, it says, prices have actually fallen in 21 of these 26 cities.
International Monetary Fund: The International Monetary Fund (IMF) is an international organization that was initiated in 1944 at the Bretton Woods Conference and formally created in 1945 by 29 member countries
The IMF is a self-described "organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.” The organization's objectives are stated in the Articles of Agreement [4] and can be summarized as: to promote international economic co-operation, international trade, employment, and exchange-rate stability, including by making financial resources available to member countries to meet balance of payments needs. Its headquarters are in Washington, D.C., United States
The data shows that there is an overall improvement in the global real estate market as prices are going up in a majority of countries. Of the 52 countries for which data is available, 33 have witnessed increase in prices, while property has become cheaper in 19.
Among advanced economies, the US, Germany and UK witnessed an increase in prices whereas the property market seems to be slumping in France, Japan and Italy. Among larger emerging economies, China, Brazil and South Africa saw a rise in prices, while India and Russia face a sinking realty sector.
India's own National Housing Bank (NHB) Residex index shows a mixed trend in Q1 2014, with 13 of the 26 cities for which property price data was available witnessing an increase in prices and 13 registering declines. Global Property Guide's analysis of India says that because of high inflation, a comparison of house prices at nominal rates might give a misleading result. At inflation-adjusted rates prices, it says, prices have actually fallen in 21 of these 26 cities.
International Monetary Fund: The International Monetary Fund (IMF) is an international organization that was initiated in 1944 at the Bretton Woods Conference and formally created in 1945 by 29 member countries
The IMF is a self-described "organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.” The organization's objectives are stated in the Articles of Agreement [4] and can be summarized as: to promote international economic co-operation, international trade, employment, and exchange-rate stability, including by making financial resources available to member countries to meet balance of payments needs. Its headquarters are in Washington, D.C., United States
Sebi issued norms for sharing kyc details with financial regulatorsThe Securities and Exchange Board of India (SEBI) on 30 August 2014 allowed sharing of Know-your-Client details with entities regulated by other financial sector watchdogs. According to the new norms, the system of KRA may be connected with any central KYC registry authorized by the Union Government for the purpose of collation and sharing of the KYC information in the financial sector. These new norms are called as the Securities and Exchange Board of India KYC Registration Agency.
Under SEBI system, a client who has already done the KYC with any SEBI registered intermediary need not undergo the same process again when he approaches another intermediary.
Earlier, the facility of sharing of KYC information was available only among SEBI-registered intermediaries. Now the KYC information of investors in the capital markets is available on the centralised KRA (KYC registration agency) system of SEBI.
KYC: KYC is an acronym for “Know your Customer”, a term used for customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds, the nature of customer’s business, reasonableness of operations in the account in relation to the customer’s business, etc which in turn helps the banks to manage their risks prudently. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.
KYC has two components - Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.
SEBI: The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992
Under SEBI system, a client who has already done the KYC with any SEBI registered intermediary need not undergo the same process again when he approaches another intermediary.
Earlier, the facility of sharing of KYC information was available only among SEBI-registered intermediaries. Now the KYC information of investors in the capital markets is available on the centralised KRA (KYC registration agency) system of SEBI.
KYC: KYC is an acronym for “Know your Customer”, a term used for customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds, the nature of customer’s business, reasonableness of operations in the account in relation to the customer’s business, etc which in turn helps the banks to manage their risks prudently. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.
KYC has two components - Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.
SEBI: The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992
RBI issues amendments to Basel 3 normsThe Reserve Bank of India has allowed banks to issue additional Tier 1 capital instruments, the principal amount of which would absorb losses, either through conversion into common shares or a write-down mechanism that allocates the losses to the instruments, either temporarily or permanently.
Unveiling a slew of amendments in the implementation of the Basel 3 regulations, the RBI said that banks must have a provision of Point of Non-Viability (PONV) for every non-equity instrument which, when triggered, would lead to a conversion to common shares (of the bank) or a permanent write-off.
The regulator has reduced the minimum tenor after which call options are permissible in perpetual debt instruments from 10 to five years. The minimum maturity of Tier 2 debt instruments has also been reduced from 10 to five years.
The limits on admissibility of excess additional Tier 1 and Tier 2 capital for computing and reporting Tier 1 capital and CRAR (capital adequacy ratio) have been withdrawn. Accordingly, a bank having met the minimum capital requirements may admit excess additional Tier 1 and Tier 2 capital for the purpose of reporting.
For exposure limits, capital funds is the sum of all eligible common equity Tier 1 capital, additional Tier 1 capital and Tier 2 capital, net of regulatory adjustments and deductions.
Banks have also been allowed to issue additional Tier 1 and Tier 2 debt capital instruments to retail investors, subject to their enhancing investor awareness and board approval.
For issuing Tier 2 capital, banks have to clearly explain to the investor the loss absorbency features of the instrument and get the investor’s confirmation that these features are clear to him.
Finally, banks need not pay coupons on perpetual debt instruments (PDI) if these are likely to result in a loss during the current year.
What are Basel-3 norms? A comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements.
Basel III is part of the continuous effort made by the Basel Committee on Banking Supervision to enhance the banking regulatory framework. It builds on the Basel I and Basel II documents, and seeks to improve the banking sector's ability to deal with financial and economic stress, improve risk management and strengthen the banks' transparency. A focus of Basel III is to foster greater resilience at the individual bank level in order to reduce the risk of system wide shocks.
Unveiling a slew of amendments in the implementation of the Basel 3 regulations, the RBI said that banks must have a provision of Point of Non-Viability (PONV) for every non-equity instrument which, when triggered, would lead to a conversion to common shares (of the bank) or a permanent write-off.
The regulator has reduced the minimum tenor after which call options are permissible in perpetual debt instruments from 10 to five years. The minimum maturity of Tier 2 debt instruments has also been reduced from 10 to five years.
The limits on admissibility of excess additional Tier 1 and Tier 2 capital for computing and reporting Tier 1 capital and CRAR (capital adequacy ratio) have been withdrawn. Accordingly, a bank having met the minimum capital requirements may admit excess additional Tier 1 and Tier 2 capital for the purpose of reporting.
For exposure limits, capital funds is the sum of all eligible common equity Tier 1 capital, additional Tier 1 capital and Tier 2 capital, net of regulatory adjustments and deductions.
Banks have also been allowed to issue additional Tier 1 and Tier 2 debt capital instruments to retail investors, subject to their enhancing investor awareness and board approval.
For issuing Tier 2 capital, banks have to clearly explain to the investor the loss absorbency features of the instrument and get the investor’s confirmation that these features are clear to him.
Finally, banks need not pay coupons on perpetual debt instruments (PDI) if these are likely to result in a loss during the current year.
What are Basel-3 norms? A comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements.
Basel III is part of the continuous effort made by the Basel Committee on Banking Supervision to enhance the banking regulatory framework. It builds on the Basel I and Basel II documents, and seeks to improve the banking sector's ability to deal with financial and economic stress, improve risk management and strengthen the banks' transparency. A focus of Basel III is to foster greater resilience at the individual bank level in order to reduce the risk of system wide shocks.
Government notifies new pension rulesIn a step aimed at checking harassment of government employees in grant of pension, a head of office will now be responsible for any failure to ascertain non-qualifying service period and will undertake preparation of paper work one year before an employee is due to retire.
According to new pension rules notified by the government, retiring employees will not have to face any delay in determination of pension due to deficiency in application forms and authorities can go ahead with determining the amount of provisional pension and provisional retirement gratuity.
Till now, employees had to run from pillar to post in many cases to get their service record verified. As per new rules, every head of office shall undertake the work of preparation of pension papers in Form 7 one year before the date on which a government servant is due to retire on superannuation, or on the date on which he proceeds on leave preparatory to retirement, whichever is earlier. Earlier, the time period to undertake such work was two years.
Also, if any portion of service rendered by a government servant is not capable of being verified in the manner specified in rules, then the government servant shall be asked to file a written statement on plain paper within a month, stating that he had in fact rendered service for that period, and shall, at the foot of the statement, make and subscribe to a declaration as to the truth of that statement.
According to new pension rules notified by the government, retiring employees will not have to face any delay in determination of pension due to deficiency in application forms and authorities can go ahead with determining the amount of provisional pension and provisional retirement gratuity.
Till now, employees had to run from pillar to post in many cases to get their service record verified. As per new rules, every head of office shall undertake the work of preparation of pension papers in Form 7 one year before the date on which a government servant is due to retire on superannuation, or on the date on which he proceeds on leave preparatory to retirement, whichever is earlier. Earlier, the time period to undertake such work was two years.
Also, if any portion of service rendered by a government servant is not capable of being verified in the manner specified in rules, then the government servant shall be asked to file a written statement on plain paper within a month, stating that he had in fact rendered service for that period, and shall, at the foot of the statement, make and subscribe to a declaration as to the truth of that statement.
Current account deficit shrinks to 1.7% in q1Rise in exports and a decline in imports helped sharply narrow the country’s current account deficit (CAD) to $7.8 billion in the April-June quarter of 2014-15 from $21.8 billion in the year-ago period, according to the Reserve Bank of India. As a percentage of GDP, the CAD was lower at 1.7 per cent in the reporting period as against 4.8 per cent in same period last year.
However, the CAD in the April-June quarter was higher than $1.2 billion (0.2 per cent of GDP) in the preceding January-March quarter, the RBI said.
CAD arises when a country’s total imports of goods, services and transfers are greater than exports. A higher CAD weakens the domestic currency. With India importing almost 80 per cent of its oil requirements, a weak currency could have an inflationary impact.
There was a net accretion of $11.2 billion to India’s foreign exchange reserves in the reporting period as against a drawdown of $0.3 billion in the year-ago period.
However, the CAD in the April-June quarter was higher than $1.2 billion (0.2 per cent of GDP) in the preceding January-March quarter, the RBI said.
CAD arises when a country’s total imports of goods, services and transfers are greater than exports. A higher CAD weakens the domestic currency. With India importing almost 80 per cent of its oil requirements, a weak currency could have an inflationary impact.
There was a net accretion of $11.2 billion to India’s foreign exchange reserves in the reporting period as against a drawdown of $0.3 billion in the year-ago period.
Threshold limit for goods, services tax proposed by states too low: fin min
The Rs 10-lakh threshold limit for imposition of Goods & Services Tax (GST) proposed by States is ‘too low’ for creating a business-friendly tax administration, according to the Finance Ministry.
The Empowered Committee on State Finance Ministers, in its meeting on August 20, agreed on setting a Rs 10-lakh threshold limit for general category States and Rs 5 lakh for special category and North Eastern States. Earlier, the proposed limit was Rs 25 lakh.
GST aims to subsume Central indirect taxes, such as excise duty and service tax, into a central GST (CGST) and various States levies, such as value-added tax and Central sales tax into State GST (SGST).
Efforts are on to build a consensus so that the Constitutional Amendment Bill for introduction of GST can be re-introduced during the Winter Session of Parliament. Once approved, the Bill would need to be endorsed by at least half of the State Assemblies before it becomes a law.
The Centre has also proposed bringing petroleum products within the GST framework with ‘nil’ rate, giving flexibility to both the Centre and States to impose duties over and above the GST.
The Rs 10-lakh threshold limit for imposition of Goods & Services Tax (GST) proposed by States is ‘too low’ for creating a business-friendly tax administration, according to the Finance Ministry.
The Empowered Committee on State Finance Ministers, in its meeting on August 20, agreed on setting a Rs 10-lakh threshold limit for general category States and Rs 5 lakh for special category and North Eastern States. Earlier, the proposed limit was Rs 25 lakh.
GST aims to subsume Central indirect taxes, such as excise duty and service tax, into a central GST (CGST) and various States levies, such as value-added tax and Central sales tax into State GST (SGST).
Efforts are on to build a consensus so that the Constitutional Amendment Bill for introduction of GST can be re-introduced during the Winter Session of Parliament. Once approved, the Bill would need to be endorsed by at least half of the State Assemblies before it becomes a law.
The Centre has also proposed bringing petroleum products within the GST framework with ‘nil’ rate, giving flexibility to both the Centre and States to impose duties over and above the GST.
12 Indian firms in Forbes’ 50 best companies in Asia-pacificTata Consultancy Services (TCS), HCL Technologies and HDFC Bank are among the 50 best public companies in Asia-Pacific according to a compilation by Forbes, which ranked India second behind China as home to the "world's next growth engines". The Forbes 2014 'honour roll of the Fabulous 50' lists best of Asia-Pacific's biggest publicly traded companies.
China has 16 companies on the list, more than any other country, a distinction it has enjoyed for the last three years. However, the number of Chinese companies on the list has gone down from 20 last year on the back of slow economic growth in the country. India trails China with 12 companies on the list, the same number as last year.
The Indian companies on the list are Asian Paints, Axis Bank, HCL Technologies, HDFC Bank, Lupin, Mahindra and Mahindra, Mothersome Sumi Systems, Sun Pharma, TCS, Tata Motors,Tech Mahindra and Titan. HDFC Bank, India's second-largest private sector bank, has made the list eight times, more than any other company since Forbes started the compilation in 2005.
TCS makes it to the list for the seventh time while Tech Mahindra, the country's fifth-largest IT player, debuts on the list after net profits soared 112 per cent to touch $500 million. Indian conglomerate ITC failed to make it to the list this year.
Forbes said TCS, India's largest IT Company, boasts a market cap of $71.25 billion, bigger than the country's next 3 IT outfits combined.
China has 16 companies on the list, more than any other country, a distinction it has enjoyed for the last three years. However, the number of Chinese companies on the list has gone down from 20 last year on the back of slow economic growth in the country. India trails China with 12 companies on the list, the same number as last year.
The Indian companies on the list are Asian Paints, Axis Bank, HCL Technologies, HDFC Bank, Lupin, Mahindra and Mahindra, Mothersome Sumi Systems, Sun Pharma, TCS, Tata Motors,Tech Mahindra and Titan. HDFC Bank, India's second-largest private sector bank, has made the list eight times, more than any other company since Forbes started the compilation in 2005.
TCS makes it to the list for the seventh time while Tech Mahindra, the country's fifth-largest IT player, debuts on the list after net profits soared 112 per cent to touch $500 million. Indian conglomerate ITC failed to make it to the list this year.
Forbes said TCS, India's largest IT Company, boasts a market cap of $71.25 billion, bigger than the country's next 3 IT outfits combined.
Eco Clearance norms for mining projects eased furtherIn a bid to simplify the process of obtaining environment clearance for coal mining projects, the Ministry of Environment & Forests has agreed to do away with public hearings for capacity increase of coal mines with 20 million tone per annum capacity.
The Expert Appraisal Committee can exempt public hearing for one time capacity expansion proposals of existing coal mines with a 20 million tone a annum capacity. The ceiling on additional production has been kept at 6 million tone per annum, if the transportation of additional coal is done by means of conveyor or rail transport. The decision was communicated through an office memorandum
The Expert Appraisal Committee can exempt public hearing for one time capacity expansion proposals of existing coal mines with a 20 million tone a annum capacity. The ceiling on additional production has been kept at 6 million tone per annum, if the transportation of additional coal is done by means of conveyor or rail transport. The decision was communicated through an office memorandum
Changes made in MGNREGAThe Centre has directed all district-level functionaries to undertake 50 per cent of all works under the rural job guarantee scheme, MGNREGA, on water conservation works, such as check dam construction, de-silting of traditional water bodies, minor irrigation tanks and canals.
Rural Development Minister Nitin Gadkari said that this was being done to mitigate a drought-like situation as well as create more productive assets under the scheme.
Gadkari said as these works required a combination of wage labor and machinery, the percentage on skilled component had been increased up to 49 per cent.
The Minister said if States wished to retain the skilled proportion to 40 per cent, they were free to do so. He also directed the Ministry that all payments and fund transfers to States be made on e-payment platform and on a ‘just in time’ basis so that wage payments were not delayed beyond a week.
MGNREGA: The National Rural Employment Guarantee Act 2005, also known as the "Mahatma Gandhi National Rural Employment Guarantee Act", and abbreviated to MGNREGA, is a labor law and social security measure that aims to guarantee the 'right to work' and ensure livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
In 2005, to converge employment generation, infrastructure development and food security in rural areas, the government integrated SGRY and FWP into a new scheme called Mahatma Gandhi NREGA
Rural Development Minister Nitin Gadkari said that this was being done to mitigate a drought-like situation as well as create more productive assets under the scheme.
Gadkari said as these works required a combination of wage labor and machinery, the percentage on skilled component had been increased up to 49 per cent.
The Minister said if States wished to retain the skilled proportion to 40 per cent, they were free to do so. He also directed the Ministry that all payments and fund transfers to States be made on e-payment platform and on a ‘just in time’ basis so that wage payments were not delayed beyond a week.
MGNREGA: The National Rural Employment Guarantee Act 2005, also known as the "Mahatma Gandhi National Rural Employment Guarantee Act", and abbreviated to MGNREGA, is a labor law and social security measure that aims to guarantee the 'right to work' and ensure livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
In 2005, to converge employment generation, infrastructure development and food security in rural areas, the government integrated SGRY and FWP into a new scheme called Mahatma Gandhi NREGA
RBI's Khan to head panel on unclaimed funds of PPFFinance Minister Arun Jaitley has set up a committee under Reserve Bank Deputy Governor H R Khan to take stock of unclaimed deposits in the Public Provident Fund (PPF) and post office saving schemes and suggest how these funds can be utilized for the benefit of senior citizens.
The committee will also suggest whether the unclaimed deposits should come to the government or be kept in a separate account. The committee members include secretary (Department of Posts); joint secretary (law ministry and Budget division of finance ministry); State Bank of India deputy managing director; and executive director of Punjab National Bank, a notification said. The panel would suggest a procedure to bring unclaimed deposits to a common pool. The committee will submit its report by December 31.
A PPF is a 15-year investment scheme, which offers tax exemption. The minimum annual investment in PPF is Rs 500. The Budget proposed raising the upper limit of annual investment in PPF by Rs 50,000 to Rs 1.5 lakh.
The committee will also suggest whether the unclaimed deposits should come to the government or be kept in a separate account. The committee members include secretary (Department of Posts); joint secretary (law ministry and Budget division of finance ministry); State Bank of India deputy managing director; and executive director of Punjab National Bank, a notification said. The panel would suggest a procedure to bring unclaimed deposits to a common pool. The committee will submit its report by December 31.
A PPF is a 15-year investment scheme, which offers tax exemption. The minimum annual investment in PPF is Rs 500. The Budget proposed raising the upper limit of annual investment in PPF by Rs 50,000 to Rs 1.5 lakh.
India tumbles 11 places on competitiveness indexIndia’s ranking on a global competitiveness index fell 11 notches to 71 in 2014-15, against 60 a year earlier, pushing its position to the lowest among BRICS nations.
There were 144 countries ranked in the Global Competitiveness Report 2014-15 released by the World Economic Forum (WEF) on 3rd September.
The data came a few days after India’s economy grew at a two-year high of 5.7 per cent in the first quarter of the current financial year, bolstering spirits in the government as well as industry.
The country’s ranking in the global competitiveness index (GCI) was 48 in 2007-08 (three quarters of which fell in calendar year 2007) and it slipped to 50 a year later.
The report said as the poorest economies among emerging Asian countries — India and Myanmar — were transitioning away from agriculture and developing a manufacturing base they would need to create a sound and stable institutional framework for local and foreign investors and improve connectivity.
According to report manufacturing accounts for less than 15 per cent of India’s GDP. Agriculture represents 18 per cent of output and employs 47 per cent of the workforce. Low productivity in the sector means very low wages and a life of mere subsistence for many
The country’s rankings on specific yardsticks were somewhat peculiar. While it ranked higher on more complex areas of competitiveness — innovation (49th) and business sophistication (57th), on the basic drivers of competitiveness such as health and primary education, its performance was poor.
India had its lowest rank in technological readiness (121st). Despite mobile telephony being almost ubiquitous, India is one of the world’s least digitally connected countries. The report said despite its immense potential and promise, by many accounts, India continued to suffer from poverty.
A third of India’s population still lives in extreme poverty — possibly the highest incidence outside sub-Saharan Africa — and many people still lack access to basic services and opportunities, such as sanitation, health care, and quality schooling.
However, it said the overall business environment and market efficiency (95th, down 10 places) are undermined by protectionism, monopolies, and various distortionary measures, including subsidies and administrative barriers to entry and operation.
It quoted the World Bank’s data on ease of doing business to say that it took 12 procedures and almost a month to register a business in India. Besides, taxes for a typical registered firm amount, on average, to 63 per cent of profits.
There were 144 countries ranked in the Global Competitiveness Report 2014-15 released by the World Economic Forum (WEF) on 3rd September.
The data came a few days after India’s economy grew at a two-year high of 5.7 per cent in the first quarter of the current financial year, bolstering spirits in the government as well as industry.
The country’s ranking in the global competitiveness index (GCI) was 48 in 2007-08 (three quarters of which fell in calendar year 2007) and it slipped to 50 a year later.
The report said as the poorest economies among emerging Asian countries — India and Myanmar — were transitioning away from agriculture and developing a manufacturing base they would need to create a sound and stable institutional framework for local and foreign investors and improve connectivity.
According to report manufacturing accounts for less than 15 per cent of India’s GDP. Agriculture represents 18 per cent of output and employs 47 per cent of the workforce. Low productivity in the sector means very low wages and a life of mere subsistence for many
The country’s rankings on specific yardsticks were somewhat peculiar. While it ranked higher on more complex areas of competitiveness — innovation (49th) and business sophistication (57th), on the basic drivers of competitiveness such as health and primary education, its performance was poor.
India had its lowest rank in technological readiness (121st). Despite mobile telephony being almost ubiquitous, India is one of the world’s least digitally connected countries. The report said despite its immense potential and promise, by many accounts, India continued to suffer from poverty.
A third of India’s population still lives in extreme poverty — possibly the highest incidence outside sub-Saharan Africa — and many people still lack access to basic services and opportunities, such as sanitation, health care, and quality schooling.
However, it said the overall business environment and market efficiency (95th, down 10 places) are undermined by protectionism, monopolies, and various distortionary measures, including subsidies and administrative barriers to entry and operation.
It quoted the World Bank’s data on ease of doing business to say that it took 12 procedures and almost a month to register a business in India. Besides, taxes for a typical registered firm amount, on average, to 63 per cent of profits.
RBI eases ECB normsTo provide more flexibility in structuring external commercial borrowings (ECBs), the Reserve Bank of India (RBI) has allowed recognised non-resident ECB lenders to extend loans in rupees, subject to riders.
The central bank said lender should mobilise rupees through swaps with a bank in India. Besides, the ECB contract should comply with all other conditions applicable to the automatic and approval routes, as is the case. The overall cost of such ECBs should be commensurate with prevailing market conditions, RBI said.
It added for rupee-denominated ECB swaps, the recognised ECB lender could set up a representative office in India by following the prescribed process in this regard.
What are ECB’s? An external commercial borrowing (ECB) is an instrument used in India to facilitate the access to foreign money by Indian corporations and PSUs (public sector undertakings). ECBs include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments such as floating rate notes and fixed rate bonds etc
The central bank said lender should mobilise rupees through swaps with a bank in India. Besides, the ECB contract should comply with all other conditions applicable to the automatic and approval routes, as is the case. The overall cost of such ECBs should be commensurate with prevailing market conditions, RBI said.
It added for rupee-denominated ECB swaps, the recognised ECB lender could set up a representative office in India by following the prescribed process in this regard.
What are ECB’s? An external commercial borrowing (ECB) is an instrument used in India to facilitate the access to foreign money by Indian corporations and PSUs (public sector undertakings). ECBs include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments such as floating rate notes and fixed rate bonds etc
Half of India was below poverty line in 2010: ADBThe Asian Development Bank (ADB) has revised its poverty line to $1.51 per person a day compared to $1.25 by the World Bank, which would push the numbers of poor by 182 million to 584 million in 2010 compared to the WB's estimates of 402 million.
ADB's calculations imply almost half of India's population (47.7 per cent) was below the line in 2010. Both these estimates are based on the year 2005's purchasing power parity (PPP) rates.
A few days ago, the Centre for Global Development's (CGD) calculations suggested 102.3 million were poor in India in the same year. While poverty estimation is undoubtedly a complex exercise, such a sharp difference does raise the inevitable question of how many poor are there in the country. The difference in these poverty estimates is on account of two factors - where one draws the poverty line and the PPP estimates used in the process of estimation.
ADB's latest estimates are based on revising the poverty line upwards from $1.25 to $1.51 per person per day. Though the regional multilateral agency mainly uses income for calculating poverty, in India it is expenditure that defines the poverty line. India does not have any official estimates for income distribution.
This revision was carried out on the grounds that the original poverty line was inadequate and did not truly reflect the costs required to maintain a minimum standard of living. By their estimates, India's poverty rate rises by 15 percentage points to 584 million in 2010, if compared to the poverty line of $1.25.
Another poverty estimate comes from the Rangarajan committee, which estimated the poverty line for India at Rs 920 (weighted average of rural and urban areas) for 2009-10, estimating the poor at 454.6 million. At the latest 2011 PPP, this translates to a poverty line of $2.03 per person per day. While, if one takes Ravallion's estimate of a PI of 0.43, the poverty line stands at $1.53, remarkably close to that used by ADB.
ADBThe Asian Development Bank (ADB) is a regional development bank established on 22 August 1966 which is headquartered in Metro Manila, Philippines to facilitate economic development of countries in Asia.
ADB's calculations imply almost half of India's population (47.7 per cent) was below the line in 2010. Both these estimates are based on the year 2005's purchasing power parity (PPP) rates.
A few days ago, the Centre for Global Development's (CGD) calculations suggested 102.3 million were poor in India in the same year. While poverty estimation is undoubtedly a complex exercise, such a sharp difference does raise the inevitable question of how many poor are there in the country. The difference in these poverty estimates is on account of two factors - where one draws the poverty line and the PPP estimates used in the process of estimation.
ADB's latest estimates are based on revising the poverty line upwards from $1.25 to $1.51 per person per day. Though the regional multilateral agency mainly uses income for calculating poverty, in India it is expenditure that defines the poverty line. India does not have any official estimates for income distribution.
This revision was carried out on the grounds that the original poverty line was inadequate and did not truly reflect the costs required to maintain a minimum standard of living. By their estimates, India's poverty rate rises by 15 percentage points to 584 million in 2010, if compared to the poverty line of $1.25.
Another poverty estimate comes from the Rangarajan committee, which estimated the poverty line for India at Rs 920 (weighted average of rural and urban areas) for 2009-10, estimating the poor at 454.6 million. At the latest 2011 PPP, this translates to a poverty line of $2.03 per person per day. While, if one takes Ravallion's estimate of a PI of 0.43, the poverty line stands at $1.53, remarkably close to that used by ADB.
ADBThe Asian Development Bank (ADB) is a regional development bank established on 22 August 1966 which is headquartered in Metro Manila, Philippines to facilitate economic development of countries in Asia.
SBI launches savings bank accounts for childrenState Bank of India, the country’ largest lender, has now launched two new savings bank accounts for children — Pehla Kadam and Pehli Udaan.
This comes after the Reserve Bank of India in May this year allowed minors aged more than 10 years to open and operate savings bank accounts independently.
While Pehla Kadam is a savings bank account for minors of any age operated jointly with his/her parent/guardian, Pehli Udaan savings bank account can be operated independently by a minor aged 10 years and above. Customers opening these accounts will be given a cheque book, a passbook and an ATM Card.
Apart from this, account holders will also be allowed internet banking facilities which can be used for certain select transactions like bill payment, opening of fixed deposits, recurring deposits, etc. with a daily transaction limit of Rs 5,000. These features will also be available on mobile banking platforms with a daily transaction limit of Rs 2,000.
Auto sweep with a minimum threshold of Rs 20,000 and in multiple of Rs 1,000 with a minimum of Rs 10,000 will also be allowed in these accounts.
This comes after the Reserve Bank of India in May this year allowed minors aged more than 10 years to open and operate savings bank accounts independently.
While Pehla Kadam is a savings bank account for minors of any age operated jointly with his/her parent/guardian, Pehli Udaan savings bank account can be operated independently by a minor aged 10 years and above. Customers opening these accounts will be given a cheque book, a passbook and an ATM Card.
Apart from this, account holders will also be allowed internet banking facilities which can be used for certain select transactions like bill payment, opening of fixed deposits, recurring deposits, etc. with a daily transaction limit of Rs 5,000. These features will also be available on mobile banking platforms with a daily transaction limit of Rs 2,000.
Auto sweep with a minimum threshold of Rs 20,000 and in multiple of Rs 1,000 with a minimum of Rs 10,000 will also be allowed in these accounts.
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