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Economy Current Affairs
Economy Current Affairs June 2nd week 2016
Author : Sowjanya
Category : Economy Current Affairs
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Economy Current Affairs June 2nd week 2016

1) Amazon announces $3 billion investment in India.

  • Amazon.com Inc, the world’s largest online retailer, will invest an additional $3 billion in India after the company exhausted its earlier investment pledge of $2 billion, piling pressure on local rivals Flipkart and Snapdeal to keep raising fresh funds.
  • Amazon’s additional investment highlights the ultra-aggressive rate at which it is spending on discounts, advertising, logistics and other things to achieve its ambition of becoming the largest e-commerce company in India.
  • Apart from its marketplace business, Amazon will also invest in building out its web services unit in India.

2) India, US announce $60 million clean energy financial support.

  • India and the US announced the setting up of two financial assistance programmes worth $60 million for supporting India’s much-needed clean energy initiatives including in solar power and other renewables.
  • This includes the creation of a $20 million US-India Clean Energy Finance (USICEF) initiative, equally supported by the US and India.
  • This is expected to mobilize up to $400 million to provide clean and renewable electricity to up to 1 million households by 2020.
  • The India and the US committed themselves to establish the US-India Clean Energy Hub as the coordinating mechanism to focus the US government’s efforts, in partnership with leading Indian financial institutions, to increase renewable energy investment in India.
  • The two leaders also agreed on a $40 million US-India Catalytic Solar Finance Programme, which would be equally supported by the US and India.

3) ADB approves $100 million loan for irrigation system in TN.

  • Multilateral lending agency Asian Development Bank has approved a USD 100 million (around Rs. 660 crore) loan to strengthen a key irrigation system and improve water management in the Vennar sub-basin of Cauvery Delta in Tamil Nadu.
  • This project will support both physical improvements and stronger water management, giving a significant boost to the lives of coastal communities who often go without sufficient irrigation water.
  • The project will strengthen the embankments of six major irrigation water channels in Vennar system to make them more resilient to floods and upgrade water regulators, sluices and pump stations.
  • To boost management, more community members will be tapped to take part in planning and delivery of water services, training will given to state water resource department officers.
  • The Cauvery delta, on the east coast of Tamil Nadu, is known as the ‘rice bowl’ of the state, with over 70 per cent of the delta population engaged in farming and fishing, but access to water is unreliable and flooding common during the monsoon season.

4) Greenko raises $230 million from GIC, Abu Dhabi fund.

  • Greenko Energy Holdings has signed agreements for a primary equity rising of $230 million from an affiliate of GIC of Singapore and an entity that is ultimately wholly owned by the Abu Dhabi Investment Authority.
  • After the GIC investment of $80 million in 2016, the ADIA entity will invest the remaining $150 million. Even after this transaction, GIC continues to be the majority shareholder of Greenko.
  • The funds will contribute to the continued growth of Greenko’s platform through the development of new renewable-energy projects, including low-risk expansions of existing wind farms. The Hyderabad-based renewable energy company has continued to attract long-term infrastructure capital for its projects.

5) GMR Infra bags Rs. 2,281 crore worth eastern rail freight corridor projects.

  • GMR Infrastructure Ltd has been awarded two more packages worth Rs. 2,280.70 crore on the Eastern Dedicated Freight Corridor.
  • The consortium has been issued a letter of award for construction of 221 km long corridor railway project on engineering, procurement and construction (EPC) mode.
  • Since the project is being executed under the EPC mode, the GMR Group is not required to provide significant investment for the same. Earlier, GMR-led consortium emerged as the successful bidder, under the international competitive bidding, for the project.
  • The project funded by the World Bank is divided into two packages. The first package comprises of 175 km single line connecting Sahnewal and Pikhani that passes through Uttar Pradesh, Haryana and Punjab. The second package is for a 46 km double line corridor in Uttar Pradesh connecting Dadri and Khurja.
  • The project entails design and construction work for single and double line on design-build lump-sum basis.

6) World Bank cuts global growth forecast to 2.4%.

  • The World Bank has lowered its forecast for the global growth in 2016 to 2.4 per cent.
  • The Washington-based institution expected the world economy to grow 2.4 per cent in 2016, 0.5 percentage point lower than the bank’s forecast in January.
  • Growth continues to falter in advanced economies, while there is considerable divergence of performance across emerging market and developing economies, and their overall growth remains below potential.
  • Developing economies are forecast to expand by 3.5 per cent in 2016, 0.6 percentage point lower than its January’s projection; advanced economies are expected to grow 1.7 per cent this year, 0.5 lower than its January’s forecast.

7) Gemporia TV eyes Rs. 100 crore in PE funding.

  • Jaipur-based Jewel Alliance Network Pvt Ltd, which runs jewellery shopping channel Gemporia TV, plans to rise about Rs. 100 crore from private equity firms in exchange for a minority stake in the channel. The company will use the funds to increase its presence and other marketing initiatives.
  • The TV channel for live jewellery retail, which started operations in India, plans to initiate talks with a clutch of PE firms. Jewel Alliance Network is a 50:50 joint venture between UK’s Gemporia and India’s Pink City Jewellers.


8) TMB profit up 6% in FY16.
  • For Tamilnad Mercantile Bank (TMB), growth will be driven by micro/small enterprises, retail and trader segments and mid-corporates in a limited way.
  • In 2015-16, the bank recorded a net profit growth of 6 per cent to Rs. 402.16 crore from Rs. 379.40 crore in the previous fiscal (FY15).
  • Total business rose 17.70 per cent to Rs. 52,946.59 crore (Rs. 44,985.91 crore in FY15). The bank has set a business target of Rs. 60,000 crore for the current fiscal.
  • The new board, which assumed charge in March this year, has declared 500 bonus shares for every shareholder. This would involve a transfer of about Rs. 120-130 crore from reserves to equity. Such bonus shares have already been issued to around 4,000 of the 18,000-odd shareholders.
9) SBI, CaixaBank ink pact to fund Indo-Spanish joint ventures.
  • State Bank of India and Spain’s Caixa Bank have inked pact to provide loans to Indo-Spanish joint ventures and local enterprises.
  • State Bank of India (SBI) and Caixa Bank have signed a memorandum of agreement to enhance business synergies.
  • As per the agreement, they will expand banks’ guarantee transaction businesses by jointly providing credit to Indian-Spanish joint ventures and Indian local enterprises.
  • The banks will also cooperate through introduction of business opportunities and partnering on possible infrastructure funds.
  • The banks will collaborate in areas of mutual interest such as syndicated loan business, guarantee transactions, trade finance and export credit agency finance, infrastructure finance and networking services, among others.
  • Through this agreement, both SBI and CaixaBank will gain direct access to their respective markets of operation.
10) TVS Automobile hits the start-up lane with Rs. 75 crore deals.
  • TVS Automobile Solutions, part of the $6 billion TVS Group, will invest in three start-ups that make the auto aftermarket business simpler.
  • The plan also marks the Chennai-based leading aftermarket player’s big leap into digital technology space.
  • The company, which took a bold step in the TVS Group by going for private equity infusion about eight years ago, has invested about Rs. 75 crore to pick up majority stake in three start-ups - Jazzmyride.com, a Rs. 20 crore e-commerce player in auto parts and accessories business; Autosense, a big data and analytics-based marketing services firm; and RedSun, which is focused on developing solutions such as connected cars.
11) FCI inks pact with Adani Group.
  • State-run Food Corporation of India (FCI) has entered into an agreement with Adani group for construction of two silos to store wheat, at an estimated cost of about Rs. 80 crore.
  • The two silos would have a combined storage capacity of 75,000 tonnes.
  • As part of the agreement, Adani Agri Logistics will construct silos at Kotkapura in Punjab and Katihar in Bihar in the next two years.
  • The silos will be designed, built, financed and operated by the private partner while it will be owned by the FCI.
  • FCI, the government`s nodal agency for procurement and distribution of food grain, would provide guarantee of rentals for 30 years.
  • The silo at Kotkapura would be of 25,000 tonne capacity and will require an investment of about Rs. 35 crore, while the other silo at Katihar would have a capacity of 50,000 tonnes to be built at a cost of about Rs. 45 crore.
  • A silo is a steel structure, comprising large size cylindrical shape bins normally each with a capacity of about 12,500 tonnes, where grains can be stored without jute bags for longer duration.
12) Textiles exports jump to 15% of total.
  • The textiles industry now contributes 15 per cent to India’s exports, marking the sector’s growth.
  • More than Rs. 6,500 crore has been spent by the Ministry of Textiles on various schemes for promotion and development of the textiles sector. Approximately five lakh additional jobs have been created in the past two years in the sector. The Ministry also aims to increase the earning of handloom weavers to Rs. 500 per day.
  • Apparel and handicrafts recorded 22 per cent growth, while textile exports grew by eight per cent during last two years compared with the previous two years.
  • To safeguard interests of domestic cotton growers, a well-planned, largest ever Minimum Support Price operation was carried out by the Cotton Corporation of India in the 2014 - 2015 season in all 11 cotton producing States. This operation was successful, with procurement crossing 86 lakh bales up to March 30, 2015.


13) PSBs’ loan quality to remain under pressure for next one year.
  • Global rating agency Moody’s Investors Service sees public sector banks’ asset quality remaining under pressure over the next 12 months.
  • This would be the case as banks continue to recognize non-performing loans from some of the larger leveraged corporate groups, particularly in the steel and power sectors.
  • As a result, elevated provisioning expenses will continue to constrain profitability and limit internal capital generation.
External capital:
  1. Moody’s Investors Service is of the view that the weak earnings outlook for India’s public sector banks highlights their high level of external capital needs. Their capitalization profiles will further deteriorate unless the government provides additional capital support.
  2. These conclusions were contained in a recently released report on ‘Indian public sector banks: Weak financial performance highlights the banks’ high external capital needs’.
  3. The Reserve Bank of India mandated asset quality review has resulted in high non-performing loan ratios and increased loan loss provisioning expenses.
  4. Eight of the 11 public sector banks rated by Moody’s posted a net loss for the full year, and the other three reported a significant decline in their profitability.
14) Tata Power acquires Welspun’s renewable energy assets.
  • Tata Power Company renewables arm has signed an agreement with Welspun Energy Pvt Ltd to acquire its green energy portfolio for an estimated at Rs. 10,000 crore ($1.4 billion).
  • Tata Power Renewable Energy has signed share purchase agreement to buy Welspun Renewable Energy`s 1.1 GW renewable portfolio in what would be the largest solar M&A in the country and also among the largest such renewable buyout in the whole of Asia.
  • Welspun Renewables is a 100 per cent subsidiary of Welspun Energy which in turn is co-owned by the listed Welspun Enterprises.
  • The company has about 1,140 mw of renewable power projects which includes about 990 mw solar power projects largest solar projects in the country and about 150 mw of wind power projects spread across ten states in India. Out of the 1,140 mw renewable portfolio, nearly 1,000 mw of capacity is operational and balance capacity is under advanced stages of implementation.

15) KVGB plans to disburse Rs. 1,000 crore to MSME sector by December.
  • Karnataka Vikas Grameena Bank (KVGB), a Regional Rural Bank sponsored by Syndicate Bank, plans to disburse Rs. 1,000 crore to micro, small and medium enterprises (MSME) sector by December.
  • The bank is already working on development initiatives for the benefit of MSMEs to fund 1,000 crore.
  • The bank will not refuse credit to viable and transparent enterprises and will also take steps to provide necessary training through RUDSETIs and SIRDs. Recently the bank chairman inaugurated a Stone Crusher Unit financed by it (KVGB) at Chikodi in Belagavi district.
  • KVGB is exploring funding MSMEs in manufacturing including the infrastructure and services sector which are key generator of job opportunities.
16) Microsoft to buy LinkedIn for $26 billion.
  • Microsoft has struck a landmark deal to acquire LinkedIn for $26.2 billion, its largest acquisition ever.
  • The all-cash offer, which values LinkedIn’s fully diluted equity at $28.2 billion, is also the biggest tech deal so far this year.
  • Microsoft, which was the biggest software company in the world during the early days of the personal computing era, has struggled to find growth in the smartphone era. Younger rivals such as Google and Apple have outstripped it in terms of revenue growth and enterprise value.
  • The purchase of LinkedIn will allow Microsoft to link the professional network with its intelligent digital assistant, Cortana, and its customer relationship management software.
  • LinkedIn, which has a growing network of more than 100m monthly active users, had seen its share price fall 40 per cent this year before the deal was announced.

17) Government approves 2 FDI proposals worth Rs. 2.19 crore.
  • The government has approved two foreign direct investment (FDI) proposals and has recommended one for approval from the Cabinet Committee on Economic Affairs.
  • The Centre cleared Aurobindo Pharma Ltd’s proposal worth Rs. 2.19 crore relating to grant of employee stock options to non-resident employees of the company.
  • It also approved Sterling Commerce Solutions India Private Ltd’s proposal to act as an investing company for Curan Software International Private Ltd, Emptoris Technologies India Private Ltd, Kenexa Technologies Private Ltd and Rational Software Corporation (India) Private Ltd, which are currently owned by overseas companies of IBM and are currently dormant.
  • The company can also from time to time act as an investing company for companies undertaking software development, technologies services or those which have become dormant pursuant to transfer of their business to IBM India.
  • Three proposals by Mylan Laboratories Ltd, Vodafone India Ltd, Reckitt Benckiser (India) Ltd were deferred and seven proposals were rejected. 



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