Current Affairs: Finance & Economy Updates : July 12, 2009

July 1, 2009 : India’s exports fall by 29% in May
July 2, 2009: India’s external debt up at $230 bn
July 2, 2009 : BP wins rights to major Iraqi oil field
July 3, 2009 : IFC report says India still not favourable for doing business: Survey
July 4, 2009 : Banking sector top job provider in first quarter hiring 16, 200 people: Assocham
July 4, 2009: India approves trade pact with South Korea
July 4, 2009 : Rs.3,000-crore package for textiles industry
July 6, 2009 : Scope of ‘Presumptive Tax’ widened.
July 6, 2009 : Health insurance for all BPL families
July 07, 2009 : Allocations for NREGS in Budget
July 10, 2009 Inflation -1.55 per cent
July 11, 2009 :Crop loan at 6% interest for farmers

July 1, 2009 : India’s exports fall by 29% in May
India’s exports declined by 29.2 per cent in May. Exports dropped to $11.01 billion in May from $15.55 billion in the same month last year, according to recently released government data. This decline was for the 8th month in a row. Imports, too, dipped for the fifth straight month by 39.2 per cent to $16.21 billion in May over the year-ago month. The trade deficit was $5.20 billion in May against $11.13 billion in May 2008.

July 2, 2009: India’s external debt up at $230 bn
India’s external debt rose 2.4 percent or $5.3 billion to $229.9 billion for the fiscal ended March 31 as per Reserve Bank of India (RBI). India, which has an external debt equivalent to 22 percent of its gross domestic product, was already the fifth most indebted country in the world in 2007.

July 2, 2009 : BP Iraqi oil field Rumaila
A group led by British Petroleum (BP) has won rights to develop Iraq’s Rumaila oil field, the largest of six oil fields on offer in a two-day bidding war in Baghdad.

July 3, 2009 : IFC survey says India still not favourable for doing business
India is still not very favourable for doing business a survey conducted by International Finance Corp (IFC), an arm of the World Bank has said. The survey says that starting new ventures in the country is a “time consuming affair” as India still faces several bottlenecks, including bureaucratic hurdles, in making its environment attractive for businesses. Out of 183 countries India has been put on rank 122.

July 4, 2009 : Banking sector top job provider in first quarter hiring 16, 200 people: Assocham
The banking sector of India has hired 16,200 people in the first quarter this fiscal and thus remained the biggest job provider in the country during the period. A survey was conducted by ASSOCHAM, which said that State Bank of India, alone created 13,000 jobs, while Danalakshmi Bank and Andhra Bank recruited 1,300 and 900 people respectively. Yes Bank hired 1,000 people during the period The IT/IT enabled services (ITeS) sector is the second-highest employment generator.

July 4, 2009: India approves trade pact with South Korea
The union cabinet of India has approved the proposal for signing of a comprehensive economic partnership agreement (CEPA) with South Korea. The pact comprises six areas including trade in goods, trade facilitation and customs cooperation, trade in services and investment and dispute settlement. Once signed, this will give Indian firms wider access to the Korean market and there would be provisions in the agreement to protect investment of investors from both sides. According to the Department of Commerce, the total trade between India and South Korea in 2007-08 stood at $8.9 billion.

July 4, 2009 : Rs.3,000-crore package for textiles industry
The government of India has formulated a financial package of Rs.3,000 crore for waiver of the overdues of loans of the handloom cooperatives of the country and also, to provide loans at concessional rates of 7 percent per annum. This was announced by Minister of State for Textiles Panabaka Lakshmi. The proposal has been sent to the finance ministry for approval.

Some problems of textile Industry of India:

  1. Textiles is the second largest employment generating sector in the country after agriculture.
  2. However this sector has seen about 600,000 job losses after a host of mills closed down since the slowdown hit the economy.
  3. India’s textiles and clothing exports have grown over 7 percent year-on-year in rupee terms between April 2008 and February 2009.
  4. Integrated Handloom Development scheme, Handloom Weavers’ Comprehensive Welfare scheme, Marketing and Export Promotion scheme, Mill Gate Price scheme and Diversified Handloom Development scheme are the five schemes which are being implemented in the 11th plan.
  5. Dayanidhi Maran , Minister of Textiles has recently promised to initiate consultation process to form a National Fibre Policy.

July 6, 2009 : Scope of ‘Presumptive Tax’ widened.
Small business with a gross annual turnover of up to Rs 40 lakhs (Rs 4 million), do not have to maintain books of accounts for scrutiny of an income tax inspector, provided they declare taxable income at eight per cent of total sales.This facility is known as the ‘Presumptive Tax’, which was earlier limited to construction, goods carriages and retail trade. Finance minister Pranab Mukherjee has expanded the scope of the ‘presumptive tax’ from 2010-11 to all businesses making life easier for millions of small businessmen.These small businesses will not have to pay advance tax.

Note: Micro, small and medium enterprises contributes about 40 per cent to the country’s industrial output.

July 6, 2009 : Health insurance for all BPL families
The government proposes to bring all BPL families under the Rashtriya Swasthya Bima Yojana (RSBY). In the Union Budget 2009-10, Rs. 350 crore which is an increase of 40% from the last year has been allocated for this Scheme.

July 07, 2009 : Allocations for NREGS in Budget :

  1. NREGS will now guarantee a minimum daily wage of Rs 100 to each beneficiary. At present, the scheme provides for a minimum daily wage of Rs 60, though states were free to stipulate a higher amount.
  2. Proposed allocation for the rural job scheme has been raised 144 per cent to Rs 39,100 crore (Rs 391 billion) in 2009-10.
  3. The government had spent Rs 30,100 crore on the scheme in 2008-09 (revised estimates) which provided work to 44.7 million households.

July 10, 2009 Inflation -1.55 per cent
Inflation dipped to minus 1.55 per cent for the week ended June 27 from -1.30 per cent in the previous week.

July 11, 2009 :Crop loan at 6% interest for farmers
A subsidised interest rate of six per cent for farmers who pay their dues in time, which is one per cent less than what others would get has been announced in the Union Budget 2009-10. The Centre has allocated Rs 411 crore (Rs 4.11 billion) more in this budget for this purpose over and above the allocation made during the interim Budget.

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