ECONOMY by VIVEK SINGH

2021-05-22 07:35:01 The above is news from Hindu. Some relevant points:

1) Earlier RBI's accounting year was from 1st July to 30th June but last year it was decided that it will move its accounting year to 1st April to 31st March. So, this time RBI prepared its account books from 1st July to 31st March so that from the present year it can move to April-March Accounting year.

2) There are various sources of income for RBI:
•The Foreign Currency Assets (FCA) are around 90% of the Forex reserves. This FCA RBI has invested in US govt. (and other govt.) bonds and it earns interest on that. It has also deposited some FCA with other Central Banks.
•When RBI purchase Indian Govt. bonds under Open Market Operation (OMO), then it earns interest on the holding of govt bonds/securities
•Lending at Repo rate to banks
•RBI acts as 'Debt Manager' of Central Govt and State Govt for which it gets commission/income.
•Seigniorage (https://t.me/VivekSingh_Economy/1453)

Last year due to pandemic crisis RBI pumped a lot of liquidity by purchase of Govt. bonds through OMO. So, it earned interest on those Govt. bonds.

Whatever is the income of RBI, some part RBI keeps with itself in the 'Contingency Risk Buffer' as it has the responsibility to handle any crisis in the financial system and rest it transfers to Govt. as dividend. As per RBI Act 1934, these two are the objectives of the Economic Capital Framework of RBI. Open / Comment

2021-05-22 07:18:16 Open / Comment

2021-05-20 17:09:52 A good article on Impact of Covid on jobs, manufacturing and other sectors. Please read till end.

https://indianexpress.com/article/explained/explainspeaking-why-has-indian-manufacturing-been-losing-jobs-since-2016-7318114/ Open / Comment

2021-05-20 08:11:18 Source: Hindu
Department of Economic Affairs under Ministry of Finance grants 'Infrastructure' Status to various sub-sectors.

Once an industry is accorded infrastructure status, the sector is entitled to a number of benefits and concessions. This grant of status enables an industry to raise money from insurance companies, pension funds, and international lenders with a longer tenure and on easier terms. Infrastructure status gives industries access to cheaper foreign currency funding through the external commercial borrowing route. Falling under infrastructure category helps the sector get credit at competitive rates and on long-term basis with enhanced limits. Open / Comment

2021-05-19 15:48:54 The following is the Lecture Plan for Economy Module Course.

You can check the details of the course on the following link and take admission:
https://www.shubhraviraj.in/course-infomation/fbf22873-04cd-467a-8eb9-6100488af1dd Open / Comment

2021-05-18 14:53:35 Online Economy Module (Pre cum Mains) Course for 2022 will start on 14th June 2021. The details will be provided day after tomorrow and you will be able to take admission also. Open / Comment

2021-05-18 08:26:19 The above is news from Indian Express. Some important points:

1) Indian received the maximum net FDI Inflow in 2020-21 worth $43.3 billion. The total FDI inflow was around $54.6 billion and FDI outflow was around $11.3 billion.
The FDI outflow consists of the profits which the FDI investors take back from India OR it can also include the sale of investments/business from India.

FDI means what foreign companies are investing in India (through shares). It happens mainly through three routes. First is acquisition/purchase of shares of Indian companies, second is through joint venture route (a foreign firm establishing a JV company in India with an Indian partner) and third is through subsidiary route when a foreign firm creates a (100%) subsidiary company in India.
In the news above, foreign firms like Facebook and Google acquired stakes/shares in RIL which consists of around 64% of the FDI last year. So, basically this consists of the first route of FDI discussed above.

When an Indian companies invest abroad then there is another term for it and this is called "Overseas Direct Investment" (ODI). It is basically the opposite of FDI in India. The ODI is quite less as compared to FDI.

2) This FDI inflows in India have been driven by growth in sectors of the Indian economy like digital economy, privatization/disinvestment plan of Govt. of India and the huge liquidity pumped by the foreign Central bankers in other countries due to covid. And this extra liquidity is chasing the attractive investments all over the world like India.

3) Due to strong FDI and FPI inflow, our foreign exchange reserves has also increased to $576 billion by end of March 2021. Actually when foreign investors bring dollars this is ultimately/indirectly taken by RBI and RBI provides them rupee. So, RBI forex reserves increases and it also increases rupee liquidity in the economy.

4) Maharashtra received the maximum FDI of around 47%, followed by Gujarat 24% and then Karnataka and Delhi. Open / Comment

2021-05-18 08:04:28 Open / Comment

2021-05-15 19:30:40 Just for Information:

"First generation reforms" means stroke of the pen reforms. This means Govt. is just changing something in law/rules and regulations. For example in 1991 we increased Foreign Investment (FDI) limits in various sectors just by changing the FDI rules and increasing limits with the stroke of the pen.

"Second generation reforms" It involves establishing complex government organizations. This means creation of State/Govt capacity through building organizations, developing a strong team of people in the organization to implement the reforms, developing processes etc. For example in case of FDI reforms ... setting up Organizations within the Govt. (say DPIIT) to promote FDI and to vet proposals for FDI and to ease various regulatory restriction for FDI and smoothening the process to bring more FDI can be considered as second generation reforms. Open / Comment

2021-05-14 22:34:40 Source: RBI

1) RBI will be providing long term loan of three years to Small Finance Banks (SFBs) at repo rate so that the SFBs are able to lend this money further to small business units, micro and small industries, and other unorganised sector entities which are adversely affected during the current wave of the pandemic. The maximum loan that the SFB can give to a single borrower is Rs. 10 lakhs

2) SLTROs will be conducted on Core Banking Solution (E-KUBER) platform. The operations would be conducted at fixed repo rate. Bids below or above policy rate will be rejected.

c) The Reserve Bank reserves the right to decide the quantum of allotment and/or accept/reject any or all the requests, either wholly/partially, without assigning any reason thereof.

d) In case of over-subscription of the notified amount, the allotment will be done on pro-rata basis. Open / Comment