General Awareness Updates 2015
Economy & Business
The Central Government is set to launch a new scheme ‘Krishi Dak Service’ aimed at distribution of improved seed varieties to farmers at their doorstep through post-offices. The government’s agri-research body Indian Agricultural Research Institute (IARI) has already initiated a pilot project in 20 rural districts.
“After its success, this scheme will now be implemented in 100 districts of 14 states through select Krishi Vigyan Kendras to provide seeds to the farmers at their doorstep,” the Union Agriculture Ministry said.
Another new scheme ‘Mera Gaon, Mera Gaurav’ is being launched to involve all the agricultural experts of the agricultural universities and ICAR institutes in the country for effective and deeper reach of scientific farming to the villages. Each expert will associate himself with one particular village for guidance for agricultural development through new technologies and creation of awareness about the role of these institutes in addressing agri-related problems.
Under this scheme, around 20,000 agriculture scientists are being given the responsibility for adopting one village each for creating scientific awareness about modern farming practices.
The Foreign Investment Promotion Board (FIPB) has cleared foreign investment in 11 entities, entailing 1,075.91 crore, and referred proposals worth 4,187 crore in pharma firms - Glenmark and Aurobindo - to the Cabinet Committee on Economic Affairs.
The FIPB cleared the proposal of Mumbai-based SeQuent Scientific Ltd for raising Rs 400 crore through QIP and issue of Foreign Currency Convertible Bonds.
JP Morgan Asset Management (Asia ) Inc USA has got approval for the acquisition of remaining 25 per cent held by JP Morgan India Pvt. Ltd in the joint venture set up in 2006 by the two companies. It entails investment up to 80.13 crore.
The proposal of BLP Wind Assets Holding Pvt. Ltd for setting up a joint venture firm for making downstream investments in the renewable energy sector has been approved. It entails an investment of 371 crore.
However, FIPB has sent the proposal of Mumbai-based Glenmark Pharmaceuticals to the Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, to raise the cap of foreign institutional investor (FII) holding to 49 per cent, from 35.07 per cent at present.
FIBP has also sent the proposal of Hyderabad-based Aurobindo Pharma for bringing in 2,165 crore foreign investment by Qualified Institutional Buyers to the CCEA. The two proposals have been recommended for consideration of the CCEA, as the investment involved in each of the proposal is above 1,200 crore.
It rejected foreign investment application of Johnson and Johnson Limited’s proposal seeking deletion of the standard pharma conditions, stipulated in the approved letter.
The other proposals cleared by FIPB include Solar Arise India Pvt. Ltd for receiving FDI from overseas investors and investing in various SPVs for solar projects.
On an annualised rate, the economy expanded 2.2 per cent in the fourth quarter. Over the full year, the data showed a flat 0.0 per cent growth rate for 2014, after a 1.6 per cent expansion in 2013.
The fall into recession dented Prime Minister Shinzo Abe’s pro-spending growth bid, dubbed ‘Abenomics’, which boosted stock prices and pushed the yen down, a plus for Japanese exporters. But the levy hike to 8.0 per cent from 5.0 per cent – Japan’s first sales tax rise in 17 years – slammed the brakes on consumer spending, plunging the economy into recession and throwing the success of ‘Abenomics’ into question.
The tax rises are aimed at paying down Japan
Wholesale prices fell the most in five-and-a-half years in January this year as decline in oil and some food items resulted in a negative inflation or deflation of 0.39 per cent for the month, raising hopes of rate cut by RBI.
This is the second time in three months that the wholesale price index has entered negative territory, as the government also revised downwards the inflation number for November to minus 0.17 per cent, from zero earlier. Inflation measured on wholesale price index (WPI) was at 0.11 per cent in December.
Although the prices of certain protein rich items and wheat declined during the month, the overall food inflation was at a six month high of 8 per cent, as per the government data. The last time the inflation had touched this low level was in June 2009 when it was at -0.4 per cent. Inflation in ‘fuel and power segment’ was negative at -10.69 per cent in January, while in manufactured products it was at 1.05 per cent.
The contraction in WPI inflation for petrol was steeper at 17.08 per cent in January from 11.96 per cent in December. Similarly, the rate of decline in diesel prices last month was higher than in the previous month. Manufactured products’ inflation rose to 1.05 per cent in the month under review from a rise of 2.96 per cent in January 2014.
The deceleration in WPI-based inflation comes on the back of retail inflation gaining momentum. The consumer price index (CPI) based inflation in January stood at 5.11 per cent month-on-month. Measured by the Central Statistical Office (CSO) on a new base year of 2012, the January inflation rose mainly due to higher food prices, including fruits and vegetables. Food inflation in January was 6.13 per cent due to costlier fruits, vegetable and cereals.
The December retail inflation based on the Consumer Price Index (CPI), recalculated with the new base year, was at 4.28 per cent. The CPI inflation in December was 5 per cent with 2010 as the base year. The RBI has set a target for CPI inflation at 8 per cent by January 2015 and 6 per cent by January 2016.
Registering the steepest decline in two-and-a-half years, exports contracted by 11.19 per cent to U.S.$23.88 billion in January but trade deficit improved marginally because of cheaper oil imports.
The trade deficit in January narrowed to U.S.$8.32 billion from U.S.$9.45 billion in the same month last year. This is its lowest level in the past eleven months.
Declining prices of oil in the international market has impacted the country’s imports, which dipped by 11.39 per cent year-on-year to U.S.$32.2 billion. The oil import bill declined by 37.46 per cent to U.S.$8.24 billion in January this year. Gold imports in January this year grew by 8.13 per cent to U.S.$1.55 billion.
The drop in exports in January 2015 is the steepest since overseas shipments contracted by 14.8 per cent in July 2012. Exports in January 2015 were in negative zone for the second consecutive month. The decline in exports was mainly on account of poor demand from the European and Japanese markets. All the major sectors including cotton yarn, chemicals, pharmaceuticals and gems and jewellery, tea, coffee, rice, tobacco and spices have recorded a negative growth in the month under review.
For April-January period of the current fiscal, exports grew by 2.44 per cent to U.S.$265.03 billion. Imports were up by 2.17 per cent to U.S.$383.41 billion in the same period, leaving a trade deficit of U.S.$118.37 billion during the period.
Out of 30 exporting sectors being tracked by the commerce ministry, 21 have recorded negative growth in January. Outbound shipments of cotton yarn, chemicals, pharmaceuticals and gems and jewellery contracted by 9.15 per cent, 10.52 per cent, 0.16 per cent and 3.73 per cent, respectively in January this year. The other sectors which recorded negative growth include oil meals, cereal, marine products and meat and poultry.
Direct tax collections increased by 11.38 per cent to 5.78 lakh crore during the April-January period of current financial year. The Central Government had collected Rs 5.19 lakh crore in direct taxes during the April-January period of last fiscal, the Finance Ministry said.
As per the Budget 2014-15, the revenue from direct tax is targeted at .36 lakh crore for current fiscal, a growth rate of 16 per cent over previous fiscal. During the ten-month period, corporate tax collections grew by 11.04 per cent at 3.64 lakh crore as against 3.28 lakh crore during the same period last fiscal.
The personal income tax collections were up by 11.32 per cent at 2.07 lakh crore in April-January as against 1.86 lakh crore in the same period last year. The Securities Transaction Tax (STT) collections surged by 44.12 per cent at 5,556 crore in the said period due to buoyancy in the stock market.
The net direct tax collection rose at a lower pace of 6.21 per cent to about Rs 4.74 lakh crore, as against 4.46 lakh crore in the same period last year, primarily on account of higher refunds. Advance tax collections have shown a higher growth rate of 13.26 per cent during April-January period of 2014-15 as against growth of 8.71 per cent shown at the same period of previous year. Growth in Tax Deducted at Source (TDS) is 7.79 per cent as against 16.65 per cent in the same period last year.
The Self-Assessment Tax showed a growth of 22.22 per cent as against 10.94 per cent in the same period last year. The growth in Regular Tax is 17.25 per cent as against 24.14 per cent in the same period last year. In the current fiscal, the government aims to collect over 13.6 lakh crore as tax revenue, which requires 16 per cent growth in direct taxes and 20 per cent growth in indirect taxes to meet the target.
The Central Government approved over 8,600 crore of highway projects in Uttar Pradesh, Odisha and Chhattisgarh.
The Cabinet Committee on Economic Affairs (CCEA) gave its approval for the six laning of the Chakeri-Allahabad section of National Highway National Highway
The CCEA also approved six-laning of Baleshwar-Chandikhole section of National Highway National Highway
The work for these approved road projects will be under the National Highways Development Project (NHDP) Phase-V.
The Central Government approved subsidy on export of up to 1.4 million tonnes of raw sugar in the ongoing 2014-15 marketing year, a move that would boost millers’ cash-flow and enable them to clear mounting sugarcane price arrears that have crossed 12,000 crore.
It further approved an uniform rate of export subsidy at 4,000 per tonne for the 2014-15 marketing year. “Other conditions will remain the same, as were last year except that in case of mills having alcohol production capacities, the incentive would be available if they offer to supply ethanol to Oil Marketing Companies (OMCs) under the Ethanol Blending Programme (EBP) up to 25 per cent of their annual production level of alcohol,” it added.
Last year, the Centre had announced a subsidy for exports of raw sugar up to 4 million tonnes in order to help the cash-starved industry clear sugarcane arrears to farmers. The subsidy scheme ended in September 2014 as the new government did not extend for the current marketing year. The quantum of subsidy fixed at 4,000 per tonne for this year is much higher than 3,371 per tonne fixed last year for August-September period.
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