ECONOMY by VIVEK SINGH

2021-03-22 05:55:20 Nothing relevant in newspapers for Economy on 21st and 22nd March. Open / Comment

2021-03-20 14:52:51 Nothing relevant in the newspapers today.

Term of the day:
Participatory Notes (P-Notes): A participatory note is an instrument issued by a registered foreign institutional investor (FII) to an overseas investor who wishes to invest in Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India (SEBI).

Actually when FIIs/FPIs invest in Indian stock market (bonds/shares both) then they need to register with SEBI and a lot of formalities are required. But once they register and invest in Indian stock market then they (FII/FPI) can pass on these investments to other foreign/overseas investors in the form of P-Notes. These other foreign/overseas investors do not need to register with SEBI but can indirectly invest in Indian stock market through FPIs/FIIs. Open / Comment

2021-03-19 09:55:24 Source: NITI AAYOG
Title: Govt Driving Transition from Linear to Circular Economy

A good article to read: Self explanatory. Open / Comment

2021-03-19 09:45:18 The above is news article from Indian Express. Following are some relevant points.

Captive Mines: Those mines which are allocated/auctioned for some specific plant/project and the mineral extracted from the captive mine can be used only for that plant/project for which it has been allocated. The mineral extracted was not allowed for sale. Now Govt. is in the process of amending the "Mines and Minerals Development and Regulation Act 1957" (MMDR), so that the captive mines which has already been given (or may be given in future) will be allowed to sell up to 50% of the output in the open market. This reform was proposed under Aatma Nirbhar Bharat.

Captive Mines became an important term because earlier till 2015/2018, Govt did not allow coal mines to be given for extraction and sale of coal in the open market. So, most of the mines which Govt. had allocated for coal (and some other minerals were Captive Mines only. Now after 2015/2018, the new mines are being auctioned for sale of coal/minerals also. But the mines which had already been given as "captive mines", even in those mines now up to 50% of production will be allowed for sale once this bill gets passed. Open / Comment

2021-03-19 09:36:09 Open / Comment

2021-03-18 08:05:12 Source: Hindu
As Govt. is planning to privatise two PSBs and it has announced that in the budget also, so there will be articles in future too on bank privatization and its relevant for syllabus too. What I will do is I will prepare a detailed notes on Bank Privatization and will share it with you and may be will prepare a video also but till that time you just go on reading these articles. Open / Comment

2021-03-17 07:41:11 The above is news from Indian Express. Some relevant points mentioned below:

1) Govt. will set up a Development Financial Institution (DFI) with 100% ownership initially but going forward it will reduce to 26%. Govt will initially infuse equity capital of Rs. 5000 crore which will be increased to Rs. 20,000 crore. Now you may wonder how it will be possible that Govt. will be increasing its capital into the bank but shareholding will reduce. This can be possible if other investors also invest as equity capital into the DFI.

2) The DFI will also raise debt capital (bonds/loans) from the market so that to increase the overall lending portfolio to Rs. 5 lakh crore in the next three years. The funds of the DFI will be used to finance the projects under National Infrastructure Pipeline (NIP). The Govt. will give some kind of securities/guarantees which will help the DFI in raising money from the market at a lower cost/interest. DFI will also attract investments/funds from pension funds and sovereign funds as these institutions are willing to invest for long term.

3) There have been earlier attempts to set up DFI like IDBI, ICICI but were later on converted into universal banks to get access to public deposits. Taking money from public (as deposits) and then lending for long term infrastructure projects is not a very good idea as generally the public deposits come for 1 to 5 years but infrastructure sector requires fund for 15 to 20 years which creates asset liability mismatch (https://t.me/VivekSingh_Economy/542). Plus there is risk to public deposits.

4) Infra projects are long gestation projects (means it starts giving returns after a long time say 10 to 15 years). Infrastructure Leasing and Financial Services (IL&FS) which used to lend for infra projects defaulted on its debt 2 years back and some of its funds/subsidiaries closed down. So there is a requirement that a Govt. funded institution comes up to fund long gestation infra projects. As there will be minimum 26% stake of Govt., other institutions/investors will be willing to invest in DFI for long term and it will be able to fund long term infra projects.

For detailed note on DFI, you can see this link: https://t.me/VivekSingh_Economy/2689 Open / Comment

2021-03-17 07:20:40 Open / Comment

2021-03-16 08:42:58 Source: Indian Express

Facts:
1) The world's top producer of oil is USA
2) India's largest supplier of oil is Iraq Open / Comment

2021-03-15 08:01:13 There are two articles in Indian Express. One is by Prof. Ashok Gulati on the Ideas Page titling "Diversifying the farm income mix" and the other is on Idea Exchange page by Rajiv Kumar, the Niti Aayog vice chairman. Not much relevant but those who want can have a look. Open / Comment