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IndiatoholdIndiaMobileCongressfromSept27-29,toattractinvestmentsintelecomandmanufacturing
MinisterofCommunication– Manoj Sinha
NoflagshipeventinIndiaVacuum
IntheWestwehavetheBarcelonaMobileWorldCongressintheEastthereistheShanghaiMobileWorldCongress
Copyright@Study-IQeducation,Allrightsreserved
TheReserveBankofIndia(RBI)willsoonintroducecurrencynotesofonerupee
denomination
Thenotes,whichhavealreadybeenprintedbytheGovernmentofIndia,arelegaltenderundertheCoinageAct,2011.Theexistingcurrency
notesinthisdenominationincirculationwillalsocontinuetobelegaltender
• Thenewnotewillhaveanoverallcolour schemeofpinkandgreenontheobverseandreverse,incombinationwithother
colours.
• ThenotewillhavethebilingualsignatureofShaktikanta Das,Secretary,MinistryofFinance.Itwillcontainthewords
‘GovernmentofIndia’and‘भारत सरकार’ andhavethereplicaofthenewonerupeecoinwiththe‘₹’symbolof
2017. ‘स'यमेव जयते’,thewordsprintedonallofIndia’scurrencynotes,willbefeaturedaswell.
• Thesurroundingdesignofthenoteconsistsofapictureof‘Sagar Samrat’,theoilexplorationplatforminMaharashtra.Aninsetletterincapitals,‘L’willalsobeprintedonthenote.Apartfromthis,theAshoka Pillar,ahiddennumber‘1’and
thehiddenword‘भारत’willbeprintedonthenote.
Itwillbe 9.7by8.3cmindimension.
InJanuary2015,thegovernmentstartedRE-printingofRe1notesaftergettingreports
ofcoinshortage
Theprintingofnewonerupeenotewillcost 94paise,whencomparedtotheonerupeecoin,
whichwillcost70paise.
Theonerupeenotewasdiscontinued in1994 -Moreexpensivetoproducethesenotes
comparedtotheone-rupeecoins.
In1995, Rs. 2and Rs. 5noteswerealsodiscontinuedtofreeup printingfacilitiesfor
higherdenominationnotes.
StillLEGAL
DIPPthe department of industrial policy and promotion (DIPP) will
now process the applications for grant of license for manufacture of defense items.
Earlier, the home ministry was carrying out this exercise.
DIPP – Works under the commerce and industry ministry, is mainly responsible for formulation of polices with regard to
promotion of foreign investment and manufacturing industries
DIPP was first established in 1995, and then reconstituted in 2000 and merged with the Department of Industrial
Development.)
DIPPStartupIndiawaslaunchedbytheGovernmentofIndiaon16th
January,2016tobuildastrongeco-systemfornurturinginnovationandStartupsinthecountrytodriveeconomicgrowthandgenerate
largescaleemploymentopportunities.
Inordertopromoteentrepreneurshipinthecountry,theGovernmentofIndiahasamendedthedefinitionofaStartup.
a) AgeofStartup increased:TakingintoaccountthelonggestationperiodbyStartupstoestablish,anentityshallbeconsideredasaStartupuptosevenyearsfromthedateofitsincorporation/
registration(fromearlier5years).However,inthecaseofStartupsintheBiotechnologysector,theperiodshallbeuptotenyearsfromthe
dateofincorporation/registration.
.
b) NoLetterofRecommendationrequired:Noletterofrecommendationfroman
incubator/industryassociationshallberequiredforeitherrecognitionortaxbenefits
c) PotentialofJobandWealthCreation:Thescopeofdefinitionhasbeenbroadenedto
includescalabilityofbusinessmodelwithpotentialofemploymentgenerationorwealth
creation
TATA- MostValuableBrandBrandfinance2017report
India’s100mostvaluablebrands
TataGroup– Estimatedbrandvalueof$13.1billion.Asperthereport,the
Airtel – Second- $7.7billionLIC– Third- $6.8billion.Infosys - 4th - $6.2billion
StateBankofIndia - 5th - $5.5billion
ITC- Mostpowerfulbrandinthecountry.
BharatSancharNigamLimited(BSNL)hassignedagreementswith
Facebook andMobiKwik
BSNLwillfacilitateconnectivityforFacebook’s `ExpressWi-FiProgram’.
BSNL– HasSignedMoUwith DisneyLandIndiato offerpremiumonlinegamingservicesto
its mobilecustomers.
BSNLandMobiKwik willworktogethertocreate aBSNLmobilewallet
Facebook - “ExpressWi-Fi”launchedcommerciallyinIndia
via700hotspotsacrossfourstatesofUttarakhand,Gujarat,Rajasthanand
Meghalaya.
GSTRevenueSecretaryHasmukh Adhia(4%moreGDPgrowth)
GSTCouncilmeet– Srinagar1211GoodsandServices
14percentofGoodsandServices- 5percent17percentofGoodsandServices- 12percent19percentofGoodsandServices- 28percent43percentofGoodsandServices- 18percent
7percent- exemptlistMilk,cereals,fruits etc
HouseholditemslikeSugar,Tea,Coffeeandedibleoilwillattract5%levy. Cerealsandmilkwill
beexemptedfromthetax.
Manufacturedgoodswillattract18%levy.Luxurycarswillattract28%GSTinadditiontoacess of
15%.
Smallpetrolcars willattract28%GSTplusa1%cess,anddieselcarswillbetaxedat 28%plus3%
cess.Capitalgoods,akeyassetforthemanufacturingsector,willbetaxedat28%.
• ThestateswouldreceiveprovisionalcompensationfromCentreforlossofrevenueduetoabolitionoftaxessuchasVAT(valueaddedtax),octroi andimplementationofGST.Thecompensationwouldbemetthroughlevyofa'GSTCompensationCess'onluxuryitemsandsingoodsliketobacco,forthefirstfiveyears.
• Thecess onluxurygoodshavebeencappedat15percent.Whiletheeffectivecess ongoodssuchas“luxury”carswill12percent
Basedontherecommendationofthefitmentpanel,theCouncilisalsolikelytoexaminetheoptionofplacingservicesundertwotaxslabs—12and18
percent.
Themovewilllikelyevenouttheoverallpriceimpactonconsumerswhonowpaytaxof15percentonall
services.
Mostservices,exceptthoseinthenegativelistofessentialservicessuchashealthcareandeducation,
willcomeunderGST.
ImpactonFMCG
• Hairoil,toothpasteandsoapswillbetaxedat18percentunderGST,significantlylowerthanthepresenteffectiverateof28percent.
• Someproductslikedetergent,shampoo etcmaybecomecostlierastheyarekeptin28%bracket
ImpactonpowerTariff
• Coalwillbetaxedat5percentunderGST,comparedtoacurrenteffectiverateof11.7percent,raisingprospectsoflowerpowertariffs.
GSTrateshavenotbeenyetbeenfinalised onsixcategoriesofproducts—
bio-diesel,beedi andcigarettes,footwear,textiles,agriculturalimplementsandgold.
TheGSTwouldreplacethefollowingtaxes:(i)TaxescurrentlyleviedandcollectedbytheCentre:
CentralExcisedutyDutiesofExcise(MedicinalandToiletPreparations)
AdditionalDutiesofExcise(GoodsofSpecialImportance)AdditionalDutiesofExcise(TextilesandTextileProducts)AdditionalDutiesofCustoms(commonlyknownasCVD)
SpecialAdditionalDutyofCustoms(SAD)ServiceTax.
(ii)StatetaxesthatwouldbesubsumedundertheGSTare:StateVAT
CentralSalesTaxLuxuryTaxd.EntryTax(allforms)
EntertainmentandAmusementTax(exceptwhenleviedbythelocalbodies)Taxesonadvertisements
PurchaseTax.Taxesonlotteries,bettingandgambling.
• StateswillalsobepermittedtolevyanynewtaxasthetaxationpowersofthestateshaveonlybeenrestrictedandnotabolishedaftertherolloutofGST.
GOI raised Rs. 1,200 crore by divesting 9.2% of paid-up capital in National Aluminum Company Ltd. (NALCO)
Now, the Government’s shareholding has become 65.37% in NALCO
>51% (Limit)
Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, has set a record target of Rs. 72,500 crore to be realized through
disinvestment in this fiscal.
In 2016-17 - Rs. 46,247 crore.
The Department of Disinvestment – December 10 1999 - under the Ministry of Finance since 2004.
- In 2016, the Department of Disinvestment was renamed as Department of Investment and Public Asset Management (DIPAM).
-National Aluminium Company Limited (NALCO) is a Navratna company functioning
under Ministry of Mines.
Dinesh Sharma CommitteeDineshSharma,specialsecretaryintheeconomicaffairs
department.
ThecommitteewilltakestockofthepresentstatusofvirtualcurrenciesbothinIndiaandglobally,examine
existingglobalregulatoryandlegalstructuresgoverningthem,suggestmeasuresonconsumerprotection,money
laundering,andexamineanyotherrelevantmatterrelatedtovirtualcurrencies.
Bitcoin,Litecoin,Darkcoin,Peercoin,Dogecoin,Primecoin
IndiaLicensingExpoisscheduledtobeheldonAugust20-21inMumbai.
TheexpowillbeIndia’s first and most influential brand licensingeventthatwillcollateopportunities,knowledgeandrecognitionsunderoneroof.
TheexpowillbeorganizedbyLicenseIndia,India’sfirstlicensingmediaServicesCompanyandsupportedby
FranchiseIndia.
Licensing– 1Billion$industry
Promptcorrectiveaction
• Asthefinancialhealthofbankshaddeterioratedoverthelastthreeyears,theReserveBankofIndia(RBI)revisedthenormsforpromptcorrectiveaction
• WhatisPCA?• PCAnormsallowtheregulatortoplacecertainrestrictionssuchas
haltingbranchexpansionandstoppingdividendpayment.Itcanevencapabank’slendinglimittooneentityorsector.Othercorrectiveactionthatcanbeimposedonbanksincludespecialaudit,restructuringoperationsandactivationofrecoveryplan.Banks’promoterscanbeaskedtobringinnewmanagement,too.TheRBIcanalsosupersedethebank’sboard,underPCA.
• TheprovisionsoftherevisedPCAframeworkwillbeeffectiveApril1,2017basedonthefinancialsofthebanksfortheyearendedMarch31,2017.Theframeworkwillbereviewedafterthreeyears.
WhenisPCAinvoked?ThePCAisinvokedwhencertainriskthresholdsarebreached.Therearethreeriskthresholdswhicharebasedoncertainlevelsofassetquality,profitability,capitalandthelike.Thethirdsuchthreshold,whichismaximumtolerancelimit,setsnetNPAatover12percentandnegativereturnonassetsfor
fourconsecutiveyears.
Whatarethetypesofsanctions?Therearetwotypeofrestrictions,mandatoryand
discretionary.Restrictionsondividend,branchexpansion,directors'compensation,aremandatorywhilediscretionaryrestrictionscouldincludecurbsonlendinganddeposit.InthecasesoftwobankswherePCAwasinvokedaftertherevisedguidelineswereissued— IDBIBankandUCOBank— onlymandatoryrestrictionswereimposed.Boththebanks
breachedriskthreshold2.
Whatnext?Somemorelendersareexpectedtocomeunderthe
correctiveactionframeworkasandwhentheirassetqualityworsens,puttingprofitabilityunderpressure.Somepublic
sectorbankshavebreachedthenetNPAparameteraswellastheprofitabilityparameter.Thesebanksarecomfortableon
thecapitalparameter,thankstothegovernment’scommitmenttoensurethePSUbanksarenotstarvedof
capital.However,asthegovernmenthasitsowncommitmentformaintainingfiscaldiscipline,itremainstobeenseenhow
longitcanaffordtoinfusecapitalinthesebanks.
FIPB
Foreigndirectinvestment (FDI)
isaninvestmentmadebyacompanyorindividualinonecountryinbusinessinterestsin
anothercountry,intheformofeitherestablishingbusinessoperationsoracquiringbusinessassetsintheothercountry,suchasownershiporcontrollinginterestinaforeign
company.
Green-fieldandbrown-fieldinvestmentsaretwodifferenttypesof foreigndirectinvestment (FDI).
Green-field investmentsoccurwhena parentcompany beginsanewventurebyconstructingnewfacilitiesinacountryoutsideofwherethecompany
isheadquartered.
Brown-field investmentsoccurwhenacompanyorgovernmentpurchasesanexistingfacilitytobegin
newproduction.
Green-fieldandbrown-fieldinvestmentsaretwodifferenttypesof foreigndirectinvestment (FDI).
Green-field investmentsoccurwhena parentcompany beginsanewventurebyconstructingnewfacilitiesinacountryoutsideofwherethecompany
isheadquartered.
Brown-field investmentsoccurwhenacompanyorgovernmentpurchasesanexistingfacilitytobegin
newproduction.
• Automaticroute:Bythis route FDIisallowedwithoutprior approval byGovernmentorReserveBankofIndia.
• Government route:Prior approval bygovernmentisneededviathis route.
Somesectorswith100%FDIbyAutomaticroute
AgricultureAirports(BothGandB)
Pharma(OnlyG)Plantationsector
Explorationofoilandnaturalgas
ForeignInvestmentPromotionBoard
TheForeignInvestmentPromotionBoard (FIPB) offersasinglewindowclearanceforapplicationsonForeignDirectInvestment
(FDI)inIndiathatareundertheapprovalroute.
FIPBishousedunderdepartmentofEconomicAffairs,MinistryofFinance
FIPBcomprisesofthefollowingSecretariestotheGovernmentofIndia:
(i)SecretarytoGovernment,DepartmentofEconomicAffairs,MinistryofFinance– Chairperson
(ii)SecretarytoGovernment,DepartmentofIndustrialPolicy&Promotion,MinistryofCommerce&Industry
(iii)SecretarytoGovernment,DepartmentofCommerce,MinistryofCommerce&Industry
(iv)SecretarytoGovernment,EconomicRelations,MinistryofExternalAffairs
(v)SecretarytoGovernment,MinistryofOverseasIndianAffairs.
FIPB
UPTO5000CRORES– FIPB– MoF isfinalauthority
Morethanthat,CCEA
DowereallyrequireFIPB90%ALREADYcomingthroughautomaticroute
Weneedmoreliberalpolicies
• Advancedcountriesgenerallywelcomeallforeigninvestmentsbuttheyhaveinstitutionalmechanismstoblockinvestmentthathurtsnationalinterest
Whatwasthealternative?• RBIcouldhaveactedasnodalagency• (RBIisalreadyconcernedwithforeignexchange),i.e.AnycompanythatisinvestinginINDIAneedstocomplywithforeignexchangereportingrequirements
Newrules• FDIproposalswould be approvedbytheministries
concernedbyfollowingthe standardoperatingprocedureapprovedbytheCabinet.
• Those11sectorsthatrequireapprovalwouldbedealtdirectlybytheconcernedministry.
• Inproposalsrelatedtosecurity,theproposalswillalsoneedtorequiretheapprovalofHomeMinistry.Thoseproposalswhicharepresentlypendingbefore
theFIPBwillbesentbacktotheministriesconcerned.
BeforeIsignoffReporate: 6.25%.
ReverseRepoRate:6%.
MarginalStandingFacility(MSF)Rate:5%.
BankRate:5%.
CashReserveRatio(CRR): 4%.
StatutoryLiquidityRatio(SLR): 20.50%.
Medium-termtargetforretailinflationis4%.
Inflationprojectionissettoanaverageof4.5%inthefirsthalfof2017-18and5%inthesecond
half.
GVAgrowthprojectionunchangedat7.4%for2017-18
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