ECONOMY - 2014 june

June 1

In the biggest-ever deal in the Indian media, Reliance Industries (RIL) announced a Rs. 4,000 crore investment for acquiring a majority stake in the Raghav Bahl-run Network 18 Media & Investments (NW18) and the deal covers subsidiary TV18 Broadcast Ltd (TV18).
* RIL plans to provide this content to customers of high-speed 4G telecom network, which it is poised to roll out.
Global liquor giant Diageo Plc has received market regulator Sebi's clearance for an open offer to acquire additional 26 per cent stake in United Spirits Ltd for Rs. 11,448.91 crore.
* As part of the deal to buy 53.4 per cent stake in Vijay Mallya-led UB group's USL, Diageo has made an Rs. 11,448.91 crore open offer for purchase of 26 per cent stake in the company from non-promoter shareholders.

June 2

A minimum pension of Rs. 1,000 a month under a scheme run by retirement fund body EPFO will be a reality this week, a development that will benefit 28 lakh pensioners, who get less than this amount at present.
* As per a proposal, pensioners were to get the benefit with effect from April 1 this year. The government will have to provide an additional amount of around Rs. 1,217 crore to ensure a minimum pension of Rs. 1,000, starting 2014-15.

June 3

India has slipped to its lowest position in over a decade in the foreign direct investment confidence index, which has been topped by the United States for the second year in a row.
* Current rank is 7th, which is the lowest ranking for India since 2001.
* India attracted $25.5 billion in FDI inflows in 2012, down from $31.6 billion in 2011, according to 2014 A.T. Kearney Foreign Direct Investment Confidence Index.
* India was ranked second for three years in 2005, 2007 and 2012 and was placed on the third spot in 2010.

June 4

Exim Bank has extended USD 46 million line of credit to Mauritius for financing goods and defense related vehicles purchases as per agreement signed between Exim Bank and Mauritius on February 12, 2014.
* Of the total credit, goods and services including consultancy services of at least 75 per cent of the contract price are expected to be supplied by seller from India and remaining 25 per cent goods and services may be procured from outside India.

June 6

Australia and New Zealand Banking Group (ANZ) said that it has received in-principle approval from the Reserve Bank to open two new branches.
* The new branches will come up Gurgaon, NCR, and outer Bangalore.
* Headquarters: Melbourne, VIC, Australia.
* CEO: Michael Smith.
* Founded: 1835.
The Indian Institute of Corporate Affairs (IICA) and Grant Thornton India LLP signed a memorandum of understanding (MoU).
* The MoU was signed to develop capacity of the Indian companies for effective implementation of the CSR (Corporate Social Responsibility) Rules laid in Section 135 of the Companies Act 2013.
About CSR
* Under the Companies Act, 2013, any company with below credentials should mandatorily spend 2% of their net profits per fiscal on CSR activities
(a) net worth more than of rupees 500 crore (or)
(b) turnover more than of rupees 1,000 crore (or)
(c) net profit more than of rupees 5 crore
* The Companies Act 2013 that replaced the Companies Act 1956 received assent of the President on 29 August 2013 and the Companies Act of 1956 replaced the first Companies Act, 1919 of Indian history.
India Inc will be investing around Rs. 22,000 crore towards corporate social responsibility (CSR) activities, according to consultancy firm Ernst & Young.
* India Inc. is a common term used by the Indian media to refer to the formal (comprising government and corporate) sector of the nation.
What happens when a company fails to meet CSR norms?
* Any company, which does not report non-compliance towards the CSR rule is liable to be charges of penalty in the bracket of Rs. 50 thousand to Rs. 50 lakhs. Also, the board of directors may be charged with imprisonment for 5 years and/or fine worth Rs. 25,000.

June 10

India had 175,000 millionaire households in 2013, ranking 15th in the world and the total number of millionaire households in the world rose to 16.3 million last year as per report “Riding a Wave of Growth: Global Wealth 2014” prepared by Boston Consulting Group.
* This list is topped by US, flowed by China and Japan.
* The highest density of millionaire households was in Qatar (175 out of every 1,000 households), followed by Switzerland (127) and Singapore (100).
* The US had the largest number of billionaires, but the highest density of billionaire households was in Hong Kong (15.3 per million), followed by Switzerland (8.5 per million).

June 11

The World Bank released Global Economic Prospects (GEP) report and revised down the economic growth forecast for developing world in 2014 to 4.8 percent from 5.3 percent estimated in January 2014.
* The forecast has highlighted that the developing nations are heading forward to third consecutive year of growth below 5 percent.

June 12

Retail inflation (CPI) is at three-month low of 8.28 percent in May against 9.66% in April.
* About Consumer Price Index (CPI)
* The CPI measures price change from the perspective of the retail buyer. CPI is calculated on certain year called as “Base Year”.
A comparison of this CPI with WPI is given below:-

WPI

CPI

Base Year

2004-05

2010

Elementary Items

676

200

Weightage to Food products (%)

24.3

49.71

Weightage to Energy products (%)

14.91

9.49

Weightage to Miscellaneous Items (%)

Services not included

26.31

June 13

Factory output rises after 2 months of contraction, at 3.4 percent in April.
* Output as measured by the index of industrial production (IIP) showed growth of 1.5% in April 2013 against 0.5% in March.
About IIP
* The Index of Industrial Production (IIP) is an index for India which details out the growth of various sectors in an economy such as mining, electricity and manufacturing.
* Manufacturing constitutes over 75 per cent of this index.
* It is compiled and published monthly by the Central Statistical Organisation (CSO) for every six weeks.
* Base year is 2004 - 2005.

June 14

The 'El Nino' risk is expected to keep inflation elevated and RBI on a "long hold" as the first rate cut by the central bank is likely in early 2015 rather than this December, the report by financial services major Bank of America Merrill Lynch said.
* El Nino occurs every four to 12 years and had last hit India's monsoon in 2009, leading to the worst drought in almost four decades.
* El Nino, which refers to warmer-than-average sea surface temperatures in the central and eastern tropical Pacific Ocean, will likely to keep CPI inflation up at 8-10 per cent in the second half of 2014.

June 15

Competition Commission of India (CCI) has slapped a penalty of Rs. 3 crore on British retailer Tesco for delay in filing notice related to its purchase of 50 per cent stake in Tata Group firm Trent Hypermarket.
* Under the Competition Act, any person or enterprise, who or which proposes to enter into a combination, shall give notice to the Commission, disclosing the details of the proposed combination, "within thirty days of execution of any agreement or other document for acquisition".
* CCI is called as “The fair trade watchdog”.

June 16

Shaktikanta Das, IAS officer of the Tamil Nadu cadre, who is also a finance ministry veteran, was brought in as the new revenue secretary.
* Previous, revenue secretary Rajeev Takru, a Gujarat cadre officer, was moved out to the ministry of development for the north eastern region.
* Das, incidentally, was also the man behind Tamil Nadu's successful SEZs and industrial policy.
Union Minister for MSME’s Kalraj Mishra launched Online Finance Facilitation Centre (OFFC) for Small and Medium Enterprises (SMEs).
* OFFC is an initiative of the Confederation of Indian Industry (CII). The Centre was launched with an objective to facilitate access to finance and credit for SMEs.
* The centre will operate as a one-stop-shop by providing collective financing options for SMEs from various major financial institutions
* It will also facilitate the SMEs across the country with documentation and preparation of bankable project proposals.
SBI went into agreement Ezetap Mobile Solutions, to deploy mobile point-of-sale (mPOS) solution.
* Mobile POS has the power to transform payments and commerce. It can be deployed easily and at low cost in every corner of the country.

June 17

In May, WPI Inflations rose to 6.01 percent versus 5.3 percent in the previous month.
* WPI is calculated w.r.t some base year; current “base year” is 2010-2011.

Cipla, a wholly owned subsidiary of the Indian company (Cipla Ltd), acquired 60 per cent stake in Sri Lanka Company ''New Company'' for $14 million (85crs).
* Headquarters: Mumbai
* Chairman: Y.K. Hamied.

Shriram Transport Finance plans to borrow up to Rs. 3,000 crore through non-convertible debentures (NCDs) to support its financing activities.

Debentures: A debenture long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.
* Convertible debentures (CD): these are convertible bonds or bonds that can be converted into equity shares of the issuing company after a predetermined period of time.
* SEBI restricts the conversion period to 36 months (3 years) for all companies in India.
* Conversion beyond 36 months is permissible only if the conversion is made optional with "put" and ''call'' option and has to take permission from SEBI.
* Non-convertible debentures (NCDs): Are bonds issued by a company that cannot be converted into stock and usually offer a higher interest rate than convertible debentures.
* Convertible Debentures with options: They are a derivative of convertible debentures with an embedded option, providing flexibility to the issuer as well as the investor to exit from the terms of the issue. The coupon rate is specified at the time of issue.
* Naked Debentures: Debentures which are issued without any charge on assets are Unsecured or Naked debentures. These are highly risky to invest.

Reliance Industries said it will invest Rs. 1.8 lakh crore across businesses in the next three years and launch the much-awaited 4G broadband services in 2015.
* RIL, which is currently ranked 135 on the Fortune 500 list of global companies, is looking at breaking into the top 50.

June 18

The Central Government has appointed former Chief Justice of India RC Lahoti as arbitrator in the Rs. 20,000 crore tax dispute case with UK telecom major Vodafone.
* The government's decision was in response to an arbitration notice served by Vodafone International Holdings BV in April under the Bilateral Investment Protection and Promotion Agreement between India and the Netherlands for resolving the dispute.

The Company Law Board (CLB) has ruled that the Unit Trust of India (UTI) does not come under the purview of the Securities and Exchange Board of India (SEBI).

Online marketplace Flipkart has signed a MoU with Federation of Indian Micro and Small and Medium Enterprises (FISME) and National Center for Design and Product Development (NCDPD) to boost manufacturing and entrepreneurship in the country.
* As per the MoU, Flipkart will provide micro, small and medium entrepreneurs in infrastructural support in data analytics, marketing and customer acquisition to help them scale their business.

June 19

Indians' money in Swiss banks has risen to over two billion Swiss francs (nearly Rs. 14,000 crore), despite a global clampdown against the famed secrecy wall of Switzerland banking system.
* India has also constituted a Special Investigation Team (SIT) to probe cases of alleged black money of Indians, including funds stashed abroad in places like Switzerland.
* The SIT will be headed by a retired Supreme Court judge, M.B. Shah.
GMR wins arbitration award of $4 million in the Male airport case against Maldivian govt.
* The Maldives government and Airport Company have to pay $4 million by way of costs within 42 days, according to the filing.
About Male airport case:
* Former President Mohamed Nasheed's government had signed a lease with Indian infrastructure giant GMR to develop and operate Male International airport. But President Dr. Mohamed Waheed had terminated the agreement in 2012 immediately on coming to power after overthrowing Nasheed.
* The GMR Group has interests in airports (Delhi, Hyderabad and the Philippines) energy, highways, and urban infrastructure.

June 20

The World Bank's Development Marketplace, a competitive grants program, has given grants worth $1.4 million (about Rs. 8.4 crore) to 12 social enterprises in the northeastern states of Assam, Meghalaya and Mizoram for development activities.
* Of the 12 enterprises that received the grants, nine got $150,000 each to implement development projects over 24 months.
* The remaining three got $25,000 each to invest in capacity building.
HPCL-Mittal Energy Ltd, a joint venture of steel tycoon L.N. Mittal and Hindustan Petroleum, shut a small unit.
* This Guru Gobind Singh Refinery is located in, Bhatinda, Punjab, India.
Oil India Ltd (OIL) signed a MoU with Russian gas firm Gazprom for jointly pursuing exploration opportunities worldwide, as well as collaborating on liquefied natural gas (LNG).
* The MoU also provides an option to the companies for technological association. Any area or project of common interest would also be covered under the purview of MoU.
* Chairman of OIL: S.K. Srivastava.
ONGC Videsh Ltd (OVL) has signed a deal with Russia's largest oil and gas producer Rosneft to jointly explore hydrocarbons in the offshore Arctic.
* Chairman of ONGC: D.K. Sarraf.
Railway minister announced passenger fare raised by 14.2%, freight charge by 6.5%.
* Railway Minister: D.V. Sadananda Gowda, Karnataka.
* Headquarters: Rail Bhavan, New Delhi.
India's forex reserves rose by $950.9 million to $313.536 billion in the week to June 13, as per RBI weekly statement.
* The gold reserves were at $20.790 billion.
* The special drawing rights (SDR) were down by $5.5 million to $4.446 billion.

June 21

World Bank has lowered India's GDP growth forecast to 5.5% for 2014-15, from the earlier forecast of 5.7 per cent.
* The World Bank report, however, said that India's growth would accelerate to 6.3 per cent in 2015-16, and 6.6 per cent in 2016-17.

June 23

Union Government of India on 23rd June 2014 decided to provide additional interest-free loan of up to 4400 crore rupees to sugar mills.
* Besides, government will extend sugar export subsidy of Rs. 3,300 per tonne till September this year.
* The decision is aimed to provide help to sugarcane farmers & Industry, as the industry is in debt of Rs.11,000 crore.
* Earlier in December 2013, the UPA Government approved 6,600 crore Rupees interest-free loans.
Apart from helping farmers, govt. wants to get its target of ethanol blending with petrol
* Government proposed its plan to implement mandatory 5 percent ethanol blending with petrol and subsequently achieve 10 percent blending target.
Ethanol blending with petrol
* It is a Mixture of Ethanol to petrol as better performing fuel.
Advantages of using Ethanol:
* Reduce the net emissions of greenhouse gases.
* Ethanol is considered renewable because it is primarily the result of conversion of the sun's energy into usable energy. Creation of ethanol starts with photosynthesis causing feedstocks, such as sugar cane, to grow.
* Burns more cleanly => more mileage.
India has moved up to 58th rank in terms of foreign money lying with Swiss banks, but it accounts for a meager 0.15 per cent of an estimated USD 1.6 trillion total global wealth held in Switzerland's banking system.
* The UK has retained its top position with highest share of close to 20 per cent of global wealth in Swiss banking system, followed by the US, West Indies, Germany and Guernsey in the top-five in terms of exposure to banks in Switzerland.

June 24

The new government of NDA announced its dates of presentation of the Railway Budget on July 8 and the country's economic survey on July 9, and union budget for the 2014-15 FY on July 10.
* Railway minister: Sadananda Gowda.
* Finance Minister: Arun jaitley.
* The Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget, prepared by Chief Economic Advisor.
Crisil lowered GDP growth of 5.5% from 6% in FY15.
* Fiscal deficit, the gap between government's expenditure and revenue, is projected at 4.5% for this FY.
Jet Airways' alliance with Abu Dhabi's Etihad Airways is facing fresh trouble as fair trade watchdog in Singapore has begun a scrutiny of the deal to probe any possible violation of its competition laws.
* The deal, which involves purchase of a 24 per cent stake in Naresh Goyal-led Jet for about Rs. 2,060 crore by Etihad and other tie-ups.

June 25

Government postponed revision in natural gas prices by three months pending a comprehensive review.
* The current rate of $4.2 per million thermal units will continue till September end instead of July.
* New revised price of $8.8 per million thermal units will be applicable after September.
* Minister of Petroleum and Natural Gas: Dharmendra Pradhan.

June 26

Centre Government gives additional three months to state governments to implement the National Food Security Act to 4th October.
* Prior, deadline for implementation of National Food Security Act expires on July 4.
* So far, Haryana, Rajasthan. Maharashtra, Punjab and Chattisgarh have fully implemented the Act, while Delhi, Himachal Pradesh, Karnataka, Madhya Pradesh, Bihar and Chandigarh have partially implemented.
* More than 19 states and union territories are yet to implement the provisions of the Act.
About Food Security Act:
* The Act guarantees 5kg of rice, wheat and coarse cereals per month per person at Rs. 3,2,1, respectively.
India has slipped by one place to the fourth position in the latest ranking of most favored destinations for investment by transnational corporations released by UN agency UNCTAD.
* China has retained its top position as the world's most attractive investment destination followed by the US and Indonesia at second and third place.
* FDI inflows into India grew by 17 per cent to USD 28 billion in 2013.

June 27

Amazon.com's Asia got signed N.R. Narayana Murthy to provide back-end support in a venture aims to help get Indian companies online.
About Amazon:
* Headquarters: Washington, USA.
* Chairman & CEO: Jeff Bezos.

June 28

Union Ministry of Commerce and Industry upgraded the NIC - 1987 to NIC - 2008.
About National Industrial Classification
* The National Industrial Classification (NIC) is an essential Statistical Standard for developing and maintaining comparable data base according to economic activities. Such classifications are frequently used in classifying the economically active population, statistics of industrial production and distribution, the different fields of labour statistics and other economic data such as national income.
* In India, Central Statistical Organisation has been finalising National Industrial Classification since 1960.
* The issue of standardization of industrial classification at the international level was deliberated in the First International Conference of Labour Statisticians (ICLS) as early as 1923.

June 29

FIIs pour in Rs. 32,000 crore in Indian equities in June.
About (Foreign Institutional Investor) FII:
* An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing.
Union Ministry of Commerce and Industry de-licensed manufacturing of defense items. Almost 55 percent of the defense items have been removed from the compulsory licensing list.
* As per the Press Note there is now a smaller negative list of defense items in which compulsory licensing is still required. These include items such as tanks, vehicles fitted with military mountings of arms and ammunition or with equipment for mine laying, defense aircraft, including helicopters, UAVs and warships.

June 30

Overseas investors have pumped in nearly Rs. 32,000 crore in Indian equities and debt this June.
* Foreign investors have infused Rs. 13,764 crore ($2.3 billion) into equities, and Rs. 18,188 crore ($3.1 billion) in debt markets, taking the total to Rs. 31,952 crore ($5.4 billion), shows the latest market data.
About overseas investments in India
* Currently, Net investment of overseas investors into India to $191 billion or well over Rs. 9 trillion (Rs. 9 lakh crore).

 

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