(General Awareness For Bank's Exams)
FDI in high-speed trains, other projects
The government is likely to allow Foreign Direct Investment in high-speed
trains and other projects including development of rail lines between
project sites and existing network.
Besides, proposing 100 per cent FDI through automatic route in the
cash-starved railway sector, the Department of Industrial Policy and
Promotion (DIPP) has also proposed to de-licence and de-reserve few areas of
However, FDI will not be allowed in train operations and safety. At present,
there is a complete ban on any kind of foreign direct investment (FDI) in
the railways sector except mass rapid transport systems.
According to the proposal, foreign investment would also be allowed in
suburban corridor, high speed train systems and dedicated freight line
projects implemented in PPP mode.
It has also suggested widening the definition of ‘infrastructure’ by
including railway line and railway sidings.
As per the proposal, foreign companies would be allowed to pick up 100 per
cent stake in the special purpose vehicle (SPV) that will construct and
maintain rail lines connecting ports, mines and industrial hubs with the
existing rail network.
First-to-last mile connectivity would mean smooth movement of raw materials
from mines to ports.
The move will help in attracting more and more FDI besides development of
infrastructure for industrial purposes.
Indian Railways has been facing a cash problem. Industrial development and
exports have been suffering on account of poor infrastructure which hampers
output and raises the cost of production.
Welcoming the development, experts said the government should come out with
clear rules for Public-Private-Partnership (PPP) projects.
Sebi’s focus areas for 2014
Looking to safeguard the interest of small investors and overall market
place, Sebi has identified a greater oversight mechanism on insider trading
and a stronger risk management framework as among key focus areas for 2014.
Sebi is currently in the process of overhauling its nearly two decade old
insider trading norms, pursuant to which those indulging in unlawful insider
trading activities would be dealt with severely.
Many new categories of persons, including public servants, regulatory
officials, judiciary and government officials dealing with unpublished
price-sensitive information are being brought under the purview of insider
At the same time, new norms would also seek to clearly differentiate between
'innocent mistakes' and genuine transactions of company executives from the
unlawful and serious trading offences.
Often, comparisons have been made between regulatory action against insider
trading in India and the US, where some high-profile cases including that of
former banker Rajat Gupta has come to light in recent months.
India's average economic growth 7.7 %
A report card titled '10 Years of Progress and Growth' highlighting
achievements of the government led by Prime Minister Manmohan Singh said
that average GDP growth rate during the period of UPA government (2004-05 to
2013-14) has been 7.7 per cent despite two global slowdown in this period.
India's average economic growth rose to 7.7 per cent in the 10-year regime
of the UPA government as compared to 6.2 per cent recorded in the previous
decade, report says.
Agriculture growth rate has been rising consistently and the sector expanded
by 2.5 per cent and 3.7 per cent during the 10th and 11th Five Year Plans,
respectively, and expected to touch 4 per cent in the ongoing 12th Plan
It further said the country's GDP at the current price has increased almost
three times to Rs 100.28 lakh crore during the last nine years from Rs 32.42
lakh crore in 2004-05.
Similarly, per capita income has risen almost three-fold during the period.
The per capita income has gone up to Rs 68,747 in 2012 from Rs 24,143 in
2004, the report card said.
Referring to large projects, it said the UPA government has expedited and
cleared as many 293 projects involving investment of Rs 5.7 lakh crore in
It said that in the last two years, 80,000 micro enterprises have been
supported by Prime Minister's Employment Generation Programme, creating job
opportunities for 9.23 lakh people.
Vodafone to buy Tata Tele Services
Vodafone is in early talks with the Tata Group to buy its controlling stake
in Tata Tele Services to create India's largest telco by subscribers.
The right of first refusal (RoFR) to the Tatas' 59.45% stake in Tata
Tele Services rests with its Japanese partner NTT Do-CoMo, which owns a
little over onefourth of the telecom company.
But if the Japanese company refuses to buy out the Tatas, the Indian partner
has the right to exercise its 'drag along' rights and force NTT DoCoMo to
sell its shares to the buyer of its choice, said two persons familiar with
If the transaction happens, the Vodafone-Tata Tele Services combine, as per
November 2013 figures, will become the country's No. 1 player in terms of
subscribers with 248 million customers, overtaking Airtel's 196 million
Norms relaxed for participation of NBFCs in Insurance JVs
Reserve Bank of India (RBI) on 28 November 2013 relaxed norms
for participation of Non-Banking Finance Companies (NBFCs) in the insurance
joint ventures by allowing them to hold more than 50 percent in such companies.
The notification of Reserve Bank of India has stated that - it has been decided
that in cases where IRDA issues calls for capital infusion into the Insurance
joint venture company, the RBI may, on a case to case basis, consider need based
relaxation of the 50 percent group limit. The relaxation will be subject to
compliance by the NBFC with all regulatory conditions. In the operation of
Insurance Company, the IRDA often requires an insurance company to expand its
capital taking into account the stipulations of the Insurance Act and the
solvency requirements of the insurance company. The restriction of a group limit
of the NBFC to 50 percent of the equity of the insurance joint venture company
prescribed in the above mentioned circular may act as a constraint for the
insurance company in meeting the requirement of IRDA.
RMS for Trade Facilitation in Export Sector Introduced
Union Finance Minister P.Chidambaram was on 13 November 2013
inaugurated the IT based Risk Management System (RMS) for the Customs clearance
of export goods at New Delhi. Government has introduced RMS to enhance trade
facilitation in export sector and to check smuggling of drugs, weapons and other
illegal substances harmful to the country. RMS will also enable the Excise and
Customs Department to enhance the level of facilitation and speed up the process
of cargo clearance. The single window system of RMS will contribute to reduce in
dwell time, by achieving the desired objective of reducing the transaction cost
in order to make the business internationally competitive. The launch of RMS in
exports covers 11 Customs stations at Bangalore, Chennai, Delhi, Hyderabad,
Mumbai, Pune and Tutocorin. It would be extended to all EDI Customs stations by
year end. Benefits are expected to accrue to the trade in terms of faster
clearances and reduced transaction costs thereby enhancing the global
competitiveness of our export goods.
Medium Manufacturing Enterprises to be included under
The Reserve Bank of India (RBI) on 26 November 2013 allowed
banks to treat loans given to medium manufacturing enterprises after 13 November
2013 as priority sector advance. RBI stated that the step has been taken to
provide enhanced liquidity support to the medium and small enterprises. The RBI
also allowed incremental bank loans to medium services enterprises extended
after 13 November 2013 to up to 100 million rupees and raised the loan limit
given to micro and small service enterprises to 100 million rupees from 50
million rupees that will be treated as priority sector advance. This facility
will remain open till 31 March 2014. Under priority sector advance, most banks
have to lend 40 percent of their loans to agriculture, micro and small
enterprises, poor people for housing, students for education and other low
income groups and weaker sectors.
NIC got approval of 75 % Innovation Fund Corpus
The National Innovation Council (NInC) on 20 November 2013
got approval of 75 percent of the 500 crore rupees initial corpus of the
upcoming India Innovation Fund (IIIF), which is an Indian model of innovation.
IIIF will have contributions from Ministry of Finance, public sector banks (PSBs)
and multilateral agencies and is being mobilized by NInC. The main objective of
IIIF is to finance Enterprises focusing on the bottom of the pyramid that is,
firms delivering goods and services to the poorest of the country. Multilateral
agency, PSBs and financial institutions already gave commitment of 375 crore
rupees and additional commitments to council, which mentioned in NInC annual
“Report of the People 2013”. The launch date not yet decided though it is in its
final stage of launching the fund. Minimum 50 percent of advances from the fund
would be to micro, small and medium enterprises (MSMEs) in the first close. The
fund will not invest more than 15 percent of the corpus in any single company to
ensure spread of investment. The fund intends to partner with public R&D
programmes and laboratories to support the commercialization and deployment of
socially relevant technologies and solutions.
The fund would be registered with Securities and Exchange of
India (SEBI). A pipeline of the potential investment prospects has been
identified. A specialised core teamis also expected to be in place before the
first closure. It is expected that the fund would be operational by the
beginning of 2014. The fund may increase eventual size of 5000 crore rupees in
the long term.
About National Innovation Council (NInC)
The National Innovation Council (NInC) was set up by the
Prime Minister under chairmanship of Sam Pitroda, an adviser to PM on public
information infrastructure and innovations (PIII). NInC will provide mutually
reinforcing policies, recommendations and methodologies to implement and boost
innovation performance in the country. The task of the National Innovation
Council include formulating Roadmap for innovation for 2010-2020 and creating
framework for evolving an Indian model of innovation, with focus on inclusive
growth, encouraging central and state governments , universities and R&D
institutions to innovate and to encourage the multi displinary and globally
competitive approaches for innovations and others. The Council will also promote
the setting up of State and Sector Innovation Councils to help implement
strategies for innovation in Stated and Specified sectors.
Provision for Higher Sugar Export announced
The Union Government of India on 15 November 2013 announced
the provision of higher sugar export with domestic production becoming surplus.
The condition of export of sugar has been relaxed by doubling
the limit of the overseas shipment that sellers can register. The export of
sugar has been doubled to 50000 tonnes from 25000 tonnes per application for
registration was announced by the Directorate General of Foreign Trade. The
sugar production of India is projected at 25 million tonnes in 2013-14, which is
two million tonnes more than the domestic demand.
Third-party payment for Export and Import Transactions
The Reserve Bank of India (RBI) on 8 November 2013 has
allowed third party payment for the export and import transactions. The
procedure relating to payments for exports or imports was liberalized taking
into account the evolving international trade procedure. Banks are allowed to
receive the payments for export of goods/software from the third party. The
order of RBI also permits the banks to make payments to the third party for
imports of goods. The third party refers to an entity other than the buyer or
the seller. The procedure was liberalised taking into account the evolving
international trade practices. However , banks would have to follow certain
conditions in case of export transaction:
Firm irrevocable order backed by a tripartite agreement
should be in place
Third party payment should come from a Financial Action
Task Force (FATF) compliant country and through the banking channel only
The exporter should declare the third party remittance in
the Export Declaration Form;
It would be responsibility of the Exporter to realize and
repatriate the export proceeds from such third party named in the EDF
Reporting of outstandings, if any, in the XOS would
continue to be shown against the name of the exporter. However, instead of
the name of the overseas buyer from where the proceeds have to be realised,
the name of the declared third party should appear in the XOS
In case of shipments being made to a country in Group II
of Restricted Cover Countries, (e.g. Sudan, Somalia, etc.), payments for the
same may be received from an Open Cover Country
The banks have been allowed to make payments for import
transactions to a third party for import of goods , subject to conditions as
Firm irrevocable purchase order / tripartite agreement
should be in place
Third party payment should be made to a Financial Action
Task Force (FATF) compliant country and through the banking channel only
The Invoice should contain a narration that the related
payment has to be made to the (named) third party
Bill of Entry should mention the name of the shipper as
also the narration that the related payment has to be made to the (named)
Importer should comply with the related extant
instructions relating to imports including those on advance payment being
made for import of goods
The amount of an import transaction eligible for third
party payment should not exceed USD 100,000. This limit will be revised as
and when considered expedient
FCNR deposit rates of Indian Bank
Indian Bank has revised interest rates on FCNR (B) term deposits with effect
from January 1.
For FCNR (B) deposits, in dollar, the revised interest rate has been fixed
at 2.58 per cent for deposits of one year and above but less than two years
(2.58 per cent existing); 2.50 per cent for two years and above but less
than 3 years (2.39 per cent); 3.87 per cent for three years and above but
less than 4 years (3.66 per cent); 4.33 per cent for four years and above
but less than 5 years (4.06 per cent) and 4.80 per cent for deposits of five
years only (4.51 per cent)
Largest corporate learning centre
Tata Consultancy Services (TCS), country's largest software services firm,
will set up the world's largest corporate learning and development centre in
Thiruvananthapuram with a total capacity to train 50,000 professionals every
Prime Minister Manmohan Singh laid the foundation stone for the facility.
The learning facility will be built over area of 6.1 million square feet and
will have the capacity to train 15,000 professionals at one time and 50,000
professionals annually, TCS said in a statement.
Located on a 97-acre property in the Technopark area of the city, the campus
will also have residential accommodation for professionals and faculty at
The TCS Learning Campus will be the new benchmark for corporate learning
worldwide and this iconic facility will produce world class professionals to
meet the future needs of the IT industry.
The project will provide direct employment to over 2,000 skilled and
unskilled local people for a period of 4 years.
FDI in e-commerce
Expediting its efforts to further relax foreign direct investment (FDI)
policy regime, the government has circulated discussion paper on FDI in
e-commerce among stakeholders, aiming to usher in the reform before the Lok
While debating as to whether FDI in e-commerce should be allowed at all, the
discussion paper has sought views on the FDI cap in the sector and listed
out the merits and demerits of the move.
Presenting both 51 per cent or 100 per cent cap scenario on the FDI in the
sector, the paper has raised sticky questions including whether the
"existing retail stores get displaced due to e-commerce".
At present, 100 per cent FDI is allowed in business-to-business e-commerce,
while business-to-consumer is prohibited.
The government allowed 51 per cent FDI in the multi-brand retail trading (MBRT)
in September 2012, with riders including mandatory investment of a minimum
50 per cent towards back-end infrastructure and compulsory 30 per cent
sourcing from SMEs.
Another important issue raised in the paper is geographical restriction for
e-commerce, as applicable in the FDI policy for MBRT. According to the
policy for MBRT, states have been empowered to take decision on notification
of towns and cities with population of more than 10 lakh as per 2011 census.
At present, 12 states including Andhra Pradesh, Assam, Delhi, Haryana, J&K,
Maharashtra, Manipur, Rajasthan, and Uttarakhand allow FDI in multi-brand
Usage of Bitcoin
The Reserve Bank of India (RBI) has cautioned users, holders and traders of
virtual currencies (VC) like Bitcoin, Litecoin, BBQcoin and Dogecoin and is
examining the legal and regulatory framework of VCs. In a press release, RBI
stated that Bitcoin and other VCs are exposed to potential financial,
operational, legal, customer protection and securityrelated risks.
According to RBI , the creation, trading or usage of VC including Bitcoin,
as a medium for payment, are not authorised by any central bank or monetary
authority. No regulatory approvals, registration or authorisation is stated
to have been obtained by the entities concerned for carrying on such
Bitcoin was created to solve the mathematical solution to double-counting
but it grew into an alternate currency system altogether; its value has
skyrocketed as more and more people, investors and enthusiasts jumped onto
the bandwagon and started transacting in the virtual currency.
A committee on comprehensive financial services for small businesses and
low-income households, set up by the Reserve Bank of India (RBI), has
suggested that each low-income household and small business should be
provided with convenient access to formally regulated lenders who have the
ability to assess and meet their credit needs and offer a full-range of
suitable credit products at an affordable price.
The committee, headed by Nachiket Mor, Central Board Member of the RBI,
submitted its report and has set January 1, 2016, as the deadline for
By that date, each district and every significant sector (and sub-sector) of
the economy would have a credit to GDP ratio of at least 10 per cent. This
ratio would increase every year by 10 per cent.
The committee was hopeful that by January 1, 2016, each district would have
a total deposits and investments to GDP ratio of at least 15 per cent.
On priority sector, the committee recommended adjusted priority sector
lending target of 50 per cent against the current requirement of 40 per cent
with sectoral and regional weightage based on the level of difficulty in
lending. It also recommended risks and liquidity transfers through markets.
``In view of the fact that banks may choose to focus their priority sector
strategies on different customer segments and asset classes,’’ the committee
recommended the regulator to provide specific guidance on differential
provisioning norms at the level of each asset class.
ONGC Videsh-Oil India’s Videocon stake
ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) have completed the acquisition
of Videocon Group's 10 per cent stake in a giant Mozambique gas field for
USD 2.475 billion.
OVL, the overseas arm of state-run explorer Oil & Natural Gas Corp, and OIL
agreed in June last year to jointly buy Videocon's 10 per cent interest in
the Rovuma Area 1 for USD 2.475 billion.
Additionally, OVL bought US energy major Anadarko Petroleum's 10 per cent
stake in the same block for USD 2.64 billion.
Payments to Videocon to close the deal were made yesterday, the companies
said in separate, almost identical statements. OVL will pay Anadarko before
OVL raised about USD 1.5 billion in one-year bridge loans from foreign
lenders, while OIL borrowed USD 900 million to fund their respective share
of payments to Videocon.
The 10 per cent stake will be split in a 60:40 ratio between OVL and OIL.
The two firms had signed definitive agreements with Videocon Mauritius
Energy on June 25 to acquire the stake in the gas field.
The partners in Area 1 include Anadarko, the operator of the project, ENH
(the national oil company of Mozambique), Mitsui, BPRL (a unit of Bharat
Petroleum Corp Ltd) and Thailand's PTT Exploration and Production.
stock markets were muted amid concern an improved U.S. economy might prompt the
Federal Reserve to reduce its stimulus faster than previously expected.
rose as expectations of greater heating oil demand in chilly North America
offset signs of weak gasoline demand.
survey that showed U.S. employment increased in December prompted concern the
Fed might accelerate the process of winding down bond buying that has supported
stock prices. The Fed has been buying $85 billion of bonds a month in a strategy
dubbed quantitative easing, or QE, but said in December it will trim that by $10
billion to $75 billion beginning this month.
Europe, France’s CAC 40 gained 0.1 to 4,264.02 while Germany’s DAX dropped 0.1
per cent to 9,491.49. Britain’s FTSE 100 was steady at 6,720.99.
Nikkei 225 shed 1.5 per cent to 15,880.3 and China’s benchmark Shanghai
Composite Index fell 0.8 per cent to 2,027.62. Hong Kong’s Hang Seng dropped 0.9
per cent to 22,787.33.
in Asia, Taiwan’s Taiex was down 0.5 per cent and Seoul’s Kospi fell 0.7 per
cent. Sydney’s S&P/ASX 200 added 0.2 per cent to 5,324.40.
the United States, payroll processor ADP said companies added 238,000 jobs in
the U.S. in December, up slightly from 229,000 in the previous month. November’s
figures were also revised higher.
100% FDI limit in pharma
government decided to retain 100% foreign direct investments (FDI) for existing
pharmaceutical companies setting aside the speculation that the limit, if not
curbed could eventually encourage a hike in cost of medicines.
in the pharmaceutical sector jumped by 86.5% to $1.08 billion during
April-October period of the current fiscal amid concerns over continuous mergers
and acquisitions of domestic drug makers by multinationals.
the past one year, a number of multinational companies have tried to acquire
Indian pharmaceutical companies leading to fears that these companies will stop
producing essential and generic drugs in the country that will result in
increase in the cost of medicines.
had allowed 100% FDI in the pharma sector through the automatic approval route
its proposal, the Department of Industrial Policy and Promotion (DIPP) had said
that the acquisition of Indian pharma companies will severely impact
availability and affordability of generic medicines in the country and
recommended a reduction in the FDI cap to 49% from 100% in rare or critical
pharma verticals. In September 2013, the government cleared the US based Mylan’s
Global food prices drop
Global food prices fell 1.6 per cent in 2013 as large supplies pushed down
international prices of commodities such as oils, sugar and cereals,
according to United Nations food agency FAO.
"Over the full 2013 year, the Index averaged 209.9 points, down 1.6 per
cent, from 2012, but still the third highest annual value on record." as per
the Food and Agriculture Organisation (FAO) price index.
The FAO price index measures monthly price changes for a basket of cereals,
oilseeds, dairy products, meat and sugar.
India slips in business optimism
India has slipped to eighth rank from the top spot in terms of business
optimism, with 69% of the corporates having a positive outlook on the
economy and growth of operations in 2014, says a survey.
India has ranked eighth in the list which was topped by United Arab Emirates
and Philippines, where 90% of businesses said they are optimistic about
growth and the economy, followed by Peru at 84%, according to Grant
Thornton's International Business Report (IBR).
IBR is a survey of both listed and privately held businesses. The data was
drawn from interviews with 3,500 senior executives across industry sectors
and was conducted between November and December 2013.
With strong sentiment for change in the recent state elections and decisive
actions by the RBI/government in last few months, it's easy to see how
medium to large businesses in India are more optimistic about the outlook
for the economy in the coming months, Chandiok added.
Moreover, the appointment of Raghuram Rajan as the governor of Reserve Bank
of India seems to have steadied the economy and provided the much-needed
confidence to Indian businesses, the report said.
According to the report, 90% of Indian businesses believe their revenues
would rise in 2014 while 76% are most optimistic for increasing
profitability this year. Around 35% of businesses are also hoping to witness
a jump in exports.
Research and Development (R&D) initiatives are also likely to get a boost
this year with 46% businesses betting big on R&D. About 65% businesses
foresee a rise in employment in 2014.
RBI buying dollars in spot market & selling it in forward market to stabilise
The Reserve Bank of India, under Governor Raghuram Rajan, seems to have
changed its strategy when it comes to defending the fragile rupee and
The central bank, which earlier used to sell dollars in the local markets,
is now increasingly buying the US currency in the spot market and selling it
in the forward market. The revised strategy seems to be having a bearing on
the non-deliverable forwards, or NDF, market.
The move, experts say, is aimed at not only stabilising the local currency
but also managing liquidity, as there was a surge in inflows after banks
were allowed to swap Foreign Currency (Non-Resident) Accounts (Banks), or
FCNR (B), proceeds for a premium.
Sebi tightens norms
Tightening norms for issue of participatory notes (P-Notes) by overseas
investors, Sebi has barred "unregulated" foreign funds from dealing in
offshore derivative instruments even if their investment managers are
appropriately regulated by their concerned regulators.
The guidelines, which are part of the newly notified Foreign Portfolio
Investor (FPI) Regulations, have come into force with immediate effect. They
provide for stricter oversight of P-Notes, the preferred route for overseas
high net worth individuals (HNIs) and hedge funds for investing in the
Earlier, according to the draft regulations by the Securities and Exchange
Board of India, it had been proposed that only 'Category-III,' or high-risk
foreign investors, would be barred from issuing P-Notes.
However, the gazette notification that brought the FPI guidelines into force
also prohibits certain entities under 'Category-II,' or medium-risk
investors, from issuing P-Notes.
P-Notes, or offshore derivative instruments, are mostly used by overseas
HNIs, hedge funds and other foreign institutions to invest in Indian markets
through registered foreign institutional investors (FIIs), while saving on
time and costs associated with direct registrations.
The new FPI regime has classified foreign investors into three groups based
on their risk profile and would eventually replace existing categories such
as FIIs, their sub-accounts and qualified foreign investors.
Category-I FPIs, entities with the lowest risk, would include foreign
governments and government-related foreign investors.
Category-II FPIs would include appropriately regulated broad-based funds,
university funds, university-related endowments and pension funds, among
Category-III FPIs would include all others not eligible under the first two
All-time high food grain production expected this year
Agriculture Minister Sharad Pawar said that the country's foodgrain
production this year is likely to surpass the previous record of 259.29
million tonnes achieved in the 2011-12 crop year.
The data regarding sowing of rabi (winter) crops like wheat is very
encouraging according to reports.
The country had a record foodgrain production of 259.29 million tonnes in
2011-12 crop year (July-June). However, the output fell marginally to 255.36
million tonnes in the next year due to drought in some parts.
This year, good monsoon has improved sowing of both kharif (summer) and rabi
(winter) crops, thereby boosting prospects of record foodgrains production.
E-auctioning of iron ore
The Goa government has set in motion the process to e-auction around 15
million metric tonne of iron ore currently stacked at jetties, leases,
stock-yards and beneficiation plants across the state’s mining belt.
Director of Mines and Geology Prasanna Acharya has issued the notification
for e-auctioning, which is scheduled to take place next month.
The Supreme Court while hearing a petition in the Goa illegal mining case
had allowed online auctioning of the ore, and money collected from the
process would be deposited in a separate account till the case is disposed
The Department issued the notice inviting applications from prospective
bidders to participate in e-auctioning of extracted ore in Goa.
As per the estimates by state government, approximately 15 million metric
tonne of ore is lying unused at jetties, leases, stockyards and
As per the notification, the companies participating in the auctioning
process get themselves registered with the Indian Bureau of Mines (IBM).
India's growth will be over 6% in 2014-15: World Bank
The World Bank has projected India's economy will grow over 6 per cent in
2014-15 and 7.1 per cent by 2016-17 as global demand recovers and domestic
In China, growth is estimated to stay flat in 2014 at 7.7 per cent, slowing
to 7.5 per cent for the next two years, reflecting deleveraging and less
reliance on policy-induced investment.
Global GDP growth may firm up to 3.2 per cent this year from 2.4 per cent in
2013, stabilising at 3.4 per cent and 3.5 per cent in 2015 and 2016,
respectively, the World Bank said in its Global Economic Prospects (GEP)
Incentives for raw sugar production
India will consider providing incentives for production of raw sugar up to 4
million tonnes for exports in the next cabinet meeting, Food Minister K V
Thomas said, as part of efforts by the world's second-biggest producer to
stop adding to massive mounds of the refined grade which are piling up
because of low prices.
A group ministers under the chairmanship of Farm Minister Sharad Pawar
revived the proposal to be placed before the cabinet, but haven't decided
about the quantum of incentives yet.
Indian mills traditionally produce white sugar but a global glut has made
exports difficult. A rise in sugar refining capacity in Asia and Africa has
now given an opportunity to export raws. Exports of raws from India, the
world's biggest consumer of sugar, will eat into the share of top suppliers
Brazil and Thailand. Extra supplies could also put further pressure on
benchmark prices in New York, which are hovering around a 3-1/2-year low in
an oversupplied world market.
RBI reference rate
The Reserve Bank of India fixed the reference rate of rupee against U.S.
dollar at 61.3518 and the euro at 83.5223 as against 61.5325 and 83.8395.
In a press release issued by RBI, the exchange rates for the pound and yen
against the rupee were quoted at 100.2120 and 58.78 per 100 yen, based on
reference rates for the dollar and cross-currency quotes at noon.
The reference rate is based on the noon rates of select banks here and the
SDR-Rupee rate would be based on this rate.
Banks to Charge customers on actual usage of SMS alerts
The Reserve Bank of India (RBI) on 26 November 2013 directed
the banks to charge customers for the transaction SMS alerts on the basis of
usage, instead of imposing a fixed fee. The RBI in its notification issued to
banks has asked the banks to charge customers based on actual usage of SMS
alerts, considering the technology available with banks to considering the
technology available with banks and the telecom service
The notification has been done to ensure reasonableness and
equity in the charges levied by banks for sending SMS alerts to customers. In
its second quarter review of monetary policy 2013-14, the RBI had advised
banks to charge for SMS alerts on usage basis. Earlier, the Reserve Bank of
India had set the guidelines for banks to send online alerts to the customers
for all types of transactions, irrespective of the amount in March
Sale of 5 kg LPG cylinders extended to petrol pumps
The Government of India on 4 November 2013 decided to extend
the sale of the non-subsidized 5 kg cooking gas (LPG) cylinders at petrol pumps
across the country. The proposal to extend the scope of the scheme was approved
by M. Veerappa Moily, the Union Minister of Petroleum and Natural Gas.Earlier,
the scheme was in operation in Mumbai, Kolkata, Chennai and Bengaluru. The
scheme was launched on 5 October 2013 by
Moily in Bangalore for sale in selected company owned and company operated
petrol pumps in the four cities. The cylinders will be sold at market rates. The
scheme will be delayed in poll bounding states like Delhi, Madhya Pradesh and
Chhattisgarh. The scheme has allowed to sale the 5 kg LPG cylinders with just
proof of Identity through Petrol Stations to students, IT professional, BPO
employees and people with odd duty timings. As per the decision, the sale of the
cylinders would be done with or without regulator for the first time. The
cylinders will be charged 1000 rupees and the regulator will be available at 250
rupees. Whereas, the cost of refills of the LPG will be as per to the
non-domestic rates applicable in the market. A 5 kg is sold at about 340 to 350
Refinance window for the MSME extended to 5000 crore
The Reserve Bank of India on 18 November 2013 opened a 5000
crore rupees refinance window for MSME sector, for a period of one year to ease
the liquidity. The view of easing the liquidity stress to the Micro and Small
Enterprises sector was taken by the RBI to provide refinance to the small
Industrial Development Bank of India. Basically the Micro and Small Enterprises
sector is employment intensive and contributes significantly to exports. At
present, the slowdown in the economy has resulted in the liquidity tightness in
the MSEs in the manufacturing and services sector raising the need of liquidity
support. The availability of the refinance facility will be till 13 November
Women SHGs to get Banks loans at 7 percent
The Reserve Bank of India (RBI) on 19 November 2013 directed
Public Sector Banks (PSBs) to provide loans to women self-help groups (SHGs) at
7 per cent per annum to avail the benefit of interest rate subvention scheme
under the Swarnajayanti Gram Swarozgar Yojana-Aajeevika (SGSY) scheme.
Salient features of RBI Notification
All women SHGs will be eligible for interest subvention
to avail the credit upto 3 lakh Rupees at 7 per cent per annum.
PSBs will be subvented to the extent of difference
between the Weighted Average Interest charged and 7 per cent subject to the
maximum limit of 5.5 per cent, for the FY-2014.
This subvention will be available to all the PSBs on the
condition that they make SHG credit available at 7 per cent in the 150
The Regional Rural Banks (RRBs) will be subvented to the
extent of difference between the lending rates and 7 per cent for the
FY-2014 on the condition they make SHG credit available at 7 per cent.
SHGs will be given an additional 3 per cent subvention on
prompt repayment of loan.
Swarnajayanti Gram Swarozgar Yojana-Aajeevika (SGSY) is an
initiative by the government to provide sustainable income to poor people living
in rural areas of the country.
About Interest Rate subvention concept
Interest Rate subvention is a subsidy of interest given by
Government to certain sectors like Textiles, Agriculture etc. For eg. Textile
Company borrows from Bank at 10 percent and Government gives subvention of 2
percent. Hence net bank takes interest from textiles companies 8 percent. Other
sectors have to pay 10 percent to the bank.
Foreign banks subsidiaries permitted to acquire domestic
The Reserve Bank of India (RBI) on 6 November 2013 permitted
the Wholly Owned Subsidiaries (WOS) of the foreign banks to acquire the domestic
private sector banks. RBI also permitted the banks to set up
branches anywhere in the country. As per the permission given by RBI, the
foreign banks will have to seek permission of RBI to open branches in certain
sensitive locations. The foreign bank subsidiaries have also
been allowed to list on the local stock exchanges. Although, they will not be
allowed to hold more than 74 percent in the private banks they may acquire. The
order of the RBI also stated that the foreign banks that
commenced banking business in India before August 2010 will be given an
opportunity to convert into a wholly owned subsidiary.
Key features of the Framework
Banks with complex structures, also the banks which do
not provide adequate disclosure in their home jurisdiction, as well as the
banks which are not widely held and banks from jurisdictions having
legislation giving a preferential claim to depositors of home country in a
winding up proceedings, would be mandated entry into India only in the WOS
Foreign banks in whose case the above conditions do not
apply can opt for a branch or WOS form of presence.
A foreign bank opting for branch form of presence shall
convert into a WOS as and when the above conditions become applicable to it
or it becomes systemically important on account of its balance sheet size in
Foreign banks, which commenced banking business in India
before August 2010 shall have the option to continue their banking business
through the branch mode. However, they will be incentivised to convert into
WOS because of the attractiveness of the near national treatment afforded to
To prevent domination by foreign banks, restrictions
would be placed on further entry of new WOSs of foreign banks/ capital
infusion, when the capital and reserves of the WOSs and foreign bank
branches in India exceed 20 per cent of the capital and reserves of the
The initial minimum paid-up voting equity capital for a
WOS shall be ‘ 5 billion for new entrants. Existing branches of foreign
banks desiring to convert into WOS shall have a minimum net worth of 5
The parent of the WOS would be required to issue a letter
of comfort to the RBI for meeting the liabilities of the WOS.
(i) Not less than two-third of the directors should be non
(ii) A minimum of one-third of the directors should be
independent of the management of the subsidiary in India, its parent or
(iii) Not less than fifty percent of the directors should be
Indian nationals /NRIs/PIOs subject to the condition that not less than 1/3rd of
the directors are Indian nationals resident in India
The branch expansion guidelines as applicable to domestic
scheduled commercial banks would generally be applicable to WOSs of foreign
banks except that they will require prior approval of RBI for opening
branches at certain locations that are sensitive from the perspective of
Priority Sector lending requirement would be 40 per cent
for WOS like domestic scheduled commercial banks with adequate transition
period for existing foreign bank branches converting into WOS.
On arm’s length basis, WOS would be permitted to use
parental guarantee/ credit rating only for the purpose of providing
custodial services and for their international operations. However, WOS
should not provide counter guarantee to its parent for such support.
WOSs may, at their option, dilute their stake to 74 per
cent or less in accordance with the existing FDI policy. In the event of
dilution, they will have to list themselves.
Definition of Infrastructure lending Sub Category widened
Reserve Bank of India on 25 November 2013 widened the
definition of infrastructure lending sub category in a bid to expedite Projects.
In a notification issued by RBI, it has stated that new sub-sectors that have
been added in the list will include hotels with project cost of more than 200
crore rupees bring built anywhere in India and of any star rating. The list will
also include convention centres with project cost of more than 300 crore rupees.
RBI also stated that the new sub-sectors will get classified as ‘infrastructure’
for the purpose of lending by banks and select All India Term-Lending and
Refinancing Institutions. Various sub-sectors under the categories such as
Transport, Energy,Water & Sanitation, Communication, Social and Commercial
Infrastructure come under infrastructure lending. Hotel and convention centre
come under ‘Social and Commercial
Infrastructure’ category for this kind of lending.
Bharatiya Mahila Bank launched
Prime Minister Dr. Manmohan Singh and UPA Chairperson, Sonia
Gandhi Jointly inaugurated India’s first all-women bank, Bharatiya Mahila Bank
in Mumbai on 19 November 2013,marking the birth anniversary of former Prime
Minister Indira Gandhi. The main objectives of the bank will be to focus on the
banking needs of women and to promote their economic empowerment. The bank will
commence operations with an initial capital of one thousand crore rupees.
The Union Government on 12 November 2013 appointed Usha
Ananthasubramanian as the first chairperson and managing director of public
sector Bharatiya Mahila Bank (BMB).
About Bharatiya Mahila Bank
1. The Mahila bank aims to service women and women-run
businesses, support women’s self-help groups and their livelihoods and promote
further financial inclusion.
2. An only-for-women bank first time in India.
3. Bhartiya Mahila Bank will be a universal bank and will
provide every banking service and facility that is provided by comparable Public
and Private sector banks. It will establish branches all over the country and,
in due course, some branches in abroad.
4. The Union Cabinet cleared the proposal for setting up of
all women bank on August 2013.
5. The Reserve Bank of India gave its in-principal approval
for the Bharatiya Mahila Bank in June 2013 and the banking company was set
6. The Union government approved 1000 crore Rupees seed
capital for the women focused public sector bank announced by Union finance
minister P. Chidambaram in his 2013-14 budget speech.
Continuation of Agriculture Export Plan of APEDA approved
The Cabinet Committee on Economic Affairs (CCEA) on 25
November 2013 approved the continuation of the Agriculture Export Promotion Plan
Scheme of the Agricultural and Processed Food Products Export Development
Authority (APEDA) during 12th Plan Period (2012-13 to 2016-17). It was a
proposal of the Ministry of Commerce and Industry for APEDA with four components
namely infrastructure development, transport assistance, market development and
quality development. The CCEA meeting was chaired by Prime Minister of India,
Manmohan Singh. The outlay of the scheme will be 1100 crore rupees during the
Poll outcome could impact growth prospects
Global ratings agency Moody’s said India’s economic recovery is likely to be
slow in the second half of 2014, but the outcome of general elections could
have an impact on the growth prospects.
Without specifically mentioning about India, Moody’s Investors Service also
said that sovereign ratings in South and Southeast Asia will be largely
stable in 2014.
This, the agency said, reflects its expectation that global growth prospects
will improve while global risks will decline.
General elections are scheduled to be completed by May-end.
The World Bank has projected that India’s economy will grow at over 6 per
cent in 2014-15 and 7.1 per cent by 2016-17 as global demands recovers and
domestic investment increases.
India’s economic growth slipped to a decade’s low of 5 per cent in 2012-13.
Growth in the first half of 2013-14 is 4.6 per cent, but the government
expects the growth for the entire fiscal ending March 2014 to be at 5 per
cent. A further pick up is also expected in the coming months.
Moody’s further said the structure of India’s government debt — which is
owed mostly domestically, in domestic currency, at relatively low real
rates, and at relatively long tenors — has mitigated stress on the
government’s fiscal position.
RBI to ease liquidity
The Reserve Bank of India (RBI) has decided to ease the liquidity conditions
by purchasing Rs 10,000 crore of government securities under Open Market
Operations (OMOs) on January 22. This would be the first OMO auction since
the last two months.
Lately, the liquidity conditions had tightened in absence of government
spending. For current financial year, the government aims to contain fiscal
deficit at 4.8% as strongly emphasized by the finance minister, P
Chidambaram, recently. This may lead to cuts in planned expenditure as was
the case last financial year when the government managed to keep fiscal
deficit was at 4.9% of gross domestic product.
According to RBI, there has been a build-up of government’s cash balances
which may not be utilized in order to meet the fiscal deficit target for
this financial year too. This would, in turn, impact credit growth.
The government’s cash balance with RBI shot up to around Rs 51,000 crore in
December owing to advance tax collections. The central bank has been
conducting 7-days, 14-days and 28-days term repo auctions in order to
address the liquidity crunch.
The central bank has projected credit growth of 15% and deposit growth of
14% for the current financial year. So far, banks have been able to clock
9.4% of growth in advances and 11.1% in deposits since the start of this
Liberalising the export-import payment norms, the Reserve Bank has extended
the time limit to complete such transactions to nine months from six months
India Inc beats Street hollow
Several heavyweights like L&T and HDFC are yet to come out with their third
quarter report card, but the Street is already on fire as Tata Consultancy,
Reliance Industries, Infosys and Bajaj Auto, which are some of the firms
that announced their results in the week gone by, surprised the Street on
the positive in the third quarter.
Brokerages are all gung-ho about the results, and have upgraded their target
prices on these stocks.
Experts say RIL is likely to rally up to 3% after the oil and gas major
reported profit after tax at Rs 5,510 crore.
The Street was expecting a drop in Reliance Industries' profit due to
worries over falling gas production and refining & petchem margins.
Experts are seeing the stock crossing Rs 1,000 level in the medium term.
Talking of TCS, it beat analyst expectations with an astonishing 50.3 per
cent jump in third-quarter profit, though sales at home played spoilsport
The country's largest IT services exporter reported a profit after tax of Rs
5,333 crore for the third quarter.
Credit Suisse has raised its target for a 12-month period to 2,750 from
Among other brokerage firms that have raised their target price on the stock
are CLSA, BofA-ML, Jefferies, Nomura, CItigroup and JPMOrgan. This upping of
the TP was post Q3 results.
CBM gas production
Reliance Industries Ltd (RIL) plans to start production of natural gas from
coal seams, called coal-bed methane (CBM), in Madhya Pradesh from 2015-16.
In a presentation to analysts post Q3 earnings announcement, RIL said first
gas from its Sohagpur CBM blocks in Madhya Pradesh is "targeted by FY16."
It plans to produce 3.5 million standard cubic meters per day of gas from
the two Sohagpur blocks.
RIL holds 3 CBM blocks -- Sohagpur (East) and Sohagpur (West) in Madhya
Pradesh and Sonhat in Chattisgarh. RIL has drilled over 40 crore holes on
the 500 square kilometer
The process for acquiring land for well sites, market assessment &
infrastructure for evacuation and transportation of gas has commenced.
The pipeline will have a capacity to transport 4.3 million standard cubic
metres per day (mmscmd) of gas, including 0.875 mmscmd capacity that will be
available for any third party for open access on non-discriminatory basis.
The pipeline will travel from Shahdol to JaysingNagar-Beohari- Gurh and
culminate at Phulpur.
China grows 7.7 per cent in 2013
China's economy grew 7.7 per cent in 2013, the lowest in 14 years, with
tapering growth in the last quarter underlining the challenges faced by the
world's second-largest economy as it grapples with rebalancing and reviving
a slowing down economy.
This marks the slowest growth since 1999, when China grew 7.6 per cent. The
previous decade saw record double-digit growth, with the country defying the
global slowdown to grow 10.4 per cent in 2010 as it unveiled a massive $ 586
Growth slowed in the fourth quarter to 7.7 per cent, down from 7.8 per cent
in the previous quarter. This brought annual growth to 7.7 per cent, down
from last year's 7.8 per cent.
Ma Jiantang, head of the National Bureau of Statistics (NBS), attributed the
slower growth to a “complex and severe situation” at home and abroad, as he
announced last year's data.
Data showed the government had made modest progress in its goal of
transforming the State-led investment model and boosting domestic
consumption, services and innovation industries.
RBI standardises gold loan norms
Reserve Bank of India (RBI), on Monday, said that it had been decided to
prescribe a loan-to-value (LTV) ratio of not exceeding 75 per cent for banks’
lending against gold jewellery, including bullet-repayment loans against pledge
of gold jewellery.
henceforth loans sanctioned by banks should not exceed 75 per cent of the value
of gold ornaments and jewellery,” the RBI said in a notification to all banks.
it has been decided that gold jewellery accepted as security / collateral will
have to be valued at the average of the closing price of 22 carat gold for the
preceding 30 days as quoted by the India Bullion and Jewellers Association Ltd.
[Formerly known as the Bombay Bullion Association Ltd. (BBA)].
central bank reiterated that banks should continue to observe necessary and
usual safeguards, and also have a suitable policy for lending against gold jewellery with the approval of their boards of directors.
MCX-SX starts Interest Rate Futures
The MCX Stock Exchange (MCX-SX), on Monday, started live trading in cash-settled
Interest Rate Futures (IRF) in its Currency Derivatives Segment, which witnessed
a turnover of Rs.928.39 crore.
the first to trade on the product were IDBI Bank and ICICI Securities Primary
Dealership Ltd from the institutional side and the East India Securities Ltd
from the intermediary side.
product witnessed turnover of Rs.928.39 crore on the exchange, with total traded
volume at 45,642 lots. At the end of trading day, the Open Interest (OI)
position stood at 10,690 lots,” MCX-SX said in a release.
Banks in India seek refuge
Mortgage lender Housing Development Finance Corp Ltd loved by global
investors for its steady profit growth, faces an intensifying battle for
business and market share as banks aggressively push home loans.
With India's economic flu hitting corporate lending, banks have cranked up
efforts to tap into the country's housing loan demand, which has proven to
be brick-hard by comparison.
Demand for homes, and loans, has been stoked by a persisting housing
shortage as long-term demographic changes - urbanisation, rising incomes,
more nuclear families - transform how and where people live in Asia's
With their eyes on the prize, banks such as state-run Bank of India (BOI) (BOI.NS)
and ICICI Bank (ICBK.NS), the biggest private sector lender, are swarming
the market with discounts and special offers, willing to even live with
Airline fare war
Consumers flying between now and April 15 — typically a lean period for
airlines — can save on bookings made till midnight on January 23. Hours
after SpiceJet announced a three-day super sale of air tickets, offering a
50% discount to spot fares, Air India, IndiGo, GoAir followed suit, with Jet
Airways expected to do the same.
Amber Dubey, partner and head for aerospace and defence at KPMG, said the
offer would help stimulate demand in a lean quarter.
Among the offers, SpiceJet has offered 50% off on limited seats on all
direct flights when booked at least 30 days prior to travel. Meanwhile,
GoAir has also slashed prices by 40-50% with the discount depending on
whether bookings are made 30 days or 60 days prior to travel.
Pause in interest rates
WPI headline inflation for December was down to 6.2% from 7.5% in November,
and core inflation was marginally up at 2.8% from 2.7% in November. CPI
inflation for December printed 9.9%, down from 11.2%, and core-CPI
(excluding food and fuel) was at 7.9%, marginally down from 8%.
A machine responding to these inflation data, based on the rules laid down
in the RBI Governor’s December Policy Reaction Function (PRF), would have
if the expected softening of food inflation does not materialise and
translate into a significant reduction in headline inflation,
if inflation excluding food and fuel does not fall (presumably both for WPI
and CPI), the Reserve Bank will act, including on off-policy dates if
But the actual decision might be more complicated.
In addition, estimates of conceptual constructs like a neutral rate or
potential output gap remains subject to measurement and model errors.
At the heart of the decision, once again, will be the role of interest rates
both in reviving investment and in anchoring inflation expectations. Growth
concerns remain, particularly given the stress in banking sector assets.
Overlaid on these concerns will be the view on inflation trajectory in 2014,
given the long lags for monetary transmission.
Earlier, it seemed likely that the repo rate, at 7.75%, would allow RBI to
pause for the rest of FY14 and then take a call in April or after, depending
on how recovery shaped out in FY15.
WEF Annual Meeting
While the rich and famous from across the world have assembled at Davos for
their annual talk-fest and networking for business, many top Indian business
leaders like Mukesh Ambani and Rahul Bajaj have given this year's WEF Annual
Meeting a miss.
Others who have been here earlier but could not make it to the ongoing
meeting include Anand Mahindra, Kumar Mangalam Birla and Chanda Kochhar.
Among these, people like Bajaj, Mahindra and Kochhar have been very active
in WEF meetings and used to speak on a host of issues very vocally, although
leaders like Ambani and Birla have always kept a low profile.
But what is not missing is a highly informal atmosphere which corporate and
political leaders from India are enjoying here in this Swiss ski resort town
-- which generally remains a rarity amid watchful public eye back in India.
Despite these dropouts, Indian delegation still runs into about 125 business
and political leaders, which makes India's presence fourth largest after the
US, UK and the host country Switzerland.
Those present here include Tata group chief Cyrus Mistry, top executives of
TCS and a host of other IT firms such as Infosys, Tech Mahindra and iGate,
Bharti group's Sunil Mittal, Ravi Ruia and Prashant Ruia of Essar group,
bankers Uday Kotak and Rana Kapoor, as also a host of CEOs from many
medium-to- large Indian companies.
Among the Indian-origin global business leaders, PepsiCo's Indra Nooyi and
ArcelorMittal's Lakshmi Mittal are also present.
In addition, Finance Minister P Chidambaram is here along with his cabinet
colleagues like Anand Sharma and Kamal Nath, as also Planning Commission
Deputy Chairman Montek Singh Ahluwalia, Economic Affairs Secretary Arvind
Mayaram and Maharashtra Chief Minister Prithvi Raj Chavan.
Old currency notes to be removed from Indian economy
The Reserve Bank of India (RBI), the country's central bank, says it will
withdraw all currency notes printed prior to 2005 from 31 March.
The move is being seen as an attempt to curb the circulation of "black
money" - cash that has not been declared or taxed.
According to some estimates, India's underground economy accounts for 50% of
its gross domestic product (GDP).
The RBI said consumers will be able to exchange old notes at retail banks.
The bank added that the notes issued before 2005 "will continue to be legal
This would mean that banks are required to exchange the notes for their
customers as well as for non-customers.
However, it said that after 1 July anyone who is not a bank's existing
customer will have to furnish proof of identity and residence if they are
looking to change more than 10 notes of 500 and 1,000 rupees denomination.
The central bank said that notes issued prior to 2005 can be identified
easily as they do not have the year of printing marked on them.
While India Banks’ Association (IBA) is voicing solidarity over raising ATM
service fees post Bengaluru ATM assault case, Finance Ministry is of
different opinion. Secretary, Financial Service, said that he would like ATM
services to be free’.
Interestingly, ever since the proposal was raised, no bank has officially
approached the government for approval to raise ATM fees. The Reserve Bank
of India (RBI) is the final authority to take the call on the matter.
Presently, banks charge no fees for ATM service to their own respective
customers. Also, RBI has regulated that in a month a bank customer may avail
ATM service including cash withdrawal and balance inquiry from any other
bank for free.
Thus, with RBI and now Finance Ministry both voicing their non-conformity
with the proposed move of IBA, customers may breathe a sigh of relief.
Chances of levying ATM fee by banks on their customers are lowered with high
authorities sounding against it.
Asia no longer seen as engine of global growth
Asian economies will contribute less to global growth this year than earlier
expected, even as their major trading partners in the West show signs of
recovery, according to Reuters poll .
China to India, Indonesia, Taiwan and Thailand, more than 225 economists polled
and have collectively downgraded or left unchanged growth estimates for nine of
the top 13 economies in Asia outside of Japan.
a time when developed economies are expected to beat last year's growth rates,
the results imply that Asia, the recent engine of world growth, may see its
stunning the world by clocking over 10 per cent growth on average for the last
three decades, China started last year to wean itself off credit and investments
and changed track toincrease domestic consumption.
As a result, its growth rate has steadily dipped. Data this month showed the
economy grew 7.7% in the last quarter of 2013.
predict a 7.4% average growth rate this year, which would be the slowest
expansion since 1990, and a further cooling to 7.2 per cent next year.
bottlenecks are seen by analysts as the key reason Asia is unable to benefit
from weak food prices globally.
Louis Philippe Cup
Randhawa, one of India's top professional golfers, will represent city-based
Dec-Ellora Laqshya Mumbai team in the Rs 1.2 crore prize money Louis Philippe
Cup tournament to be held in Mumbai from February 17-22.
Milkha Singh, Anirban Lahiri, Gaganjeet Bhullar, Siddikur Rehyman, SSP
Chowrasia, Rashid Khan and Himmat Rai, among others, are competing in the third
edition of the event, featuring nine teams and offering Rs 36 lakh to the
winning outfit and Rs 24 lakh to the losing finalist.
this is the first time Jeev would be playing in the metropolis as part of the
Shubhkamna Delhi outfit.
teams are Navratna Ahmedabad, Puravankara Bangalore, TAKE Chennai, DLF Gurgaon,
Jaypee Greens Greater Noida, AVT Kolkata, Dev-Ellora Laqshya Mumbai, Krrish
Colombo and Shubhkamna Delhi.
tournament is sanctioned by the Professional Golf Tour of India (PGTI) and
conceived and promoted by RN Golf Management (RNGM).
India regains No. 1 ranking in ODIs
regained its No. 1 ranking in the ICC ODI list after Australia lost its fourth
One- Day International against England by 57 runs thereby dropping to the second
place in the 13-team table.
per the latest ICC table, India is back on top with 117 points while Australia
is second with 116 points.
lost its No. 1 spot in the ODI rankings recently , when it lost to New Zealand
in the second ODI. But in order to maintain its top rank, India must win the
third ODI against the Black Caps — failing which it will again lose its top
Restrictions on gold imports
The restrictions on gold imports will be reviewed by March-end, according to
Finance Minister P. Chidambaram .
To contain the rising gold imports, the government had increased customs
duty on the yellow metal three times in 2013. The levy currently stands at
10 per cent.
Mr. Chidambaram said there has been about 1-3 tonnes of gold smuggled into
the country every month following the restrictions imposed on shipment in
Gold smuggling has increased, but the restrictions on gold import were
absolutely necessary because it is these restrictions, which have brought
down gold import, which in April and May had crossed 300 tonnes.
RBI hikes repo rate and keeps CRR unchanged
In an unexpected move, the Reserve Bank of India RBI raised the repo
rate---its key lending rate—by 0.25 percentage points to 8%, raising fears
of yet another rise in home loan EMIs.
The surprise hike in the benchmark lending rate came in despite lower
inflation rates in December. The central bank cut its growth forecast to
less than 5% for 2013-14, but placed its bets firmly on the turnaround in
the broader economy in the next financial year.
The central bank, however, made it clear that any action on interest rate
movements will be determined by future price data.
Equity markets reacted sharply with the benchmark Sensex falling by over 100
points shortly after the RBI’s rate hike announcement.
Higher borrowing costs will likely hit consumers squeezed by high prices,
flat salary hikes and costly mortgage financing rates.
The RBI’s latest move, however, will likely draw strong reactions from
business leaders who have been clamouring for an interest rate cut arguing
that costly borrowing and high raw material costs have crimped expansion and
India’s wholesale inflation rate eased to a five-month low of 6.16% in
December on plunging vegetable prices, giving some reason to smile for the
UPA government battling to help the economy fight through a period of low
growth and high prices ahead of national elections.
India Inclusive Innovation Fund
The National Innovation Council (NInC) and the Ministry of Micro, Small and
Medium Enterprises announced the creation of the India Inclusive Innovation
The fund seeks to combine innovation and the dynamism of enterprise to solve
the problems of citizens at the bottom of the economic pyramid in India.
The fund, launched by Sam Pitroda, head of the NInC, is an autonomous Rs
500-crore fund, with the Union Government contributing 20 per cent. The
balance will come from public sector banks, financial institutions,
insurance companies, multilateral/bilateral development agencies, Indian &
The fund’s life is for nine years, extendable by up to two years (subject to
approval of contributors) and it will focus on healthcare, food and
nutrition, agriculture, education, energy, financial inclusion, environment,
technology as an enabler, among others.
Export duty on iron ore pellets
Considering the increase in the average speed of packing machines, the
government has revised the capacity of production and consequently increased
the duty applicable to pan masala and tobacco products including gutka,
chewing tobacco, unmanufactured tobacco and filter khaini packed in pouches
with the aid of packaging machines etc. under the compounded levy scheme.
Beside above, considering the domestic requirement of iron ore pellets, the
government has decided to impose an export duty of 5% on iron ore pellets.
Iron ore fines and lumps are leviable to an export duty of 30%. Iron ore
pellets are however exempt from export duty. In 2012-13, exports of iron ore
pellets were negligible.
However, in April-November 2013, exports of iron ore pellets have risen
sharply, causing an apprehension about shortage of iron ore in the country.
Iron ore is a critical raw material required for production of steel.
RBI rate hike to check inflation
The Reserve Bank's hiking the key lending rate by 0.25 per cent is a
reflection of its "strong commitment" to check inflation, according to Prime
Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan .
It is a reflection of the strong commitment of Reserve Bank to the price
stability as the chief objective of the monetary policy. The decision also
reflects certain change in terms of the indicators being monitoring.
While the Wholesale Price Inflation (WPI) remains near the comfort zone, the
Consumer Price Inflation (CPI) is not. Therefore the decision to increase
the interest rate is once again reflection of the shift in terms of the
focus from wholesale price inflation to retail inflation.
Retail or CPI inflation in December had moderated to a three month low of
9.87 per cent, while the wholesale or WPI was at 5-month low of 6.16 per
Asia forex bounces
The South Korean won led a relief rally among emerging Asian currencies as a
huge interest rate hike by Turkey's central bank calmed emerging markets
after several days of turmoil.
Turkey followed India by tightening policy at a midnight meeting of its
central bank, with the massive hike in the overnight lending rate of 425
basis points taking rates all the way to 12 per cent.
The won also benefited from stronger-than-expected industrial output growth
and a record current account surplus. The won's strength lifted the Taiwan
Malaysia's ringgit advanced on buying by offshore hedge funds and demand
against the Singapore dollar.
Asian shares also rallied after Turkey's move, reflecting a broad rise in
risk-appetite which provided some respite for the battered Turkish lira.
Malaysia's central bank is expected to keep its interest rate unchanged at
3.00 percent later in the day.
The recent selloff in emerging market assets drove Asian currencies sharply
lower as investors fretted over the twin concerns of a cutback in U.S.
stimulus and slowing growth in China.
The Fed is expected to announce another $10 billion cut in its monthly
bond-purchase programme when it concludes a two-day policy meeting later in
The won rose as offshore funds scrambled to cover short positions and on
demand from exporters such as shipbuilders, traders said.
South Korea's industrial output jumped in December and its current account
surplus grew to a record last year, suggesting the economy carried strong
momentum into 2014 with sufficient buffers to weather the latest global
FPI and uniform tax rate
a major boost for overseas entities, the government has said that foreign
portfolio investors (FPIs) will attract uniform tax rate across categories.
bring together all the three investment categories — foreign institutional
investors (FIIs), their sub-accounts and qualified foreign investors (QFIs).
the tax rate for FPIs would be the same as that extended to FIIs. The new system
would be especially beneficial for QFIs, who were subjected to higher tax rate
Central Board of Direct Taxes has notified that the new class of investors, FPIs, would be treated as FIIs under the Income Tax Act, 1961.
the new class would be given a permanent registration, as against the current
practice of granting approvals for one year or five years to the overseas
entities seeking to invest in Indian markets.
registration would be permanent unless suspended or cancelled by SEBI or
surrendered by the FPI.
I FPIs, classified as entities with lowest risk, would include foreign
governments and government related foreign investors.
II would cover appropriately regulated broad based funds, appropriately
regulated entities, broad-based funds whose investment manager is appropriately
regulated, university funds and pension funds, among others. Those who are not
eligible to be in the first and second set of classifications would be
considered under Category III.
No round tripping in Mauritius
which is the single biggest source of foreign direct investment into India, does
not encourage round tripping
funds flow from one country and through several other countries, it is very
difficult for anybody to identify the original source of the money; but the
original fault would be with a system that allows money to get out without
and Mauritius had agreed on the contours of a ‘framework’ that would allow the
‘exchange of information’ between tax authorities in the two countries. Till a
few years ago, investments to India accounted for about half of outbound
investments from that country, but now it was only about 24 per cent. Meanwhile,
investments flowing into the African continent had risen to about one-third of
the investments from Mauritius.
FDI ranking of India
India's FDI ranking has slipped by one notch to 16th position in 2013 among the top 20
global economies receiving foreign direct investment.
foreign direct investment (FDI) into India grew by 17 per cent last year to USD
28 billion despite unexpected capital outflows in the middle of the year,
according to a United Nations report.
2012, the country was positioned 15th in the list.
said that foreign inflows across the world rose to levels not seen since the
start of the global economic crisis in 2008.
uneven levels of growth, fragility and unpredictability in a number of economies
and risks related to the tapering of quantitative easing could dampen the FDI
flows to developing economies reached a new high of 759 billion dollars,
accounting for 52 per cent, during the year.
countries, however, remained at an historical low (39 per cent) for the second
inflows to developed countries increased by 12 per cent to USD 576 billion, with
such investment to the European Union increasing, while flows to the United
States continued their decline. The US received USD 159 billion in FDI flows
The BRICS Brazil, Russian Federation, India, China and South Africa continued to be
strong performers in attracting FDI. Their current share of global FDI flows at
22 per cent is twice that of their pre-crisis level.
the Reserve Bank of India tacitly acknowledge the existence of dogecoin, a
digital currency that was initially started as a joke, the central bank couldn’t
have imagined that the dogecoin community would put together a fund-raising
effort aimed at helping Indian athletes reach the Sochi Winter Olympics.
The Dogecoin Foundation, a non-profit organisation started by dogecoin creators
Jackson Palmer and Billy Markus, has just done that, however. According to
several media reports, Indian athletes Himanshu Thakur and Nadeem Iqbal require
funding to defray the costs of competing at the Sochi Winter Olympics.
The dogecoin community took to the challenge, and raised the roughly $6,000 required
to help the athletes.
currencies such as bitcoin and dogecoin have received little clarity with
regards to regulation from the Government and the RBI.
I-T department and Enforcement Directorate have conducted raids against several bitcoin operators despite the current lack of regulation.