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the year 2009-10. The growth rate of secondary sector stood at 7.2% and that of the service sector is 9.3% during 2010-11.
the per capita income grew by a slower 6.4 per cent to Rs.35993 in 2010-11 as compared to Rs.33843 in 2009-10. In Terms of Foreign Fund flows January 2012 is the Best Month since November 2010 As per data published by the market regulator SEBI on 27 January 2012, net FII buying crossed the $2-billion mark in January 2012 making January the best month in terms of foreign fund flows since November 2010. FIIs had recorded a net outflow of $358 million in 2011. Inflows in January 2012 is in sharp contrast to over $1 billion outflow in January 2011. The surge in inflows also helped strengthen the Indian rupee which closed above the 49-level after nearly 10 weeks. Januarys inflow figure, however was less than a third of the monthly inflow record set in October 2010, when $6.4 billion was pumped in by foreign fund managers. In October 2010 the figures were further pumped through the hugely successful Coal India IPO. SEBIs data showed a net FII inflow of $1779 million. Institutional
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs trading data on the BSE showed net inflow figure on 27 january at Rs 1240 crore, which translates to $252 million. The aggregate of the two is slightly over the $2 billion mark. and offer high-end data services even in regions where they do not have 3G spectrum. The Commission also decided to introduce slew of riders to govern spectrum sharing. The riders are as follows: Only those operators that have airwaves in a particular region can share it. Spectrum can be shared only between two spectrum holders. A non-licensee or licensee who has not been assigned spectrum as yet cannot be party to spectrum trading. Two companies can share airwaves only if their combined holdings do not exceed the limits prescribed in the M&A norms. The Telecom Commission had recently approved sector regulator TRAIs recommendation that during mergers, the combined entity be allowed to have up to 25% of the total airwaves in the region. Spectrum sharing deals will also have to be renewed every five years. When operators share spectrum, both companies will have to pay usage charges on the total airwaves held jointly. Currently, operators share between 2% and 6% of their annual revenues based on the quantity of airwaves they hold.
GROwTh RATe Of eIGhT CORe IndUSTRIeS feLL TO 3.1% In deCeMBeR 2011 fROM 6.3% In deCeMBeR 2010
According to the data released by the Commerce and Industry Ministry on 30 January 2012, the growth rate of eight core industries slowed down to 3.1 per cent in December 2011 from 6.3 per cent in December 2010. These eight sectors had recorded a 6.8 per cent growth in November 2011. The decline in core sector activity was due to a fall in the production of crude oil and natural gas. The eight core sectors have a combined weight of 37.9 per cent in the Index of Industrial Production (IIP). The sectors that showed poor performance in December 2011 due to a fall in output include crude oil, natural gas, petroleum refinery products and steel, while those which fared better include coal, fertiliser, cement and electricity. The growth of these eight sectors during April-December 2011 was 4.4 per cent against 5.7 per cent during the corresponding period in 2010.
Second generation (2G) spectrum is largely used for offering vanilla voice services. The telecommnication companies cannot therefore share 3G spectrums. Incumbents such as Bharti Airtel, Vodafone, Aircel and Idea Cellular took the government to court, after the telecom department asked these companies to terminate their 3G roaming deals. These companies had hoped the Commissions policy changes had hoped that policy changes permitting the sharing of airwaves, would put an end to this controversy. The companies had signed up 3G customers across the country riding on bilateral roaming agreements that allow these firms to use each others airwaves
Government-appointed C R Sundaramurti Committee submitted its report to finance minister Pranab The telcos sharing spectrum Mukherjee. The report suggested a must pay the government the complete overhaul of government commercial value of the airwaves accounting norms in order to enforce it is using. It essentially means, transparency and better monitor public an operator that has 4.4 MHz of spending. The proposed accounting airwaves, and is sharing radio classification structure will provide a frequencies with another telco foundation for a more robust public that has the same amount, must financial management which could be pay current prices for additional used for enforcing more transparency and effectiveness of Public delivery 4.4 units of spectrum it is using.
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs channels of the government. The accounting classification of receipts and disbursements is prescribed under the Constitution and is maintained by the Controller General of Accounts (CGA) on the advice of the Comptroller and Auditor General of India (CAG). programme or scheme from one level of governance to another level of administrative entities. committee had suggested 0.50% of the investment, subject to a minimum of Rs 20 and maximum of Rs 50000. As per PFRDAs measures announceds, a distributor will get a flat Rs 100 on initial subscription and 0.25% of the initial subscription amount. Every year on subsequent investments, the point of presence will be entitled to 0.25% of that amount. The minimum that a point of presence can charge is Rs 20 and the maximum Rs 25000. Bajpai committee had observed that the earlier structure of the pension system was amounting to the poor subsidizing the richa person investing Rs 6000 and a person investing Rs 1 lakh were both paying Rs 20. Also the fixed sum was acting as a deterrent to sell NPS amid better commissions-yielding products such as insurance policies.
ReCOMMendATIOnS
The committee in its report recommended rationalisation and reorganisation of the existing account classification of list of major and minor heads of accounts (LMMHA) of centre and states. The panel also proposed a multidimensional classification framework which has seven mutually exclusive segments with their own individual hierarchical structures. The revised accounting classification codes which are being perceived as a milestone in the area of accounting reforms were proposed to be implemented with effect from financial year 2013-2014. The proposed classification structure provides for capturing expenditure on special thrust area of government policy objectives such as development of women, schedule castes, schedule tribes, below poverty line population. The Committee is of the opinion that the recommendations/suggestions framed by it would help in the effective management tools. It would help national and sub-national governments for better planning, allocation and application of resources, and more effective monitoring of public spending. The panel has also carried out standardisation of coding of all such entities which are recipient of public fund, as channels of public delivery. The measure is likely to facilitate tracking of flow of funds under a government
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs dollar in intra-day trade. The central bank decided to reverse a two-year policy of interest rate hikes because of decelerating growth although inflation continued to remain a concern. RBI was prompted to ease liquidity because of a structural shortfall which was forcing banks to borrow anywhere between Rs 1.25 lakh to Rs 1.5 lakh from RBI in January. The RBI's action is seen as an attempt to strike a balance between risks to growth and inflation. touching the peak in 2011-12 fiscal. During the April-December period of 2011-12, gems and jewellery exports grew 11.65 per cent to $32.1 billion, compared to the the April-December period of 2010-11. However, despite the drop in December, the countrys gem and jewelry exports still grew in the second half, reaching $32.1 billion 11.65% higher than in the corresponding half of 2010. To reduce dependence on traditional markets, the exporters are exploring new markets like Latin America, Africa and Russia. India mainly imports gold and rough diamonds in large quantities and re-exports value-added items like jewellery. of petroleum products. Profits fell 13.2% in the first half of 2011-12 due to steep rise in raw material and fuel prices, high interest rates and delay in payment of cash subsidy to the oil marketing companies (OMCs) by the government. Also, a sharp depreciation in rupee since September 2011 brought mark-to-market (MTM) losses to firms and thus further pulled down profits. In a situation where high input costs and interest rates continue to haunt Indian companies, the corporate affairs ministry provided some relief by allowing capitalisation of MTM losses on long-term loans taken for the acquisition of fixed asset till March 2020. The exemption was earlier available only till March 2012 and only to companies which had opted for it in 2008-09. In spite of this, corporate India is expected to report substantial amount of forex losses in the December 2011 quarter since major chunk of the forex liabilities of corporate India are short-term, CMIE noted. Forex, however, expected to rise by 9.9% in the January-March quarter riding on the back of robust 40.2% rise in net profits of the banking industry. The net profits in the banking industry was attributed to lower provisions and low base.
demand from Europe and the US. The major export markets include the UAE & Hong Kong. The exports had stood at $3.5 billion in the December 2010. the overseas shipments in May 2011 had logged in 33% growth,
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs New Zealand, Vietnam and Finland.The Visa-on-Arrival facility is now available at four international airports at Delhi, Mumbai, Kolkata and Chennai. There were 6.29 million foreign tourists in 2011, out of whom 12761 had availed the scheme. Upgraded road connectivity to all major tourist circuits, including Gangtok and Leh, eco tourism and reaching out to schools to promote tourism related vocational schools were amongst the decisions taken by the committee. It was also decided that a subcommittee consisting of Member Secretary, Planning Commission, Culture Secretary, Secretary (Environment and Forests), Secretary (Rural Development) and Secretary(Tourism) will identify the potential of tourism in rural, eco and cultural sectors in the country and submit its report within four weeks. It was observed that tourism ought to be seen as development, should be pro-poor and focus on employment creation. Emphasis was on the need to give tourism a major fillip during the 12th Plan so as to more than double the number of foreign tourists arriving in India and further encourage domestic tourism. A co-ordination committee consisting of Joint Secretaries of MHA, MEA and Tourism Ministry was constituted to resolve day-today visa related complaints. The Ministry of Environment and Forest were asked to finalise its eco-tourism policy at the earliest possible after analysing the feedback it received from different quarters. In order to facilitate connectivity, which is crucial for tourism, it was decided that Ministry of Defence (Border Road Organisation) will expedite ongoing work at Gangtok and Leh roads which are tentatively scheduled to be completed by 2014 and 2015 respectively. generally such SMSes originated from locations within Germany, Sweden, Nauru, Fiji, Cambodia, Bosnia, Albania, Grenada, the United Kingdom, Jersey, Sint Maarten, Tonga, Vanuatu, Namibia, Panama, and Antigua and Barbuda. These SMSes contain the headers which are alphanumeric or starting with +91 or numbers with international codes. The regulator thus oredered all telecom companies to ensure that no international SMS containing an alphabet header or alphanumeric header or +91 as the originating country code is delivered through their networks. Also, if any source or number from outside the country generates more than 200 SMSes an hour with a similar signature, these could not be delivered through the network.
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs commodity exchanges and brokers through whom the risk is proposed to be hedged and the credit lines proposed to be availed. The name and address of the regulatory authority in the country concerned may also be given. Size/ average tenure of exposure and/or total turnover in a year, together with expected peak positions thereof and the basis of calculation can also be included.
the new regime, which suggests that there will be only four types of licence in future as against many currently available across the communication sector.
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs licences separately, like the one for offering Internet services that are generally known by the nature of the service being offered. it was higher than in November, when overseas shipments grew by just 3.8 per cent. Imports on the other hand grew at a faster pace of 19.8 per cent year-onyear to $37.8 billion in December 2011 thereby translating into a trade deficit of $12.8 billion. During the AprilDecember period of 2011, exports aggregated to $217.6 billion, a year-onyear growth of 25.8 per cent as a result of the export growth witnessed in the early months of 2011. From a peak of 82 per cent in July, export growth slipped to 44.25 per cent in August, 36.36 per cent in September and 10.8 per cent in October 2011. foreign investor, or QFI. The regulator mentioned that the investors will need to take delivery of shares they purchase on the local bourses. Sebi specified that QFIs will have to invest in demat form through Sebi-registered depository participants (DPs) who will have to fulfill the Know Your Customer (KYC) norms. QFIs were barred from issuing offshore derivatives instruments or participatory notes and will also have to give a declaration to this effect to the DP. The Sebi circular however does not mention whether these investors can trade in Indias futures and options segment. DPs will have to ensure that the same set of end beneficial owners is not allowed to open more than one demat account as QFI. Also, Foreign investors, who wish to invest directly in Indian shares, will also have to obtain a separate permanent account number or PAN. The QFI shall transact in Indian equity shares only on the basis of taking and giving delivery of shares purchased or sold and it shall not issue offshore derivatives instruments/ participatory notes. The DP will have to provide on a daily basis, QFI wise, ISIN wise and company wise buy/ sell information and any other transaction or any related information to their respective depositories on the day of transaction. The stock exchanges shall provide the details of paid up equity capital of all the listed companies to the depositories once in six months, periodically and also provide information regarding change in paid up equity capital in any listed company immediately.
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs compensation of wholetime directors, chief executive officers and other risk takers in private and foreign banks. The central banks directions are aimed at preventing greed from destabilising the institution. The guiderlines include provisions to clawback pay if transactions fail years after origination.The guidelines based on the recommendations of the International Financial Stability Board did not prescribe any quantitative limit on absolute pay. The guidelines however deal with the structure of pay which in the past favoured excessive risk-taking. guaranteed bonus has been banned. Risk management staff will have more of fixed component than the rest. pay other than accrued benefits like gratuity and pension, except in cases where it is mandatory by any statute. Foreign banks operating in India will be required to submit a declaration to RBI annually from their head offices to the effect that their compensation structure in India, including that of CEOs, is in conformity with the FSB principles and standards. Private sector and foreign banks are also required to obtain regulatory approvals for remuneration of CEOs and wholetime directors. of Industrial Production in 2011 was noted to be very volatile. With this, the IIP growth during the April-November period of 201112 stood at 3.8 per cent as compared to 8.4 per cent in the same period of 2010-11. The industrial production had registered a 6.4% expansion in November 2010. Output had grown 7.8 percent in the 2010/11 fiscal year that ended in March, slower than 10.5 percent clocked in the 200910 fiscal. Growth in the manufacturing sector, constituting over 75 per cent of the index, went up by 6.6 per cent in November as compared to of 6.5 per cent in November 2010. Electricity also saw a robust growth of 14.6 per cent during the month under review as compared to 4.6 per cent in November 2011. Production of consumer goods witnessed a healthy 13.1 per cent increase as compared to a mere 0.7 per cent growth in November 2010. Infrastructure sector output, which contributes nearly 38 percent to
IndUSTRIAL PROdUCTIOn BOUnCed BACK wITh A GROwTh Of 5.9 PeR CenT In nOveMBeR 2011
As per the Index of Industrial Production (IIP) data, industrial production bounced back with a growth of 5.9 per cent in November 2011, marking a five-month high in
a reversal from the negative trend witnessed in October 2011. The Index
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PMO dIReCTed CASh-RICh PSUS TO InveST AROUnd `.1.76 LAKh CRORe fOR STIMULUS
The Prime Minister's Office on 11 January 2012 directed cash-rich public sector undertakings (PSUs) to invest around Rs.1.76 lakh crore, including Rs.1.41 lakh crore domestically to act as a stimulus in the next fiscal (201213). At a meeting chaired by Prime Minister's Principal Secretary Pulok Chatterjee, 17 companies with cash and bank balances in excess of Rs.1000 crore were identified to undertake these investments primarily in the infrastructure sector. The PSUs will invest Rs.1.41 lakh crore domestically in 2012-13 and Rs.35009 crore overseas. The Principal Secretary observed that the PSU investment could provide stimulus to the economy and asked the companies to draw up credible investment programmes and implement those with an objective to achieve the maximum benefit for the companies themselves as well as the national economy. Among the companies, ONGC is projected to invest the maximum amount of Rs.53526 croreRs.33,065 crore in the domestic market and Rs.20,461 crore overseas. NTPC will invest Rs.20,995 crore domestically and Power Grid Corporation of India is to invest Rs.20000 crore.
dePARTMenT Of IndUSTRIAL POLICy And PROMOTIOn nOTIfIed 100% fdI In SInGLe-BRAnd ReTAIL
The Department of Industrial Policy and Promotion (DIPP) ON 10 January 2012 notified the rules allowing 100% foreign direct investment (FDI) in single-brand retail. Currently 51% FDI
is permitted in this segment of retailing which was opened to foreign players almost six years ago. Removal of the investment cap will help global fashion brands, especially from Italy and France, to venture alone in the growing Indian market. Shares of retail giants Kishore Biyani-led Future Group firm Pantaloon Retail (India) surged by 10% to an early high of Rs 161.40, while Provogue (India) zoomed up by 14.22% to Rs 28.10 on the BSE following the announcement by the government. In a similar fashion, Koutons Retail gained 12.52%, Shopper's Stop rose by 9.38%, Tata Group retail venture Trent Ltd advanced by 5.50% and Vishal Retail jumped by 4.98%. The decision to increase FDI in singlebrand retail was taken by Cabinet on 24 November 2011 along with the decision to open the gates for overseas investment in multi-brand retail. The government was however forced to put FDI in multi-brand retail on hold in the face of opposition by several political parties, including UPA ally Trinamool Congress. In respect of proposals involving FDI beyond 51%, the mandatory sourcing of at least 30% would have to be done from the domestic small and cottage industries which have a maximum investment in plant and machinery of USD 1 million (about Rs 5 crore).
currency bank deposit increasing from NP (not prime) to Prime (P-3). Upgradation suggested acceptable ability to repay short-term obligations. Prime falls under the investment grade, while not prime is a speculative grade. The upgradation will improve flows from foreign institutional investors and flows from non-resident Indians will also accelerate. In December 2011, Moodys upgraded the credit rating of Indian governments bonds from speculative to investment grade. The rating agency had also upgraded the long-term government bond denominated in domestic currency from Ba1 to Baa3. The long-term country ceiling on foreign currency bank deposit was also upgraded from Ba1 to Baa3. The move was expected to encourage FIIs to increase their exposure in gilts and help companies raise funds from abroad at competitive rates.
MOOdyS UPGRAded ShORT-TeRM COUnTRy CeILInG On fOReIGn CURRenCy BAnK dePOSIT fROM nP TO PRIMe
The Finance Ministry announced on 10 January 2012 that rating agency Moodys Investor Services upgrade the short-term country ceiling on foreign
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs trend in FDI continued, the FDI in the current financial year 2011-12 will cross $30 billion. The develoment is to have a positive effect on rupee in the foreign exchange market. The selling pressures in the stock market from the foreign institutional investors and rising trade deficit had led the rupee to decline by about 15% since August 2011. Sectors which attracted the maximum funds include services, construction activities, power,computers and hardware, telecom and housing and real estate. Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India. The Moody's upgraded India's short-term foreign currency rating from speculative to investment grade. administrative ministry. Under the MoU system, annual targets are set for the PSUs and CEOs get personal appraisal points if the tasks are achieved. While about 50 PSUs including Hindustan Aeronautics Ltd and Heavy Engineering Corporation Ltd which can be listed on stock exchanges did not opt for the same.The government had set a target of raising Rs 40,000 crore through stake sale in PSUs in the current fiscal. In the three remaining months befor the fiscal year 2011-12 comes to end, the Finance Ministry is working on several methods including share buyback by cash-rich PSUs. The Ministry has been able to receive Rs 1145 crore through disinvestment in Power Finance Corporation.
UnIOn GOveRnMenT TO InCenTIvISe UnLISTed PSUS TO heLP TheM COMe UP wITh InITIAL ShARe OffeRInGS
The Union government decided to incentivise the unlisted PSUs to help them come up with initial share offerings in the stock market in 201213. Currently, there are about 50 PSUs which are listed and their shares are actively traded in the stock market. There are about 50 more of such government-owned firms which are eligible but unlisted for various reasons. The government already decided that unlisted PSUs with no accumulated losses and having earned net profit in three preceding years should come out with initial public offerings (IPOs) even as the state holding would not come below 51%. One of the options to incentivise the PSUs for IPOs is to put this task in the memorandum of understanding (MoU) which an individual enterprise signs with its
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs that includes setting up of training and research centres pertaining to rural roads. The programmewas supposed to have covered all habitations with a population of 500 people (250 people in the case of tribal and hilly areas) by 2007. Provision of rural connectivity to habitations of 500 people in general areas and 250 people in tribal areas need to be worked upon on pririty basis. to frequently review the ALM policy of the insurer. Any change in the policy must be reported to the regulator. Under the uniform framework, insurers have to put in place an effective mechanism to monitor and manage their asset-liability positions. The objective is to ensure that their investment activities and assets positions are in sync with their liabilities, risk profiles and solvency positions. The guidelines, which would come into effect from 1 April 2012, make it mandatory for insurance companies to prepare an ALM policy as well as get it approved by the Insurance Regulatory and Development Authority (IRDA) by end of March 2012. The insurers are also required to develop and implement controls and reporting systems for the ALM policies that are appropriate for their businesses and to the risk to which they are exposed. They would have to put in place effective procedures for monitoring and managing their assetliability positions to ensure that their investment activities and asset positions are appropriate to their liability, risk profiles and solvency positions.
IRdA GUIdeLIneS
The IRDA guidelines require the ALM (asset liability management) policy to be approved by the board of the insurer. Such board-approved policy is to be submitted to the IRDA within 90 days. While approving the ALM policy, the board is to take into account the asset-liability relationships, the insurer's overall risk tolerance, risk and return needs, solvency positions and liquidity requirements. The guidelines also make it mandatory for the board
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs in sync with fluctuations in yields on government securities. It had also hiked the interest rates on PPF deposits from 8 per cent to 8.6 per cent while raising the ceiling on annual contributions to the fund to Rs.1 lakh from Rs.70000. Interest rates on Post Office Savings Accounts rose to 4 per cent from 3.5 per cent. Similarly, interest rates on deposits of various maturities of one year, two years and five years too were raised from December. The sale of Kisan Vikas Patra (KVP) has been discontinued from November 30, 2011. The maturity period of Monthly Investment Schemes (MIS) and National Savings Certificates (NSCs) been reduced from six years to five years. Banks have been borrowing in excess of R 1 lakh crore a day from the RBI's liquidity adjustment facility (LAF) or repo window. The liquidity deficit in the system in recent weeks has been way beyond the limit of 1% of the net liabilities of the system, or around Rs 55000 crore. would be overseen by the exchanges. SEBIs measure is considered to be very progressive step towards creating an organised and effective mechanism that will not only facilitate fund raising but also assist companies to comply with the listing norms in a non-disruptive manner. There shall be at least 10 allottees in every IPP issuance. No single investor shall receive allotment for more than 25% of the offer size. For the purpose of compliance with public holding norms, SEBI had earlier directed all such promoter shareholders to dilute their equity stake to 75% or below by June 2013 through public offering of shares. The companies were also barred from using the qualified institutional placement ( QIP) route for diluting promoters' shares. However, the new institutional placement route can be used for either fresh issue of shares or dilution by the promoters through an offer for sale. The IPP method can be used to increase public holding by 10% and could be offered to only qualified institutional buyers with 25% being reserved for mutual funds and insurance companies. Under the IPP, companies will have to announce the ratio of buy-back, as is done in the case of rights issues and fix a record date for determination of entitlements as per shareholding on record date. Besides improving efficiency, the revised buy-back process is expected to give a fair deal to all shareholders.
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs bill to amend the Forward Contracts Regulation Act 1952. Parliamentary Standing Committee on consumer affairs, food and public distribution, chaired by Congress MP Vilas Baburao Muttemwar, submitted its report on the FCRA (Amendment) Bill 2010 to Parliament on 22 December 2011.The current department-related standing committee (DRSC), set up in 2009, was asked by the Lok Sabha speaker in December 2010 to prepare a report on the bill and submit it to the Lok Sabha Secretariat. The committee in its report recommended a doubling of the maximum penalty for trading rule violations to Rs 50 lakh. The standing committee report suggested raising the upper limit on penalties for offences like insider trading to Rs 50 lakh from Rs 25 lakh stipulated in the Forward Contracts Regulation Act (FCRA) Amendment Bill 2010. Insider trading involves using unpublished price sensitive information for personal gain. The bill seeks to empower commodity futures market regulator Forward Markets Commission on par with its securities markets counterpart. It is seen as the single-most important reform in the eight-year-old commodity exchange market. derivatives market as trading lot sizes will be lower than in futures contracts, where the minimum traded quantity for most farm products is 10 tonne. investing in an option also tends to minimise losses as only the premium to buy (call option) or sell (put option) is forgone in the event of prices moving adversely. a futures position taken by a trader is on the other hand marked to market daily. Marking to market involves daily settlement of the difference between the prior agreed price and the daily futures price. It can thus lead to huge losses alongside supernormal profits. (RIL) $1.529 billion investment plan for developing four satellite fields in the flagging KG-D6 block. RILs investment plan will boost falling output in the Krishna-Godavari Basin KG-D6 block. The investment proposal was signed by the three partners in the block- RIL, UK's BP Plc and Niko Resources of Canada and the representative of DGH. The KG-D6 block oversight committee, which includes officials from the Oil Ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), met for the third time in three months on 3 January to finally approve the proposal. The MC approval, which is the final approval an operator needs before beginning work, put a cap on the cost of developing the four fields that surround the currently producing Dhirubhai-1 and 3 (D-1 & D-3) fields in the KG-D6 block. The cost cannot vary by more than 15%. The MC had at its two previous meetings in November and December 2011 refused to approve the field development plan (FDP) for the Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields after the government representative raised certain objections. RIL agreed to cap spending on the four fields at $1.529 billion, plus or minus 15%.
The RePORT
The report recommended that options be introduced for the benefit of stakeholders. The inclusion of the clause was one of the reasons why the bill in its earlier avatar during the UPA I regime faced resistance. Those who had opposed the bill then especially the Left parties argued that options would increase speculation in commodities. The report suggested that options will actually make it easier for farmers and smaller users to participate in the
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs the profit margin of Sesa Goa Ltd., India's largest iron-ore exporter by volume. Steel Minister Virbhadra Singh always wanted more restrictions on exports. Based on his ministrys inputs, Finance Minister Pranab Mukherjee had earlier imposed a 20 per cent duty on exporting the domestically mined mineral. Shipments from the South Asian country decreased 28% between April and November to 40 million tons, according to the Federation of Indian Mineral Industries. Volumes were hit by a mining ban in the southern state of Karnataka, a freeze on sale of old stocks in western Goa state and transport bottlenecks in the eastern state of Orissa. India exported 97.64 million tons iron ore in 2012. Prior to the export tax change, industry officials had estimated exports in 2011-12 to be between 60 million and 65 million tons because of mining-related issues. As a result of high export tax and railway freight, India's iron-ore exports is not likely to exceed 50 million tons in 2011-12. The Supreme Court had in early 2011 banned mining in the major iron-ore producing districts of Karnataka to prevent illegal mining and environmental damage. In Goa, moves to reduce environmental impact and illegal mining affected production. The two states account for around 70% of India's iron-ore exports. over to internationally-accepted Gross Caloric Value-based pricing mechanism. The new system is based on the recommendations of the Integrated Energy Policy Committee and the Expert Committee on Road Map for coal sector reforms. The board approved switching over of non-coking coal pricing from Useful Heat Value based grading system to Gross Caloric Value (GCV) based classification with effect from 1 January 2012. GCV measures the amount of heat released by carbon and hydrogen in coal when it is heated and is an internationally accepted pricing mechanism. the UHV mechanism was followed in India Howeverbecause of the high-ash content in Indian coal. The UHV took into account the heat trapped in ash. In Indian coal, GCV is 25% higher than UHV. The Coal Ministry mentioned that the pricing of coal on GCV-based mechanism was not likely to lead to any significant change in pricing. The new system will incentivise improvement in quality, resulting in better quality of coal to consumers and commensurate revenue realisation for coal firms. increase further. The banking systems exposure to NBFCs-D (deposit taking) was observed to have considerably increased over the years. The concerns to be further accentuated in case the banks own liquidity position becomes tight at the time of crisis or even at crisis like situation. The consolidated balance sheets of NBFCs (both the categories i.e. deposit taking and non-deposit taking and systemically important companies) revealed that more than 68 per cent of the consolidated balance sheet constitutes borrowings. 30 per cent resources of the total 68% are borrowed from banks and financial institutions as at the end of March 2011. Borrowings by way of debentures issued by the NBFCs constituted around 33 per cent and of which a sizeable portion is subscribed by the banking system.
CIL APPROved The SwITChInG OveR TO GROSS CALORIC vALUe-BASed PRICInG MeChAnISM
State-owned Coal India (CIL) announced on 2 January 2012 that its board approved in a meeting held on 30 December 2011 the switching
exPORT
Exports grew 3.87% to $22.3 billion in November, 2011, compared to $21.49 billion in November 2010. exports
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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs for the current fiscal is expected to be around $280 billion, below the $300 billion target for 2011-12 due to global economic slowdown. The country's overseas shipments had amounted to $21.48 billion in November 2010. According to export body Fieo Director General Ajay Sahai, further decine in export will push export growth ina negetive zone. From 82 per cent in July, export growth slipped to 44.25 per cent in August, 36.36 per cent in September and 10.8 per cent in October. In the eight-month April-November period, exports aggregated to $192.69 billion, a year-on-year growth of 24.55 per cent. Experts opined that the country's exports growth during the entire fiscal would stand at about 20 per cent. to $ 215.41 billion during the AprilNovember period. international firms. The HSBC Markit India Manufacturing PMI jumped to 54.2 from 51.0 in November, its biggest monthly rise since April, 2009. The index stayed above the 50 mark that separates growth from contraction for 33 months now. The PMI or Purchasing Managers Index dipped to 50.4 in September 2011. Data released by the government had showed a 5.1 per cent contraction in the IIP numbers in October 2011, its slowest since March, 2009. The successive rate hikes by the RBI and weak macroeconomic conditions domestically and globally were blamed for the contraction. The official industrial output data showed factory output plunged 5.1% in October, raising worries about the health of the manufacturing sector. This was the first fall in industrial output in nearly two years. Manufacturing sector employment also increased slightly during December 2011, ending a period of job losses that had set in during August 2011. Costs went up on higher prices of raw materials and fuel on the input front, adding with higher demand. The demand from clients allowed manufacturing companies to increase output prices at an accelerated pace to pass on the costs.
TRAde defICIT
Imports grew at a faster rate of 24.5 per cent year-on-year to $35.9 billion in November 2011 which in the process translated into a trade deficit of $13.6 billion. Between April-November exports grew 33.2% to $192.7 billion while imports also rose 30.2% to $ 309.53 billion. The trade deficit during the eight months of the fiscal year therefore stood at $116.8 billion.
IMPORT
Imports were up 24.5% at $35.92 billion in November 2011. In November, 2010, imports aggregated $28.84 billion. Oil imports grew by 32.28 per cent to USD 10.3 billion in November 2011 while non-oil imports rose by 21.69 per cent to $25.6 billion vis-a-vis the year-ago period. Between April and November oil imports stood at $94.1billion, an increase of 42.67% compared to $65.97 billion in November 2011. Non-oil imports, a key gauge of economic activity, rose 25.46%
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