1. Retail inflation highest in five years
- Consumer Price Index (CPI) based inflation (retail inflation) in December 2019 has reached at 7.35 %, which is highest since July 2014.
- CPI inflation at 7.35 % is more than the maximum limit fixed by the Monetary Policy Committee (MPC). As per MPC, CPI inflation should remain between 2-6%.
- The retail inflation has increased due to an increase in food inflation, which has nearly 50% weightage in the CPI index. In December 2019, food inflation increased to 14.2 %.
- In December 2019, vegetable prices inflation was at 60.5 %.
- In December 2019, core CPI inflation stood at 3.75%. In November 2019, it was 3.5%.
- Food items and energy products (oil) are not included in the calculation of core CPI inflation.
- Consumer Price Index (CPI):
- It is used to measure changes in retail prices of goods and services.
- It was earlier known as the Cost of Living Index Numbers.
- The base year for CPI calculation is 2012.
- Currently, the Central Statistical Organisation compiles different CPIs.
2. Amazon and Flipkart to be investigated for deep discounting
- Competition Commission of India (CCI) has given an order for an investigation into deep discounting to selected sellers by Amazon and Flipkart.
- Delhi Vyapar Mahasangh has filed a complaint that Amazon and Flipkart were preferring selected sellers and giving them deep discounts.
- Delhi Vyapar Mahasangh has said that while Flipkart gave deep discounts to Omnitech Retail, Amazon gave deep discounts to Cloudtail India and Appario Retail.
- CCI has asked Director-General Investigation to provide a report on the issue within 60 days.
- On 8 January 2020, CCI has issued a report titled as Market Study on E-commerce in India: Key Findings and Observations.
- Competition Commission of India(CCI):
- CCI was formed on 14 October 2003.
- It has a chairperson and six members.
- The chairperson and members are appointed by the Central government.
3. 931 fraudulent GST refund cases revealed by data analytics
- Data analytics by the revenue department has shown 931 fraudulent GST refund cases since 2017.
- GST Data Analytics wing will scrutinize all settled and pending refund claims for inverted duty structure.
- In the current fiscal year, nearly 27,000 taxpayers have filed refunds of more than ₹28,000 crore due to inverted duty structure.
- Inverted duty structure means higher taxes on inputs than final products. Due to an inverted duty structure, Input Tax Credit (ITC) gets accumulated in the books of taxpayers. ITC is later claimed as refunds.
- ITC is the main feature of GST. It prevents the cascading effect of taxes.
4. Permission for attaching JP Morgan's properties in India
- Supreme Court has permitted Enforcement Directorate (ED) to seize JP Morgan's properties in India.
- The case is related to the diversion of funds of homebuyers by JP Morgan in collusion with Amrapali and violation of Foreign Exchange Management Act (FEMA) rules.
- The court also ordered ED to arrest and investigate money laundering against the Amrapali group's Chairman and Managing Director (CMD) Anil Kumar Sharma and two directors.
- In July 2019, Supreme Court has cancelled the Real Estate Regulatory Authority (RERA) registration of Amrapali Group.
- JP Morgan is the brand name for investment banking operations of US-based JPMorgan Chase & Co.
- Real Estate Regulatory Authority (RERA):
- The Real Estate (Regulation and Development) Act, 2016 provided for the establishment of RERA in each state.
- The main purpose of establishing RERA is regulation of the real estate sector.
- RERA also acts as an adjudicating body for the speedy resolution of real state sector disputes.
5. Restrictions placed on Bengaluru-based SGRSBN
- Reserve Bank of India (RBI) has placed restrictions on banking operations of Bengaluru-based Sri Guru Raghavendra Sahakara Bank (SGRSBN) for 6 months from January 10, 2020.
- The Bengaluru-based cooperative bank will continue its banking operations with restrictions as RBI has not cancelled its banking license.
- The bank will not be able to give new loans, make new investments, sell or transfer its assets without RBI's approval.
- The bank will not borrow funds, accept fresh deposits and disburse payments without RBI's approval.
- After the restrictions, the bank's customers started to withdraw their money. But, they could withdraw only Rs 35,000 as per the maximum withdrawal limit fixed by RBI.
- RBI has placed restrictions under Section 35 A of Banking Regulation Act, 1949 (AACS) and Section 56 of Banking Regulation Act, 1949 (As Applicable to Co-operative Societies (AACS)).
- In September, 2019, RBI has imposed restrictions on Punjab and Maharashtra Cooperative (PMC) Bank for period of six months.
Multiple Choice Questions (MCQs)
1. What was the value of the Consumer Price Index (CPI) based inflation (retail inflation) in December 2019?
- 3.50 %
- 6. 78 %
- 7.35 %
- 9. 45 %
- 14.2 %
2. Which of the following has ordered an investigation of deep discounting by Amazon and Flipkart?
- Securities and Exchange Board of India (SEBI)
- Competition Commission of India (CCI)
- E-commerce Regulatory Authority of India (ERAI)
- Delhi Vyapar Mahasangh
- Confederation of All India Traders (CAIT)
3. The term Inverted duty structure refers to the situation in which
- Taxes on inputs are higher than taxes on final products
- Taxes on final products are higher than taxes on inputs
- States taxes on final products and inputs are higher than central taxes
- Lower taxes on both final products and inputs
- None of the above
4. Real Estate Regulatory Authority (RERA) registration of Amrapali Group was cancelled by Supreme Court in
- August 2018
- September 2018
- January 2019
- July 2019
- December 2019
5. RBI has recently imposed restrictions on Bengaluru-based Sri Guru Raghavendra Sahakara Bank under
- Section 35 A of Banking Regulation Act, 1949 (AACS)
- Section 35 B of Banking Regulation Act, 1949 (AACS)
- Section 36 AA of Banking Regulation Act, 1949 (AACS)
- Section 36 AB of Banking Regulation Act, 1949 (AACS)
- Section 36 AD of Banking Regulation Act, 1949 (AACS)