Current Affairs search results for tag: economyfinance
By admin: Sept. 18, 2022

1. Piyush Goyal to Chair first Ministerial Meeting of Economic, Investments Committee in Saudi Arabia

Tags: Economy/Finance Person in news

The Union Commerce and Industry Minister Piyush Goyal will be on a 2-day (18-19 September 2022) visit to Saudi Arabia to co-chair the inaugural Ministerial Meeting of the Economic and Investments Committee with Saudi Arabia's Energy Minister Prince Abdul Aziz Bin Salman.

Piyush Goel will also  discuss with the Saudi minister’s ,on ways to speed up the proposed $100 billion investment in India announced by the  Crown Prince Mohammad Bin Salman during his visit to India in February 2019.

The revival of the West Coast Refinery Project in Ratnagiri, Maharashtra is also expected to be on top of the agenda between the two ministers.


IMPORTANT FACTS -

West Coast Refinery project :

  • The 60 million tonnes per annum refinery was announced in 2015. The refinery will be set up jointly by Indian Oil Corporation Ltd.(IOC), Bharat Petroleum Corporation Ltd (BPCL) , Hindustan Petroleum Corporation Ltd (HPCL) and world’s largest oil companies  Aramco of Saudi Arabia and United Arab Emirates  company Adnoc.
  • Aramco and Adnoc hold 50% stake in the project, while IOC has a 25% stake. The remaining 25% is split equally between BPCL and HPCL.
  • The project was announced in 2015 but the project had to be stopped after opposition from the local population and the environmental groups.

By admin: Sept. 18, 2022

2. PM Modi unveils National Logistics Policy

Tags: National Economy/Finance National News

Prime Minister Narendra Modi launched the National Logistics Policy (NLP) at Vigyan Bhawan, New Delhi on 17 September.


IMPORTANT FACTS -

  • The central government has been working on the National Logistics Policy for three years.
  • The commerce ministry released a draft logistics policy for consultation in 2019, but it was delayed due to the COVID-19 pandemic.

  • Finance Minister Nirmala Sitharaman announced the National Logistics Policy in the budget  2022-23.

  • PM said faceless assessment has started in customs and e-way bills and FASTag are bringing efficiency in the logistics sector.

  • He said the Sagarmala project to link ports and dedicated freight corridors has started improving logistics connectivity and systematic infrastructure development work.

  • The Prime Minister said that India is now the fifth largest economy in the world and is emerging as a manufacturing hub.

Aim of the National Logistics Policy :

  • It aims to promote smooth movement of goods and enhance the competitiveness of the industry.

  • Through this policy, the focus will be on areas like process re-engineering, digitization and multi-modal transport.

Highlight of the Policy :

  • This policy seeks to support rapid growth in the aftermath of the corona pandemic.

  • It will streamline regulations and remove supply-side bottlenecks, besides providing a roadmap to reduce fuel costs and logistics costs.

  • The draft policy seeks to create a reference point for all logistics and trade facilities and to reduce costs for the logistics sector by 10 percent over five years.

  • The logistics sector is estimated to account for 13-14 per cent of the GDP.

  • This policy is an attempt to improve the competitiveness of Indian goods, increase economic growth and employment opportunities.

India's logistics sector :

  • India's logistics sector has more than 20 government agencies, 40 participating government agencies (PGAs), 37 export promotion councils, 500 certifications, over 10,000 items and a $160 billion market.

  • As per the World Bank Logistics Index of 2018, India is ranked 44th in logistics costs.

By admin: Sept. 17, 2022

3. Windfall tax reduced on domestic crude oil and export tax on ATF slashed

Tags: Economy/Finance

The Union Ministry of Finance has issued a notification on 16 September 2002 slashing the windfall taxes on the domestically produced crude oil and has also reduced the taxes on the export of diesel and Aviation Turbine Fuel (jet fuel).


IMPORTANT FACTS -

Why was Special taxes imposed by the Government :

  • Government of India imposed windfall taxes on the domestically produced crude oil and imposed special taxes on the on export of petrol,diesel on 1 July 2022 after the crude oil prices shot up in the international market. 
  • At that time ,Nirmala Sitharaman  had said that India imports around 83% of its crude oil  and pays a high price for it . The oil companies after importing crude oil at high prices export the  petroleum products like petrol ,diesel earning huge profits. This has resulted in a shortage of petroleum products in certain parts of the country.
  • To encourage the companies to sell their products in India export duties were  imposed. 
  • Also windfall taxes were imposed to collect extra revenue for the government to provide subsidies for the poor. 
  • The Finance minister Nirmala Sitharaman had promised that the government will review these special taxes every 15 days and reduce it if the international prices of oil comes down.
  • With the recent drop in the crude oil prices in the international market the government has reduced the taxes .

New Tax rates : 

  • The tax on domestically-produced crude oil has been reduced  to Rs 10,500 per tonne from Rs 13,300 per tonne.
  • The levy on the export of diesel was reduced to Rs 10 per litre from Rs 13.5. 
  • Also, the tax on Aviation Turbine Fuel (ATF) exports was cut to Rs 5 a litre from Rs 9 per litre.

Who will be affected by these taxes : 

  • While private refiners Reliance Industries Ltd and the Russian owned  Nayara Energy are the principal exporters of fuels like diesel and ATF, the windfall levy on domestic crude targets producers like state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd.

ADDITIONAL INFORMATION -

Windfall Tax :

  • It is a special tax which is imposed on companies which earn abnormal profits due to sudden increase in the price of the goods they sell . 
  • In India domestic crude oil price  is linked with the international prices .  With the increase in the international price the domestic price increases automatically resulting in abnormal profit for  crude oil producing companies like ONGC ,Oil India limited and Vedanta limited.

By admin: Sept. 17, 2022

4. SBI Global Factors becomes 100% subsidiary of the SBI

Tags: Economy/Finance

India’s largest bank, State Bank of India (SBI) has bought the entire 13.82 per cent stakes held by Small Industrial Bank of India (SIDBI), Bank of Maharashtra and Union Bank of India in the SBI Global Factors Ltd (SBIGFL).

  • Now SBI Global Factors Ltd has become a 100% subsidiary company of SBI.
  • SBIGFL is a non-banking financial company. It provides domestic and export factoring services under one roof.
  • The regulator of Factors in India is the Reserve Bank of India.

IMPORTANT FACTS -

What is Factoring in Finance ?

  • It is a financing method in which a business owner sells its account receivable at a discount to a third party to raise capital for its business needs.

How it works : 

  • Suppose Business man A sells goods worth Rs 100 to a business man B. The businessman B promises to pay back the amount after three months and issues a statement in a proper format to A, mentioning all the details of the amount due and the date of repayment.  
  • Suppose after one month A needs money urgently for its business. It will approach SBI Factors and show it the statement given by B and will ask money from SBI Factor.
  • If SBI Factor is satisfied that B is credit worthy then it will buy the statement issued by B at a discount of suppose 4%. It means that it will pay 96 rupees to A and it will collect Rs 100 from B.
  • In this way A gets money for its business and SBI Factors earns Rs 4 on the deal.
  • The statement issued by B to A is called as account receivables. 

ADDITIONAL INFORMATION -

SBI Global Factors Ltd :

  • It is a Non-Banking Financial Company (NBFC)
  • It was founded in 2001
  • It’s Headquarters: Mumbai 
  • Chairman: Ashwini Kumar Tewari 

By admin: Sept. 16, 2022

5. Nirmala Sitharaman calls for more women directors at the 2nd Women Director’s Conclave

Tags: place in news Economy/Finance Summits

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman called for increasing the representation of women in the company’s board of directors in India.

She was speaking at the 2nd ‘Women Director’s Conclave’ being held at Bombay Stock Exchange in Mumbai on 16 September.


IMPORTANT FACTS -

  • The theme of the Conclave was: Celebrating Women Board Leaders'.
  • Nirmala Sitharaman said that only three-fourths of the listed firms on the National Stock Exchange have appointed at least one woman as an independent director.
  • The Security and Exchange Board of India (SEBI), in accordance with the Companies Act 2013, has mandated the appointment of one independent woman director in the board of listed companies.

By admin: Sept. 16, 2022

6. India to have Hydrogen powered Train by 2023: Ashwini Vaishnaw

Tags: Economy/Finance

Speaking at the SOA University in Bhubaneswar, the Union Railways Minister Ashwini Vaishnaw said on 15 September 2022, that India is developing hydrogen-powered trains and they will be ready in 2023.

This year Germany launched the world's first fleet of hydrogen-powered passenger trains. The 14 trains with hydrogen fuel cell drive have been developed by French company Alstom at a cost of around $92 million.


IMPORTANT FACTS -

Advantage of Hydrogen fuel cell powered vehicle :

  • The Hydrogen fuel cell is environment friendly and it does not emit any greenhouse gasses.  The hydrogen fuel cell uses hydrogen and air to generate electricity. The combination of air and hydrogen will produce water as a by-product which will be released by the Train. 
  • India is committed to achieve zero net carbon emission by 2070.

Other Hydrogen fuel project in India :

  • India's first hydrogen fuel cell bus developed by the CSIR-NCL (Council of Scientific and Industrial Research- National Chemical Laboratories) Pune and private firm KPIT Limited was unveiled on 21 August 2022 in Pune.
  • On 30 July 2022 the Prime Minister inaugurated the NTPC Green Hydrogen Mobility Project at Leh, Ladakh. It is a pilot project which aims to run five Fuel Cell Buses in and around Leh. This pilot project would be the first deployment of Fuel Cell Electric Vehicles for public use in India.
  • Amara Raja Power Systems is setting up India’s first green hydrogen fuelling station in Leh, Ladakh for the National Thermal Power Corporation Ltd (NTPC). It will power the NTPC’s Hydrogen fuel buses. 
  • India’s First India's first green hydrogen-based advanced fuel cell electric vehicle was launched by Toyota Kirloskar Motor ltd called Toyota Mirai.

By admin: Sept. 16, 2022

7. 3rd Global Fintech Fest to be held in Mumbai

Tags: place in news Economy/Finance Summits

The 3rd edition of the Global Fintech Fest will be held in Mumbai, Maharashtra from 19-22 September 2022.


IMPORTANT FACTS -

  • The 3rd Global Fintech Fest will be held in a hybrid mode.
  • The Global Fintech Fest is being organised by National Payment Corporation of India (NPCI), Payment Council of India and the Fintech Convergence Council.
  • The theme for Global Fintech Fes 2022 is: 'Creating A Sustainable Financial World - Global | Inclusive | Green'

What is Fintech :

  • It is composed of two words: Financial and Technology. It refers to the technological innovation in the design and delivery of financial products like saving accounts, loans, wealth management, investment in stock markets etc.

By admin: Sept. 16, 2022

8. Ministry of Corporate Affairs notifies changes in the definition of ‘Small Companies’

Tags: Economy/Finance

The Union Ministry of Corporate Affairs has notified changes in the definition of the Small Companies through a notification issued on 15 September 2022. 

It has increased the paid capital limit of the company and the turnover limit. 


IMPORTANT FACTS -

Definition of Small Companies :

  • The Companies Act 2013, introduced the concept of small companies in India.
  • The Act defines a small company as a company that is not a public company and has:
  • (i) Paid up  share capital of the company shall not exceed Rs 4 crores (Rs 2 crore) 
  • (ii) The turnover of the company shall not exceed Rs 40 crore (earlier Rs 20 crore) during the immediately preceding financial year. 
  • However the concept of Small Companies does not apply to the following companies:
  • (i) Public Companies 
  • (ii) Holding company or a subsidiary company 
  • (iii) A company registered under section 8 of the Companies Act.
  • (iv) A company or body corporate government by any special act.
  • Union Minister  for Corporate Affairs : Nirmala Sitharaman

By admin: Sept. 16, 2022

9. RBI allows NRI to pay utility bills through Bharat Bill Payment System

Tags: Economy/Finance

The Reserve Bank of India (RBI) has allowed the Non Resident Indian (NRI) to pay their utility bills in India through the Bharat Bill Payment System (BBPS) from 15 September 2022. 

Till now only resident Indians were allowed to use the BBPS.

It means that the Non-Resident Indians (NRI) will be able to make utility, education and other bill payments for their families in India by using the Bharat Bill Payment System (BBPS).

The circular was issued by the RBI on 15 September 2022.


IMPORTANT FACTS -

What Is BBPS :

  • It is a wholly owned subsidiary of the NPCI (National Payment Corporation of India).
  • It offers interoperable and accessible bill payment service to consumers via digital (bank channels) as well as through a network of agents & bank branches.
  • These banks or agents are called as operating units of the Bharat Bill Payment System. 
  • Bharat Bill Pay offers all recurring payments like electricity, telecom, DTH, Gas, water bills, Insurance, Loan repayments, Education fees, FasTag Recharge, Municipal taxes, Housing society, Subscription fees etc. at one single window.
  • "National Payments Corporation of India (NPCI) has been authorised by the Reserve Bank of India (RBI) as the Bharat Bill Payment Central Unit (BBPCU).  
  • The BBPCU undertakes clearing and settlement activities related to transactions routed through BBPS."

By admin: Sept. 16, 2022

10. Global Rating agency ‘Fitch’ reduces India’s expected growth rate to 7% in 2022-23

Tags: Economy/Finance

Global Credit rating Agency Fitch has reduced the expected growth rate of the Indian economy in the current fiscal year (2022-23) to 7% from its earlier June estimates of 7.8%.

It has also reduced the expected growth rate of the Indian economy in 2023-24 to 6.7%.

The revision in the Indian GDP growth rate comes after the Indian grew by 13.5% in the first quarter of the current financial year (April –June) 2022 way below the RBI projected growth rate of 16.2%.

IMPORTANT FACTS -

Reason for reducing Indian Growth Rate :

  • According to Fitch, the growth rate in India is expected to slow down due to the uncertainty in the global economy, mainly due to the fear of recession in Europe and the United States and continuing Russia-Ukraine war.
  • It expects RBI to continue its tight monetary policy and expects its to increase its policy rates (Repo rate) to control Inflation which is likely to affect economic growth.

World Economic Growth :

  • Fitch expects the world economy to grow by 2.4% in the 2022 calendar year (January-December) and 1.7% in 2023.
  • It expects the Eurozone and the United States to enter into recession later this year.

Forecast for Indian Economy Growth Rate by Various agencies (till 16 September 2022) :

Agency /Institutions 

Forecast for 2022-23 

RBI 

7.2%

World Bank 

7.5%

International Monetary Fund 

7.4%

Asian Development Bank 

7.2%

SBI

6.8%

Moody Investor Service 

7.7%

India Rating 

6.9%

Standard and Poor (S&P)

7.3%

United Nations 

6.4%

OECD 

6.9%

ADDITIONAL INFORMATION -

Concept Clearing :

Recession :

  • When there is a negative growth in the economy for the two consecutive quarters then the economy is in recession. 


EURO ZONE :

  • It refers to those 19 European countries which have abolished their national currency and adopted Euro as their common currency.
  • Euro as a common monetary unit was introduced on 1 January 1999.
  • Member countries of Eurozone : Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland, Slovenia, Cyprus, Malta, Slovakia, Estonia, Latvia, and Lithuania.
  • The European Central Bank is the monetary authority of the Euro Zone countries.