Banking, Financial and Economic Awareness of 17 December 2019

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

• In its final report for April 1, 2021 to March 31, 2026, the 15^th 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 5^th 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, 15^th Finance Commission was constituted under the chairmanship of NK Singh.
  • On 27 November 2019, the term for the 15^th 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.