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August 03, 2012

January - Current Affairs - Economy

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U S Economy Grows 2.8 %in Q Y

The U S economy grew at its fastest pace in one – and -a -half years in the fourth quarter , rebuilding of stocks by businesses and week spending on capital goods hinted  for the shole of 2012,the economy grew 1.7 % after expanding 3 % the prior year .

$ 5 – Billion Loss : Goods Made in India, Faked in China

Chinese manufacturers are increasingly “ faking “ popular Indian products of consumer goods giants such as Dabur and ITC, undermining the legitimacy of brands and causing losses worth as much as $ 5 billion annually, officials said.


Govt readies Rs. 50k cr infra fund plan

LIC, IIFCL, IDBI Bank, ADB & HSBC likely Parteners for New Finance Firm. The government has finalized the outlines of a $10 billion crore  ( over Rs. 50, 000 crore ) infracture debt fund ( IDF ) with 50% participation from a foreign bank and a multilateral agency, while the rest of the corpus will be contributed by state owned financial institutions on 2 January 2012.Government officials and bankers said India Infracture Finance Company ( IIFC ), Life Insurance Corporation and IDBI Bank along with Asian Development Bank and HSBC are joining hands to set up a non banking finance company ( NBFC ).

RBI governor hints at soft monetary policy

Concerned over the declining growth Reserve Bank Governor D Subba Rao has indicated on 2 January 2012 that the central bank could reverse the tight monetary stance adopted by it since March 2010 to control inflation.  The central bank is scheduled to announce the monetary policy review on Jan 24.  RBI has hiked key interest rate 13 times since March 2010 in its bid to check rising inflation, but it took a pause in its December monetary policy .

ONGC to invest $2.9 bn in Krishna Godavari gas find

State – owned Oil and Natural Gas Corporation ( ONGC ) plans to invest $2.894 billion ( about Rs. 15, 340 crore ) in developing its ultra deepsea UD – 1 gas discovery in the KGi basin by 2016 – 17.

Andhra Bank hikes NRE deposit rates

The state – run Andhra Bank has hiked its interest rates on NRE term deposits to 9.40% per annum for one year, 9.25% pa from one to two years and 9% pa for 2 to 3 years with effect from December 30, 201.

SBI achieves 100% Financial Inclusion in AP

State Bank of India has achieved 100% coverage of its alloted unbanked villages in Andhra Pradesh under the Financial Inclusion Programme ( FIP ) of the Reserve Bank of India.

PFC’s Rs. 5,000 – Cr Tax – Free Bonds

Power Finance Corporation ( PFC ) on 2 Jan. 2012 has come out with a Rs. 5,000 crore tax – free bond issue.  PFC is a Navratna Government of India undertaking with the government holding 73.72% stake in it. Government approves RIL’s $1.529 B Investment Plan for Satellite Fields in KG-D6 Block.
The Union government approved Reliance Industries’ (RIL) $1.529 billion investment plan for developing four satellite fields in the declining KG-D6 block on 3 January 2012. RIL’s investment plan will boost falling output in the Krishna-Godavari Basin KG-D6 block . Growth in Direct Tax collection down by 8.3%”.
Annual growth in net direct tax collection slowed to 8.3% during the first nine months of the fiscal year amounting to Rs. 3,23,955 crore, raising concerns about the centre’s ability to meet its revenue targets.

ONGC declares 125% Interim Dividend

State – run Oil Natural Gas Corp ( ONGC ) declared a 125% interim dividend.  The Board has approved an interim dividend of Rs.6.25 per equity share  ( of Rs. 5 each ) for 2011 – 12 on 4 Jan. 2012.

SEBI allows UTIMF to launch new schemes

Reversing its  earlier stand, market regulator SEBI on 4 Jan. 2012 has allowed UTI Mutual Fund ( UTIMF ) to launch new funds again even though the fund house continues to function without its top executive officer nearly a year now.

SBI Loan to Kingfisher Airlines turns NPA

State Bank of India, the country’s largest lender says its exposure to ailing private carrier Kingfisher Airlines has turned a bad loan or a non-performing asset ( NPA ) on 5 Jan. 2012.

SIDBI inks pact with IOB

Small Industries Development Bank of India ( SIDBI ) has entered into a memorandum of understanding with Indian Overseas Bank ( IOB ) to extend assistance to micro, small and medium enterprises ( MSME ) to the customers of IOB on 6 January 2012.

State FMs agree in principle on GST ( Goods and Services Tax ) list

The empowered committee of state finance ministers on GST on Jan. 9, 2012 agreed in principle on the concept of “negative list” and suggested the Centre could prepare such a list which would help widen tax base. The panel has agreed in principle to the concept of negative list and the Union Government should prepare it and can also implement it from April, 2012. The Committee suggested that all those items mentioned in the Constitution’s Schedule – II should be included in the negative list so that Union Government can not impose tax on them.

Air India told to pay service tax dues

The Central Board of Excise and Customs ( CBEC ) on 10 Jan. 2012 has warned the national carrier Air India to pay up a “reasonable” part of its service tax dues as early as possible or face having its accounts frozen.

Govt. notifies 100% FDI in single-brand retail Retains rider of 30% sourcing from Indian small industries

The Government, which has been facing flak for ‘policy paralysis,’ on 10 Jan. 2012 notified 100 per cent Foreign Direct Investment in single-brand retail trading, moving a step forward in opening up of the retail sector.  The current FDI limit is 51 per cent.  Investments will be through the Government approval route.

IRDA plans to take up complaints on its own

Customers may except better services from their insurers soon.  The Insurance Regulatory Development Authority is planning to take insurance complaints on its own to ensure fair play by the insurers.

Govt investing $20 b in creating information highway, says Pitroda

The Government is investing $20 billion in projects related to creating information highway, according to Mr Sam Pitroda, Advisor to the Prime Minister on Public Infrastructure, Information and Innovations.

SEBI asks bankers to disclose due diligence records

Stock market regulator SEBI ( Securities and Exchange Board of India ) on 10 Jan. 2012 has asked merchant bankers to disclose their track record of due diligence done during the last three financial years from the date of listing for each public issue managed by them.

Rs. 1,935 crore worth FDI cleared

The Government on 10 Jan. 2012 has approved 20 proposols of Foreign Direct Investment worth Rs. 1,935.24 crore according to an official statement. One among them include Rs. 1,150 crore by Sterlite Grid, to act as an investment company.

RBI says no to CRR cut

The Reserve Bank of India has ruled out the possibility of a cut in the cash reserve ratio or CRR, in its monetary policy review on January 24, according to bankers who took part in the customary pre-policy meeting held by the central bank on Jan.10, 2012.

Rice procurement up 17.3%

The Government has so far procured 18.11 million tonnes rice from farmers across the country in the current marketing year that started October , the food ministry said on 10 Jan. 2012.

Malaysia palm oil exports fall

Malaysia’s palm oil exports fell 19 per cent in the first 10 days of January compared with the previous month.

Indirect tax collections up 16.1 per cent

Indirect tax collections went up by 16.1 per cent to Rs. 2.86 lakh crore in April-December this fiscal as compared to Rs. 2.46 lakh crore garnered during the same period of 2010-11.

Moody’s upgrades India’s Short – Term Foreign Currency Bank Deposits Rating

It will help Indian banks, other entities raise overseas deposits at finer rates.Global rating agency Moody’s on Jan. 10, 2012 has upgraded the country’s rating of short term foreign currency bank deposits from ‘speculative’ to ‘investment’ grade.  Since December 20 last year, this is the fourth upgrade by Moody’s Investor Service, which is expected to help Indian banks and other entities in raising overseas deposits at finer rates.

SBI cuts processing fee by half for bigger share of Home Loan Mkt

The State Bank of India on 11 January 2012 cut processing fees on home loans by half, a move aimed at acquiring a larger business in the home loan market and giving competition to private banks and housing finance companies.

SBI opens exclusive branch for women customers

The branch, Vasundhara Jubilee Senortia Banking centre is opened by SBI in Hyderabad on Jan. 11, 2012.  It is only the second of its kind in the country.  It is aimed at tech-savvy, educated women customers including entreprenuers.  ”"with play room for kid and other facilities women customers can handle their banking transactions in a safe and family atmosphere”".

Andhra Bank lauches ‘ Abhaya Wealth Pack ‘

Andhra Bank on 12 January 2012 launched ‘ Abhaya First Wealth Pack ‘ for the common man.  The bank termed it as ‘one wealth management for all financial needs’.  It will have a savings bank account, a recurring group deposit account, a group term insurance and a unit linked insurance plan.

India to be Reckitt Benckiser’s New Regional Head Quarters

Benckiser, one of the world’s largest consumer goods companies , has upgraded India to its regional head quarters for Sooutheast Asia, covering 12 nations representing a market of 1.8 billion people.

S&P may strip France of AAA rating for first time

Standard & Poor’s is stripping France of its AAA rating for the first time according to Agence France-Press report.

SEBI wants Fund Houses to Launch Pension Products

Asset Management Companies ( AMCs ) need to launch pension products that will channel retirement savings into stock market, Securities and Exchange Board of India (SEBI) Chairman UK Sinha said on 13 January 2012.

Indian Exports up 6.7% in December, may touch $300-b target

India’s exports rose for the first time in five months, encouraging the government to reaffirm that it would achieve its $300-billion target for the year.  Exports in December grew 6.7% to $25 billion over the previous month according to the data released on 16 January 2012.

At 7.47%, December Inflation takes major load off Govt

Inflation rose at its slowest pace in two years in December 2011.  Headline Inflation as measured by the Wholesale Price Index (WPI), dropped to 7.47% in December on lower food prices, as compared with 9.11% in November, government data released on 16 January 2012.

S&P downgrades the Brussels’ bailout fund EFSF

The Standard and Poor’s, the US credit ratings agency on January 16 downgraded the Brussel’s main bailout fund, European Financial Stability Facility (EFSF) by one notch to AA+ but said it would restore the top AAA ranking if the fund obtains additional guarantees.The decision was the result of downgrades to France’s and Austria’s ratings from AAA since they served as top-level guarantors of the European Financial Stability Facility, S&P said in a statement.

Govt. set to allow FDI in domestic airlines

In a major relief to financially distressed Indian airlines, the government on 17 Jan. 2012 said foreign airlines would soon be allowed to acquire up to 49% stake in them.

Chinese Banks lend $1.18 bn to Reliance Communications

Chinese state banks lend debt-laden Reliance Communications (Rcom) $1.18 billion to repay foreign currency convertible bonds worth Rs 6,125 crore ($1.18 billion) on 17 Jan. 2012.

India ranked behind Pakistan, Bangladesh

India has been ranked as 132 behind Pakistan and Bangladesh in 2012 in the World Bank’s latest ‘Ease of Doing Business’ rankings.  India has moved up seven points to 132 this year, from 139 last year.

Rupee undervalued 61% : Big Mac Index

The Indian rupee is the most undervalued currency, trading at around 61% below its actual price against the dollar according to The Economist’s Latest Big Max Index.  The Index measures the effective purchasing power of different currencies by looking at how much Mc Donald’s popular burger costs in various countries.

Iran explores buying more goods from India

Iran is considering stepping up its purchases from India to obtain a more balanced trade and reduce the payments problem faced by the two countries in setting payments for crude import by India in the wake of fresh sanctions from the US.

Centre plans to boost up textiles sector

The government is planning to give incentives to the textiles sector with retrospective effect as it seeks to revive India’s second largest manufacturing sector burdened with sickness, debt and declining demand.

World Bank cuts Global GDP forecasts

The World Bank on 18 Jan. 2012 warned the developing countries of the upcoming recession danger.  It cut its forecast for growth in developing economies to 5.4% for 2012 from its previous forecast of 6.2% saying expansion in Brazil and India and to a lesser extent Russia, South Africa and Turkey had slowed already.

States want to hike professional tax

In a Budget wish list presented to finance minister Pranab Mukherjee, finance ministers of states on 18 Jan. 2012 demanded that the government should allow them to tax top professionals more and   lift the ceiling from the current 2,500 a year.

Centre urged to give funds directly to States

Majority of States have favoured the Rangarajan Committee’s recommendations on doing away with the current system of classification of expenditure into Plan and Non-Plan categories on 18 Jan. 2012.  They have also agreed that the BK Chaturvedi Group report on Centrally sponsored schemes should be implemented. Mr. Sushil Kumar Modi, Chairman of the empowered Committee of States’ Finance Ministers, asked the Centre to give funds to the states directly for various social sector schemes.

Small And Medium Units Urged

SMEs (small and medium enterprises ) in the country used to work more closely with special economic zones  to gain from the facilities extended .

Banks  Want Tax Compliance Norms

Banks have moved the finance ministry to ease the procedure relating to the compliance being faced by depositors  to the senior citizen and economically weaker categories . saying that pan in forms 15G/15H should not be mandatary .

Center Mulls Textiles Sops With Retrospective Effect

The Government is planning to give incentives  to the textiles sectors which are burdened with  debts.No ,subsidy scheme was given for these campanies in 2010 – 11 .Companies which were deprived for benifit last year will be covered under the changed rule .

LIC Crosses One Million Mark

The Life Insurance Corporation of Indai has crossed the one million mark in cumulative lives under its health Insurance segment.

LIC Launching Jeevan Ankur

Life Insurance Corparation of India  is launching  a new plan  . Lic ‘s Jeevan ankur on 23 ‘rd Jan  2012 to meet the educational  and other needs of the child .

China To Rescue UK Economy

China’s fastest growing economic presence in Britan to rescue the UK economy the china investment corporation (CIC)  has bought a 8,6% stake in Thames water,which is Britans’s largest water and sewerege  company .

The production target for worlds largest coal produce coal India ( C I L)  is likely to be fixed at 46.4 million tones mt for the 2012-2013 financial year.

4 Pharma FDI Plans Okayed

For money inflow intact, the government has cleared forms foreign direct investment proposals in pharmaceutical space , dispelling fears that the recent change in rules will effectively kill foreign investments in the sector.The foreign investment promotion board ( F I P B ) examines proposals that are in approval route on merit .

Tata Power In Talks To Buy 15 % Stake in MEC Coal

The Tata group already owns 30 % in mines promoted by the Bakrie group one of the Indonesia’s biggest house.Tata company  plans to secure coal supplies from Indonesia to reduce power generation costs .If the deal goes on it will be the second time buying a stake in Indonesia coal mines .

R B I Cuts C R R Rates

The Reserve Bank of India on 24 th Jan 2012 cut the cash ratio by 50 basis points from 6% to 5.5 % with effect from 28 th Jan 2012 , which would release Rs 32,000 crore  in the financial system . keeping all other unchanged repo rate at 8.50 % . GDP growth from 7.6% to 7 % now .With the RBI holding back on cutting interest rates due to increased inflation risk from global crude , oil prices, the lingering impact of rupee depreciation  .CRR cuts would bring liquidity and help in sensex up .

India – Srilanka Bilateral Trade Surges by 70 %

Trade between India and Srilanka surged by more than 70 % in 2011over the past years  touching all time high of $ 5 billion .

Solar Powered A T M ‘s In Rural Areas

Innovation which makes a difference to people’s lives in the Indain context is very different  .The company Vortex placed in Chennai helping the banks by solar powered A T M’s installed in rural places .Where as conventional  ATM’s requires 50 watts of power everyday while Vortex’s machines require just 70 watts power to work .

India Signs International Tax Treaty

The government had made another move to get information about black money stashed away from the country .India had signed the multilateral convection on mutual administrative assistance regarding tax matters , that promotes international cooperation .India and other countries joined to ensure that individuals and multinational enterpries pay right amount of tax ,at the right place .Which is based on international standards of transparency and exchange of information .

Samsung India To Exit From Window AC Market

India’s largest consumer durable firm Samsung India Electronics had decided to exit from window air conditioners segment from the year 2012 .And completely focusing on fast growing split air conditioners market ,due to the window AC market is shrinking significantly .

TCS Opens New Facililty In Silicon Valley

The I T major ( T C S ) Tata Consultancy Services has opened a new facility in U S , It will serve as the world wide headquaters of the company’s mobility solution units .And which aims to bring the benifits of emerging technologies such as big data , analyties and mobility to enterprises across all industries .

CAG To Audit In States

The Comptroller and Auditor General of India  (CAG) has decided to audit the spending of all states under the National Rural Health Mission (N H R M ) Scheme  .After hearing  a Rs 5,754 , crore  NRHM scam in Uttarpradesh . The  CAG will conduct independent audits of the scheme in 17  other states to ascertain losses to exchequer  . The ministry has written letters to states, asking them to cooperate with their accounts generals.

Excise Duty ,Service Tax May Be Hiked In The Upcoming Budget

To revive Indian economy ,impacted by the global slowdown , the government had provided three fiscal stimulus packages starting from Dec 7,2008 the government had brought down excise duty from 14 % to 10 % to miligate the impact of the global financial crises .The duty was further cut to 8 % on Feb 24, 2009 . On Feb 26 2010 rolled back the cut partially . The excise duty and service tax may be hiked by 2% in the up coming budget . Government is thinking that entire cut be rolled back  . When industry is down and demand is depressed , raising duties may further hurt growth .There will be fiscal deficit  likely to be 5.6  % to 5.1 % .in 2011-2012 .

Economic Growth Revised Down By 8.5% To 8.4 %

The central Statistics office on 31 st Jan 2012 lowered  its estimate for the country’s gross domestic product  (GDP) growth in 2010-2011 to 8’4 % from 8.5 % earlier , The gross national income grew 7.9 % in 2010-2011 .GDP growth in Agriculture sector is 7% .GDP growth in service sector  grew up by  9.3 % . GDP growth in financial savings reduced from 12.9% to 10 % .GDP growth in private cooperate sector down by 8.2 % to 7.9 % .GDP growth in saving of public sectors increased from 0.2 % to 1.7 % .The gross demostic capital formatiom at current prices increases from Rs. 23.64 lakh crore to 26.92 lakh crore in 2010-2011.The rate of capital formation stood at 35.1 % in 2010-2011 low down than earlier against 36.6 % in 2009-2010 . These are the latest revisions ,part of quick estimates of of nationalincome ,cunsumtion expenditure ,saving and capital information released by central statistics office  .

RBI lowers Export Figures by $ 6 B, surprises Economists

The Reserve Bank of India ( RBI ) has revised its export numbers downwards by $6 billion in its balance of payments statement for the first quarter ( April – June ) of the fiscal indicating massive over statement in the country’s export numbers. 

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