ECONOMY by VIVEK SINGH

2024-05-26 06:01:09 Source: Indian Express
Income Tax Department (Ministry of Finance) has notified 'Cost Inflation Index (CII)' for calculating long term capital gain tax arising from sale of immovable properties, securities (shares/bonds) and jewellery).

For example. If i purchased a house worth Rs. 1 crore in present year and sold it in Rs. 1.1 crore next year and the CII is 10% then I don't need to pay any capital gain tax as the increase in the price of my house is just equivalent to inflation. If there is any additional gain over inflation (CII) then only I need to pay any capital gain tax. Open / Comment

2024-05-23 12:53:02 Join Economy Capsule Pre Cum Mains Course for UPSC 2025/26 by Vivek Singh Sir

Start Date: 18th June, 2024

Early bird discount till 26th May

Course Features:
Covers both Static and Current Affairs.
Economic Survey and Budget will be covered
Includes Previous Years Questions

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2024-05-23 08:11:11 Source: The Hindu
Every year RBI earns income from seigniorage (currency printing) and other sources and out of this income some part it keeps with itself (contingency risk buffer) and some part it transfers (dividend) to Govt. of India. This is called 'Economic Capital Framework'.

Bimal Jalan Committee has recommended to keep contingency risk buffer in the range of 5.5% to 6.5% of the balance sheet (i.e. assets or liabilities).

Higher income of RBI may be because of higher currency circulation in the system due to higher economic growth and higher amount of transactions.

https://bit.ly/3SdghTR Open / Comment

2024-05-20 11:45:27 Due to medical reasons I will not be able to post news analysis for the next two weeks. Open / Comment

2024-05-19 09:14:56 Trade Statistics (2023-24):

India's Exports of goods and services =

$437 billion + $340 billion = $777 billion (21.5% of GDP)

India's imports of goods and services =

$677 billion + $177 billion = $854 billion (23.6% of GDP)

India's merchandise exports and imports both have decreased (in absolute terms) in 2023-24 as compared to 2022-23


Agriculture Trade
Exports = $48 billion
Imports= $32 billion

India's agriculture exports and imports both have decreased (in absolute terms) in 2023-24 as compared to 2022-23 Open / Comment

2024-05-17 15:39:42 Join Economy Capsule Pre Cum Mains Course for UPSC 2025/26 by Vivek Singh Sir

Start Date: 18th June, 2024

Early bird discount till 20th May

Course Features:
Covers both Static and Current Affairs.
Economic Survey and Budget will be covered
Includes Previous Years Questions

Payment Link:
* Online Mode: https://bit.ly/4bGszdZ
* Offline Mode: https://bit.ly/4bJ3GyC

For more details, visit Unacademy IAS: 3-B, Pusa Road, Block 11, Old Rajinder Nagar, New Delhi, 110060, or call us at 8147045876
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Further details will be shared later. Open / Comment

2024-05-16 06:20:47 Indian Govt. securities joining Global Bond Index

•JP Morgan and Bloomberg will include (in June 2024) Govt. of India bonds/securities in their ‘Global Bond Index’. This will enable Govt. of India to access foreign debt capital easily.

•A ‘bond index’ includes bonds of different entities like different corporations and Governments.

•An investor can invest either in the bonds of a single institution/company/government or they can invest in a "Bond Index (fund)" where the money will be put in bonds of various institutions/Governments proportionately as per the weights of the different bonds in the "Bond Index".

•If a foreign investor wants to purchase Govt. of India bonds, then they need approval of SEBI. But if foreign investors are investing through bond index (fund) then every foreign investor does not require SEBI approval, rather, only the (JP Morgan) bond index (fund) will require SEBI approval as a foreign portfolio investor (FPI). [So basically whenever a foreign investor invests in JP Morgan bond index fund then this fund will purchase Govt. rupee denominated bonds]

•This could lead to billions of dollars worth of inflows into India’s rupee-denominated government debt. (Earlier there was a discussion that its foreign currency denominated.... but actually it will be rupee denominated. In the book also its written foreign currency denominated but it will be Rupee denominated)

•Everything else remaining same, an incremental source of demand from foreign investors will bring down the government cost of borrowing and will free up the liquidity for domestic financers to deploy in more productive assets. This will also result in increase in liquidity in Indian Govt. securities.

•But it could also expose the country to a greater degree of exchange rate risk and potentially lead to volatility in the rupee if external conditions were to turn adverse.

https://bit.ly/3SdghTR Open / Comment

2024-05-07 11:50:44 Source: Indian Express
Its just in pilot phase,,,,,,read it once. No explanation required.
https://bit.ly/3SdghTR Open / Comment

2024-05-07 11:36:29 The above is just a draft guideline by RBI.

RBI has increased the provisioning required for Project finance (loans for which there is no additional collateral and the lenders expect to receive the principal and interest payment only from the specific project revenues to which the lender has provided loan).

Because of increase in provisioning requirement, Lenders will have to keep an additional amount for any future losses due to loans given for project finance (which are risky). So, due to provisioning, the account books of banks will change.... students don't need to go in detail as it requires an understanding of accounting concepts, but let me just put it in simple words.

Suppose a bank did provisioning of Rs. 100 crore amount then this amount will be subtracted from the income statement (as loss) and the same will be adjusted in the balance sheet of the bank due to which 'Common Equity Tier 1 capital' will get reduced which will result in reduction in 'Capital Adequacy Ratio (CAR)' [which is includes Tier 1 capital on numerator] and it also increases banks cost (of lending) as this much amount can't be lent. Open / Comment

2024-05-07 09:03:35 Relevant points of above article:

1. All GST anti-profiteering complaints are now dealt by the Competition Commission of India (CCI) from December 1, 2022. Prior, the National Anti-profiteering Authority (NAA) was set up in November, 2017 to check unfair profiteering activities by registered suppliers. And now the GST Appellate Tribunal (GSTAT) has also been operationalized.

2. Monthly GST Collections in April 2024 has crossed Rs. 2 lakh crore out of which SGST completely goes to States, IGST.... half goes to states and half to Centre and, out of CGST..... 41% goes to Stattes (as per Finance Commission)

3. Revenue Neutral (Tax) Rate in the context of implementing GST is basically that rate of GST at which the GST tax revenue will be equal to the tax revenue before implementing GST. This was suggested to be 15.3 per cent at the time of implementation of GST. But this Revenue Neutral Tax Rate has come down to 11.6 per cent that means now after implementing GST even at 11.6% of effective GST rate the tax revenue collection will be equal to what was the revenue collection at 15.3% at the time of implementation of GST. This is really good.

4. Tax Buoyancy has improved from 0.72 (before GST) to 1.22 right now. Even if we remove the compensation cess, GST Tax Revenue Buoyancy will be around 1.15. (Above 1 is considered as good).

5. Gross GST to Tax ratio has touched almost 7%. Overall Tax/GDP ratio of India is around 16%

6. GST is best example of Cooperative federalism as almost all the decisions happen through consensus. Open / Comment