1. Core sector output expands by 12.7% in June
Tags: Economy/Finance
According to official data the output of eight core infrastructure sectors expanded by 12.7 per cent in June against 9.4 per cent in the year-ago period.
Important facts
The output growth of eight infrastructure sectors – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity – stood at 19.3 per cent in May 2022.
Production of coal, refinery products, fertilisers, cement and electricity grew by 31.1%, 15.1%, 8.2%, 19.4% and 15.5%, respectively, in June.
Crude oil production contracted by 1.7%.
Growth in natural gas and steel production declined to 1.2% and 3.3%.
Core Sector Industries in India
The core industries have a major impact on general economic activities and industrial activities.
They significantly impact most other industries and represents the capital base of the economy.
The combined share of these eight industries in the Index of Industrial Production (IIP) is more than 40%.
These eight core sectors are - electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers.
About Index of Industrial Production (IIP)
It is an index of India that details the development of various sectors such as mineral mining, power and manufacturing in an economy.
The All India IIP is a composite indicator that measures short-term changes in the volume of production of a basket of industrial products over a given period.
Base year of IIP is 2011-2012.
NSO compiles the Index of Industrial Production (IIP) using secondary data received from 14 source agencies in various Ministries/Departments or their attached/subordinate offices.
What are Strategic Sectors?
These are -
Atomic energy, space and defence
Transport and telecommunications
Power, petroleum, coal and other minerals and
Banking, insurance and financial services
2. PM Modi inaugurates India’s first international bullion exchange at GIFT city, Gandhinagar
Tags: Economy/Finance State News
Prime Minister Narendra Modi on 29 July launched 'India International Bullion Exchange (IIBX)', the country's first international bullion exchange near Gandhinagar.
Important facts
He visited India's first International Financial Services Centre (IFSC) at the Gujarat International Finance Tec-City (GIFT City) on 29 July.
Gandhinagar’s GIFT city is an international financial services hub set up by the Gujarat government outside the State capital.
The exchange will facilitate efficient price discovery with responsible sourcing and quality assurance, besides promoting financialization of gold in India.
India is the second largest consumer of gold in the world and the establishment of IIBX is seen as India's effort to bring transparency in the market for this precious metal.
In addition, setting up of IIBX could lead to standard pricing of gold in the country and make it easier for small bullion dealers and jewellers to trade the precious metal.
India, a leading importer of bullion
India is a major importer of the metal and imported 1,069 tonnes of gold in 2021, up from 430 tonnes in 2020.
Currently, only designated banks and agencies approved by the Reserve Bank of India in the country can import gold and sell it to dealers and jewellers across the country.
Foundation stone of IFSCA
PM Modi laid the foundation stone of the headquarters building of the International Financial Services Centres Authority (IFSCA).
IFSCA is the country’s first and only IFSC in line with those in UAE, Singapore and Hong Kong.
IFSCA will support innovation and also act as a catalyst for growth opportunities in the financial services sector in the country.
3. India receives highest-ever FDI inflow in last financial year
Tags: Economy/Finance
According to the Ministry of State for Commerce and Industry India has received the highest-ever Foreign Direct Investment inflow of over six lakh 31 thousand crore rupees in the last financial year.
Important facts
The central government has formulated a liberal and transparent policy to attract foreign direct investment.
FDI equity inflow into manufacturing sectors has also increased by 76 per cent in the last financial year as compared to 2020-21 to more than one lakh 58 thousand crore rupees.
What is FDI?
Foreign direct investment or FDI is an investment made by a party of one country in a business or corporation operating in another country with the intention of earning long-term profits.
Through FDI, foreign companies are directly involved in the day-to-day operations of another country.
Routes to gets FDI in India
Foreign investment in India can be done mainly through two routes -
Automatic Route - Under this route, the non-resident investor or the Indian company does not require any approval from the Government of India for investment.
Government route - Under this route, prior to investment, approval from the Government of India is required. Proposals for foreign direct investment under this route are considered by the respective Administrative Ministry/ Department.
4. Government initiates work on consumer spending survey
Tags: Economy/Finance National News
The Centre has started the process of conducting the five-year Household Consumption Expenditure Survey (HCES) this month.
Important facts
The questionnaire for the survey has been modified to capture data on items received free of cost from welfare programs of the government.
Field work for the survey, which for the first time will involve three visits in a year to assess spending patterns in selected households, will begin soon.
The survey was last conducted in 2017-18, but its findings were not published, citing data quality concerns.
Therefore, the last official publicly available estimates on consumer spending are from the 2011-12 survey.
What is the Consumer Expenditure Survey (CES)?
CES is traditionally a quinquennial survey conducted by the government’s National Sample Survey Office (NSSO).
It is designed to collect information about consumption expenditure patterns of urban and rural households across the country.
The data collected in this survey reveals the average expenditure on goods (food and non-food) and services and helps in estimating the household Monthly per Capita Consumer Expenditure (MPCE).
The survey is conducted between July and June and this year's exercise is expected to be completed by June 2023.
Need of CES
There is no official estimate of India's per capita household expenditure.
It provides separate data sets for rural and urban areas, and different spending patterns for each state and union territory, as well as for different socio-economic groups.
It also helps to calculate the demand dynamics of the economy.
5. Rs 1.64 lakh crore revival package for BSNL gets Cabinet nod
Tags: Economy/Finance National News
In a bid to revive state-owned telecom company Bharat Sanchar Nigam Limited (BSNL), the Union Cabinet on July 27 approved a ₹1.64 lakh crore package for its revival.
Important facts
The package has a cash component of ₹43,964 crore and a non-cash component of ₹1.2 lakh crore for over four years.
The package will include administrative allotment of 4G spectrum worth ₹44,993 crore.
Bharat Broadband Network Ltd (BBNL), was set up to implement the ambitious BharatNet project, which will be merged with BSNL.
The revival package will enable BSNL to improve services and generate net profit in 3-4 years.
BSNL 5G services launch will happen in the next 1.5-2 years.
Its 4G telecom services will reach the people in 1-1.5 years.
Other key components of the package
Capex support of ₹22,471 crore
Viability gap funding of ₹13,789 crore for rural wireline operations
Debt structuring by raising of bonds with sovereign guarantee worth ₹40,399 crore
Financial support for Adjusted Gross Revenue (AGR) dues worth ₹33,404 crore.
Capex support
The Cabinet had approved the allocation of 900/1800 MHz band spectrum worth ₹ 44,993 crore to support 4G services of BSNL.
This will allow BSNL to compete in the market and provide high speed data.
The government will make a capital expenditure of ₹22,471 crore over the next four years to "promote development and deployment of self-reliant 4G stacks".
About BSNL
BSNL was incorporated on 15th september 2000.
It is a 100% Govt of India owned Public Sector Undertaking.
It is a technology-oriented integrated telecom service providing company.
It provides Wire line Services, GSM Mobile Services including 2G, 3G, 4G & Value added Services (VAS), Internet and Broadband services, Wi-Fi services, Data Centre services etc.
6. Establishment of cooperative bank run by women for the first time in Rajasthan
Tags: Economy/Finance State News
A MoU was signed between Rajasthan Rural Livelihood Development Council (Rajivika) and Streenidhi Telangana for technical assistance in the establishment of the first and country's third "Women Financial Institute" in Rajasthan.
Important facts
The MoU has been signed by Rajivika on behalf of Rajivika by State Mission Director Manju Rajpal and Telangana Managing Director of Women Fund G. Vidyasagar Reddy.
The Rajasthan Women Fund in the state is being set up successfully on the lines of the women's fund model operated in Telangana.
After the establishment of the Women's Fund, the economic empowerment of women of Rajivika's self -help groups will be strengthened and they will be able to receive loans for their enterprise.
This fund will be operated by women of SHG only for women of SHG.
The Rajasthan Women's Fund will serve as a supplementary financial institution with formal banks.
For the establishment of Rajasthan Women's Fund, a total grant of Rs 50 crore (25 crore rupees in the first year) will be given by the state government in two years and proposals have been sent to the Central Government for a grant of Rs 110 crore.
In the budget of 2022-23 by Chief Minister Ashok Gehlot, it was announced regarding the establishment of banks run by women.
It will be set up on the lines of the Stree Nidhi model of Telangana.
7. IMF cuts global growth forecasts, warns high inflation threatens recession
Tags: Economy/Finance
The International Monetary Fund (IMF) cut global growth forecasts again on July 26.
Important facts
The IMF warned that high inflation and Ukraine's war could lead to a downward spiral in economic growth and the world economy could be on the verge of recession if left unchecked.
The IMF said that global real GDP growth will slow to 3.2% in 2022 from a forecast of 3.6% issued in April.
The report said the world's GDP actually shrank in the second quarter due to slowdowns in China and Russia.
The IMF cut its 2023 growth forecast to 2.9% from the April estimate of 3.6%, citing the impact of tighter monetary policy.
Global growth has fallen below 2% only five times since 1970.
In 1973, 1981 and 1982, 2009 and 2020, global growth fell below 2% due to the COVID-19 pandemic and caused a recession.
India's growth forecast for the financial year 2023-24 has also been lowered by 0.8 percentage points to 6.1% due to rising economic risks.
India’s growth forecast by other institutions
Reserve Bank of India's (RBI) estimation of India’s growth in 2022-23 - 7.2%
Asian Development Bank's India's Growth Forecast for 2022-23 - 7.2%
About International Monetary Fund (IMF)
The International Monetary Fund (IMF), a United Nations (UN) specialised agency, was established in 1944 at the Bretton Woods Conference to secure international monetary policies.
The International Monetary Fund is an organisation with 189 member countries.
First Deputy Managing Director- Geeta Gopinath
Headquarters- Washington, D.C., U.S.
Managing Director- Kristalina Georgieva
Chief Economist - Pierre Olivier Gourinchas
8. PM to lay foundation of India's maiden International Financial Services Centre
Tags: Economy/Finance State News
Prime Minister Narendra Modi will lay the foundation stone of the International Financial Services Centre Authority (IFACA) headquarters building in Gujarat on July 29, 2022.
Important facts
This authority is the unified regulator for the development and regulation of financial products, financial services and financial institutions in International Financial Services Centres in India.
The Headquarters building of this Authority is envisaged as an iconic structure, reflecting the growing reputation and structure of Gujarat International Finance Tech as a premier international financial hub.
The Prime Minister will also launch India's first International Bullion Exchange i.e. Bharat International Bullion at Gujarat International Finance Tech- International Financial Services Centre.
About International Financial Services Centres Authority (IFSCA)
IFSCA was established in April 2020 under the International Financial Services Centre Authority Bill, 2019.
An IFSC provides essential services to customers outside the jurisdiction of the domestic economy.
Its headquarter is located in GIFT City of Gandhinagar (Gujarat).
It has been established to promote 'Ease of Doing Business' in IFSC and to provide a world class regulatory environment.
Recently the International Financial Services Centre Authority has become an associate member of the International Organisation of Securities Commissions (IOSCO).
9. Cochin Shipyard, IIM-Kozhikode Sign Agreement To Boost Start-Ups In Maritime Sector
Tags: Economy/Finance National News
Cochin Shipyard Limited (CSL) has signed an agreement with IIM, Kozhikode (IIM-K), business incubator of the Laboratory for Innovation Ventures and Entrepreneurship (LIVE) to support start-ups in the maritime sector.
Important facts
The idea of such a framework is to develop an ecosystem in India for start-ups in the maritime sector from a technical, regulatory, financial and marketing perspective.
IIM-K Executive Director Rajesh Upadhyay and CSL General Manager Dipu Surendran signed the agreement in the presence of IIM-K Director Debashish Chatterjee and CSL Chairman and Managing Director Madhu S Nair.
Under this initiative, start-ups can get Rs 50 lakh as initial grant, Rs 1 crore as prototype grant and equity funding for start-ups at scale up stage.
IIM-K will act as the implementation partner of the initiative and provide incubation, mentorship and training to the start-ups selected under the programme.
Indian Institute of Management Kozhikode
Indian Institute of Management Kozhikode (IIM Kozhikode or IIMK) is an autonomous public business school located in Calicut (Kozhikode), Kerala.
It was established in 1996 by the Government of India in collaboration with the Government of Kerala State.
It was the fifth IIM to be established in India.
Director - Debashish Chatterjee
10. Reserve Bank of India imposes restrictions on four cooperative banks
Tags: Economy/Finance
In view of the deteriorating financial condition of the four co-operative banks, the Reserve Bank of India has imposed some other restrictions including withdrawal.
Bank names on which sanctions have been imposed
Saibaba Janata Sahakari Bank in Maharashtra
The Suri Friends' Union Co-operative Bank Ltd at Suri in West Bengal
United India Co-operative Bank Limited, Uttar Pradesh
National Urban Co-operative Bank Ltd, Bahraich, Uttar Pradesh
What are the restrictions imposed by the RBI?
A depositor of Saibaba Janata Sahakari Bank cannot withdraw more than Rs 20,000 from the bank, while the withdrawal limit for Suri Friends Union Co-operative Bank has been fixed at Rs 50,000.
In the case of National Urban Co-operative Bank, the withdrawal limit has been capped at Rs 10,000 per customer.
RBI has also imposed several restrictions on United India Co-operative Bank Ltd Bijnor, including restrictions on withdrawal of funds by customers.
The directions issued by RBI to these four co-operative banks under the Banking Regulation Act, 1949 will remain in force for six months.
About Reserve Bank of India
Established on April 1, 1935 as per the provisions of the Reserve Bank of India Act, 1934.
The central office of the Reserve Bank was initially established in Calcutta but was permanently shifted to Mumbai in 1937.
In the Central Office the Governor sits and policies are formulated.
The affairs of the Reserve Bank are handled by a central board of directors.
