CURRENT AFFAIRS 1-2nd Oct., 2014

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CURRENT AFFAIRS 2nd Oct., 2014

1. Government has set up four different task forces to lay a road map for upgradation of existing agencies in the financial sector and establishment of new ones, including the Public Debt Management Agency (PDMA). The action is based on recommendations of the Financial Sector Legislative Reforms Commission. PDMA would help the government raise debt and support its cash management function.

2. Chief executive officer (CEO) of Microsoft Corp, Satya Nadella announced that the company would set up 3 local data centres in the country by 2015. Microsoft will offer cloud services from its Azure and Office 365 stacks to local business and government clients. New initiatives of the government such as Digital India, smart cities and the financial inclusion scheme-Jan Dhan Yojana offer significant opportunity for hosting data and cloud services.

3. According to Times Higher Education's ranking of the world's best universities this year, only two Indian universities - The Indian Institute of Science (IISc) and Punjab University appeared among top 300. They are placed between 276th and 300th positions. This also means the latter's ranking has slipped from last year, when it was between 226th and 250th.

4. The Deepak Parekh committee, set up in 2010 to look at financing for infrastructure development has submitted its report. It has recommended public-private partnerships (PPPs) in the coal mining and power distribution segments. The report gains significance as SC had recently cancelled all coal block allocations made in 1993. The latest report also provides a plan for reviving investment in key sectors during the 12th Plan.

5. The agreement for the first hydroelectric project developed by a joint venture between PSUs of India and Bhutan was signed. The 600-Mw Kholongchu hydroelectric project in Bhutan is being developed by Shimla-based power public sector unit (PSU) SJVN Ltd under the BOOT (build, own, operate and transfer) model.

CURRENT AFFAIRS 1st Oct., 2014

RBI's fourth Bi monthly Monetary Policy statement 2014-15 was announced on 30th September 2014

1. RBI has kept all key policy rates unchanged. Repo rate at 8%, CRR at 4%, reverse repo rate at 7%, bank rate at 9%. Despite the recovery of emerging economies like US and decline of headline inflation, RBI has kept rates the same owing to unstable geopolitical situations in West Asia and volatile investments.

2. Domestic growth: There has been a fall in the manufacturing output which was negated by increase in exports. RBIs industrial outlook survey foresees expansion of export orders. Agriculture sector may have a setback as rainfall deficit is seen in major productions zones of north western part of India. However, there is cautious optimism that economy can be built on the back of improved business sentiment and solid foundations through increased investment.

3. Banking and Finance: Banks credit growth has declined due to tight monetary policy and high credit demand. Finance from other non-bank sources such as foreign direct investment and external commercial borrowing has increased. Net bank credit particularly public sector banks is lower because of repayment of loans by entities and borrowing of oil companies is also lower.

4. The policy reviewed the developmental and regulatory measures for banks and financial markets that are being put in place. It emphasises the strengthening of the monetary policy framework; fortifying the banking structure; broadening and deepening financial markets; expanding access to finance; and dealing with stress in corporate and financial assets and putting them back to work.

5. An Early Warning System (EWS) is being put in place to track banks’ critical financial parameters. Deviations from pre-defined benchmarks would trigger more granular oversight in the form of enhanced off-site monitoring, focused discussions, on-site examination and punitive action. In addition, a Central Fraud Registry is also proposed to be created simultaneously as a searchable centralised database for use by banks.

The fifth bi monetary policy review is scheduled on December 2, 2014.