1. The Reserve Bank of India has increased the cash reserve ratio (CRR) for banks
Tags: National Economy/Finance Latest Popular
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The Reserve Bank of India has increased the cash reserve ratio (CRR) for banks by 0.50 percent to 4.5 percent.
On May 4, 2022, in the meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India, Reserve Bank Governor Shaktikant Das announced an increase in the CRR.
In the meeting of the Monetary Policy Committee (MPC), it was decided to increase the repo rate by 0.40 percent to 4.4 percent.
The new rates will be applicable from May 21.
What is Cash Reserve Ratio (CRR)?
CRR refers to the bank deposits that banks need to keep with the central bank in cash.
What is the repo rate?
Repo rate is the rate at which the central bank of a country (RBI in India's case) lends money to commercial banks when they are short of funds. Here the central bank buys securities.
What will be the effect of the hike in repo rate?
The increase in the repo rate by the RBI will increase the EMI of other loans like home and car loans.
An increase in the repo rate can help bring down inflation. The Reserve Bank believes that due to the costlier interest rate, the inflation rate will be controlled.
The impact of increasing the repo rate will also affect the savings bank account and FD. Banks can increase the interest rate on your savings account and fixed deposits.
2. GeM reaches all-time high of over Rs 15,000 crore for Financial Year 2021-22
Tags: National Economy/Finance
The purchase orders by the Defence Ministry through the Government e-Market (GeM) portal have reached an all-time high of Rs 15,047.98 crore for the financial year 2021-22.
This is a jump of over 250 per cent as compared to the previous financial year.
Government e-Market (GeM) portal
GeM is an acronym for One Stop Government e-Market Place hosted by DGS&D where common user goods and services can be procured.
GeM is a dynamic, self-sustaining and user-friendly portal for procurement by government officials.
Public procurement is a very important part of government activity and reform of public procurement is one of the top priorities of the present government.
The Government e-Marketplace originated in January 2016 based on the recommendations of two Groups of Secretaries.
Apart from reforms in DGS&D, they recommended setting up of a dedicated e-market for various goods and services bought or sold by the Government/PSUs.
Subsequently, the Finance Minister in his budget speech for the financial year 2016-17 announced the setting up of a technology driven platform to facilitate procurement of goods and services by various ministries and agencies of the government.
DGS&D with technical support from the National e-Governance Division (Ministry of Electronics & Information Technology) has developed a GeM portal for procurement of both products and services.
The portal was launched on 9 August 2016 by the Minister of Commerce and Industry.
3. GST Revenue collection for April 2022 highest ever at Rs 1.68 lakh crore
Tags: National Economy/Finance Popular Economics/Business
According to the data released by the Union Finance Ministry, the highest level of collection recorded since the implementation of GST in July 2017 rose to Rs 1.68 lakh crore in April.
The gross GST revenue collected in the month of April, 2022 is–
CGST is Rs 33,159 crore
SGST is Rs 41,793 crore
IGST is Rs 81,939 crore (including Rs 36,705 crore collected on import of goods).
Cess is Rs 10,649 crore (including Rs 857 crore collected on import of goods).
Gross GST collection in April 2022 is the highest ever, an increase of Rs 25,000 crore over the previous month's highest collection of Rs 1,42,095 crore.
The revenue for the month of April 2022 is 20% more than the GST revenue in the corresponding month of last year.
During April, revenues from import of goods were 30% higher and the revenues from domestic transactions were 17% higher than the revenues from during the same month last year.
4. India’s Pharma exports grow by 103% since 2013-14
Tags: National Economy/Finance
Indian pharma exports witnessed a growth of 103% since 2013-14, from Rs 90,415 crore in 2013-14 to Rs 1,83,422 crore in 2021-22.
The exports achieved in 2021-22 is the best ever export performance of the pharma sector.
This is a remarkable increase with exports increasing by about US$ 10 billion in 8 years.
The trade balance remains in India's favour with a surplus of USD 15175.81 million.
India’s Pharma industry
India is the world's third-largest pharmaceutical producer.
Indian pharma companies have made India a global mark with 60% of the world's vaccines and 20% of generic drugs.
The share of the drug in India's global exports is 5.92 percent.
Currently, more than 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical companies.
It contributes 1.5% to the Indian GDP.
India's top five pharma export destinations are the US, UK, South Africa, Russia and Nigeria.
The pharmaceutical industry in India offers 60,000 generic brands across 60 therapeutic categories.
5. Core Industries grow by 10.4% during FY 2021-22
Tags: National Economy/Finance
The cumulative growth rate of the Index of Eight Core Industries (ICI) posted robust growth of 10.4 percent during 2021-22 fiscal as compared to the corresponding period of previous Financial Year.
According to data from the Ministry of Commerce and Industry, the combined index of eight core industries rose 4.3% in March this year compared to the index for March 2021.
The growth in the production of natural gas stood at 7.6%, steel index appreciated 3.7%, cement index grew 8.8% and electricity stood at 4.9% during the month of March 2022.
Refinery Products grew 6.2% and fertiliser output grew by 15.3% in March this year.
ICI measures combined and individual performance of production in selected eight core industries viz Coal,Natural Gas, Crude Oil, Fertilisers, Refinery Products, Steel, Cement and Electricity.
The eight core industries comprise 40.27 per cent of the weight of the items included in the Index of Industrial Production (IIP).
6. Release of over Rs 2 lakh cr as GST compensation to States for FY 2020-21
Tags: National Economy/Finance Popular
The Finance Ministry has said that an amount of Rs 2 lakh 78 thousand crore has been released to the states as GST compensation for the financial year 2020-21.
The ministry has so far released 7 lakh 35 thousand crore rupees to the States including the assistance released on back-to-back basis.
Presently only Rs 78 thousand 704 crore compensation for the year 2021-22 is pending due to insufficient amount in the fund, which is equivalent to four months' compensation.
Normally, compensation for ten months of April to January of any financial year is released during that year and the compensation of February and March is released only in the next financial year.
The GST compensation for eight out of the ten months of 2021-22 has already been released to the states and the pending amount will also be released after the cess amount is deposited in the Compensation Fund.
At the time of the introduction of the Goods and Services Tax, GST, a constitutional amendment provided that Parliament would, by law, provide compensation to the States for the loss of revenue due to the introduction of the GST, for a period of five years.
7. IFSCA Issues Framework for FinTech Entity in International Financial Services Centres
Tags: Economy/Finance National News
The International Financial Services Centres Authority (IFSCA), has issued a “Framework for FinTech Entity in the IFSCs”.
The Framework aim is giving boost to the establishment of a world class FinTech Hub at GIFT IFSC comparable with other International Financial Centres (IFCs).
The framework proposes to cover financial technology (FinTech) solutions resulting in new business models, applications, processes or products in areas/activities linked to financial services regulated by IFSCA.
It covers advanced/innovative technological solutions which aid and assist activities in relation to financial products, financial services and financial institutions (TechFin).
The framework provides for a dedicated Regulatory Sandbox for FinTech products or solutions namely IFSCA FinTech Regulatory Sandbox.
8. Exports of Indian chemicals register growth of 106% in 2021-22 over 2013-14
Tags: National Economy/Finance
The export of Indian chemicals has registered a growth of 106 percent in 2021-22 as compared to the year 2013-14.
India's chemical exports for 2021-22 set a record at US$ 29296 million, while India's chemical exports stood at US$ 14210 million in 2013-14.
The growth in exports of chemicals has been driven by a jump in shipments of organic, inorganic chemicals, agrochemicals, dyes and dye intermediates, specialty chemicals.
Today the Indian chemical industry has become a global player and earns foreign exchange for the country with the "Make in India" approach.
India’s position in chemical production
India is the sixth largest producer of chemicals in the world and the third largest in Asia.
India ranks 14th position in export of chemicals.
Today India is a leader in the production of dyes and contributes 16%-18% of the world's dyestuff exports.
Indian dye is exported to more than 90 countries. India is the fourth largest producer of agrochemicals in the world and manufactures more than 50% of technical grade pesticides.
About 50% of the agrochemicals in the world are exported from India.
India is the largest producer and exporter of castor oil in the world and is responsible for almost 85-90 % of total global exports in this segment.
9. Net direct tax collection reaches highest-ever in FY 22
Tags: Economy/Finance Economics/Business
The net direct tax collections (income tax and corporate tax) reached an all time high of Rs 14.09 lakh crore in the financial year 2021-22. it was Rs 9.45 lakh crore in FY 2020-21.
The net direct tax collection has increased by 49.02 per cent during the financial year 2021-22.
an increase in direct tax collection signals that the Indian economy has bounced back after two years of the pandemic.
As far as Income Tax and Corporation Tax are concerned, the collection is the best ever.
What are Direct Taxes?
Direct tax can be defined as a tax that is paid directly by an individual or organisation to an imposing entity (usually the government).
The Central Board of Direct Taxes deals with matters relating to levy and collection of direct taxes and formulation of various policies relating to direct taxes.
A taxpayer pays direct taxes to the government for various purposes, including real wealth tax, personal wealth tax, income tax on property, gift tax, capital gains tax, etc.
Direct tax-to-GDP ratio
It is around 12%.
The Central Board of Direct Taxes (CBDT) is working to increase this ratio to 15-20% in 5-10 years.
10. India extends duration of $400 mn currency swap facility to Sri Lanka
Tags: Economy/Finance
India has expanded a currency swap facility worth $400 million to Sri Lanka, which is facing an economic crisis.
The government led by Sri Lankan President Gotabaya Rajapaksa on April 12 temporarily suspended repayment of various debts.
After that this is the first time that the loan facility has been extended to Sri Lanka.
Earlier, Sri Lanka had said that it would not be able to repay any international debt until an agreement is reached with the International Monetary Fund (IMF).
The Reserve Bank of India (RBI) had signed a currency swap agreement with the Central Bank of Sri Lanka under the SAARC Currency Swap Framework 2019-22.
Under the agreement, the Central Bank of Sri Lanka can withdraw a maximum of $ 400 million or its equivalent in US dollars, euros or Indian rupees.
What is a Currency Swap?
A currency swap is a transaction in which two parties exchange equal amounts with each other but in different currencies.
Under this, the parties essentially lend money to each other and pay the amount on a specified date and exchange rate.
Its purpose is to reduce the cost of borrowing in a foreign currency.
The parties involved in currency swaps are usually financial institutions.
SAARC currency swap facility
The SAARC currency swap facility came into operation on November 15, 2012.
It provides funding for short term foreign exchange liquidity requirements or short-term balance of payments stress.
This facility is available to all SAARC member countries, provided they sign bilateral swap agreements.
Apart from India, the other South Asian Association for Regional Cooperation (SAARC) member countries are Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
