Topic: Indian Economy and Financial Market
1. Government may choose expansionary budget to achieve economic growth and recovery.
- Government may choose an expansionary budget to achieve economic growth and recovery.
- The idea by British economist John Maynard Keynes is being supported during pre-budget consultations.
- As per Keynes, a free market cannot ensure GDP growth in times of recession. In 2020, India and the world were going through a recession due to Covid-19.
- In 2020, consumers avoided discretionary spending due to low consumer confidence. This led to a fall in demand and firms were not interested in investing.
- As per the Keynesian economic theory, government intervention through higher spending is needed to achieve growth during the recession.
- Finance Ministry is also thinking about the review of the Fiscal Responsibility and Budget Management Act.
- NK Singh panel has recommended that in place of fiscal deficit, debt-GDP ratio should be taken as the main target for fiscal policy.
- Government used the escape clause of the FRBM Act and kept Budget Estimate of fiscal deficit for 2020-21 at 3.5%.
- As per government estimate, GDP is likely to show a negative growth of 7.7%. Last year, the combined debt of the centre and states as a percentage of GDP stood at 72%. This may increase to 85% next year due to a decline in GDP growth.
- Government may keep the Revised Estimate for fiscal deficit for 2020-21 at 6.5%.
2. National Employment Policy (NEP) likely to be made by December 2021.
- National Employment Policy (NEP) is likely to be made by December 2021.
- NEP is likely to be developed after the implementation of four labour codes and completion of four major surveys.
- Three labour codes on Industrial Relations, Social Security and Occupational Health Safety & Working Conditions (OSH) were passed by Parliament last year.
- Code on Wages was passed in 2019. All four codes are likely to be implemented from April 1, 2021.
- Four all India surveys on migrant workers, domestic workers, employment generated by professionals and transport sector are to be conducted by Labour Bureau.
- Field work for four all India surveys is expected to begin by March and results are expected to be out by the end of October 2021.
- ‘All India Quarterly Survey’ on Employment of Enterprises (employment in organized and unorganized sectors) will be launched soon by Labour Bureau.
Topic: Regulatory Bodies/Financial Institutions
3. Notices issued to DGCA and Ministry of Civil Aviation (MoCA).
- Notices have been issued to DGCA and the Ministry of Civil Aviation (MoCA) on the issue of Jet Airways’ slots or date and time at which airline’s aircraft are allowed to depart or arrive at an airport.
- Mumbai Bench of the National Company Law Tribunal (NCLT) issued notices and asked DGCA and MoCA to make their opinions about the issue clear.
- NCLT bench asked them to appear for a hearing on January 12. The issue is the allocation of Jet Airways’ slots by MoCA to other airlines.
- Application of Resolution Professional (RP), Ashish Chhawcharria is being heard by two-judge Bench to approve the resolution plan of Kalock Capital and Murari Lal Jalan.
- In November 2020, Kalock Capital and Murari Lal Jalan filed a resolution plan for Jet Airways. Jet Airways stopped operations in April 2019.
4. Japan to provide Official Development Assistance (ODA) loan of JPY 30 billion to India.
- Japan will provide Official Development Assistance (ODA) loan of JPY 30 billion (Rs 2,113 crore) to India.
- Covid-19 Crisis Response Support Loan for Social Protection will be to support India’s efforts to assist poor people affected by Covid-19 pandemic.
- Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC) coined the term Official Development Assistance (ODA). ODA is a tool for increasing bilateral cooperation.
Topic: Indian Economy
5. DGTA recommends extension of anti-dumping duty on phthalic anhydride import from Russia.
- Directorate General of Trade Remedies (DGTA) has recommended a five-year-long extension of anti-dumping duties on phthalic anhydride import from Russia.
- Phthalic anhydride is an industrial chemical. It is used in the Plastic industry and other industries.
- In case of Japan, DGTA has recommended the withdrawal of anti-dumping duties. Now, Finance Ministry will issue a notification in this regard.
- In December 2015, the government had imposed anti-dumping duties on Phthalic Anhydride from Russia and Japan.
- Several companies have filed an application and requested DGTR for review and continuation of the anti-dumping duties. DGTR initiated the review.
6. RInfra completes sell of 74% equity stake in PKTCL to India Grid Trust (IndiGrid).
- RInfra has completed sell of 74% equity stake in Parbati Koldam Transmission Company Limited (PKTCL) to India Grid Trust (IndiGrid).
- Along with Power Grid Corporation of India Limited (PGCIL), RInfra owns 74% stake in PKTCL. Announcement about deal was made in November 2020.
- IndiGrid (India Grid Trust) is the first power sector Infrastructure Investment Trust of India. It was established in October 2016. It is registered with SEBI.
- Reliance Infrastructure Limited (RInfra) is doing stake sell to reduce its debt. Earlier, it has sold its stake in Delhi-Agra Toll road to Cube Highways and Infrastructure III Pte Limited.
Topic: Reports and Indices
7. Rise in world food price index continues for seventh consecutive month in December.
- Rise in the world food price index has continued for the seventh consecutive month in December.
- In December 2020, the Food and Agriculture Organization (FAO) Food Price Index stood at 107.5 points. In November, it stood at 105.2.
- The average of food price index for the whole of 2020 was 97.9 points. It increased by 3.1% from 2019.
- FAO Vegetable Oil Price Index increased 4.7% in December. It reached the highest level since September 2012.
- FAO Vegetable Oil Price Index was 19.1% higher in 2020 in comparison with the year 2019.
- FAO Cereal Price Index and FAO Dairy Price Index increased 1.1% and 3.2% from November. It was 6.6% higher in comparison with 2019.
- FAO Food Price Index (FFPI) includes five commodity group price indices. They are FAO Cereal Price Index, FAO Vegetable Oil Price Index, FAO Dairy Price Index, FAO Meat Price Index and FAO Sugar Price Index.
- FFPI was introduced in 1996. It measures the monthly change in prices of certain commodities. Its base period is 2014-16.
8. Re-appointment of Vishakha Mulye as ICICI Bank’s Executive Director approved by RBI.
- Re-appointment of Vishakha Mulye as ICICI Bank’s Executive Director has been approved by RBI.
- Vishakha Mulye’s re-appointment as ICICI Bank’s Executive Director will become effective from January 19 for a three year period.
- ICICI Bank (ICICI Bank Limited) is a private sector bank. Girish Chandra Chaturvedi is chairman of its board of directors. Its MD & CEO is Sandeep Bakhshi.