Current Affairs: Finance & Economy Updates : July, 2009

July 6, 2009 : SLBC to formulate action plan for Banking facilities in Unbanked areas
July 6, 2009: Govt. Provided Rs 186,000 crore stimulus to counter slowdown
July 6, 2009: Funds for climate change strategy
July 6, 2009: National River and Lake Conservation Plans to Rs 562 crore
July 6, 2009: President’s allowances Rs 38 lakh
July 6, 2009 : Tax Limits at a Glance
July 8, 2009 : Govt permitted scheduled banks to issue zero-coupon bonds
July 9, 2009 : Soon Bio Beer will be launched


July 6, 2009 : SLBC to formulate action plan for Banking facilities in Unbanked areas
While presenting the Budget 2009-10 in Lok Sabha , Union Finance Minister Pranab Mukherjee announced that a sub-committee of State level Bankers Committee (SLBC) would identify and formulate an action plan for providing banking facilities in under-banked/unbanked areas in the next three years.
Some More Points:
  1. A sum of Rs 100 crore has been set aside as one-time grant in aid to ensure provision of at least one centre/point of sales (POS) for banking services in each of the unbanked blocks.
  2. 3.3 crore accounts with either nil or near to nil minimum balance have been opened till now as part of the financial inclusion drive by scheduled commercial banks
  3. The Reserve Bank of India has announced a further relaxation in its branch authorisation policy.
  4. Scheduled commercial banks are now allowed to set up off-site ATMs without prior approval, subject to reporting.

July 6, 2009: Govt. Provided Rs 186,000 crore stimulus to counter slowdown
The government has taken several measures to counter the negative fall -out of the global slow down on the Indian economy.

  1. The government responded by providing three focused fiscal stimulus packages in the form of tax relief to boost demand and increased expenditure on public projects to create employment and public assets.
  2. The RBI took a number of monetary easing and liquidity enhancing measures to facilitate flow of funds from the financial system to meet the needs of productive sectors
  3. This fiscal accommodation led to an increase in fiscal deficit from 2.7 per cent in 2007-08 to 6.2 per cent of GDP in 2008-09.
  4. The difference between the actual of 2007-08 and 2008-09 constituted the total fiscal stimulus.
  5. This fiscal stimulus at 3.5% of GDP at current market prices for 2008-09 amounts to Rs 1,86,000 crore.

July 6, 2009: Funds for climate change strategy
Currently in India, there are eight national missions that are being launched following the National Action Plan on Climate Change (NAPCC) unveiled in 2008.
While presenting the budget ,Finance Minister Pranab Mukherjee said that necessary funds are proposed to be allocated for these programs. Following funds have been allocated :

  1. National River and Lake Conservation Plans: Rs 562 crore
  2. Indian Council of Forestry Research and Education, Dehradun : Rs. 100 Crore
  3. Botanical Survey of India Rs. 15 Crore
  4. Zoological Survey of India Rs. 15 Crore

July 6, 2009: President’s allowances Rs 38 lakh
An amount of Rs 38 lakh has been allocated for salaries and allowances of the President in the 2009-10 budget presented by Finance Minister Pranab Mukherjee. The Budget for the Rashtrapati Bhavan has been pegged at Rs 27.52 crore.

July 6, 2009 : Tax Limits at a Glance: Some memorable points

  1. Elimination of Surcharge: The 10 per cent surcharge on taxes for those earning annual income above Rs 10 lakh (Rs 1 million) will no longer exist.
  2. This will help those in the higher income bracket.By raising the limits the government has returned Rs 11,700 crore to individual taxpayers. This amount was slated to be collected from the 10 per cent surcharge, according to the interim Budget estimates.
  3. Marginal increase in tax exemption: Personal income tax exemption limit raised for senior citizens by Rs 15,000 and for all others by Rs 10,000. This will help those in the lower income bracket, especially those just starting out their careers.
  4. New Limits:
    Men : 160000
    Women : 190000
    Senior Citizens: 240000
  5. Abolishment of Fringe Benefit Tax: FBT on the value of fringe benefits provided by employers to employees has been abolished.
  6. Higher deduction under Section 80DD: Annual deduction in respect of maintenance, including medical treatment, for a dependent with severe disability (more than 80%) has been raised to Rs 1 lakh from the current Rs 75,000.
  7. Expanded scope of Section 80E: Annual deduction in respect of interest on loans taken for higher education purposes has been expanded from the current limited list of courses to cover all fields of studies, including vocational studies, pursued after completion of schooling. This should provide a fillip to all those who want to study courses for which previously the tax treatment on education loans was not favourable
  8. Increase in Wealth Tax exemption: The exemption limit for wealth tax has been increased from Rs 15 lakh to Rs 30 lakh

July 8, 2009 : Govt permitted scheduled banks to issue zero-coupon bonds
The government of India has permitted scheduled banks, including state-owned ones, to issue “zero-coupon bonds” to meet long-term capital requirements.

What is a Zero Coupon Bond?
Zero Coupon Bond means a bond, which is issued by any infrastructure capital company or infrastructure capital fund or public sector company and no payment and benefit in respect of such bonds is received or receivable before maturity or redemption from infrastructure capital company or infrastructure capital fund or a public sector company. At the time of maturity, bondholders will receive the face value of the bond.

For example, a bond with a face value of Rs 100 may be issued at Rs 85 for a duration of two years. At the end of the two years, the bondholders will get Rs 100, implying an interest income of Rs 15. At present, only an authorised infrastructure capital company/fund or a public sector company is allowed to issue zero-coupon bonds under Section 2 (48) of the Income Tax Act.

July 9, 2009 : Soon Bio Beer will be launched
Bio Beer is a herbal and vitamin-rich beer produced by a Bangalore-based researcher and would be launched in more states this year. Dr B Srinivas Amarnath of Advaith Biotech Bangalore had produced it after several years of research. He is a recipient of President’s Award for research in alternative medicines. This beer had been produced using 12 different medicinal herbs including first quality aloe vera, ashwagandha.

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