econ - aug

7/27/2019 ECON - AUG

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.:: August 2013 Economic Afairs ::.

India, on 20 August, raised the issue o heavy trade imbaance

!ith "hina and sought immediate ste#s to aciitate Indian

e$#orts o #harmaceutica and agricutura #roducts, bufao

meat and inormation technoogy %I&' services. Raising the issue

with Chinese Minister of Commerce, Gao Hucheng, during his meeting in Brunei,

Commerce and Industry Minister Anand Sharma drew the attention of the Chinese

Minister to India’s pending request for faciitating Indian e!ports of I" ser#ices,

$uffao meat, pharma and agricutura products% Mr% Sharma is in Brunei to attend

the Regiona Comprehensi#e &conomic 'artnership Agreement, &ast Asian

&conomic Ministers and the AS&A()India Ministeria meeting%

Both the sides agreed that the wor*ing group on trade and economic co)operation

shoud meet in Septem$er aong with another wor*ing group on trade in ser#ices

and trade statistics with a #iew to impementing the decision ta*en $y the

eadership of the two countries% "hey aso discussed a$out the possi$iity for the

ne!t meeting of the +oint &conomic Group +&G- i*ey to $e schedued for ate

.cto$er in Bei/ing% Gao assured Sharma that China woud ma*e e#ery effort to

faciitate imports from India for $ridging trade im$aance% Sharma aso sought

Chinese in#estment in manufacturing in the (ationa Manufacturing In#estment

0ones% It was decided that they woud finaise the detais a$out in#estments in

#arious sectors during their ne!t meeting in .cto$er%

&he Reserve (an) o India %R(I' on 20 August 2013 urther

rea$ed the *tatutory +iuidity Ratio %*+R' to #rovide more

unds to ban)s or ending. "his was in #iew of the osses suffered $y

$an*s in their in#estment portfoio% Re#ising its earier imit, as*ing $an*s to

reduce their hod)to)maturity $ond hodings graduay to 12 per cent of deposits,

RBI has now aowed $an*s to retain those hodings at 13%4 percent% "o further

ease rupee #oatiity, RBI wi conduct open mar*et operations of ong dated

go#ernment securities worth Rs% 5666 crore on 12 August 1672% RBI stated that

depending on e#o#ing mar*et conditions, it wi thereafter decide on the amount

and frequency of .M.s .pen Mar*et operations-% S8R stands for Statutory

8iquidity Ratio% "his term is used $y $an*ers and indicates the minimum

percentage of deposits that the $an* has to maintain in form of god, cash or other appro#ed securities% In other words, it is ratio of cash and some other appro#ed

securities to ia$iities deposits-% It reguates the credit growth in India%

&he -nion "abinet on 13th August, a##roved the #ro#osa orsetting u#

o the &a$ Administration Reorm "ommission %&AR"'. "heCommission

&/+ E

EAR+ E

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wi consist of a Chairman, two fu time mem$ers and four part)time

mem$ers, of which at east two part)time mem$ers wi $e from the pri#ate

sector% "he Chairman wi $e an eminent person ha#ing wide e!perience of

ta! administration and poicy ma*ing% 9u)time mem$ers of the Commission

wi $e one mem$er each with a $ac*ground in re#enue ser#ice pertaining to

Income "a! and Centra &!cise and Customs respecti#ey%

"he term of the Commission wi $e 75 months% "he Commission wi re#iew

the appication of ta! poicies and ta! aws in India in the conte!t of go$a

$est practices and recommend measures to strengthen the capacity of the

ta! system in India that woud refect $est go$a practices% "he Commission

wi hep in remo#ing am$iguity in appication of ta! poicy and ta! aws,

there$y esta$ishing a sta$e ta! regime and a non)ad#ersaria ta!

administration% "he Commission wi faciitate an efficient ta! administrati#e

system that woud enhance the ta! $ase as we as ta! payer $ase%

&he +oan and roect Agreements or 4ord (an) %I5A'

assistance o -* -* 6100 miion or +o! Income /ousing

7inance roect !ere signed bet!een 8overnment o India,ationa /ousing (an) %/(' and the 4ord (an) in e! 5ehi

on 19th August. "he 8oan Agreement was signed $y (iaya Mitash, +oint

Secretary, :epartment of &conomic Affairs, Ministry of 9inance on $ehaf of

Go#ernment of India and Mr% Michae Haney, .perations Ad#isor of ;ord Ban*

India- on $ehaf of the ;ord Ban*% "he .$/ecti#e of the pro/ect is to pro#ide

access to sustaina$e housing finance for ow income househods, to purchase,

$uid or upgrade their dweings%

9inancing under the pro/ect aims to create incenti#es for enders to focus on ower

income househods through a net a)in reduction of the enders’ cost of funds of appro!imatey 166)266 $asis points% "he pro/ect aso aims to dei#er on its stated

o$/ecti#e of reaching a higher proportion of ower income househods whie maintaining

portfoio quaity standards% "he pro/ect e!pects to de#eop prudent ending standards to

ser#e the more #unera$e, ower income househods, e!pand the co#erage of credit

$ureaus to incude informa income $orrowers, de#eop consumer information and

discosure norms for the pro/ect’s target groups, enhance the appraisa capacity of the

enders, as we as piot new poicies and products to o#ercome the chaenges of

dweing informaity% It is a nancia

intermediary oan or an im#ementation #eriod o ; years. /(is the

im#ementing agency.

"he Minister of State in the Ministry of Commerce and Industry :r% &% M% Sudarsana

(atchiappan on 73th August, in a written repy in Ra/ya Sa$ha informed that, in<

#rinci#e a##rova or ationa Investment and anuacturing

=ones %I=s' in "hittoor, eda) and ra)asam districts has

been accorded as reuested by the 8overnment o Andhra

radesh. "he state

go#ernments ha#e to de#eop the <ones $efore any pri#ate in#estment can ta*e

pace in the same%

4eighed do!n by a !ea) ru#ee, the Reserve (an) o

India %R(I' on 30th >uy chose to )ee# a )ey interest

rates unchanged and as)ed the government to ta)e

urgent ste#s to reign in the high current account decit.

8owering the G:' growth pro/ection for the current fisca to 4%4 = from

4%> =, the centra $an* said the e!terna sector is the ?$iggest threat? to

economic sta$iity%

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%

7/27/2019 ECON - AUG


It aso said that the recent iquidity tightening measures, ta*en to support the

rupee, wi $e roed $ac* in a cai$rated manner as sta$iity is restored to the

foreign e!change mar*et, ena$ing it to re#ert to the poicy of supporting growth

with continuing #igi on infation% "he RBI wi endea#our to *eep infation, which is

under threat from a depreciating rupee, at 4 = $y March end%

?"he poicy stance is guided $y the need for continuous #igi and preparedness to

pro)acti#ey respond to ris*s to the economy from e!terna de#eopments,

especiay those stemming from go$a financia mar*ets,? RBI Go#ernor :% Su$$a

Rao said in what woud $e his ast poicy announcement un#eied here%

Accordingy, the repo rate or the rate at which RBI ends to the system,

has $een retained at > %14 = and the cash reser#e ratio, the amount of

deposits $an*s par* with RBI, has $een *ept unchanged at 3 =% Gi#ing

the poicy guidance, the go#ernor said, ?Monetary poicy going forward

wi $e shaped $y the consideration of supporting growth, anchoring

infation e!pectations and maintaining e!terna sector sta$iity%?

&he "abinet "ommittee on Economic Afairs %""EA', in

accordance !ith the 8overnment o India?s disinvestment

#oicy on 2 August, has a##roved the disinvestment o 10

#ercent #aid<u# euity in the Indian @i "or#oration +imited

%I@"+', out o its euity ca#ita hoding o B.C2 #ercent. "he

disin#estment wi $e through .ffer for Sae .9S- method in the domestic

mar*et according to the S&BI rues and reguations% After this disin#estment

the Go#ernment of India sharehoding in the company woud come down to

@5%1 percent%

"he paid up equity capita of the company, as on 27st March, 1672 was Rs% 1,315

crore% "he Go#ernment of India hods > 5%1 per cent of the paid up capita in I.C8%

&he I@"+ is a DaharatnaD ubic *ector -nderta)ing underthe

administrative contro o the inistry o etroeum and atura8as. It

is the highest ran*ed Indian corporate in the prestigious 9ortune Go$a 466

isting with a ran*ing of 52 for the year 1671% I.C8 is primariy engaged in refining,

transportation and mar*eting of petroeum products and petrochemicas with an

instaed refining capacity of 43%1 miion metric tonnes%

&he inistry o *tee under 8overnment o India has becomethe rst

"entra inistry to be a!arded I*@ C001:200B, uaityanagement

*ystem certication. "he certification in#o#es aying down the wor* processes,

manage and contro them with the aim of continuous impro#ement% &he (ureau

o Indian *tandards has conerred the inistry !ith the certicationor

three yearsF !.e.. 2;.0G.2013 to 29.0G.201G.Ministry is the first

amongst Centra Go#ernment Ministries to ha#e recei#ed the certificate% IS. 667

is quaity management system which codifies quaity standards in e#ery area of

organi<ation’s functioning% Many Go#ernments around the ;ord ha#e made IS.

667 a mandatory requirement% IS. certification wi resut in transparent

performance of the Ministry and quic* dei#ery of resuts to the $eneficiaries%

&he "abinet "ommittee on Economic Afairs %""EA' on 2 August has

a##roved creation o the *#ecia ationa Investment 7und or the

s#ecic obective o meeting the minimum #ubic sharehoding o 10

7/27/2019 ECON - AUG


#ercent reuirement in the oo!ing si$ "entra ubic *ector

Enter#rises %"*Es'. i- Andrew ue D Company 8td% ii- 9ertii<ers D Chemicas

7/27/2019 ECON - AUG


"ra#ancore- 8td% iii- Hindustan 'hoto 9ims Manufacturing Co% 8td%i#- HM" 8td%

#- I"I 8td% #i- Scooters India 8td% Since these Companies were not financiay

sound, it was found difficut to meet the minimum pu$ic sharehoding $y foowing

S&BI appro#ed methods% Howe#er, Go#ernment was *een to compy with the

requirement in a Go#ernment Companies% "he :epartment of :isin#estment

discussed the matter with S&BI and has proposed to meet the minimum pu$ic

sharehoding in the a$o#e si! Companies%

&he inister or icro, *ma and edium Enter#rises, H. /.

uniya##a inaugurated the Indian *choo or Entre#reneurs and

Enter#rise 5eveo#ment i*EE5 in e! 5ehi on 1 August. Spea*ing at

the inauguration the Minister stated that in the present competiti#e word, Inno#ation

dri#en &ntrepreneurship is critica for the growth of the Indian economyE% ;ordwide, the

micro sma and medium enterprises MSM&s- primariy dri#en $y first generation

entrepreneurs ha#e $een accepted as the engine of economic growth and for

promoting equita$e de#eopment% "he MSM& sector is a nursery of entrepreneurship,

often dri#en $y indi#idua creati#ity and inno#ation% "o ena$e Indian youth in

entrepreneurship and inno#ation, the Minister emphasi<ed that the MSM& ministry is

conducting S*i :e#eopment 'rogrammes for the entire #aue chain of manufacturing%

76 "oo Rooms under the Ministry are pro#iding $oth ong and short term training for

more than one a*h persons the Minister highighted%

"ariq Anwar, Minister of State for Agricuture and 9ood 'rocessing Industries in a

written repy to a question in the 8o* Sa$ha on @ August, stated that, as #er the

rovisiona Estimates reeased by "*@ on 31st ay, 2013,

Agricuure sector is estimated to gro! at 1.C in 2012<13 at 2009<

0; #rices and the contribution o agricuture to the 85 is i)ey to

decine to 13. in 2012<13. "he decine in growth rate and contri$ution of

agricuture to G:' is on account of structura changes due to a shift from a traditiona

agrarian economy to a ser#ice dominated one% In order to $ring reforms in agricutura

mar*eting, the Ministry framed a mode A'MC Act in 1662 and circuated to StatesF"s

for adoption% Go#ernment has aunched se#era schemes to increase the growth rate of

agricuture and $oost farm production in terms of its contri$ution to the G:' such as

Rashtriya rishi i*as o/ana R-, (ationa 9ood Security Mission (9SM-,

:e#eopment and Strengthening of Infrastructure faciities for 'roduction and

:istri$ution of Juaity Seed, (ationa Horticuture Mission(HM-, Rainfed Area

:e#eopment 'rogramme RA:'-, Integrated Scheme of .iseeds, 'uses, .i 'am

and Mai<e IS.'.M-, Gramin Bhandaran o/ana etc% In addition, Go#ernment has

su$stantiay impro#ed the a#aia$iity of farm creditK impemented a massi#e

programme of de$t wai#erK introduced $etter crop insurance schemesK increased

Minimum Support 'rice MS'-, impro#ed mar*eting infrastructure, etc%

&he "abinet "ommittee on Economic Afairs %""EA' on B

August 2013 a##roved the e$#ort o additiona 2 miion

tonnes !heat rom its godo!ns % "he additiona wheat woud $e

traded through pu$ic sector trading firms% "he proposa for additiona e!port

of wheat was proposed $y the nion 9ood Ministry% "he decision was ta*en

for cearing the surpus stoc* and to ease the storage crunch% "he additiona

e!port is aowed as there is a huge stoc* of 36 mi ion tonnes of wheat%

icrosot, on G August, aunched its @Jce 3G; or u<time and

#art<time university students in India !ith a subscri#tion ofer.

&he @Jce 3G; -niversity incudes the compete set of .ffice appications

and can $e

instaed on two 'Cs or Macs% Microsoft has priced it at Rs%3,7 for a four)year

7/27/2019 ECON - AUG


su$scription and is a#aia$e for students studying in accredited coeges and

uni#ersities%

&he ariament has #assed the historic "om#anies (i 2012,moved by

*achin iot, inister o "or#orate Afairs% "he Bi was passed $y the

Ra/ya Sa$ha on 5 August, which had aready $een passed $y the 8o* Sa$ha

many months ago in :ecem$er 1671-% 'iot has termed it as a historic day for the

country as it wi usher in a new era in the Corporate Go#ernance% &he ne!

"om#anies (i, on its enactment, !i ao! the country to have

a modern egisation or gro!th and reguation o cor#orate

sector in India% "he e!isting statute for reguation of companies in the country,

#i<% the Companies Act, 74@ had $een under consideration for quite ong for

comprehensi#e re#ision in #iew of the changing economic and commercia

en#ironment nationay as we as internationay% "he new aw wi faciitate

$usiness)friendy corporate reguation, impro#e corporate go#ernance norms,

enhance accounta$iity on the part of corporatesF auditors, raise e#es of

transparency and protect interests of in#estors, particuary sma in#estors% &he

saient eatures o the ne! "om#anies a! are: Business friendy

corporate ReguationF pro)$usiness initiati#esK e)Go#ernance Initiati#esK Good

Corporate Go#ernance and CSRK &nhanced :iscosure normsK &nhanced

accounta$iity of ManagementK Stricter enforcementK Audit accounta$iityK

'rotection for minority sharehodersK In#estor protection and acti#ismK Better

framewor* for inso#ency reguationK and Institutiona structure%

&he 5e#artment o /eavy Industry, inistry o /eavy Industries

and ubic Enter#rises has #re#ared the Indian Eectrica

Eui#ment Industry ission an 2012<22 !ith the obective to

ma)e the ra#id deveo#ment o the domestic eectricaeui#ment industry #ossibe and to enhance its

com#etitiveness, !hich !as aunched on 29.0.2013 % Gi#ing this

information in written repy to a question in the 8o* Sa$ha on 5 August, 'rafu

'ate, Minister of Hea#y Industries and 'u$ic &nterprises, said that in this Mission

'an, fi#e areas ha#e $een identified for strategic and poicy inter#entions, $oth $y

the go#ernment and the industry% "hese are i-% industry competiti#eness, ii-%

technoogy upgradation, iii-% s*is de#eopment, i#-% e!ports and #-% con#ersion

of atent demand%

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