Current Affairs February 2017 - Economic

News 1 - Finance Minister presented the Economic Survey 2016-17

The Economic Survey 2016-17 presented in the Parliament by the Union Finance Minister Shri Arun Jaitley stated that Indian Economy has sustained a macro-economic environment of relatively lower inflation, fiscal discipline and moderate current account deficit coupled with broadly stable rupee-dollar exchange rate. Indirect taxes grew by 26.9 percent during April-November 2016.

Agriculture sector is estimated to grow at 4.1 percent in 2016-17 and industrial sector is estimated to moderate to 5.2 per cent. Service sector is estimated to grow at 8.9 percent in 2016-17. Trade deficit declined to US$ 76.5 billion in 2016-17.

News 2 - GDP growth in 2017-18 is projected between 6.75% to 7.5%

The Economic Survey 2017 presented in Parliament stated that once the cash supply is replenished, which is likely to be achieved by end March 2017, the economy would revert to the normal. Therefore, the real GDP growth in 2017-18 is projected to be in the range of 6.75% - 7.5%.

The cash squeeze will have significant implications for GDP, reducing 2016-17 growth by 0.25% to 0.5% points compared to the baseline of 7%. It stated that an improved tax system could promote greater income declaration.

News 3 - Union Minister for Finance presented the General Budget 2017-18

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley presented the General Budget 2017-18 in Parliament. This is the first of its kind which included the Railway Budget. The total expenditure in Budget for 2017-18 was placed at Rs. 21.47 lakh crores. The total resources being transferred to the States and the Union Territories with Legislatures will be Rs. 4.11 lakh crores. Defence expenditure excluding pensions, is to be Rs. 2,74,114 crores.

The fiscal deficit for 2017-18 has been pegged at 3.2% of GDP and revenue deficit for next year is pegged at 1.9%.

News 4 - General Budget 2017-18 proposed Reduction in Customs and Excise

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18, announced substantial relief in Customs and Excise Duties for Renewable Energy Sector and for manufacture of Cashless Transaction Devices.

Proposals for reduction in Customs duty on inputs and raw materials to reduce costs and for incentivizing domestic value addition under Make in India have been submitted for certain items like Liquefied Natural Gas, Nickel, Vegetable Tanning Extracts and certain Capital Goods.

News 5 - Total allocation for Infrastructure Development stands at Rs. 3,96,135 crores

The Union Minister for Finance and Corporate Affairs announced total allocation for infrastructure development in 2017-18 of amount Rs. 3,96,135 crores. This has been divided into Highways (Rs. 57,976 crores), Civil Aviation infrastructure (Rs. 2,41,387 crores) and Telecom sector’s BharatNet Project (Rs. 10,000 crores).

A new and restructured Central scheme, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18 to focus on our export infrastructure in a competitive world.

News 6 - Finance Minister reduced the tax rate from 10% to 5%

The Union Finance Minister Shri Arun Jaitley reduced the rate of taxation from existing 10% to 5% for individual assesses between income of Rs. 2.5 lakhs to Rs. 5 lakhs. This would reduce the tax liability of all persons below Rs. 5 lakh income either to zero (with rebate) or 50 percent of their existing liability.

It is decided to have a simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income up to Rs. 5 lakhs other than business income.

News 7 - CSO released first revised estimates for the year 2015-16

Central Statistics Office, Ministry of Statistics and Programme Implementation released the first revised estimates of National Income, Consumption Expenditure, Saving and Capital Formation for the financial year 2015-16 as per the revision policy.

Nominal GDP or GDP at current prices for the year 2015-16 is estimated as Rs. 136.75 lakh crore exhibiting a growth of 10.0 percent during 2015-16. Real GDP stood at Rs. 113.58 lakh crore during 2015-16. Per Capita Income is estimated at Rs. 94,178 for 2015-16.

News 8 - Government ruled out tax incentive beyond Rs. 2 lakhs for a second home

The Government has ruled out the rollback of the proposal to restrict tax incentive for second home to 2 lakh rupees per annum.

The Finance Bill 2017 has restricted set-off loss towards second home against other heads of income up to 2 lakh rupees under Section 71 of the Income Tax Act. Under the present dispensation, there is no such limit for set-off loss from house property, which is mainly the difference between the rental income and interest on home loan. In other words, a buyer could deduct the entire net interest paid on the home loan.

News 9 - Google's Terra Bella business sold to start up Planet Labs

Google's satellite business, Terra Bella, was acquired by American start up ‘Planet Labs’ which will allow Planet to combine its current constellation of medium resolution satellites with Terra Bella's high-resolution satellite images, however Google will continue to license Earth imaging for its use from Planet in a multi-year contract which is part of the sale arrangement.

With this business merger, Planet labs will soon launch additional 88 so-called cubists which will be lower cost satellites and largest single launch of satellites at one time.

News 10 - CBDT signed 4 Unilateral Advance Pricing Agreements

Central Board of Direct Taxes signed four more unilateral Advance Pricing Agreements. The four APAs signed pertain to the Manufacturing, Financial and Information Technology sectors of the economy. The international transactions covered in these agreements include Contract Manufacturing, IT Enabled Services and Software Development Services.

With this, the total number of APAs entered by the CBDT has reached 130.The APA Scheme was introduced in the Income-tax Act in 2012, to provide certainty to taxpayers in the domain of transfer pricing.

News 11 - Nokia to buy Finnish telecom software company Comptel for $371 million

Nokia plans to acquire Finland-based telecommunications software company Comptel in a cash deal worth €347 million ($371 million).

Comptel is founded im Helsinki. It develops software for Operations Support Systems (OSS). Nokia plans to combine Comptel’s business with its own OSS offering, analytics, and cloud infrastructure to provide an “endto-end orchestration of complex NFV and SDN deployments. The aim of the acquisition is to help phone carriers manage their networks.

News 12 - Nomura projected India’s GDP at 5.7 % in January-March quarter, 2017

Global financial services major Nomura has predicted India's GDP growth at 5.7% in the January-March quarter because of demonetization of high value currency.

The GDP growth was 7.3% during JulySeptember 2016 and is expected to slow to 6% during the October-December 2016 quarter. The Reserve Bank of India has lowered its GVA forecast to 6.9 per cent for the fiscal. The index of industrial production (IIP) contracted by 0.4 per cent in December 2016 and manufacturing growth dipped by two percent.

News 13 - SoftBank to buy Fortress Investment for $3.3 billion in cash

Japanese Internet and telecommunication giant SoftBank Group would buy U.S.-based private equity and asset management firm Fortress Investment Group for about $3.3 billion in cash.

With this SoftBank is looking to add investment expertise as it prepares to launch the world’s largest private equity fund. SoftBank will pay $8.08 a share for Fortress, a 39% premium to the company’s 13 February closing price. The deal is subject to approval by Fortress shareholders as well as regulators.

News 14 - Tata Motors inked Strategic Technological Agreement with Microsoft

Tata Motors and Microsoft announced a strategic agreement to redefine connected and personalized driving experiences for Indian customers. Tata Motors will leverage Microsoft’s connected vehicle technologies.

The technology brings together artificial intelligence (AI), advanced machine learning, and the Internet of Things (IoT) capabilities on the global hyper-scale Azure cloud, to traverse the digital and physical worlds and create a highly personalized, smart and safer driving experience across the digital life of a vehicle owner.

News 15 - Havells India to buy Lloyd Electric’s consumer business

Havells India Ltd will acquire the consumer durables business of Lloyd Electrical and Engineering Ltd, run by the BR Punj Group.

The acquisition is at an enterprise value of R1,600 crore on a debt-free, cash-free basis subject to closing adjustments. Postacquisition, acquisition, Lloyd Consumer will remain a division of Havells, but its brand name will be preserved. With the deal, Havells wants to get a toehold in the fast-growing Indian air conditioners business.

News 16 - Coal imports declined by 21.7% to 14.31 million tonnes in January

Coal imports declined by 21.7% to 14.31 million tonnes last month on the back of sufficient availability of domestic fuel. Imports in January 2017 stood at 14.31 million tonnes against 18.28 million tonnes in same month last year.

The government had said, in September, 2016, that it was working on a plan to end dependency on coal imports in next three to four months to facilitate consumption of the surplus fossil fuel produced by Coal India. Coal India accounts for over 80% of domestic coal production.

News 17 - Flipkart and Microsoft enter a cloud partnership to expand e-commerce in India

Microsoft and Flipkart announced a strategic partnership to provide consumers in India with the best online shopping service. Microsoft CEO Satya Nadella and Flipkart Group CEO Binny Bansal announced the news at an event in Bengaluru.

As a part of the agreement, Flipkart will adopt Microsoft Azure as its exclusive public cloud platform. Flipkart’s partnership with Microsoft is aimed at jointly accelerating the digital transformation of e-commerce and creating personalized experiences for customers.

News 18 - Britannia Industries signed an MoU with Greek-company Chipita

Britannia Industries has signed a non-binding memorandum of understanding with Greece's cakes and confectionery major, Chipita. The two companies are in advanced stages of discussion to finalise definitive agreements including a Joint Venture.

Chipita is internationally in 4 major product categories — croissants and similar dough products, savoury snacks (bake rolls), cakes and confectionery. Chipita started in 1973 and has been operating outside Greece since 1995.

News 19 - CII inked MoU with Singapore trade and business agencies

The Confederation of Indian Industry (CII) has inked a Technology Partnership MoU with two Singapore agencies, International Enterprise (IE) Singapore and the Singapore Business Federation (SBF), to promote expertise in expanding businesses.

The MoU is a first of its kind between Indian and Singapore business institutions. The MoUs would help in building platforms to establish partnerships which can connect the start-ups and small enterprises in both the nations.

News 20 - IMF projected India's GDP to slow to 6.6% due to demonetization

The international Monetary Fund has projected India's growth to slow down to 6.6% in 2016-17 fiscal due to the strains that have emerged in the economy because of temporary disruptions caused by demonetisation.

The IMF, however, has predicted the Indian economy to bounce back and grow at more than 8% in the next few years. The postNovember 8, 2016 cash shortages and payment disruptions caused by the currency exchange initiative have undermined consumption and business activity, posing a new challenge to sustaining the growth momentum. India's economy grew at 7.6% in 2015-16.

News 21 - Gross Value Added growth dropped to 6.2% in Q3

As per ICRA rating agency, the economy based on the gross value added dropped from 6.9% to 6.2% in quarter Oct – Dec 16, due to note ban. GDP growth is also estimated to decline to 6.5 percent from 7.2 percent due to slowdown in growth of the industry, services and agriculture expansion.

However, ICRA announced a growth in the performance of agriculture, forestry and fishing due to better kharif harvest and services sector is also expected to ease to 8 percent from 9.1 percent.

News 22 - Bharti Airtel acquired Telenor India

Major telecom player Bharti Airtel has bought Telenor (India) Communications Pvt. Ltd operations in seven circles of Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh (East), Uttar Pradesh (West) and Assam. Airtel will be able to increase its spectrum in the 1800 MHz band.

This acquisition will not only include transfer of all Telenor India’s assets, but also its customer base to Bharti Airtel. The proposed acquisition will undergo seamless integration, both on the customer as well as the network side, as and when acquisition will be completed on paper.

News 23 - Indian digital payments market to reach $500 Billion by 2020

Digital payments industry in India is expected to reach 500 billion US dollars by 2020, with over 50 percent of Internet users in the country will be using it. In India, BCG estimates that digital technologies will influence up to 45 percent of all retail sales by 2025.

The report counts government's plans to build 100 smart cities across the country and 'Digital India', which aims to increase the optical fiber network to thousands of villages where two-thirds of the population lives.

News 24 - India to be the fastest growing economy among the G-20 Nations: Moody's

International rating agency Moody's Investors Service has predicted India to be the fastest growing economy among G-20 countries with a 7.1% growth in year 2017 in its report titled 'Modest Acceleration in the Global Economy'.

Moody also predicted the growth in G-20 countries to pick up modestly to 3% in 2017 and 2018 from 2.6% in 2016. As per the report, China's economy has stabilised around the official growth target of 6.7% in 2016 but will likely continue to decelerate to 6.3% and 6% in 2017 and 2018.

News 25 - India's steel exports registered three-fold increase in January

India's steel exports registered a three-fold increase to 8.89 lakh tonnes in January 2017, compared to Jan 2016. The massive jump in exports comes amid government providing extensive support to the domestic steel industry by way of various trade remedial measures including anti-dumping.

As per the Joint Plant Committee data, the country shipped out 58.65 lakh tonnes in the first 10 months of the ongoing fiscal, registering an increase of 71%. Export in January, 2017 was up 224% over January 2016 and was up by 19% over December 2016. The country's steel export in January 2016 was 2.74 lakh tonnes.

News 26 - FDI inflow zooms 18% to $46 billion in 2016: DIPP

As per the data released by the Department of Industrial Policy and Promotion, Foreign Direct Investment in the country grew 18 per cent in 2016, to 46 billion dollars. The country attracted Foreign direct investment of $39.32 billion in 2015.

The sectors which attracted the highest foreign inflows include services, telecom, trading, computer hardware and software, and automobiles. The bulk of this Foreign direct investment came in from Singapore, Mauritius, the Netherlands and Japan.

News 27 - Gorb partners with Ola

Food technology company, Gorb has entered a partnership with Ola to offer food to consumers at discounted rates in Mumbai. As a part of the partnership, Ola riders will receive a code via SMS and mail every time they book a cab, which can be availed on the Gorb app or website to order food.

The offer, valid till April 30, will provide a discount of Rs. 100 on a minimum order value of Rs. 200. Gorb was launched in 2016 with a tagline ‘Jaisa Mood Waisa Food’.