mehekkaoberoi

Bасkgrоund:-

• ChinaInc. determined to show that he was playing football with the OK of the Party-but when the genesis of trying to get else companies to secretly support Xi Jinping’s new idea began, it was shocking, another large Chinese company told me privately.
• The struggle for general heartiness has included programs ranging from duty out and limitations to hours for technology professionals who can work to forestall profitable education in primary seminary subjects and strict limits on the volume of time children can spend playing tape games.
• This while, Xi has shown great commitment to bringing about common heartiness, emphasizing that it is not just a profitable pretension but the core of the party’s core stewardship.
• But either we got used to the idea. It’s not about burgling the rich. It’s about rebuilding society, and constructing a middle class. And we’re a shopping business at the end of the day-so it’s good for us.

Linkаges:- 

• If normal capital means a growing focus on middle- class Chinese people-that could mean a blessing to the foreign business that board to these accounts.
• Joerg Wuttke (the moderator of the EU Chaamber of Commerce in China) says, “youth people chancing employment is good and should be cantered”.
• Notwithstanding, which has been eroding, that’s fine for us, If they feel part of the social movement in this country. Because the middle class grows, the farther shots there are.
• Notwithstanding, businesses caught up in the luxury industriousness may not perform well, warns Mr Wuttke.
• Chinese spending goes up about 50 of global luxury spending-with this if the well- pitched Chinese are willing to buy European luxury motors, Swiss watches and Italian ties in this case industriousness might take over.
• But while Mr. Wuttke acknowledges that the Chinese penny-pinching needs drastic changes to increase the average Chinese average earner, he says normal failure may not be the most effective way to get there.
• “General robustness does not guarantee growth of middle class same way as it did 40 spans ago”, says Steven Lynch.
• He likes to tell the story of how fast the Chinese husbandry has grown in the last legion decades.
• “Thirty cycles ago a Chinese family could have a circus of dumplings once a month, “he told me over the phone in Beijing.
• But so far Mr. Lynch says, general feast has been palpable, with the exception of the kind of social commitment efforts by Alibaba and Tencent.
• There are a lot of quick rules written in multifield fields, he said of a recent cause for technology companies. This situation raises questions and creates misdoubt. If they turn inwards- do they really need the whole world?

Сurrent  Sсenаriо:-

• At its heart the common plenitude is about balancing Chinese society, at least according to the Communist Party. And this has the power to change that means radicalism in the environment of the world.
• “The group is anteriorly concerned about brokers-akin as taxi motorists, transplanted workers and the boys in need,” said Wang Huiyao of the Centre for China and Globalization from Beijing.
• But long time Chinese activists say that if ultra-conservatism-with Chinese symbols- changes into a different model for all of us is what the Party wants, either normal robustness is not the way to go.
• “It’s part of the left-hander and it’s part of the quest for fresh control that has shown that Xi Jinping is still under his control,” said George Magnus, who works with China Centre at Oxford University.
• Mr. Magnus adds that general robustness does not mean repeating the European social model.
• “The pressure that has been put on him to be in line with the party’s things, “he said. Assessment will be assessed on unreasonable and high wage. There will be pressure on private sector for alms towards fat things but for sustainable taxation no major step has been taken.

Imрасt:-

• Under Xi Jinping, it’s now clear on how Chinese state and society will be treated.
• With this comes the word of a disinterested society-a large and deep-pocketed middle class, with companies giving back rather than simply taking over.
• The high- profile brand is at the top of Starry China, where the party hopes to turn a different working model in the world to what the West is doing.
• But there comes a catch more control and power in the hands of the Party.
• China has always been a ticklish place for foreign business to operate, a general sap means that the world’s first-largest saving has frontiersman it extremely ticklish to navigate.

Curated by- Siddhi Kale

 13,364 total views

Bасkgrоund:-

• Petrol prices have reached an all-time high, concerns that the cold winter could intensify the crisis that has led to the collapse of many energy suppliers and raised fears about industrial closure and rising debt.
• Amid growing global energy prices, the cost of carbon and coal  permits reached record levels with $80 crude oil on Tuesday for the first time in three years.

Linkаges:- 

• Winter delivery gas for British consumers jumped more than 20% to 218.4p therm during early morning trading. European gas prices have risen by 10%, and price pressures have been boosted by Russia’s declining supply.
• Sales fell Tuesday as Russia’s gas pipeline through the Yamal pipeline and Europe dropped by more than half, reports Interfax news agency, citing information from Gascade operator gascade.
• Since past few years, market prices have quadrupled in UK which has worsened the situation.
• Rising prices in Europe have been linked to unusually low gas storage costs in the UK, as well as shutdown of the power system, including fires on critical power inputs, which have led to increased reliance on power plants.
• Consumers have been warned to expect higher debt and further failure of domestic energy suppliers, while the heavy industry and the food and beverage industry are facing the prospect of closure and shortages of pre-Christmas products.

Сurrent  Sсenаriо:-

• The “winter gas season”, when the demand for heat is usually higher, starts on October 1 and there are forecasts of colder temperatures than normal winter.
• While ministers stressed that the UK has enough gas to prevent the lights going out or a three-day operation in the 1970s, analysts have warned that low temperatures could eliminate the problem.
• In this cold, Europeans and other countries especially those who cannot afford current electricity prices could face lower natural gas supplies, if winter gets much colder than usual.
• His colleagues at Refinite have warned that even hotter temperatures than expected would “not be enough” to lower prices.
• On Monday Russia’s power supply through Yamal – Europe  pipeline was 35,131 MWh per hour which then dropped to 15,021 megawatts (MWh) per hour.
• A group of European politicians wrote to the European Commission this month calling for an investigation into whether Russian power company Gazprom was deliberately trying to stop the flow of electricity into Europe.
• They expressed fears that Russia was using its gas volume in the region to increase pressure to accept the Nord Stream 2 pipeline, which should have been sanctioned and awaited the approval of more laws.
• A Kremlin spokesman denied Russia’s use of gas as a weapon against Europe and said Gazprom was ready to export its goods to Europe.
• As electricity prices rose, oil also followed, Brent sold more than $ 80 a barrel for the first time in three years before the collapse and as traders made a profit.
• Markets were partially responding to the gas crisis, amid expectations that some firms would switch to oil to boost their performance. Goldman Sachs predicted that Brent crude could hit $ 90 by the end of the year.
• Recovery in economies such as China and India following the Covid-19 depletion has also forced a rise in the price of fuel, with coal-fired, coal-fired power plants, up 96% this year.
• Prices are driven by a power outage in China, where efforts to decarbonise meet the reality of a widespread industrial breakdown and disrupt domestic energy supply as winter approaches, fuelling the demand for coal.
• As gasoline prices rise, so does the cost of carbon dioxide emissions.
• Tim Dixon, lead analyst at Cornwall Insight, said: “The price of trading in the carbon industry in the UK also recorded [their] largest daily increase in our records, exceeding £ 8 per ton this morning to reach the maximum £ 75 per ton,
• October’s electricity price at the Dutch TTF facility, European benchmark, had risen by 7.47, or 9.7%, by € 84.00 per megawatt (MWh) hour.

Imрасt:-

• Rising fuel prices have left the UK in a state of crisis, with fears of families at risk as debt rises and power outages collapse.
• During 1990’s “dash for gas” was made by UK. In recent years, it has become increasingly difficult to reduce fuel consumption in coal. That makes the UK more dependent on electricity for energy, with 86 percent of households using it for heating and more than a third of electricity from power stations.
• The main reason for the current problem is the lack of gas supplies, as a result of declining production in Norway and elsewhere, and demand from Asia. And, to a lesser extent, due to low air and fire emissions last week which left the UK-France power link offline. Prices and carbon emissions have gone up, with older coal and more powerful power stations. High fuel prices have risen 176 percent since the beginning of the year, and electricity prices last month increased by 266 percent on average this year.
• It didn’t have to be this way. Energy problems such as these are part of the cycle of fuel price fluctuations, depending on global and political conditions that cannot be controlled by any one nation. Countries that have prioritized low carbon emissions are highly protected from such shocks.
• Gas prices will be a major problem this winter, but illegal solutions have been prioritized. Today’s Daily Telegraph recommends the installation of trackers to increase domestic gas production. But companies have spent years failing to deliver shale gas under UK laws. For one thing, some blame the energy price. Some want renewable levies to be deducted from electricity bills, which people will still have to pay in taxes.
• The UK’s nuclear power agency says nuclear is the answer. However a new nuclear plant could take at least a decade to build, and the monetary model under consideration will leave energy debtors to bear the cost of construction goes beyond budget and plan.
• With extraordinary unity, the UK government and its main political rivalry seem to see the only real long-term solution to cut the UK’s dependence on electricity by supporting renewable and other low-carbon alternatives in electric boilers, such as heat pumps.
• The UK has a good record of renewable support and reduced their costs. Additional subsidies for wind and solar energy will be released at auctions starting in December. The world’s scorecard on energy use is very bad. A series of home-improvement or energy efficiency programs have been put in place, most recently the Green Homes Grant, which was demolished to upgrade only a tenth of the homes it was built for.

Curated by- Siddhi Kale

 6,750 total views

Bасkgrоund:-

• The US trade deficit has increased beyond expectations in August to a record $ 73.3bn as businesses boost the list of consumer goods and industrial goods.
• Trade deficits of goods and services grew from $ 70.3bn in July, an increase of 4.2%, the Department of Trade said on Tuesday. That was much higher than expected by economists at $ 70.5bn.
• The error decreased for the first time in three months in July. It is also $ 31.7bn larger than before the epidemic.

Linkаges:- 

• A report on Tuesday by Department of Trade suggests that, monthly trade deficit increased by 4.2% in August  which surpassed the previous month record of June that was $73.2 billion.  Trade deficits represent a gap between what the country exports and what imports.
• In August, exports increased by 0.5% to $ 213.7 billion, reflecting a resurgence in overseas demand. However, imports, despite the problems with port purchases, had risen sharply by 1.4% to $ 287 billion.
• The shortage of critical political assets with China rose 10.8% to $ 31.7 billion in August. This year’s shortfall with China in eight months reached $ 218.9 billion, up 13.7% from the same period last year.

Сurrent  Sсenаriо:-

• Exports increased by $ 1bn from last month to $ 213.7bn, with an increase in exports of natural gas and gold sold by private retailers which partially reduced the decline in exports of cars and parts and public aircraft.
• Meanwhile imports increased by $ 400m to $ 287bn, driven by consumer goods such as toys and games and pharmaceutical goods, while imports of vehicles and parts were reduced.
• The US and China and Canada shortages – their major trading partners – have risen. The gap with China increased by $ 3.1bn to $ 28.1bn and in Canada it increased by $ 1.4bn to $ 5.1bn.
• Economists expect domestic demand to be balanced in the coming months, while foreign needs are expected to move abroad. However, as land growth is hampered by the ongoing disruption of the supply and duplication of vaccines, we expect trade deficits to grow steadily towards the end of the year.
• The total deficit so far this year has been $ 558.1 billion, up 33.7% higher than last year when the epidemic-related disease outbreak reduces Americans ’desire for foreign goods.
• Analysts said they expected the rise in inflation to begin to decline as other economies began to recover and buy exports. However, some have warned that global procurement problems could hurt imports and imports in the coming months.
• The closure of a significant global car industry last month suggests that further declines in exports and imports in August will continue to work, ”said Andrew Hunter, a major U.S. economist. In Capital Economics. The automotive industry has been particularly hard hit by supply problems involving chip chips.
• Katherine Tai, Biden’s chief trade official, announced on Monday that the United States plans to launch new trade talks with China but will keep the Trump administration taxable as it moves China to fulfil its promises to buy more US goods and services.
• Biden officials have spent months since taking office reviewing China’s economic relations, the world’s second-largest economy.

Imрасt:-

• As the U.S. economy grows at a faster rate than the rest of the world, U.S. demand for imports is slowing the slow increase in exports to U.S. exports.
• As measured in April – June quarter gross domestic product grew by a strong 6.5%  in global economy. The GDP growth in trade deficits a cut of 0.4 percent points.
• The shortfall in commodity trade reached $ 93.2 billion in June, a figure reduced by $ 17.4 billion recorded by the US trade union. The United States often has a shortage of services, such as air travel and hotels, but that figure has been hit this year due to the impact of the epidemic on international travel.

Curated by- Siddhi Kale

 6,469 total views

Bасkgrоund:-

• The first Defence Procurement Procedure (DPP) was issued in 2002, and it has been updated on a regular basis since then to help the local defence sector grow and attain greater self-reliance.

• The Defence Acquisition Procedure (DAP) 2020, which was implemented in September 2020, governs the acquisition of capital assets by the armed forces.

• DAP 2020 included a chapter on leasing equipment for a limited time, in addition to buying equipment from Indian or international players.

• Under the new powers, the forces will be able to fill immediate vacancies by hiring for shorter periods of time.

Linkаges:- 

• he greater delegation of financial capabilities is primarily intended to allow Field Commanders and below to quickly acquire equipment/war-like goods for urgent operational needs and to meet vital subsistence requirements.

• The increased delegation of financial powers would result in faster decision-making at all levels, allowing for greater planning and operational readiness of the Services in a shorter time frame while maximising resource use.

• It will not only eliminate procedural bottlenecks, but it will also improve operational efficiency. It will increase the efficiency with which the Defence Services achieve operational readiness

Сurrent  Sсenаriо:-

• The Delegation of Financial Powers to Defence Services (DFPDS) guidelines for 2021 have been announced by the Ministry of Defence.

• The fundamental goal of increased financial delegation is to reduce administrative delays, increase decentralisation, and improve operational efficiency.

• The DFPDS 2021 guidelines are a significant step forward in defence reforms aimed at bolstering security infrastructure.

Key Highlights of DFPDS 2021

• It is providing enhanced delegation of Revenue Procurement powers to the Armed Forces (the Army, Navy and Air Force).

• Guidelines: The DFPDS 2021 consists of guidelines related to the following Schedules of Financial Powers:

• Army Schedules of Powers-2021 (ASP-2021)
• Navy Schedules of Powers-2021 (NSP-2021)
• Air Force Schedules of Powers-2021 (AFSP- 2021)
• IDS Schedules of Powers-2021 (ISP-2021)

• Focus Areas:

• Financial powers devolved to field formations 
• Operational preparedness 
• Promoting ease of doing business and
• Jointness among Services

• Financial powers:

• Delegated Financial Powers of Vice Chiefs of the Services have been increased by 10 per cent, subject to an overall ceiling of Rs 500 crore.
• New Schedules for Field Commanders Special Financial Powers to meet Strategic/Operational requirements, in line with the existing Army Schedule on ‘Army Commanders Special Financial Powers’ have been introduced for Navy and Air Force.

• Emergency Powers:

•  Enabling provision of Emergency Financial Powers to Field formations below Command level for Defence Services incorporated in Emergency Powers Schedule for ops immediate military necessities.

• General Enhancement: 

• A general enhancement of up to two times has been approved for the Competent Financial Authorities (CFAs). 

• Delegation of Non Procurement Powers: 

• Substantial delegation has also been approved for non procurement powers.

• Indigenisation:

•  Up to three times increase in Schedules related to Indigenisation/R&D to achieve ‘Atma Nirbhar Bharat’
• A new schedule on hiring of aircraft and associated equipment has been introduced for the Indian Air Force which includes hiring of Air to Air re-fuellers. 
• For the Indian Navy, powers for replenishment of Disaster Management Bricks have been delegated to Command Level for immediate response to Natural Disasters/HADR Operations.

• Empowered Committee: 

• Clarifications or interpretation of provisions will be addressed by an Empowered Committee headed by AS&FA, Ministry of Defence with representatives of Department of Defence (DoD)/Department of Military Affairs (DMA).

• Monitoring:

•  A system of oversight, disclosure and internal audit mechanism will be put in place by the administrative wing of DoD/DMA in consultation with MoD (Finance).

Imрасt:-

• Will ensure more autonomy for the Karbi Anglong Autonomous Council, safeguarding of Karbi people’s identity, language, culture, and other aspects of their culture, and concentrated development of the Council region without jeopardising Assam’s geographical and administrative integrity.

• Armed organisations will abandon violence and join the democratic process, while the administration would make it easier for their cadres to be rehabilitated.

• The groups also stated that reserving 10 seats on KAAC for residents from any community was pointless, and that there was no use in reserving seats in sixth schedule managed places like KAAC.

Curated by-Meghna.Manoj

 7,750 total views

Bасkgrоund:-

• Karbi Anglong, the state’s largest district, is home to many tribal groups, including the Karbi, Dimasa, Bodo, Kuki, Hmar, Tiwa, Garo, Man (Tai speakers), and Rengma Naga.

• The  diversity spawned several organisations and fueled an insurgency that stifled the region’s development.

• The Karbis are a large Assamese ethnic group with numerous divisions and splinters. Since the late 1980s, the Karbi group’s history has been marked by assassinations, ethnic warfare, kidnappings, and taxation.

• The People’s Democratic Council of Karbi Longri (PDCK), Karbi Longri NC Hills Liberation Front (KLNLF), and other insurgent organisations in the Karbi Anglong area arose from a prime demand for formation of a separate state.

• Since 1946, the Karbi have demanded their own state. Later, their movement evolved into an insurgency, which grew stronger in the 1990s.

• The Centre signed a number of ceasefire deals with various parties, but there were always breakaway elements that fought on.

Linkаges:- 

• The recent agreement is in line with the vision of an insurgency-free and prosperous North East, which envisions the region’s overall growth, peace, and prosperity.
• While the demand for a separate state for the Karbis has been around for decades, it became violent in the mid-1990s. In 1996, two organisations — the Karbi National Volunteers (KNV) and the Karbi People’s Force (KPF)  joined to establish the United Peoples’ Democratic Solidarity (UPDS) (UPDS).

•  Some of the recent demands of the militant groups are:Inclusion of some areas into Karbi Anglong Autonomous Council (KAAC),Reservation of seats for Scheduled Tribes,More powers to the council, Inclusion of Karbi language in the Eighth Schedule,Financial package of Rs 1,500 crore.

• The agreement, which has been hailed as “historic,” promises to “end the decades-old problem” and maintain Assam’s territorial integrity, and comes months after over 1,000 members of armed groups came forward to surrender and abandon the path of bloodshed.

Сurrent  Sсenаriо:-

• The historic tripartite Karbi Anglong Accord was signed on September 4, 2021 between the government of India, government of Assam and six factions of the Karbi.

• According to the agreement, the Government of Assam will evaluate favourably a proposal by the Karbi Anglong Autonomous Council (KAAC) to declare Karbi as the council’s official language.

• Official languages will continue to be English, Hindi, and Assamese.

• The Indian government would invest Rs 500 crore (Rs 100 crore per year) in the development of KAAC.

• Assam’s government will set aside Rs 500 crore for development projects that will be undertaken as part of the special package.

• To recruit the Karbi youth, the army, paramilitary forces, and police will need to organise a specific drive.

• The Assam administration would remove non-serious cases brought against armed groups in conformity with the law. The call for egregious situations, on the other hand, will be handled on a case-by-case basis.

• The Assam government would pay a financial compensation of Rs 5 lakh to each of the relatives of those who died in the agitations for an autonomous state.

Imрасt:-

• Will ensure more autonomy for the Karbi Anglong Autonomous Council, safeguarding of Karbi people’s identity, language, culture, and other aspects of their culture, and concentrated development of the Council region without jeopardising Assam’s geographical and administrative integrity.

• Armed organisations will abandon violence and join the democratic process, while the administration would make it easier for their cadres to be rehabilitated.

• The groups also stated that reserving 10 seats on KAAC for residents from any community was pointless, and that there was no use in reserving seats in sixth schedule managed places like KAAC.

Curated by-Meghna.Manoj

 7,803 total views

Bасkgrоund:-

• SDC is an apex-level body that was set by the government of India in order to create a super regulatory body. Its establishment was first recommended by the Raghuram Rajan Committee in 2008.

• In 2010, Pranab Mukherjee (the then Finance Minister of India) decided to set up this autonomous body to deal with macro prudential and financial regularities of the entire financial sector in India. It is not a statutory body. No funds are allocated separately to the council to undertake its activities.

• In order to strengthen and institutionalize the mechanism of maintaining financial stability, to enhance inter-regulatory coordination and to promote financial sector development, FSDC was set up as the apex level forum in December 2010.

• This council is considered as India’s initiative to be better conditioned in preventing any economic crisis in future.

Linkаges:- 

• Sitharaman proposed a Rs 6 lakh crore National Monetisation Pipeline (NMP) in August, with the goal of unlocking value in infrastructure assets ranging from power to roads and railroads.

• The council also discussed the Insolvency and Bankruptcy Code (IBC) proceedings, banks’ exposure to various industries and the government, government data sharing systems, the internationalisation of the Indian Rupee, and pension-related problems.

• Sources also said that the finance minister may ask financial sector regulators to relax and harmonise investment norms for instruments like infrastructure investment trusts (InvITs) to be used to monetise public assets like highways, power and railway tracks.

Сurrent  Sсenаriо:-

• Finance Minister Nirmala Sitharaman presided over the Financial Stability and Development Council’s (FSDC) 24th meeting on Friday at Vigyan Bhawan in New Delhi. The meeting was held to address the health of the financial sector and a strategy for assisting the pandemic-affected economy’s embryonic recovery.

• Secretaries and members of the Financial Stability and Development Council (FSDC) attended the meeting on Friday, September 3rd, in addition to Finance Minister Nirmala Sitharaman and Union Minister Of State For Finance Pankaj Chaudhary.

• According to a Finance Ministry statement, attendees discussed the FSDC’s various mandates, including financial stability, financial sector development, inter-regulatory coordination, financial literacy, financial inclusion, and macro-prudential supervision of the economy, including the functioning of large financial conglomerates.

• During the FSDC conference, it was mentioned that the government and other regulators need to maintain a constant eye on the financial situation.

• The Financial Stability and Development Council reviewed issues such as stressed asset management, institutional strengthening for financial stability analysis, financial inclusion, and the framework for financial institution resolution, among other things.

• The FSDC also took note of the activities undertaken by the council’s sub-committee, which is chaired by RBI Governor Shaktikanta Das, and the action taken by members on the past decisions of FSDC, according to the Ministry of Finance.

Imрасt:-

• The development of the financial sector plays an important role in relaxing the restrictions on external financing of firms and, hence, in promoting economic growth.

• The development of the financial sector plays an important role in relaxing the restrictions on external financing of firms and, hence, in promoting economic growth. The development of the stock market is positively correlated with economic growth in the long term.

• The FSDC is expected to review various aspects associated with the stimulus packages announced by the government to tide over the economic crisis induced by the pandemic.

Curated by-Meghna.Manoj

 7,692 total views

Bасkgrоund:-

• Global FDI flows moderated significantly since the eruption of the global financial crisis in 2008, albeit with an uneven pattern across regions and countries.

•  Though initially developing countries showed some resilience, the crisis eventually spread through the trade, financial and confidence channels and FDI flows declined in both the advanced and developing economies during 2009.

• Subsequently, while FDI flows to advanced countries continued to decline, FDI flows to many of the Latin American and Asian countries witnessed strong rebound during 2010 on the back of improved corporate profitability and some improvement in M&A activities.

• FDI flows to India also moderated during 2009 but unlike trends in other EMEs, flows continued to be sluggish during 2010 despite strong domestic growth ahead of global recovery. This raised concerns for policy makers in India against the backdrop of expansion in the current account deficit.

•  When the global FDI flows to EMEs recovered during 2010-11, FDI flows to India remained sluggish despite relatively better domestic economic performance ahead of global recovery. This has raised questions especially in the backdrop of the widening of the current account deficit beyond the sustainable level of about 3 per cent.

• The Government of India on April 1, 2011 to further liberalize the FDI policy to promote FDI inflows to India took a number of efforts to boost India’s image as a preferred investment destination and attract FDI inflows to India in the future.

Linkаges:- 

• Foreign Direct Investment (FDI) stocks measure the total level of direct investment at a given point in time, usually the end of a quarter or of a year. The outward FDI stock is the value of the resident investors’ equity in and net loans to enterprises in foreign economies. The inward FDI stock is the value of foreign investors’ equity in and net loans to enterprises resident in the reporting economy.
•  FDI stocks are measured in USD and as a share of GDP. FDI creates stable and long-lasting links between economies.

• Foreign Direct Investment (FDI) flows have grown rapidly in size and importance in recent decades. They are an important source of capital in emerging markets and make up a significant proportion of GDP in many countries around the world.

• A  third of the inflows have been due to acquisition of shares through secondary transactions rather than investments by companies in plants, helping the country amass durable foreign exchange reserves in the process.

Сurrent  Sсenаriо:-

• According to government statistics, FDI entering the country more than doubled to $17.57 billion in April-June this fiscal year from $6.56 billion the previous year.

• In the first quarter of FY22, total FDI inflows increased to $22.53 billion, up from $11.84 billion the previous year. Inflows of equities, earnings reinvested, and other capital make up total FDI.

• In the first three months of 2021-22, FDI equity inflows increased by 168 percent ($17.57 billion) over the same period the previous year ($6.56 billion).

• The automobile industry attracted the most FDI, accounting for 27% of total FDI equity inflows, followed by computer software and hardware at 17% and services at 9%.

Imрасt:-

• They provide a comprehensive summary of the impacts of such capital movements, ranging from increased technology spillovers to a decrease in the destination country’s stock market’s market value.

• Increased foreign investment in a country’s stock markets shows that the markets are trending upward. The market may be showing symptoms of stress if foreign investment is declining. Keeping track of foreign investors might help you decide when it’s the right time to invest.

• As the equity inflow increased, investors from outside India continued to pour money into India’s markets. 60 percent of overall foreign investment is made up of foreign direct investment (FDI) and venture capital (VC) investments.

• In the first three months of 2021-22, FDI equity inflows increased by 168 percent. Karnataka was the leading beneficiary of FDI equity inflows in the quarter, accounting for 48 percent of total FDI equity inflows, followed by Maharashtra (23%), and Delhi (11%).

• As a result of the preceding facts, it can be stated that foreign direct investment has surged, and the stock market is in a boom phase. As a result, stock prices will rise  in the near future.

Curated by-Meghna.Manoj

 7,744 total views

Bасkgrоund:-

• The Employee Provident Fund (EPF) is a retirement benefits scheme in which employees of an organization contribute a small portion of their basic pay monthly. In the same line, the employer also contributes a similar amount on their behalf towards the scheme.

• According to existing legislation, if a person’s monthly wage does not exceed Rs. 15,000, he or she is required to join the EPF.

• In February 2021, the Budget suggested that interest income on Provident Fund (PF) contributions over Rs 2.5 lakh in a year will not be tax exempt. The government filed an amendment to the Finance Bill, 2021, proposing to increase the contribution cap for tax-exempt interest.

• With this, the government granted assistance for contributions paid to the General Provident Fund, which is solely available to government employees and for which the employer makes no contribution.

Linkаges:- 

• The government has discovered cases where some employees are donating large sums to these funds and are receiving tax benefits at all phases.

• The government has thus proposed imposing a threshold limit for tax exemption in order to restrict Significant Net Worth Individuals (HNIs) from the advantage of high tax-free interest income on their large contributions.

• EPFO is working to bring all eligible workers in the country within the EPF & MP Act, 1952, and to bring them under the umbrella of the Act’s Schemes.

• The Ministry of Labour and Employment has introduced the Pradhan Mantri Shram Yogi Maan-dhan Yojana, which is a voluntary and contributory pension system that provides a monthly minimum assured income of Rs. 3,000 to people who reach the age of 60.

• The scheme is open to unorganized workers between the ages of 18 and 40 who have a monthly income of Rs.15, 000 or less and are not members of EPFO, ESIC, or NPS. The beneficiary pays 50% of the monthly contribution, and the Central Government matches it with an equal monthly contribution.

Сurrent  Sсenаriо:-

• The guidelines for taxing interest income on contributions to the Employees’ Provident Fund were recently announced by the Finance Ministry.

• Interest income earned on EPF contributions above Rs. 2.5 lakh (for private sector employees) and Rs. 5 lakh (for government employees) would be taxed.

• In Financial Year 2021-22, the government will tax interest on contributions made in excess of these restrictions, with separate accounts for taxable and non-taxable contributions to be kept inside the provident fund account in FY 2021-22 and following years.

• A fiscal year (FY), often known as a budget year, is a time period used by the government and corporations to prepare annual financial accounts and reports for accounting purposes.

• The Central Board of Direct Taxes (CBDT) has added a rule in which states that non-exempt income from interest accrued during the previous year is computed as interest accumulated in the taxable contribution account during the previous year.

• The interest income on the additional contribution (above Rs 2.5 lakh for private employees and Rs 5 lakh for government employees) for a year would be taxed every year, according to the notification.

• This indicates that if a person contributes Rs 10 lakh to a PF each year in FY 2021-22, the interest income on Rs 7.5 lakh will be taxed not only in FY 2021-22, but also in subsequent years.

Imрасt:-

• In the face of low bond rates this year, the stock market surge is likely to maintain a high interest rate.

• For FY21, the EPFO has suggested an interest rate of 8.5 percent. EPFO spent a total of 32,377 crore in FY20, 27,743 crore in FY19, and 19,796 crore in FY18.

• The organization has decided to invest 15% of its incremental flows (new contributions) in equities Exchange Traded Funds (ETFs).

• The Sensex, Nifty, CPSE Index, and Bharat 22 Index are all indexed to ETFs, according to the response. However, during the last few years, the latter two indices that focus on Public Sector Undertaking equities have lagged larger benchmarks.

• The Finance Ministry plans to invest a tiny amount of the EPF fund in stocks. Several options were addressed at the CBT meeting. One suggestion was to invest 1% of the EPF fund, which is believed to be worth Rs 8, 25,000 crore, in stocks. This will result in a stock market inflow of Rs 8,250 crore.

• Labor unions, on the other hand, are adamantly opposed to EPF funds being invested in the stock market. Employees’ EPF is their hard-earned money. Employees’ life savings, they believe, should not be vulnerable to the changes of a market that can rise sharply one year and then fall off a cliff the next.

Curated by-Meghna.Manoj

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Bасkgrоund:-

• Fiscal policy, in simple terms, is an estimate of taxation and government spending that impacts the economy.

• Fiscal policy has a crucial bearing on macro-economic management within the frame of national economic policy and towards the attainment of the objectives of economic growth, equity and financial stability.

• In India, the sources of fiscal data generally are the Government budget documents and is governed by the system of Legislative Financial Control enshrined in the Constitution of India.

• This involves an elaborate process of presentation, scrutiny and passing of an Annual Budget and specific Parliament or Legislative approval for Government’s taxation and expenditure proposals. Fiscal accounts are maintained on an elaborate 6-tier system of function-cum-program basis of classification.

•  Fiscal data are also recast according to the economic and functional grouping of the activities. These are at present comprehensively compiled only in the case of the Central Government. Some State Governments also compile an economic and functional classification of the budgetary data.

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• Ind-Ra estimates the gross market borrowings of states in aggregate will increase to Rs 8.2 lakh crore in FY22. The net market borrowings will be Rs 6.2 lakh crore in FY22.

• Despite the low base, revenue receipts increased by 1.5 percent in Q1 FY22 over the pre-COVID 19 period of Q1 FY20. This suggests that these states’ revenue collection was unaffected by the second COVID wave’s difficulties.

• In FY21, overall market borrowings for all states totaled Rs 7.88 lakh crore. States’ overall market borrowing was Rs 1.94 lakh crore in April-July 2021, compared to Rs 2.1 lakh crore in April-July 2020.

• The agency expects state gross market borrowings to rise to Rs 8.2 lakh crore in FY22, up from Rs 8.4 lakh crore in FY21. In FY22, net market borrowings are expected to be Rs 6.2 lakh crore, up from Rs 6.45 lakh crore in FY21.

Сurrent  Sсenаriо:-

• India Ratings and Research (Ind-Ra) said on Friday that it expects the country’s aggregate budget deficit to narrow to 4.1 percent of GDP in the current financial year, down from 4.3 percent previously.

• In FY22, the agency forecasts the aggregate debt/GDP ratio to be 32.4 percent, down from the prior estimate of 34 percent.

• As a result of a big portion of the population receiving vaccinations, state government revenue receipts are predicted to improve, backed by an economic recovery.

• As a result, states will loosen limitations on business and commercial activity even more. The agency now estimates the aggregate revenue shortfall of states to be 1.3 percent of GDP in FY22, down from 1.5 percent of GDP previously expected.

Imрасt:-

• It is found that a long run relationship exists that with the increase in Fiscal deficit, stock market index decreases.

•  This implies that FD is negatively affecting the stock market index. This is due to the fact that the extent of fiscal deficit and means of financing it, influence the money supply and the interest rate in the economy.

• High interest rates mean higher cost of capital for the industry, lower profits and hence lower stock prices.

• India Ratings and Research (Ind-Ra) expects the combined estimate of taxation and spending of states to moderate to 4.1 per cent of the gross domestic product (GDP). The agency’s earlier forecast for FY21 was 9.5 per cent.

• Evaluating the current situation it is clear that FD and Stock Market have a negative effect. Thus, it can be concluded that the computed the prices of selected stocks is likely to rise in the upcoming period.

Curated by-Meghna.Manoj

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Bасkgrоund:-

• Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence the foreign exchange rate of its currency, and to maintain confidence in financial markets.

• Foreign exchange reserves assets can comprise banknotes, deposits and government securities of the reserve currency, such as bonds and treasury bills.

•  Some countries hold a part of their reserves in gold, and special drawing rights are also considered reserve assets. Often, for convenience, the cash or securities are retained by the central bank of the reserve or other currency and the “holdings” of the foreign country are tagged or otherwise identified as belonging to the other country without them actually leaving the vault of that central bank.

• Normally, interest is not paid on foreign cash reserves, nor on gold holdings, but the central bank usually earns interest on government securities. The central bank may, however, make a profit from a depreciation of the foreign currency or incur a loss on its appreciation.

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• Foreign exchange refers to the currency of other countries, whereas foreign reserves refer to a central bank’s holdings in international currencies.

• Foreign reserves enable governments to maintain currency stability; reserves are employed as an instrument of exchange rate and monetary policy, as well as a means of settling foreign debt and liabilities, and as a buffer against unanticipated emergencies and economic shocks.

• It’s crucial to understand the relationship between foreign reserves and the stock market because building up international reserves has recently become the preferred policy of developing economies in order to attain financial stability.

• Financial flows such as direct investment and portfolio investment became more important. Usually financial flows are more dangerous and unstable that enforce the need of higher reserves. More than that, holding reserves, as a result of the increasing of financial flows

Сurrent  Sсenаriо:-

• The country’s foreign exchange reserves increased by US dollar 16.663 billion in the week of  August 27, reaching a career high of USD 633.558 billion, according to RBI data.

• The gain was mostly attributable to an increase in Special Drawing Rights (SDR) holdings. SDR holdings are part of a country’s foreign exchange reserves. The IMF distributes SDRs to its members in proportion to their current quotas in the Fund

• On August 23, 2021, the International Monetary Fund (IMF) made an SDR 12.57 billion (about USD 17.86 billion at the current exchange rate) grant to India.

• According to weekly data issued by the Reserve Bank of India (RBI) on Friday, the country’s SDR holdings increased by USD 17.866 billion to USD 19.407 billion in the reporting week ending August 27, 2021.

Imрасt:-

• Foreign currency assets (FCAs), a major component of overall reserves, fell by USD 1.409 billion to USD 571.6 billion in the reporting week.

• If the currency starts to depreciate against the dollar, the central bank can sell its dollar reserves and buy the local currency to stop it.

• Reserves of gold increased by USD 192 million, to USD 37.441 billion and the country’s reserve position with the IMF increased by USD 14 million to USD 5.11 billion in that week.

• This large amount of reserves is beneficial as that it provides the central bank with adequate weapons to combat future currency devaluation.

• Businesses can be certain that the rupee would not fall sharply as a result of the central bank’s reserve building. They believe the RBI’s reserves will be utilized to protect against large currency movements. As a result, these companies are unable to hedge their dollar exposures on their balance sheets.

• It creates a never-ending vicious cycle in which the more reserves the RBI has, the more secure these corporations grow in taking unhedged exposure and therefore avoiding the costs of financial assets, and the more justification the RBI has for hoarding reserves.

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