Economy Current Affairs
Economy Current Affairs February 4th Week 2016
Category : Economy Current Affairs
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1) Empowered Group of State Transport Ministers formed to suggest measures on transport sector.

  • The Road Transport and Highways ministry has announced formation of an Empowered Group of State Transport Ministers to advice on policy issues to make the country`s transport sector modern, efficient and transparent.
  • The Empowered Group will be headed by Rajasthan`s transport minister Yunus Khan. Transport minister Nitin Gadkari made this announcement.
  • The formation of the group is in tune with the Union Government’s concerted action plan to reduce road accidents by half by 2019.

2) Ricoh India wins Rs. 344 crore contract to supply computer hardware to Odisha schools.

  • Printing and IT solutions firm Ricoh India has bagged an order worth Rs. 344 crore from Kerala State Electronics Development Corporation to supply computer hardware to 2,000 government schools in Odisha.
  • "The company has got an order...for supply, installation and commissioning of computer hardware, connected accessories, software, maintenance of equipment and provision of computer education devices in 2,000.
  • Government and government-aided high schools in Odisha on five years BOOT Model Project under ICT@School Scheme``, Ricoh India said in a BSE filing.
  • Last month, Ricoh India, a subsidiary of Ricoh Group, Japan, had said it is eyeing 55% growth in revenues this fiscal.

3) CII inks MoU with Dubai exports to boost trade.

  • The Confederation of Indian Industry (CII) has signed a Memorandum of Understanding (MoU) with Dubai Exports to boost trade and explore business opportunities.
  • CII is a non-government organization of Indian businesses. which works to create an environment conducive to the growth of industry in the country.
  • Dubai Exports works with other Dubai Government Departments to simplify the export process by developing long-term growth strategies to expand businesses and maximize opportunities.
  • Signatory parties pledge to maintain regular and frequent contact with each other for mutual exchange of economic, trade and non-confidential information.
  • CII and Dubai exports will also organize exchange of visits for business cooperation and provide necessary support in terms of mounting business delegations, organizing conferences and other activities to each other.

4) CGPDTM issues revised patent guidelines for Computer Related Inventions.

  • The Controller General of Patents, Designs and Trademarks (CGPDT) has issued an order excluding software patents in its revised guidelines for Computer Related Inventions (CRIs).
  • The new order clearly mentions that, mere computer programmes those not in conjunction with a novel hardware will not be granted patent in India.
  • Implication of these guidelines: Software developers and start-ups will continue to have the freedom to innovate without worrying infringement notices in Computer Related Inventions area.
  • The Office of Controller General of Patents, Designs & Trade Marks (CGPDTM) under the aegis of Union Ministry of Commerce and Industry is nodal agency that supervises the working of Intellectual Property Rights (IPR) laws in India.


5) Government To Sell Its 5% Stake In NTPC.

  • In the sixth public sector unit (PSU) share sale this fiscal, the government will sell 5% stake in India`s largest power producer NTPC at a floor price of Rs. 122 a piece to raise Rs. 5,030 crore.
  • The share sale, which comes days ahead of the Budget 2016, will be the first under Sebi`s revised offer for sale (OFS) rules that allow the bidding for shares spread over two days.
  • The government has fixed a floor price for the sale of over 41.22 crore shares in NTPC at Rs. 122 a piece, a 3.82% discount to its closing price on the BSE.
  • The shares of NTPC closed at Rs. 126.85 on the BSE.
  • While the issue would open for institutional bidders, the retail investors, for whom 20% shares have been reserved, will get to bid. At a floor price of Rs. 122, the NTPC share sale would fetch about Rs. 5,030 crore to the exchequer.
  • NTPC is the first company to hit the markets under the revised offer for sale (OFS) guidelines of the market regulator the Securities and Exchange Board of India (Sebi).
  • In a BSE filing, NTPC said that government will sell over 41.22 crore shares in the company at a floor price of Rs. 122 a piece.
  • A 5% additional discount would be offered to retail investors, which are those who bid for shares worth not more than Rs. 2 lakh.
  • SBICAP Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities are acting as merchant bankers for the share sale.
  • The Cabinet had approved the 5% stake sale in NTPC. The government holds 74.96% in the firm. It had last sold stake in NTPC.

6) United States won WTO dispute against India`s solar rules.

  • The United States won a ruling against India at the World Trade Organization after challenging the rules on the origin of solar cells and solar modules used in India`s national solar power program.
  • In a statement, the US Trade Representative`s office called the ruling a significant victory that would hasten the spread of solar energy across the world and support clean-energy jobs in the United States.
  • The United States complained to the WTO in 2013 about the Indian solar program, which sought to ease chronic energy shortages in Asia`s third-largest economy without creating pollution.
  • But a requirement that certain cells and modules be made in India fell afoul of WTO rules on discriminating against imports. The United States said its solar exports to India had fallen by 90 per cent from 2011, when India imposed the rules.
  • The WTO ruling, which can be appealed within 60 days, was repeatedly delayed as the two sides tried to negotiate a settlement. An Indian official had said a compromise might let India subsidize state projects such as defense or railway projects.

7) Union Cabinet approves $150 million Credit for Chabahar Port Development.

  • For greater trade and investment flow with Iran and neighbouring countries, government today cleared proposals for development of strategic Chabahar port in the Persian Gulf nation including through a $150 million credit from Exim Bank.
  • ``The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to the proposal of the Ministry of Shipping for provision and operationalisation of credit of $150 million from EXIM Bank for development of Chabahar Port in Iran``, a Shipping Ministry statement said after the meeting.
  • The Cabinet has also authorised the Shipping Ministry to form a company in Iran for implementing the Chabahar Port Development Project and related activities.
  • The strategic port, which is located off Iran`s south eastern coast will provide India a sea-land access route to Afghanistan bypassing Pakistan.
  • In May last year, Road Transport, Highways and Shipping Minister Nitin Gadkari had visited Tehran where India and Iran signed a pact to develop the Chabahar port.
  • "India is negotiating this project to facilitate the growing trade and investment with Iran and other countries in the region, notably Afghanistan and also to provide opportunities to Indian companies to penetrate and enhance their footprint in the region".
  • Chabahar Port lies outside the Persian Gulf in Iran and will help in expanding maritime commerce in the region.
  • As per the MoU signed between the two nations in May last year, India is to equip and operat two berths in Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a ten year lease.
  • "Ownership of equipment will be transferred to Iranian side on completion of 10-year period or for an extended period, based on mutual agreement``, it said adding, the Iranian side had requested for provision of a credit of $150 million in accordance with the MoU.
  • As per the per the pact, operation of two berths will commence within a period of maximum 18 months after the signing of the contract.

8) Union Cabinet approved Promotion of Payments through Cards and Digital means.

  • The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of steps for promotion of payments through cards and digital means.
  • The move aims at reducing cash transactions. Several short term (to be implemented within one year) and medium term measures (to be implemented within two years) have been approved for implementation by the Government Ministries/ Departments/ Organisations.
  • Promotion of payments through cards and digital means will be instrumental in reducing tax avoidance, migration of Government payments and collections to cashless mode, discourage transactions in cash by providing access to financial payment services to the citizens to conduct transactions through card/ digital means and shifting payment ecosystem from cash dominated to non-cash/ less cash payments.
  • The essential features of the proposals for promotion of payments through cards and digital means include steps for withdrawal of surcharge/ service charge/ convenience fee on card/ digital payments currently imposed by various Government Departments/ organisations and introduction of appropriate acceptance infrastructure in Government Departments/ organisations; rationalization of Merchant Discount Rate (MDR) on card transactions and a differentiated MDR framework for some key transaction segments.
  • Mandating payments beyond a prescribed threshold only in card/ digital mode; introduction of formulae linked acceptance infrastructure by the stakeholders of certain card products.
  • The infrastructure of card/ digital payments is growing, but remains modest in comparison to cash payments. For card/ digital payments to increase, they should be easy to use, readily available and accepted, should not impose any undue financial burden on the merchant and user, and should offer an appropriate level of security.
  • While the payment system initiatives taken in the form of Electronic Clearing Service Scheme, National Electronic Funds Transfer, Real Time Gross Settlement Scheme etc. have been impressive, the benefits of modern card/ digital payment systems are yet to reach all sections of the society and be accepted across the length and breadth of the country.
  • Current experience and evidence indicates that the penetration and success of modern card/ digital payment products and services is concentrated to a large extent in the tier-l and tier-ll locations of the country and mostly to those citizens who have access to the formal banking channels.

9) Highlights of Railway Budget 2016-17.

  • Railway Minister announces a capital plan of Rs. 1,21,000 crore for 2016-17; claims action initiated on 139 budget announcements made last year.
  • The Union Railway Budget 2016-17 focused on capacity creation in the rail sector, with an increased outlay of about Rs. 1.21 lakh crore, and on completion of the ongoing projects rather than announcing new ones. Extending 2015`s measure, passenger fares remain the same.
  • Mr. Prabhu`s announcements included India`s first rail auto hub, boost to e-catering, connectivity to North-East and Wi-Fi in railway stations.

Theme of the Budget:

  1. `Chalo, Milkar Kuch Naya Karen` for overcoming challenges – Reorganize, Rejuvenate, Restructure Indian Railways Three pillars strategy: Nav Arjan – New revenues, Nav Manak – New norms, Nav Sanrachna – New Structures.

Railway Fares:

  1. No new hike in passenger fares and Freight fares. Promised to bring down freight rates and double non-tariff revenue for the ailing national transport.

New Initiatives:

For the unreserved passenger:

(i) Antyodaya Express superfast unreserved service.
(ii) Deen Dayalu unreserved coaches with potable water facility and higher number of mobile charging points.

For the reserved passenger:

(i) Humsafar: Fully air-conditioned service with an optional service for meals.

(ii) Tejas: It will operate at speeds of 130 kmph and above and shall showcase the future of train travel in India. It will offer onboard services such as local cuisine, entertainment, WiFi, etc.

(iii) UDAY (Utkrisht Double-Decker Air-conditioned Yatri) Express: Overnight double-decker express on the busiest routes. Potential to increase carrying capacity by almost 40%.

(iv) SMART (Specially Modified Aesthetic Refreshing Travel) Coaches: These coaches are designed to ensure higher carrying capacity and provision of new amenities including automatic doors, bio-vacuum toilets, bar-code readers, water-level indicators, accessible dustbins, ergonomic seating, vending machines, improved aesthetics, LED lit boards for advertising, entertainment screens, PA system.


  • SMS service ‘Clean my Coach’, ranking of A1 and A railway stations based on periodic third party audit and passenger feedback, Awareness campaigns. Waste segregation and recycling centres, additional 30,000 bio-toilets etc.

Catering and stalls at stations:

  • IRCTC will manage catering services in a phased manner; Railway is extending e-catering to all rail stations. IRCTC will make available local cuisine of choice, hygienic food. Travelling mothers, Children’s menu, baby foods, baby boards will be made available.

Women Quota:

  • 33 per cent sub-quota for women will be provided under all reserved categories. Railways will also increase the quota of lower berths for women and senior citizens.

Rail Mitra Sewa:

  • Strengthening the existing services for enabling passengers to book battery operated cars, porter services, etc. Expanding Sarathi Seva in Konkan Railway to help the disabled and old passengers.


  • Capacity of e-ticketing system has been enhanced from 2000 tickets per min to 7,200 per min Railway introduces 1,780 ticket-vending machines. e-ticket facility for foreign debit, credit card holders

Mobile Applications:

  • Integrating all facilities into two mobile apps that will deal with ticketing issues and for receipt and it will also redressal of complaints and suggestions.


  • Capacity of e-ticketing system has been enhanced from 2000 tickets per min to 7,200 per min Railway introduces 1,780 ticket-vending machines. e-ticket facility for foreign debit, credit card holders

Catering and stalls at stations:

  • IRCTC will manage catering services in a phased manner; explore possibility of making catering services optional, build local ownership and empowerment. Railway is extending e-catering to all rail stations. IRCTC will make available local cuisine of choice, hygienic food. Travelling mothers, Children’s menu, baby foods, baby boards will be made available.

High Speed Rail:

  • From Mumbai to Ahmedabad will be undertaken with the assistance of the Government of Japan. Prime benefit would be providing technology advancements and new manufacturing capability.


  • Invite FM Radio stations for providing train borne entertainment. Extension of ‘Rail Bandhu’ in all regional languages to all reserved classes of travelers.

Building terminal capacity:

  • Developing Rail side logistics parks and warehousing in PPP mode, TRANSLOC (Transport Logistics Company of India) will develop 10 goods sheds in 2016-17. India’s first rail auto hub will be inaugurated in Chennai. Rail University will come at Vadodara, Gujarat. Development of cold storage facilities on vacant land near freight terminals in which local farmers and fisherman will be given preferential usage of the facility.

Travel Insurance to passengers:

  • Optional travel insurance will be offered for rail journeys at the time of booking.

Rail Development Authority:

  • It will be established as statutory body to enable fair pricing of railway services and promote competition, protect customer interests and determine efficiency standards.


(i) Indian Railways will partner with State Governments for operating tourist circuit trains, promotion of tourism through UNESCO world heritage Railways and Railway museums.
(ii) To spread awareness about our National Animal, the Tiger, complete packages including train journey, safaris and accommodation to cover the wildlife circuit comprising Kanha, Pench and Bandhavgarh will be offered.

10) Mallya-USL deal under SEBI lens.

  • Vijay Mallya’s $75 million deal to exit United Spirits has come under the lens of market regulator SEBI.
  • According to SEBI sources, the contours of the deal are being examined for violations of corporate governance norms and the conditions under which the USL board decided to strike the deal.
  • If required the regulator could also go into the various agreements done by Vijay Mallya (prior to Diageo’s acquisition of shares from United Breweries) in which USL was a party and which were struck down by shareholders in November 2014, sources said.
  • Ironically, the company’s filing to the stock exchange stated that the deal was to ‘end the uncertainty relating to the company’s governance.
  • Proxy advisories hold the view that there is more to the deal than what meets the eye. In a scathing report, JN Gupta, Managing Director, Stakeholders Empowerment Services (SES), questioned the basis of the $75 million payout to Mallya.
  • Investors, it seems, have little chance for recourse. Shriram Subramanian, MD, InGovern, told BusinessLine that there is no single large institutional investor in USL which can take up the fight for minority investors.

11) UltraTech calls off Rs. 5,400 crore deal to buy Jaiprakash units.

  • UltraTech Cement, an Aditya Birla Group company, has decided to call off the deal with Jaiprakash Associates to buy two of its cement units in Madhya Pradesh.
  • The move to acquire the assets on a ‘going concern’ basis was not approved by the Bombay High Court citing the Mines and Minerals Development Regulation Act, which does not allow transfer of mining rights along with a sold asset.
  • Earlier this month, global cement giant Lafarge called off a Rs. 5,000 crore deal to sell 5.1 million tonnes cement capacity at Jojobera and Sonadih in eastern India to Birla Corporation for the same reason.
  • In a statement, UltraTech said the court could not sanction the scheme (for acquisition) in the absence of any timeline for amendment or clarification to the MMDRA. Under this circumstance, it was decided to apply for the withdrawal of the scheme filed before the High Court, which gave permission (for withdrawal) .
  • In December 2014, UltraTech signed a deal with Jaiprakash Associates to acquire 2.1 million tonnes per annum cement unit and 2.6 mtpa cement grinding unit at Bela along with 3.1 mtpa clinker and 2.3 mtpa cement grinding unit at Sidhi both in Madhya Pradesh all for an enterprise value of Rs. 5,400 crore. The deal also included captive power plants for 180 MW.

12) Blackstone-backed BPO Intelenet eyes buys in US, UK for $134 million.

  • Blackstone-backed business process outsourcer Intelenet Global Services is in talks to acquire two companies, one in the US and the other in the UK, for $122-134 million.
  • The acquisitions would help the BPO firm expand its presence across these geographies.
  • In the US, Intelenet is in discussions to buy a firm with a presence in the BFSI (Banking, Financial Service and Insurance) and healthcare space for $45-50 million. The deal, according to sources close to the development, is expected to be closed.
  • The sources declined to be identified as the talks are in private domain. When contacted, an Intelenet spokesman declined to comment.
  • In the UK, Intelenet is looking to take over a retail firm for £55-60 million ($77-84 million).
  • This deal is expected to be closed by this year-end, the sources added.
  • ``While the US buy would help expand the company’s footprint, the one in the UK could be a retail tuck-in acquisition``, one of the sources said.
  • The company has independent operations in UK, which were earlier conducted through its former owner Serco Plc.
  • Intelenet started out as 50:50 joint venture between HDFC and TCS in 2000, handling call centre operations for a range of sectors from financial services to travel. Then, in 2004, HDFC acquired TCS’ stake for an undisclosed amount and sold it to banking major Barclays.
  • In 2007, the management of Intelenet led a buyout, backed by PE firm Blackstone Group. In 2011, it was bought out by UK-based Serco Plc for Rs. 2,800 crore, making it the largest deal in the Indian BPO space. Last year, Blackstone paid Rs. 2,558 crore to buyout Intelenet, expecting an increase in outsourcing business.
  • Intelenet has followed a strategy of both organic and inorganic growth, and in 2005 acquired Sparsh BPO Services for an undisclosed sum. This paved the way for its entry into the domestic BPO sector.

13) Zee to acquire 80% stake in 2 India Today firms.

  • Zee Media Corporation will acquire up to 80 per cent stake in India Today group`s loss-making e-commerce and TV shopping entities Today Merchandise and Today Retail Network Pvt Ltd for Rs. 165.78 crore in staggered payments over the next four years.
  • "The board of directors of the company has approved in-principle, acquisition of 80 per cent equity stake by the company in both Today Merchandise Pvt Ltd (TMPL) and Today Retail Network Pvt Ltd (TRNL)``, Zee Media Corporation said in a BSE filing.
  • "The target companies, which are currently in losses, have been developing infrastructure for launching a `TV Shopping` channel and also operating an e-commerce website to complement the TV shopping business``.
  • The investment will be made in tranches. Zee Media will acquire 49 per cent stake by investing Rs. 39.78 crore by subscribing equity shares of both companies and have managerial and operational control over the target companies.
  • The company shall increase its stake by investing up to Rs. 126 crore over 4 years subscribing to any security convertible into equity shares of both companies, as par value, that upon conversion, the shareholding of the company shall be 80 per cent of fully-diluted capital of TMPL and TRNL.

14) Union Budget of 2016-17.

  • Affirming that the economy is right on track, Finance Minister Arun Jaitley presented the Union Budget for 2016-17. Citing that the CPI inflation has come down to 5.4% from 9 plus, he said it is huge relief for the public.
  • Total expenditure for 2016-17 has been projected at Rs. 19.78 lakh crore.
  • Higher allocation for agriculture, infrastructure and social sectors.
  • Fiscal deficit pegged at 3.5%, Revenue deficit was at 2.5% during 2015-16.


  1. 1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.
  2. Companies with revenue less than 5 crore rupees will be taxed at 29% plus surcharge.
  3. 0.5 per cent Krishi Kalyan Cess to be levied on all services.
  4. Infrastructure cess to be levied. 1% excise imposed on articles of jewellery, excluding silver. 1% Pollution cess of on small petrol, CNG and LPG cars. 2.5% on diesel cars of certain specifications and on higher-end models 4% cess.
  5. Corporate Tax for new manufacturing units fixed at 25%


  • Total allocation of Rs. 35984 crore for agriculture and farmer welfare.
  • Unified Agricultural marketing ePlatform to be launched that will provide a common online platform for wholesale markets.
  • ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented & 28.5 lakh hectares will be brought under irrigation.
  • 5 lakh hectares of land will be brought under irrigation. 5 lakh acres will be brought under organic farming over a three year period. Allocation of 60,000 crore rupees for recharging of ground water to focus on drought hit areas cluster development for water conservation. 20,000 crore rupees Dedicated Irrigation Fund in NABARD.
  • Allocation under Prime Minister Fasal Bima Yojana Rs. 5,500 crore.
  • Rs. 850 crore shall be allotted for four dairying projects - ‘Pashudhan Sanjivani’, ‘Nakul SwasthyaPatra’, ‘E-Pashudhan Haat’ & ‘National Genomic Centre for Indigenous Breeds’.
  • Soil Health Card scheme would cover all 14 crore farm holdings 2017.
  • ‘Parmparagat Krishi Vikas Yojana’ & `Organic Value Chain Development in North East Region` are to be used to promote organic farming.

15) RURAL & SOCIAL SECTOR WERE ALLOCATED Rs. 87,765 Crore & Rs. 1,51,581 Crore

  • 100% village electrification by 1st May, 2018.
  • MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) has been allotted Rs. 38,500 crore.
  • Under the Deen Dayal Antyodaya Mission - Every block under drought and rural distress will be taken up.
  • Under the Shyama Prasad Mukherjee Rurban Mission - 300 Rurban Clusters will be developed.
  • A new Digital Literacy Mission Scheme to be implemented for rural India to cover around 6 crore household within the next 3 years.
  • Rs. 2,000 crore has been allocated as initial cost for providing LPG connections to BPL families.
  • Rashtriya Gram Swaraj Abhiyan, a new scheme has been proposed with an allocation of Rs. 655 crore.


  1. 65 eligible habitats will be connected via 2.23 lakh kms of road. Current construction pace is 100 kms/day. Allocation of Rs. 27,000 crore on roadways and Rs. 55,000 crore for roads and highways. Total allocation of Rs. 97,000 crore for road construction under PMGSY.
  2. Shops to be given option to remain open 24*7 across markets. On east and west coasts, new Greenfield ports will be developed.
  3. Underserved airports will be revived. For regional connectivity centre to partner with States to revive small airports.
  4. 100 per cent FDI in food processing and marketing of food products produced and marketed in India. Department of Disinvestment to be renamed as Department of Investment and Public Asset Management.
  5. Government to amend Motor Vehicle Act in passenger vehicle segment to allow innovation. 100 per cent tax exemption for startups for 3 years.


  1. For promoting entrepreneurship among SC/ST, Rs. 500 crore will be allocated to Scheme 10 public and 10 private educational institutions will be made world-class.
  2. Digital repository mandatory for all school leaving certificates and diplomas. For higher education financing, allocation of Rs. 1,000 crore.
  3. Allocation of 1,700 crore rupees for 1500 multi-skill development centres.
  4. 62 navodaya vidyalayas to be established to provide quality education. Digital literacy scheme will be launched to cover 6 crore additional rural households.
  5. Entrepreneurship training will be provided at schools, colleges and massive online courses. Provide skill training to 1 crore youth under the PM Kaushal Vikas Yojna in the next 3 years. 1500 Multi-skill training institutes will be set up.


  • Allocation of Rs. 25,000 crore towards recapitalization of public sector banks.
  • Banking Board Bureau will be operationalised. Govt to increase ATMs, micro-ATMs in post offices in rural areas in next three years General Insurance companies will be listed in the stock exchange Under MUDRA, target of disbursement increased to 1,80,000 crore.


  1. New health protection scheme will be launched for health cover upto 1 lakh per family. Additional healthcare cover of Rs. 30,000 will be provided to senior citizens under it. National Dialysis Service Programme will be launched at all district hospitals with funds through PPP mode.
  2. PM Jan Aushadhi Yojana will be strengthened and 300 generic drug store to be opened.


  1. Allocation of 3000 crore for nuclear power generation Government to chalk out comprehensive plan for exploiting nuclear energy.
  2. Government to provide incentive for deepwater gas exploration and market freedom for it. Pre-determined ceiling price will be on landed price of alternate fuels.

16) 100 Crore each allocated for celebrating Birth Centenary of Pt Deena Dayal Upadhyay and 350th Birth Anniversary of Guru Gobind Singh.

  • "The Budget has allocated initial sums of Rs. 100 crore each for celebrating the birth centenary of Pandit Deendayal Upadhyay and the 350th birth anniversary of Guru Gobind Singh``, Finance Minister Arun Jaitley said while presenting General Budget 2016-17 in Lok Sabha.
  • Pandit Deendayal Upadhyay, a leader of the Bharatiya Jana Sangh, was born in 1916.
  • Guru Gobind Singh, the tenth guru of Sikhism, was born in 1666.