Group 5 || Weekly Economic Newsletter

Section B

Govt may do away with LPG subsidy for rich, says FM Arun Jaitley Click Here
The government is considering doing away with the LPG subsidy for the well-off, Finance Minister
Arun Jaitley said. Currently, 12 cylinders are available to consumers at a subsidised rate of Rs 414
each (in Delhi). Any requirement beyond this will have to be purchased at the market price of Rs 880
per 14.2-kg cylinder.
Unsustainable tax demand will give India a bad name: FM Arun Jaitley Click Here
Finance Minister Arun Jaitley today said that an unsustainable tax demand would only earn the
country a bad name as an investment destination, comments that come in the wake of tax
department losing its battle against Shell in Mumbai High Court. Jaitleys comments come in the
wake of Mumbai High Court order earlier this week wherein Income-Tax Department lost its Rs
18,000-crore transfer pricing cases against oil major Shell India. Already the government is engaged
in a Rs 20,000 crore tax dispute with British telecom major Vodafone.
India less vulnerable to global shocks than before: HSBC Click Here
India, which witnessed substantial financial volatility last year over talks of US Feds plan to taper its
bond buying programme to boost American economy, has improved its external balance position
and is less vulnerable than before, an HSBC report says. According to the global financial services
major, the Fed is expected to hike interest rates next year, but many investors seem to believe that
Asia is in relatively good shape since most economies boast current account surpluses.
Barack Obamas immigration orders to benefit thousands of Indians in US Click Here
Obamas executive actions provides portable work authorisation for high-skilled workers awaiting
LPR status. Under the current system, employees with approved LPR applications often wait many
years for their visa to become available, a White House factsheet said. The Department of Homeland
Security (DHS) will make regulatory changes to allow these workers to move or change jobs more
easily. DHS is finalising new rules to give certain H-1B spouses employment authorisation as long as
the H-1B spouse has an approved LPR application.

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WPI inflation to remain range bound at 1.8-2 pct during November: Dun & Bradstreet Click Here
The broad based slowdown in inflation trajectory is likely to continue amid declining global oil prices
and the headline WPI inflation is expected to remain range bound at 1.8-2 per cent during
November, says a report. According to the report, going forward, inflationary pressures in some
items may increase due to slight improvement in demand. Moreover, waning of base effect might
also lead to reversal of inflation rate. D&B expects the headline WPI inflation to remain range bound
at 1.8 per cent- 2 per cent during November 2014.
WTO officials, commerce ministry review trade policies Click Here
Trade Policy Reviews (TPR) is mandated in the WTO agreements, and accordingly member countries
trade and related policies are examined and evaluated at regular intervals. During the TPR review
meetings, the WTO team will, among other things, monitor measures that may have an impact on
the global trading system including government subsidies as well as direct and indirect assistance for
exports and investments, measures taken to protect certain sectors, especially agriculture, high
duties on certain manufactured items, trade and investment restrictions, as well as frequent use of
anti-dumping measures, according to sources.
Global Slavery Index: The India Story Click Here
Indias modern slavery challenges are immense. Across Indias population of over 1.2 billion people,
all forms of modern slavery, including inter-generational bonded labour, tracking for sexual
exploitation, and forced marriage, exist. Evidence suggests that members of lower castes and tribes,
religious minorities, and migrant workers are disproportionately affected by modern slavery
LEADERS SPEAK IN ONE VOICE - G-20 Endorses India's Concerns on Black Money Click Here
Leaders of the group of 20 industrialised and major emerging economies on Sunday endorsed India's
concerns over black money and tax avoidance, and promised to modernise global tax rules and begin
automatic exchange of tax information. New Delhi described the outcome of the meeting -Narendra
Modi's first at G-20 as prime minister -as an unprecedented success. It said the leaders endorse
the global Common Reporting Standard for the automatic exchange of tax information on a
reciprocal basis. We will begin to exchange information automatically with each other and with
other countries by 2017 or end-2018, subject to completing necessary legislative procedures.
Slower Pace of Growth in Q2 May Delay Economic Recovery Click Here
The year-on-year growth in aggregate sales and operating profit for the September 2014 quarter
slipped to a five quarter low. Though analysts had anticipated tepid growth for the quarter, the
actual numbers are below expectations due to sluggish industrial and consumer demand. Total
revenue of a sample of 1,831 companies -excluding banks, finance firms and oil and gas industry rose 6.1% year-on-year during the September 2014 quarter. Operating profit grew by 14.5% and,
thanks to a higher other income growth, net profit rose 26.6%.

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8,868 of 15 cr Ready to Give up LPG Subsidy Click Here

An early call of the Narendra Modi government, urging people to voluntarily give up subsidies on
cooking gas cylinders has signed up just0.006% of the customer base of 15 crore connections. In
three months since the government exhorted people to give up subsidies on their gas cylinders, just
8,868 people or entities have opted to voluntarily part with subsidies, an embarrassing civic
consciousness statistic in a country that takes pride in its ever expanding list of millionaires.
World Economy Worst in 2 Yrs, Europe Darkening: Survey Click Here
The world economy is in its worst shape in two years, with the euro area and emerging markets
deteriorating and the danger of deflation rising, according to a Bloomberg Global Poll of
international investors. A plurality of 38% of those surveyed last week described the global economy
as worsening, more than double the number who said that in the last poll in July and the most since
September 2012, when Europe was mired in a recession. Much of the concern is again focused on
the euro area: Almost two-thirds of those polled said its economy was weakening while 89% saw
disinflation or deflation as a greater threat there than inflation over the next year
Cut in Interest Rates to Boost Economy: Jaitley Click Here
The finance minister also listed the reforms that his government will roll out, including the
constitutional amendment Bill for goods and services tax, the insurance amendment Bill and changes
to the land acquisition law to speed up infrastructure projects. Wholesale inflation declined to a five
year low of 1.77% in October while retail inflation was down to 5.5%, below RBI's January 2016
target of 6%, triggering a call from industry and some economists to cut rates.
Perishable Goods to Get Price Stabilisation Fund Click Here
Prices of potatoes, pulses, tomatoes, onions and several other perishable goods will not shoot up
next summer as usually happens between July and November, with the Centre planning to roll out a
price stabilisation fund by next month that will intervene in markets when key commodities
suddenly get expensive.
OIL DIPLOMACY AT WORK - Centre Steps on Gas to Cut Import Bill by Rs 10,000 Cr

Click Here

The initiative comes at a time when the members of the Organization of the Petroleum Exporting
Countries (OPEC) are battling for market share amid competition from new energy suppliers. Gulf
countries too have shown heightened interest in investing in India, particularly after Narendra Modi
became the prime minister. India depends heavily on term contracts with Middle East countries,
which announce a monthly official selling price. Oil industry executives and officials say the country
will save about 9,000 crore a year for every $1 reduction in price.
Recently, Saudi Arabia raised the price for Asian buyers, but cut it for the US, where the shale
revolution has lifted oil output to the highest in three decades. India feels that as one of the largest
importers from the Middle-east it too is entitled to such concessions.

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Disposable Income Adds Sparkle to Solitaire Sales Click Here

Sales of solitaires have grown at an estimated 12-13% in India in the first seven months of the fiscal
year although diamonds have been losing their sparkle in global markets, a contrasting trend that
retailers attribute to increasing demand from young and upwardly mobile Indians. While a 6-7%
drop in prices in the past four five months has also fuelled demand for solitaires, retailers say this is
not the prime reason for the spike in sales in India.
Alarmed at Surge in Gold Imports, Govt may Bring Back Curbs Click Here
India could soon re-impose some restrictions on gold imports to keep them in check, having grown
wary after a sudden surge in the amount of the metal coming into the country in the last two
months. Bullion dealers and jewellers anticipate that imports by star and premier trading agencies
may be restricted. Along with this, the government is likely to impose a ban on exports of machinemade jewellery from India and rein in bank loans for this purpose. Gold imports rose almost four
times to $4.17 billion in October from $1.09 billion a year ago. In terms of quantity, they surged to
150 tonnes from 24 tonnes, widening the trade deficit to $13.35 billion from $10.59 billion in
October 2013.
Kisan Vikas Patra Relaunched to Boost Savings in Households Click Here
It will be a freely tradable, fully secured instrument with no upper limit on the amount one can
invest in it. Available in denomination of Rs 1,000, 5,000, 10,000 and 50,000, the amount invested in
KVP will double in 100 months, which translates into effective annual interest rate of 8.7%. The
instrument can be encashed after a lock-in period of 30 months.

Group Members
Sayan Kar M120/14
Dilip Samanta M093/14
Gauri Rajpal M094/14
Avinash Das M082/14
P Dimple Reddy M 110/14
Praveen Kumar M 114/14

Group 5 Weekly Newsletter

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