Economy
RBI 6th Bi-monthly Monetary Review 2014-15
The Reserve Bank of India (RBI) has on 3 February announced sixth Bi-Monthly Monetary Policy Statement 2014-15. In its bi-monthly monetary policy statement, RBI has not changed its main lending rate i.e.Repo Rate and cash reserve ratio (CRR). But changed statutory liquidity ratio (SLR) of scheduled commercial banks.The RBI reduced the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.0% to 21.5% of their net demand and time liabilities.
ICICI Bank Launches India’s First Digital Bank Pockets
The Industrial Credit and Investment Corporation of India (ICICI) Bank, has on 10 February launched India’s first digital Bank on mobile phones, Pockets. This service will enable users to instantly send money to any e-mail id, mobile number, friends on Facebook and bank account.
Railway Budget 2015-16
Railway Minister Suresh Prabhu on 26 February 2015 presented the Railway Budget 2015-16 in the Lok Sabha. In his first Railway Budget, Prabhu outlined a plan to invest over 8 lakh crore rupees over 5 years. The size of the Plan Budget has gone up by 52 percent from 65789 crore rupees in 2014-15 to 100011 crore rupees in 2015-16.
2015-16 Railway Budget at a Glance (Rs in crore) :-
* Gross Traffic Receipts – 1,83,578.00
* Total Work Expenditure – 1,62,210.00
* Net Railway Revenue – 25,076.45
* Total Passenger Earnings – 50,175.00
* Good Earnings – 1,21,423.00
* Divindend Payable To General Revenues – 10,810,74
* Operation Ratio – 88.5%
Highlights of the Railway Budget 2015-16 :-
New Trains :- Announcement of no new trains (This will be done after doing a comprehensive analysis and feasibility studies)
Passenger Fare :- No increase in Passenger fares
Freight :- Freight increase up to 10% on select items: 10% for urea, 2.7% for cement and 6.3% for coal, 0.8% for iron and steel
Railway Operations :- Railway’s Operating Ratio to improve to 88.5% in 2015-16 compared with targetted 91.8% in 2014-15
Railway Finances :-
a) Five-year outlay at Rs 8.5 lakh crore
b) Plan expenditure in Railways to he hiked 52% to Rs 1.11 lakh crore for 2015-16
c) 77 projects totalling Rs 96,182 crore on cards to expand capacity
Railway Safety :-
a) Rs 6,581 cr earmarked on level crossing safety
b) Train protection warning system to prevent fires
c) Collision avoiding system
d) 917 safety work projects to eliminate over 3,000 unmanned crossings in all states
e) Audio visual warning and radio based signals design for unmanned level crossing with technical assistance from IIT-Kanpur on cards to enhance safety
f) Five years safety plan will be ready by June 2015
g) Surveillance camera on cards for women’s safety, financing from Nirbhaya fund
Improving Train Speed :- Speed of 9 railway corridors to be increased from existing 110 and 130 kmph to 160 and 200 kmph respectively. Average speed of freight trains in empty and loaded conditions will be enhanced to 100 kmph for empty freight trains and 75 kmph for loaded trains.
Network Expansion :- Fast-track sanctioned works on 7000 kms of double/third/fourth lines Commission of 1200 km of network in 2015-16 at an investment of 8686 crore rupees.
Railway Modernisation :-
a) 6,000 km of route km to be electrified in 2015-16, up from 462 route km in 2014-15
b) 800 km of gauge conversion on cards
Railway Convenience :-
a) Proposes to move towards paperless ticketing
b) Now, book your tickets 120 days in advance
c) Rs 120 crore provided for lifts and escalators at Railway stations
d) Phone charging facilities will be provided in all trains including general compartments
e) Online booking of wheelchairs for seniors, physically challenged passengers
f) Food can be ordered through IRCTC website while booking tickets
g) Wifi availability at 400 railway stations across the country including B class stations too
h) To introduce “Operation 5 minutes” to allow unreserved passengers to book tickets in 5 minutes
Railway Cleanliness :-
a) 17,000 toilets to be replaced and modernized
b) Vacuum-based toilets on cards
c) New toilets in 650 railway stations
d) Railways will set up waste management plants to dispose off waste
e) Will work on Swacch Rail in lines with Swacch Bharat
Bullet Train :- Feasibility study for High Speed Rail between Mumbai-Ahmadabad is in advanced stage.
Station Redevelopment :- Zonal and Divisional offices to be empowered for quicker decision making Development of 10 Satellite Railway terminals in major cities with twin purpose of decongesting the city and providing service to suburban passengers
Infrastructure :-
* Track capacity will be increased by 10% to 1.38 lakh km.
* 10 satellite railway terminals will be developed in major cities in 2015-15.
* Connectivity to North-East India will be improved. In J&K rail connectivity will be on focus.
Tourism :-
* Railways will promote Gandhi circuit in order to mark centenary year of Mahatma Gandhi’s return from South Africa. Special travel scheme Kisan Yatra for farmers for farming and marketing technique centres. Under Incredible India, Incredible Rail will be launched.
Union Budget 2015-16
Union Finance Minister, Arun Jaitley on 28 February 2015 presented Union Budget 2015-16 in the Lok Sabha. It was the first full year Budget of the NDA government under leadership of Prime Minister of Narendra Modi and the second budget of Arun Jaitley as Finance Minister.
2015-16 Budget Estimates (Rs in Crore )
* Revenue Receipts – 1,141.6
* Capital Receipts – 635.9
* Total Receipts – 1,777.5
* Non-Plan Expenditure – 1,312.2
* Plan Expenditure – 465.3
* Total Expenditure – 1,777.5
* Revenue Deficit – 394.5
* Effective Revenue Deficit – 283.9
* Fiscal Deficit – 555.6
* Primary Deficit – 99.5
Highlights of the Union Budget 2015-16 :-
Taxation:-
* No change in the Tax slab on personal income.
* Wealth tax abolished.
* Additional 2% surcharge for the super-rich with income more than Rs. 1 crore.
* For next 4 years, corporate tax has been reduced to 25 percent from present 30 percent.
* Service tax increased to14 per cent.
* Apart from CSR, 100% tax exemption for contribution to Swachch Bharat Abhiyan.
New projects:-
* New projects 5 more AIIMSs in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
* IIT in Karnataka. While, the Indian School of Mines in Dhanbad, Jharkhand will be converted into IIT.
* 2 more IIMs in Jammu and Kashmir and Andhra Pradesh.
* Post-Graduation institutes of Horticulture in Amritsar, Punjab.
* University of Disability Studies will be established in Kerala.
* In Arunachal Pradesh, Centre of film production, animation and gaming will come up.
* For Infrastructure sector Rs. 70,000 crores allocated.
* Projects in rail road and irrigation bonds will be tax free.
* Infrastructure development through PPP model will be revitalised and government will bear majority of the
risk.
* Atal Innovation Mission will be established to draw on expertise of researchers and entrepreneurs to foster
scientific innovations. For this mission Rs. 150 crore allocated.
* 5 ultra-mega power projects each of 4000MW proposed by Government
Defence:-
* 2,46,726 crore allocated for Defence. It is 9.87 per cent greater than last year.
* Make in India campaign will take into consideration for speedy manufacturing of Defence equipment.
Welfare Schemes and new Programmes :-
* Under the Swachh Bharat Abhiyan, six crore toilets across the country will be built.
* By 2020, housing for all.
* Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) will get MGNREGA of Rs. 5,000 crore. It is highest allocation to this scheme.
* To improve quality of life of common man, GST and JAM trinity (Jan Dhan Yojana, Aadhaar and Mobile) will be launched. To encourage first generation SC/ST entrepreneurs, MUDRA bank will provide finance.
* Direct Benefit Transfer (DBT) will be further be expanded to 10.3 crore from 1 crore.
* Government will contribute 50% of the premium limited to Rs. 1,000 a year for the Atal Pension Yojana.
* 9,000 crore unclaimed funds in PPF/EPF will be used for Senior Citizens Fund.
* For all Indian, government will create universal social security system.
* For electric cars production Rs. 75 crore allocated.
* Renewable energy target for 2022 – 60K MW in wind; 10K MW in biomass, 100K MW in solar and 5K MW in small hydro plants.
* Under the new tourism scheme, development of churches and convents in old Goa; Hampi, Elephanta caves, , Jallianwala Bagh, Forests of Rajasthan, Leh palace, Varanasi Qutb Shahi tombs at Hyderabad.
* Visa on Arrival (VoA) facility to be increased for 150 countries from present 43 countries.
* As an alternative to purchasing gold, Sovereign Gold Bond will be launched.
* In order to facilitate depositors of gold to earn interest and jewellers to obtain loans on their metal accounts new scheme will be launched.
* Forward Markets Commission (FMC) will be merged with the Securities and Exchange Board of India (SEBI). * Under SARFAESI Act 2002, NBFCs registered with the RBI having asset size of Rs 500 crore and above to be considered as financial institution for mid-corporate businesses and fund SME.
* For Rural Infrastructure Development Bank, Rs. 25,000 crore allocated.
* To support Micro Irrigation Programme, Rs. 5,300 crore allocated.
Economic Survey 2014-15
Union Finance Minister Arun Jaitley presented the Economic Survey for 2014-15 in the Parliament on 27 February 2015.The Economic Survey forms the basis for the Union Budget for the fiscal year starting 1 April. This Economic Survey has been prepared by the Finance Ministry’s Chief Economic Adviser Arvind Subramanian.
Following are the important highlights of Economic Survey:-
Economic Growth :-
* Economic growth at market prices is expected between 8.1 to 8.5% during 2015-16 (based on the new GDP calculation formula)
* Growth rate in 2014-15 is estimated at 7.5%
* The total stock of stalled projects stands at Rs. 8.8 lakh crore or 7% of GDP and are mostly in private sector
Fiscal Deficit and Current Account Deficit :-
* Union Govt. will stick to fiscal deficit target of 4.1% of GDP in 2014-15
* Country needs to meet its medium-term fiscal deficit target of 3% of GDP
* Current Account Deficit (CAD) estimated to fall 1% of GDP in 2015-16
Inflation:-
* Consumer inflation in 2015-16 likely to range between 5 to 5.5%
* Inflation likely to be below RBI’s target by 0.5 to 1% point
* Inflation shows declining trend in 2014-15
* Decline in inflation by over 6% points since late 2013
Foodgrain Production:-
* Foodgrains production for 2014-15 estimated at 257.07 million tonnes
* The production will exceed last 5 years by 8.5 million tonnes
Subsidy :-
* Food subsidy at Rs. 1,07,823.75 crore during 2014-15 (up to January 2015), an increase of 20% over previous year