What is “Jet Privilege-HDFC Bank Credit” ?

• Jet Airways tied up with the HDFC bank to launch ‘Jet Privilege-HDFC Bank Credit’. This is a range of credit cards which will offer benefits and rewards in the form of JP Miles.
• The unique travel option will make air travel for economical.
• The card will facilitate members to enjoy several lifestyle benefits, including six JP Miles for every Rs 150 spent and another 10000 JP Miles with in the first ninety days.

GAIL and ONGC inked Swap Agreement and Gas Co-operation Agreement.

As per the Gas Co-operation Agreement:

• ONGC can sale and purchase the gas from GAIL for 3 years
• Both the companies can supply or sale LNG by GAIL to ONGC for the reduction of C2+ Extraction at Dahej.
• C2+ components will be supplied to ONGC Petro additions Limited (OPAL) for producing the petrochemicals at Dahej Special Economic Zone.

As per the Swap Agreement:

• ONGC would supply gas to customers through GAIL's infrastructure so as to boost the availability and the efficient exploitation of resources.

As per Central Bureau of Investigation (CBI), current telecom operators Bharti Airtel (earlier known as Bharti Cellular) and Vodafone India (earlier known as Hutchison Max & Sterling Cellular) were sold additional spectrum beyond 6.2 MHz, up to 10 MHz, in unnecessary hurry in January 2002.

As per its report of the then communication minister Pramod Mahajan bypassed the opinions of the member (finance), the wireless adviser and even the highest decision-making body in the DoT and allocated extra spectrum to these companies in undue haste. The decision led to a loss of Rs 508 crore to the exchequer.

How the loss has been calculated?

• The current revenue share for telecom companies during the period under investigation was pegged at 4% for 6.2-8 MHz and 8-10 MHz spectrum, with no differential rates. Only those with more than 10 MHz spectrum were charged 5 %. As per the DoT the difference - if the rate was pegged at 5 % instead of four percent would have been Rs 508 crore to the exchequer.

India received its first investment via the QFI (Qualified Framework Investor) route, thus ending speculations that the India's efforts to get investors to buy shares directly will be on the fritz. Kotak Mahindra Bank struck a deal worth $5 million, following which India received its first investment via the QFI route. T

The strategy to pull investment via the QIF route is anticipated to draw in investment worth about $30 billion in 2012-13 period, thereby assisting the country fund a chunk of the CAD (Current Account Deficit) pegged at 4.2% of GDP in 2011-12.

The finance ministry had in the recent past conducted road shows in 5 countries in the Gulf region- Bahrain, Dubai, Kuwait, Muscat and Riyadh - to protrude India as the incredible investment destination for wealthy investors.

Who is a Qualified Foreign Investor (QFI)?

• A QFI is a person or a trust resident in a country which is a member of the Financial Action Task Force (FATF) can invest directly in India.

What is the Investment Regime for QFI (QFI)?

• QFIs have been allowed to invest in all the 3 segments of the Indian Capital Market viz.-

1. Corporate Debt
2. Equity
3. Mutual Funds (MFs)

Why is Indian Government promoting QFI route?

• The Indian Govt feels that the wealthy investors should be boosted to invest directly so that the stable in-flows could fund the CAD (Current Account Deficit).

An Empowered Group of Ministers (EGoM) headed by home minister P Chidambaram finalized the rules for upcoming second generation (2G) spectrum auctions, recommending the fixing of minimum price for CDMA airwaves in the 800 MHz band at 1.3 times the base price for GSM airwaves in the 1800 MHz band.

• The EGoM rejected the Department of Telecom’s (DoT) suggestion that reserve price in the 800 MHz band for CDMA players be twice as that of airwaves in the 1800 MHz band.
• The EGoM recommended that the minimum price for GSM airwaves be cut to Rs 14,000 to Rs  16,000 crore.
• The EGoM’s decision discomfited the mobile phone companies as they were tossing for an 80% reduction from the Rs 18,111 crore suggested by the telecom regulator, TRAI.
• The EGoM has suggested 2 specific reserve price for the 1800 MHz band at Rs 14,111 crore and Rs 15,111 crore for 5 units of airwaves on a pan-India basis.

The EGoM provided two options to the Cabinet on the spectrum usage charge that forms part of the revenue share for mobile phone companies:

1. To keep this levy at 5% of the tele-company’s annual revenues, or
2. Calculate this levy as per the current rules.

At present, the spectrum usage charges range b/w 2% to 7% of the tele-company’s yearly revenues depending on 2 factors – the quantity of airwaves and the availability of third generation airwaves.

• The EGoM also stated that fresh entrants and companies that lost their mobile licences owing to the Supreme Court’s ruling can bid for a maximum 6.25 MHz of airwaves in the 1800 MHz band in the forthcoming auctions, whilst existent operators in the GSM space can bid for a maximum of 2 blocks or 2.5 MHz of airwaves.

What is the argument being put up against this decision?

• It is being argued that discrimination b/w CDMA and GSM is being broadened by holding the auction reserve price for 800 MHz at 1.3 times of 1800 MHz on the principle that less than 5 MHz is being put up for auction. A like alternative is nevertheless not being offered to GSM operators to retain their 900 MHz spectrum at a price of 1.3 times of 1,800 MHz in the event that less than 5 MHz is obtained at the time of the license extension.
• The prerequisite for 25% of upfront payment for CDMA and 35% of upfront payment for GSM is another instance of discrimination b/wn CDMA & GSM.
• It is being argued that this discrimination will go against the aim of crafting a level playing field among the operators.