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Economic Current affairs 2019

Following the current events and news in the area of Economic is very very important for the general studies paper in the UPSC exam. In recent times questions are set on only those topics that have made news. Regular study of Economics from NCERT books or otherwise is no longer required. The idea is to follow the current affairs news related to Economics and understand the Economics behind those issues. This is true for all levels of teh IAS exam - prelims, mains and also the interview.




Current Affairs Quiz

Current Affairs in Economic - September 2019

  • New income tax rules come into effect from September 1: Union finance minister Nirmala Sitharaman in her maiden budget speech announced some income tax-related changes which will come into effect from Sunday (September 1), September 1. Her key announcements were that the tax deducted at source (TDS) will be levied at the rate of 2 per cent on cash payments worth more than Rs 1 crore. Also, the TDS will be levied if life insurance maturity received is taxable. Further, the government amended 194-IA of Income Tax Act to include all charges of the nature of club membership fee, car parking fee, or any other charges of similar nature under immovable property for levy of the TDS. Here is a 5-point explainer of new tax-related changes that have come into effect in India from September 1.
  • TDS on additional payment made when purchasing immovable property:The government had amended 194-IA of Income Tax Act during the budget announcement in July in which FM Nirmala Sitharaman announced that if any person purchases an immovable property of Rs 50 lakh or more than that (excluding agricultural land), is required to deduct TDS at the rate of 1 per cent from September 1, 2019, onward. The amendment included all charges of the nature of club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee or any other charges of similar nature, which are incidental to the transfer of immovable property.
  • TDS on cash withdrawals from bank accounts:The government has included a new section 194N in the Act. With this new inclusion, the TDS can be levied at the rate of 2 per cent on cash payments worth more than Rs 1 crore in aggregate made within the year, by a cooperative bank, a banking company, or post office to any individual from an account, which is maintained by the recipient.
  • TDS on payments made by HUF/Individual to professionals and contractors:Under this provision announced in the Budget, if the payment made to a contractor or a professional or a brokerage exceeds Rs 50 lakh in a year, an individual or HUF (Hindu Undivided Family) is required to deduct 5 per cent TDS at the time of crediting such amount. This will help check evasion but may lead to a higher burden of compliance for the payer.This means that individuals making payments of over Rs 50 lakh, let's say, house renovation, wedding functions or any other purpose to a single professional in a year would be required to deduct tax at the time of making the payment.
  • TDS on life insurance:If life insurance maturity proceeds received are taxable, then the TDS will be deducted at the rate of 5 per cent on the net income portion. The net income portion is defined as the total sum received less of the total amount of insurance premium paid. Earlier, the TDS was 1% of the gross maturity payout under the policy.
  • Interchangeability of Pan and Aadhaar:Union finance minister Nirmala Sitharaman in her Budget speech had announced that taxpayers who don't own a PAN card (Permanent Account Number) can now file Income Tax returns with their Aadhaar Card also. The FM allowed the interchangeability of PAN and Aadhaar card for filing tax returns.

Current Affairs in Economic - July 2019

  • National Investment and Infrastructure Fund (NIIF):It currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI).The three funds are: Master Fund: The Master Fund is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc. Fund of Funds: Fund of Funds anchor and/or invest in funds managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services and allied sectors.Strategic Investment Fund: Strategic Investment Fund is registered as an Alternative Investment Fund II under SEBI in India. The objective of “Strategic Fund” is to invest largely in equity and equity-linked instruments. The Strategic Fund will focus on green field and brown field investments in the core infrastructure sectors.
  • 58:It is the Turnover Ratio of India in 2018 according to the World Bank, which was a 43 per cent drop from 101 recorded in 2004. A turnover ratio represents the amount of assets or liabilities that a company replaces in relation to its sales. The concept is useful for determining the efficiency with which a business utilizes its assets. In most cases, a high asset turnover ratio is considered good, since it implies that receivables are collected quickly, fixed assets are heavily utilized, and little excess inventory is kept on hand. This implies a minimal need for invested funds, and therefore a high return on investment. Conversely, a low liability turnover ratio (usually in relation to accounts payable) is considered good, since it implies that a company is taking the longest possible amount of time in which to pay its suppliers, and so has use of its cash for a longer period of time.
  • ECGC: It is a premier export credit agency of the Government of India to provide Export Credit Insurance Services to facilitate exports from the country. The ECGC offers credit insurance schemes to exporters to protect them against losses due to non-payment of export dues by overseas buyers due to political and / or commercial risks. It functions under the administrative control of Ministry of Commerce & Industry, and is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, and insurance and exporting community.
  • NEVF: It stands for North East Venture Fund is the first dedicated venture capital fund for the North Eastern Region. It has been set up by North Eastern Development Finance Corporation Limited (NEDFi) in association with Ministry of Development of North Eastern Region (M-DoNER). The objective is to contribute to the entrepreneurship development of the NER and achieve attractive risk-adjusted returns through long term capital appreciation by way of investments in privately negotiated equity/ equity related investments. The investment under this schemer ranges from Rs. 25 lakh to Rs.10 crore per venture, which is long term in nature with investment horizon of 4-5 years.
  • Finance Bill:It means a Bill ordinarily introduced every year to give effect to the financial proposals of the Government of India for the next following financial year and includes a Bill to give effect to supplementary financial proposals for any period. The Finance Bill is introduced immediately after the presentation of the Budget. The introduction of the Bill cannot be opposed. The Appropriation Bills and Finance Bills may be introduced without prior circulation of copies to members. The Finance Bill usually contains a declaration under the Provisional Collection of Taxes Act, 1931, by which the declared provisions of the Bill relating to imposition or increase in duties of customs or excise come into force immediately on the expiry of the day on which the Bill is introduced. In view of such provisions and the provision of Act of 1931, the Finance Bill has to be passed by Parliament and assented to by the President before the expiry of the seventy-fifth day after the day on which it was introduced. As the Finance Bill contains taxation proposals, it is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known. The scope of discussion on the Finance Bill is vast and members can discuss any action of the Government of India. The whole administration comes under review. The procedure in respect of Finance Bill is the same as in the case of other Money Bills.
  • Wages Bill: Are the one whose new version of Code was recently cleared by the Union Cabinet. It seeks to define the norms for fixing minimum wages that will be applicable to workers of organised and unorganised sectors, except government employees and MGNREGA workers. The Code on Wages will amalgamate the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. The code on wages is one of the four codes that would subsume 44 labour laws with certain amendments to improve the ease of doing business and attract investment for spurring growth. The four codes will deal with wages, social security, industrial safety and welfare, and industrial relations.
  • MSP: It is the minimum price set by the Government at which farmers can expect to sell their produce for the season. When market prices fall below the announced MSPs, procurement agencies step in to procure the crop and ‘support’ the prices. The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP takes into account demand and supply, the cost of production and price trends in the market among other things when fixing MSPs. MSPs ensure that farmers get a minimum price for their produce in adverse markets. MSPs have also been used as a tool by the Government to incentivise farmers to grow crops that are in short supply.
  • RBI: It stands for Reserve Bank of India(RBI) will now be given power to takes over as the regulator of Housing Finance Firms(HFFs) instead of NHB(National Housing Bank) as announced on July 5, 2019 by Finance Minister Nirmala Sitharaman. The government will also provide a one-time six-month partial guarantee to state-run banks for the acquisition of up to 1 trillion rupees ($14.6 billion) of highly-rated assets from NBFCs (Non-Banking Financial Company). The financial crisis emerged from Dewan Housing Finance Corporation (DHFC) and Reliance Capital Ltd led to this decision for giving fresh fund. The cash crunch at such firms could weaken the financial system and economy given their large lending role and ties with banks, mutual funds, and insurers. The RBI has also proposed plans to tighten NBFCs’ asset-liability management and liquidity coverage ratios and resisted demands from within the industry to provide a separate liquidity window for NBFCs.
  • Financial Statements: The Medium Term Fiscal Policy Statement, The Fiscal Policy Strategy Statement,The Macro Economic Framework Statement are the three statements under the Fiscal Responsibility and Budget Management Act, 2003 which are laid on the Table of Lok Sabha after the presentation of Union Budget. No discussion on Budget takes place on the day it is presented to the House. Budgets are discussed in two stages—the General Discussion followed by detailed discussion and voting on the demands for grants.
  • 30th November, 2019:It is the period up to which Cabinet recently approved extension of the term of the Fifteenth Finance Commission. The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves. Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the centre and the States respectively and equalization of all public services across the States.
  • KVIC:It stands for Khadi and Village Industries Commission has distributed over 1.10 lakh bee-boxes across India in last one and half years under its Honey Mission. This has created over 11,000 new jobs for the farmers, unemployed youths and tribal people; 430 metric tonnes of honey worth Rs 4 crore has been extracted through these bee-boxes only. Honey Mission was launched in August 2017. Under this mission KVIC provides beekeepers: Practical training about examination of honeybee colonies. Acquaintance with apicultural equipment’s. Identification and management of bee enemies and diseases. Honey extraction and wax purification. Management of bee colonies in spring, summer, monsoon, autumn and winter seasons. Loans for setting up processing units, packaging units and labelling units for honey.
  • $5-trillon:It is the level to which Indian economy is expected to be taken by 2024 by the present government. In 2014, India’s GDP was $1.85 trillion. Today it is $2.7 trillion and India is the sixth-largest economy in the world. If India grows at 12% nominal growth (that is 8% real GDP growth and 4% inflation), then from the 2018 level of $2.7 trillion, India would reach the 5.33 trillion mark in 2024. India must keep growing at a rapid pace to attain this target.
  • Zero Budget Natural Farming: It is a method of farming where the cost of growing and harvesting plants is zero. This means that farmers need not purchase fertilizers and pesticides in order to ensure the healthy growth of crops. It is, basically, a natural farming technique that uses biological pesticides instead of chemical-based fertilizers. Farmers use earthworms, cow dung, urine, plants, human excreta and such biological fertilizers for crop protection. It reduces farmers’ investment. It also protects the soil from degradation. As both a social and environmental programme, it aims to ensure that farming – particularly smallholder farming – is economically viable by enhancing farm biodiversity and ecosystem services. It reduces farmers’ costs through eliminating external inputs and using in-situ resources to rejuvenate soils, whilst simultaneously increasing incomes, and restoring ecosystem health through diverse, multi-layered cropping systems. Cow dung from local cows has proven to be a miraculous cure to revive the fertility and nutrient value of soil. One gram of cow dung is believed to have anywhere between 300 to 500 crore beneficial micro-organisms. These micro-organisms decompose the dried biomass on the soil and convert it into ready-to-use nutrients for plants.
  • India:This country will be the first recipient of local currency financing by the Asian Infrastructure and Investment Bank (AIIB). The objective of local currency financing is to provide more options to borrowers. India is the second-largest shareholder of AIIB with a 7.5% stake. It has received about $2-billion funding for various projects so far. China holds 20.06% and Russia holds 5.92%.
  • Standard Chartered:It will be the first foreign bank to launch operations at International Financial Service Centre (IFSC). The bank has received in-principle regulatory approvals to set up its IFSC Banking Unit (IBU) in Gujarat International Finance Tec-city (GIFT city). Gift city was one of the dream projects of Shri. Narendra Modi when he was the Chief Minister of Gujarat. It has been set up by the Gujarat government in joint partnership with Infrastructure Leasing and Financial Services (IL&FS). The recent budget has laid special emphasis on aircraft financing and leasing which would make GIFT City, help build a hub for aircraft financing and leasing with the help of Standard Chartered and other organizations in the future.
  • Zappfresh:India’s first fully-integrated Fresh Meat brand, was conferred with the ‘Best Farm to Fork Fresh Meat Brand’ accolade at the 6th edition of ‘CMO Asia National Awards for Marketing Excellence’ which were held at Taj Lands End, Mumbai, Maharashtra on July 4, 2019. It was awarded for its innovative solutions in transforming the meat buying experience of consumers through its farm-to-fork model and for disrupting the fresh meat brand market in the country. Zappfresh is currently present across 8 cities- Delhi, Gurugram, Noida, Faridabad, Ghaziabad, Chandigarh, Mohali, and Panchkula.
  • GeM: It is a state-of-the-art national public procurement platform of Ministry of Commerce and Industries, that has used technology to remove entry barriers for bonafide sellers and has created a vibrant e-marketplace with a wide range of goods and services. GeM aims to enhance transparency, efficiency and speed in public procurement. It facilitates online procurement of common use Goods & Services required by various Government Departments / Organisations / PSUs. It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users, achieve the best value for their money.
  • CCTNS:It stands for Crime and Criminal Tracking Network and Systems is a project initiated in June 2009 which aims at creating a comprehensive and integrated system for enhancing the efficiency and effectiveness of policing at the Police Station level. This will be done through adoption of principles of e-Governance, and creation of a nationwide networked infrastructure for evolution of IT-enabled state-of-the-art tracking system around “investigation of crime and detection of criminals”. CCTNS is a Mission Mode Project (MMP) under the National e-Governance Plan of Govt. of India. The Project will interconnect about 15000 Police Stations and additional 5000 offices of supervisory police officers across the country and digitize data related to FIR registration, investigation and charge sheets in all Police Stations. It will not only automate Police functions at Police station and higher levels but will also create facilities and mechanism to provide public services like registration of online complaints, ascertaining the status of case registered at the police station, verification of persons etc.
  • DoT and ICRIER MoU:It stands for Indian Council for Research on International Economic Relations have signed a Memorandum of Understanding (MoU) to develop a Broadband Readiness Index (BRI) for Indian states and Union Territories (UT). The index will include indicators such as percentage of households using computers/ laptops with internet connection, percentage of households with fixed broadband connection, internet users as a percentage of the population, smartphones density, percentage of households with at least one digitally literate member, etc.

Current Affairs in Economic - June 2019

  • India and Switzerland:They are the two countries which were recently removed by USA from its currency monitoring list of major trading partners, citing certain developments and steps being taken by them which address some of its major concerns. The US currency monitoring list includes Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia and Vietnam. In both Switzerland and India, there was a notable decline in 2018 in the scale and frequency of foreign exchange purchases, the report said. India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in May 2018 along with five other countries - China, Germany, Japan, South Korea and Switzerland.
  • NSIC: It recently signed MOU with Ministry of MSME which envisages provision of enhanced services by NSIC under its marketing, financial, technology and other support services schemes for MSMEs in the country. Under the scheme of National SC-ST Hub being implemented by NSIC on behalf of the Ministry of MSME, it will be a continued endeavour to provide assistance to SC/ST entrepreneurs through different interventions and various outreach activities with the overall objectives to increase their participation in public procurement. The National SC/ST Hub has been set up to provide professional support to Scheduled Caste and Scheduled Tribe Entrepreneurs to fulfil the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt applicable business practices and leverage the Stand-Up India initiative.
  • EQUIP: It is the name of the ambitious ₹1.5 lakh crore project which the Ministry of Human Resource Development plans to launch to improve the quality and accessibility of higher education over the next five years. EQUIP stands for the Education Quality Upgradation and Inclusion Programme and was crafted by ten committees led by experts within the government. EQUIP is meant to bridge the gap between policy and implementation. The project is made to bring transformation in the higher education system in the upcoming 5 years.
  • OMO: It stands for Open Market Operations. Open market operations is the sale and purchase of government securities and treasury bills by RBI or the central bank of the country. The objective of OMO is to regulate the money supply in the economy. RBI carries out the OMO through commercial banks and does not directly deal with the public. It was in the news recently that The Reserve Bank of India is planning to inject Rs. 15,000 crores into the financial system next month through purchase of government bonds via the auction route.
  • Elephant Bonds:They are the one which the high-level government-appointed committee on trade and industry has suggested to issue to people for declaring undisclosed income to mandatorily invest 50%. Elephant Bonds are the 25-year sovereign bonds in which people declaring undisclosed income will be bound to invest 50 per cent. The fund, made from these bonds, will be utilized only for infrastructure projects.
  • Requirement of strong room: Area of the strong room/ vault of at least 1,500 sq ft. Area of the strong room/ vault of at least 600 sq ft in hilly areas are the two major requirement for setting up of currency chests as per the Reserve Bank of India new guidelines. The other requirements are that the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. Those situated in the hilly/ inaccessible places, a capacity of 2.1 lakh pieces of banknotes per day. The currency chests should have Chest Balance Limit (CBL) of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of the Reserve Bank.
  • December 2010:It is the month in which FSDC (The Financial Stability and Development Council) was constituted. An apex-level FSDC is not a statutory body. The FSDC was set up to strengthen and institutionalise the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development. The Council is chaired by the Union Finance Minister and its members are Governor, Reserve Bank of India; Finance Secretary and/or Secretary, Department of Economic Affairs; Secretary, Department of Financial Services; Chief Economic Adviser, Ministry of Finance; Chairman, Securities and Exchange Board of India; Chairman, Insurance Regulatory and Development Authority and Chairman, Pension Fund Regulatory and Development Authority. It also includes the chairman of the Insolvency and Bankruptcy Board (IBBI). Recently, the government through a gazette notification, had included ministry of electronics and information technology (MeitY) secretary in the FSDC in view of the increased focus of the government on digital economy.
  • Dispute Resolution Committee: In a major decision to facilitate the solar and wind energy projects, the government has approved a proposal to set up a Dispute Resolution Committee to consider the unforeseen disputes between solar/wind power developers and SECI/NTPC, beyond contractual agreement. The move will give further fillip to the smooth implementation of solar/wind energy projects in India. It fulfils a long pending demand of the industry to resolve expeditiously, unforeseen disputes that may arise beyond the scope of Contractual Agreements. Solar and Wind Industry have been demanding setting up of Dispute Resolution Mechanism by MNRE for quite some time, to resolve expeditiously, unforeseen disputes that may arise beyond the scope of Contractual Agreements between solar power developers / wind power developers and SECI/ NTPC. A three-member Dispute Resolution Committee (DRC) will be set up with the approval of Hon’ble Minister (NRE), consisting of eminent persons of impeccable integrity. The upper age for the DRC members shall be 70 years.
  • Five trillion:Dollar economy by 2024 -It is the goal set for India by Prime Minister Narendra Modi on June 15, 2019 during the fifth meeting of the Governing Council of The National Institution for Transforming India (NITI) Aayog which was held under the chairmanship of the Prime Minister Shri Narendra Modi at Rashtrapati Bhawan Cultural Centre, New Delhi. This was the first governing council meeting under the new Modi government. The guiding principle of Union Government is “Sabka Saath, Sabka Vikas and Sabka Vishwaas”. Focus should be given to fisheries, animal husbandry, horticulture, fruits and vegetables in order to fulfill the commitment to double incomes of farmers by 2022.
  • 58.8%:It is the growth rate of total digital transactions in 2018-19 as per the The Reserve Bank of India (RBI) report “Payment and Settlement: The Plumbing in the Architecture of India’s Financial System”. It stated that, the digital transactions till March 2019 witnessed tremendous growth and they will rise by four times from Rs 2,069 crore in December 2018 to Rs 8,707 crore in December 2021. Digital transactions in value terms grew by 19.5% during 2018-19.
  • The Asian Development Bank (ADB):It has approved a project submitted by the Urban Development Department (UDD) of Tripura amounting to Rs. 1650 crore for overall infrastructure development of seven districts headquarter towns of Tripura. The fund is meant for development of piped water supply, underground drainage, underground sewage or scientific septage management, roads with pavement. The ADB will give 80 percent of Rs 1650 crore as grant-in-aid and the State Government of Tripura will have to repay back only 20 percent loan in due course of time. The seven-district headquarters include-Khowai (Khowai), Ambassa (Dhalai district), Dharmnagar (North Tripura), Kailashahar (Unakoti), Udaipur (Gomati), Bishramganj (Sepahijala), Belonia (South Tripura), where the plan will be implemented.

Current Affairs in Economic - May 2019

  • India and Switzerland:They are the two countries which were recently removed by USA from its currency monitoring list of major trading partners, citing certain developments and steps being taken by them which address some of its major concerns. The US currency monitoring list includes Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia and Vietnam. In both Switzerland and India, there was a notable decline in 2018 in the scale and frequency of foreign exchange purchases, the report said. India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in May 2018 along with five other countries - China, Germany, Japan, South Korea and Switzerland.
  • NSIC: It recently signed MOU with Ministry of MSME which envisages provision of enhanced services by NSIC under its marketing, financial, technology and other support services schemes for MSMEs in the country. Under the scheme of National SC-ST Hub being implemented by NSIC on behalf of the Ministry of MSME, it will be a continued endeavour to provide assistance to SC/ST entrepreneurs through different interventions and various outreach activities with the overall objectives to increase their participation in public procurement. The National SC/ST Hub has been set up to provide professional support to Scheduled Caste and Scheduled Tribe Entrepreneurs to fulfil the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt applicable business practices and leverage the Stand-Up India initiative.
  • EQUIP: It is the name of the ambitious ₹1.5 lakh crore project which the Ministry of Human Resource Development plans to launch to improve the quality and accessibility of higher education over the next five years. EQUIP stands for the Education Quality Upgradation and Inclusion Programme and was crafted by ten committees led by experts within the government. EQUIP is meant to bridge the gap between policy and implementation. The project is made to bring transformation in the higher education system in the upcoming 5 years.
  • OMO: It stands for Open Market Operations. Open market operations is the sale and purchase of government securities and treasury bills by RBI or the central bank of the country. The objective of OMO is to regulate the money supply in the economy. RBI carries out the OMO through commercial banks and does not directly deal with the public. It was in the news recently that The Reserve Bank of India is planning to inject Rs. 15,000 crores into the financial system next month through purchase of government bonds via the auction route.
  • Elephant Bonds:They are the one which the high-level government-appointed committee on trade and industry has suggested to issue to people for declaring undisclosed income to mandatorily invest 50%. Elephant Bonds are the 25-year sovereign bonds in which people declaring undisclosed income will be bound to invest 50 per cent. The fund, made from these bonds, will be utilized only for infrastructure projects.
  • Requirement of strong room: Area of the strong room/ vault of at least 1,500 sq ft. Area of the strong room/ vault of at least 600 sq ft in hilly areas are the two major requirement for setting up of currency chests as per the Reserve Bank of India new guidelines. The other requirements are that the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. Those situated in the hilly/ inaccessible places, a capacity of 2.1 lakh pieces of banknotes per day. The currency chests should have Chest Balance Limit (CBL) of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of the Reserve Bank.