Economy Current Affairs
Economy Current Affairs July 1st week 2016
Category : Economy Current Affairs
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1) India to get over $1 billion from World Bank for PM Narendra Modi`s solar goals.
  • The World Bank would lend India more than $1 billion for its huge solar energy programme.
  • Modi is banking on India`s 300 days a year of sunshine to generate power and help fight climate change rather than committing to emission cuts like China.
  • The World Bank loan is the global lender`s biggest solar aid for any country and comes as India has set a goal of raising its solar capacity nearly 30 times to 100 gigawatts by 2020 and is attracting mega investment proposals from top companies and institutions.
  • India is the largest client of the World Bank, which lent it around $4.8 billion between 2015 and 2016.
2) CBDT notifies rules for foreign tax credit, FMV.
  • Corporates earning income abroad will be able to claim credit for taxes, surcharges and cesses paid abroad with the tax department notifying Foreign Tax Credit rules. The rules, which come into effect from April 1, 2017, allow taxpayers to claim credit of foreign tax under dispute, once it is finally settled. FTC, however, will not be allowed in case of interest, fee or penalty.
  • In a separate notification, the CBDT also notified rules for calculating ‘fair market value’ of assets located in India in case of indirect transfer by multinational companies for the purpose of tax levy.
  • As per the rule, the fair market value (FMV) of listed companies will be computed on the basis of a formula taking into account its market capitalization, book value of liabilities and total number of shares. In case of an unlisted firm, the FMV would be determined by a merchant banker or accountant as per internationally accepted methodology.
3) P-Note investments rise to 2.15 lakh crore in May.
  • Investments into India`s capital markets through participatory notes (P-Notes) rose to Rs. 2.15 lakh crore at the end of May, after hitting a 20 month low in the preceding month.
  • P-Notes are typically instruments issued by registered foreign portfolio investors to overseas investors who wish to invest in Indian markets without registering themselves directly in India to save on time. But they still need to go through a proper due diligence process.
  • The total value of P-Notes investment in Indian markets - equity, debt and derivatives - increased to Rs. 2,15,338 crore at the end of May, from Rs. 2,12,132 crore in March-end.
  • The figure in March had touched the lowest level since August 2014 when the cumulative value of such investments stood at Rs. 2.11 lakh crore.


4) India’s pharma industry expected to grow to $55 billion by 2020.
  • The rapidly growing pharmaceutical market in India is expected to be worth USD 55 billion by 2020, becoming the sixth largest market globally in absolute size.
  • The Indian pharmaceuticals market is growing rapidly, from USD 6 billion in 2005 to USD 55 billion by 2020.
  • Branded generics dominate the pharmaceuticals market, constituting nearly 70 to 80 per cent of the market. India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume.
  • India`s cost of production is significantly lower than that of the US and almost half of that of Europe and that give a competitive edge to India over others.
5) New FDI rules: Liberty Videocon Gen Insurance to get Rs. 310 crore.
  • Liberty Videocon General Insurance is headed for capital infusion of Rs. 310 crore as its foreign JV partner is set to raise stake to 49 per cent, the limit under the revised guidelines for the insurance sector.
  • The joint venture is between India`s Videocon Industries and Liberty Citystate Holdings Pte, part of the US-headquartered Liberty Mutual Insurance Group.
  • The JV Company had launched its operations in India in 2013, with a current market share of 0.4 per cent. It looks to become one of the dominant players in the general insurance business.
  • Liberty and Videocon both have invested in India to keep growing year on year.
6) India`s rank falls to 75 on money in Swiss banks.
  • With Swiss francs (CHF) 1.2 billion (around Rs. 8,392 crore) held by its citizens in Switzerland`s banks, India has slipped to the 75th position, its lowest since the Swiss National Bank began releasing such data in 1997.
  • The data for 2015 placed India at 61st place, while it used to be among top 50 countries in terms of holdings in Swiss banks till 2007.
  • India was also lowest ranked among the BRICS countries - Russia was ranked 17th (CHF 17.6 billion), China 28th (CHF 7.4 billion), Brazil 37th (CHF 4.8 billion) and South Africa 60th (CHF 2.2 billion).
  • Britain and America were the only two countries that accounted for Swiss bank holding of double-digit percentage share each.
  • India was ranked 75th with CHF 1.2 billion, which is not even 0.1 per cent of the total foreign money in Swiss banks. 
7) Centre to allot Rs. 400 crore for developing airports in UP.
  • Narendra Modi government is working to give a big push to operationalize numerous airports in Uttar Pradesh. Rs. 400 crore will be provided by the Centre for developing airports in Agra, Allahabad, Kanpur and Bareilly.
  • The assistance would be provided by Modi government within a period of one and a half months. Which the state government had provided Rs. 200 crore and the work is being executed by RITES and would be complete with a year.
  • The big infrastructure push also assumes political significance at a time when BJP is aggressively gearing up for the UP polls to be held next year.
8) Aditya Birla Fashion acquires global clothing brand Forever 21.
  • Aditya Birla Fashion and Retail (ABFRL) will acquire global clothing brand `Forever 21` in the Indian market for USD 26 million (around Rs. 175.52 crore).
  • The company has executed a business transfer agreement with Diana Retail and DLF Brands for acquisition of the business undertaking of Diana Retail... under the Forever 21 brand and also through e-commerce channel on a going concern basis, in the Indian market.
  • Diana Retail is the franchisee of Forever 21 brand in India.
  • The transaction involved acquisition of the Forever 21 Undertaking of Diana Retail through a business transfer agreement not share transfer. The consideration for acquisition is USD 26 million.
9) Online pharmacy 1mg acquires lab aggregator Medd.
  • Taking a step further in its aggressive growth plans, Sequoia Capital backed online pharmacy 1mg announced that it has acquired Medd, a marketplace for booking diagnostic and imaging tests. 1mg did not divulge the deal size and structure.
  • Diagnostics is a huge opportunity within ecommerce since there are more than 100,000 diagnostics labs with very few scale players.
  • Consumer experience is also not satisfactory with issues like requirements of advance bookings, lack of transparency in pricing across labs.
10) Edelweiss Housing Finance plans to raise Rs. 500 crore via fully secured NCDs.
  • Edelweiss Housing Finance, a part of the Edelweiss Group, is planning to raise Rs. 250 crore through 100 per cent secured non-convertible debentures with a green-shoe option of another Rs. 250 crore.
  • This is the maiden public issue of NCDs by the company and is specially targeted at retail investors (including high net worth individuals) with a share of 60 per cent of the total amount followed by 20 per cent each for institutional and non-institutional (corporate) investors.
  • Despite doubling of gross domestic product to $2 trillion in a span of just about a decade, retail finance is still an under-catered market. India is expected to become a $5 trillion economy by 2025 and this means lot of growth for retail finance.
11) Google buys France-based startup Moodstocks.
  • Google announced a deal to buy Moodstocks, a French startup behind technology that helps smartphones recognize whatever they are aimed at.
  • Moodstocks caught the US technology giant`s eye for its work in computer vision and machine learning, as well for accomplishments in enabling smartphones or other mobile devices to recognize images and objects.
  • Google is among Silicon Valley titans investing in ways to get computers to see and understand the world aroun them the way people do.
  • Machine learning has been woven into an array of Google offerings, such as its free language translation and photo services.
12) CCEA okays Axis Bank plan to hike foreign holding to 74%.
  • The Cabinet Committee on Economic Affairs (CCEA) approved increase in foreign shareholding in Axis Bank Ltd to 74 per cent from the existing 62 per cent.
  • With this approval, foreign investment of Rs. 12,973.14 crore is expected to flow into the country.
  • It would also lead to creation of 6,000 to 7,000 jobs over the next three years.
  • Currently, foreign investments in private sector banks are capped at 74 per cent, with the FII limit at 49 per cent.
  • The CCEA had to consider the Axis Bank proposal as the investment envisaged exceeded Rs. 5,000 crore.