(Current Affairs For SSC Exams) Economic November: 2014

November 2014

Retail inflation declined to 5.5% in October

Helped by softening prices of food items, the retail inflation declined to 5.52 per cent in October, the lowest since the new series of data was introduced in January 2012.
This is the fourth consecutive month of decline in the Consumer Price Index based inflation or retail inflation, which had fallen to 6.46 per cent in the previous month.
The overall food inflation measured on CPI came down to 5.59 per cent in October against 7.67 per cent in the previous month.
Retail prices of vegetables declined by 1.45 per cent against a rise of 8.59 per cent in September, according the data released by the Ministry of Statistics and Programme Implementation.
Inflation in fruits slowed to 17.49 per cent from 22.4 per cent in September. Similarly the rate of price rise in protein rich items like eggs, fish and meat was at 6.34 per cent in October, slightly down from 6.35 per cent in the previous month.

Universities may offer credit transfer scheme from next year

The Skill Assessment Matrix for Vocational Advancement of Youth (SAMVAY) was launched to mark National Education Day.
It defines the rules for credit allotment and follows the National Skill Qualification Framework (NSQF) — approved by the Union government last year — which allows students to alternate between vocational and general courses.
“The University Grants Commission in its meeting took a decision on how various Central universities can practice choice-based credit transfer, and I hope all our universities will implement this system in the next academic year so that all our students can seamlessly study from one university to another,” Human Resource Development Minister Smriti Irani said at the launch.
The Ministry also launched the ‘Know Your College’ portal in the presence of President Pranab Mukherjee, Minority Affairs Minister Najma Heptulla and Ministers of State for HRD Upendra Kushwaha and Ram Shankar Katheria.
The portal http://www.knowyourcollege-gov.in/ has basic details of colleges offering technical courses that would help students make an informed choice.

Rate cut by RBI will give good fillip to economy says Jaitley

Union Finance Minister Arun Jaitley has said that since inflation has moderated, “if RBI [Reserve Bank of India], which is a highly professional organisation, in its wisdom decides to bring down the cost of capital [it] will give a good fillip to the Indian economy.”
The Finance Minister was delivering the key note address at the Citi’s Investor Summit: ‘India – Poised for Higher Growth’. Also present were Finance Ministry officers and RBI Deputy Governor S.S. Mundra.

India’s Exports fall in October

India’s exports shrunk first time this fiscal in October, declining minus - 5.04 per cent to $26.09 billion.
September’s exports were $28.90 billion. A nearly four-fold surge to $4.17 billion in gold imports during the Diwali month of October against $1.09 billion in the same month last year widened the trade deficit to $13.36 billion. The trade deficit was $14.25 billion in September.
Reserve Bank Deputy Governor S. S. Mundra told reporters here on Monday that over the past two-three days the central bank was in deliberations with the Modi Government on the steps required to be taken in view of the sharp surge in gold imports. He was responding to questions on if curbs on importing gold could be brought back.
Overall imports rose 3.62 per cent to $39.45 billion, according to the latest official trade data released. Especially worrying is a 9-per cent decline in engineering exports.

JSW Energy agrees to acquire two hydro projects from Jaypee

The prolonged Jaypee power deal was closed with billionaire Sajjan Jindal signing an agreement with Manoj Gaur to acquire two hydro power projects of Jaiprakash Power Ventures Ltd (JVPL) for Rs 9700 crore.
JSW Energy said it had executed documents to acquire 100 per cent stake in the two power plants with a combined capacity of 1391 MW from JPVL and other shareholders.
The board of directors of JPVL has approved the transfer of 300 MW Baspa II Hydro- Electric project and the 1091 MW Karcham Wangtoo Hydro-Electric project, both located in Himachal Pradesh, into a separate company called Himachal Baspa Power Company Ltd (HBPC Ltd) as a going concern through a scheme of arrangement which would be acquired by JSW Energy.
“Subsequent to the scheme of arrangement being made effective and subject to other terms and conditions agreed between the company and JPVL, JSW Energy proposes to acquire 100 per cent of the securities of HBPC Ltd held by JPVL,” JSW Energy said in a filing to the stock exchanges.
This acquisition opens a new chapter in JSW Energy and makes it the largest hydro energy producer in the private sector. With this the company total generation capacity including thermal will go up to 4531 MW.
Currently the company is setting up a 240 MW hydro power plant in Himachal Pradesh. Both the acquired power plants have 29 years and 37 years life respectively and can be extended for another 20 years, the company said.
“This is an attractive deal for our shareholders as it is expected to be earning accretive on closure. Our strategy is to increase capacity many fold and create synergy through a mix of organic and inorganic opportunities supported by excellence on operation,” Sajjan Jindal, Chairman and Managing Director, JSW Energy said.

ING Vysya Bank decided to merge with Kotak Mahindra Bank

In an all stock amalgamation, ING Vysya Bank decided to merge with Kotak Mahindra Bank, creating the fourth largest private sector bank in the country.
ING Vysya shareholders will receive 725 shares in Kotak for 1,000 shares of ING Vysya. “The share exchange ratio is considered fair and reasonable given the underlying value of ING Vysya, as also giving shareholders the ability to benefit from the potential that can be realised upon merging into Kotak,” a press release issued jointly by Kotak Mahindra Bank and ING Vysya Bank stated.
“This exchange ratio indicates an implied price of Rs.790 for each ING Vysya share based on the average closing price of Kotak shares during one month to November 19, 2014, which is a 16 per cent premium to a like measure of ING Vysya market price,” it added.
The proposed merger would result in issuance of approximately 15.2 per cent of the equity share capital of the merged Kotak.
One of ING Vysya’s directors will be joining the Board of Directors of Kotak.
The merger decision was taken at their respective board meetings of Kotak Mahindra Bank and the ING Vysya Bank.
The amalgamation is subject to the approval of the shareholders of Kotak and ING Vysya respectively, Reserve Bank of India under the Banking Regulation Act, the Competition Commission of India and such other regulatory approvals as may be required.
Upon obtaining all approvals, when the merger becomes effective, “all ING Vysya branches and employees will become Kotak branches and employees. ING Vysya’s CEO designate, Uday Sareen, will be inducted into the top management of Kotak reporting directly to Uday Kotak, Executive Vice Chairman and Managing Director of Kotak.”

ATM use over 5 times will attract fee now

Using ATMs (automated teller machines) to withdraw money or for other purposes such as balance enquiry beyond five times in a month will attract a levy of Rs.20 a transaction from Saturday.
According to the Reserve Bank of India’s new guidelines that come into force from Saturday, bank customers in six metros —Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore — are allowed to withdraw money and/or carry out non-financial transactions like mini-statements at ATMs of banks, where they hold saving/current accounts, free of charge only five times a month.
Every transaction beyond this threshold will be charged Rs.20 per use. Besides, the number of free transactions at ATMs of non-home banks has been cut to three times a month from five times.

TRAI will start review of telecom interconnect charges

Telecom regulator TRAI is likely to review this week interconnect charges, which one telecom operator pays to another for completing calls and SMSs.
In the previous review, Telecom Regulatory Authority of India has reduced interconnect charges, leading to reduction in tariffs.
TRAI has plans to start process to review IUC (inter usage connection) charges this week,. This would be second IUC review by TRAI after the one in 2009. The regulation was framed in 2003.
At present, TRAI had fixed a mobile call termination charge at 20 paise per minute for all local and national long-distance charges. This charge earlier varied between 15 to 50 paise depending on the distance.
This means that a telecom company now pays 20 paise per minute charge to the other company on whose network call has been made.
The regulator raised the MTC (mobile termination charge) for incoming international calls to 40 paise per minute from 30 paise, while putting a ceiling on carriage fee of 65 paise per minute for domestic long-distance calls.

Committee on Economic Affairs hikes MSP for Rabi crops

The Cabinet Committee on Economic Affairs has hiked the minimum support price (MSP) for several Rabi crops.
These include wheat, barley, gram, Masur lentil, rapeseed or mustard and safflower. The prices are for the 2014-2015 season which will be marketed in next fiscal.
The MSP of wheat has been hiked from Rs. 1,400 to Rs. 1,450, barley from Rs. 1,100 to Rs. 1,150, gram from Rs. 3,100 to Rs. 3,175, Masur from Rs. 2,950 to Rs. 3,075, rapeseed from Rs. 3,050 to Rs. 3,100 and safflower from Rs. 3,000 to Rs. 3,050.
The prices have been decided by the Commission for Agricultural Costs and Prices.
Finance Ministry cuts non-Plan spending by 10%
The Finance Ministry ordered a mandatory 10 per cent cut in the Centre’s non-Plan expenditure for 2014-15.
The cut does not cover interest payment, repayment of debt, defence capital, salaries, pension or Finance Commission grants to States, says a circular. Subsidies will face the brunt of the cuts.
The UPA government too had in place austerity measures. For 2013-14, former Finance Minister P. Chidambaram rolled out cuts of 15 per cent on average across both Plan and non-Plan expenditures. Union Finance Minister Arun Jaitley has spared Plan expenditure from his 10 per cent spending cut.
A Finance Ministry release said the objective of the fiscal prudence and economy measures was the need to rationalise expenditure and optimise available resources.
The Ministry revived its standard measures, including curbs on conferences abroad or in five-star hotels, purchase of vehicles and staff cars, travel curbs on flying first class and ban on new posts.

‘Black money could add $30 billion to forex reserves’: BofA-ML

The unearthing of capital flight of black money Indians have allegedly stashed away in Swiss banks could add USD 30 billion to the country’s forex reserves, says a Bank of America Merrill Lynch (BofA-ML) report.
According to the global financial services major, though there would not be any immediate forex impact given the legal issues involved, it could add USD 30-35 billion to the forex reserves over time.
BofA-ML has worked with an estimate of capital flight of about USD 200 billion based on a recent research study.
According to the study, Raghbendra Jha and Duc Nguyen Truong, of Australian National University, estimated total capital flight of more than USD 186 billion during 1998-2012.
“If even half of this is unearthed, it could add USD 30-35 billion (three to four months of current import cover) to forex reserves over time,” BofA-ML said in a research note.

India world’s 4th largest steel maker in Jan-Sept

With 62.41 million tonnes output, India remains the world’s fourth largest steel producer in the first nine months of the current year, preceded by China, Japan and the US.
World Steel Association (WSA) data showed India’s steel production grew by 1.8 per cent, the second highest among the top four steel producing nations, during the January-September period from 61.27 MT in the same period last year.
India has been the world’s fourth largest steel maker for the last four years. The order is likely to remain unchanged in current year too, an industry expert said.
During the first nine months, China produced 618 MT steel which is a little more than half of world’s total production at 1,231 MT.
China logged 2.3 per cent growth during the period. But its steel production remained static in September, as per data revealed by WSA, at 67.5 MT when compared with the same month last year.
Japan remained the remote second with 83.1 MT production during the nine-month period clocking just 0.8 per cent growth over 82.4 MT production in the same period last year.