Economy Current Affairs
November 2nd week 2015 current affairs
Category : Economy Current Affairs
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1) CBDT inks 11 more unilateral advance pricing agreements

  • The Central Board of Direct Taxes (CBDT) has entered into 11 more unilateral advance pricing agreements (APAs). The APAs were signed with Indian subsidiaries of foreign companies operating in various segments of the economy such as investment advisory services, engineering design services, marine products, contract research and development, software development services, IT-enabled services and cargo handling support services. 
  • With this round of signing, CBDT has so far entered into 31 APAs (30 unilateral and one bilateral). An APA is an agreement between a taxpayer and the tax authority concerning the transfer pricing method and the rate applicable to the taxpayers’ inter-company transactions, and normally covers multiple years. While seven of these APAs have rollback provisions contained in them, the other four agreements are for future five years 
  • APAs with rollback provisions can cover a maximum period of nine years in total. India had introduced the APA programme in 2012. As many as five APAs were concluded in the first year and four APAs got signed in the second year. 
  • The pace of negotiations has picked up in the current year. This year has already witnessed the conclusion of 22 APAs. 
  • The CBDT aims to finalise another 30 to 40 APAs before the end of this fiscal to provide stability and confidence to foreign enterprises operating in India.
2) India to launch $1-b equity fund for renewable energy
  • India proposes to launch a $1-billion equity fund, with seed capital from public sector units, to support renewable energy companies. Addressing a ‘Talkathon’ ahead of the 2015 Paris Climate Conference or COP-21, Piyush Goyal Minister of State (Independent Charge) Power, Coal and New & Renewable Energy, said, the Paris talks will help developed countries provide long-tenor low-cost funding, we are also preparing ourselves to see how we can finance our renewable energy thrust.
3) Telangana to have 3 new aerospace parks
  • Telangana`s aerospace sector will get a fillip with the State government gearing up to create three more aerospace parks around Hyderabad (near outer ring road) in the next four years and come out with an aerospace and defence policy shortly. 
  • Suitable land for the proposed new parks is being scouted. Each of the park will have at least 200 acres. The State, which boasts of the country’s first Aerospace and Precision Engineering SEZ at Adibatla in Ranga Reddy District, has already attracted Rs 1,000 crore in the last one year and hopes to garner additional Rs 2,500 crore by 2019 when the new parks will be operational, Arvind Kumar, secretary, Industries & Commerce, Telangana government 
  • He said with a strong presence of around 450 MSME and large enterprises, there will be demand for space for manufacturing, research and development, logistics, training etc. To encourage new companies to enter into the State and existing companies to bring in fresh investment, the State is providing power subsidies, electrical duty exemptions, land cost concessions, subsidy on capital investment. 
  • As the State is poised to become a major aerospace hub in next two years, the land and manpower requirements could be met. 
4) HSBC closes private banking business in India
  • HSBC is closing its private banking business in India which caters to those with a net worth of over $1 million (Rs 6.7 crore). These customers will now be offered services under HSBC Premier, a retail banking and wealth management product for the mass affluent with assets of over Rs 25 lakh. HSBC is planning to complete the migration in the first quarter of 2016.

5) IMF pitches for greater investment in infrastructure for larger women labour force

  • Current Affirs International Monetary Fund, IMF has pitched for greater investment in infrastructure and enhanced social spending in India to bring in larger number of women in labour force. As per a recent IMF study, India`s GDP can expand by 27 per cent if the number of women workers increases to the same level as that of men. According to Kalpana Kochhar, Deputy Director of IMF`s Asia and Pacific Department, the GDP gain that would materialise if the labour force participation gap between men and women is closed.
  • She also said this gender gap in labour force participation is much larger in India than in most other countries. Mrs Kalpana also said this gender gap is around 50 per cent in India, compared with an average gap of 12 per cent in OECD countries. 
  • She added that since the gap is much larger in India, the economic gain from closing it is much larger compared with other countries.
6) Revenue-share mode for energy exploration
  • The government on 16th November proposed to introduce a revenue-sharing model with operators for exploration and development of oil and gas blocks, replacing the current profit-sharing mechanism, earlier criticised by the Comptroller and Auditor General.
  • The plan, which aims to set new rules for auctioning exploration blocks, includes pricing and marketing freedom for natural gas produced from blocks awarded under the new regime.
  • A consultation paper put out by the ministry also proposed a uniform licensing policy that will allow operators to explore all forms of oil and gas resources, including coal-bed methane, shale gas and oil, tight gas and gas hydrates. 
  • The ministry has suggested an open acreage licensing that will allow companies to bid for exploration blocks of their choice. Under open acreage licensing, which will replace the existing New Exploration Licensing Policy, the upstream regulator will apply its own geological data to authenticate the expressions of interest submitted by companies for an area and carve out blocks. This will be followed by invitation of bids from all interested parties.
7) World Bank, AP ink $75-m credit deal for rural project
  • The Centre, Andhra Pradesh and the World Bank have inked a $75 million (?500 crore) credit deal for the Andhra Pradesh Rural Inclusive Growth Project. The project seeks to enhance agricultural incomes of small and marginal farmers and ensure increased access to services related to health, nutrition, sanitation and social entitlements. It will focus on increasing economic opportunities for small and marginal farmers, especially from Scheduled Caste (SC) and Scheduled Tribe (ST) households in the 150 most backward mandals.
  • In addition, it will invest in developing a network of social enterprises for food, nutrition, sanitation and other social enterprises which operate at community and district level.
  • The Project will help link small and marginal farmers to urban markets and make them competitive across the value chain. Investments will be made for increasing the nutritional content of products such as milk, vegetables and poultry.
8) Rs 242 cr AMRUT plan to address water logging in 25 cities
  • Taking steps to tackle the problem of water logging, Kerala, Madhya Pradesh, Gujarat, Odisha and Mizoram propose to invest Rs 242 crore in construction of storm water drains for discharging flood waters in 25 cities in these states
  • The works would be undertaken under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) action plans for 2015-16, according to an Urban Development Ministry statement. The five states account for 82 Atal Mission cities.Other mission cities would be covered in subsequent years. Kerala government, in the state annual action plan (SAAP) for 2015-16 under AMRUT submitted to the Urban Development Ministry has proposed to spend Rs 105 cr (18 per cent of the total outlay of Rs 588 cr) on storm water drains in all the nine mission cities. 
  • About Rs 24 cr will be spent in this regard in Kochi, Thiruvananthapuram will get Rs 18 cr, Thrissur: Rs 15 cr, Guruvayoor: Rs 13 cr, Kannur: Rs 11 cr, Palakkad: Rs 9 cr, Kozhikkode: Rs 7 cr, Allapphuaza: Rs 6 cr and Kollam: Rs 2 cr. 
  • Under the SAAP of Madhya Pradesh for 2015-16 approved by the UD Ministry, construction of storm water drains will begin in 12 cities at a cost of Rs 36 cr.
  • In Mizoram, Rs 47 cr (64 per cent of total approved SAAP outlay of Rs 73 cr for 2015-16) will be spent on construction of storm water drains. 
  • Under Atal Mission, construction of storm water drains has been prioritised after provision of basic infrastructure relating to water supply and sewerage connections.
  • Central assistance to the extent of 50 per cent of project costs will be extended to cities with a population of below one million each and one-third of project cost if the population is above ten lakhs. Many metro cities including Delhi, Mumbai and now Chennai have been faced with the problem ofwater logging following heavy rains.

9) AMRIT to sell drugs at cheaper prices

  • Government has launched India`s first retail facility at AIIMS to provide drugs for cancer and cardiovascular diseases at highly discounted rates. The pharmacy named AMRIT -- Affordable Medicines and Reliable Implants for Treatment -- will have 202 drugs of cancer and cardiovascular diseases where the price is going to be reduced on an average by 60 to 90 per cent. 
  • With the aim to reduce the expenditure incurred by patients on treatment of cancer and heart diseases, the Union Minister for Health & Family Welfare, J P Nadda inaugurated the Affordable Medicines and Reliable Implants for Treatment (AMRIT) outlet at AIIMs on 16th November. 
  • To begin with, the retail outlet will sell drugs for the two ailments at highly discounted rates at the All India Institute of Medical Sciences. 
  • Health Minister said AMRIT will be launched in all Central Govt hospitals soon and lakhs of patients will benefit from this initiative. 
  • The AMRIT pharmacy would be selling 202 cancer and 186 cardio-vascular drugs, and 148 types of cardiac implants at very affordable prices. Patients can buy medicines and implants at 50 to 60 percent cheaper prices than the open market from AMRIT outlet in AIIMS. 
  • The project has been floated in a tie-up with government-owned HLL Lifecare Ltd (HLL) which is deputed to establish and run the AMRIT chain of pharmacies across the country. 
  • The government’s move comes amid statistics that peg Indians diagnosed with cancer at 700,000 every year. About 2.8 million people have cancer at any point of time and half a million die of the disease each year. The annual figure of women being diagnosed with breast cancer in India is 145,000, according to the World Health Organisation. 
  • Nearly over 50 percent of patients stop visiting hospitals after two or three cycles of chemotherapy due to unaffordable costs. Keeping this in mind Amrit will sell drugs at highly discounted prices.For example one can purchase `Docetaxel 120mg` used for chemotherapy cycle at Rs.888.75 for one cycle, when the MRP of the injection is Rs.13,440. Similarly, Caboplatin 450 mg would be sold at Rs.1, 316.25 while its MRP is Rs. 2,561.57. 
  • Every year 700,000 patients get diagnosed. About 2.8 million people have cancer at any point of time. Half a million die of the disease each year. Annual figure of women being diagnosed with breast cancer is 145,000. 50 percent of patients stop visiting hospitals after two or three cycles of chemotherapy due to unaffordable costs.
10) Rs. 800-crore Food Park to come up in Telangana
  • A mega food park with an initial investment of Rs. 110 crore is set to come up in Lakkampally village in Nizamabad district of Telangana. The total investment is expected to be Rs. 800 crore. The complex will also consist of a smart agro park. It is likely to benefit about 40,000 farmers 
  • The Union Minister for Food Processing Industries, Harsimrat Kaur Badal, laid the foundation stone on 16th November. The Minister said the project has to be completed within 24months. 
  • There will be ancillary units in nearby Medchal, Medak and Nalgonda. In the first stage, 78 acres of land will be developed with 30 units. It is expected to give a boost to agro-processing. 
  • The Ministry of Food Processing Industries is implementing the mega food park scheme to give a major boost to the food processing sector and to facilitate creation of modern infrastructure for food processing.
11) AP keeps in abeyance order permitting bauxite mining in Vizag
  • The Andhra Pradesh Government has decided to adopt a cautious approach on the bauxite mining issue and has kept in abeyance the GO permitting bauxite mining in the Eastern Ghats of Visakhapatnam district issued earlier this month. 
  • The decision was taken late on Monday night at the State Cabinet meeting held in Vijayawada, following a public outcry and huge controversy in the wake of the GO issued on November 5. A bandh was observed for a day in the Eastern Ghats of Visakhapatnam district, known locally as the agency area, and there were protests from all the political parties, including many local leaders of the ruling Telugu Desam Party. Maoists active in the area also threatened to oppose the move tooth and nail. 
  • Under the circumstances, the State Government decided to keep the GO in abeyance but many local organisations and political parties are demanding that the GO be scrapped and the Government issue a clear and categorical statement that the move to undertake bauxite mining in the Eastern Ghats of Visakhapatnam district would not be revived.
  • The AP Government has also decided to set up a state maritime board. The Cabinet has also cleared the Visakhapatnam metro rail project.
12) PM calls for targeted economic sanctions to curb terror funding
  • Prime Minister Narendra Modi on 18th November called for targeted economic sanctions to disrupt fund flows for terrorists. Addressing the sixth Global Conference on Asset Recovery in New Delhi,
  • According to the Prime Minister, the terrorists derive funding from a variety of criminal activities which include smuggling of narcotics, fake currency or from state sponsored activities in failed states.
Prime Minister stressed on: 
  1. Targeting proceeds of crime is an important elements in the fight against crime and sought international cooperation in this regard
  2. The need to focus on enhancing international co-operation in the field of asset recovery for fighting crime, corruption and terrorism.
  3. Globalisation of organised crime poses a major threat to economies throughout the world.
 On corruption, Prime Minister Modi said: 
  1. His government has taken significant steps to check corruption and menace of black money in a short span of time.
  2. The Government is unsparing when it comes to punishing the corrupt.
  3. The Centre is committed to implementing a uniform global standard on automatic exchange of information on a fully reciprocal basis to check black money.
  4. The mission of his government is to build a prosperous India and it is essential to fight relentlessly against corruption to achieve this objective.
13) Govt approves 10% stake sale in Coal India, eyes 20,000 cr
  • CCEA has also approved 10 per cent stake sale in Coal India Ltd amid growing concerns over meeting Rs 69,500 crore disinvestment targets in the current fiscal. According to Coal and Union Power Minister Piysh Goyal the government hopes to mop up around Rs 20,000 crore. At current market capitalisation, 10 per cent stake sale could fetch about Rs 21,137 crore. Government holds 79.65 per cent stake in Coal India.
14) Interest subsidy for Exporters from small, labour-intensive sectors
  • Exporters struggling to stay afloat in a global market hit by slowdown have been extended the long-awaited interest subvention (subsidy) scheme that would allow those in labour-intensive and small scale sectors to avail themselves of loans from banks at a three per cent lower rate. 
  • The scheme, now re-named interest equalisation scheme, was approved by the Cabinet Committee on Economic Affairs (CCEA) on 18th November. It will be implemented with retrospective effect from April 1, 2015 and will cost the exchequer an estimated Rs. 2,500 crore- Rs. 2,700 crore, annually. 
  • The scheme would be available to all exports of micro small and medium enterprises (MSME) and 416 other items spread across 25 sectors. The sectors covered are mostly labour intensive and include agriculture/food items, auto-components, bicycle parts, handicrafts, electrical engineering items and machinery, telecom equipment, handmade carpet (including silk), handloom products, coir items, jute, readymade garments and made ups, toys, sports goods, paper and stationary, leather goods and ceramics. The scheme, however, will not be available for merchant exporters.
15) Highway Ministry can approve projects up to Rs.1, 000 crore
  • The Cabinet Committee on Economic Affairs has given its approval to segregate construction cost from that of land acquisition, and pre-construction activities for appraisal and approval of National Highways projects. 
  • Additionally the Cabinet has stated that all NH projects with a civil construction cost of up to Rs. 1,000 crore approvals of the Ministry for Road Transport and Highways will be sufficient. Only for projects over Rs. 1,000 crore, a Cabinet Committee of Economic Affairs nod will be required.
  • The policy will speed up process of appraisal and approval of NH projects and help meet the target of 10,000 km set for this year. 
  • In another move, the CCEA also authorised NHAI to give road developers more time to finish their projects if the delays have not been caused by the developer. 
  • But the time for operations (toll collection or annuity payments) will continue to be the same, said an official release. This will be permitted for only for four-lane projects.
  • It may be noted that there are provisions for extending the toll collection period as a part of the contract between developer and NHAI. 
  • The extension will be given based on assessment of independent engineer, both individual and the firm, who will be accountable for the assessment of the extension recommended in the concession period. 
  • The projects using the above special dispensation shall have to achieve physical completion in the next three years. The move will help 34 languishing road projects.
16) Govt launches fund for MSMEs to acquire clean manufacturing tech
  • Government has launched Technology Acquisition and Development Fund (TADF) to help the MSME sector acquire clean technologies and boost manufacturing.
  • The scheme is conceptualised to catalyse the manufacturing growth in MSME sector to contribute to the `Make in India` initiative 
  • The fund, under the National Manufacturing Policy, would provide financial assistance to micro, small and medium enterprises (MSMEs). 
  • According to Commerce and Industry Minister Nirmala Sitharaman it would facilitate acquisition of clean and green technologies by MSME across the sectors and thus, bridge the technological gap at an affordable cost. 
  • Under the direct support for technology acquisition, it said proposals from the industry will be invited for reimbursement of 50 per cent of technology transfer fee or Rs 20 lakh, whichever is lower. 
  • In in-direct support for technology acquisition via patent pool, it said financial support would be provided to acquire technology or patent from across the globe based on applications received from MSMEs. Technology or patent will be licensed to selected firms, with a mutually agreed value and the selected companies will get a subsidy of 50 per cent of the mutually agreed value or Rs 20 lakh The fund will also support, via subsidies, manufacturing of equipment, machines, devices for controlling pollution, reducing energy consumption and water conservation. 
  • Further, the scheme will incentivise introduction of environment friendly projects like construction of green buildings, implementation of waste treatment facilities and renewable energy projects. 
  • The scheme will facilitate resource conservation activities in industries located in NIMZ (national investment and manufacturing zones) through the introduction of incentive/subsidy schemes for energy, environmental, water audits, construction of green buildings, implementation of waste treatment facilities and implementation of renewable energy projects through financial support under the TADF," it said.
  • TADF is a new scheme to facilitate acquisition of clean, green and energy efficient technologies, in the form of technology, customised products, specialised services, patents, industrial design available in India or globally, by MSMEs, it added. The scheme would be implemented through Global Innovation and Technology Alliance (GITA).