reads a newspaper and magazine, but sometimes, it becomes hard to keep a
track of the different issues and development. Since the news items on different
issues are found in a scattered form in the newspapers and magazines, it becomes
a cumbersome process to memorize the important events, from an exam point of
It provides you with a timeline of the important events and developments in
different spheres, from an exam perspective.
Kelkar Committee has favoured retaining the Production
Sharing Contract (PSC) system for the Oil and Gas exploration sector,
because guarantees for the recovery of all input costs are important to
attract major investors. Under the present system, oil companies can recover
all costs from sales of oil and gas before sharing profit with the
government. However, the CAG has criticised the PSC as it encourages the
private partners to increase capital expenditure and delay the government's
share. Kelkar Panel favours PSC for shallow and on-land blocks only, not
deep-sea exploration. It also favours an open acreage regime where companies
can pick exploration areas through the year, instead of periodic auctions.
The Panel has proposed to constitute a National Data Repository (NDR).
FDI in Pharmaceutical Sector- The government has
decided to continue with 100% FDI in pharmaceutical sector. However, to
avoid the cases of acquisitions that are not in the interest of the economic
availability of essential drugs, the Foreign Investment Promotion Board (FIPB)
would decide the non-competent clause in special cases. The decision was
taken after cases of acquisitions of Indian pharmaceutical firms by foreign
RBI relaxed FDI norms, giving foreign investors an option
to exit their investments by selling their holdings of equity or debt. This
is expected to bring greater FDI flow. FDI contracts can now have
optionality clauses, allowing the investor to exit, subject to conditions of
minimum lock-in period and without any assured returns.
Foreign Portfolio Investment- the government has
decided that the Foreign Portfolio Investment (FPI) will attract uniform tax
rate across categories. FPI include the category of- Foreign Institutional
Investment (FII), their sub-accounts and Qualified Foreign Investors (QFI).
The new system would be beneficial for QFIs, who were
subjected to higher tax rates earlier. The Central Board of Direct Taxes (CBDT)
notified that the FPIs would be treated as FIIs under the Income Tax Act,
1961. SEBI has classified the FPIs into 3 classes, based on their risk
profile and KYC requirements- 1. Category I FPIs are classified as low risk
entities, and include foreign governments and government related foreign
investments; 2. Category II FPIs cover the regulated broad based funds,
regulated entities, university funds and pension funds; and 3. Category III
FPIs include those not included in the first two categories.
NRI and Economy
RBI allows NRIs relative as joint holder- banks
might now include a close NRI relative as a joint holder in an individual
resident's existing or new bank account on an 'either or survivor basis'.
Such accounts would be considered as resident account for all purposes. But,
cheques, instruments, remittances, cash, card or any other proceedings of
the NRI relative will not be eligible for credit to this account.
Mauritius does not allow Round Tripping- Mauritius
is the single biggest source of FDI in India. Mauritius has asserted that it
does not encourage round tripping. The Mauritius Minister of Commerce and
Consumer Protection said that 'we are open to any investigation or probe
that the Indian authorities would like to initiate about the flow of the
Dr. Parthasarthi Shome Committee on GAAR's
recommendations have been generally agreed upon, but considerations on
retrospective taxations are under debate, as it could send negative signals
in the market. Dr. Shome said that GAAR (General Anti-Avoidance Rules) would
not be used as a tax generation tool, but to prevent erosion of the tax base
Cabinet Committee on Economic Affairs (CCEA)
CCEA approved setting up of a unified system at the national level-
National Vehicle Security and Tracking System- and state level- City Command
and Control Centre- for GPS tracking of the location of the emergency
buttons in and video recording of incidents in public transport vehicles. It
also approved amendments in the Mega Power Policy 2009 for provisional Mega
GDP Growth rate
2011-12- India has revised the 2011-12 GDP growth rate from 6.2 to 7%.
India has been overstating the slowdown, and thus underestimating the
World Bank Report- World Bank's global economic forecast gave a
positive picture of Indian economy projecting it at 3.2% for 2014, and would
remain at that level for two years. World Bank's positive feedback is shared
by other institutions like the IMF. The report also suggested an improvement
in the advanced economies.
However, it pointed that in the post-recession period, India and China
are no longer the leaders of global growth. Rather, the leadership role has
been taken over by the US and other advanced countries. World Bank expects
the US to grow at a rate of 2.8% in 2014. This shows a declining
significance of the BRICS grouping in the global economy.
Similarly, Japan has been able to overcome the economic slowdown, thanks
to the aggressive monetary and fiscal policy of Shinzo Abe.
By 2016, the Indian economy is expected to grow at a rate of 7.1%. Also
the gap between the growth rate of India and China is expected to narrow
The government updated the growth rate for 2012-13 at
4.5%, compared to the earlier estimates of 5%, on account of subdued
performance by Agriculture, mining and manufacturing. Growth in year 2012-13
is the lowest in the decade. The primary sector grew only by 1%, as against
the earlier data of 1.6%. The Secondary sector grew by 1.2%, as against
earlier data of 2.3%. Thus, the main factor of growth has been the tertiary
and service sector.
However, GDP growth rate for 2011-12 has been revised up to 6.7% from
The Central Statistical Organization (CSO) released the
estimates for 2013-14 GDP growth at 4.9%. The figures for 2012-13 stand at
4.5%, which is the lowest for the decade. The recovery in the growth rate
has come mainly because of the agriculture, forestry and fishery sector.