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Economy Current Affairs
Economy Current Affairs May 5th Week 2018
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Economy Current Affairs May 5th Week 2018

1. 15th Finance Commission Constitutes Panel For Health Sector.

The Fifteenth Finance Commission has constituted a High Level Group consisting of eminent experts from across the country to examine the strengths and weaknesses for enabling balanced expansion of Health Sector.

 

 

The role and functions of the High Level Group on Health Sector will be:

i. To evaluate the existing regulatory framework in the Health sector and examine its strength and weaknesses for enabling a balanced yet faster expansion of the health sector keeping in view India`s demographic profile;

ii. To suggest ways and means to optimize the use of existing financial resources and to incentivize the state governments` effort on fulfillment of well-defined health parameters in India; and

iii. To holistically examine best international practices for the health sector and seek to benchmark our frameworks to these practices for optimizing benefits keeping in mind our local issues.

In the context of ambitious schemes like Ayushman Bharat and also keeping in mind the needs of huge young population of the country, this is considered as an important step to understand the needs of the health sector in the country. Finance Commission also organised a conference on agriculture in Chandigarh this month.

 

High Level Group on Health Sector will have following Convenor and Members:

Dr. RandeepGuleria, Director, AIIMS, New Delhi (Convenor);

Dr. Devi Shetty, Chairman, Narayana Health City, Bengaluru;

Dr. DeelipGovindMhaisekar, Vice Chancellor, Maharashtra University of Health Science, Pune;

Dr. NareshTrehan, Medanta City, Gurgaon;

Dr. BhabatoshBiswas, Prof & HOD of Cordio Thoracic Surgery, R.G.Kar Medical College, Kolkata; and

Prof. K. Srinath Reddy, President of Public Health Foundation of India

 

2. India Signs Loan Agreement With World Bank For Rajasthan Project.

India on May 29, 2018 signed a loan agreement with the World Bank for IBRD Credit of USD 21.7 million for the strengthening public financial management in Rajasthan Project.

The agreement was signed by Sameer Kumar Khare, Joint Secretary (FB and ADB), Department of Economic Affairs, Union Ministry of Finance and Hisham Abdo, Acting Country Director of World Bank (India) in New Delhi. 

While, the Implementing Entity Agreement was signed by the Secretary, Finance (Budget) on behalf of the Rajasthan Government and Hisham Abdo on behalf of the World Bank.

 

Highlights of the project:

i. The project aims to improve budget execution, enhance accountability and greater efficiency in revenue administration in Rajasthan.

ii. The project will be implemented at a total cost of around USD 31 million, of which USD 21.7 million will be financed by the World Bank, and the remaining amount will be funded-out of the State Budget. 

iii. It involves strengthening of the public financial management framework; strengthening of expenditure and revenue systems; project management and capacity building among others.

iv. The Project duration is of five years.

 

3. BMGI Enters Into A Strategic Partnership With SmartConnect Technologies.

BMGI, a global management consulting firm, has entered into a strategic partnership with SmartConnect Technologies, which provides Social / Digital Process Transformation through its IP-suite UNFYD®COMPASS across Marketing, Sales, Customer Service, mobility and field service operations.
 
"Today BFSI sector is highly dependent on improving their business operations using technology. Processes, if not re-engineered before automation, can lead to significant waste in technology operations. We have hence partnered with BMGI, which is globally renowned for using structured methodologies of Innovation, Lean and Six Sigma for designing best-in-class processes to deliver the desired results. We are confident that with a powerful cutting-edge product suite like UNFYD®COMPASS, several of the BFSI firms would significantly benefit from the power of social interface, artificial intelligence and process automation," said Srikanth Seshadri, CEO at SmartConnect Technologies.
 
"We have decided to provide our clients with a one-stop solution to latest available technology and tying up with select top technology fintech providers in the field. We are happy to have partnered with SmartConnect Technologies and are looking forward to supporting various corporates in the BFSI sector, and enabling them to significantly benefit from the cutting edge UNFYD® product suite," said Mr. Naresh Raisinghani, CEO and Executive Director at BMGI.
 
 
4. Moody`s Slashes India Growth Forecast To 7.3%.
Moody’s Investors Service report on Wednesday said it has cut India’s GDP growth forecast to 7.3% in 2018, from its previous forecast of 7.5% due to higher oil prices and tighter financial conditions.
 
“The Indian economy is in cyclical recovery, led by both investment and consumption. However, higher oil prices and tighter financial conditions will weigh on the pace of acceleration. We expect GDP growth of about 7.3% in 2018, down from our previous forecast of 7.5%,” the report said.
 
It, however, kept growth expectation for 2019 remains unchanged at 7.5%.
 
Moody’s further said: “On the domestic front, growth should benefit from an acceleration in rural consumption, supported by higher minimum support prices and a normal monsoon. The private investment cycle will continue to make a gradual recovery, as twin balance-sheet issues -- impaired assets at banks and corporates -- slowly get addressed through deleveraging and the application of the Insolvency and Bankruptcy Code.”
 
It said ongoing transition to the new Goods and Service Tax regime could also weigh on growth somewhat over the next few quarters, which poses some downside risk to its forecast.
 
“However, we expect these issues to moderate over the course of the year,” it said.
 
 

5. Microsoft Is Now Third Most Valuable Firm Globally.

Microsoft may not be a favorite in the race to a becoming the country’s first trillion-dollar public company. But recently, after its younger tech peers whizzed past in valuation, Microsoft has become the second most valuable firm—albeit intermittently—for the first time since 2015.

On Tuesday, Microsoft was valued at $714 billion, about $3 billion above Alphabet and Amazon. Only Apple, valued at $838 billion, is higher.

Microsoft had briefly ascended to No. 2 on April 12 and then again on April 16. But it hasn’t been able to maintain its position for long.

On Tuesday, amid worries about higher U.S. Treasury yields and disappointing earnings by other companies that sent the S&P 500 down1.3%, Microsoft rose to No. 2 by virtue of its shares falling less—2.3%—than those of its rivals.

Shares in Google parent company Alphabet closed down nearly 5% on Tuesday, amid concerns about the earnings it reported a day earlier. Meanwhile shares of e-commerce giant Amazon sank 3.8%.

Investors are concerned that tech company earnings over the next couple of weeks will fail to meet lofty expectations. Tech firms were among the best performers of 2017, but they have hit a wall this year as investors rethink their enthusiasm.

Microsoft’s stock has gained momentum under CEO Satya Nadella, who has beefed up the company’s corporate-focused business. The uptick harkens back to a time when the software giant was the most valuable company. At the height of the dot-com boom in 2000, Microsoft was valued at $533.4 billion—about $777 billion in today’s dollars—followed by firms like Cisco Systems and General Electric. But when the bubble burst, Microsoft’s shares took a beating.

The distraction of an antitrust lawsuit by the Justice Department along with missed opportunities in search and mobile didn’t help.

 

6. Patanjali Launches New Messaging App `Kimbho`.

Baba Ramdev`s Patanjali has entered the realm of chatting applications with its own instant messaging application called Kimbho. The new app is already up and live on Android Play Store and has already received over 10,000 downloads.

The launch was confirmed by the company`s spokesperson, SK Tijarawala over a tweet. This move comes right after the announcement of Patanjali-BSNL partnership to launch SIM cards with relatively low tariffs. Initially, the SIM cards will only be available to employees of Patanjali but will be launched to the general public later.

The new app, Kimbho is being promoted as a "swadeshi messaging platform" that will compete with the market leader in the respective segment, WhatsApp.

According to the description of the application, the app has "dozens of amazing features to share Text, Audio, Photos, Videos, Stickers, Quickies, Location, GIF, Doodle and more."

Kimbho claims to use advanced socket technology for instant, real time messaging. According to the company, the messages are end-to-end encrypted by AES. The descritption on the application claims that no data is saved on their servers or cloud.  

Another interesting feature is ghost chatting where the sender can select this option before clicking on the send option. The message marked with the ghost option will disappear in a matter of seconds.

Kimbho also allows different themes within the application. The user can pick their favourite wallpaper and "get fresh experience every time."

Quickies is another feature where the app will suggest preset messages and the user will not have to type in messages. We are not sure if Kimbho is using AI to select responses. The new messaging application uses conch as the icon with a green background and is registered under Patanjali Communication.

 

7. SBI Hikes Interest Rate On Fixed Deposits.

The State Bank of India has hiked the interest rates on fixed term deposits by up to 25 basis points. The new rate, which is effective from May 28, is applicable on retail deposits below Rs 1 crore. Under the revised rate structure, the deposits for 1 year to 2 years will now accrue 6.65 per cent as against 6.40 per cent earlier. For the senior citizens, the new rate is 7.15 per cent from 6.90 per cent earlier. For the investments from 2 years to 3 years, the interest rate is revised to 6.65 per cent from 6.60 per cent.

There is no change in interest rate for deposits less than one year. Currently, the banks gives 5.75 per cent for deposits under 7 days to 45 days scheme. For 46 days to 179 days, the interest rate is 6.25 per cent with no change. For investment under 211 days to less than year, the rate is fixed at 6.40 per cent. In all these schemes, senior citizens get 50 basis points higher than their non-senior citizen customers.   

This is the second time in just three months the largest lender has raised the rates for term deposits. Earlier in February, the SBI had hiked interest rates on its retail deposits - those below Rs 1 crore - by 10-50 basis points. But before that in November last year, the bank had slashed rates by 25 basis points.

There is an inverse relation between credit off-take and fixed deposit rates. When there is little demand for credit, banks reduce deposit rates because they don`t need funds and in case the demand is high, banks turn to customers to get more funds to facilitate credit. The SBI`s rate hike has come days after the state-run lender reported a record standalone net loss of Rs 7,718 crore in the Jan-March quarter.

The SBI`s move may inspire other banks to follow suit on rate hike. Just last month, the largest private sector bank HDFC raised the interest rate for one year deposits from 6.75 per cent to 6.85 per cent. For investments between 2 years to 5 years, the bank hiked rates from 6 per cent 7 per cent

 

8. Infosys Acquires US-Based WongDoody For $75 Million.

Infosys on Wednesday said that it has completed the acquisition of WongDoody Holding Company, a US-based digital creative and consumer insights agency, for a total consideration of upto $75 million.

“WongDoody, an award-winning creative agency with studios in Seattle and Los Angeles, brings to Infosys globally recognized creative talent and deep marketing and brand engagement expertise,” the company statement said.

“Through this acquisition, Infosys enhances its digital experience services ecosystem with services ranging from strategy, design and user experience, to creative and digital marketing across the customer experience value chain. Infosys further expands its worldwide network of Digital Studios that are fulfilling the needs of global clients for comprehensive digital transformation solutions required to meet customer demand for next-generation, enhanced customer experiences,” Infosys said.

Founded in 1993, WongDoody has clients across industries like telecommunications, consumer electronics, healthcare and consumer packaged goods.

Infosys, on April 13, reported a consolidated net profit of Rs 3,690 crore, or Rs 16.98 per share, in January-March 2018 quarter as compared to Rs 3,603 crore, or Rs 15.77 a share in the same period a year back.

For 2018-19, Infosys expects its revenue to grow in the range of 6-8 percent in constant currency terms and 7-9 percent in the US dollar terms. For financial year 2018-19 Infosys expects operating margin range at 22 percent to 24 percent.

The company said its revenues grew 5.6 percent to Rs 18,083 crore in the January-March quarter compared with Rs 17,120 crore in the year-ago period. Net profit was up 11.7 percent at Rs 16,029 crore, while revenues grew 3 percent to Rs 70,522 crore in FY2017-18 over the previous year.

 

9. India And World Bank Signs $500 Million Additional Financing For PMGSY.

The World Bank, which has supported PMGSY since its inception in 2004, has so far invested over $1.8 billion in loans and credits mostly in the economically weaker and hill states across North India - Bihar, Himachal Pradesh, Jharkhand, Meghalaya, Rajasthan, Uttarakhand, and Uttar Pradesh. It has built and improved about 35,000 km of rural roads and benefited about eight million people with access to all-weather roads, the statement said.

To provide additional financing for the Pradhan Mantri Gram Sadak Yojana (PMGSY) Rural Roads Project, the central government and the World Bank today signed a $500 million loan agreement. The scheme, implemented by Union Ministry of Rural Development, Govt. of India, will build 7,000 km of climate resilient roads, and out of which 3,500 km will be constructed using green technologies, said a Finance Ministry statement.

The World Bank, which has supported PMGSY since its inception in 2004, has so far invested over $1.8 billion in loans and credits mostly in the economically weaker and hill states across North India - Bihar, Himachal Pradesh, Jharkhand, Meghalaya, Rajasthan, Uttarakhand, and Uttar Pradesh. It has built and improved about 35,000 km of rural roads and benefited about eight million people with access to all-weather roads, the statement said.

The agreement for the project was signed by Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the government of India and Junaid Ahmad, Country Director, World Bank India, on behalf of the World Bank in the presence of Alka Upadhyaya, Joint Secretary (RC), Ministry of Rural Development.

Sameer Kumar Khare, said “The PMGSY over the years has brought about a paradigm shift in the way rural roads are mapped, designed, monitored and built, involving communities especially women.” 

He further added, “The additional finance will bring a new shift in construction technology using green and low carbon designs and climate resilient construction techniques. Now more rural communities will have access to better economic opportunities and social services.” 

According to the statement, adequate maintenance of the existing 4.6 million km of road network is emerging as a major challenge. Many parts of the existing road network are either vulnerable to or have already suffered damage from climate induced events such as floods, high rainfall, sudden cloud bursts and land-slides.

 

10. Indian Oil Most Profitable PSU For 2nd Straight Year.

Fuel retailer IOC has for the second year in a row beaten ONGC to become India’s most profitable state-owned company, raising questions over calls for the explorer to subsidise retailers amid soaring petrol and diesel rates.

Indian Oil Corporation, which has for decades been India’s biggest company by turnover, last week posted a record net profit of Rs 21,346 crore in the fiscal year ended March 31, 2018 (FY 2017-18), up 12 per cent from Rs 19,106 crore in the last fiscal.

Oil and Natural Gas Corp (ONGC) yesterday reported its FY18 numbers – 11.4 per cent rise in net profit to Rs 19,945 crore.

Billionaire Mukesh Ambani-led Reliance Industries retained the crown of being India’s most profitable company for the third year in a row, posting highest ever net profit of Rs 36,075 crore.  


 

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