Banking, Financial and Economic Awareness

2019-12-17

1. WPI inflation rises in November

  • Wholesale or WPI inflation rises to 0.58% in November due to the rise in food prices.
  • The price rise in non-food articles declined to 1.93 % from a 2.35 % rise in October.
  • It was slowing down since June and rose to 0.16 % in October.
  • Recently, the Consumer Price Index (CPI) based inflation (retail inflation) for November 2019 was recorded at a three-year high of 5.54 %.
  • Wholesale Price Index (WPI):
    • It is a measure of the average change in the prices of commodities at the wholesale level.
    • WPI does not include services.
    • WPI inflation is also called headline inflation.

 

2. Agreement between BP and RIL

  • British Oil Company BP and Reliance Industries Ltd (RIL) have signed an agreement related to proposed Indian fuels and mobility joint venture (JV).
  • JV may be formed in the first half of 2020.
  • It will have pan-India fuels retail service station network and aviation fuel marketing business.
  • BP:
    • It was earlier known as The British Petroleum Company plc and BP Amoco plc.
    • It is a British oil and gas company. It is also the sixth-largest Oil and Gas Company in the World.
    • Chairman: Helge Lund

 

3. 15th Finance Commission's final report to consider structural reforms

  • In its final report for April 1, 2021 to March 31, 2026, the 15th Finance Commission will consider the government's structural reforms, revenue and fiscal position and implications of GST.
  • The commission will submit its final report for April 1, 2021 to March 31, 2026 by October 30, 2020. On 5 December 2019, it submitted its report for FY21 (2020-21).
  • At its 5th meeting, the Economic Advisory Council of Commission discussed issues like GST stabilization and compensation being paid to states.
  • It also discussed issues related to the relationship between the GST Council and Finance Commission.
  • Finance Commission:
    • The Finance Commission is a constitutional body under Article 280 of the Constitution of India.
    • On 27 November 2017, 15th Finance Commission was constituted under the chairmanship of NK Singh.
    • On 27 November 2019, the term for the 15th Finance Commission was extended for the second time.

 

4. IMF’s Chief Economist Gita Gopinath recommends structural reforms for India

  • She said that India should prioritize banks clean-up, labour reforms and more ambitious fiscal consolidation path.
  • She said that India's focus on boosting investment, the rural economy and infrastructure spending is good.
  • She also said that India's focus on streamlining Goods and Services Tax (GST), direct tax reforms and a business-friendly policy to reach a USD 5-trillion economy is also good.
  • Gita Gopinath became Chief Economist of the International Monetary Fund in October 2018.
  • International Monetary Fund :
    • Members: 189 countries
    • Headquarters: Washington, D.C
    • Formed: 1944
    • It works to ensure monetary cooperation at the global level, protect financial stability and promote international trade.

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