Indian Economy - Current Affairs for January, 2016

Indian Economy Current Affairs for January, 2016

Month wise coverage of Indian Economy Current Affairs helps you improve your general knowledge and prepare for all competitive exams like IBPS, Bank PO, SBI PO, RRB, RBI, LIC, Specialist Officer, Clerk, SSC, UPSC, Railway etc. This section is updated daily with the most important events.

Preparing Indian Economy Current Affairs January, 2016

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▼ India overtakes Thailand as world’s largest rice exporter   [01-27-16]

India has overtaken Thailand as the largest rice exporter in the world. It is the world’s largest rice exporter in 2015, shipping 10.23 MT according to a top Thai rice exporters body Thai Rice Exporters Association. Thailand has exported 9.8 MT of rice in 2015 down 10.8% Y-O-Y. They attributed downturn to global economy contraction with high rice demand and Thailand ended up second position in terms of overall exports. Vietnam won the third position globally while China was the leading importer of rice.

▼ Export of half the sectors of the closely monitored of the Commerce Ministry were in the negative zone   [01-25-16]

Exports of half of the sectors out of the 30 closely monitored by the Commerce Ministry were in the negative zone in December on account of fall in global prices and demand. Outbound shipments of close to 15 key sectors such as leather, engineering and petrol have dipped last month due to ministry data. Exporters body FIEO indicated that the pace of fall has moderated in December. India’s exports fell about 15 percent in December to USD 22.2 billion, placing trade deficit to USD 11.66 billion, which is the most massive in the past 4 months. In November, it fell by 24.43 percent and continuous export declines will impact jobs and place pressure on CAD. Government should address inverted duty structure in sectors in the Budget besides exemption of exports from service tac and export development fund. FIEO has indicated that the top 2 sectors engineering and petrol products fell by 15.68 percent and 47.69 percent respectively in December 2015. Gems and jewellery exports shrank by around 7.75% to USD 2.46 billion in the previous month. These 3 sectors make 55% of the country’s total exports in 2014-2015 which was pegged at USD 310.5 billion. Agri products that constitute over 10 percent of the country’s total shipments has recorded negative growth during the month in review.

▼ RBI permits banks to sell Indian Gold Coins   [01-22-16]

RBI permits banks to sell Indian Gold Coins with Ashok Chakra minted by MMTC via their branches. This terms and conditions shall be as per a contract between MMTC and designated banks. MMC has made the decision that gold used for IGC will be mobilised domestically under the Gold Deposit Scheme and Gold Monetisation Scheme. Coins are available in denominations of 5 and 10 grams while a 20 gram bullion is being manufactured by MMTC. India imports 1000 tonnes of gold each year, draining out the foreign exchange and plain pressure on fiscal deficit.

▼ CAD narrows to 0.5% of GDP   [01-21-16]

India’s current account deficit may narrow to 0.5% of GDP in 2016 from 0.7% in 2015 on account of lower commodity prices especially oil. Given lower oil prices, one expects CAD to narrow to 0.5% of GDP in 2016 from 0.7% in 2015. As per official figures, exports contracted for the 13th month in the row in December 2015. Outward shipments shrank 14.75% to USD 22.2 billion and global demand slowdown. Imports can plunged 3.88 percent for USD 33.9 billion in December ober the same month in the previous year.

▼ USD 250 million loan agreement with the World Bank formed   [01-21-16]

India has signed a USD 250 million loan agreement with the World Bank for Bihar Kosi Basin Development Project for enhancing resilience to for floods and enhancing agricultural productivity. Objective of the project is for enhancing resilience to floods and enhancing agricultural production and productivity in targeted districts in Kosi River Basin and enhance the capacity of Bihar to respond effectively to an eligible crisis or emergency. FM has indicated this in a statement. Primary beneficiaries will be rural producer and households in the Kosi River Basin who are exposed to floods, it is indicated.

▼ EXIM Bank has entered into MoU with AP   [01-19-16]

EXIM Bank has entered into MoU with AP to promote exports from the state. MoU was signed by EXIM Bank CMD Yaduvendra Mathur and Shamsher Singh Rawat, Secretary and Commissioner for Industrial Promotion, AP. EXIM Bank aims to support exporters possessing operations in the AP in attaining higher exports by facilitation of market linkages through market advisory services that will assist in identification of suitable partners.

▼ India’s trade deficit mounts to 44.87 billion in 2015   [01-14-16]

India’s trade deficit with China has risen to 44.87 billion in 2015. India’s trade deficit with China has reached USD 44.87 billion in the past year and exports shrank to USD 13.38 billion as bilateral trade registered a considerable increase adding up to USD 71.64 billion missing out on the USD 100 billion target established by leaders of the nations. India-China trade has reached USD 71.64 billion according to reports released by Chinese customs. Bilateral trade registered a marginal increase as against USD 70.59 in 2014. This year China’s exports have increased to USD 58.25 billion as against USD 70.59 billion in 2014.

▼ India’s Index of Industrial Production for November has contracted 3.2%   [01-13-16]

India’s Index of Industrial Production for the month of November has fallen by 3.2% as against 9.8% in October while CPI has risen for the month of December to 5.6% compared to 5.41 percent for November. As per the CNBC TV 18 poll, CPI has come to around 5.5% while consensus was expecting IIP to come down to levels of 1.8 to 2 percent.

▼ Urijit Patel, Deputy Governor of RBI, reappointed for 3 years   [01-11-16]

Urijit Patel, Deputy Governor of RBI in charge of the monetary policy department, has been appointed for a term of three years for the second time. Patel, 52, will finish his 3 year term on January 10, and has become the longest serving deputy governor in 2015-2016 if he serves the full three year term. Many of the recent deputy governors served a maximum period of only 5 years. A deputy governor can serve for the period of three years w.e.f taking on the charge on or after January 11,2016 or till further orders, whichever is earlier. A PhD from Yale University in Economics and graduate of the University of London and Oxford, he has served as the head of the U. Patel Committee proposing inflation targeting as the prime objective of the central bank. As per the agreement, RBI will target 4 percent inflation at the close of the financial year 2016-2017 and for subsequent years, with a band of +/- 2 percent. Other deputy governors of the RBI are H. R. Khan, R. Gandhi and S. S. Mundra.

▼ Union Cabinet gives approval for Credit Guarantee Fund for MUDRA   [01-8-16]

Union Cabinet gives approval for Credit Guarantee Fund for MUDRA (Micro Units Development Refinance Agency) loans and conversion of MUDRA Ltd into MUDRA SIDBI. Fund will generate more than 100,000 crore worth of loans to micro and small units within the first instance.

▼ India produced 7.98 million tonnes of sugar till December 2015-2016: ISMA   [01-6-16]

India has produced 7.98 MT sugar and exported 0.3 MT till December 2015-2016. Country’s sugar output rose to 7.98 MT in a percentage increase of 6.5 during the first three months of 2015-2016 while exports were 3,00,000 tonnes during the same period, according to industry body ISMA. As per the latest production data released by Indian Sugar Mills Association, overall output of the country rose to 7.98 MT in October-December 2015-2015 up from 7.49 MT in the same period a year ago. Sugar output in top sugar producing state Maharashtra rose to 3.37 MT from 3.26 MT in the review period.

▼ Government abolished export duty on iron ore pellets   [01-6-16]

Government of Indian abolished export duty on iron ore pellets, from 5 to 0 percent in a move that will make the commodity more competitive amidst weakening prices and falling demand. In the year 2014, government has levied a 5% export duty on iron ore pellets which are value added products of leftover low grade iron used in still making. Notification in this regard was issued by Central Board of Excise and Customs. Pellet Manufacturers Association of India Secretary General, Deepak Bhatnagar has said that industry had been lobbying the withdrawal of export duty since 2014 when it was first levied and that pellet industry’s capacity utilisation has fallen to 35%.

▼ Retail information for farm, rural workers rises up in November   [01-5-16]

Retail inflation for farm labourers and rural workers in November increased to 4.92% and 5.02% respectively on account of increase in food item prices. Corresponding inflation in October was 4.43% and 4.65%. Food inflation under CPI-AL and CPI-RL came at 4.79% and 5.15 percent in November 2015. All India CPI numbers for agricultural and rural labourers for November rose to 853 and 857 points respectively. CPI-AL and RL of TN registered the maximum increase while Meghalaya saw the maximum fall.

▼ HSBC pegs FY16 growth at 7.4%   [01-5-16]

Foreign brokerage firm HSBC said the country is current amidst a credit less recovery and policy reforms were the main step to attaining higher growth. Economists have also expressed dissent with the new method of GDP computation and said the economy will clock 7.4% in FY16 and remain stable in FY17 as well. During this phase of credit less recovery, sectors like investment which rely on external funding take the longest to revive. The macro side is facing fiscal trilemmas according to economists where the main challenge was funding higher wages at the same time, lowering fiscal deficit and continuing government capex.

▼ e-Commerce industry likely to be worth USD 38 billion by 2016   [01-4-16]

This is a 67% jump over USD 23 billion revenue for 2015 as per industry body ASSOCHAM. Indian e-commerce market was worth USD 3.8 billion in 2009 and went up to USD 17 billion in 2014 nd USD 23 billion in 2015. It is expected to touch USD38 billion mark by 2016. Enhanced internet and mobile penetration as well as increased acceptability of online payments and desired demographics will provide the e-commerce sector a chance to connect with customers. ASSOCHAM predicts a 5 to 7 fold increase in revenue generated via e-commerce.

▼ GoI releases Medium Term Debt Management Strategy/MTDS   [01-4-16]

To better managing public borrowing, government has taken the decision to switch to INR 50,000 crore high cost debt in 2016-2017 and 2017-2018 into fresh instruments of longer term maturity. In terms of releasing Medium Term Debt Management Strategy, Finance Ministry has announced the objective of debt management strategy is obtaining government funding at all times at a cost which is low in the medium/long term. MTDS is put together for the period 2015-2016 to 2017-2018 associated with outstanding government market borrowing as noted on March end 2015. Switches of INR 30,000 crore are conducted in 2015-2016 and INR 50,000 crore in 2016-2017 and 2017-2018 as part of the scenario analysis of the MTDS. Reversal in the interest rate cycle is set to lower borrowing cost in the domestic market in 2015-2016. MTDS is in accordance with the Medium Term Fiscal Policy Statement.

▼ Growth in 8 core sectors of economy declines to 1.3% in November   [01-4-16]

Growth in 8 sectors of the economy fell 1.3 percent in November, as against 3.2 percent growth in October. This showcases the uneven nature of economic recovery. While cement, crude oil, steel and natural gas production declined M-O-M, electricity production was unchanged. Pace of growth was slower as carrying refined products, fertilizer, refined petrol products and coal output rose. Fiscal deficit for April to November rose to INR 4.83 lakh crore and is currently pegged at 87% of the FY16 Budget estimate.

▼ SEBI proposes fresh norms for public issue of REITs   [01-4-16]

For providing new avenues for raising funds, capital market regulatory body SEBI on 31st December 2015 proposed fresh norms for public issue of Real Estate Investment Trusts. This includes a cap of 75% allocation to institutional buyers. Proposed norms for the public issuance of REITs pertain to appointment of merchant bankers, disclosures within the offer documents and filing of draft papers, keeping them in public domain for a minimum of 21 days. For issue made via book building process or otherwise, allocation in public issue should equal maximum 75% to Qualified Institutional Buyers and 25% to other investors, according to SEBI. Investment managers can allocate close to 60% of the portion available for allocation for QIBs to anchor investors subject to specific conditions. Anchor investors need to create applications for INR 10 crore minimum in public issue and allocation to investors should be on discretionary basis subject to minimum of two investors for maximum allocation up to INR 250 crore and 5 other such investors for over INR 250 crore.