Economy Current Affairs
November 1st week 2015 current affairs
Category : Economy Current Affairs
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1) Government advances roll out of BS-V and BS-VI norms for 4-wheelers

  • The government on 28th November said it has advanced the date for implementation of the roll out of Bharat Stage (BS) stage V and VI norms for four-wheelers by three years. According to the roadmap earlier laid down by the Auto Fuel Policy, BS-V norms were to be implemented from April 1, 2022 and BS-VI from April 1, 2024, it added. 
  • Accordingly, the ministry has decided to implement BS-V norms from April 1, 2019. 
  • BS-VI norms, which aim at substantial reduction in NOx/4C levels will be implemented from April 1, 2021, it added. This reflects a firm commitment to play a major role in reducing vehicular emissions.
  • Draft norms for two- and three-wheeler categories will be notified shortly with advanced timeline similar to the four wheeler category, it added.
2) India 5th on doing biz in clean energy
  • Considering India`s notable policy reforms in the renewable energy sector, Bloomberg New Energy Finance has ranked the country at fifth place on a list of 30 countries on ease of doing business in the renewable energy space. The ranking done by Bloomberg New Energy Finance`s annual Climatescope report indicates that clean energy`s centre of gravity is shifting from developed to developing countries. The report ranked China in the first place, followed by Chile, Brazil, South Africa and India. 
  • As solar energy became more cost-competitive in emerging markets in 2014, there would be a surge of investment and capacity-building in the Asian countries, especially China and India, the report noted. Last year, India added 5 gigawatt (Gw) of clean energy generation capacity
  1. Among the states, Tamil Nadu led the pack with the highest wind energy capacity, followed by Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Gujarat.
  2. Madhya Pradesh scored the highest among Indian states on growth rate of clean energy investments. The state`s favourable land policy and easy clearances have resulted in attracting projects.
  3. Gujarat, which was once a haven of clean energy investments, slipped from the top slot due to policy uncertainty and litigation over tariff.
  4. Maharashtra`s high feed-in tariff led to a surge in wind capacity.
  5. Renewable energy in Rajasthan at 4 Gw represents a high share (32 per cent) of total power capacity of 13 Gw, compared to other states.
  6. At 7.4 Gw, Tamil Nadu has more wind installed than any other state. Since 2012, however, annual new-build rates have fallen and in 2014, only 208 megawatt was commissioned.
  7. This is largely due to the poor financial health of state-owned distribution utility companies and occasional payment delays to power project owners.
  8. The Indian government`s goal of providing round-the-clock power to 1.25 billion citizens has triggered huge interest from investors. The report noted that a strong energy minister overseeing coal, power, and new and renewable energy sectors could have a positive influence.
  9. The Modi-led government has revised the targets for renewable energy to 175 Gw by 2022.
3) Rs 3,250 crore package to decongest Delhi
  • In a major move to decongest the city, urban development minister Venkaiah Naidu on 22nd November announced a Rs 3,250 crore package for the capital, to be used for construction of flyovers, underpasses and rail overbridges to free up arterial roads. From the fund, the Delhi government will get Rs 1,500 crore, DDA Rs 1,665 crore and the North Corporation Rs 85 crore. 
  • While DDA has been given the money for projects in Dwarka, Narela, Mundka and Holambi, the Delhi government has been asked to prioritize projects in consultation with Delhi Police, municipal bodies and PWD. The North Corporation will use its share to complete the Rani Jhansi flyover, hanging fire since 2008. 
  • The projects to be undertaken by DDA include construction of a rail underbridge at Holambi; a rail overbridge at Mundka on Urban Extension Road II; a rail bridge at Narela; a tunnel near Bhagya Vihar and Meer Vihar and construction of the Dwarka Expressway from Urban Extension Road II to Northern Peripheral Road. The 3.5km stretch is expected to give relief to residents of Dwarka and Gurgaon by decongesting NH8 and cutting travel time. 
  • The cash-strapped North Corporation, which has not initiated any new project in a long time, will be given Rs 85 crore for completion of the Rani Jhansi grade separator. The foundation for the flyover, from St Stephens Hospital to Filmistan, was laid in 2008 and the project has been held up at various stages since due to fund crunch and land acquisition issues. Completion of the flyover is expected to reduce travel time from the present one hour to just 10 minutes.
4) All States but T.N. to roll out Food Security Act by April
  • Barring Tamil Nadu, all States are on board for implementing the National Food Security Act by April next, according to Union Food Minister Ram Vilas Paswan 
  • So far, 22 States and Union Territories have rolled out the Act which covers up to 67 per cent of the population (75 per cent rural and 50 per cent urban) and gives with 5 kilogram of subsidised rice or wheat or coarse cereals per identified beneficiary. 
  • It is mandatory for the States and Union Territories to adopt digital identification of the beneficiaries, arrange for doorstep delivery of foodgrains and constitute grievance redressal cells before they roll out the scheme. 
  • Representatives of 11 States said they would be ready with the digitisation and identification of beneficiaries by March next year. 
  • The Tamil Nadu representative, however, said the Public Distribution System was universal in the State and as such it was difficult to identify beneficiaries. To switch to a targeted system would involve a policy decision. 
  • The NDA government had given three extensions till September this year for States to roll out the scheme. Now it has said that States that are not ready by March will get additional allocation of foodgrains under TPDS at the minimum support price. 
  • Of the 14 States that have not implemented the Food Security Law, Andhra Pradesh and Sikkim will be ready by December. Uttar Pradesh, Meghalaya, Jammu & Kashmir and Andaman & Nicobar will roll it out in January 2016. Other States, including Gujarat, Kerala, Arunachal Pradesh, Manipur, Mizoram, Nagaland, will implement it by March next year. 
  • On the issue of the Direct Benefit Transfer scheme, the Minister said it was not compulsory. The government was implementing it on a pilot basis in Puducherry and Chandigarh.


5) Get rid of NPAs: Finance Minister

  • Indian Finance Minister Arun Jaitley said, the government has proactively taken measures to remove problems in stressed sectors and expressed the hope that the bad loans situation in the banking sector will improve for the better. According to him:
  1. There is an unacceptable level of bad loans at Indian banks and part of stress on banks is due to certain sectors.
  2. Banks should get rid of the past scars of Non Preforming assets, NPAs and clean up their balance sheet at the earliest.
  3. A series of steps that have been announced by RBI in this direction will certainly improve on the quality of those assets.
  4. he gross NPAs of PSBs rose to 6.03 per cent at the end of June 2015, as against 5.20 per cent in March 2015.
  5. On the issue of wilfull defaulters, the banks have full authority to deal with each of its dectors in prudent manner.
  6. Bankruptcy law gets passed the ability of banks to get failed creditor to exit will increase.
6) MRF to set up Rs. 900-cr facility in Telangana
  • Current Affirs MRF is planning to set up a Rs. 900-crore facility in Medak district of Telangana soon. The tyre major has received the formal approval from the State Government to set up the manufacturing facility. The permissions were given as part of the State’s new Industrial Policy TS-iPASS (Telangana State Industrial Project Approval and Self Certification System). The policy promises quick and easy permissions from the industry, using a single-window mechanism. As many as 16 proposals from various industrial houses have been approved in the fourth batch that promises a total investment of Rs. 1,570 crore. They would provide about 1,800 jobs. Prominent among the proposals include GMR group’s 5 MW solar power plant. The infrastructure firm would spend Rs. 27 crore on the project.

Other projects:

  1. SEI Sriram Power proposes to set up a 10-MW solar power plant with an investment of Rs. 55 crore, while Preca Solutions would establish a facility to produce pre-stressed concrete material by investing Rs 33 crore.
7) DIPP notifies easing of FDI policy in several sectors
  • The Department of Industrial Policy and Promotion, DIPP on 24th November notified the recent liberalisation of FDI policy in several sectors including defence, retail and construction development sector. DIPP has also defined the term "manufacturing" for the purpose of attracting foreign direct investment. 
  • In a recent decision, the government permitted a manufacturer to sell products made in India through wholesale, retail including through e-commerce platforms without government approval. 
  • DIPP has defined the term "control" for the purpose of FDI in Limited Liability Partnerships. ‘Control’ shall include the right to appoint a majority of the directors or to control the management or policy decisions. 
  • The government had on 10th of this month opened up 15 sectors including real estate, defence, civil aviation and news broadcasting in a bid to push up reforms.
8) Railways inks pact with SAIL-RITES to procure steel wagons
  • The Railways has signed an assured offtake agreement with SAIL-RITES Bengal Wagon Industry Pvt Ltd to procure 1,200 new stainless steel wagons and rehabilitate 300 wagons every year. SAIL-RITES Bengal Wagon Industry Pvt Ltd is a 50:50 joint venture between Steel Authority of India and engineering consultancy RITES and has a factory in Kulti in West Bengal, set up at a cost of Rs.120 crore. The factory is expected to generate employment for about 400-500 people. According to the agreement, the Railways will procure Rs. 2,500-crore worth of wagons spread over 10 years.


9) Govt inks 11 pacts to sort transfer-pricing issues

  • The government has concluded 11 agreements to tax multi-national companies via the transfer-pricing mode. Of these, one advance pricing agreement (APA) has a `rollback provision`, which means those relating to previous years. The government has signed 22 APAs so far in the current financial year and 30 more are expected to be inked in FY16, providing a climate of certainty and non-adversarial tax regime to foreign companies.
  •  The APAs were signed with companies in sectors ranging from investment advisory, contract research & development, and shipping services.
  •  The conclusion of APAs will facilitate the clearance of the large backlog of around 550 applications with the authorities, and ensure the lowering of tax litigations in the country.
  •  Agreements signed were unilateral APAs, involving only the taxpayer and the tax authority. Another 10-15 agreements are expected to be signed by December.
  •  The concluded APAs included companies based out of France, the US and the UK, among others. According to sources, most of them are service providers. The APA relating to shipping support services has been finalised at margins of 17-18 per cent and the investment advisory ones at margins close to 21 per cent.
  •  An APA is essentially an ahead-of-time agreement between a taxpayer and a taxing authority on an appropriate transfer-pricing methodology for some set of transactions over a fixed period of time.
  •  Aimed to reduce transfer-pricing litigations in the country, finance minister Arun Jaitley had announced the roll-back provision in the first Budget of the Bharatiya Janata Party-led government in July last year, where the agreement entered into for future transactions might also be applied to international transactions of the previous four years.
  •  The first rollback APA was signed in August between a US multinational and the tax department. 
  • Up to September 2015, around 575 APA applications have been filed with the APA authorities. These APAs are in diverse sectors such as telecom; oil exploration; pharma; finance; banking; software development & business process outsourcing, covering international transactions such as interest payments and corporate guarantees; non-binding investment advisory services, contract manufacturing, trading; and information technology (IT) & IT-enabled services (ITeS). Approximately, 40 per cent of APA applications are from the IT & ITeS sector. 
  • India signs unilateral APAs with multinationals that belong to countries with which it doesn`t have tax treaties. Bilateral APAs involve the taxpayer, its local subsidiary, the Indian tax authority and that of the country the company is headquartered in.
10) Pfizer, IIT Delhi set up incubation centre for healthcare innovations
  • Pharma major Pfizer and IIT-Delhi on 24th November launched an incubation accelerator initiative co-created by Pfizer and the Foundation for Innovation and Technology Transfer (FITT). The programme will be open to Indian individuals and startup companies.
  •  The accelerator will address two components. For innovators seeking comprehensive support to translate their healthcare ideas into patents, the programme will provide two years of residential incubation at IIT Delhi, funding of up to Rs 50 lakhs for each innovator, mentoring support from IIT Delhi`s faculty, access to infrastructure and prototyping laboratories, IP search and filing services, guidance from Pfizer`s experts, venture capitalists and other industry linkages.
  •  For innovators who have a ready proof of concept and are seeking to obtain a patent, the programme will provide access to IP attorneys and services and cover the patent fee.
  •  Pfizer`s funding through this programme will be unencumbered. All rights on the innovations will be owned by the innovators and they will be free to commercialize their patents as they desire.
  •  The programme will invite two rounds of proposals during the year 2015-2016. Call for proposals for the first round will open from November 27, 2015 until January 15, 2016.
11) Three entities get RBI nod to set up trade receivables discounting system
  • Three entities — Axis Bank, Gurgaon-based Mynd Solutions and a joint bid by NSE Strategic Investment Corporation and Small Industries Development Bank of India — have been granted in-principle approval for setting up the Trade Receivables Discounting System (TReDS).
  •  While seven entities had applied for it, four, including Trade Receivables Exchange and NSDL Database Management, did not make the cut.
  •  First announced in the Union Budget this year, the use of TReDS is aimed at improving the flow of funds to micro, small and medium enterprises (MSMEs) by reducing the receivables realisation cycles.
  •  TReDS will allow SMEs to post their receivables on the system and get them financed.
  •  This will not only give them greater access to finance but also impose greater discipline on corporates to pay their dues on time.
  •  The “in-principle” approval granted will be valid for six months, during which time the applicants will have to comply with the requirements under the guidelines and fulfil other RBI conditions.
  •  On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the Reserve Bank would consider granting to them a Certificate of Authorisation for commencement of the business of TReDS,” the RBI said in a notification.
12) Bill payments nod for NPCI
  • The RBI has also decided to grant ‘in principle’ approval to the National Payments Corporation of India (NPCI) to function as the Bharat Bill Payment Central Unit (BBPCU).
  • The Bharat Bill Payment System (BBPS), an integrated bill payment system, will function as a tiered structure for operating the bill payment system in the country with a single brand image, providing convenience of ‘anytime, anywhere’ bill payment to customers.
  • It includes utility payments, such as electricity, water, gas, telephone and direct-to-home (DTH) service.
  • Based on the experience, this would be extended to include other types of repetitive payments, such as school/university fees, and municipal taxes, among others, the RBI said.
  • For collection of bills, the RBI had also invited applications from non-banks/banks for which the last date of receipt has been extended to December 18 from November 20.
  • So far, the RBI has received 12 applications from non-bank entities and 18 requests from banks to operate as Bharat Bill Payment Operating Units.
  • Govt approves investment of Rs 3000 cr for boosting urban infrastructure in 102 cities
  • Government on 26th November approved an investment of over 3000 crore rupees for boosting urban infrastructure in 102 cities across five states, including enhancing water supply, sewerage network and availability of public spaces.
  • The Urban Development ministry approved the investment under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). It said, an inter-ministerial Apex Committee chaired by Urban Development Secretary Madhusudhan Prasad approved state-level Annual Action Plans for 2015-16 for five states.
  • The annual action plan for Haryana, which has 18 AMRUT cities was approved with an investment of 438 crore rupees while 573 crore rupees was approved for Chattisgarh. Besides, 416 crore rupees for Telangana, 588 crore rupees for Kerala and 1,105 crore rupees for West Bengal, have also been approved.
13) RBI allows foreign investors to buy defaulted bonds
  • The Reserve Bank on 26th November allowed foreign investors to buy bonds that are either fully or partially under default in repayment and raised the maturity period of such NCDs/bonds to three years and more. As per the earlier rules, investments by Foreign Portfolio Investors (FPI) in NCDs/bonds were required to be made in securities with a minimum residual maturity of three years. 
  • On a review, it has been decided to permit FPI to acquire NCDs/bonds, which are under default, either fully or partly, in the repayment of principal on maturity or principal installment in the case of amortising bond, RBI said in a notification. The revised maturity period of such NCDs/bonds, restructured based on negotiations with the issuing Indian company, should be three years or more, it added. The proposed move is expected to provide relief into the country`s distressed debt market.
14) RBI relaxes expat rules for foreign banks
  • The Reserve Bank of India (RBI) has allowed foreign banks to deploy up to four expatriates for each branch opened in India and up to six expatriates for their head office functions. The banking regulator said it decided to review its position after some foreign banks requested it to remove the numerical restriction on engagement of expats 
  • These banks had expressed concerns about the numerical restrictions in view of the operational difficulties faced by them in doing business in India. 
  • This move is expected to benefit and help foreign banks get global expertise for their Indian operations as well. However, the regulator clarified that the other instructions with regard to the posting of trainee officers and remittance facilities by the expatriate officers in Indian branches remain unchanged.
15) Govt announces indirect tax sops for shipbuilding industry
  • The Government has decided to provide further indirect tax incentives for domestic shipbuilding industry. According to the notification issued by the Ministry of Finance, the exemption has been provided from customs and central excise duties on all raw material and parts for use in manufacture of ships, vessels, tugs and pusher crafts. At presently, certain specified ships and vessels are exempt from basic customs duty and Central Excise duty.
16) India needs over Rs 9 lakh cr investment for energy demand by 2040: IEA
  • International Energy Agency has said that India needs more than Rs 9 lakh crore in energy investment per year by 2040 as it is set to contribute more than any other country to the rise in global energy demand. 
  • Of this, around seven lakh crore rupees are required every year in energy supply, 75 per cent of which is required to meet India`s burgeoning need for electricity, and a further two lakh crore rupees per year to improve energy efficiency, Executive Director of International Energy Agency, IEA, Fatih Birol said while releasing India Energy Outlook 2015 in New Delhi.
17) Solar power to illuminate 140 Naxal-hit villages in Chhattisgarh
  • In Chhattisgarh, as many as 140 villages in remote and Maoist affected area will soon be illuminated with solar power. These villages will be electrified with solar energy under the Remote Village Electrification Programme. 
  • These villages fall under the Maoist-hit Sukma, Bijapur, Narayanpur, Sarguja and Dantewada districts. The villages, mostly located in the dense forests of Bastar division and some in Sarguja division. 
  • The project to electrified these villages is being executed by the Chhattisgarh State Renewable Energy Development Agency. 
  • CREDA has provided power in around 1,700 villages across the state since 2003, where there is no reach of conventional source of electricity. To fix technical problems, the agency also employs a technician who serves a cluster of 10 to 15 villages.