Indian Economy - Current Affairs for September, 2015

Indian Economy Current Affairs for September, 2015

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 September, 2015

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  • Month & Year   
▼ RBI cuts rate by 50 basis points on 29th September 2015   [09-30-15]

Central Bank governor Raghuram Rajan has cut the rate by 50 basis points. Most economists had predicted a quarter cut in rates. This is the biggest move since the 2009 international recession and RBI also engaged with the ministry regarding reform of the central bank to establish a monetary policy committed to set rates. In another positive sign, the largest state owned bank SBI indicated it would cut main lending rate by 0.4 percentage points. Focus should be on bringing inflation to around 5% by March 2017.

▼ Google announces proposal for broadband connectivity at railway stations in India   [09-29-15]

Google CEO Sundar Pichai on 28th September announced a proposal for introduction of broadband connectivity, via Wi-Fi hotspots, at 100 railway stations expanded to 400 in 2016. He also announced the launch of ten-language vernacular typing for Android users.

▼ India sets up INR 10,000 crore plan for Andaman and Nicobar Islands   [09-28-15]

India has formed an ambitious INR 10,000 crore plan for transforming Andaman and Nicobar islands into the first maritime hub of the country. It will create a base for infrastructure including expanded dry dock and ship repair facilities in Port Blair. The plan also includes protection of Jarawa inhabitants while improving the tourism potential for attractions such as mud volcanoes and limestone caves. A 15 year perspective plan developed for shipping and port infrastructure on the islands. Safe berthing and docking capacity facilities will also be improved in Andaman and Nicobar Islands. GoI also sanctioned an INR 50 crore project on the development of a sea route from Port Blair to Baratang, one of the islands and home to the mud volcanoes. 23 sites has been discovered for port development with 7 of these being small facilities. The islands are a chain of 572 of which slightly more than 30 are inhabited. The islands are 0.2% of the land mass of the country and provide for 30% of 200 nautical mile EEZ.

▼ Centre to provide continued funding and support to Andhra Pradesh   [09-26-15]

Centre has decided to provide continued support for development of backward districts of Andhra Pradesh and work for creation of new capital of AP including Raj Bhawan, High Court, Government Secretariat, Legislative Assembly, Legislative Council, and such other essential infrastructure. Centre has also announced special assistance of INR 1000 crore during current fiscal. It will also give special assistance of INR 350 crore for development of 7 backward districts, another INR 350 crore for development of state capital and INR 300 crore for Polavaram Irrigation Project. AP Reorganisation Act 2015 divided AP into two- creating the new state of Telangana from 2nd June 2014. Special assistance is to be provided to backward areas of the state as well and amount of INR 4403 crore was released to successor AP state during 2014-2015.

▼ Draft framework proposes lowering of cost borrowing for ECBs   [09-24-15]

RBI proposed to allow domestic firms to take money from pension funds, insurance funds and SWFs as part of ECBs. Draft framework of ECB proposed to lower all in cost borrowing by 0.50 percent to make sure funds are borrowed at reasonable interest rate from abroad. Basic goal of the framework is to retain more qualitative parameters for normal foreign currency denominated ECB and provide liberal dispensation for long term foreign currency borrowings. According to the draft guidelines, there will only be a small negative list which include stock market operations, real estate activity and purchase of land not be allowed to raise resources through ECBs and rupee denominated borrowing. RBI suggested to expand the list of recognised ECB lenders by including overseas regulated financial entities, pension funds, insurance funds, sovereign wealth funds and similar other long-term investors. It also permitted Indian banks to act as ECB lenders subject to norms. It made the proposal to cap the minimum maturity of ECB up to USD 50 million at 3 years and 5 years for amount exceeding USD 50 million. The minimum average maturity for long term ECB should be 10 years. With regard to all inclusive cost, it said, interest rate for normal ECB should be 50 basis points less than the existing rate which LIBOR plus 350 basis point. Revised guidelines suggest that ECB funds can be used for repayment of trade credit for up to 3 years.

▼ Country’s manufacturing sector reaches 4 month high at 53.9%   [09-23-15]

Country’s manufacturing sector has grown on an annual basis in September, even as mining and electricity are acting as drag on economic activity. SBI composite index for measuring manufacturing stood at a 4 month high at 53.9 compared to 53.4 in the same period in 2014. But the monthly index declined to 48.4 in September from 53.1 in the month of August. Upturn has been boosted by manufacturing while mining and electricity are creating obstacles for economic growth. There are signs of growth in certain industries such as basic metals, petrochemicals and drugs and pharma.

▼ Total public debt increases by 3.5% in April-June 2015    [09-20-15]

GoI has increased total debt by 3.5% in April-June period of fiscal 2015-2016 as against the previous quarter. The public debt (excluding liabilities under the `Public Account') of the central government provisionally increased by 3.5% in the first quarter of FY2016 on quarter-on-quarter basis,“ as per a finance ministry statement. Internal debt constituted 92.3% of public debt at end of June 2015, while marketable securities accounted for 84.2%, the statement said. Close to 29.5% of outstanding stock has a residual maturity of up to five years, which implies that over the next five years, on an average, around 5.9% of outstanding stock needs to be rolled over every year, the statement added.

▼ IFCI sells 1.5% stake in NSE for INR 263.3 crore.   [09-18-15]

Infrastructure lending company IFCI has sold 1.5% of its stake in NSE for INR 263.3 crore. It has made partial divestment of up to 1.5% of stake in NSE at 6,75,000 equity shares, to a certain buyer, at a price of Rs 3,900 per share, aggregating Rs 263.3 crore on September 15, 2015. The company earlier held 5.6% in NSE.

▼ Exchange traded funds withdrew USD 1.17 billion from Indian equities   [09-17-15]

Exchange traded funds withdrew USD 1.17 billion from Indian equities from the start of August to the first week of September, as per Bloomberg data. This accounts for one third of total pullout from Indian equities and ETFs have sold stocks worth USD 6.5 billion in emerging markets since August of which nearly 20% were from India. FPIs sold USD 3.1 billion worth of stocks over this period. There is redemption pressure in ETFs. Appetite to own risky assets such as emerging market equities is dying out in the global investment scenario.The values re 17.96 % for total EM and India’s are, total FPI outflow in India was around 3148 while ETF to FPI flow in percentage was 37.34%. From August to September 4, 2015, the total EM EFT outflow was USD 6546.6 million of which the following values were for the following countries:

S. Korea- 580.34
China/HK- 1245.1
S. Africa-315.61
Brazil 414.6

▼ Indian exports fell for the ninth month in the row in August 2015   [09-17-15]

Indian exports fell on account of sluggish global demand and lower commodity prices leading to job loss in sectors which are labour intensive. Contraction in imports despite sharp increase in gold purchases held the trade deficit in check. Data released showed exports fell from USD 21.6 Billion to USD 26.8 billion in 2015 from 2014. Imports declined by 10% to USD 33.7 billion leaving a trade gap of USD 12.4 billion which is lower than the previous month’s USD 12.8 billion. Traditional exports of Indian such as engineering, carpets and leather fell in August by 29%, 12.78% and 22%. Petrol product exports fell by 47.88%. Data released by Commerce and Industry Ministry also showed that gold imports rose to USD 4.9 billion in August however. Decline in imports was led by massive 42% fall in petrol goods and non oil imports grew by 7% to USD 26.38 billion. In the first 5 months of present fiscal(April-August) exports fell 16.17% to USD 111.09 billion and imports declined to USD 168.8 billion by 11.61% resulting in trade deficit of USD 57.5 billion.

▼ Centre's share in funding SSA down to 50%   [09-17-15]

Funding pattern of Sarva Shiksha Abhiyan has changed to 50:50 between Centre and State government from the current 65:35 creating a problem for the future of the programme. Centre has been receiving a barrage of protests from states like Odisha. Fresh funding pattern will be applied from this fiscal by HRD Ministry. Problems SSA will now face include truncation of allotted funds and quality control.

SSA is the flagship programme for UEE(Universalisation of Elementary Education). It addresses the needs of 192 m children in 1.1 m habitations in India. SSA seeks to provide quality elementary education to children aged 6 to 14 years.

▼ RBI signs MoU with Nepal Rastra Bank on supervisory cooperation & exchange of supervisory information   [09-16-15]

The MoU was signed by Meena Hemchandra, ED of RBI and Nepal Rastra Bank’s ED Narayan Prasad Paudel in New Delhi. Through this agreement, RBI will promote greater co-operation and share supervisory information among the authorities. The apex bank has so far entered into MoU with supervisors of 27 countries and Letter for Supervisory Co-operation and Statement of Co-operation with supervisors of one country. This is to promote greater co-operation and share supervisory information.

▼ Annual rate of inflation based on WPI in August 2015 at -4.95%    [09-16-15]

Wholesale prices dropped for the tenth consecutive month, while retail inflation remained at positive level, raising prospects of an interest rate cut when the Reserve Bank of India (RBI) reviews monetary policy. The annual rate of inflation, based on wholesale price index, stood at -4.95% in August, compared to -4.05% for the previous month and 3.85% during the corresponding month of the year 2014. Sharp slide in global crude oil prices and vegetable prices contributed significantly to the dip in wholesale price pressures.Retail inflation in August rose an annual 3.66% compared to the previous month's 3.69%, well below RBI's comfort level while food and beverages inflation stood at 2.9% in August, sharply below the double digit levels seen in the past.

However, prices of pulses and some vegetables remain issues of concern.Core wholesale inflation (excluding food and fuels) decelerated to 4.1% in August 2015 from 4.3% in July 2015 and thereby , continuing the momentum of decelerating core inflation. Both categories of inflation indicate that they are moderating and under control.

▼  Gujarat – Tops the list for ease of doing business by DIPP & WB   [09-15-15]

In a bid to improve India’s rank (142) for ease of doing business, WB and DIPP released state wise rankings where Gujarat topped the list at 71.14%. It was followed by Andhra Pradesh at 70.12% and Jharkhand and Chhattisgarh jointly came third.

▼ CAD has seen a drop of USD 6.2 billion in Q1FY2015-2016   [09-14-15]

First quarter current account deficit has fallen to 1.2% of the nation’s GDP from USD 7.8 billion or 1.6% in Q1FY15. CAD was higher as against 1.3 billion or 0.2% in Q4FY15. RBI data released on 12th September 2015 shows POL basket dropped to USD 24 billion from 40 billion. A massive component of this is crude and fall in import value is due to global crude prices crash.

▼ 7% Economic growth in April - June in India.   [09-11-15]

According to data released by Niti Aayog, India’s growth in Q2 was around 7% compared to 7.5% in the previous quarter. Indirect tax collections increased by 36.7% from 54396 crore in April to 2.63 lakh crore in August. GDP and indirect tax collections indicate economy is recovering. A large part of the buoyancy is due to additional resource measures including increase in duty on petroleum products, increase in clean energy cess, withdrawal of exemptions for motor vehicles, capital goods and consumer durables, and the increase in service tax from 12.36% to 14% from June 2015. Customs duty collection has been aided by 6% rupee depreciation in the period between April to August. Growth in indirect tax collections increased to 12.2% in April August and 11% in August as per data revealed by finance ministry. Government has raised 33% of budgeted amount of INR 6.46 lakh crore for FY16 and growth in addition to 18.8% for this year. Tax collections are growing over double digits suggesting underlying tax base and nominal GDP are moving upwards.

▼ Spectrum trading to address shortage of radio waves & call drops   [09-11-15]

Spectrum trading is a move to address issues such as quality of service, shortage of radio waves, tackle problem of call drops, increase spectrum usage efficiency and assist companies as well as consumers in the telecom sector. Ownership rights will remain with GoI though right of usage can be traded between 2 TSPs. Government has approved sale and purchase of unused spectrum between telecom firms, allowing them to transfer their spectrum rights and obligations to another party and leads to skilful spectrum image. This is because idle spectrum will be used by those facing a spectrum crunch. Under the new regime, ease of business will be facilitated as spectrum trading will not change the original validity period of spectrum assignment as apple to traded block of spectrum

▼ DA hiked by 6 percentage points   [09-10-15]

The decision to raise DA by 6 percentage points was taken by the Union Cabinet. DA is paid as a proportion of the basic pay. In April, government hiked DA to 113% of basic pay w.e.f January. Proposed DA hike is to come into force from July 1, 2015. According to the agreed formula, DA rate increase comprises an average of 12 month CPI-industrial workers from July to June 2015. Proposed hike is as per recommendations of 6th Pay Commission.

▼ Indian tax authorities request Swiss for Neo Corp International Limited’s information for black money   [09-10-15]

In new disclosure on suspected black money being probed by Indian tax authorities, Switzerland has received request for information about Indore origin textile firm Neo Corp International Ltd. This company began as a small woven sack maker in the 1980s and now alleges it is an MNC technical textiles group. It has faced income tax searches in February 2015 for suspected tax evasion. Around 12 names have been disclosed in this high profile crackdown by Swiss and Indian authorities.

▼ Inclusive Growth and Development Report – India ranks 37 for fiscal transfers   [09-10-15]

Report on Inclusive Growth and Developed released by WEF aims to achieve inclusive growth across as well as within countries. It has ranked India 37th of 38 low middle income nations on fiscal transfers and 32nd rank for tax code. On social protection, India’s rank was 36 out of 38 nations. It occupied the last rank in the small business ownership category. Economic growth cannot take place without social inclusion, the report stresses.

▼ NCST urges Odisha govt. to upgrade 'Ashram Schools' as models   [09-7-15]

NCST Chairman Rameshwar Oran urged the state government to emphasise on quality education and proper health care in residential tribal schools.