Indian Economy - Current Affairs for August, 2015

Growth of the country's infrastructure sector slowed to a 3-month low of 1.1 per cent in July, as the output of crude oil, natural gas and steel contracted. The eight core sectors, which contribute about 38 per cent to the overall industrial production, had grown at 4.1 per cent in July last year.

The proportion of population in India is Hindu -96.63 crores (79.8%), Muslim-17.22 crores (14.2%), Christian -2.78 crores (2.3%), Sikh-2.08 crores (1.7%), Buddhist-0.84 crores (0.7%), Jain-0.45 crores (0.4%), Other Religions & Persuasions-0.79 crores (0.7%), Religion Not Stated-0.29 crores (0.2%).

On 23rd Aug’15 it was announced by the MP’s Energy Minister that state would host the world’s largest 750 Mega Watts (MW) solar power station. The project, named Rewa Ultra Mega Solar, will be a joint venture of Solar Energy Corporation of India and MP Urja Vikas Nigam, wherein both parties have 50% stake. At present the world’s largest solar power project located at Mojave Deserts in California, United States named as Ivanpah Solar Power Facility of 392 MW.

A Finance Ministry statement said that the banking sector has been allocated an overall disbursement target of Rs 1,22,188 crore during 2015-16 for MUDRA loans and the banks have already disbursed Rs 15,566 crore as on August 17 to more than 20 lakh borrowers under PMMY. The statement said, while lending, priority will be given to SCs/STs enterprises.

The PMMY provide loans between Rs 50,000-Rs 10 lakh to small entrepreneurs. The Micro Units Development and Refinance Agency Ltd , MUDRA, launched by the Prime Minister Narendra Modi in April this year, focuses on the over 5 crore self-employed who use funds of Rs 11 lakh crore and provide jobs to 12 crore people.

The power plant has been set up at Chilla, which will be run through the Hydraulic Turbine propelled by treated effluents coming out of a Sewerage Treatment Plant. An official release said, the treated effluents fall through the height of 4.8m which, due to created pressure and velocity, leads to the rotation of the turbine thereby generating power.

It is a Pilot Project which has been set up free of cost and will produce 20,000 KWH of electricity per year. It said, no fossil fuel is being used in the generation of the power, therefore this technology is termed as pollution free technology.

With this, Cochin airport became the first airport in India to run on solar power. The project is reportedly the single largest solar project which has been constructed in an airport in India.

A payment bank is different from conventional banks as it cannot lend to its customers. It is allowed to take deposits, allow remittances and provide simple financial products. The central bank has approved applications of National Securities Depository Limited (NSDL), Reliance Industries , Aditya Birla Nuvo , Airtel M Commerce, Department of Posts , Fino PayTech, Tech Mahindra, Vodafone m-pesa, Cholamandalam Distribution Services, PayTM, and Sun Pharma.

The Reserve Bank of India (RBI) has suspended licences of seven non-banking financial companies (NBFCs), some for being dormant and some for either not carrying out its principal business or not fulfilling various norms including minimum net owned funds. The seven NBFCs whose licences were suspended are Religare Finance, Artisans Micro Finance, Eden Trade & Commerce, RCS Parivar Finance, Nott Investments, Dewra Stocks & Securities and Swetasree Finance.

Country's food grain production is estimated to have declined 4.66 per cent to 252.68 million tonnes (MT) in 2014-15 crop year due to poor monsoon and unseasonal rains in February-March. An official statement says, total foodgrain production in the country is estimated at 252.68 MT, which is lower by 12.36 MT than the last year's record foodgrain production of 265.04 MT.

Department of Telecom said in a notice on its website that last date for submission of suggestions and comments on report of committee on Net Neutrality through discussion forum under MyGov.in has been extended till 20th of August. Net neutrality implies that equal treatment be accorded to all Internet traffic and no priority be given to an entity or company based on the payment to content or service providers such as telecom companies, which is seen as discriminatory. The neutrality debate flared up in India after telecom operator Airtel launched a platform, Airtel Zero, that would allow free access of some websites on its network.

Last year, the apex bank had transferred 52,679 crore rupees of its surplus profit to the Government.

Deflationary trends continued for the ninth month in a row in July with wholesale inflation plunging to a low of minus 4.05 percent on cheaper vegetable and fuel. The WPI number follows retail inflation (CPI) data, which had slipped to a record low of 3.78 per cent in July. The overall wholesale price index-based (WPI) inflation was minus 2.40 percent in June. It has been in the negative zone since November 2014. A year ago in July 2014, inflation was 5.41 per cent. During the month, pulses, milk, edible oil, egg, meat and fish turned dearer.

Indirect tax revenue jumped over 37.6 percent to over 2.1 lakh crore rupees during April-July period of current fiscal due to the higher excise collections. A press release issued by the Finance Ministry on 11th Aug’15 stated that the indirect tax collections were 1.53 lakh crore rupees during the similar period of the previous fiscal. While in July 2015-16, the indirect tax collections grew by 39.1 percent from a year ago period to 56,739 crore rupees.

The objective of NCRMP-II is to reduce vulnerability to cyclone and other hydro-meteorological hazards of coastal communities in the States of Goa, Gujarat, Karnataka, Kerala, Maharashtra and West Bengal; and increase the capacity of the State entities to effectively plan for and respond to disasters. NCRMP-II has four components which are: (i) Early Warning Dissemination Systems; (ii) Cyclone Risk Mitigation Infrastructure; (iii) Technical Assistance for Multi-Hazard Risk Management; and (iv) Project Management and Implementation Support.

This is announced in Lok Sabha on 7th Aug’15. It will result in the revenue gain of about Rs 90 crore to the exchequer.

The Employment Provident Fund Organisation - EPFO will invest around Rs 5,000 crore this fiscal through SBI Mutual Fund's two index linked ETFs, one to the BSE's Sensex and the other to NSE's Nifty. The decision comes after the labour ministry allowed EPFO to invest 5 to 15 % of its incremental corpus in equities through ETFs. Asked why EPFO was starting off with just 5% of the corpus when it has the mandate for 15%, EPFO Commissioner K.K. Jalan said that the organisation had decided to go slow. Adding that investing through ETF route reduces risk, Mr. Jalan said fund allocation could increase to as much as Rs 70 billion to Rs 80 billion next year and that the organisation will also consider investing in other ETFs. Currently, EPFO has 8.5 trillion rupees under management, most of it invested in government bonds.

In Mumbai, RBI announced that repo rate at which the RBI lends to the system, will remain unchanged at 7.25 percent. The cash reserve ratio (CRR) which is the proportion of deposit banks have to park with the central bank, will remain at 4 percent.

Under this project about ten lakh beneficiaries would get payment of social security pensions of July 2015 through banks or post offices directly into their accounts marking the successful completion of its first phase.

Tamil Nadu was followed by Kerala and Punjab. The use of LPG was least in Chhattisgarh (1.5% of households) followed by Jharkhand (2.9%) and Odisha (3.9%).

India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. Large imports of gold impact the country's current account deficit, which occurs when value of import of goods and services is more than its exports. The CAD in 2014-15 shrank to 1.3 per cent of GDP (USD 27.5 billion) from 1.7 per cent (USD 32.4 billion) in 2013-14. The Reserve Bank and the government have maintained that the CAD level is comfortable. In 2014-15, India imported 915.54 tonnes of gold as against 661.71 tonnes in the previous financial year.