(Current Affairs) Economy & Energy | September: 2015

Economy

India’s big Defence Deals Worth $4.7 Billion, Boeing Spy Planes

  • The Indian Army will be replacing its vintage anti-aircraft guns, decided the Defence Acquisition Council (DAC) - headed by the Defence Minister Manohar Parrikar — that met late this evening. The committee has cleared purchase of defence equipment worth Rs. 30,000 crore, sources said.

  • The new guns will have to be bought from Indian companies. But no Indian firm has yet demonstrated the capacity to manufacture these weapons. The army is likely to get 428 guns and it is likely to cost the exchequer Rs. 16,900 crore.

  • Currently, the Indian army uses L-70 and Zu- 23 mm guns of 1950s vintage, acquired from Swedish manufacturer Bofors and from the erstwhile Soviet Union’s Podolsky Electromechanical Plant.

  • In 2013, then UPA Government had issued global tenders for anti-aircraft guns and invited Israeli, British, French, Russian and Polish firms to compete. None, however, responded as they did not find the proposal lucrative enough and the tender was later cancelled.

  • Besides, the DAC has allowed the Indian Navy to buy four more P8i maritime surveillance aircraft from the US.

  • The Indian Navy has eight such long-range maritime surveillance and anti-submarine aircraft made by Boeing. The purchase of four more is likely to cost the exchequer Rs. 4,380 crore.

Centre,s new initiative for trade facilitation

  • Concerned over declining exports, the government will soon set up a trade facilitation council comprising members of the Centre and states to promote India’s overseas shipments.
  • The council will be chaired by Commerce and Industry Minister Nirmala Sitharaman and secretaries of key ministries and state ministers will be the members.
  • The main objective of the council will be facilitating trade from states in a bid to boost the country’s exports.
  • The Union Commerce Ministry is also working on other measures including dis-segregation of exports data state-wise. “We will give access to DGCI&S window for their (states) own data to see where they are going,” the official added.
  • The Directorate General of Commercial Intelligence and Statistics (DGCI&S), under the Ministry of Commerce, is an official organisation for collection, compilation and dissemination of India’s trade statistics and commercial information.
  • The Commerce Ministry will encourage every state to set up a State Trade Policy in order to streamline procedures and increase exports.
  • Seeking to involve states for promoting exports, the Commerce Ministry had asked them to appoint commissioners and prepare export strategy.
  • As many as 21 states have appointed export commissioners, while 14 states, including Madhya Pradesh and Gujarat, have worked out strategies for outward shipments.
  • The move is aimed at achieving the $900 billion exports target by 2019-20.
  • The Ministry is also working with the states to prepare a list of infrastructure projects which would ensure full potential of growth in exports.
  • Contracting for the sixth month in a row, India’s exports dipped by 20.19 per cent in May to $22.34 billion.

Wholesale prices fall 2.4 pct y/y in June

  • India’s wholesale prices fell at a faster-than-expected annual rate of 2.4 percent in June, their eighth straight decline, mainly on the back of weak fuel prices, government data showed on Tuesday.
  • The data compared with a 2.2 percent year-on-year fall forecast by economists in a Reuters poll and a provisional 2.36 percent annual decline in May.

SBI to provide all info of distressed asset under auction

  • State Bank of India, which has received muted response for online auction of distressed commercial assets in the past, is compiling all legal and basic infrastructure related information of such properties to help bidders take an informed decision.

  • At the past two online auctions conducted in March and June, which was an industry first, the bank was successful in selling distressed residential properties, but failed to sell commercial properties in sizable numbers.

  • At both the online auctions the bank had sold around 280 properties which were largely residential properties.

  • “A major issue is that people don’t want any problem, when it comes to commercial properties, from the exiting owner, which he can very easily do by going to a court. So, we have to find a solution to it and we are very close to that.”

EPFO considering a scheme

  • Retirement fund body the Employees Provident Fund Organisation (EPFO) is considering a scheme for its subscribers so that they are able to own a house by retirement, Labour Minister Bandaru Dattatreya said here on Friday. “

  • While he did not provide details of the scheme, sources said the Ministry intends to collaborate with PSU banks, housing finance companies, state-owned construction firms like NBCC and authorities like DDA, PUDA, HUDA to build houses at prices to be fixed by the government.

NHAI, six other PSUs to raise Rs.40,000 cr through tax-free bonds

  • Union Government on Wednesday allowed seven state-owned entities, including NHAI, IRFC and NTPC, to raise Rs.40,000 crore in the current fiscal through tax-free bonds.
  • The National Highways Authority of India has been permitted to raise Rs.24,000 crore and Indian Railways Finance Corporation Rs.6,000 crore, said a notification issued by the Central Board of Direct Taxes (CBDT).
  • Housing and Urban Development Corporation has been allowed to raise Rs.5,000 crore and Indian Renewable Energy Development Agency Rs.2,000 crore. NTPC, Power Finance Corporation and Rural Electrification Corporation can issue tax-free bonds of Rs.1,000 crore each.
  • Retail investors, which include HUFs and NRIs investing on repatriation basis, can invest up to Rs.10 lakh in such bonds.
  • Those investing higher amount would be classified as HNIs. The bonds will have a tenure of 10, 15 or 20 years and the interest rates is to be decided with reference to the rates of Government Securities.
  • The coupon rate for below ‘AAA’ rated bonds could go up to 20 basis points above the rates offered for the bonds with highest rating.
  • Besides, retail individual investors (RIIs), qualified institutional buyers, corporates, trusts, partnership firms, limited liability partnerships, co-operative banks, regional rural banks and other legal entities and high networth individuals (HNIs) would be eligible to subscribe the bonds.
  • The circular said that companies will have to raise 70 per cent of the issue size through public offer, of which 40 per cent has to be reserved for retail investors.
  • The remaining portion of the issue size can be offered through private placement route. Interest earned through tax-free bonds, which are usually issued by PSUs to raise long-term funds, do not attract tax.

 

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