Current Affairs

IMF downgrades India’s GDP growth forecast to 6.6%

The International Monetary Fund (IMF) on 16 January 2017 released the World Economic Outlook Update 2016 in Washington DC, the USA.
●    The update estimated the global growth at 3.1 percent in 2016. The growth forecast is in line with the October 2016 forecast.
●    With regard to India, the update projected India’s Gross Domestic Product (GDP) growth rate at 6.6% in 2016-17 against its earlier estimate of 7.6%. For 2017-18, the growth rate is trimmed by 0.4 percentage points.
●    After a lackluster growth in 2016, economic activity is projected to pick up pace in 2017.
●    This forecast is based on the assumption of a changing policy mix under a new administration in the United States and its global spill overs.
●    This projection is consistent with the rise in equity prices and the sizable appreciation of the U.S. dollar since the November 2016 presidential election.


Reserve Bank Increases ATM Cash Withdrawal Limit To Rs.10,000 A Day

Reserve Bank of India (RBI) on Monday decided to increase the cash withdrawal limit from ATMs to Rs 10,000 per day from the present Rs 4,500 with immediate effect.
●    However, there is no change in the weekly withdrawal limits, which stays at Rs 24,000. 
●    The limit on withdrawal from current accounts has been enhanced from the current limit of Rs 50,000 per week to Rs 1,00,000 per week. 
●    This also extends to overdraft and cash credit accounts.
●    From current accounts, the amount that can be collected each week has been doubled to a lakh.
●    Finance Minister Arun Jaitley has pointed to improved tax collections to dismiss reports of economic disruption after the notes ban.
●    The RBI has been criticised for following the government's lead on a landmark decision on currency and for taking a backseat in the days that followed, with Mr Patel missing from briefings that made important announcements on issues like cash limits.


Central government employees to get Rs.9000 minimum pension

The minimum pension has been increased to Rs9,000 per person besides a two-fold hike in ex-gratia amount for central government employees, union minister Jitendra Singh said on Thursday.
●    Addressing the 29th meeting of the Standing Committee of Voluntary Agencies (Scova) in the city, he said almost 88% of pension accounts have been seeded to Aadhaar. 
●    There are about 50-55 lakh pensioners in the country, said Singh, minister of state in Prime Minister’s office.
●    He further said that minimum pension has been increased to Rs9,000 per person and ex-gratia amount has been increased from Rs10-15 lakh to Rs25-35 lakh, as per a release issued by personnel ministry.
●    He said the retired employees are a healthy and productive workforce for India and we need to streamline and channelise their energies in a productive direction. 
●    DoP&PW should be reoriented in such a way that pensioners become a part of nation building process.


Bilateral Advance Pricing Agreement signed by CBDT

The Central Board of Direct Taxes (CBDT) entered into a Bilateral Advance Pricing Agreement (BAPA) on the 13th of January, 2017 with Indian subsidiary of a Japanese trading company. 
●    Recently, the CBDT has also modified an existing Bilateral APA with another Indian subsidiary of a Japanese company to include rollback provisions. 
●    Thus, total three Bilateral APAs are now signed with Indian subsidiaries of Japanese companies all including rollbacks. The total number of bilateral APAs entered into by the CBDT is now eight.
●    The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. 
●    Signing of bilateral APA is an important step towards ascertaining certainty in transfer pricing matters of multinational company cases and dispute resolution. 
●    Under BAPA, certainty in tax treatment is provided for the next 5 years while rollback provides dispute redressal for a maximum of four past years preceding APA years.
●    A BAPA may be preferred by multinational companies since finalisation of the same involves reaching an understanding between the tax administrations of the two countries and for the transfer pricing adjustment done in the hands of the Indian entity, corresponding adjustment is available in the hands of related foreign entity, thereby relieving economic double taxation. 
●    The progress of the APA Scheme strengthens the Government’s mission of fostering a non-adversarial tax regime.  The CBDT expects more BAPAs to be concluded and signed in the near future.


World Bank cuts India's growth forecast to 7%

The World Bank has lowered its growth forecast for India to 7 per cent from 7.6 per cent in 2016-17.
●    The World Bank’s Global Economic Prospects January 2017 report added that the Indian economy is subsequently set to recover its growth momentum, with growth rising to 7.6 per cent in FY18 and further strengthening to 7.8 per cent in FY20.
●    Weak industrial production and manufacturing and services purchasing managers’ indexes (PMI), further suggest a set back to activity in the fourth quarter of FY2017.
●    This was further accentuated by other economic factors, the report added, leading to a slump in the entire year’s growth rate.
●    The report, however, noted that four key reforms in India in 2016 could help growth rebound.


Core sector growth slows to 4.9% in November

The eight core industries recorded a year-on-year growth in output of 4.9 per cent in November 2016, slower than the previous two months - that is, a 6.6 per cent increase in October and 5.01 per cent in September.
●    Output in electricity and coal posted healthy growth rates of 10.2 per cent and 6.4 per cent respectively in November as against 2.85 per cent and (-) 1.5 per cent respectively in October 2016, according to government data released on Monday. 
●    In November 2015, electricity and coal production posted a growth of 5.6 per cent and 3.8 per cent respectively.
●    The 10.2 per cent growth in output of electricity in November is the highest since 14.68 per cent in April 2016. 
●    The eight core industries comprise close to 37.9 per cent of the weight of items included in the Index of Industrial Production (IIP) and electricity has the maximum weight (of 10.32 per cent) among the eight sectors. 


Aadhaar Pay launched by Government

The Union Government on 25 December 2016 launched the Aadhaar Payment App with an aim to simplify the digital transactions. This app will do away with the need of carrying plastic cards and the point of sale machines.
●    It will also do away with the additional fee payments for service providing card companies such as Mastercard or Visa.
●    There are two sides to this Aadhaar Payment app, one is the consumer app and the other is the merchant app.
●    On the consumer front, the app is just like any mobile wallet which will be used to transfer money.
●    While, merchants will require two things to use this app, one is an Android smartphone and second is a fingerprint scanner.
●    This app can also be used by a person to make payments without any phone.
●    The app was developed by IDFC Bank along with UIDAI and National Payments Corporation of India. 


Post-demonetisation: 23% Jan Dhan Accounts still without balance

The Union Government on 12 December 2016 announced that around 23 percent of Jan Dhan Accounts are without balance even after demonetization.
●    This development is a worrying factor for the policy makers because it can be considered as an indication of low-income capacity and purchasing power among the lower strata of the society.
●    These are zero-balance accounts specifically meant for bringing below poverty line population under the ambit of financial inclusion.
●    They are opened as part of the Pradhan Mantri Jan-Dhan Yojana which was launched on 28 August 2014 by the Prime Minister Narendra Modi.
●    The Jan Dhan Accounts provide a variety of financial services including insurance, debit card and credit facilities to the account holders.
●    Within five months of its launch, the around 11.5 crore accounts were opened under the scheme covering 99.74% of targeted household. 
●    Since its inception, around 25 crore Jan Dhan accounts were opened across the country till 7 December 2016. And, a total of Rs 74609 crore was deposited in these accounts so far.


0.75% discount for Cashless Refuelling

The Indian Oil Corporation Limited (IOCL) on 12 December 2016 announced that the consumers can now avail a discount of 0.75 percent on petrol and diesel fuel purchases, if the payment is made using digital means.
●    The 0.75 percent discount on payments made using credit/debit cards, e-wallets or mobile wallets will be converted into a rebate of 49 paisa per litre on petrol and 41 paisa per litre on diesel.
●    The discount will be credited to customer's account by way of cash back within maximum three working days of the transaction.
●    This will come into effect from 13 December 2016.
●    Nearly 4.5 crore consumers buy petrol or diesel every day and collectively contribute around Rs 1800 crore in transactions. 
●    Usually, only 20 percent of these transactions are digital, but in November, these cashless transactions rose to 40 percent due to the cash crunch.



Incentivizing Digital Payments 

Government of India has initiated numerous steps to combat the scourge of Corruption and Black Money in the last two and a half years. Demonetization of 500 and 1000 Rs. notes is an important milestone in this endeavour. 
●    The highlights of the proposed incentives scheme are as follows-
●    All consumers and merchants using digital payments shall be eligible
●    There are two levels of incentive amounts available under the scheme:
●    Weekly lucky draw of the transaction IDs generated in that week, the contours of which are being finalized.
●    Quarterly draw for grand prizes.
●    While designing the scheme the focus will be on poor, lower middle class and small businesses.
●    All modes of digital payments- viz. USSD, AEPS, UPI and RuPay Cards- will be eligible.
●    For merchants, transactions made on the POS machines installed at their locations would be considered.
●    The detailed guideline of the scheme shall be unveiled soon. However, it would be ensured that all those who have used digital payment systems after November 8thshall be eligible to participate in the scheme.
●    The scheme would also provide for recognition of State Governments, their Undertakings, Districts and Urban & Rural Local Bodies who innovate for promoting electronic payment in their respective jurisdictions.

Very very thanks to Ankur sharma sir