1. Digital payment logs a growth of 40 % at September 2021
Tags: Economics/Business
Digital Payment across the country experienced a growth rate of 40% in a year through September 2021. This data was brought out by the RBI Digital Payment Index (RBI-DPI) that measures the adoption of digital payment in India.
RBI-PDI Index
RBI in its sixth Bi- monthly Monetary Policy Statement 2019-20 dated 6 February 2020 announced a composite Digital Payments Index (DPI) to capture the extent of digitisation of payments across the country
Base Period of the Index
The RBI-DPI has been constructed with March 2018 as the base period, i.e. DPI score for March 2018 is set at 100.
The index for September 2021 stands at 304.06 as against 270.59 for March 2021.
Composition of the RBI-PDI Index
The RBI-DPI comprises 5 broad parameters that enable measurement of deepening and penetration of digital payments in the country over different time periods. These parameters are –
(i) Payment Enablers (weight 25%),
(ii) Payment Infrastructure – Demand-side factors (10%),
(iii) Payment Infrastructure – Supply-side factors (15%),
(iv) Payment Performance (45%) and
(v) Consumer Centricity (5%).
Frequency of its publication
The index is published by RBI every six months from March 2021 onwards with a lag of four months.
2. UNCTAD releases Global Investment Trends Monitor report
Tags: Economics/Business
United Nation Conference on Trade and Development (UNCTAD) has released its Global Investment Trends Monitor Report on 19 January 2022.
The report tracks the flow of Foreign Direct Investment (FDI) in the world for the year 2021.
Highlights of the report
- Global foreign direct investment (FDI) flows showed a strong rebound in 2021, up 77% to an estimated $1.65 trillion, from $929 billion in 2020, surpassing their pre-Covid-19 level.
- The report said the growth rate of 2021 is unlikely to be repeated in 2022 but the outlook for 2022 is positive.
- The report said that the international project finance in the infrastructure sector will continue to provide growth in 2022.
- The FDI in India decreased by 26 % as compared to last year as the Mergers and Acquisition deals reported in 2020 were not repeated in 2021. According to the UNCTAD report In 2020 India received $64 billion FDI.
- FDI in the United States increased by 114% to $323 billion.
- China saw a record $179 billion of inflows – a 20% increase – driven by strong services FDI.
- `Developed economies saw the biggest rise by far, with FDI reaching an estimated $777 billion in 2021 – three times the exceptionally low level in 2020.
- FDI flows in developing economies increased by 30% to nearly $870 billion.
UNCTAD
- The United Nation Conference on Trade and Development (UNCTAD) was set up by the United Nation in 1964.
- It was set up to promote and safeguard the interest of the developing countries in world trade.
- The headquarters of UNCTAD : Geneva, Switzerland
- The Secretary General of UNCTAD : Rebeca Grynspan of Costa Rica
3. Microsoft to buy “Call of Duty” maker Activision Blizzard in $68.7-billion deal
Tags: Economics/Business
Indian-born Satya Nadella led Microsoft Corporation has agreed to buy “Call of Duty” video game maker Activision Blizzard for $68.7 billion in cash. This is the largest deal in the gaming sector, making the Xbox maker the third-largest gaming company by revenue behind Japan’s Sony and China’s Tencent. The merger is expected to be finalized next year.
- Activision's library of games includes games like “Call of Duty” and 'Overwatch', ‘World of Warcraft’, ‘Candy Crush’ among others
- Bobby Kotick will continue to serve as CEO of Activision Blizzard
- Demand for video games has surged during the pandemic, as stuck-at-home consumers play more games to keep themselves entertained
- Last week, rival videogame publisher Take-Two Interactive Software Inc. said it would buy 'FarmVille' creator Zynga in an $11 billion cash-and-stock deal, marking another biggest industry-wide acquisition of all time
4. India extends USD 500 million loan to Sri Lanka
Tags: Economics/Business
India has extended a $500-million Line of Credit (LOC) to Sri Lanka for urgent fuel imports, just days after providing $900 million relief to the island nation, which is facing one of its worst economic downturns.
- The announcement followed a virtual meeting between Dr. Jaishankar and Sri Lanka’s Finance Minister Basil Rajapaksa on 15 January 2022.
- In the meeting they reviewed a $1.5 billion credit facility by India to help Sri Lanka augment its fast-depleting foreign reserves, crucial to importing essential food items, medicines, and fuel.
5. Oil Price at a 7 year High
Tags: Economics/Business
The price of oil hit its highest level in more than seven years on 19 January 2022 as traders worried that an attack on a fuel storage facility in the United Arab Emirates by the Yemeni Houthi rebels could affect supply.
Brent crude, which is the international benchmark for oil prices, rose almost 1% to hit $87.22 a barrel. Price rises were even steeper in the US, where West Texas Intermediate crude increased by 1.3% to $84.89 a barrel.
Why oil prices are rising
Fear of supply disruption
The attack of the Houthis on oil facilities of UAE has led to fear of escalation of conflict in the region involving Saudi Arabia, Iran and others.
Russia and its conflict with Ukraine and unrest in Kazakhstan has added to this fear. Saudi Arabia, UAE ,Russia are major exporters of oil in the world and any conflict will lead to disruption in oil supply in the world market .
Failure of OPEC+ to increase output of oil
In the month of December 2021, the OPEC + members had promised to increase its output by 4 lakh barrels per day to dampen the high oil price in the world market . However the promised oil supply has not materialized leading to a tight supply and demand situation .
Optimism about World economic recovery
The World Bank has predicted a 5.5% growth rate for the world economy in 2021 and 4.1% in 2022 taking into account a disruption in the world economy due to the Omicron wave . However the current wave of omicron variant of Coronavirus is not as severe as the Delta variant of last year.
Market expects a good economic recovery in the world leading to a surge in demand for oil
Impact on India
India imports about 82% of its oil requirement and any increase in the oil price will increase the oil import bill of India
This will increase the fiscal deficit of the countries as the import bill rises.
The rupee is likely to depreciate as the demand for dollars to buy oil will put pressure on Indian rupees and will make import costlier.
It will increase inflation in the country as the price of oil increases.
This will lead to flight of capital from India as RBI will follow a tight monetary policy to control inflation leading to a lowering of growth prospects in India.
6. Silos of over 11 million ton storage capacity to be built through PPP for FCI
Tags: Economics/Business
In a bid to attract investment into India’s food grain storage infrastructure from big corporate entities, the food ministry has approved a policy which encourages the private players to bid for construction of 249 state-of-art silos with close to 11 million tonne (MT) wheat storage capacity for the Food Corporation of India (FCI).
In how many states it will be built
The silos will be built across 12 states, including Punjab, Haryana, Madhya Pradesh, Maharashtra, Haryana and Kerala, over the next four to five years through the public-private partnership (PPP) model with an estimated investment of Rs 9,200 crore.
The FCI will use the silos for storage of wheat through a lease of thirty years with private entities.
Committee on Restructuring FCI
Based on the recommendation of a high-level committee for restructuring of FCI, chaired by former food minister Shanta Kumar, in 2014, an action plan for construction of 10 MT capacity wheat silos through private sector investment was approved by the food ministry in 2016.
How much capacity created so far
So far, silos with more than 1.11 MT wheat storage capacity have been created in Punjab, Madhya Pradesh, Gujarat, Haryana, Bihar and Assam at 22 locations.
First rice silos
For the first time, two rice silos with a combined storage capacity of 25,000 tonne are currently being built at Buxar and Kaimur in Bihar by private entities for FCI on a pilot basis.
Benefit of Silos
Food ministry officials say that if food grains are stored in silos and transported in bulk, losses due to theft, pilferage and transportation would be negligible compared to the food grains stored in warehouses.
FCI stores around 55 MT to 85 MT of rice and wheat at any given point of time.
FCI
- The Food Corporation of India was set up in 1965 by the Government of India under the Food Corporation act 1964.
- It is under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
- Its Headquarters is in New Delhi.
7. SIDBI sanctions Rs 650-crore loan to AU SFB and Jana SFB
Tags: Economics/Business
The Small Industries Development Bank of India (SIDBI) has sanctioned Rs 650 crore to two Small Finance Banks ,AU Small Finance Bank and Jana Small Finance Bank.
- They will use this fund to to provide loans to Micro Small and Medium Enterprises (MSME) and Micro Finance Institutions (MFIs).
- The financial assistance has been extended out of the Special Liquidity Facility sanctioned by the Reserve Bank of India.
- This liquidity line has been provided to SIDBI to meet the challenges being faced by the MSMEs due to the prevailing Covid-19 pandemic situation.
Headquarter of Jana Small finance Bank : Bengaluru
Headquarter of AU Small Finance Bank : Jaipur
SIDBI
- The Small Industrial Bank of India was set up in 1990 through an act of Parliament.
- It was set up as a principal Financial Institution for the promotion ,development and financing of Micro small and Medium Enterprises in India.
Headquarters : Lucknow
- It is owned by the Government of India .
For details about MSME and its contribution to the Indian Economy see the post of 12 December 2021.
8. India can achieve the targets of USD 650 billion in the current financial year
Tags: Economics/Business
The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal said it is possible to achieve exports of USD 650 Billion within the current financial year.
The total merchandise export during April to December 2021 was USD 299.7 billion and the overall target for merchandise export for the financial year 2021-22 is USD 450 billion.
The target for the Service sector export is USD 250 billion for the current financial year.
9. Tata Power commissions 100 MW solar projects in Uttar Pradesh
Tags: Economics/Business
Tata Power Renewable Energy Ltd (TPREL) has commissioned two solar power projects of 50 MW each at Prayagraj and Banda in Uttar Pradesh.
- The plants are expected to generate more than 221.26 million units annually.
- The plants at Prayagraj and Banda are expected to reduce 1,77,037 lakh tonnes of carbon emission annually.
- Power Purchase Agreement (PPA) has already been signed between TPREL and Uttar Pradesh Power Corporation Ltd (UPPCL), Lucknow for these two projects.
- With the addition of 100 MW, the renewables capacity in operation for Tata Power will be 3,055 MW with 2,123 MW of solar and 932 MW of wind.
10. Chinese Economy grew by 8.1% in 2021
Tags: Economics/Business
According to the data released by the National Bureau of Statistics (NBS) of China on 17 January 2022 the second largest economy in the world grew 8.1% in 2021 and reached the $18 trillion mark.
- Last year's growth rate was the fastest since 2011 and marked a strong recovery after growth dipped to a 44-year-low of 2.2% in 2020.
- The NBS said 10.6 million babies were born last year, down from 12 million in 2020, a growth rate of 0.034 %, lowest since the founding of the People’s Republic of China in 1949 .
- China's population grew to 1.41 billion by the end of last year, stoking fears of a looming demographic crisis and a consequent economic slowdown in the world's most populous nation.
- Experts have warned that a demographic turning point may be just around the corner in the world’s most populous nation, and some say it threatens to erode the foundation of China’s booming economic growth over the past 40 years.
China is the second largest economy in the world after the United States.
China is the most populous country in the world,second in India and third is the U.S.
