(General Awareness For Bank's Exams) Business and Economy
August - 2014

Black economy now amounts to 75% of GDP

•  Driven substantially by the higher education sector, real estate deals and mining income, India’s black economy could now be nearly three-quarters the size of its reported Gross Domestic Product (GDP).
•  There were no “reliable” estimates of black money generated in India and held within and outside the country, the government commissioned the National Institute of Public Finance and Policy (NIPFP) to estimate the black money in India and held overseas by Indians.
•  The capitation fees collected by private colleges, on management quota seats in professional courses, last year was around Rs 5,953 crore.

Two-step authentication must for credit cards: RBI

•  All transactions involving domestic credit cards must necessarily conform to additional authentication or validation process as mandated under the rules.
•  Asserting this, the Reserve Bank India (RBI) has made it clear that the two-step authentication process is a must even for ‘card not present transactions’.
•  The toughening RBI stance on two-step authentication process is primarily aimed to set right an unintended wrong arising out of the so-called customer-friendly payment model followed by certain service providers.
•  By doing so, they have managed to give the two-step authentication requirement a slip.
•  According to the RBI, however, this is resulting in foreign exchange outflow.

Plan afoot to make telcos tighten verification norms

•  The Government is planning to finalise and notify an upgraded penalty structure after its strategy of imposing fines on companies with unverified mobile phone subscribers paid marginal dividends.
•  The Department of Telecom (DoT) has been invoking licence conditions to impose penalties on companies slow in verifying whether subscribers have complied with the formalities of providing their residential address and other details.
•  The Department of Telecom has always drawn short when penalising private companies. Every year about two dozen telecom operators attract penalties for various offences but the actual money flowing to the Government Exchequer has hovered around the 15 to 20 per cent mark.
•  According to DoT, these phone companies have been unable to account for the identity and residence proofs of over 4.5 crore SIM cards. Companies should have paid heed to the country’s national security interests while competing with each other to enrol more customers.

PM announces Rs. 8,000-crore package

•  Prime Minister Narendra Modi waived off Jammu and Kashmir’s Rs. 60-crore liability towards the Food Corporation of India and announced a special Central assistance of Rs. 8,000 crore for four major road projects.
•  Listing ‘Prakash’ (energy), ‘Paryavaran’ (ecology) and ‘Paryatan’ (tourism) as development boosters the State needs, Mr. Modi said the development of J&K was a top priority for his government.
•  Mr. Modi also inaugurated two power projects — at Nemo Bazgo in Leh and at Chutak in Kargil — besides laying the foundation stone of a Rs 1,788-cr transmission line that would connect entire Ladakh region to the northern grid via Srinagar and Drass.

DoT working on modalities of BSNL-MTNL merger

•  In a bid to revive BSNL and MTNL, Department of Telecom is working on modalities to merge the two state-run telecom companies and also undertake organisational restructuring.
•  Asked if there is a timeline for the merger, the source said there is no set timeframe but it might take one to two years.
•  Minister of Communications and IT Ravishankar Prasad had also met the senior management of BSNL and MTNL recently to discuss the blueprint for reviving the loss-making PSU telecom companies.
•  The total debt of the two firms has increased to Rs. 21,208 crore at the end of June 2014.

Labour issues can’t be solved using police: HC

•  “A labour problem cannot be solved using police force,” said Justice P. Devadass of the Madras High Court, while releasing on conditional bail 167 workers arrested on the Independence Day for staging a demonstration at the KancheepuramCollectorate.
•  The judge said the arrested could not be treated as hardened criminals as they did not possess any lethal weapon.
•  The police or public or public officials were not their enemies. They were airing their grievance against the management of a company.

L&T to bid for bullet train project

•  Larsen & Toubro (L&T) is gearing up to bid for the government’s ambitious bullet train project, its Executive Chairman A. M. Naik, said.
•  He said that L&T had emerged as the lowest price bidder for the SardarVallabhbhai Patel’s Statue of Unity project in Gujarat though the contract was yet to be awarded.
•  The company is also expecting bigger opportunities from infrastructure projects, including metro rail.

5 Indian firms among Forbes’ most innovative companies

•  Five Indian companies, including Hindustan Unilever and Tata Consultancy Services, are among Forbes’ list of the world’s 100 most innovative companies that investors think are most likely to “generate big, new growth ideas“.
•  The annual ‘World’s Most Innovative Companies’ list, released, has been topped by California-based global cloud computing company Salesforce for the fourth year in a row.
•  The five Indian companies on the list are consumer goods company Hindustan Unilever, which is ranked 14th, followed by IT major Tata Consultancy Services (57), construction services firm Larsen & Toubro (58), pharma major Sun Pharma Industries (65) and Bajaj Auto (96).

RBI panel to study tax structure on financial instruments

•  The Reserve Bank of India, set up a working group to study various issues relating to taxation of financial instruments.
  The working group is expected to suggest appropriate rationalisation measures to boost private financial savings.
  It will review the current tax structure as applicable to various financial instruments issued in theIndian financial system.
  It will also identify possible ‘tax arbitrage’ among financial instruments under the extant tax structure.
  Also, it will suggest rationalisation of tax treatment across financial instruments to promote financial savings and for minimising distortions, taking into account the recommendations of earlier committees in this regard and the draft Direct Taxes Code.
•  BalbirKaur, Adviser, Department of Economic and Policy Research, Reserve Bank of India, will be the convenor of the group.
•  It is expected to submit its report within three months of its first meeting.

Tata Value ties up with Snapdeal

•  Online marketplace Snapdeal and Tata Value Homes, a subsidiary of Tata Housing with focus on affordable housing , announced partnership to enable users to buy houses online.
•  As part of the partnership, about 1,000 homes across projects in cities such as Mumbai, Pune, Ahmedabad, Bangalore and Chennai will be put up for sale on Snapdeal. These houses are priced between Rs.18 lakh and Rs.70 lakh and range from 1 BHK to 3 BHK.
•  Tata Value Homes will continue to sell through its own portal as well.
•  Upon possession of the house, customers buying the house through Snapdeal will get Rs.10,000 a month for a year as an assured rent (whether they stay on premise or lease it out) as part of the deal.
  Centre to unveil home loan scheme for transgenders
•  The Union Ministry of Housing and Urban Poverty Alleviation (HUPA) has proposed rolling out a loan assistance scheme that will for the first time help transgenders and economically weaker sections to secure home loans in urban areas.
•  The Ministry has tweaked the existing Rajiv RinnYojna (RRY), which was launched as an instrument to aid the EWS (economically weaker sections) and LIG (lower income group) segments in urban areas, through enhanced credit flow and replaced it with a new scheme that will make it easier for the economically weaker sections and minority groups to own homes.
•  The RRY launched by the UPA government with much fanfare failed to take off and funds earmarked for it lapsed.
•  The Ministry has now not only given it a new name — HOMES (Home Owners Mortgage Equity Subvention Scheme) but has also made it more attractive by enhancing the loan amount and increasing the interest subsidy from 5 per cent to 5.5 per cent on loans granted to construct houses or extend the existing ones.

Insurance Bill may be cleared by year-end

• Union Finance Minister ArunJaitley has expressed hope that Parliament will pass the Insurance Bill for raising the foreign direct investment (FDI) limit to 49 per cent by the end of this year, the first major economic reform proposed by the NarendraModi Government.
•  The UPA Government had originally proposed raising the FDI cap back in 2008 when it introduced the Insurance Laws (Amendment) Bill. However, opposition from political parties, including the BJP, did not allow the Bill to be taken up in the RajyaSabha.
•  The Modi Government introduced a fresh Insurance Laws (Amendment) Bill in Parliament earlier this month. It proposes a rider that management control rests in the hands of an Indian promoter alongside the eased FDI cap.
•  After the introduction of the Bill, the government moved 97 amendments because of which it could not be passed.

Monthly cap on LPG cylinders goes

•  The Union Cabinet lifted the restriction of one LPG cylinder per month to a domestic consumer. While households will still get only 12 cylinders in a year at subsidised rates.
•  The monthly cap has been lifted in view of complaints from consumers regarding the limited access to LPG imposed by the earlier restriction.
•  Now consumers can avail themselves of their quota of 12 cylinders at any time of the year.

Smart cards to buy milk

•  Angry customers haggling with milk-booth operators for change is a common sight.
•  Keeping this in mind and to promote cashless transactions, Delhi-NCR’s largest milk supplier, Mother Dairy, has teamed up with the State Bank of India to make everyone’s life easier with the help of a smart card.
• Higher minimum PF pension from Sept. 1
•  The minimum monthly pension of Rs. 1,000 and a higher wage ceiling of Rs. 15,000 for social security schemes run by the Employees’ Provident Fund Organisation will be implemented from September 1. It will benefit 28 lakh pensioners.
•  The government has raised the maximum sum assured under the Employees’ Deposit Linked Insurance Scheme to Rs. 3 lakh.
•  This means in case an EPFO subscriber dies, his family will be entitled to sum assured of Rs 3.6 lakh instead of existing Rs 1.56 lakh.
  Govt to increase dearness allowance to 107 p.c
•  The Government is likely to approve a hike in dearness allowance (DA) to 107 per cent from the existing 100 per cent, benefiting around 30 lakh Centre’s employees and its 50 lakh pensioners including dependents.
•  “The average rate of retail inflation for industrial workers from July 1, 2013 to June 30, 2014 works out to be 7.25 per cent. Thus the Central government will hike dearness allowance for it employees by 7 per cent,” an official said.
•  He said the Finance Ministry will now put a Cabinet proposal for approval of 7 per cent DA hike from July 1 this year as the revised Consumer Price Index-Industrial Workers data for June was released by Labour Ministry on Saturday.
•  With increase in DA, the pensioners will also gain as the benefit provided to them as dearness relief will be hiked to 107 per cent of basic pay.
•  The previous UPA government had increased DA to 100 per cent from 90 per cent with effect from January 1, 2014, on February 28 on the basis of agreed formula for revision of the allowance.
  Competition Commission of India puts Sun-Ranbaxy deal under public scrutiny
•  The Competition Commission, which has put the multi-billion dollar Sun-Ranbaxy deal for public scrutiny, said the major issue is whether the combination would result in high market concentration of certain molecules.
   

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