Economy current for 2014-15

8/10/2019 Economy current for 2014-15

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Make In India Programme

Make in Indiais a major new national program designed tofacilitate investment, foster

innovation, enhance skill development,protect intellectual property and build best-in-class

manufacturing infrastructure. - Addressing a gathering consisting of top global CEOs , the Prime

Minister said FDIshould be understood as FirstDevelop India- new de-licensing and

deregulation measures-self-certification and third party certification-Dual use items having

military as well as civilian applications deregulated-eBiza single window IT platform for services-

environmental clearances made online.- All returns should be filed on-line through a unified form.- A check-list of required compliances - single electronic register. - No inspection should be

undertaken without the approval of the Head of the Department.

With the easing of investment caps and controls, Indiashigh- value industrial sectorsdefense,

construction and railwaysare now open to global participation.

Policy in Defence sector liberalised and FDI cap raised from 26% to 49%.

Portfolio investment in Defence sector permitted up to 24% under the automatic route.

100% FDI allowed in Defence sector for modern and state of the art technology on case to case

basis.

100% FDI under automatic route permitted in construction, operation and maintenance in

specified Rail Infrastructure projectsPrime Minister Inaugurates Shramev Jayate

Pandit Deendayal Upadhyay Shramev Jayate scheme.

The five main schemes launched by Shri Modi included:

. A dedicatedShram Suvidha Portal:That would allot Labour Identification Number (LIN) to nearly 6

lakhs units and allow them to file online compliance for 16 out of 44 labour laws

2. An all-new Random Inspection Scheme:Utilizing technology to eliminate human discretion in selection

of units for Inspection, and uploading of Inspection Reports within 72 hours of inspection mandatory

. Universal Account Number:Enables 4.17 crore employees to have their Provident Fund account

portable, hassle-free and universally accessible

4. Apprentice Protsahan Yojana:Will support manufacturing units mainly and other establishments byreimbursing 50% of the stipend paid to apprentices during first two years of their training

. Revamped Rashtriya Swasthya Bima Yojana: Introducing a Smart Card for the workers in the

unorganized sector seeded with details of two more social security schemes

Shram Suvidha Portal -The 4 main features of this Portal are:

. Unique labour identification number(LIN) will be allotted to Units to facilitate online registration.

2. Filing of self-certified and simplified Single Online Returnby the industry. Now Units will only file a

single consolidated Return online instead of filing 16 separate Returns.

. Mandatory uploading ofinspection Reportswithin 72 hours by the Labour inspectors.

4. Timely redressal of grievanceswill be ensured with the help of the portal.

2. The portal will be operative in4 central organizationsnamely Chief Labour Commissioner,Directorate General of Mines Safety, Employee Provident Fund and EmployeesState insurance

Corporation.

Labour Inspection Scheme:--The four features of the inspection scheme are:

. Serious mattersare to be covered under the mandatory inspection list.

2. A computerized listof inspections will be generated randomly based on pre-determined objective

criteria.

. Complaints based inspectionswill also be determined centrally after examination based on data and

evidence.

4. There will be provision ofEmergency Listfor inspection of serious cases in specific circumstances.


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Dedication of Portability through Universal Account Number (UAN) for Employees Provident

Fund:

2. Under the scheme complete information for approximately 4 crore subscribers of EPF has been

centrally compiled and digitized and a UAN has been allotted to all.

3. The UAN is being seeded with Bank accountand Aadhar Card and other KYC details for financial

inclusion of vulnerable section of society and their unique identification.4. The minimum pension for employees has been introduced first time so thatemployeespension is

not less than Rs. 1000 per month.

5. The wage ceiling has been raised from Rs. 6500 to Rs. 15000 per month to ensure that vulnerable

groups are covered under EPF Scheme.

Recognition of Brand Ambassadors of ITIs :-- There are11,500 ITIs having about 16 lakh seats.But this is

grossly inadequate for supplying skilled manpower to Indian industry.

Only 10% of the workforce has got formal or informal technical training.

Only one fourth of this is formally trained.Whereas in South Korea, Japan, Germany, the percentage of

workforce having received skills training is 96, 80 and 75 respectively.

There is also another big imbalance.The intake capacity of undergraduate engineering colleges was morethan 16 lakh in India which was almost same as seating capacity of ITIs. Whereas we need about at least 10

shop floor workers for an engineer.

Therefore we need to rapidly expand certificate level vocational training if we have to succeed in our

mission of Makein India.

blue collar work is not respected -Over 60 years of existenceITIs have given excellent technician,

mechanics, entrepreneurs and professional leaders.

Manufacturing sector is reservoir of this success. They have brought name and fame in the country and

abroad. It is proposed to compile these success stories and publish in print and electronic form.

These success stories shall be used for motivating youngsters and their parents. This will also improve the

brand image as well as social acceptance of the vocational training.

The Prime Minister has released this publication and felicitate few of these Brand Ambassadors.

. All India Skill Competition:---> All India Skill Competition for Craftsmen among trainees admitted

underCraftsmen Training Scheme (CTS). It is conducted once in a year. On the basis of marks obtained in

skill competition by trainees, the award is given to BEST CRAFTSMAN-cash prize and merit certificate,

BEST INSTITUTEa merit certificate and theBEST STATE a shield.

2. All India Competition for Apprenticesamong trainees admitted under Apprenticeship Training Scheme

(ATS). It is conducted twice every year. The award is given to the BEST Apprentice- cash prize of Rs

50,000 and a merit certificate and Runner Up Apprentice- cash prize of Rs 25000 and merit certificate in

each Trade, and the BEST ESTABLISHMENTon all India basis- a trophy and certificate by President of

India.

Launch of Apprenticeship Protsahan Yojna :---->The Apprentices Act 1961was enacted for regulating theApprenticeship Training Scheme in the industry for imparting on-the-job training to apprentices. Presently,

there are only2.82 lakh apprenticesundergoing training against 4.9 lakh seats.

Similar schemes have been highly successful in countries like Germany, China and Japan where the

number of apprentices are stated to be 3 million, 20 million and 10 million respectively.

There are four components of this initiative, which are given below:

. Making the legal framework friendlyto both, industry and youth. The necessary Bill amending the Act

was placed and passed in Lok Sabha on 14.8.2014.

2. Enhancing therate of stipendand indexing it to minimum wages of semi skilled workers.


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. Apprentice Protsahan Yojanawhich will support manufacturing units mainly and other establishments

by reimbursing 50% of the stipend paid to apprentices during first two years of their training.

4. Basic training component(mainly class room training part) of the curricula is being restructured on

scientific principles to make it more effective, and MSMEs will be supported financially by permitting

this component in government funded SDI scheme.

2. The Apprentice Protsahan Yojana willsupport one lakh apprenticesduring the period upto March

2017.

Indian Economy Will Grow By 6.4%According to World Bank, Indian economy, which accounts for 80 per cent of South Asiasoutput, is set

to grow by 6.4 per cent in 2015-16as against 5.6 per cent in 2014-15.

Countries in the region should build on this strength. As East Asian labor costs increase, South

Asia has an opportunity to become the manufacturing hub of the world; but achieving this will

require boosting competitiveness.

Axis Bank Joins ETC Implementation Plan

Indian Highways Management Company Limited (IHMCL), a NHAI promoted company and Axis Bank has

signed an agreement for provision of Central Clearing House (CCH) services and sale of FASTag, for

Electronic Toll Collection (ETC) at the Toll Plazason the National Highways.

for implementation of unified Electronic Toll Collectionon Indian national highwaysElectronic Toll

Collection enables road users to pay highway tolls electronically without stopping at the toll plazas.

The unique number of the RFID FASTag affixed on the wind shield of the vehicle will be read by the

readers fitted in the dedicated ETClanes of plazas and the toll will be deducted automatically.--IHMCL

now has two banks viz ICICI and Axis Bank to perform clearing and settlement of electronic toll

transaction, which is a key requirement for interoperable electronic toll collection.--Considering the

complexities and geographical spread, the nationwide ETC would be first of its kind in the whole world.

BSNL & MTNL Merger Soon

The much-awaited merger of telecom PSUs, BSNL and MTNL, is likely to take place by July next year asthe two companies look at synergising operations by offering services as a single entity.

At present, BSNL offers services in the whole country, except Delhi and Mumbai.

MTNL provides telecom services in these two zones.

The deadline of June-July 2015 has not been officially commissioned to the organisation but the merger is

likely to take place in the time frame.--Currently,BSNL is billing MTNLand vice versa for services for

which both are paying taxes. If it becomes one entity, the tax outgo will be less.

Govt Clears Stake Sale in CIL, ONGC, NHPC

In a meeting of the CCEA, headed by Prime Minister Narendra Modi, the disinvestmentproposals of

ONGC, Coal India and NHPChave been cleared by the Cabinet Committee on Economic Affairs.

At current market prices, the sale of shares in state- owned CIL, ONGC and NHPC could garner over Rs

23,000 crore, Rs 18,000 crore and Rs 2,800 crore respectively, helping the government meet its

disinvestment target of Rs 43,425 crore for this fiscal.

CCEA has cleared 10 per cent stake dilution in CIL, 5 per cent in ONGC and 11.36 per cent in NHPC

through the Offer For Sale (OFS) route,sources said.

The government has already selectedmerchant bankersfor managing ONGC and NHPC disinvestment and

is in the process for doing so for CIL.

India Signs Trade in Services & Trade Agreement


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India has formally signed the Trade in Services & Trade in Investments Agreement with ASEAN.

9out of ten ASEAN countries have signed the same.

Philippines is completingits domestic procedure and it is expected to sign soon.

It may be mentioned that India-ASEAN Agreement on Trade in Goods was signed in 2009and

became effective from 2010.

Some of the important Articles contained in the Agreement are ones on transparency, domestic

regulations, recognition, market access, national treatment, increasing participation of developing

countries, joint committee on services, review, dispute settlement and denial of benefits. India on the other hand has tabled three schedules of commitmentsone forPhilippines, one

forIndonesiaand one for the remaining eight ASEAN Member States.

Latest Cabinet Decisions

TheCabinet Committee on Economic Affairshas approved raising of FDI cap in insurance sector to 49

percent from 26 percent.

The insurance sector was opened up for private sector in 2000after the enactment of the Insurance

Regulatory and Development Authority Act, 1999 (IRDA Act, 1999).

This Act permitted foreign shareholdingin insurance companies to the extent of 26 percent with an

aim to provide better insurance coverage and to augment the flow of long term resources for

financing infrastructure.

CCEA OKAYS SALE OF 10 MN TONNES OF WHEAT IN OPEN MARKET

The government approved sale of10 million tonnes of wheat from FCI stock in the open market in order to

boost domestic supply and check prices.

A decision in this regard was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA),

headed by Prime Minister Narendra Modi.

The CCEA has cleared sale of about 10 million tonnes of wheat via the Open Market Sale Scheme

(OMSS) tobulk buyers.

Thereserve priceunder OMSS has been fixed at Rs 1,500 per quintal plusfreight charges for old

crop and five per cent premium for new crop.

The country had produced a record 95.60 million tonnes of wheat in the 2013-14 crop year.CABINET CLEARS BILL TO EMPOWER SEBI TO DEAL WITH PONZI SCHEMES

A Bill to effectively empower the market regulator SEBIto crack down on ponzi schemes and investment

frauds was approved by the Cabinet.

Following the CCEA approval, the Securities Laws (Amendment) Billwill be introduced in Parliament.

The Bill seeks to give Sebi sweeping powers like attachment of properties,launch of recovery

proceedings, seeking call data records to investigate cases and ordering search and seizure against

manipulators and fraudsters.

Mega Food Parks in the Country

During Eleventh Plan, Government approved taking up of 30 Mega Food Parks Projectsin the country.All the 30 Mega Food Park projects have been approved by theMinistry of Food Processing

Industriesfrom the eligible proposals received against Expression of Interest for selection of projects.

In the North Eastern Region, total three Mega Food Park projects have been approved by the

Ministry during eleventh Plan in the States of Assam, Tripura and Sikkim.

Food Processing Industries are set up both in organized and unorganized sectors.

Aimed primarily at providing adequate infrastructure facilities for the food processing industry along

the value chainfrom farm to market, The Mega Food Parks would bring together farmers,

retailers and processorsand link agricultural production to market in order to maximise value

addition, minimise wastage and improve farmersincome


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IL&FS Clusters as Project Management Agency (PMA) is responsible for management, capacity building,

coordination and monitoring support.

Panel on Cost Audit Rules Set-up

The Union government set up an expert committeeto look into the concernsraised by cost

accountantsover some provisions in the new Cost Records and Audit Rules.

Following notification of the Companies (Cost Records and Audit) Rules 2014, the Council of the

Institute of Cost Accountants of India had expressed concerns over certain provisions of the rules,

particularly coverage of sectors of economyunder the rules.

4th All-India-Census of MSME Sector

As per thelatest Census (Fourth Census), conducted (with base reference year 2006-07), wherein the data

was collected till 2009 and results published in 2011-12, as well as data extracted from Economic Census

2005conducted by CSO, MoSPI, for activities excluded from Fourth Census, namely wholesale/retail trade,

legal, educational & social services, hotel & restaurants, transports and storage & warehousing (except cold

storage).

The total number of persons employed in the sector increased to 805.24 lakh as compared to 249.33 lakh

in the Third All India Census of Small Scale Industries, conducted with reference year 2001-02.More employment opportunities could have been generatedduring the 4th census period, if the MSMEs

would not have faced constraints such as non-availability of credit, inadequate infrastructure, shortage of

skilled manpower, obsolete technology etc.

The Ministry is implementing anumber of schemes and programmessuch as;

Credit Guarantee Scheme,

Credit Link Capital Subsidy Scheme (CLCSS),

Cluster Development Programme,

Entrepreneurship and Skill Development Programmes,

National Manufacturing Competitiveness Programme (NMCP) etc.

There has been asubstantial increasein the allocation under the scheme Prime MinistersEmployment Generation Programme (PMEGP) from Rs.5540 crore in 11thPlan to Rs.8060 crore in

12th

Planto strengthen Ministrysefforts for employment generation.

Steps Taken to Mitigate Impact of Deficient Rainfall

As per India Meteorological Departments(IMD)second stage operational long range forecast,South-

West Monsoon (June-September) rainfall during 2014 is likely to be 93% 4% of countrysLong Period

Average (LPA) of 890 mm.

Central Research Institute of Dryland Agriculture(CRIDA), in collaboration with State

Agricultural Universities has prepared contingency plansfor 500 districts for implementing location

specific interventions to sustain agriculture production in the eventuality of weak monsoon/deficient

rainfall. States have been advised to ensure availability of short duration and drought tolerant varieties of

seedsso as to be in a position to supply them to farmers in case such a need arises.

States have also been advised to keep asides 10% of funds available under Rashtriya Krishi Vikas

Yojana (RKVY) and other schemes for undertaking appropriate interventions to mitigateField functionaries

and extension workers under Agricultural Technology Management Agency(ATMA) and other schemes

are educating, training and making the farmers aware of various techniques to overcome deficient rainfall.

Farmers are also being advised through farmers SMS portal, Kisan Call Centres, Kisanvani

Programme


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NFSM Approves 2100 cr for Golden Revolution

General Council of the National Food Security Mission (NFSM), which met here today under the

Chairmanship of Agriculture Minister, Shri Radha Mohan Singh, approved action plans of different

States for Rs. 2100 crore for 2014-15. approved taking up pulses under NFSM programme in Himachal

Pradesh, Jammu & Kashmir and Uttarakhand. taking up demonstrations of inter-cropping of food

grains with oilseeds which was not part of the Mission activities till now. Director CRRI made a

presentation on the prospects of cultivation of hybrid rice in India and its role in increasing rice

production.

-The Minister stressed upon the need to take up soil testing and providing soil health cardsto individual

farmers, especially small and marginal farmers.

Committee Setup to Restructure FCI

The Government has decided to set up a High Level Committee (HLC) of distinguished persons and

experts to recommend restructuring of (Food Corporation of India) FCI after considering various

aspects of present structure and functional areas of the organization and consulting various

stakeholdersTo studyvarious models of restructuring or unbundling ofand to suggest a bestsuited model for restructuring or unbundling of FCI to improve its operational efficiency and financial

management.

To suggest measures for overall improvementin management of foodgrains by FCI.

To define or give suggestions toreorient the role and functions of FCI in MSP operations,storage

and distribution of foodgrains and food security systems of the country.

To suggest a way forward for strengthening and integration of supply chainof foodgrains in the

country.

To recommend scientific model ofstorage.

To recommend rationalised mode of moving grains including tracking of carriage.

To suggest the upgradation of technology in management of foodgrains.FOOD CORPORATION OF INDIA:

The Food Corporation of Indiawas setup under the Food Corporation Act 1964,in order to fulfill

following objectives of the Food Policy :

Effective price support operationsfor safeguarding the interests of the farmers.

Distribution of foodgrainsthroughout the country for public distribution system

Maintaining satisfactory level of operational andbuffer stocks of foodgrains to ensure National Food

Security

Varishtha Pension Bima Yojana Relaunched

He said that VPBY will benefit the vulnerable section of society with limited resources as it willprovide monthly pension ranging from Rs 500/ to Rs 5,000/ per monthto senior citizens of the

country.

VPBY is like reverse of a normal insurance policy as in case of VPBY, the beneficiary gets an income at

the overall rate of 9.38 % per annum on their deposits as they are being paid on monthly basis.

3.16 Lakh annuitants who had applied under that earlier window are being benefitted today

with pension payments ranging from a minimum of Rs.250 per month to a maximum of Rs.2000

per month based on their subscriptions, and the associated corpus amounts to Rs. 6,095 Crore.


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The revived scheme will be open during the window stretching from 15th August, 2014 to

14th August, 2015for the benefit of citizens aged 60 years and above, and will provide

financial security by ensuring regular income during their advancing years.

The scheme will be administered by the LIC.

The subscription to the scheme is likely to create a corpus of more than Rs. 10,000

crore,and would thus also be a significant source of resource mobilization for the development

of the country.

Under this Scheme, the senior citizens would get pension onfixed basiseither on yearly ormonthly basis.

SOME KEY FEATURES OF THE SCHEME ARE:

Available to citizensaged 60 yearsand above.

Pension would be on immediate annuity basis in monthly, quarterly, half-yearly or annual mode,

varying, respectively, between Rs. 500 to 5000 (monthly), Rs. 1500 to 15,000 (quarterly), Rs. 3000 to

Rs. 30,000 (half-yearly) and from Rs. 6,000 to Rs. 60,000 (annually), depending on the amount

subscribed and the option exercised.

The payout implies an assured return of 9%on monthly payment basis, which amounts to an

annualized return of 9.38%.

Loan(up to 75% of subscribed amount) can be availed after 3 yearsfrom the Date ofCommencement.

New Bharat Bill Payment System (BBPS)

For the convenience of people to pay school fees and municipal taxes and utility bills through

an integrated platform,the Reserve Bank proposed setting up an anytimeanywherebill payment

system.

Bill payment is a major component of the retail payment transactions as over3,080 crore

billsamounting to more than Rs 6,00,000 crore are generated each year in the top 20 cities in the

country.

Though various formsof payments are accepted, cash and cheque payments continue to be

predominant, particularly at the BillersOwn Collection Point.

The existing systems do not fully address the needs of the consumers/customers to pay a variety

of bills including utility bills, school/university fee, municipal taxes, due to lack of interoperability in the

payment processes as well as lack of access to various modes of electronic payments by a vast

majority of customers.

In this backdrop, the RBI has proposed Bharat Bill Payment System(BBPS) with an objective to

implement an integrated bill paymentsystem and offerinteroperable and accessible bill payment

service to customers through a network of agents, enabling multiple payment modes, and providing

instant confirmation of payment.

Hence, it has been decided that the existing players in the online commerce segment catering to

the requirements of bill payments as well as aggregation of payment services(in relation to bill

payments) will be a part of BBPS.

The proposedBharat Bill Payment System (BBPS)will function as atiered structurefor

operating the countrysbill payment system.

It will have a single brand imageproviding convenience of anytimeanywhere payment to

customers.

The BBPS will offer inter-operable and accessible services through a network of agents,

enabling multiple payment modes and providing instant confirmation of payment.

In future, the scope of BBPS could be extended to include servicesthat require repetitive

payments, such as school/university fees and municipal taxes.


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The Reserve Bank of India left itsbenchmark lending rate unchanged, taking a break from a recent

string of rate increases, to gauge whether the countrys high inflation rates are easing back to

acceptable levels.

The RBI kept its key overnight lending rate,which it had raised at three of the previous four policy

meetings, steady at 8%and in line with expectations.

The central bank also left thecash reserve ratio, or the minimum percentage of deposits that lenders

must park with the RBI, unchanged at 4%.

Meantime, Indiastwo top measures of inflationhave fallen in recent weeks, due partly tolower food prices following a better-than-average monsoon last year.Wholesale prices,the

benchmark measure of inflation in India, slipped to 4.68% in February from 7.5% in

November. Consumer prices,which track inflation experienced by urban consumers, fell from

11.2% in November to 8.10% in February.

RBI Cancels Three NBFCs

. M/s Mona Finvest Private Limited, Kolkata

. Jinvani Commercial Private Limited, Kolkata

. M/s Negus Mercantile Private Limited, Kolkata

DIFFERENCE B/W BANKS & NBFCs

NBFCs lend and make investments and hence their activities are akin to that of banks;however there

are a few differences as given below:

NBFCcannot accept demand deposits;

NBFCs do not form part of the payment and settlement system and cannot issue

chequesdrawn on itself;

Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to

depositors of NBFCs, unlike in case of banks.

Loans to Exporters for 10 Year Tenure

The Reserve Bank allowed banksto provide loans with tenures of up to10 yearsto exporters to

help them ensure capital flows to fulfil long-term contracts.

Existing norms allow banks to give loans for up toone year only.

In view of requests received from exporters, it has been decided to permit banks to allow exporters

having a minimum of three yearssatisfactory track recordto receive long-term export advance

up to a maximum tenor of 10 years to be utilised for execution of long-term supply contracts for export

of goods.

This facility is available withcertain conditions, including an interest rate limit of 200 basis points

above the London interbank offered rate (Libor), a global benchmark.

Besides, exporters receiving loans of USD 100 millionor above need to report the transaction

immediately to the RBI.

ONGC Signs Deal With RosneftONGC Videsh Ltd (OVL), the overseas arm of the state-owned explorer ONGC, has signed a deal

with Russias largest oil and gas producer Rosneftto jointly explore hydrocarbons in the

offshore Arctic.

The Memorandum paves the way for the companies cooperation in subsurface surveys,

exploration and appraisal activities and hydrocarbons production in Russiasoffshore Arctic.

The parties willjointly considerforming a consortium led by Rosneft and involving other

partners.


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His firm had offered OVL a stake in nine offshore oil and gas blocks in the Barents Seaand one

in the Black Sea.

Rosneft is also looking at supplying crude oil to Indian refineries.

Moscow is courting Indiato counter moves by the US and Europe to isolate it for annexing

Crimea from Ukraine.

India does not have a firm contract to import crude oil from Russia. It gets a small volumes

once in a while from OVLsSakhalin-1 project in Far East Russia.

OVL has a 20 per cent stake in the Sakhalin-1 oil and gas field in the Russian Pacific Ocean.Rosneft has a similar stake in the project, which is operated by Exxon Mobil.

OVL had boughtImperial Energy, which has fields in Siberia, for USD 2.1 billion in January

2009. It is keen to get a foothold in the Arctic projects and expand in Siberia and Far East

Russia.

Indian Rupee is Best Performing Currency

Boosted by capital inflows and euphoria around the incoming government,rupees surge to 11-

month high levelshas made it the best performing currency inAsia-Pacific regionagainst the US

dollar so far in 2014.

With a gain of about 5.3 per centsince the start of this year, rupee has sprinted ahead of its

other Asia-Pacific peers, including Indonesiasrupiah and New Zealand dollar, in terms of year-

to-date rise, shows an analysis of various currencies vis-a-vis the Greenback.

The rupee, which closed at58.52 levels against the US dollar on the last trading day on

Friday, has incidentally seen a lionsshare of 5.3 percent gain in the past one month.

The Indian currency stood atRs 61.8 levelper US dollar at the start of 2014 and has recorded

a gain of 327 paise in less than six months, partly helped by robust foreign fund inflows.

This marks a major turnaround since August last year when rupee touched its life-time low

of 68.80.

In Asia-Pacific, the rupees gains versus the US dollarare followed by theRupiah

(Indonesia)that has appreciated 4.6 per cent, New Zealand dollars3.75 per cent rise

and Australiancurrencys3.5 per cent rise.

The Yen (Japan), the Won (South Korea) and the Ringgit (Malaysia) have gained between 2-3

per cent in this calendar year so far.

Philippines Pesohas appreciated 1.6 per cent against the US dollar, followed by 0.5 per cent

uptick in ThailandsBaht and Singaporean dollar.

While the Hong Kong dollaris almost unchangedsince 2014 started, the Taiwan dollar and

Chinese Yuan have lost value.

RBI Rejects Licence Application Cooperatives for Banking

The Reserve Bank of India has rejected the licence applications of Buldana, Nagpur, and Wardha

DCCBsin order to protect the interest of the depositors. It may be highlighted that on liquidation, every depositor is entitled to repayment of his

depositsup to a monetary ceiling of `1,00,000/- (Rupees One Lakh) from the Deposit

Insurance and Credit Guarantee Corporation (DICGC).

Govt Accepts Sahoo Committee Recommendations

The issue of Foreign Currency Convertible Bonds and Ordinary Shares(through Depository

Receipt Mechanism) Scheme, 1993was formulated at a time when Indias capital markets were

substantially closed to foreign capital and the domestic financial system was not very well developed.


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In this period, theIndian legal and regulatory system for financial markets has evolved with

substantial changes. These developments warranted a fresh look at the Scheme governing the

issuance of Depository Receipts (DRs).

The key recommendations of the Committee include allowing issuance of DRs against any

underlying securities equity or debt; by any issuer listed or unlisted.

The Committee has recommended that DRs can be issued both for capital raising through new

shares or against existing/ secondary shares and the issuance may be either sponsored or

unsponsored. It is proposed that DRs will count as public shareholdingif they have attached voting rights

for holders. The draft Scheme covers Depository Receipts only and FCCBs have been left out of

its ambit (they would continue to be governed by the existing scheme until further notification).

54 Indian Companies in Forbes Powerful List

China is home to the worldstop three biggest public companies and five of the top 10.

The US retains its dominanceas the country with the most Global 2000companies at 564.

Japan trails the US with 225 companies in aggregate. India is home to 54 of the worlds biggest

companies.

Reliance Industries is ranked 135 on the listwith a market value of 50.9 billion dollars and 72.8

billion dollars in sales as on May 2014.

Reliance is followed by State Bank of India which is ranked 155 and has a 23.6 billion dollars

market value.

State-controlled Chinese bank ICBC holds onto its number 1 spotfor a second consecutive

year, while China Construction Bank takes second place andAgricultural Bank of

Chinamoves up five spots to third.

Banks Disallowed From ECBs to Repay Loans

The Reserve Bank of India disallowed overseas branchesof domestic banks from extending

external commercial borrowings(ECBs) to manufacturing and infrastructure companies for

repaying rupee loans.

An external commercial borrowing(ECB) is an instrument usedin India to facilitate the access to

foreign money by Indian corporations and PSUs (public sector undertakings).

ECBs includecommercial bank loans, buyerscredit, supplierscredit, securitised instruments such as

floating rate notes and fixed rate bonds etc., credit from official export credit agencies and commercial

borrowings from the private sector window of multilateral financial Institutions such as International

Finance Corporation (Washington), ADB, AFIC, CDC, etc.

46 Nations Adopt Declaration on Tax Information

India and scores of other countries, including Switzerland, have adopted a global declaration for

automatic exchange of tax information.The adoption of the Declaration on Automatic Exchange of Information in Tax Matterslast week

comes in the backdrop of India stepping up pressure on Switzerland to share information on alleged

illicit funds stashed away by its citizens in Swiss banks.

The Declaration recognises that investments kept offshore by taxpayers should not go untaxed.

It stresses that a key aspect of cooperation between tax administrations iseffective exchange of

information on automatic basis subject to appropriate safeguards.

On 6th May,46 countries,includingIndia, besides the European Union, meeting under the auspices

of the OECD, adopted the declaration.


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The Paris-based Organisation for Economic Cooperation and Development(OECD) sets the global

tax standards and frames conventions against tax frauds, among others.

The declaration has referred to the Multilateral Convention on Mutual Administrative Assistance

in Tax Mattersthat has been signed by over 60 nations, including almost all OECD and G-20

countries.

Indias Own Card Payment Network Launched

RuPay is an Indian domestic card scheme conceived and launched by the National Payments

Corporation of India (NPCI).President congratulated theReserve Bank of Indiafor havingenvisioned the need for such an indigenously managed service in 2005 and for entrusting this

task to the National Payments Corporation soon after its operationalization in 2010.

He said that it usually takes five to seven yearsto build a fully functional card payment

network. He was happy to note that the NPCI could make the RuPay service operational by April

2013.

RuPayis the coinage of two terms Rupee and Payment.The RuPay Visual Identity is a

modern and dynamic unit.

Theorange and green arrowsindicate a nation on the move and a service that matches its

pace. The color blue stands for the feeling of tranquility which is the people must get while

owning a card of the brand RuPay.The bold and unique typeface grants solidity to the wholeunit and symbolizes a stable entity

NPCI entered into a strategic partnership with Discover Financial Services (DFS)for RuPay

Card, enabling the acceptance of RuPay Global Cardson Discovers global payment network

outside of India.

BENEFITS OF RuPay:

The Indian market offers huge potential for cards penetration despite the challenges. RuPay Cards wil

address the needs of Indian consumers, merchants and banks. The benefits of RuPay debit card are the

flexibility of the product platform, high levels of acceptance and the strength of the RuPay brand-all of

which will contribute to an increased product experience.

Lower cost and affordability: Since the transaction processing will happen domestically, it

would lead to lower cost of clearing and settlement for each transaction. This will make the

transaction cost affordable and will drive usage of cards in the industry.

Customized product offering :RuPay, being a domestic scheme is committed towards

development of customized product and service offerings for Indian consumers.

Protection of information related to Indian consumers: Transaction and customer data

related to RuPay card transactions will reside in India.

Provide electronic product options to untapped/unexplored consumer segment :There

are under-penetrated/untapped consumers segments in rural areas that do not have access to

banking and financial services. Right pricing of RuPay products would make the RuPay cards

more economically feasible for banks to offer to their customers. In addition, relevant product

variants would ensure that banks can target the hitherto untapped consumer segments.

Inter-operability between payment channels and products: RuPay card is uniquely

positioned to offer complete inter-operability between various payments channels and products.

NPCI currently offers varied solutions across platforms including ATMs, mobile technology,

cheques etc and is extremely well placed in


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Economy current for 2014-15

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Transcript of Economy current for 2014-15