1. 25th Energy Technology meet held in Mumbai
Tags: place in news Economy/Finance Summits
The 3 day (15-17 September 2022) , 25th Energy meet organised by the Centre for High Technology (CHT), under the aegis of Ministry of Petroleum & Natural Gas ,Government of India, in association with Hindustan Petroleum Corporation Ltd is being held in Mumbai .
The Energy meet was earlier called the Refining and Petrochemicals Technology Meet.
IMPORTANT FACTS -
- Theme of the 25th Energy meet: Refining in the new Energy era”
- The 25th Energy meet was addressed by the Union Minister for Petroleum and Natural Gas Hardeep Singh Puri and Union Minister of State for Petroleum and Natural Gas, Rameshwar Teli on 15 September 2022.
- Speaking on the occasion Rameshwar Teli said that the Government is committed to raise the share of Natural Gas in the country’s energy mix to 15% by 2030 from its current share of just above 6%.
- He added that the Government has decided to set up 18 thousand Compressed Natural Gas (CNG) stations in the country by 2030.
2. South Korea fines Google and Meta for violation of privacy law
Tags: Economy/Finance International News
South Korea’s Personal Information Protection Commission has fined Google 69.2 billion won ($50 million) and Meta (earlier called Facebook) 30.8 billion won ($22 million) for violation of privacy law violation.
Both the companies were found guilty of collecting and analysing behavioural information of the customer without obtaining their prior consent.
IMPORTANT FACTS -
Republic of Korea (South Korea) :
- It lies in the Korean peninsula in East Asia.
- The Korean peninsula was divided into communist Democratic People’s Republic of Korea (North Korea) and Republic of Korea (South Korea) after the Korean War in 1953.
- Capital: Seoul
- Currency: South Korean Won
3. 26th meeting of FSDC held in Mumbai
Tags: place in news Economy/Finance Summits
The Union Finance Minister Nirmala Sitharaman chaired the 26th meeting of the Financial Stability and Development Council (FSDC) in Mumbai on 15 September 2022.
The meeting, which was attended by the chief of various financial sector regulators, discussed important financial issues which can affect the country’s financial sectors and its stability.
IMPORTANT FACTS -
Financial issues discussed :
- It discussed the Early Warning Indicators for the economy and India’s preparedness to deal with them, improving the efficiency of the existing Financial/Credit Information Systems, issues of governance and management in Systemically Important Financial Institutions including Financial Market Infrastructures, strengthening cyber security framework in the financial sector,etc.
The meeting was attended by :
- Dr. Bhagwat Kishanrao Karad, Minister of State for Finance ;
- Pankaj Chaudhary, Minister of State for Finance ;
- Dr. T. V. Somanathan, Finance Secretary and Secretary, Department of Expenditure, Ministry of Finance;
- Shri Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance;
- Shri Tarun Bajaj, Secretary, Department of Revenue, Ministry of Finance; Shri Sanjay Malhotra, Secretary, Department of Financial Services, Ministry of Finance;
- Dr. V. Anantha Nageswaran, Chief Economic Adviser, Ministry of Finance;
Head of Financial Sector Regulators :
- Shaktikanta Das, Governor, Reserve Bank of India;
- Ms. Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India;
- Debasish Panda, Chairperson, Insurance Regulatory and Development Authority of India;
- Supratim Bandyopadhyay, Chairperson, Pension Fund Regulatory and Development Authority;
- Ravi Mittal, Chairperson, Insolvency and Bankruptcy Board of India, Shri Injeti Srinivas, Chairperson, International Financial Services Centers Authority, and the
- Secretary of the FSDC, Department of Economic Affairs, Ministry of Finance.
Financial Stability and Development Council (FSDC) :
- It was set up on the recommendation of the Raghu Ram Rajan committee on “Financial Sector Reform”.
- FSDC was set up by the Government of India in 2010.
Function of the FSDC :
- The Council monitors macro prudential supervision of the economy, including functioning of large financial conglomerates, and addresses inter-regulatory coordination and financial sector development issues.
- It also focuses on financial literacy and financial inclusion.
ADDITIONAL INFORMATION -
Sub-Committee of FSDC :
- The FSDC Sub-committee has also been set up under the chairmanship of Governor, RBI.
- All the members of the FSDC are also the members of the Sub-committee.
- All four Deputy Governors of the RBI are also the members of the Sub Committee.
Full Form :
- Financial Stability and Development Council
4. DBS bank to fund startups with Billionaire Venture
Tags: Economy/Finance
DBS Bank India limited has signed a Memorandum of Understanding (MoU) with the Chennai based Billionaire Venture Incubation to set up a Special Purpose Vehicle (SPV) to fund startups in India .
The SPV with $200 million capital will fund around 150 startups in Tamil Nadu, Karnataka and Maharashtra.
The Joint Venture will focus on funding startups in fintech, edtech and other critical areas. It will also provide technology and education support to startups.
IMPORTANT FACTS -
DBS Bank India Limited :
- DBS Bank India limited is a wholly owned subsidiary of DBS bank Singapore Limited.
- Headquarter : Mumbai, Maharashtra
- Tagline : Live More, Bank Less
- Managing Director and Chief Executive Officer : Surojit Shome
5. Saudi Arabia, regains No.2 Oil supplier status to India in August 2022
Tags: Economy/Finance
According to a Reuters report, Saudi Arabia has become the second largest crude petroleum oil supplier to India in the month of August 2022.For the past three months, Russia was the second largest supplier of crude oil to India while Iraq is still the largest supplier of crude oil to India.
IMPORTANT FACTS -
Reason for Rise in Purchase of Russian Oil :
- India started buying the Russian crude oil after the Russians started offering its crude oil at a heavy discount. This was done by Russia after heavy sanctions were imposed on it by the Western countries after its invasion of Ukraine in February 2022.
- India which never condemned Russian action started buying Russian oil as it was very cheap compared to the Saudi and other traditional suppliers.
- India during the March-July period became the second largest buyer of Russian oil after China.
Why Russian oil import has now declined ?
- There are mainly two reasons for Saudi Arabia regaining its second spot.
- One, the Russians have considerably reduced the discount on its oil which has made its oil less attractive to India.
- Secondly, India has a contractual obligation to buy oil from Saudi and it has to honour the contract.
- Indian purchase of Russian oil was a short term opportunity for India to buy cheap oil in a market where the international prices were high.
Top oil supplier to India in August month 2022 :
The top supplier of crude oil to India were as follows;
- Iraq
- Saudi Arabia
- Russia
- United Arab Emirates
- Kuwait
ADDITIONAL INFORMATION -
- India is the world’s third biggest oil importer and consumer.
- Largest importer of crude oil in the world was China followed by the United States.
- Largest consumer of oil in the world was the United States followed by China and India was at the third spot.
6. No TDS on one time settlement of loans: CBDT
Tags: National Economy/Finance
The Central Board of Direct Tax (CBDT) has clarified in a circular issued on 13 September 2022 that the banks are not required to deduct 10 per cent Tax Deduction at Source (TDS) on one-time settlement (OTS) or loan waivers.
- The CBDT said OTS on loan waiver by a bank will not be treated as a benefit or a perquisite and not face Tax Deduction at Source (TDS) as they would have to bear the additional cost of tax deduction along with the haircut.
IMPORTANT FACTS -
Who will benefit ?
- This exemption from TDS includes public financial institutions, scheduled banks, cooperative banks, rural development banks, state financial corporations, and state industrial investment corporations.
Others who are exempted from TDS :
- The CBDT also clarified that the TDS provisions will not apply to the issuance of bonus/rights shares issued by a company ,where bonus/rights shares are issued to all shareholders of such a company.
Concept clearing :
One time Settlement :
- It is a scheme which is offered to the defaulters who are unable to repay their loans and does not seem in foreseeable future to generate enough resources to pay back the loans.
- In these types of loan settlements banks often take Haircuts on the loan.
Haircut on loan settlement :
- Haircut simply means that banks are willing to accept less than what is their due. For example if the person owes Rs 100 to the bank the bank accepts Rs 80 from the borrower and closes the loan. Here the bank is taking a haircut of 20%.
Tax Deduction at Source (TDS) :
- It was introduced under the Income Tax Act 1961 to stop tax evasion. The concept of TDS was introduced with an aim to collect tax from the very source of income.
- As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.
- The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS for TDS certificate issued by the deductor.
- For example a person opens a fixed deposit with a bank and deposits an amount. If the interest income on the deposit is more than Rs 5000 per year then the bank will deduct 10% TDS on the interest amount. So if the interest income is Rs 6000 per year then the bank will deduct 1000x10%= Rs 100.
- Here the bank is the deductor while the depositor is the deductee.
The TDS rates are different for different financial transactions.
Bonus issues :
- When a company issues new shares of the company to its existing shareholder in the form of dividend then it is called as Bonus issues.
Right Issue :
- When a company issues new shares to its existing shareholders at a price, it is called Right Issues.
ADDITIONAL INFORMATION -
Central Board of Direct Taxes (CBDT) :
- The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963.
- The CBDT is a part of the Department of Revenue in the Ministry of Finance.
- On one hand, CBDT provides essential inputs for policy and planning of direct taxes in India, at the same time it is also responsible for administration of direct tax laws through the Income Tax Department.
- Chairperson: Nitin Gupta
7. Honda motorcycle to launch fully ethanol run two wheelers in 2025
Tags: Economy/Finance Science and Technology
World’s largest motorcycle manufacturer company Honda has announced that it will introduce ethanol-only motorcycles in India in the year 2025.
The Japanese company is the first company in the world to introduce a bike powered by an eco-friendly fuel mixed with bio-ethanol and petrol. It was first introduced in Brazil in March 2022.
IMPORTANT FACTS -
Ethanol fuel based Bike :
- Initially Honda will introduce E 20 fuel bikes having a fuel content of 20 percent ethanol mixed with petrol in 2023.
- It will introduce an E100 fuel bike having a fuel content of 100 percent ethanol in 2025.
Biofuels in India :
- Bio fuel is the fuel obtained by mixing hydrocarbon based fuel with agricultural produce. In India, Ethanol obtained from molasses (produced during the production of sugar from sugarcane) is mixed with Petrol.
Target set by government of India :
- Under the national Biofuel policy 2018 as amended in 2022, the government of India has set a target of:
- 10% blending of petrol with ethanol by 2022
- 20% blending of petrol with ethanol by 2025-26
- 10% blending of ethanol with diesel or biodiesel by 2030.
8. Govt constitutes M Damodaran committee to suggest ways to attract VC/PE investments
Tags: committee Economy/Finance
The Union Ministry of Finance on 13 September 2022 has set up a committee to suggest ways to attract venture capital and private equity (VC/PE) investments in India.
IMPORTANT FACTS -
- The Committee will be headed by the former chairman of the Securities and Exchange Board of India (SEBI), M Damodaran.
- The Finance minister in her Budget speech for the fiscal year 2022-23 had stated that the government was considering forming a committee that will encourage Private Equity and Venture Capital investment in India.
- According to the Ministry the committee will "comprehensively study, using a systems approach, the end-to-end frictions and potential accelerants from regulatory policy and taxation to facilitate ease of investing, as well as to encourage investments in India".
Venture Capital Fund and Private Equity are regulated by SEBI in India.
9. Newly Constituted Board of Trade first meeting held in New Delhi
Tags: place in news Economy/Finance
The first meeting of the newly constituted Board of Trade was held in New Delhi on 13 September 2022. The meeting was presided over by the Union Minister for Commerce and Industry Piyush Goel.
The Board of Trade meeting focused on export target setting, the new Foreign Trade Policy (2022-27), and the strategies and measures to be taken in order to take forward domestic manufacturing and exports.
IMPORTANT FACTS -
Board of Trade and its functions :
- The Board of Trade was set up by the government of India by merging Council for Trade Development and Promotion with Board of Trade,
- The Board of Trade advises the Government on policy measures connected with the Foreign Trade Policy in order to achieve the objectives of boosting India’s trade.
- It provides a platform to state governments and Union Territories (UT) for articulating state-oriented perspectives on Trade Policy.
- It also acts as a platform to the Government of India for appraising State Governments and UT about international developments affecting India’s trade.
- It is an important mechanism for deliberations on trade related issues with industry bodies, associations, export promotion councils, and state and UT governments.
10. Vedanta, Foxconn signs MoU with Gujarat government to set up a semiconductor unit in the state
Tags: place in news Economy/Finance Science and Technology
In a boost to the government’s semiconductor mission, Anil Agarwal led Vedanta Group and electronic manufacturing giant Foxconn of Taiwan signed a Memorandum of Understanding (MoU) with the Gujarat Government on 13 September 2022 to set up a FAB manufacturing unit in the state. The manufacturing unit which will include display and semiconductor facilities will be set up near Ahmedabad.
Update on 16 September 2022
The Vedanta Limited has issued a clarification on 16 September 2022 that Volcan Investments would undertake the business of manufacturing semi-conductors and not Vedanta Limited. Volcan Investments is a holding company wholly owned by the Agarwal family trust. It is also the majority shareholder of the London based Vedanta Resources and owns more than 50 percent stake in Vedanta India. However, unlike Vedanta India, Volcan Investments is unlisted.
- The agreement was signed in the presence of Union Minister for Railways, Communication, Electronics and Information Technology Ashwini Vaishnaw.
- A fab (fabrication facility) is short for fabrication plant where raw silicon wafers are processed and turned into integrated circuits.
IMPORTANT FACTS -
Joint Venture partners :
- The manufacturing giant Foxconn will be the technical partner in the Joint venture while the oil-to-metals conglomerate Vedanta is financing the project, as it looks to diversify into chip manufacturing.
- Under the Joint Venture , Volcan Investment will hold a majority stake of up to 60%, and the remaining 40% will be held by Foxconn.
- The total investment in the manufacturing unit will be Rs 1, 54,000 crore to set up the facility in Gujarat which is expected to create one lakh job opportunities.
Other Chip manufacturing proposals :
- Vedanta is the third company to announce a chip plant location in India after international consortium ISMC and Singapore-based IGSS Ventures, which are setting up in the southern states Karnataka and Tamil Nadu, respectively.
- The world chip market is dominated by China and Taiwan and India wants to be self-sufficient in this critical technology
India’s Semiconductor Mission :
- On 29 December 2022, the Information Technology Minister, Ashwini Vaishnaw, launched the India Semiconductor Mission.
- Under the policy, the government will provide Rs 76000 crore incentives for companies setting up manufacturing facilities in India.
- This was done by the government to encourage companies to set up chip manufacturing plants in India.
What is semiconductor :
- Semiconductors are materials which have a conductivity between conductors and insulators. They can be pure elements, silicon or germanium or compounds; gallium, arsenide or cadmium selenide.
- They are the basic building blocks that serve as the heart and brain of all modern electronics and information and communications technology products.
- These chips are now an integral part of contemporary automobiles, household gadgets and essential medical devices such as ECG machines.
Fabrication units in India :
- Currently, India has two fabrication facilities (fab).One is Society for Integrated Circuit Technology and Applied Research (SITAR) of the Defense Research and Development Organisation (DRDO) in Bengaluru and a semiconductor laboratory in Chandigarh, which builds silicon chips for strategic purposes like defense and space and not for commercial use.
ADDITIONAL INFORMATION -
Vedanta limited :
- It is a multinational company headquartered in Mumbai, India.
- It is in the business of Zinc-Lead-Silver, Iron ore, Steel, Copper, Aluminium, Power, Oil and Gas.
- The Chairman of Vedanta group: Anil Aggarwal
