1. SEBI approves government's proposal to convert Vodafone Idea telecom debt into equity
Tags: Economy/Finance
The capital market regulator Securities Exchange Board of India (SEBI) has approved the central government’s proposal to convert around $1.92 billion telecom dues of Vodafone Idea to equity shares.
In September 2021 the government of India announced a relief package for the telecom sector so that they can pay back the due they owe to the government of India after a Supreme Court judgement of 2019.
Under the package the telecom companies, Reliance Industries' Jio, Bharti Airtel and Vodafone Idea were given an option to convert their dues into equity shares and issue it to the Government of India. Jio and Airtel opted to pay back the dues to the government but Vodafone opted to convert its dues into equity shares.
The package was primarily for Vodafone Idea which was on the verge of bankruptcy and the government did not want the telecom sector to be dominated by two companies.
Under the deal the government stake in Vodafone Idea will be around 35.8% of the total outstanding shares of the Vodafone-Idea Company, while the promoters Vodafone and Aditya Birla Group would hold around 28.5% and around 17.8% stake in the company, respectively.
The government intends to sell the share of the company when Vodafone Idea becomes profitable.
Vodafone Idea
It is a joint venture of Vodafone (United Kingdom) and Aditya Birla Group.
It has the third largest mobile telecommunication network in India.
Headquarters: Gandhinagar, Gujarat
Corporate Headquarters: Mumbai
Chairman: Ravinder Takkar
Chief Executive Officer: Akshay Moondra
2. World Bank to launch ‘Business climate sturdy’ which will replace the discontinued Ease of Doing Business report
Tags: Economy/Finance International News
The World Bank has said that it will launch a new system for assessing the business and investment climate in economies worldwide following the discontinuation of the Ease of Doing Business report. The report titled Business Enabling Environment” (BEE) is expected to be launched in April 2024.
The Ease of Doing Business report which was first published by the World Bank in 2003 titled “Doing Business” report. The report ranked the country on their business friendly environment by about 12 indicators.
The report which was annually published by the World Bank was discontinued in September 2021 after a data rigging scandal came to light.
An internal audit of the World Bank revealed data irregularities in reports on China, Saudi Arabia, the United Arab Emirates and Azerbaijan in the 2018 and 2020 editions.
Subsequently, the Bank decided to come out with a new system that would be far more robust and credible than the earlier one. Hence it will come out with “Business Enabling Environment’.
India has performed very well on the Ease of Doing Business Index. It improved by 79 ranks to record 63rd positions in 2019 , according to the last Bank’s Doing Business report 2020.
Other Important World Bank reports
- World Development Report
- Global Economic Prospect
President of World Bank: David Malpass
3. CCI fines Google Rs 1337.76 crore for abusing its dominance in the Smartphone Android platform
Tags: Economy/Finance
The Competition Commission of India (CCI) imposed a Rs 1,337.76 crore fine on Google, owned by Alphabet company for abusing its dominant position in the Android mobile device market.
The antitrust regulator also barred Google from conducting unfair business practices, including offering incentives to smartphone makers for exclusively carrying its search services.
Background to the case
In May 2019 there was a complaint against Google that it used its dominant position as the supplier of the Android operating system to stifle competition and give it undue advantage.
Around 96% of the smartphones in India are run on Android OS as of September, while 4.09% run on Apple’s iOS.
Google sign an agreement with the Original Equipment Manufacturers (OEMs) of smartphones and tablets called Mobile Application Distribution Agreement (MADA). Under this agreement the OEM has to pre-install entire Google Mobile Suite like its search engine, YouTube etc. and place it prominently on their device.
This gave Google an unfair advantage to Google as compared to its competitor.
The CCI found Google guilty of abusing its dominant position to illegally hurt competitors in India.
The Indian case is similar to one faced by Google in Europe, where regulators imposed a $5 billion fine on the company for forcing manufacturers to pre-install its apps on Android devices.
It was formed by Larry Page and Sergey Brin in 1998. In 2015, Google was reorganized as a wholly owned subsidiary of Alphabet Company.
It is an American multinational technology company that focuses on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics.
Chief Executive Officer: Sundar Pichai
Global Headquarters: California, United States of America
Google India Headquarters: Hyderabad
4. China’s total trade surplus with India ‘surpasses $1 trillion’
Tags: Economy/Finance International Relations
Since the boom in bilateral trade in the early 2000s, China has taken advantage of a favourable trade balance with India that now exceeds $1 trillion.
India-China bilateral trade
Bilateral annual trade between India and China crossed $100 billion for the first time in 2021 to reach $125.6 billion, of which India's imports were $97.5 billion.
Important facts
Trade ties between both countries began to boom in the early 2000s.
This was largely driven by the import of Chinese machinery and other equipment by India.
It increased from $3 billion in 2000 to $42 billion in 2008 and China became India's largest trading partner in 2008.
One-third of the machinery and about two-fifths of organic chemicals that India buys from the world come from China.
Automotive parts and fertilizers are other items where China accounts for more than 25 per cent of India's imports.
India procures nearly 90 percent of the parts for some mobile phones from China.
India’s export to China
China is also a major partner of India in terms of export market.
China is the third largest destination for Indian shipments.
According to the Federation of Indian Export Organisations (FIEO), India's share in China's total exports is only a little over two per cent.
5. NSIC Signs MoU with Phillips Machine Tools India Pvt Ltd
Tags: Economy/Finance National News
A MoU signed between the National Small Industries Corporation Ltd (NSIC) and Phillips Machine Tools India Pvt Ltd for Skill Development Training in Additive Technologies on October 18, 2022 in New Delhi.
Important facts
B B Swain, Secretary (MSME), Gaurang Dixit, CMD, NSIC and Mercy Epao, Joint Secretary (SME) were also present on the occasion.
The MoU was signed by Navin Chopra, CGM-SG (Tech), NSIC.
This MoU will be a significant step for preparing skilled manpower in additive technologies which is the future of manufacturing.
National Small Industries Corporation
It is an ISO certified Government of India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME).
NSIC is working to promote, assist and promote the development of Micro, Small and Medium Enterprises in the country.
NSIC works through a countrywide network of offices and technical centres in the country.
6. 41.5 Crore Indian lifted out of Poverty says the Global Multidimensional Poverty Index report 2022
Tags: National Economy/Finance
According to the 4th Global Multidimensional Poverty Index (MPI) 2022 report, India has successfully lifted 41.5 crore people out of poverty between 2005-06 and 2019-20. The report is jointly brought out by the UNDP’s Human Development Report Office and the Oxford Poverty and Human Development Initiative (OPHI).The first report was released in 2019 and it is released annually.
The report ranks 111 developing countries in the world on its Multidimensional Poverty index.
Main Points of the report
Poverty in the world
- According to the report 1.2 billion people in the world are multidimensionally poor.
- The highest number of poor people are in Sub Saharan Africa (579 million), followed by South Asia (385 million). The two regions together are home to 83% of poor people.
India report
Decline in Poverty over the years
- 41.5 Crore people in the country were lifted out of multidimensional poverty between 2005-06 and 2019-20.
- The data shows that roughly 27.5 crore people exited multidimensional poverty between 2005-6 and 2015-16, which works out to 2.75 crore people a year on an average.
- Between 2015-16 and 2019-20, 14 crore people were lifted from multidimensional poverty, which works out to an average of 2.8 crore people a year.
World’s largest poor in India
- India has the largest number of poor people worldwide (228.9 million), followed by Nigeria (96.7 million projected in 2020).”
- The Index has used 2020 population data of India for this purpose.
- In India “about 4.2 per cent of the population live in severe poverty (meaning their deprivation score is 50 per cent or higher).
Children are the poorest age group
- Poverty is found more amongst the children as compared to the adults.
- Children are still the poorest age group, with more than one in five (21.8 per cent) children being poor, compared to around one in seven adults (13.9 per cent).
- There are around 9.7 crore poor children in India.
More poor in rural areas
- The percentage of people who are poor is 21.2 per cent in rural areas compared with 5.5 per cent in urban areas
- Rural areas account for nearly 90 percent of poor people and 205 million of the nearly 229 million poor people live in rural areas
Poverty more in female headed households
- About 19.7 percent of people living in female-headed households live in poverty compared with 15.9 per cent in male-headed households.
Performance of the States
- Only West Bengal was successful in coming out of the list of 10 poorest state list prepared in 2015/16.
- The other 9 poorest states of India are Bihar, Jharkhand, Meghalaya, Madhya Pradesh, Uttar Pradesh, Assam, Odisha, Chhattisgarh and Rajasthan.
- Across states and union territories the fastest reduction of poverty in relative terms was in Goa, followed by Jammu and Kashmir, Andhra Pradesh, Chhattisgarh and Rajasthan.
What is Multidimensional poverty Index?
- Multidimensional poverty assessments aim to measure the non-income based dimensions of poverty, to provide a more comprehensive assessment of the extent of poverty and deprivation.
- The Index measures a person’s deprivation across three dimensions and 10 indicators: health (child mortality, nutrition), education (years of schooling, enrollment), and living standards (water, sanitation, electricity, cooking fuel, and assets).
- It first identifies which of these 10 deprivations each household experiences, then identifies households as poor if they suffer deprivations across one -third or more of the weighted indicators.
The Index reflects deprivations on the following indicators:
- Adult(under 70 years) or child being malnourished
- Death of any Child (under age of 18 years) within the household in the last 5 years
- No household member aged above 6 years has completed at least six years of schooling
- Disrupted or curtailed schooling (a minimum of years 1-8)
- Any child of the family who is not attending school upto the age at which he/she would have completed class eight study
- Lack of access to safe drinking water
- Lack of access to basic sanitation services
- Lack of access to clean cooking fuel
- Lack of basic modern assets (radio, TV, telephone, computer, bike, motorbike, etc.)
- Lack of access to reliable electricity
United Nations Development Programme (UNDP)
It was set up by the United Nation General Assembly on 22 November 1965.
It help the countries in developing their own solutions on the issues of;
- Sustainable Development,
- Democratic governance and peace building, and
- Climate and Disaster resilience.
Headquarters: New York City, United States
Reports
- It publishes a Human Development Report every year.
- It also publishes the Multidimensional Poverty Index with the Oxford Poverty and Human Development Initiative.
7. Grant of Rs 1,764 crore released to four states for urban local bodies
Tags: Economy/Finance National News
The Department of Expenditure, Ministry of Finance has released an amount of Rs 1,764 crore to 4 states on 19 October 2022 for providing grants to Urban Local Bodies.
Important facts
The states to which the grant was released include Andhra Pradesh (Rs 136 crore), Chhattisgarh (Rs 109 crore), Maharashtra (Rs 799 crore) and Uttar Pradesh (Rs 720 crore).
In Uttar Pradesh, this amount has been given for Agra, Allahabad, Ghaziabad, Kanpur, Lucknow, Meerut and Varanasi.
Whereas, Vijayawada and Visakhapatnam in Andhra Pradesh, Durg, Bhilainagar and Raipur in Chhattisgarh and Aurangabad, Greater Mumbai, Nagpur, Nashik, Pune and Vasai-Virar cities in Maharashtra will spend this amount.
A total grant of Rs 4,761.8 crore has been released to urban local bodies in the year 2022-23 so far.
Two categories of Urban Local Bodies
The 15th Finance Commission in its report for the period 2021-22 to 2025-26 has divided the urban local bodies into two categories -
Urban agglomeration/cities with population Million-Plus (except Delhi and Srinagar)
All other cities and towns with less than one million population (Non-Million Plus cities).
The commission had recommended a separate grant for them.
Of the total grants recommended by the Commission for over one million cities/urban clusters (MPCs/UAs), more than 2/3 are recommended for the solid waste management component and the remaining 1/3 for ambient air quality.
Sanjay Malhotra, Secretary, Department of Financial Services, will take over as the new Revenue Secretary on November 30 2022, currently Tarun Bajaj is the Revenue Secretary.
Secretary of Finance - Benjamin E. Diokno
8. CCI imposes penalty of over Rs 392 crore on online travel firms
Tags: National Economy/Finance National News
The Competition Commission of India(CCI) on 19 October, 2022 slapped penalties totalling more than Rs 392 crore on online travel firms MakeMyTrip, Goibibo and hospitality services provider OYO for unfair business practices.
Important facts
A fine of Rs 223.48 crore has been slapped on Make My Trip-Goibibo (MMT-Go) and Rs 168.88 crore on OYO.
MMT-Go was alleged to have enforced price parity in its agreements with hotel partners.
Under such agreements, hotel partners were not allowed to sell their rooms on any other platform or on their online portal at a price lower than the price at which it was being offered on the platforms of the two other entities.
It was also alleged that MMT preferred OYO on its platform, thereby denying market access to other players.
The CCI had ordered a detailed inquiry into the matter in October 2019.
MakeMyTrip (MMT) acquired Ibibo Group Holding in 2017.
Competition Commission of India (CCI)
The Competition Commission of India (CCI) is the chief national competition regulator in India.
It was set up under the Competition Act, 2002.
It comes under the Ministry of Corporate Affairs.
It promotes healthy market competition and prevents activities that have an adverse effect on competition in India.
CCI also approves merger and acquisitions of companies in India so that the two merging entities do not dominate the market unfairly
Headquarter - New Delhi
Current Chairman - Ashok Kumar Gupta
9. Reserve Bank Innovation Hub (RBIH) to support innovations in financial products and services
Tags: Economy/Finance National News
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India Post Payments Bank (IPPB) and Reserve Bank Innovation Hub (RBIH) have come together to focus their efforts to increase access to financial solutions to large sections of society across India and enable seamless finance to one billion Indians.
Important facts
The collaboration between IPPB and RBIH will explore projects which shall have impact on the masses by:
Leveraging the deep rural outreach of IPPB- Department of Posts (DOP) to take rural finance to one billion Indians.
Enabling access to sustainable and secure finance services for every section of the society through research and innovation.
Additionally, IPPB will work as an active partner with RBIH on initiatives of national importance under the leadership of RBIH.
The partnership with RBIH is a milestone in IPPB's journey to leverage its digital platform and physical network to provide comprehensive, customer-centric and convenient digital solutions to one billion Indians.
About Reserve Bank Innovation Hub (RBIH)
It has been set up under Section 8 of the Companies Act, 2013 with an initial capital contribution of Rs.100 crore.
It is a wholly owned subsidiary of RBI.
It has been set up to promote and facilitate an environment that accelerates innovation across the financial sector.
It is working on a plan to identify and mentor start-ups with maximum potential.
It aims to create an ecosystem that focuses on promoting access to financial services and products for the low-income population in the country.
About India Post Payment Bank (IPPB)
It is set up under the Department of Posts, Ministry of Communications with 100% equity owned by the Government of India.
Founded- 1 September 2018
Headquarters- New Delhi
MD & CEO- J. Venkataramu
In January 2022, IPPB had crossed 5 crore customers.
10. Government increase wheat MSP by Rs 110 for the 2023-24 marketing season
Tags: Economy/Finance
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on 18 October 2022 has approved an increase of Rs 110 per quintal in the Minimum Support Prices (MSP) of wheat and has also approved an increase in all the mandated Rabi Crops for Marketing Season 2023-24.
The highest increase has been for lentil (Masur) at Rs.500/- per quintal followed by rapeseed and mustard at Rs.400/- per quintal.
The increase in MSP for Rabi Crops for Marketing Season 2023-24 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the All-India weighted average Cost of Production, aiming at reasonably fair remuneration for the farmers.
MSP for all Rabi Crops for Marketing Season 2023-24 (All figures are in Rs per quintal)
Crops | 2022-23 MSP | 2023-24 MSP | Increase in MSP |
Wheat | 2015 | 2125 | 110 |
Barley | 1635 | 1735 | 100 |
Gram | 5230 | 5335 | 105 |
Lentil (Masur) | 5500 | 6000 | 500 |
Rapeseed & Mustard | 5050 | 5450 | 400 |
Safflower | 5441 | 5650 | 209 |
Focus on Pulse and Oil seeds Production
India is one of the largest importers of pulses and oil seeds in the world and the government is making efforts to increase the production and productivity of the two crops.
Oilseeds production has increased from 27.51 million tonnes in 2014-15 to 37.70 million tonnes in 2021-22 (4th advance estimates)
In case of pulses productivity has been increased from 728 kg/ha (2014-15) to 892 kg/ha (4th Advance estimates, 2021-22) i.e. 22.53% increase.
Similarly, in oilseed crops productivity has been increased from 1075 kg/ha (2014-15) to 1292 kg/ha (4th Advance estimates, 2021-22).
Minimum Support Price (MSP)
MSP is the minimum price at which the government guarantees to buy the selected crops from the farmer. This is done to assure farmers that their produce will be bought by the government at a guaranteed price.
However, the government is not bound to buy the crops of every farmer.
Who decides MSP?
The MSP price is calculated by an expert committee under the ministry of Agriculture. The expert committee is called CACP (Commission for Agricultural Costs and Price). It recommends the MSP to the Agricultural ministry and the ministry announces the MSP. However the Agricultural Ministry is not bound to accept the recommendation of the CACP.
When is MSP Announced ?
MSP is announced by the Agricultural ministry twice a year. One during Kharif season and another during Rabi season.
Crops under MSP
The Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.
The mandated crops are;
- Cereals - Paddy, Wheat, Maize, Sorghum, Pearl millet, Barley, Ragi
- Pulses - Chickpea / Gram, Tur, Moong, Urad, Lentil
- Oilseeds - Peanut, Rapeseed, Soyabean, Sesame, Sunflower, Safflower, Niger seed
- Commercial crops - Copra, Sugarcane, Cotton, Raw jute.
