1. India has the potential to lead fourth Industrial Revolution; PM Modi
Tags: National Economy/Finance Summits
Prime Minister Narendra Modi has said that India has the potential to lead the 4th Industrial revolution and the government is working to make the country a manufacturing hub.
The message of the Prime Minister was read out at the “Conference on Industry 4.0: Challenges Ahead and Way Forward”, held at Kevadia, Gujarat on 7 October 2022.
The Conference was organised by the Union Ministry of Heavy Industry and was inaugurated by the Union Minister for Heavy Industries Dr. Mahendra Nath Pandey.
On the occasion, Union Minister for Heavy Industries Dr. Mahendra Nath Pandey and Minister of State for Heavy Industries Krishan Pal Gurjar flagged off 175 e buses, 75 from Gujarat and 100 from Karnataka under FAME Scheme
He also inaugurated a Centre for Industry 4.0 (C4i4) Lab in Pune.
In 2019, Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II)' for promotion of Electric Mobility in the country was approved. Through the scheme, it is planned to support 10 Lakhs e-two wheelers, 5 lakh e-3 wheelers, 55,000 4-wheelers and 7,000 e-buses.
Fourth Industrial Revolution
The Fourth Industrial Revolution (4IR) is a term coined in 2016 by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.
Incorporating advanced digital production (ADP) technologies into industrial production processes has given rise to the concept of Industry 4.0, also known as the Smart Factory.
In the 4IR, computers are connected and communicate with one another to ultimately make decisions without human involvement.
A combination of cyber-physical systems, the Internet of Things and the Internet of Systems make Industry 4.0 possible and the smart factory a reality.
Ultimately, it's the network of these machines that are digitally connected with one another and create and share information that results in the true power of Industry 4.0.
Industrial Revolutions
Industrial revolution refers to the change in human history from an agrarian society/economy to an economy/society dominated by Industry and machine manufacturing.
The First Industrial revolution started in England in about 1750-60. It was based on the use of machines for production which were driven by water and steam.
The second Industrial revolution which started in the late 19th century and early 20th century was characterized by the mass production of goods through assembly lines using electricity.
The third Industrial revolution was triggered by the use of computers which led to automation in production systems and development of smart and autonomous systems fueled by data and machine learning.
2. SEBI gives approval to BSE to set up a Social Stock Exchange
Tags: Economy/Finance
The capital market regulator Securities Exchange Board of India (SEBI) has given in principle approval to the BSE to set up a social stock exchange (SSE) as a separate segment of BSE. This will help the social sector enterprises raise capital from the market.
Union Finance Minister Nirmala Sitharaman proposed the concept of an SSE in her 2019-2020 Budget speech.
What are Social Sector Enterprises?
- According to SEBI the Social enterprises which wants to get listed on the SSE must satisfy the following criteria’s;
- It has to be a non-profit organization registered for a minimum of three years as a charitable trust with a certificate valid at least for the next 12 months at the time of seeking registration.
- Corporate foundations, political or religious organisations or activities, professional or trade associations, and infrastructure and housing companies, except affordable housing, will not be eligible to be identified as a social enterprise.
- Annual spending by the entity in the previous financial year must be at least Rs 50 lakh and it must have had funding of at least Rs 10 lakhs in the current financial year.
- The NPO must have a valid Permanent Account Number (PAN) issued by the Income Tax department.
- Social enterprises, raising funds through the SSE, will have to provide an audited Annual Impact Report (AIR) within 90 days from the end of the financial year,
Social activities identified for Social enterprises
- The social enterprises will have to engage in a social activity out of 16 broad activities listed by the regulator.
- The eligible activities include eradicating hunger, poverty, malnutrition and inequality; promoting healthcare, supporting education, employability and livelihoods; gender equality empowerment of women and LGBTQIA+(lesbian, gay, bisexual, transgender, questioning, queer, intersex, asexual, pansexual, and allies) communities; and supporting social enterprise incubators.
BSE
- It was set up in 1875 as ‘The Native Share & Stock Brokers' Association in Bombay (now Mumbai).
- It was later renamed as Bombay Stock Exchange and now it is known as BSE.
- It is the first stock exchange to be set up in Asia.
- In 2017 BSE became the 1st listed stock exchange of India.
- BSE has launched India INX, India's 1st international exchange, located at GIFT CITY IFSC in Ahmedabad.
- BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock market benchmark index.
3. Government of India launches Credit Guarantee Scheme for Startups
Tags: Economy/Finance
To boost funding to the Startups in the country, Department for Promotion of Industry and Internal Trade (DPIIT), under the Union Ministry of Commerce and Industry has notified the establishment of the Credit Guarantee Scheme for Startups (CGSS). The CGSS will provide credit guarantees to loans upto Rs 10 crore extended by Scheduled Commercial Banks, Non-Banking Financial Companies and Securities and Exchange Board of India (SEBI) registered Alternative Investment Funds (AIFs) to the Startups registered with DPIIT.
It means that if the eligible Startups fail to repay the loan taken from eligible financial institutions then the lender will be compensated by the government of India. This guarantee by the government is likely to increase the flow of credit to the Startups.
Extent of Loan Guarantee
The credit guarantee cover under the Scheme would be transaction based and umbrella based. The exposure to individual cases would be capped at Rs. 10 crore per case or the actual outstanding credit amount, whichever is less.
- The extent of transaction-based cover will be 80% of the amount in default if the original loan sanction amount is up to Rs. 3 crore;
- 75% of the amount in default if the original loan sanction amount is above Rs. 3 crore, and up to Rs. 5 crore, and
- 65% of the amount in default if the original loan sanction amount is above Rs. 5 crore (up to Rs. 10 crore per borrower).
The umbrella-based guarantee cover will provide guarantee to Venture Debt Funds (VDF) registered under AIF regulations of SEBI.
The extent of umbrella-based cover will be the actual losses or up to a maximum of 5% of Pooled Investment on which cover is being taken from the fund in eligible startups, whichever is lower, subject to a maximum of Rs.10 crore per borrower.
Who will operate the scheme?
The National Credit Guarantee Trustee Company Limited (NCGTC) will be operating the Scheme.
The National Credit Guarantee Trustee Company Limited is a private company set up on 2014, under the company’s act 2013. It is under the administrative control of the Union Ministry of Finance. It is owned by the Government of India.
Other Important Information for Exam
National Startup Day is observed in India on 16 January .
India’s first dedicated start-up branch was opened by SBI in Koramangala, Bengaluru on 16 August 2022.
4. Amit Shah inaugurates the Eastern and North-Eastern Cooperative Dairy Conclave 2022 in Gangtok, Sikkim
Tags: place in news Economy/Finance Summits State News
The Union Minister for Home and Cooperation, Amit Shah inaugurated the Eastern and North-Eastern Cooperative Dairy Conclave 2022 in Sikkim capital, Gangtok, on 7 October 2022.
Speaking on the occasion the minister said that “milk production is the only way for women empowerment, poverty alleviation and doubling of farmer's income.
Lauding the achievement of the Sikkim dairy farmers he said that “ Sikkim state, which is called the Switzerland of the Northeast, should not be known only for its beauty, but also by enriching every village, a prosperous and developed state’.
Operation Flood
To increase the production of milk and dairy products in the country, Operation Flood was launched in the country in 1970 with the help of the European Union and World Food Programme.
Operation flood was based on the cooperative model where farmers formed dairy cooperatives.
In this cooperative model of development, a pioneering role was played by Verghese Kurien who was instrumental in setting up Anand Milk Union Limited (AMUL) in Anand, Gujarat in 1950. This successful model was replicated all over India and now India is the largest producer of milk in the world.
Verghese Kurien is also called as the milk man of India, Father of white revolution (Dairy revolution)
Uttar Pradesh is the largest milk producing state in India.
5. RBI directs the Credit Information Companies to appoint Internal Ombudsman by 1 April 2023
Tags: Economy/Finance
Reserve Bank of India in a circular issued on 6 October 2022 has asked the Credit Information companies (CIC) to strengthen their customer grievance redressal mechanism by appointing Internal Ombudsman by 1 April 2023.
Function of the internal ombudsman
The Internal ombudsman will hear the appeal against the decision of the CIC which has partially or wholly rejected the complaints of a customer.
It will not hear direct complaints of the customer against the CIC.
Who can be appointed for the post of Internal Ombudsman?
According to the central bank, the internal ombudsman shall be either a retired or a serving officer, not below the rank of deputy general manager or equivalent in a financial sector regulatory body, credit information companies, a non-banking financial company (NBFC) or bank. The person shall have a minimum experience of 7 years.
The appointment will be for a fixed term of not less than three years, but not exceeding five years.
The internal ombudsman cannot be removed before the completion of the contracted term without the RBI's explicit approval.
Difference between Banking Ombudsman and Internal Ombudsman
Banking Ombudsman was introduced by RBI in 1995 under the Banking Regulation act 1949.
Banking Ombudsman are the senior officers of RBI, appointed by RBI.
They hear complaints of the customer against the deficient services provided by the banks.
The customer can approach the banking ombudsman if they are satisfied with the reply of the bank on their complaint.
The whole process is free and is an alternative mechanism to the court system.
Internal Ombudsman
To lessen the burden on the banking ombudsman, RBI introduced the Internal Ombudsman system in 2015 for the banks initially.
It was introduced to settle the complaint of the customer at the bank level itself.
Internal ombudsman are an independent person appointed by the banks themselves and they review complaints of the customer that were partially or wholly rejected by the respective banks.
Credit Information Companies
Credit Information companies are financial companies which maintain the credit history of a person or companies. It means it maintains the record of their borrowing from financial institutions, their track record in the repayment of loans and on the basis of that it prepares a credit information report. This report is used by the banks etc. to decide whether to provide loans to the person /company or not.
CIC in India are:
- Credit Information Bureau of India Limited (CIBIL),
- Equifax Credit Information Company,
- Experian Credit Information Company, and
- CRIF High Mark Credit Information Company.
They are regulated by the RBI.
6. SEBI orders closure of Bengaluru based Brickwork credit rating agency
Tags: Economy/Finance
The capital market regulator Securities Exchange Board of India (SEBI) has cancelled the license of the Brickwork Ratings India Pvt Ltd and asked it wind up its operation within six months. In an order issued on 6 October 2022 SEBI has prohibited it from taking on any new business,
SEBI in its order said that the company has “failed to exercise proper skill, care and diligence while discharging duties as a credit rating agency”.
In a joint investigation of Brickwork by RBI and SEBI several irregularities were found in the working of the company.
Some of the violations alleged in the findings of the two probes were delay or failure in recognition of default of non-convertible debentures of entities like Bhushan Steel, Zee Entertainment Enterprises, Essel Corporate Resources and Diamond Power Infrastructure while failing to review the rating of firms like Great Eastern Energy Corporation and Gayatri Projects.
Brickwork is one of the seven Sebi-registered credit rating agencies. The others are CRISIL, CARE, ICRA, Fitch, Infomerics Ratings and Acuité Ratings & Research.
Brickwork Ratings
It was set up in 2007 and Canara Bank was one of the promoters of Brickworks Ratings
It’s Headquarters: Bengaluru, Karnataka
Managing Director: Vivek Kulkarni.
7. RBI approves the re appointment of Prashant Kumar as MD & CEO of Yes Bank
Tags: Economy/Finance Person in news
Reserve Bank of India on 6 October 2022, has approved the re-appointment of Prashant Kumar as the Managing Director (MD) and Chief Executive Officer (CEO) of Yes Bank for a period of 3 years. The appointment will, however, be subject to the approval of shareholders.
Prashant Kumar was appointed as the MD and CEO of Yes Bank in 2020 as an effort by the government to rescue the scandal hit Yes Bank.
Before joining YES Bank, Kumar was the Deputy Managing Director & Chief Financial Officer of the State Bank of India.
8. RBI launches web based ‘Daksh’ for better monitoring of Banks and NBFC
Tags: Economy/Finance
The Reserve Bank of India Governor Shaktikanta Das launched a new super tech initiative called “DAKSH” on 6 October 2022. It is RBI’s Advanced Supervisory Monitoring System, which will help in better supervision of Banks and Non-Banking Financial Company (NBFC) by the RBI. .
According to the RBI it is a part of the effort of the RBI to strengthen its supervision by utilizing the latest data and analytical tools, technology for implementing more efficient and automated work processes.
RBI says that "DAKSH is a web-based end-to-end workflow application through which RBI shall monitor compliance requirements in a more focused manner with the objective of further improving the compliance culture of Banks, NBFC.
Reserve Bank of India
It was set up on 1 April 1935 under the RBI act 1934.
The central office of RBI was in Kolkata but was shifted to Mumbai in 1937.
It was nationalized in 1949 and it is owned by the Government of India.
It is the supreme monetary and regulatory body in India.
It regulates the banks under the Banking Regulation Acts 1949.
It regulates NBFC under the Reserve Bank of India act 1934.
Governor of RBI: Shaktikanta Das
9. Nirmala Sitharaman inaugurates the 3rd Regional center of CCI in Mumbai
Tags: place in news Economy/Finance Person in news
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman inaugurated the Competition Commission of India’s (CCI) Regional Office (West) in Mumbai, on 6 October 2022, in a virtual event.
The Regional Office (West) in Mumbai is the third regional office opened by CCI, after Regional Office (South) in Chennai (inaugurated in February 2021) and Regional Office (East) in Kolkata (inaugurated in April 2022).
Competition Commission of India (CCI)
The Competition Commission of India (CCI) was established under the Competition Act, 2002 for the administration, implementation and enforcement of the Act.
It was constituted in March 2009.
The following are the objectives of the Commission.
- To prevent practices having adverse effects on competition.
- To promote and sustain competition in markets.
- To protect the interests of consumers and
- To ensure freedom of trade.
Headquarter - New Delhi
Current Chairman - Ashok Kumar Gupta
10. The World Bank reduces India’s growth forecast to 6.5% in 2022-23
Tags: Economy/Finance
The World Bank in its latest report on South Asia released on 6 October 2022 has reduced the expected Indian economy growth rate in 2022-23 to 6.5% from an earlier estimate of 7.5% it forecasted in June 2022.
Growth estimates for the South Asian region - comprising India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives were revised down to 5.8% from 6.8% forecast in June 2022.
The bank cited the impact of war in Ukraine, which has caused a rise in commodity prices, and the uneven recovery from the impact of the COVID-19 pandemic in the region.
In a recent report the United Nations Conference on Trade and Development (UNCTAD) also revised the Indian economic growth in 2022 to 5.7%.
This is the third time the World Bank has revised its GDP growth forecast for India in 2022-23. In June, it had slashed its GDP growth forecast for India to 7.5%. Earlier in April, it had trimmed the forecast from 8.7% to 8%.
The Reserve Bank of India (RBI) has recently cut the economic growth projection for the current fiscal to 7% from 7.2% estimated earlier on account of extended geopolitical tensions and aggressive monetary policy tightening globally.
Important for Exam
World Bank headquarters: Washington D.C, United States of America
World Bank President: David Malpass
The report published by World Bank are
- World Development Report
- Global Economic Prospect
- Ease of Doing Business (it has been suspended now )
