Economy Issue May 2013 Www.upscportal.com

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MAY

2013

EconomyEconomyEconomyEconomyEconomy

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CCI approves Five Oil,CCI approves Five Oil,CCI approves Five Oil,CCI approves Five Oil,CCI approves Five Oil,

Gas Blocks OperationsGas Blocks OperationsGas Blocks OperationsGas Blocks OperationsGas Blocks Operations

The Cabinet Committee on

Investment (CCI) on 21 March 2013cleared Reliance Industries (RIL)

KG-D6 and NEC-25 blocks for oil

and gas exploration along with threeother areas. The work on these

blocks, which has an investmentclose to 10.7 billion has dollars, was

having difficulties because of inter-

ministerial differences, particularlyrelating to Defence issues. Eight

blocks, including RILs KrishnaGodavari basin KG-D6 block and gas

discovery area of NEC-25 in the

North East Coast (NEC) region, weredeclared No-Go zones for reasons

relating to defence issues raised bythe Indian Navy, and the Indian Air

EconomyForce. An approval for eight blocks,

was Sought by the Petroleum andNatural Gas Ministry of which one

was al ready renounced by thecontractor, Reliance Industries Ltd.

Out of the remaining seven,

conditional clearance for fourblocks two of Reliance Industries,

one each of ONGC consortium and

Cairn India were sought. The

Ministry had also sought CCI

approval to declare three blocks asno go areas. Two blocks belonged

to the ONGC-led consortium andone to the Oil India Ltd-led

consortium. The CCI, headed by

Prime Minister Manmohan Singh,was set up to fast-track clearances

to infrastructure projects involvinginvestments of over 1000 crore

rupees.

AuthorizedAuthorizedAuthorizedAuthorizedAuthorized

Capital of NABARD RaisedCapital of NABARD RaisedCapital of NABARD RaisedCapital of NABARD RaisedCapital of NABARD Raised

The Union Cabinet of India

approved raise in the authorizedcapital of National Bank for

Agriculture and Rural Development,Nabard to 20000 crore rupees from

5000 crore rupees.

The authorized capital was

increased with the aim to enlarge

the operations and broadening theactivities of NABARD.

10 Rupees10 Rupees10 Rupees10 Rupees10 Rupees

Plastic Notes in 5 CitiesPlastic Notes in 5 CitiesPlastic Notes in 5 CitiesPlastic Notes in 5 CitiesPlastic Notes in 5 Cities

The Union Government and

RBI on 12 March 2013 decided tointroduce one billion pieces of 10

Rupees bank notes made of plastic

on a field trial basis in five. A 10

Rupees note in polymer/plastic ona field trial basis will be introducedfirst; Minister of State for Finance

Namo Narain Meena said it in a

written reply to the Rajya. The fieldtrail is supposed to be conducted

in five cities of Kochi, Mysore,Jaipur, Bhubhaneswar and Shimla


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with varied geographical locations

and climatic. As per the RBI, the

primary objective of introduction ofpolymer notes is to increase its life,

it could also help in combating

counterfeiting. Various agenciessuch as the RBI, Ministry of Finance,

Ministry of Home Affairs, Securityand Intelligence Agencies of the

Centre and States, Central Bureau ofInvestigation are already working in

tandem to thwart the illegal

activities related to Fake IndianCurrency Notes (FICN). The work of

these agencies is periodicallyreviewed by a nodal group set up

for this purpose.

RBI CutsRBI CutsRBI CutsRBI CutsRBI Cuts

Repo Rate by 25 Base PointsRepo Rate by 25 Base PointsRepo Rate by 25 Base PointsRepo Rate by 25 Base PointsRepo Rate by 25 Base Points

The Reserve Bank of India (RBI)

on 19 March 2013 cut the repo rate

by 25 basis points to 7.57.57.57.57.5 per centfrom 7.75 percent in its mid-quarter

review of the monetary policy. Thechange of the Repo rate is aimed to

prompt growth and revive

investment. Consequently, thereverse repo rate under the LAF

stands adjusted to 6.5per cent fromthe earlier 6.75 per cent and the

marginal standing facility (MSF) rate

and the Bank Rate to 8.5 per centwith immediate effect. The Cash

Reserve Ratio (CRR) has been

retained at 4 per cent. It is for the

second time since the start of the

year RBI has cut down the repo ratein a bid to help revive flagging

growth in Asias third-largesteconomy. RBI has also warned that

its scope for further policy easing is

limited. The RBI will continue to

actively manage liquidity through

various instruments, including open

market operations, so as to ensureadequate flow of credit to

productive sectors of the economy.

With the change in Repo rate, theReserve Bank of India also

announced infusion of 10000 crorerupees into the financial system by

purchasing government securities aspart of its liquidity injection

measure. The Indian economy

expanded at a 25-quarter low of4.5% in October-December 2012

quarter, and the 2.4% rise inindustrial production in January

2013 after two months of

contraction suggests the recovery is

still weak. The current accountdeficit hit a record-high 5.4 per centin the September quarter and is

expected to end the 2012/13 fiscal

year at its highest level ever.

What is Repo Rate?

The rate at which the RBI lends

money to commercial banks iscalled repo rate. It is an instrument

of monetary policy. Whenever bankshave any shortage of funds they canborrow from the RBI. A reduction

in the repo rate helps banks get

money at a cheaper rate and vice

versa.What is Reverse Repo rate?What is Reverse Repo rate?What is Reverse Repo rate?What is Reverse Repo rate?What is Reverse Repo rate?

Reverse Repo rate is the rate atwhich the RBI borrows money from

commercial banks. An increase inreverse repo rate can prompt banks

to park more funds with the RBI to

earn higher returns on idle cash. Itis also a tool which can be used by

the RBI to drain excess money outof the banking system.

What is cash Reserve Ratio?What is cash Reserve Ratio?What is cash Reserve Ratio?What is cash Reserve Ratio?What is cash Reserve Ratio?

Cash reserve Ratio (CRR) is theamount of funds that the banks have

to keep with the RBI. If the centralbank decides to increase the CRR,

the available amount with the banks

comes down. The RBI uses the CRRto drain out excessive money from

the system.

Highlights of the RBI QuarterlyHighlights of the RBI QuarterlyHighlights of the RBI QuarterlyHighlights of the RBI QuarterlyHighlights of the RBI Quarterly

Monetary Policy Review:Monetary Policy Review:Monetary Policy Review:Monetary Policy Review:Monetary Policy Review: Repo rate changed to 7.5

Percent from 7.75 Percent CRR Remain Unchanged at 4

Percent Reverse repo rate changed to

6.75 percent from earlier 6.5Percent

Marginal standing facili ty(MSF) rate 8.5 Percent

Bank Rate to 8.5 per cent

CCEA approvedCCEA approvedCCEA approvedCCEA approvedCCEA approved

Increase of MSP of CopraIncrease of MSP of CopraIncrease of MSP of CopraIncrease of MSP of CopraIncrease of MSP of Copra

The Cabinet Committee on

Economic Affairs approved

increase in the Minimum SupportPrice (MSP) for 2013 season of both

Milling and Ball Copra by 150 rupeesper quintal over the MSP that was

regulated in 2012. The MSP for the

Fair Average Quality (FAQ) ofMilling Copra is fixed at 5250 rupees

per quintal, and for the Ball Copra itis 5500 rupees per quintal. The

decision from government of India

may ignite the interests of thefarmers to invest in cultivation of

coconut to increase itsproductivity. Government also

cleared that National Agricultural

Cooperative Marketing Federationof India Ltd. (NAFED) is the body

that will act as the nodal agency for

undertaking the price supportoperation at the minimum support

prices in the coconut growingstates.

Exports ofExports ofExports ofExports ofExports of

India Increased By 0.8 Per CentIndia Increased By 0.8 Per CentIndia Increased By 0.8 Per CentIndia Increased By 0.8 Per CentIndia Increased By 0.8 Per Cent

The exports of India increased


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by 0.8 percent in the month of

January 2013 to 25.58 billion US

dollars. Comparatively, exports inJanuary 2012 were 25.37 billion US

dollars. Imports on the other hand,

increased by 6.12 percent to 45.5billion US dollars. During April to

January 2012-2013, the overseasshipments of India dropped by 4.86

percent to 239.6 billion US dollars.The main concern for the country is

however to widen the trade

deficit. As a cumulative result, theexports depicted an arrest in

decreasing exports. Now, the resultis -4.9 percent. Import of crude oil

was growing at a faster pace. Oil

imports in January 2013 increased

by 6.91 percent to 15.89 billion USdollars in comparison to 14.87billion US dollars in January 2012.

BHEL and GAIL GrantedBHEL and GAIL GrantedBHEL and GAIL GrantedBHEL and GAIL GrantedBHEL and GAIL Granted

Maharatna StatusMaharatna StatusMaharatna StatusMaharatna StatusMaharatna Status

The Union Government ofIndia gave the Maharatna status to

two PSUs- BHEL and GAIL on 1

February 2013. Granting Maharatnastatus to BHEL and GAIL will

provide them with better functionaland financial freedom and will also

guarantee them with better

valuation of the shares. Ideally anyMaharatna firm has a capacity to

take investment decision of around

5000 crore Rupees without taking

assistance from the government. On

the other hand, forms with Navratnastatus have the capability of 1000

crore Rupees. However, both BHELand GAIL do not have enough non-

official directors on the board,

which is why they cannot exercise

their Maharatna powers. Even

though all other conditions of

Maharatna status were met by boththese PSUs but their boards do not

have requisite number of board

members. While GAIL is short of 4independent directors, BHEL, on

the other hand is short of 6 non-official directors. In terms of

turnover, networth as well as netprofit, both these companies meet

all the eligibility criterions.

Eligibility of a Company to get aEligibility of a Company to get aEligibility of a Company to get aEligibility of a Company to get aEligibility of a Company to get a

Maharatna StatusMaharatna StatusMaharatna StatusMaharatna StatusMaharatna Status

For any company to qualify forMaharatna status, the annual

turnover should be over 25000

crore Rupees in past threeyears, as per the guidelinesissued by Department of

Public Enterprises. The net worth of the PSU

should be more than 15000crore Rupees in past three

years. The net profit should be over

5000 crore Rupees during pastthree years.

At present, there are seven

Maharatna companies, after

inclusion of BHEL and GAIL andthese companies are - ONGC, IndianOil, SAIL, NTPC and CIL. Also, there

are 14 Navratna companies,

including Rashtriya Ispat NigamLimited and NMDC.

Price Pooling Mechanism on CoalPrice Pooling Mechanism on CoalPrice Pooling Mechanism on CoalPrice Pooling Mechanism on CoalPrice Pooling Mechanism on Coal

The Cabinet Committee onEconomic Affairs (CCEA) gave its

principle approval for the pricepooling mechanism of coal. The

mechanism includes cost blending

of the domestic coal with the

imported one to counterbalanceprice hike. Basic principles andparameters of the price pooling

mechanism have been identified

and a specific data on the samewould be created by the Power and

Coal Ministries. The mechanism hasbeen created before government

decided to put on sale the 9.5

percent stake of the National

Thermal Power Corporation (NTPC)from its present holding of 84.50

percent. The sale of the stake was

approved by the EmpoweredGroup of Ministers on disinvestment

chaired by Finance Minister PChidambaram on 5 February 2013.

This disinvestment of NTPC wouldfetch about 12000 crore rupees for

the exchequer.

World Bank Estimated a growthWorld Bank Estimated a growthWorld Bank Estimated a growthWorld Bank Estimated a growthWorld Bank Estimated a growth

of over 6 Percentof over 6 Percentof over 6 Percentof over 6 Percentof over 6 Percent

The World Bank in the month

of March 2013 forecasted that the

Indian economy is estimated togrow over 6 per cent during 2013-

14. World Bank Chief Jim YoungKim, who is on a three-day visit to

India asserted that India is estimated

to have grown 5 percent in thecurrent fiscal and the growth rate is

likely to improve to 6.1-6.7 percentin 2013-14. The Indian economy, like

any other economy, is subject to

global slowdown. It has effect hereand at the same time, the export

market has started doing better. Onthe positive node, it also had be

seen that share of India in global

economy almost doubled in fiveyears between 2005 and 2010. Kim

is on his first visit to India after taking

over as President of World Bank

Group in July 2012.

Penalty on Rajasthan RoyalsPenalty on Rajasthan RoyalsPenalty on Rajasthan RoyalsPenalty on Rajasthan RoyalsPenalty on Rajasthan Royals

The Enforcement Directorate

(ED) slapped the IPL team Rajasthan

Royals with a penalty notice ofaround 100 crore Rupees for


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violating the Forex laws. ED issued

this penalty notice after investigating

the matter for 2 years under theForeign Exchange Management Act

(FEMA).

Three notices in all were sentacross to the IPL franchise whichtotaled to 98.5 crore Rupees. The

Jaipur IPL Cricket Private Limited(JIPL) as well as its directors was

sent a penalty notice of 50 croreRupees. Apart from this, 34 croreRupees penalty notice was issued

against EM Sporting Holding,Mauritius and its directors for

evading the Forex duties. A noticeof 14.5 crore Rupees was also issuedadditionally against the Ms ND

Investments, United Kingdom andits directors. All these three parties

are free to appeal against the penaltyorder in appellate authority of

FEMA. According to the order, IPL

team needs to make the payment in45 days. This is said to be the first

biggest order against any teamissued by the ED. According to the

penalty order, it was found that theforeign investment in JIPL wasconducted in flagrant contravention

of FEMA. The first penalty orderwas is sued by ED agai ns t the

Rajasthan Royals in mid-2011. Now,it issued the final orders after itmoved to FEMA Adjudicating

Author ity in De lh i in or der toexamine investigations in the case.

Coal India signed Fuel SupplyCoal India signed Fuel SupplyCoal India signed Fuel SupplyCoal India signed Fuel SupplyCoal India signed Fuel Supply

Pacts with 56 Power PlantsPacts with 56 Power PlantsPacts with 56 Power PlantsPacts with 56 Power PlantsPacts with 56 Power Plants

The Union government on 12March 2013 informed that state-

run Coal India Ltd. (CIL)Coal India Ltd. (CIL)Coal India Ltd. (CIL)Coal India Ltd. (CIL)Coal India Ltd. (CIL)signed fuelsupply pacts with 56 power plants

so far. Minister of state for coal,

Pratik Prakashbapu Patil in his

wr it ten repl y to Lok Sabhamentioned that, Coal India Ltd hassigned 56 fuel supply agreements

(FSAs) with the power plants as on

2 March 2013. It is important to notethat the deadline set by the PrimeMinisters Office (PMO) for signingof FSAs between CIL and power

producers expired in January 2013.Chief vigilance officer replying to a

question regarding CILs highlightedirregularities in awarding of FSAs.

CIL observed certain

inadequacies in the documents of11 cases, during verification of thedocuments in respect of milestone

achievement of LoAs (letter ofassurance). It was also affirmed by

the minister that appropriate action

would be taken in this regard byCILs subsidiaries to ensure that all

due procedures are observed.Minister of state for coal stated that

there is a proposal to engage anindependent third party samplingagency by CIL for consumers having

FSAs.

Indias Trade Deficit wasIndias Trade Deficit wasIndias Trade Deficit wasIndias Trade Deficit wasIndias Trade Deficit was

estimated at 167168.12 Millionestimated at 167168.12 Millionestimated at 167168.12 Millionestimated at 167168.12 Millionestimated at 167168.12 Million

US DollarsUS DollarsUS DollarsUS DollarsUS Dollars

As per the data released by

Union Ministry of Commerce and

Industry on 13 February 2013, Indias

performance in export and importare as following:

ExportsExports during January, 2013

were valued at 25587.24 million USdollars. (138981.70 crore rupees)

which was 0.82 per cent higher inDollar terms (6.67 per cent higher

in Rupee terms) than the level of

25379.05 million US dollars(130294.02 crore rupees) during

January 2012. Cumulative value ofexports for the period April-January

2012 -13 was 239687.01 million US

dollars (1305420.39 rupees) as

against 251930.14 million USdollars (1196962.33 crore rupees)registering a negative growth of

4.86 per cent in Dollar terms and

growth of 9.06 per cent in Rupeeterms over the same period 2011-

12 .

Imports

Imports during January, 2013were valued at 45583.25 million USdollars (247593.63 crore rupees)

representing a growth of 6.12 percent in Dollar terms and 12.28 per

cent in Rupee terms over the levelof imports valued at 42952.47million US Dollars ( 220514.54 crore

rupees) in January 2012. Cumulativevalue of imports for the period April-

January 2012-13 was 406855.13million US dollars (2215115.46 crorerupees) as against 406820.28 million

US dollars (1934946.96 crorerupees) registering a positive growth

of 0.01 per cent in Dollar terms andgrowth of 14.48 per cent in Rupeeterms over the same period 2011-

12.

Crude Oil andCrude Oil andCrude Oil andCrude Oil andCrude Oil and

Non-oi l ImportsNon-oi l ImportsNon-oi l ImportsNon-oi l ImportsNon-oi l Imports

Oil imports during January,2013 were valued at 15899.3 million

US dollars which was 6.91 per cent

higher than oil imports valued at14871.2 million US Dollars in the


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corresponding period last year. Oil

imports during April-January, 2012-

13 were valued at 140420.1 millionUS dollars which was 11.56 per cent

higher than the oil imports of

125874.2 million US dollars in thecorresponding period last year.

Non-oil imports during January 2013were estimated at 29684.0 million

US dollars which was 5.71 per centhigher than non-oil imports of US

28081.3 million in January 2012.

Non-oil imports during April January 2012-13 were valued at

266435.0 million US dollars whichwas 5.17 per cent lower than the

level of such imports valued at

280946.1 million US dollars in April

- January 2011-12.

Trade Finance

The trade deficit for April -

January 2012-13 was estimated at167168.12 million US dollars which

was hi gher than the de fi ci t of154890.14 million US dollars during

April -January 2011-12.

Economic Growth of IndiaEconomic Growth of IndiaEconomic Growth of IndiaEconomic Growth of IndiaEconomic Growth of India

Estimated to Fall To 5 Percent inEstimated to Fall To 5 Percent inEstimated to Fall To 5 Percent inEstimated to Fall To 5 Percent inEstimated to Fall To 5 Percent in

2012-2013 FY2012-2013 FY2012-2013 FY2012-2013 FY2012-2013 FY

The Central Statistics Office

(CSO) on 7 February 2013 revealed

that the economic growth of Indiais estimated to fall to 5 percent in

2012-2013 financial year, which is a

lowest figure in 10 years. A fall inthe economic growth is because of

the poor performance of theservices, agriculture and

manufacturing sectors. The Central

Statistics Office (CSO) in its advanceforecast of the national income

chopped off the gross domesticproduct (GDP) growth estimate to

5 percent for financial year whichwill end on 31 March 2013. This ismuch less than the GDP of 6.2

percent in 2011-2012 financial year.This is said to be the worst

performance of economy of India

since 2002-2003 when the economicgrowth was 4 percent. The major

share of Indias GDP comes from the

services sector. The services sector

is estimated to record a growth of5.2 percent in 2012-2013 fiscal year

against 7 percent of 2011-2012 fiscal

year.As far as the industry sector is

concerned, it is expected that the

growth would decrease to 1.9percent in 2012-2013 FY. The farmsector growth will fall down to 1.8

percent. It is important to note thatthe official projection of the

economic growth of India is muchlower than budgetary estimate as

well as projections of the central

bank of India and otherorganisations. In the union budget

for financial year 2012-2013 whichwas presented in March 2012, thegovernment pegged Indias

economic growth at 7.6 percent.Also in the quarterly monetary

policy review which took place inthe first week of February 2013, theReserve Bank of India projected the

growth of 5.5 percent for 2012-2013financial year. In the meanwhile,

Finance Minister P. Chidambaramhad projected the economic growthof 5.7 percent. In first half of 2012-

2013 FY, the economy of India grewby 5.4 percent. However, as per the

latest estimate, the growth would bearound 4.6 percent in second halfof 2012-2013. Industry bodies in

the meanwhile asked thegovernment to press for the reform

process in order to revive theeconomic growth.

Memu Coaches ManufacturingMemu Coaches ManufacturingMemu Coaches ManufacturingMemu Coaches ManufacturingMemu Coaches Manufacturing

Facility at BhilwaraFacility at BhilwaraFacility at BhilwaraFacility at BhilwaraFacility at Bhilwara

Memorandum of

Understanding (MoU) was signed

on 25 February 2013 between IndianRailways and Bharat HeavyElectricals Ltd (BHEL) for setting up

of Greenfield MEMU coaches

manufacturing facility by BHEL atBhilwara in Rajasthan. Main Line

Electric Multiple Unit Trains,popularly known as MEMU trains

were first introduced in Indian

Railways in the Year 1994-95, as a

mode of rapid transit system, tocater to non-suburban passengers,

residing in small towns and villages

surrounding urban and industrialcentres.

MEMU trains have higher

passenger carrying capacity andhigher average speed as comparedto conventional loco hauledpassenger trains due to faster

acceleration and brakingcharacteristics. These rakes are now

being manufactured with toiletfacilities to take care of passengerneeds. MEMU trains increase the

line capacity utilisation, andtherefore are more suitable for

running on high traffic densityroutes.

These MEMU trains have

gained rapid popularity over theyears. Currently, there are about 160

MEMU services running. There aredemands coming from all over thecountry for running more and more

MEMU trains. The demand for thesecoaches will further increase as

Indian Railways have plans toElectrify approximately 15000 routekilometre during the next 10 years,

in addition to the existing 22000route kilometre of electrified track.

There was a shortfall in acquisition

of 800 MEMU coaches during XIthPlan Period due to capacity

constraints at Rail Coach Factory,Kapurthala, where these MEMU

coaches are produced. Overall it isexpected that the requirement ofMEMU coaches will grow to nearly

9000 coaches during the next 10


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year period. Setting up of factory for

conventional MEMU coaches will goa long way in meeting this demand.

Bharat Heavy ElectricalsLimited (BHEL) is a Maharatna

Central Public Sector Unit (CPSU)company, which is a partner of

Indian Railways for a period

spanning more than 40 years. It hasbeen manufacturing and supplying

electric rolling stock includingEMUs and MEMUs; as well as sub-

assembly and equipment for rolling

stock being manufactured at IRsown production units. The

proposed facility for production ofMEMU coaches will be set up by

Bharat Heavy Electricals Limited

(BHEL) at Bhilwara in the State ofRajasthan. The entire cost will be

borne by BHEL. Government ofRajasthan will provide land to

Railways, for setting up the project.

In order to make the project viable,Ministry of Railways will give

Assured Off- Take orders to BHEL.

Railway Revenue EarningsRailway Revenue EarningsRailway Revenue EarningsRailway Revenue EarningsRailway Revenue Earnings

Increased by 20.38 Per CentIncreased by 20.38 Per CentIncreased by 20.38 Per CentIncreased by 20.38 Per CentIncreased by 20.38 Per Cent

The total approximate earnings

of Indian Railways on originating

basis during 1 April 2012 to 31January 2013 were 101223.95 crore

rupees compared to 84083.74 crorerupees during the same period last

year, registering an increase of 20.38

per cent, as per the data releasedby Ministry of Railways.

The total goods earnings havegone up from 56163.30 crore

rupees during 1 April 2011 31st January 2012 to 70067.36

crore rupees during 1 April2012 31 January 2013,

registering an increase of24.76 per cent.

The total passenger revenue

earnings during 1 April 2012 31 January 2013 were

25924.29 crore rupeescompared to 23344.42 crore

rupees during the same periodlast year, registering an

increase of 11.05 per cent. The revenue earnings from

other coaching amounted to2617.19 crore rupees during

Apri l 2012 - January 2013compared to 2353.54 crore

rupees during the same periodlast year, an increase of 11.20

per cent. The total approximate

numbers of passengers

booked during 1st April 2012 31st January 2013 were7150.60 million compared to

6910.00 million during thesame period last year,

showing an increase of 3.48per cent. In the suburban and

non-suburban sectors, thenumbers of passengers

booked during April 2012 -January 2013 were 3753.32

million and 3397.28 millioncompared to 3651.70 million

and 3258.30 million during thesame period last year,

showing an increase of 2.78per cent 3.48 per cent

respectively.

Indian Financial RegulatorsIndian Financial RegulatorsIndian Financial RegulatorsIndian Financial RegulatorsIndian Financial Regulators

signed pact to Monitorsigned pact to Monitorsigned pact to Monitorsigned pact to Monitorsigned pact to Monitor

ConglomeratesConglomeratesConglomeratesConglomeratesConglomerates

The countrys top four financial

regulators on 8 March 2013 signedan agreement among each other forco-operation on consolidated

supervision and monitoring of

financial groups identified asfinancial conglomerates- large banksand other key players. Thedecisivenesses were taken at a sub-

committee meeting of the FinancialStability and Development Council

(FSDC) held in the Reserve Bank.The regulators who signed the pact

were the Reserve Bank of India

(RBI), Securities and ExchangeBoard of India (SEBI), InsuranceRegulatory and Development

Au thor ity and Pens ion Fund

Regulatory and DevelopmentAuthor ity. The FSDC (FinancialStability and Development Council)meeting, chaired by RBI Governor

D Subbarao also approvedformulating a national strategy for

financial education by incorporatingthe feedback received from publicconsultations and from a global peer

review, RBI said without providingdetails. RBI had on 22 February 2013

released rules on allowingcompanies to start banks in India

and such coordination amongregulators is needed for effectivesupervision.

Inflation goes Down to ThreeInflation goes Down to ThreeInflation goes Down to ThreeInflation goes Down to ThreeInflation goes Down to Three

Years LowYears LowYears LowYears LowYears Low

The inflation rate of Indiadropped down to the three year lowin the chart to 6.62 percent in

January 2013 from the 7.18 percent,measured in December 2012. The

inflation was measured based uponmonthly Wholesale Price Index.The official Wholesale Price Index

for All Commodities (Base: 2004-05= 100) in January, 2013 rose by 0.4

percent to 169.2 (Provisional) from168.6 (Provisional) for the previousmonth. Slowing exports and decline

in investments and low demand inthe domestic market have been a

major factor in slipping down thegrowth rate of India. The two factorshave affected the manufatruing as


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well as service sectors of India. The

growth forecast for the runningfiscal year that would end on 31March 2013 was lowered by the

Indias Statistical Office to 5 percent.

The Reserve Bank of India alsochanged its forecast from 5.8percent to 5.5 percent. To revive afresh air in the slowing down

economic conditions of India, theReserve Bank took a major step of

lowering the key interest rate from8 percent to 7.75 percent; this wasthe first step in nine months. The

Policy makers have also taken afreshsteps to revive the slowing

economic conditions of the nation.

Teledensity declined by 25.97Teledensity declined by 25.97Teledensity declined by 25.97Teledensity declined by 25.97Teledensity declined by 25.97

MillionMillionMillionMillionMillion

As ce llphone operator scontinued disconnecting inactive

SIM cards, Indias total telecomsubscriber base declined by 25.97

million to 895.51 million in

December. In November, the

country had 921.47 million telecom

subscribers. Telecom Regulatory

Authority of India(TRAI) stated thattotal wireless subscriber base

decreased from 890.60 million in

November 2012 to 864.72 million atthe end of December 2012. TRAI

reasoned that this decline is majorlydue to large scale disconnections of

inactive SIMs by some of the serviceproviders. With this, the overall

teledensity in India decreased to

73.34 per cent at the end ofDecember, 2012 from 75.55 per cent

in the previous month.

Export of Additional 5 MillionExport of Additional 5 MillionExport of Additional 5 MillionExport of Additional 5 MillionExport of Additional 5 Million

Tonnes of Wheat approvedTonnes of Wheat approvedTonnes of Wheat approvedTonnes of Wheat approvedTonnes of Wheat approved

The Union Government ofIndia on 7 March 2013 approved

export of extra five million tonnes

of Wheat from its Godowns. Thegroup of ministers in its meeting also

decided that the added quantity of5 million tonnes of wheat shall be

exported by the private traders. It

also cleared that the public sector

trading firms will not be aparticipant in export of the

additional quantity of wheat.

The GoM (Group of Ministers)have also decided that bidding

process would be used by the

Private traders to export the 2011-12 crop and the floor price decided

for per quintal is 1480 rupees. Forthe present fiscal, the permitted

export of wheat from the godowns

of the Food Corporation of Indianow stands at 9.5 million tonnes.


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Date post:	02-Apr-2018
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Economy Issue May 2013 Www.upscportal.com

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