ECONOMY by VIVEK SINGH

2021-08-13 07:41:51 Govt finalising plan to monetise Rs 6 lakh crore infra assets: DIPAM secretary [12th Aug 2021]

Asset Monetization:
Asset Monetization involves creation of new sources of revenue by unlocking of value of hitherto unutilized or underutilized public assets. Many public sector assets are sub-optimally utilised and could be appropriately monetized to create greater financial leverage and value for the companies and of the equity that the government has invested in them. The objective of the asset monetization programme of the Government of India (GOI), is to unlock the value of investment made in public assets which have not yielded appropriate or potential returns so far, create hitherto unexplored sources of income for the company and its shareholders, and contribute to a more accurate estimation of public assets which would help in better financial management of government/public resources over time.

Asset Monetization can include:
* Selling of unutilized land of GoI/PSU
* Giving an asset (let us say Dedicated Freight Corridor) of a PSU/GoI to a Private Operator for Operation and Maintenance for a contract period (say 30 years) in return of one time money or annual payments
* Giving the already constructed NHAI roads to Private Parties on TOT (Toll Operate Transfer) model for a certain period in return for one time money [For details refer the book]
* Giving the Airports to Private Operators for a certain period on PPP model in return of annual payments (example.. Lucknow, Ahmedabad etc. given to Adani group)
* Giving the Transmission Assets of PGCIL, Oil & Gas pipelines of GAIL, IOCL, HPCL to private operators in return for annual payments for certain contract period.

"Disinvestment/divestment" generally means reducing the stake/ownership in a company/entity (where a company/entity can have several assets). But "Asset Monetization" basically means giving a particular (brownfield) asset of GoI/PSU to Private Parties in return of one time or annual payments. Open / Comment

2021-08-12 07:19:00 Term of the Day: "Animal Spirits"

This is a term that refers to the emotions and instincts that guide the behaviour of investors and consumers in a market economy. It was coined by British economist John Maynard Keynes in his 1936 book The General Theory of Employment, Interest, and Money, to explain the persistence of economic fluctuations under capitalism. Keynes argued that investment and consumption are often based on how people feel about the overall economy rather than on unbiased, rational analysis of facts. Critics have argued that while people are not perfectly rational, they are not completely guided by emotions either; hence, animal spirits cannot sufficiently explain economic cycles.

Animal Spirits is basically a spontaneous urge to action rather than inaction, which is based on conviction/confidence rather than just facts/figures. The term is derived from spiritus animalis, which means the spirit that drives human thought. Open / Comment

2021-08-12 06:19:14 The answer to the above question is (d) All of the above.

Explanation:
Operation Greens (also called Tomato Onion Potato (TOP)) scheme aims to promote Farmer Producers Organizations (FPOs #), agri-logistics, processing facilities and value addition etc. in identified production clusters.

As per budget Announcement 2021-22, expanded operation greens scheme covers 22 perishables including shrimp.

The scheme provides for short term intervention by way of providing transportation and storage subsidy @ 50% and long term intervention through value addition projects in identified production clusters with Grant-in-aid @ 35% to 70% of eligible project cost subject to maximum of Rs. 50 crore per project.

Under the scheme, state-wise funds are not allocated as the scheme is demand driven and projects are approved as per scheme guidelines on the basis of applications received for setting up of projects in eligible production clusters. Open / Comment

2021-08-10 06:03:31 The above is article from Indian Express.

Govt. is planning to amend the "Electricity Act 2003" through "Electricity Amendment Bill 2021". Electricity is "concurrent" subject but in India, the "Power Distribution" sector is mostly in the control of State Govt.s through their "DISCOMS" which are basically State PSUs. Only Delhi, Mumbai and 2/3 cities have privatized their Discoms. Most of the DISCOMS (State PSUs) are in huge loss and time to time Central Govt. has brought in Schemes and supported these DISCOMs out of their financial mess but it has not resulted in any viable long term solution. And after every few years these DISCOMs seek support from the Govt. That is why Central Govt. is planning to bring the following amendments in the Electricity Act 2003 to introduce the changes at the all India level:

1) Delicense the power distribution sector and allow private DISCOMs: It will result in competition and more efficiency and reduction in tariffs - But few States are continuing their same old cry and are against privatization. States are saying that Private distribution companies will "cherry-pick" only good areas with more industrial and commercial consumers and not residential and rural consumers. — This can be resolved by structuring the project in proper way.

2) Right now Industrial and Commercial user "Cross-subsidize" the residential and agricultural consumers which means tariff for commercial and industrial consumers is high and that money is used to provide cheaper electricity to residential and agricultural consumers. States fear that if private sector is allowed then cross-subsidy may be removed.

3) Bill increases penalty for DISCOMs that fail to meet renewable Power Purchase Obligations (RPO). Let me explain. Presently every DISCOM is given a target to purchase renewable energy out of its total purchase of electricity and State DISCOMs have failed in that. So, States fear that this penalty will hurt them.
For more detail on RPOs pls see this link https://t.me/VivekSingh_Economy/1683 Open / Comment

2021-08-10 05:31:09 Open / Comment

2021-08-10 04:58:57 The answer to the above question is (c).

Explanation:

"e-RUPI" is not a digital/virtual currency. It is not a currency at all. Its just an electronic voucher backed by Indian rupee.

"e-RUPI" can be issued by Govt. agency or private corporate entities THROUGH banks. This means that a Govt. agency can use this electronic voucher (e-RUPI) facility if they want to implement welfare schemes. For example, if the price of Rice is Rs. 25/kg in the market and Govt. wants to provide it in Rs. 3/kg to a particular beneficiary, then Govt. agency will approach a (partner) bank and will provide the details of that particular person/beneficiary to the bank. The bank will send the e-RUPI (SMS string or QR code) to the mobile No. of that beneficiary. The beneficiary can then use this e-RUPI (electronic voucher) and go to specified shops and this e-RUPI will be scanned at that particular shop and the beneficiary will get one KG rice by paying just Rs. 3. The shopkeeper (after scanning) will get Rs. 25 - Rs. 3 = Rs. 22/kg from the bank. The bank will get Rs. 22/kg from the Govt. agency.
In the same way a private corporate entity can also use this if they want to provide any benefit to its employees.

So, basically "e-RUPI" can be issued by Govt. Agency/Corporate entity (which means that Govt./private agency can use this system) but the e-RUP (SMS string/ QR code) will be sent by BANKS to the beneficiaries.

e-RUPI cannot be transferred or converted into cash.

And please read the following links, each and every point has been explained.
https://t.me/VivekSingh_Economy/3123
https://t.me/VivekSingh_Economy/3129

A CAUTION for students: By seeing your answers, it seems that you guys are just focussing on the NEWs HEADLINES rather than reading the newspaper properly. It was very clear in the newspaper article/explanation that "e-RUPI" is just a electronic voucher and not digital currency. Newspapers just want to highlight the headlines through buzzwords like "Digital Currency". Do not fall into that trap. Similar was the case when few TRAINS were give to IRCTC to run/operate and every newspaper said... Trains are being PRIVATIZED, which was wrong. Open / Comment

2021-08-09 07:56:18 Question of the day:

Consider the following statements regarding "e-RUPI":

(i) It is a digital/virtual currency
(ii) It will be issued by National Payments Corporation of India (NPCI)
(iii) It (the SMS string / QR Code) will be sent to the beneficiary's mobile by the participating banks
(iv) It can be used only by specific persons for specific purpose
(v) It can be redeemed only at certain specific centres
(vi) It can be accessed even by someone who do not have a bank account
(vii) It can be transferred to other person and converted into cash Open / Comment

2021-08-08 06:52:56 Source: The Hindu
I have already covered "e-RUPI" in my previous telegram post (https://t.me/VivekSingh_Economy/3123). So, first read that post and then go through this (good) article, it will give you further clarity on "e-RUPI". Open / Comment