Current Affairs search results for tag: economyfinance
By admin: Sept. 4, 2022

1. India set to become third largest economy in the world by 2029: SBI

Tags: Economy/Finance

State Bank of India (SBI) in its latest research report Ecowrap published on 3 September 2022 has projected the Indian economy to become the third largest economy by surpassing Japan in 2029. 

Quoting IMF data, a recent Bloomberg report has said that the Indian economy overtook the United Kingdom economy at the end of December 2021 to become the 5th largest economy in the world.

At present the world’s largest economy is the United States followed by China, Japan and Germany and India.

Main points of the report :

The Indian economy grew by 13.5% in the first quarter of the financial year 2022-23. India is still the fastest growing economy amongst the major economies in the world .

The SBI research paper assumes that the Indian economy will grow at an average growth rate of 6 per cent to 6.5 percent in the foreseeable future .

If it happens then the Indian Gross Domestic Product( GDP) share in the world GDP which is  now at 3.5 per cent, is likely to cross 4 per cent in 2027, the current share of Germany in global GDP.

With this growth rate the Indian economy will become the third largest economy  in the world by 2029. In 2014 India was ranked the 10th largest economy in the world .

It will surpass Germany in 2027 and Japan in 2029.

 Note :

SBI has assumed Nominal GDP while making this forecast.

India’s Transition since 2014 :

Rank in the world 

Year

10

2014

7

2015

6

2019

5

2022

4

2027 (provisional)

3

2029 (provisional)

Source IMF, SBI research 

By admin: Sept. 3, 2022

2. India becomes the second largest market for wearable watches in the world

Tags: Economy/Finance

India has surpassed China to become the second biggest smartwatch market in the world. According to the United Kingdom based market research company, Counterpoint, at the end of June 2022 quarter, the Indian market grew by 347% as compared to the same period last year. During the June 2022 quarter the global market grew at just 13%. 

Main Points of the report 

North America remains the largest smartwatch market in the world with a shipment of 26% of the global market.

India was the second largest market in the world with a shipment of 22% of the global market.

China remained the third largest market with a shipment of 21% of the global market.

Smartwatch Brand in the world 

 The world's largest smartwatch company was Apple accounting for 29.3% of the overall shipments, followed by Samsung (9.2%), Huawei (6.8%).Fire-Boltt (6.3%) and Noise (5.9%).

Fire-Bolt and Noise are Indian companies and they have been included in the top five companies of the world for the first time.

By admin: Sept. 3, 2022

3. IndusInd Bank with ADB sets up partial guarantee to finance MSME in supply chains

Tags: Economy/Finance

IndusInd Bank has signed an agreement with the Asian Development Bank (ADB) for a partial guarantee programme with an initial outlay of $70 million (Rs 560 crore), for supply chain financing.

Under this agreement ADB will provide partial credit guarantees to lenders. 

It means that if the customer defaults on loan repayment which is covered under the partial guarantee then ADB will pay the guaranteed portion of the principal and interest to the bank.

The IndusInd bank hopes to increase its business in the Micro Small and Medium Enterprise (MSME) financing through this partnership.

IndusInd Bank 

It is a scheduled commercial private sector bank .The bank was set up by the Hindujas group in 1994.

Headquarters: Mumbai 

Managing Director and Chief Executive Officer: Suman Kathpalaia 

Tagline of the Bank: We Care Dil Se : We Make You Feel Richer 

Asian Development Bank 

  • It was set up in 1966.
  • Its headquarters is at Mandaluyong City, Manila, Philippines 
  • Total member countries : 68 
  • President of ADB : Masatsugu Asakawa of Japan

By admin: Sept. 3, 2022

4. RBI gives lenders time till end-November to comply with new digital loans guidelines

Tags: Economy/Finance

The Reserve Bank of India (RBI), has given lenders until the end of November to put in place systems and processes to ensure existing digital loans are in compliance with the regulator's rules issued on 10 August 2022. This direction was issued by the RBI on 2 September 2022.However, for new and existing customers availing fresh loans, these norms will be applicable immediately.

The Reserve Bank of India on 10 August issued detailed guidelines that will increase scrutiny and supervision over digital lending apps and lenders who engage with them on 10 August 2022. This was done by RBI after receiving many reports of malpractices by the digital lending apps and lenders who engage with them. 

Digital lenders are those entities which provide loans online. The entire process takes place online and there is no physical interface between the lender and the borrower.

Working Group on Digital lending 

RBI had set up a working group on ‘digital lending including lending through online platforms and mobile apps’ (WGDL) on January 13, 2021, with Jayant Kumar Dash, Executive Director, RBI as the Chairman.  

The working group was set up by the RBI after there were several complaints of malpractices by the online lending apps.

Main points of the RBI Guidelines 

Classification of online lenders 

RBI has classified the online lenders into three categories;

  • entities regulated by the RBI and permitted to carry out lending business; 
  • entities authorized to carry out lending as per other statutory/regulatory provisions but not regulated by RBI; and
  •  Entities lending outside the purview of any statutory/ regulatory provisions.

Guidelines applicable on which category of entities 

RBI has said that its guidelines will be applicable on entities (Banks, NBFC) that are regulated by the central bank and the lending service providers (LSPs) engaged by them. Lending service providers are the intermediary between the regulated entities and the borrower. In simpler terms it is an online platform which brings the lender and the borrower online.

Guidelines of RBI 

  • All loan disbursals and repayments are required to be executed only between the bank accounts of the borrower and the regulated entities. It shall not be routed through any LSP or third party.
  • Any fees, charges, etc., payable to LSPs in the credit intermediation process has to be paid directly by the regulated entity and not by the borrower.
  •  The all-inclusive cost of digital loans in the form of Annual Percentage Rate (APR) is required to be disclosed to the borrowers. 
  • There cannot be an automatic increase in the credit limit without explicit consent of the borrower.
  • Any lending sourced through DLAs (Digital Lending Apps) have to be reported to Credit Information Companies (CICs) by regulated entities irrespective of its nature or time period. This is particularly important given a number of 'buy now, pay later' players were not reporting the loans they were offering to CICs.
  •  RBI has said the data collected by Digital lending Apps  (DLAs) has to be need based, they should have clear audit trails and should be only done with prior explicit consent of the borrower.

By admin: Sept. 3, 2022

5. GMR Group to sell its entire 40% stake in Philippines' Cebu airport

Tags: Economy/Finance International News

The New Delhi based Multinational GMR Group, on 2 September 2022, has said that it will divest its entire 40 per cent stake in Cebu international airport in Philippines for a payment of Rs 1,330 crore.

However the GMR will continue to provide consultancy service to the Airport till 2026 and will earn revenue for it.

According to GMR, the company will now focus on high growth opportunities. It will now use the capital to invest in the Kualanamu International Airport at Medan, Indonesia. The Kualanamu International Airport is being developed and operated by GMR Airports International.

Mactan Cebu International Airport 

It is the second largest Airport of the Philippines after the Ninoy Aquino International Airport Manila.

In 2014, GMR Infrastructure in partnership with Megawide Construction Corporation of Philippines won the bid to operate and develop the Mactan Cebu International Airport. 

Both the Megawide Construction Company and GMR are selling their stake to Aboitiz InfraCapital Inc. of Philippines.

Currency of Philippines: Philippine pesos

GMR Airports International

GMR Airports International is a subsidiary of GMR Infrastructure Ltd 

GMR Group operates the IGI Delhi International Airport, Rajiv Gandhi Hyderabad International Airport and Bidar Airport in (Karnataka).

It is building a Greenfield airport at Mopa in North Goa and an International Greenfield Airport at Bhogapuram, Vizianagaram, and Andhra Pradesh.

It is the only Indian company to develop and operate foreign International airport. It is developing airports in Indonesia, Greece.

The GMR group was founded by Grandhi Mallikarjuna Rao. It is in the business of Infrastructure, Energy, transportation etc. 

By admin: Sept. 3, 2022

6. The Indian economy grew by 13.5% in the first quarter of the financial year 22-23

Tags: Economy/Finance

The Indian economy grew by 13.5% in the April to June (2022-23) as compared to the same period last year. However it was below the Reserve Bank of India 16.2 % forecast for the first quarter.

The data regarding the performance of the Indian economy in the first quarter of the fiscal year 20222-23 was released by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation on 31st August 2022.

India still remains the fastest growing major economy in the world. The Chinese economy grew by 0.4% during April -June 2022.

The growth rate of the Indian economy in 2021-22 was 8.7%.

GDP growth rate at constant price (2011-12 base year) 

Sector of Economy

Growth rate of Q1(April-June) GDP in  2022-23

Agriculture 

4.5%

Industry

8.5%

Service sector 

17.6%

GDP

13.5%

Gross value Addition (GVA) 

12.7%

GVA=GDP + subsidies on products – taxes on products.

Nominal GDP

The Nominal GDP at Current Prices in Q1 2022-23 is estimated at Rs 64.95 lakh crore against Rs 51.27 lakh crore in Q1 2021-22, showing a growth of 26.7 per cent compared to 32.4 per cent a year ago.

 While calculating the nominal GDP the market price of goods and services are included. It makes no adjustment for inflation 

GDP at Constant Price or Real GDP

The Real Gross Domestic Product (GDP) at Constant Price (2011-12) in Q1 2022-23 is estimated at Rs 36.85 lakh crore, as against Rs 32.46 lakh crore in Q1 2021-22, showing a growth of 13.5.

While calculating the GDP at constant price the price rise in the goods and services due to inflation is not counted. Prices are fixed to a base year (2011-12). It measures the actual increase in the production of goods and services. 

GDP at constant price is the best indicator to measure the growth of an economy.

Expected GDP growth rate in fiscal year 2022-23

The Reserve Bank of India expects the Indian Economy to grow by 7.2% in 2022-23.

The Union Finance Secretary T V Somanathan said that the Finance Ministry expects the growth rate of the economy to be 7-7.5% in the current fiscal year (2022-23).

By admin: Sept. 3, 2022

7. RBI to launches pilot project to digitize Kisan Credit Card In MP and Tamilnadu

Tags: Economy/Finance State News

The Reserve Bank of India has decided to launch pilot projects to digitize Kisan Credit Cards (KCC) in Madhya Pradesh and Tamil Nadu to transform rural credit delivery systems and to improve the quality of credit delivery in the rural areas.

The Digitisation Project 

  • RBI will launch a pilot project for end-to-end digitalisation of Kisan Credit Card (KCC) lending, developed by the Reserve Bank Innovation Hub (RBIH) Bengaluru
  • The pilot project would entail automation of various processes within banks and integration of their systems with the service providers. 
  • The proposed digitalisation of the KCC lending process will make it more efficient, reduce costs for borrowers and reduce Turn Around Time (TAT) from loan application to disbursement significantly.

Where it will be launched 

The pilot project will commence in September 2022 in select districts of Madhya Pradesh and Tamil Nadu with Union Bank of India and Federal Bank, respectively, as partner banks and with active cooperation of the state governments.

Kisan Credit Cards (KCC)

  • It was introduced in India by banks in August 1998 to meet the agricultural credit needs of the farmers.
  • The model of KCC scheme was prepared by NABARD (National Bank for Agriculture and Rural Development) on the recommendations of RV Gupta Committee.
  • RBI set up a High Level Committee on Agricultural Credit through Commercial Banks in 1997. The committee was headed by RV Gupta. 

By admin: Sept. 3, 2022

8. India overtakes United Kingdom to become fifth largest economy in the world: Bloomberg

Tags: Economy/Finance

According to a news report published by Bloomberg, India has overtaken the United Kingdom to become the 5th largest economy in the world.

India is now ranked behind the United States, China, Japan and Germany.

 Main highlights of the Bloomberg Report :

  • According to Bloomberg, the Indian economy overtook the United Kingdom economy at the end of December 2021.
  • According to Bloomberg at the end of March 2022, the Indian Gross Domestic Product (GDP) was $854.7 billion while the United Kingdom GDP was $$816 billion.

Gap between Indian and United Kingdom economy to grow :

Bloomberg expects the gap between the Indian and United Kingdom economy to grow in future.

The United Kingdom is facing the fastest inflation in four decades and rising risks of a recession that the Bank of England (Central Bank of the United Kingdom) says may last well into 2024. 

The United Kingdom economy has contracted by 0.1% in the second quarter (April-June) of 2022.

On the contrary, India's economy is likely to grow by over 7% this year and it is expected to be one of the fastest growing economies in the world. 

The International Monetary Fund (IMF)  own forecast show India overtaking the UK in dollar terms on an annual basis this year.  

A decade ago, India ranked 11th among the largest economies, while the United Kingdom was 5th.

Basis of Bloomberg calculation :

Bloomberg has used the GDP figures of both the countries from the International Monetary Fund database and converted them into US dollars using the latest exchange rate.

What is recession ?

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

Recession leads to large scale closure of factories, loss of employment, and increase in unemployment, poverty and spread in social and political unrest in the country. 

Bloomberg :

Bloomberg is an American based global media and financial data and Analytics Company. It provides data service and news to financial companies and organizations.

Its Headquarters is in New York, United States of America. 

What is the Difference between United Kingdom and Great Britain 

United Kingdom 

It is an empire consisting of England, Wales, Scotland, and Northern Ireland

 Great Britain :

It includes England, Wales and Scotland.

The Queen of England is the Head of both United Kingdom / Britain

The capital of the United Kingdom/Great Britain is London. 

By admin: Aug. 30, 2022

9. Bengaluru ranks second after Beijing in the list of top technology hubs in the Asia-Pacific region

Tags: Economy/Finance Popular

Bengaluru ranks second after Beijing in the list of top technology hubs in the Asia-Pacific region, according to a report by property consultants Cushman & Wakefield.

IMPORTANT FACTS -

  • Cushman & Wakefield's latest report titled 'Tech Cities: The Global Intersection of Talent and Real Estate' identifies technology markets based on 14 criteria related to real estate and business environment.
  • According to the report, Bengaluru, Chennai, Hyderabad and Delhi are the top technology hubs after Beijing in the Asia-Pacific region.

  • Bengaluru was the leader in India with 2,30,813 technology job creation during the last financial year. It was followed by Chennai (1,12,781 jobs), Hyderabad (1,03,032 jobs) and Delhi (89,996 jobs).

  • Globally, 46 top tech markets were identified from over 115 tech cities in total, and six of the 14 cities in the Asia Pacific region were in India.

  • Bengaluru is one of the largest contributors to office space leasing with an average share of 25-30% in annual pan-India leasing activity between 2017 -2021.

  • The technology sector accounts for an average of 38-40% of the annual leasing activity in the Bengaluru office market, which is higher than the national average of 35%.

By admin: Aug. 30, 2022

10. Nirmala Sitharaman announces 'Millet Challenge' for startups

Tags: Economy/Finance National News

Union Finance Minister Nirmala Sitharaman on August 27 announced 'Millet Challenge' for startups engaged in coarse cereals.

IMPORTANT FACTS -

  • Nirmala Sitharaman also announced Rs 25 crore funding for the University of Agricultural Sciences at Raichur, Karnataka under NABARD (National Bank for Agriculture and Rural Development).
  • This amount will be used for value addition and capacity building to promote coarse cereals and for setting up of incubation centers for coarse cereals value chain and processing.

  • She attended the Millet conclave 2022 which was held at the agricultural university, Raichur, Karnataka. 

What is the 'Millet Challenge' for startups ?

  • NITI Aayog will soon announce this challenge for startups related to coarse cereals.

  • In this, any startup providing solutions in innovative ways will be able to participate.

  • The names of the winners will be announced before December.

  • A basic grant of Rs 1 crore each will be given to three winners, Rs 20 lakh each to 15 selected candidates and Rs 10 lakh each to other 15 selected candidates.

  • The Union Finance Minister asked the major millet processing companies to focus on Karnataka to make the state a brand in this sector.

About Millets :

  • Millets are high nutrient cereal crops and are classified as small seeded grasses.

  • They include jowar (sorghum), ragi (finger millet), korra (foxtail millet), arke (kodo millet), sama (little millet), bajra (pearl millet), chena/barr (proso millet) and sanwa (barnyard millet).

  • India is one of the major producers of millets in the world with an estimated share of about 41% in the global production.

  • Major producers of millets are Rajasthan, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Haryana.

  • Millet has been notified as a nutritional cereal by the government in April 2018.

  • They are a rich source of protein, fiber, minerals, iron, and calcium and have a low glycemic index.

  • The production of millets in India has increased by 16 % to 17.26 million tonnes (MT) in the 2019-20 crop year (July-June) from 14.5 MT in 2015-16.

  • In March 2021, India led a UN General Assembly resolution to declare 2023 as the International Year of Millets.

  • India's proposal was supported by 72 countries.

  • India is the 5th largest exporter of Millets globally.