Banking, Financial and Economic Awareness

2020-05-15

1. WPI based food inflation decreases from 5.49% to 3.6%

  • Due to Covid-19 pandemic, WPI based food inflation have decreased from 5.49% in March to 3.6% in April.
  • WPI based inflation for primary articles group declined from 3.72% in March 2019 to 0.79% in April 2020.
  • As per the recently released data, the deflation in fuel and power segment was 1.6 % in March 2019 and 10.12% in April 2020.
  • Data was not available for manufactured product group for April 2020.
  • Earlier, the release of data for CPI-based inflation for April was deferred by National Statistical Office (NSO).

2. MoneyGram Payment Systems and Federal Bank enter into an agreement

  • MoneyGram Payment Systems and Federal Bank have entered into an agreement.
  • The agreement will allow customers in India to have deposits in their bank account directly. This is called direct-to-bank account credit option.
  • As per the World Bank, India is world's largest recipient of remittances.
  • Federal Bank is a private sector bank with 15% share in India's remittance market. Its headquarters are located in Aluva, Kochi. Its CEO is Shyam Srinivasan.
  • MoneyGram Payment Systems is a US headquartered money transfer service provider.

3. 5paisa.com launches 5paisa loans

  • 5paisa.com has launched 5paisa loans, which is a platform for peer-to-peer lending.
  • The platform can be used to give multiple borrowers loans between Rs 500 and Rs 50 lakh. The lenders can get up to 36% per annum interest.
  • 5paisa loans is a NBFC. It is registered with RBI.
  • 5paisa.com
    • It is a Fintech company.
    • It is the single diversified online platform in India.
    • Its CEO is Prakarsh Gagdani.
    • It also allows equity investments, debt investments and gold investments on its platforms.

4. Finance Minister announces first part of special economic package

  • Finance Minister has announced first part of special economic package, which include measures related to MSMEs, taxes and employee provident fund.
  • For MSME sector, Finance Minister has announced collateral free loan worth Rs 3 lakh crore, subordinate debt worth Rs 20,000 crore and equity infusion worth Rs 50,000 crore.
  • While collateral free loan worth Rs 3 lakh crore is expected to support 45 lakh units, subordinate debt worth Rs 20,000 crore is aimed at Rs 2 lakh stressed MSMEs or MSMEs included in NPAs.
  • Equity infusion worth Rs 50,000 crore will be done under framework called mother-fund and daughter-fund. Government will create a fund of funds. The corpus of fund of funds will be RS 10,000 crore.
  • Government has ended separation between MSMEs in manufacturing and services sectors. It added turnover as the criteria for defining MSMEs.
    • The MSMES in micro category will have investment less than Rs 1 crore and turnover of less than Rs 5 crore.
    • The MSMES in small category will have investment less than Rs 10 crore and turnover of less than Rs 50 crore.
    • The MSMES in medium category will have investment less than Rs 20 crore and turnover of less than Rs 100 crore.
  • Government has allowed global tenders for government procurement till the limit of Rs 200 crore.
  • Finance Minister has also announced that the lack of trade fairs and exhibitions due to COVID-19 lockdowns will be replaced by e- market facilities for micro, small and medium enterprises (MSMEs).
  • Finance Minister has announced 45 days time for clearance of all receivables of MSMEs by central government and all PSUs.
  • Finance Minister has announced that government will provide EPF support for next 3 months.
  • The mandatory payments to Employee Provident Fund has been lowered from earlier 12 % to 10 %.
  • The new rule of 10 % is applicable to employees and employers within all organizations, except government organizations.
  • As per announcement made by Finance Minister, central government will fully guarantee Rs 30,000 crore worth investment scheme to support NBFCs, microfinance institutions (MFIs) and housing finance companies (HFCs).
  • An Rs 45,000 crore credit scheme will be partially guaranteed by Central government to support NBFCs, HFCs and MFIs.
  • Finance Minister has also announced liquidity infusion worth Rs 90,000 crore for power distribution companies and six months extra time for real estate projects that expired on or after 25th March, 2020.
  • Government has also lowered TDS and TCS rates by 25% and extended deadline for ITR filing for FY 20 till 30th November 2020. Lowered tax rates will be applicable till 31 March, 2021.
  • New deadline for Vivad se Vishwas scheme is 31st December, 2020.

5. Reduced TDS rates not to be applied to salaried class and remittances

  • Finance secretary Ajay B Pandey has clarified that reduced TDS rates will not be applied to salaried class and remittances sent abroad.
  • As part of special economic package, government has lowered TDS and TCS rates by 25% between May 14, 2020, and March 31, 2021.
  • Currently, Finance Secretary Ajay B Pandey is also serving as Revenue Secretary.
  • TDS refers to Tax Deducted at source. It is applied on professionals receiving money for services. Buyer of the service is responsible for cutting TDS and depositing with government.
  • TCS refers to Tax Collected at Source. It is applied on buying of gold or silver. The seller or recipient of payment is responsible for cutting TCS and depositing with the government.
  • Currently, TDS is applied at 23 types of payments and TCS is applied at only four types of receipts.

 

Share Blog


Loading Comments