Topic: Reports and Indices
1. Services PMI has grown to 59 in December.
- Services PMI stood at 56.9 in November.
- Input costs rose at a slower pace than in November. But output prices rose at a faster pace.
- Survey participants indicated that new workers had been hired in services sector.
- Services sector contributes 54% to Gross Value Added (GVA).
- Recently, manufacturing PMI declined to 18 months low level to 54.9 in December.
- S&P Global prepares both the PMIs based on responses from purchasing managers of 400 companies.
Topic: Indian Economy/Financial Market
2. India’s foreign exchange (forex) reserves increased to the highest level in last 21 months.
- Foreign exchange (forex) reserves increased $2.759 billion to $623.20 billion in the week ended December 29, 2023.
- The reserves chiefly increased due to foreign currency assets (FCA) and gold holdings.
- Foreign currency assets (FCA) and gold holdings increased by $1.869 billion and $853 million, respectively, during the week ended December 29, 2023.
- Foreign currency assets (FCA) include multi-currency assets that are kept in multi-asset portfolios.
- Investment in securities, deposits with commercial banks overseas and deposits with other central banks and the BIS are included in FCA.
- Special Drawing Rights (SDRs) and investment in SDR denominated Notes issued by IMF, increased $38 million.
- However, the Reserve Tranche Position in IMF declined by -$2 million.
- India’s forex reserves have risen by $44.751 billion since March-end 2023.
Topic: Taxation
3. 01 March 2024 is the deadline for inclusion of e-invoice in B2B transactions.
- Businesses with annual revenues more than ₹5 crore will not be able to issue e-way bills for business-to-business transactions without incorporating e-invoice details starting from March 1.
- From March 1, businesses with annual revenue greater than ₹5 crore will not be permitted to create an e-way bill without enclosing e-invoice details for every B2B transaction.
- E-way bills are necessary for the interstate transport of products valued more than 50,000 under the goods and services tax regime.
- E-way bills, on the other hand, will continue to operate normally for other types of transactions, including B2C and non-supplies.
- An e-way bill is an electronic document generated on a portal.
- It is an evidence of the movement of goods. It indicates whether tax has been paid.
- A e-way bill must be generated by any registered person who causes the transportation of goods with a consignment value greater than ₹50,000, as per Rule 138 of the CGST Rules, 2017.
- This requirement applies to movements between two States and within a State.
- Since October 2020, taxpayers with an annual aggregate turnover (AATO) of more than ₹500 crore can use e-invoices.
Topic: Regulatory Bodies/Financial Institutions
4. SEBI Board’s November 2023 decision to extend the requirement of mandatory appointment of custodians has become effective.
- In November 2023, mandatory appointment of custodians by Alternate Investment Funds (AIFs) was extended to schemes with corpus less than or equal to ₹500 crore.
- Till now, this mandatory Custodian appointment norm applied to Category III AIFs and to Category I and II AIFs with corpus more than ₹500 crore. It now extends to all AIFs.
- With effect from January 5, SEBI has amended its 2012 framed AIF Regulations.
- As per the amendment, AIFs can hold securities of their investments only in dematerialised form. This is subject to certain exceptions.
- The exceptions include investments by AIFs in instruments which are ineligible for dematerialization.
- Investments held by an AIF’s liquidation scheme that are not available in dematerialised form.
- AIFs may now designate a Custodian who is a Sponsor of an alternative fund or an Associate of a Manager, but only under specific circumstances.
- The Sponsor or Manager should always have at least ₹ 20,000 crore in net worth.
- Furthermore, the interests of the Sponsor, Manager, and their allies are not represented by fifty percent or more of the Custodian's directors.
- Additionally, SEBI is now requesting that the AIF Manager and the Custodians sign a pledge promising to operate independently of one another when handling the Fund's schemes.
Topic: Indian Economy/Financial Market
5. Discrepancies of ₹2.59 lakh crore have been recorded in GDP numbers for FY24.
- Discrepancies in computation of advance estimates of the India's GDP for 2023-24 stood at ₹2.59 lakh crore as per National Statistical Office (NSO).
- Discrepancies stood at (-) ₹3.80 lakh crore in 2022-23 and (-) ₹4.47 lakh crore in 2021-22, according to NSO.
- Discrepancies in the statistical GDP data is the difference in national income under production method and expenditure method.
- Three methods of computation of national income are production, expenditure and income.
- As per experts, there are always some discrepancies in national accounts.
- Discrepancies in national accounts arise due to delay in reporting of information by agencies including state governments.
Topic: RBI
6. Definition of politically-exposed persons (PEPs) has been revised by RBI for KYC purposes.
- This step will make it easier for these people to carry out various banking transactions, including availing loans.
- RBI has made some changes to the Know Your Customer (KYC) norms.
- In the earlier norm, PEPs were open-ended and there was a lack of clarity on the definition. PEPs were facing difficulties in getting loans or opening bank accounts.
- In the new KYC norms, PEPs have been defined as “individuals who are or have been entrusted with prominent public functions by a foreign country”.
- PEPs include heads of state/governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations and important political party officials.
- The central bank had removed a sub-clause of the master direction in the KYC norms issued through a circular dated February 25, 2016.
- RBI has directed chairpersons and chief executives of banks and other financial services to execute directions immediately.
Topic: Reports and Indices
7. UN report has reduced India's 2024 GDP growth forecast to 6.2%.
- On January 5, a United Nations report revised India's gross domestic product (GDP) growth forecast for the 2024 calendar year to 6.2% from the earlier estimate of 6.7%.
- As per the World Economic Situation and Prospects (WESP) report 2024, projected growth in India is slightly lower than the 6.3% estimate for 2023.
- This decline is despite strong domestic demand and robust growth in the manufacturing and services sectors.
- GDP in the South Asian region grew by an estimated 5.3% in 2023 and is projected to increase by 5.2% in 2024, the report said.
- This is driven by a strong expansion in India, "which remains the fastest growing large economy in the world".
- As per the report, in 2022, FDI (foreign direct investment) inflows into India increased by 10%.
- Slowing global demand, unresolved trade tensions between the largest trading partners, and geopolitical conflicts are impacting trade flows in the short term, the report said.
Topic: Appointments
8. G Ram Mohan Rao has been appointed as Executive Director by SEBI.
- He has been appointed as Executive Director for a period of three years.
- He will be handling the internal inspection department and the investigation department.
- He has worked with SEBI for 25 years. During this period, he has supervised departments such as inspections, litigation, recovery, investor awareness, grievance redressal, etc.
- Before this appointment, he was regional director of the Eastern Regional Office of SEBI.
Topic: Indian Economy/Financial Market
9. National Statistical Office has released its second advance estimate for the Indian Economy.
- According to it, the Indian economy is expected to grow at 7.3% in the Financial Year 2023-24.
- Indian Economy will grow by 7.3% in FY 2023-24 over the provisional growth rate of 7.2% in the previous financial year.
- NSO’s report is based on the First Advance Estimates (FAE) of National Income for the financial year 2023-24.
- In this report, NSO said that the construction sector has been estimated to have a growth rate of 10.7%.
- All the economic sectors have done well and witnessed over 6% growth, except for the Agriculture and Allied sectors.
- For the Agriculture and Allied sectors, estimated growth is 1.8%.
- The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation said that Advance Estimates of National Income are indicator-based.
- Advance Estimates of National Income are compiled using the benchmark-indicator method.
- As per NSO, this report has been made on the basis of data inputs collected from various Ministries, Departments, and Private Agencies.
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