Economy Current Affairs
Economy Current Affairs June 3rd week 2016
Category : Economy Current Affairs
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1) Airtel teams up with Singtel to expand data business in 325 cities globally.
  • Singapore Telecommunications Ltd (Singtel) and Bharti Airtel have joined hands to deliver high-speed secure data network coverage to Asia-Pacific, West Asia, Africa, Europe and the US.
  • They have combined resources into one network to provide high speed data connectivity to 325 cities across the world through 370 Points of Presence (PoP). This will form one of the largest Internet Protocol Virtual Private Networks (IP VPN) globally.
  • Together, Singtel’s 200 PoPs in 160 cities around the world and Airtel’s 170 plus PoPs in 165 cities across India, Africa and West Asia, will form a new network that offers a connectivity backbone to enterprises that spans several continents.
  • With its wide coverage of cities in India, this network paves the way for our international customers to enter into one of the world’s most vibrant economies.
  • Businesses only need to deal with a single contract and customer helpdesk on the back of one network to manage their communications across multiple countries.
2) Indiabulls Housing Finance to raise Rs. 25,000 crore in FY17.
  • Indiabulls Housing Finance plans to raise almost double the amount it borrowed incrementally in FY16.
  • The company is looking to raise Rs. 25,000 crore in FY17 as it aims to grow its loan book by about 25 per cent or atleast Rs. 15,000-16,000 crore.
  • The company’s loan book stood at Rs. 68,700 crore, growing 31.5 per cent in FY16 over FY15. Its borrowings increased by Rs. 13,600 crore or 29 per cent in the same period to stand at Rs. 61,090 crore.
3) Cabinet approves disinvestment of 10% paid up equity of Housing and Urban Development Corporation Ltd. (HUDCO).
  • The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has given its approval for disinvestment of 10% paid up equity of Housing and Urban Development Corporation Ltd. (HUDCO) out of Government of India’s shareholding of 100% through Initial Public Offering (IPO) in the domestic market as per the Securities and Exchange Board of India (SEBI) Rules and Regulation.
  • The paid up equity capital of HUDCO is Rs. 2001.90 crore and Government of India owns 100% 0f the equity at present. Net worth of the Company is approximately Rs. 7,800 crore.
  • HUDCO was incorporated in 1970 as a wholly owned Government of India Enterprise under the administrative control of Ministry of Housing and Urban Poverty Alleviation with the objective of providing long term finance for construction of houses for residential purposes. It also finances and undertakes housing and urban development projects in the country.
4) Uber enters into pact with Tata group.
  • Tech-based car hailing company Uber has entered into an agreement with Tata group to help its drivers own Indica and Indigo cars with less hassle. While Tata Capital Financial Services and Tata Motors Finance will offer loans at "competitive`’ interest rates, ‘affordable’ insurance would be offered by Tata AIG as a package.
  • Started off in Hyderabad, the scheme will be rolled out in other cities where Uber runs its services.
  • Over the next one year, the initiative endeavours to fuel micro-entrepreneurship across India by enabling over 20,000 drivers to start their own business on the Uber platform.
5) Coal India arm to buy back Rs. 1,200 crore worth shares.
  • State-owned Coal India subsidiary South Eastern Coalfields Ltd will buy back shares worth Rs. 1,200.19 crore.
  • The move will help the government in realizing its disinvestment target of Rs. 56,500 crore for the fiscal.
  • The SECL buyback will represent 23.53 per cent of the total number of equity shares in the paid-up share capital of the subsidiary for an aggregate amount not exceeding Rs. 1,200.19 crore (maximum buyback size) being up to 25 per cent of the paid-up equity share capital and free reserves as on fiscal ended.
  • The buyback will be at a price of Rs. 14,180.57 per equity share payable in cash.
  • Buybacks help a company reduce equity by using idle cash and hence provide better returns to shareholders.
  • Coal India had recently informed bourses that two of its subsidiaries Mahanadi Coalfields and Northern Coalfields will buy back shares worth around Rs 1,978 crore from their shareholders.
  • CIL accounts for over 80 per cent of domestic coal production.
6) Vikram Solar to invest Rs. 1,000 crore to raise capacity.
  • Solar panel manufacturer Vikram Solar plans to invest up to Rs. 1,000 crore over three-four years to expand its panel manufacturing capacity to 2,000 MW per annum, and to set up solar cell manufacturing of 500 MW per annum.
  • It currently has 500 MW of panel manufacturing capacity located in West Bengal.
  • All manufacturing is currently out of West Bengal. Adding another 400 MW of capacity this year. Beyond the capacity addition this year, the new facilities will come up outside West Bengal. The solar cell manufacturing facility with 500 MW will come up in West Bengal.
7) Alstom India wins Rs. 202 crore contracts from PowerGrid.
  • Alstom T&D India, part of the GE Group, has won two contracts worth Rs. 202 crore from PowerGrid Corporation of India for the execution of projects in Madhya Pradesh.
  • The projects will facilitate evacuation of power and add to the availability of electricity in Central India.
  • Under the first contract, worth Rs. 119.7 crore, Alstom T&D will set up a 400/220 kV AIS substation in Rewa, Madhya Pradesh.
  • The contract also includes the supply of three 500 MVA power transformers and one shunt reactor at 500 kV level. The substation will evacuate power from the 750 MW solar park coming up in Rewa.
  • In the second contract, worth Rs. 82.8 crore, Alstom T&D India will install, test and commission a part of the Gadarwara Part (A) Transmission system project in Madhya Pradesh.
  • The project will evacuate power from NTPC’s 1,600MW, Gadarwara Supercritical Thermal Power Station. 
8) Government decided to impose export duty of 20% on the export of sugar.
  • Government imposed 20 per cent customs duty on sugar exports to boost domestic supply and check prices which are ruling high at Rs. 40/kg.
  • The move comes at a time when prices have surged sharply in various commodities including tomato, wheat and pulses.
  • To keep the domestic prices of sugar under check, the government has decided to impose export duty of 20 per cent on the export of raw sugar, white or refined sugar.
  • A decision has been notified by the Central Board of Excise and Customs (CBEC).
  • The duty has been imposed to restrict exports following sharp rise in global prices. The duty is, however, lower than 25 per cent proposed by the Food Ministry.
  • India, the world`s second largest sugar producer after Brazil, has exported 1.6 million tonnes of sugar so far in the 2015-16 marketing year (October-September). Further exports are unlikely to take place with this decision.
9) World Bank arm to invest $75 million in Glenmark.
  • International Finance Corp. (IFC), the private sector lending arm of the World Bank was looking to invest up to $75 million, or about Rs. 500 crore, in Glenmark Pharmaceuticals Ltd, which is raising $200 million to reduce debt and fund expansion plans.
  • The Mumbai-based drugmaker is raising the capital by selling quasi-equity instruments. The company plans to use the money to expand manufacturing capacity, mostly in India, build research and development (R&D) capacity for new products and reduce debt.
  • Of the total, Glenmark plans to invest a significant amount in capital expenditure over the next three years across its facilities in India.
  • Having IFC as an anchor investor in this round of fund-raise will also help attract other investors-which is important during a time of volatile markets... The company also values IFC’s ability to fund future rounds as the company implements its growth plans and strategy.
  • As of 31 March, Glenmark’s debt stood at around Rs. 4,000 crore, with a debt-equity ratio of 0.6. For year ended, Glenmark posted a net profit of Rs. 702 crore on Rs. 7,649.6 crore of revenue.
10) Blackberry partners HCL for selling software.
  • Smartphone maker Blackberry announced its partnership with IT services firm HCL Infosystems for the distribution of the former`s enterprise software products and services in India through HCL`s network of distribution partners.
  • In addition to sales support, HCL will also reportedly provide value-added services such as technical support and consulting to Blackberry`s customers.
11) DHFL Pramerica unveils dengue protection policy.
  • DHFL Pramerica Life Insurance (DPLI) has forayed into the digital space with the launch of pure online health insurance product - Dengue Shield.
  • DHFL Dengue Shield is an affordable Dengue Insurance Policy with premium as low as Rs. 1 a day. It is a fixed benefits policy and no detailed bills needed at the time of claim.
  • An individual has the option to choose a sum insured of between Rs. 25,000 and Rs. 50,000. Options of both single and annual premium payments exist where a customer can enjoy a discount of up to 21 per cent on single premium payment. The group version of Dengue Shield will be available soon.
12) Max Life, Max Financial to merge with HDFC Life.
  • Max Financial Services and Max Life have entered into an agreement for a merger with HDFC Life. Their respective boards have approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger.
  • The agreement provides for a mutually agreed exclusivity period for due diligence and discussions between the parties in relation to a proposed transaction. However, it has not been mentioned as to how much stake the foreign partner of Max Life will hold post the merger. No timeline has been given for the merger.
  • The combined entity would be the largest private sector insurer, both in terms of assets under management and new business premiums. Assets under management of the combined entity would touch Rs 1.10 lakh crore and new premiums would almost touch Rs. 9400 crore.
  • HDFC Life is a joint venture between HDFC and Standard Life Plc, a provider of financial services in the UK. While HDFC holds 61.65 per cent in it, the foreign partner holds 35 per cent. Max Life Insurance is a joint venture between Max Financial Services Ltd. and Mitsui Sumitomo Insurance Co. Ltd. The foreign partner holds 25 per cent in the insurer.
  • Max Financial Services is already listed on the stock exchanges and is the holding company of Max Life Insurance.
13) Yatra acquires auto rickshaw aggregator mGaadi.
  • Gurgaon-based travel portal, acquired Bangalore-based auto rickshaw aggregator, mGaadi for an undisclosed amount.
  • Founded in 2012, mGaadi is an app-based commuting service from India Drivers Network, a Bangalore-based social enterprise.
  • As a part of the deal, mGaadi`s employee transportation platform, Cartr along with other technologies will be integrated into Yatra’s products.
14) India sees highest-ever tea production in FY16.
  • India recorded it’s highest-ever tea production of 1,233 million kg in 2015-16 fiscal. Further, the exports during the fiscal crossed the 230 million kg mark for the first time in 35 years after reaching 232.9 million kg (valued at Rs. 4,493 crore).
  • The surge in exports is attributed to the increased demand from Russia, Iran, Germany, Pakistan, Bangladesh, UAE and Poland.
15) Odisha to invest Rs. 1,000 Crore for skill development.
  • To create the `Skilled in Odisha` brand name, the state government decided to invest Rs. 1,000 crore for setting up of eight advanced skill development centres, besides upgrading existing institutes in order to train eight lakh youths in three years.
  • Three years from now, every graduate of an ITI of the state will be at the forefront of technology.
  • With an outlay of Rs. 1,000 crore and loan assistance from the Asian Development Bank (ADB), eight advanced skill development training institutes will come up in different parts of the state.
  • Stating that the state must make `Skilled in Odisha` a reality.
  • In the last two years 3.3 lakh youths in the state have been trained, equipping them with employability and self employment skills.
16) Eurozone approves €7.5 billion in funds for Greece.
  • The Eurozone has approved €7.5 billion (about $8.46 billion) in bailout funds for Greece, in what will be the first payment since 2015.
  • This will allow the country to meet €3.5 billion in debt repayments to the European Central Bank in July.
  • Notably, Greece owes its creditors over €300 billion, approximately 180% of its Gross Domestic Product (GDP).
17) JSW Steel’s US arm pays MM Steel $55 million penalty.
  • Sajjan Jindal’s JSW Steel has decided to appeal against a penalty of $55 million (Rs. 368 crore) levied against its US subsidiary in an anti-trust case filed by MM Steel in 2012.
  • MM Steel had filed the case in a US district court against its competing distributors and steel manufacturers, including JSW Steel, claiming that its rivals had conspired to deprive it of supplies and that manufacturers had joined the plot, leading to the closure of its business in 2013.
  • The district court directed JSW Steel’s subsidiary to pay a $156 million (Rs. 1,040 crore) fine. JSW filed a petition for re-hearing with the Fifth Circuit Court. JSW US Inc’s petition for review was rejected and it was asked to pay the penalty.
  • JSW Steel’s US unit comprises three pipe and plate mills that it had acquired from Sajjan Jindal’s elder brother Prithviraj Jindal for Rs. 3,690 crore in 2007
18) Odisha electronics park likely to attract Rs. 1,000 crore investment.
  • Odisha government is expecting around Rs. 1,000 crore investment in the proposed Greenfield Electronics Park, spread over an area of 203 acres, in the state capital.
  • The park is ready to house around 100 units of electronics manufacturing cluster with state-of-the-art, infrastructure and common facilities.
  • The Odisha Industrial Infrastructure Development Corporation (IDCO) is developing the park and master planning has been done by Jurong Consultants, Singapore.
  • Core infrastructure like road, provision of power and water for the park is almost ready and finalized. "It is expected to attract an investment of Rs. 1,000 crore.
  • The state government has given 203 acres land in Iarapur and Durgapur of Khurda district and providing around Rs. 110 crore.
  • The state has a Special Incentive Package Scheme which provides incentives to electronics manufacturing companies over and above the m-SIPS scheme of the Centre.
19) Niue`s currency coins have cartoon characters.
  • Niue, an island country in the Pacific has coins displaying popular fiction characters on its currency, the Niue dollar.
  • The coins have a Disney series, featuring characters like Mickey Mouse, Goofy, and Snow White, apart from other series like Star Wars, Pokemon, the Godfather and Doctor Who.
  • The country also earns royalty whenever a coin is purchased by collectors.
20) Two-day `Rajswa Gyansangam`, an annual conference of tax administrators held in New Delhi.
  • The two day "Rajswa Gyansangam- Annual Conference of Tax Administrators-2016” concluded. "Rajswa Gyansangam” was held in national capital, 2016 and marked a new height in the generation of innovative ideas and opened new frontiers for the tax administrators.
  • The Prime Minister Shri Modi stressed that facilitation should be the core of the tax ecosystem and the fear of the law rather than the law enforcer should be the maxim on which tax administrators should work. While acknowledging the significant role of revenue collection in the growth and development of the country, he exalted the revenue officers to achieve high standards in taxpayer friendly services towards compliant tax payers.
  • The Prime Minister Shri Narendra Modi emphasized that ``RAPID`` (Revenue, Accountability, Probity, Information, Digitization) should become the cornerstone of tax architecture.
  • A joint session of CBDT and CBEC was addressed by renowned novelist Chetan Bhagat on ``Taxing with Love``. 

21) India most open economy in world for FDI.

  • India the most open economy in the world for FDI and would give boost to employment as part of efforts to transform the country.
  • Amendments in FDI policy would promote ease of doing business as there will now be 100 per cent FDI under government approval route for trading, including e-commerce for food products manufactured or produced in India.
  • Government radically liberalizes FDI regime with the objective of providing major impetus to employment & job creation.
  • Key reform decisions were taken at a high level meeting chaired by the PM, which makes India the most open economy in the world for FDI.
  • The government announced the second wave of FDI reforms allowing 100 per cent inflows in civil aviation and food processing sectors while easing norms in defence and pharmaceuticals.

22) Government to set up ETF to meet disinvestment target.

  • The government will set up a new exchange traded fund (ETF) to sell its shares in public sector undertakings (PSUs) and other private companies, as part of its 56,500 crore disinvestment target for the 2016-17 fiscal.
  • ETFs are investment vehicles which hold assets like stocks or bonds and are traded on a stock exchange.

23) Prudential to raise stake in DHFL Pramerica Life to 49%.

  • US-based insurance major Prudential Financial Inc (PFI) has signed definitive agreements to increase its shareholding in private life insurer DHFL Pramerica Life Insurance (DPLI) to 49 per cent from existing 26 per cent.
  • The transaction is not closed yet. Agreements have been signed and submitted to IRDA for movement of Prudential’s stake from 26 per cent to 49 per cent. IRDA approval is awaited and expected in the next two weeks.
  • Shareholders of DPLI have already had one round of discussions with officials from the Insurance Regulatory and Development Authority (IRDA).
  • Under the recently liberalized regime, foreign direct investment in life insurance can come under the automatic route without having to approach the foreign investment promotion board (FIPB).
  • Even in this transaction, there will not be any need to approach the FIPB, Pabby noted.
  • Prior to the latest agreements, Prudential International Insurance Holdings, a wholly-owned subsidiary of PFI, had a 26 per cent stake in DPLI while Dewan Housing Finance Corporation Ltd (DHFL) and its two promoter entities together held 74 per cent.

24) Union Government approves 100% FDI in Aviation, Defence and e-commerce sectors.

  • The government announced sweeping changes in India`s foreign direct investment policy, opening up the airline business to 100 per cent ownership, relaxing rules for single brand retail and defence and putting most sectors on the automatic approval route, continuing with the reforms programme that was kicked off after state polls ended.
  • India is now the most open economy in the world for foreign direct investment.
  • Now most of the sectors would be under automatic approval route, except a small negative list.
  • Apple could be a high-profile beneficiary of the changes.
  • Local sourcing conditions have been relaxed for single-brand retailers, helping companies such as Apple to set up its own stores in India. With its previous application having been denied.
  • Barring the sectors on this list, FDI up to 49 per cent will be allowed automatically, marking an important shift in the way the policy is administered.
  • The decision to further liberalize the FDI regime with the objective of "providing major impetus to employment and job creation in India".

25) Gayatri Projects bags Rs. 700 crore order for Navi Mumbai airport.

  • Gayatri Projects Ltd has made inroads into the construction of airports by bagging a Rs. 700 crore contract from the City and Industrial Development Corporation of Maharashtra (Cidco).
  • This is part of the larger Navi Mumbai International Airport project contract. The project entails development of land for the Mumbai International Airport (package-II).
  • The Hyderabad-based construction and infrastructure company is seeking to gain a foothold into the relatively nascent and fast growing EPC opportunity in airport related construction works.
  • The construction and development of airports is expected to be become a major source of business for infrastructure companies, given that the Indian aviation sector is likely to see investments of over $120 billion for the development of airport infrastructure and aviation navigation services over the next decade.
  • With India set to be the third largest civil aviation market by 2020, it will involve the development of many Greenfield airports as well as improvement of existing airports.

26) Zydus acquires two new drug applications from Teva.

  • Cadila Pharmaceuticals Ltd (Zydus Cadila), has acquired two Abbreviated New Drug Applications (ANDAs) from Teva, which would strengthen its US portfolio.
  • These ANDAs were being divested by Teva. It was a pre-condition to the Zydus’ acquisition of Allergan’s generic business. The acquisition was contingent on closing of the Teva-Allergan Generics transaction and approval by the US Federal Trade Commission. The financial details of the transaction remained undisclosed.
  • These ANDAs have been acquired by its wholly-owned subsidiary, Zydus Worldwide DMCC, and the transaction will be financed through the group’s internal accruals.
  • The acquired portfolio comprises an ANDA that is already commercialized, and one pipeline ANDA that is a transdermal patch. The estimated market size of the two ANDAs put together is nearly $200 million.

27) MasterCard plans to invest $800 million in India over the next 4 years.

  • Global payments Services Company MasterCard plans to invest $700-800 million in India between now and 2020.
  • These investments will flow into processing, mobile technology and solutions and data analytics.
  • Some investments will also go towards royalty for technology as a whole and not related to MasterCard.
  • The planned investments of about $800 million are double the $400 million that MasterCard had invested in India since 2014.

28) Cabinet approves Rs. 6,000 crore package for textiles.

  • Government approved a Rs. 6,000 crore special package for textiles & apparel sector to create one crore new jobs in 3 years, attracting investments of $11 billion and generating $30 billion in exports.
  • The measures approved include additional incentives for duty drawback scheme for garments, flexibility in labour laws to increase productivity as well as tax and production incentives for job creation in garment manufacturing.
  • Apparel manufacturing had shifted to countries like China which had cost advantages. However, China`s cost advantage has been neutralized to some extent because of increase in labour wages.
  • The package will help in realizing the true potential of employment generation in the textile and apparel sector.
  • The Rs. 6,000 package will result in additional investments worth $11 billion, creation of one crore additional jobs and increase in exports worth $30.4 billion which will help boost textile and garmenting sector.

29) GVFL invests Rs. 40 crore in cold-chain operator.

  • GVFL Limited announced an investment of Rs. 40 crore in Mumbai-based integrated cold-chain operator Schedulers Logistics India Pvt Ltd under GVFL’s Golden Gujarat Growth Fund.
  • The transaction marks the second round of growth financing for GVFL’s first exposure in the logistics sector.
  • Schedulers Logistics operates a fleet of reefer vehicles and temperature-controlled warehouses across the country.
  • Started in 2013 with a fleet of 33 reefer vehicles, Schedulers operates 200 reefer trucks and manages 13,000 tonnes of temperature-controlled warehousing space.