Weekly Roundup of Business Newspapers for UPSC CSE. (Period: 16th Nov 2020 to 22nd Nov 2020)

Weekly Roundup of Business Newspapers for UPSC CSE. (Period: 16th Nov 2020 to 22nd  Nov 2020)

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Hello students and welcome to BYJU'S IAS. Welcome  to a session on Economy This Week, wherein we'll   be taking some of the very important articles  that have appeared in various business-related   newspapers and we'll be analyzing these particular  articles. For this particular video, I've chosen   the time period from 16th to 22nd November  2020 and the articles that I've chosen are   from Business Line, The Hindu, business-standard,  Indian Express, LiveMint and Financial Express.  Let's begin the discussion. The first very  very important article is with respect to RCEP.   RCEP stands for Regional Comprehensive  Economic Partnership. Now some of the   very important points with respect to RCEP are:  One this is one of the free trade agreements   that has been signed very recently by 15  countries. Initially, when this was proposed  

back in the year 2012, it was actually initiated  by ASEAN, which is a grouping of 10 countries.   This particular proposal consisted of 16  countries. Out of this India was one of them.   India very recently, that is at the end of last  year, decided not to join RCEP and it quit the   negotiations which were being conducted earlier.  As a result of this 15 countries have gone forward   and very recently have signed this particular  agreement and this has basically been in the   newspaper. Now some of the very important points  with respect to the concept of RCEP is, understand  

this - in order to promote the trade generally,  there is a concept of economic integration   model which is discussed. In this particular  economic integration model at various stages,   there is an increased economic integration or  the complexity of the trade keeps on increasing.   Initially, the concept of economic integration  model starts with free trade agreement;   after free trade agreement there is a concept of  the customs union, after customs union, there is a   common market, and after common market, there is  an economic union. After this, there is again,   political union but that is not important  in the context of economics. Now generally   what happens in a free trade agreement- in  case of a free trade agreement two member   countries will sign an agreement with each other  under this. They'll basically agree to impose a  

certain specialized tariff structure. That  is basically- 'A' - Which will export goods   to 'B' or let's say services to be 'B' country  will either impose a very low amount tariff or   no tariffs on these kinds of imports and in return  when 'B' will export goods services or investments   to country same kind of preferential treatment or  preference is given in terms of lower tariff or no   tariff. The objective is generally to promote  trade amongst these particular countries. Now   the Free trade agreements can be done between two  countries or multilateral countries or group of   countries and the concept of RCEP is a type of  a free trade agreement itself. Apart from this,   the concept of ASEAN or the grouping of ASEAN  partially is a concept of free trade agreement   itself. In addition to this, if you speak from the  context of India, India has signed multiple free  

trade agreements with multiple countries. For  example, India has a trade agreement with japan   India has a trade agreement with South Korea  it has a trade agreement with ASEAN itself.  Now the second point customs union under the  concept of a customs union these particular   group of countries which have signed and fleeted  agreement will have common external custom   tariffs; that is basically whenever the goods  will start coming into these particular countries,   in what way the tarrifs will be imposed by all  these particular member countries will be decided   under the concept of a customs union. Then  comes the concept of a common market- under  

which basically the services movement will be  much freer. And finally, there is a concept of   economic union wherein you can find a  common monetary policy which could be formed   by this particular group of countries,  free movement of a people can be found   under this particular concept. So this is  basically how the economic integration takes place   in the global market and whenever there's  an economic integration which is happening   on these particular lines generally you will  see that the trade will keep on increasing   the movement of a financials, movement of  a capital, movement of human resources,   etc. will also keep on flowing from one country  to another country and as a result of all of this;   investments capital formation, the contribution  to global trade, global GDP growth rate,   etc will also keep on increasing. This is the  basic idea for Economic Integration Model. 

Now in the case of India though there  was an option for India to join this   particular grouping, that is, RCEP; India  opted not to join this particular RCEP.  What are the reasons for this? Just give me a couple of minutes,   I'll explain that particular idea to you. But  before that once the RCEP comes into application   or implementation, this will be the biggest  trading block in the world. RCEP will account for   around 30 of the global trade it will also  account for around 30% of the global population.   The next very important point with respect to RCEP  is- it will cover goods, it will cover services,   and it will also cover the investment.  Now coming to the most important point-   Why did the government of  India decide not to join RCEP?  Here are some of the very very  important facts related to this. 

First and foremost, India wanted very  strict rules of origin guidelines.   Now, what is this particular concept of rules  of origin? In the case of the china that is the   second factor here I'll clip both of them in the  case of China, India has a huge amount of a trade   deficit with this particular country. Now, what  is this idea of a trade deficit? That is basically   the difference between imports as well as exports.  If imports value is higher than exports generally  

will refer to this as a trade deficit in case  of china today the trade deficit that india has   is more than 50 billion dollars, and in last 15  years this particular deficit has kept on bulging   or ballooning in favor of china. Now in case  of china, what government of india has done is,   in order to control the imports which  are coming from this particular country,   government of india has imposed multiple types  of tariffs. But it has been found that in order   to escape from these particular tariffs Chinese  exporters are basically rooting their exposure   from a third country. Now to counter this,  the government of India wanted a very strict   rule of origin. Basically in case of rules of  the region what happens is the exporter has to   prove a certain amount of value addition that has  happened in a respective country. For example,   again going beyond this particular concept of  RCEP, the government of India has introduced   CAROTAR guidelines. Under this particular CAROTAR  guideline which has come into force very recently,  

the exporter will have to prove that at least 35%  of the value addition has happened in his home   country. That is, a let's say we are importing  something from Malaysia, the exporter in Malaysia   has to prove that at least 35% of the value  edition on this particular plot has taken place   in Malaysia itself. If he is unable to prove that  then a different level of a tariff is applicable   on these particular exports. So basically  government of India, when the negotiations   were being held under the concept of RCEP, wanted  a very strict the rules of origin guidelines   and this was not accepted this was one of the  reason and here is the current affair - Government   of India rather than being dependent on  RCEP guidelines has already implemented   CAROTA guidelines, which again discusses the  basic idea of a rules of origin application. Second- India was very much worried about the  trade deficit that already has with china, despite   implementing so many tariffs, despite taking  measures to reduce the imports coming from China,   the trade deficit with China has been ballooning,  and the dependence on imports from China also has   been increasing. In fact, India joins RCEP, then  it has to withdraw certain tariffs, that does   basically reduce the customs or the taxes which  it is imposing on the imports which are coming   from multiple countries especially from RCEP  member countries. And if that actually happens  

then Chinese exporters would simply flood  the domestic market or the Indian market.   And if these particular cheaper  imports will flood the domestic market,   then the domestic manufacturing would be  affected in a very great way. That was the   biggest concern which has been raised by the  government of India for not joining the RCEP.  Third - very important reason for the government  of India to not join RCEP: is the government of   India usually gives the concept of a most favoured  nation to its strategic allies. Now you'll ask me   a question sir what is a most favored nation the  basic idea for most favored nations is one of   the pillars under WTO (world trade organization).  Most of favoured nation basically means a member  

country should not be biased against imports  which are coming from another trading partner,   that is basically a member country of WTO. That  is in simple terms imagine india is conducting   trade with 'A', 'B' and 'C'- the most favoured  nation basically means that the imports which are   coming from country 'C' into india shall not be  treated unfairly by government of India; the same   treatment shall be provided by india as if these  particular imports are coming from country 'A' as   well as country 'B'. But having said so even under  the concept of WTO, there are certain exceptions   to the concept of an MFN. For example, free trade  agreements is an exception, a generalized system   of preferences is again an exception, so basically  the government of India provides the most   favoured nation status to its strategic allies  but under RCEP, it was being asked to provide   most favoured nation to the investments which  are coming from other RCEP members. Government  

of India did not specifically want or it was not  interested in providing this particular MFN status   to investments which are coming specifically from  china this was another very important reason. Next, fourth - Very important reason is with  respect to tariffs. Now understand this,   from the 1990s till 2013-2014 the tariffs, that  is, average tariffs in case of India have been   reducing from 125 percent to around 13 to  14 percent and post that, the tariffs have   increased to around 17 to 18 percent. Now here  comes the problem under the concept of RCEP,  

the government of India was asked to reduce  the tariffs on the basis of a 2014 number. But   government of India wanted this to be 2019. The basic idea is the tariffs by government   of india on the imports have been increasing  post-2014 and if 2019 is the base year then the   tariffs will be reduced from a higher level to  lower level but if 2014 is taken as a base year   then the tariffs would be reduced from much  lower level to another much lower level. This was   another issue which was raised by government of  india which was again being negotiated under RCEP.   In addition to this another very important  reason was- india's experience with other free   trade agreements. As earlier mentioned, india  has a free trade agreement with South Korea,   with ASEAN, etc and India's performance  with respect to these particular FTAs has   not been very satisfactory. That is as per  one NITI-A report it has been shown that  

the trade deficit with the signing of these  particular freighted agreements has increased   in the context of India, that is basically  india's a trade deficit with RCEP members   after india signed these particular free  trade agreements has actually expanded;   which in other simple words can be said like this  - After signing the free trade agreements the   other trading partners have got more benefit out  of this particular agreement compared to India.  That is a precise reason why these particular  free trade agreements are being reviewed by   government of India now. So these are some of the  reasons which have been cited by government of   india for not joining RCEP. Now if government  of india doesn't join RCEP, what will happen?  

I'm using that term it doesn't join for a  simple reason, understand this very carefully,   though this particular RCEP deal has been signed  by 15 member countries of RCEP excluding india   the window for joining RCEP has been kept open  under this particular RCEP if any other country   wants to become a member of RCEP, it has to give  application in writing and then there's a waiting   period of 18 months. This particular waiting  period is mandatory. But RCEP very recently has   stated that this particular waiting period will  be waived up for India, it has to give a written   application to RCEP showing it's interested to  join RCEP. Then what is the situation that will   be taken into consideration in order to negotiate  with India? So this is the window that they are   actually referring to that is open for India  to join RCEP even today. Now if India decides   not to join RCEP even after this what will be  the problem what India will be missing out?  First and foremost the former CEA Mr Arvind  Subramanian has basically stated that in the   global market, because of the pandemic or because  of rising protectionist trends amongst some of the   developed countries, more and more countries are  signing these kinds of multilateral agreements   to protect themselves. On the other hand india is  moving away or india is moving in exactly opposite  

direction, that's the first very important issue. Second very important issue is,   if RCEP comes into force without india being  a partner in the RCEP or member in the RCEP,   then these particular 15 member countries will  improve the trade amongst themselves or there is   enhanced trade amongst these particular 15 member  countries; India will be left out of the block.   Next, very important problem with respect to this  is - the export-related investments or export to   driven investments, india will be finding it very  hard to attract this particular export to driven   investments if India doesn't join the RCEP. Next  very important problem is india is not a very big   country in terms of a participation in global  supply chains or global value chain systems.   If india doesn't become a member of RCEP then  india might lose out on joining a major player or   becoming a major player in the global value chains  in the global market. So these are some of the  

issues which have been raised by various experts  which would harm the Indian prospects if it   decides not to join RCEP any further so these are  certainly very important points with respect to   this particular RCEP. Now based on  this I've given a question here -  The term CAROTAR often appearing in the newspaper  refers to? It refers to option C- rules regarding   the country of origin or rules of origin. Now in addition to this, if you want you can   take down a mains descriptive question  that is basically "Critically evaluate   the RCEP". Again this is a straightforward  question whatever we have discussed so far is   basically idea of a critical evaluation itself,  the question could be given in a twisted manner   also but if you can understand what is the concept  of RCEP; Why India should have become a member of   RCEP? What will happen if India doesn't become  a member of RCEP? And, what are the concerns   which have been showcased or which have been told  by the government of India for not joining RCEP?  If you know that more than sufficient and the  last final point with respect to the concept   of RCEP will be 'Way Forward'. If government  of India does not join RCEP, then it has to   enter into more and more agreements. What kind of  agreements? Free trade agreements; For example,   right now the negotiations are going on with  European Union, that is another very important   market for us if they can sign a free trade  agreement with that. another set of negotiations  

is happening with respect to United States  of America again that is a very important   trading partner for us with which specifically  we have a trade surplus, so india should enter   into more and more free trade agreements so that  indian exporters will get access to more markets   right with signing of these particular agreements.  Second one, manufacturing in case of india should   be improved quality manufacturing should take  place which will result in india becoming one of   the major dominant players in global value chains  so these are the two very important way forwards   that india should adopt if it does  not join the RCEP in the coming days. So the next article is with respect to PSEs  and Dividend. First and foremost what is this   particular concept of a dividend; any company  which has issued shares will pay returns to the   owners or the shareholders I'll repeat the statement here imagine company 'C' has issued shares these particular shares have been purchased by the investors now, these are referred to as what? -Shareholders. now these particular shareholders are  paid certain returns by this particular company from the profits that it has generated this particular return given to the shareholders is referred to as dividend now government of India owns majority of the stake in CPSCs (central public sector enterprises) and since government of india owns majority of the stake in CPSCs it expects a huge amount of a  dividend from these particular CPSCs and next   very important point these particular dividends  which are garnered by government of india   form a very important source of the Non-Tax Revenue Receipts for the government of India   now what is this particular non-tax revenue  receipts for the government of India understand   this whenever the government of india will present the budget. Budget is divided into two parts - one - is called as a revenue side and the second one  is called as a capital side.

Now i'll be focused on the revenue side within the revenue side there  are two sites one is called as a revenue receipts   and the other one is revenue expenditure focus  on the first one again here revenue receipts   again are two types here one is called as a tax  revenue and the other one is non-tax revenue   receipts focus on the latter one non-tax revenue  residence under non-tax revenue resets government   of India collects the receipts in the form of  dividends from CPSC's surplus transfer from rbi   whenever there is a sale of a spectrum government  will also collect a huge amount of charges   or revenue from the spectrum sales so these  are the three very important source of   revenue or non-tax revenue resides for the government of india. In recent times, the government of India's   tax revenue receipts have taken a hit. right For example, in this particular article itself it says that the tax revenues are for the month or from  the duration April to September, have come down   by 21.6 percent compared to the same tenure in the  early year and the total tax revenue collected for   this particular duration stands at 7.2 trillion  rupees and another very important point that you   should remember with respect to this particular tax revenue majority of the tax revenues or the   sources of tax have taken a hit.   That is the tax collections have come down. One very important   source of tax revenue which has increased  in the present or the current financial year   is the excise duty that the government of india collects and specifically this particular   exercise duty collection has been higher because  of increased excess duty by government of india on   petrol, as well as diesel. So coming back to the original discussion here, the total revenues of  

government of India have taken a hit. On the other hand, the total expenditure of the government of India   especially the revenue expenditure, have kept on increasing. This has forced or this has expanded   the fiscal deficit of our government of India. Now at this particular situation, government of india   has basically asked these particular CPSEs, which is majorly owned by the government of india itself,  to pay higher dividend, rather than being normal dividend, government of India has asked these   particular CPSEs- to dip into their reserves. That is basically, the profits which are carried on   from one year to next year, the profits which  is undistributed are kept in the form of reserves.

These particular reserves government of  India wants the CPSEs to dip their hands basically   take out these particular resources hand it out to the government of India. Next point the total dividend   that is paid by this particular CPSEs to government  of India has kept on declining or there has been   a declaring trend with respect to the payment of  a dividend from CPSEs. government of india as shown   in this particular graphical representation you  can see that basically the dividends which were   transferred from the cps to government of india in  the year 2009 2010 that is a year when it peaked   was 0.33 of gdp and this has kept on steadily  declining and from 2019-2020 data it shows that   it stood at a point two four percent of  gdp so what it basically showcases is that   the dividends which are paid by the cpss to  government of india have kept on declining   and have declined especially in the last couple of  years now in addition to this this decline seems   very rational if you look at the profitability of  these particular public sector enterprises as per   the graph given here the profitability of these  particular cps's stood at 1.45 percent of gdp in   the year 2009 2010 and has kept on declining and  for 2018 and 19 this particular number stood at   0.7 percentage of gdp as the profitability of  these particular cps's have been declining the  

dividends paid by them to government of india also  has taken a hit the next point is with respect to   these particular cpscs for the financial aid  19 it has been found that of 1.43 trillion   of profits which are generated by these particular  cpscs the top 10 cps are accounted for more than   75 percent of these particular profits as  a first point second very important point   of a 249 operating public sector enterprises  for the financial year 19 it has been found that   70 of these particular cps are incurring huge  amount of losses which basically showcases   the reason for this particular decline in the  dividends which are given by these particular   cps to government of india in addition to this  another very important reason as to why government   of india is forcing these particular cps is to pay  higher dividends is because of the disinvestment   target for the current financial year government  of india has set up a disinvestment target of   2.1 trillion rupees out of this it has been able  to collect only around 5700 odd crore rupees   which comes at around 2.7 percent of the targeted  budgeted number so this has put a lot of financial   pressure on the government of india as a result of  this it has basically sent a notice a guideline to   all of these particular cpss to transfer higher  dividends to the government of india so this is   the gist of the article given here based on this  i've given a question here which of the following   form part of non-tax revenue resides for the  government telecom spectrum receipts yes dividends   from cpsc's yes difference from rbi or surplus  transfer from rbi all the three are correct option   d is the correct option here the next article is  in relation to inflation now as per the recent   data which has been published in the newspaper the  wholesale price index has hit a 8 month high of   1.48 for the month of october and cpi has hit a 77  month high of 7.61 for the same month of october   in addition to this core wpi has also reached  a very high level that is 18 month high of 1.7  

now this is just a data should we mug up this  particular data not required what you need to   understand is what is the implication of this  structure that is very very important for you   first and foremost this particular cpi that  is consumer price index which is also retail   inflation has been hovering more than six percent  which is a mandated number that is basically under   inflation targeting government of india has asked  rbi to maintain the inflation rate four percent   with a relaxation of 200 basis points on the  either side of the target so this particular   retail inflation has been hovering more than six  percent for the last many many months in fact   in this particular year that is a calendar year  except for the month of march in all the months   the retail inflation rate has been more than six  percent itself now what is the importance of this   whenever the retail inflation is higher than six  percent it will force rbi not to cut the lending   rate i've got a statement here rbi if it wants  to promote growth one of the ways of promotion of   growth is what cut the interest rates for example  cut repo rate which will basically translate into   lower lending rates by the banking sector which  will increase the lending activity in the market   which will lead to economic recovery but because  the inflation target mandate is six percent and   retail inflation has been hovering more than six  percent for many many months now rba is forced   or rbi as a decision to cut the lending rates  might be postponed that is first very important   implication second very important implication is  the core wpi the core wpa has picked up and has   reached 1.7 percent and this is a 18 month high of  the inflation rate or core wpi first and foremost   what do you mean by four generally understand  this there are two terms so while measuring   the inflation one is called as a headline  inflation and the second one is core inflation   in case of headline inflation we will consider  all the commodities and calculate inflation   in case of a core inflation there are certain  commodities whose prices are very volatile there   are certain commodities whose prices are keep on  fluctuating to a very great extent in the market   hence will exclude them and then calculate the  inflation that is called as a core inflation so   in case of a wpi core wpi has hit 18 month high  of 1.7 percent which basically indicates there   is increased demand in the market now third very  important point one of the ways or one of the most   important ways through which recovery would happen  in case of indian market is through higher demand   or increased demand when you see wpi data yes  there is an indication that there is increased   demand in the domestic market but this is slightly  undercut by the fact that the retail inflation   rate which basically affects all of us that is  basically the consumers are affected by this   inflation rate has been hovering more  than six percent for the last many months   generally what happens is when the retail  inflation keeps on increasing like this   it will basically affect the real rate of returns  of the people who are saving in the domestic   market and second it also affects the consumption  of the households that is in simple terms when   retail inflation will start increasing like this  it will basically reduce the purchasing power of   the households which will reduce the consumption  or the purchasing that is done by the households   so this is going to again affect the recovery  that could happen in the domestic market   so these are the three very important implications  with respect to this high retail inflation as well   as a wpa number or the data that has been  given in the newspaper the next article   is with respect to lvb bank lakshmi village  bank very recently rbi has announced that   it will be taking this particular lbb bank  and merging this particular bank under dbs   which is a wholly owned a subsidy of a singapore  bank now what was the reason why rb has done this   rb has cited higher npas in this particular bank  mounting losses in this bank as per rbi report   in the last three years this particular bank has  kept on increasing value of the losses and third   the deposits in this particular bank have been  reducing as per rbi report the deposits have   shrunk down to 6900 crore rupees so citing these  three reasons rba has announced that it will be   merging this particular lbb bank with dbs bank now  before this particular decision was taken by rbi   it basically put this particular lbb bank under  the concept of a prompt corrective action pca   under prompt corrective action basically rbi  takes some of these particular banks who is a nps   whose liquidity whose capital adequacy ratio  are deteriorating basically the quality or   the performance of this particular bank keeps  on deteriorating it will keep it under this   particular framework of a prompt corrective  action and it will also impose additionally   certain restrictions as the condition of the  bank keeps worsening the restrictions imposed   by rbi will also keep on increasing basically  this particular framework was introduced by rbi   in order to restore the health of the bank now  despite keeping this particular bank under pca   from the last in itself the health of the bank  has further deteriorated the promoters of the   bank or the owners of the bank have not been able  to come out with a resolution plan so rba very   recently announced that in that particular  case we are announcing the merger of lbb   bank with the dbs bank now let's go beyond this  particular factual information first and foremost   understand this with the announcement  of rbi the equity capital investors   equity capital investors money has been written  down what do you mean by this imagine here is a   lbp bank if you have invested in the shares  of this particular lbp bank it is basically   equity capital investment then the value of this  particular investment has been reduced to 0 rupees   in addition to this if you remember earlier there  was one more bank which fell into problems that   was yes bank and in case of s bank basically rba  had reduced the investments of the investors in   the 81 bonds to zero rupees or basically they had  written down that to zero rupees but in case of   lbv bank it has been reduced to zero rupees in  case of equity capital investors these equity   capital investors have already opposed this and  they are saying we are waiting for the detailed   plan to be announced by rbi then we might go to  court against this particular rbi action the first   very important implication second very important  implication is this this time rb has been much   more proactive in what way it has not waited  for further deterioration of health of the bank   before the further deterioration takes place  rb has taken an initiative and has announced   merger of lbb with dbs third very important  point though the argument of equity capital   investors is understandable but please understand  the duty of rbi is to protect the depositors   and this is exactly what has been done by rbi when  this particular merger of lbb will happen to dps   basically in the new books only the depositors  will be transferred like this that is very very   important point that you need to make a note  of next fourth very important point is this   in the last couple of years more and more  financial institutions in case of india are   coming under a lot of pressure or these kind of  financial pressures are happening in more and   more financial institutions for example earlier  this happened to one of the biggest nbfcs in india   island fs infrastructure leasing and financial  services there was a problem with respect to   punjab maharashtra cooperative bank earlier there  was a problem with respect to es bank and now   same thing has happened in case of laksmi will  ask bank the problem with respect to this is if   indian economy has to recover then the banking  sector will play one of the very important roles   in addition to banking sector it will also be  nbfcs which are also very very important in terms   of achieving higher growth rate or for that matter  even positive growth rates in the coming days   but increasingly what is happening is because of  various issues because of administrative issues   lack of oversight in these particular banks  because of certain risky decisions that they   have taken because of various other issues these  kind of financial institutions are commended lot   of financial pressures and this is happening in  the indian economy so there is a need to reverse   this particular trend in addition to this rb  has imposed a moratorium for the withdrawals on   these particular banks now what is this particular  concept of a moratorium rba has basically stated   that the moratorium is applicable for one month  and during this particular one month withdrawals   of more than 25 000 will not be allowed for a  depositor again in certain conditions for example   medical expenses if you take the permission more  withdrawals or beyond this limit is also allowed   to be withdrawn the next very important one that  is sixth very important point is this with rb   announcing the amalgamation of lbb into dbs is  expected to promote functioning of foreign banks   in india and moreover against this particular  decision various investors have already raised   their concern that is basically they are saying  on what basis this particular foreign bank was   selected by rbi and why specifically dbs so these  are some of the very important points related to   the announcement of rbi to amalgamate lbb with  a dbs bank the next article is with respect to   internal working committee of rbi now first and  foremost this particular internal working group   was headed by pk mohanty that's the first very  important point now most important apart from   this is the recommendation of this particular  intel working group because it is expected that   there will be a lot of discussion with respect  to these recommendations there will be support   from some quarters there will be a position  from some quarters on some of these particular   recommendations first and foremost this committee  has recommended allowing corporate houses   to set up banks in india now rba strictly  speaking has been opposed to this particular   idea of allowing corporate houses to set up and  run the banks because basically their concern   is how can these particular corporate houses  also be the owners and the borrowers in the   same bank don't you think there's a conflict of  interest right what about the transparency there   are so many issues associated with allowing the  corporate houses to set up and run the commercial   banks but this is one of the very important  recommendation given by this committee   and in the coming days this will be the  recommendation which will have a lot of discussion   second very important recommendation is with  respect to nbfcs it is basically stated that those   particular nbfcs with asset size of over 50 000  crore rupees could be allowed to be converted into   commercial banks that is a second very important  recommendation again there are conditions for   example they are saying that they should have  a function for at least 10 years and so on and   so forth third in case of nbfcs the promoters  ownership should be increased from 15 percent   to 26 percent over a period of 15 years this  is another very important recommendation fourth   very important recommendation is with respect to  payment banks in case of a payment banks if they   want to convert into small finance bank then  the three years experience will be more than   sufficient next recommendation if these particular  payment banks and sfvs want to be listed then it   shall be done after working six years from the  date of reaching certain amount of net worth sixth   very important recommendation is with respect  to minimum capital in case of setting up a bank   or a new bank the minimum capital requirement  should be enhanced from 500 crore rupees   to 1000 crore rupees and second in case  of small finance bank this minimum capital   requirement should be enhanced from rupees 150  crore to 300 crore rupees so these are some of   the very important recommendations given by  the internal working group that was set up by   rbi to look into the ownership or enhancement of a  capital requirement so on and so forth in case of   the universal banks in case of the payment banks  in case of the small finance banks okay so this   is the gist of the article given here the next  article is related to atma bharta and its price   now in this particular article they have  discussed the negative impact that the   concept of a self-reliance or atma nirvata will  have on the domestic market or domestic economy   government of india in the last couple  of months has been pushing the idea of us   or self freelancer fervently and has been imposing  certain guidelines or restrictions on some of the   cps's in this article they have discussed the  issue that is being faced by one of the public   sector company that is bsnl earlier bsnl had put  out a tender and had asked request from some of   the vendors in the market including the foreign  companies government of india asked the bsnl to   withdraw this particular tender and start sourcing  only from the domestic vendors now citing certain   issues this particular company has written  to government of india some of the concerns   which are raised by this particular company are  first in case they want to source on the domestic   vendors majority of the vendors who have already  shown interest are going to sell these particular   equipments for the first time to this particular  company so these are the first time sellers to   the bsnl second when compared that is in terms of  prices these particular vendors who are selling   from the domestic market to bsnl or who have shown  interest to sell it to bsnl are quoting 50 to 79   percent higher prices compared to when bsnl was  sourcing these particular equipments from foreign   vendors now third issue is bsnl is competing with  private sector companies in the market if this is   competing with the private sector companies then  first and foremost the equipment or the technology   that they are using should be very much updated  or should be very high and if you're sourcing   these particular equipment from the domestic  market only then there will be a concern with   respect to this updated version of the technology  or the updated equipments or the latest equipments   second if the equipment that is sourced is  costly or the cost of the acquisition is going to   increase then the services which are provided by  the bsnl will also get affected and you expect the   bsnl to compete with the private sector companies  in the market so these are the three very   important issues which have been raised in this  particular article just make one correction here   rather than 79 percent the article quotes that the  prices which are quoted by the domestic vendors   is a 50 to 89 percent higher than what the bsnl  would have paid if their source from the foreign   market so these are certain very important issues  which have been raised by the bs channel which   are cited in the article and article goes beyond  this and says the problem with ahmadinejad is not   just applicable to bsnl alone it has a larger  implications for the overall economy and this   has cited one of the papers which has been written  by mr arvind subramanian and this particular paper   basically cites that in case of india the tariffs  between 1991 to 2014 have reduced from 125 to 13   and since then have risen to reach 18 percent  and this particular rise in the tariffs is   predominantly because the duties have been  imposed by government of india on more than   70 percent of its imports or more than 70 of  the imports which are coming into india are   attracting higher duties which have been imposed  by government of india in the last couple of years   and if government of india wants to promote  more and more economic recovery to happen then   the better way would be promotion of exports and  the promotion of exports would only happen if the   imports are cheaper for these particular companies  so these are certain very important articles as   well as the questions related to articles for this  particular time period thank you have a good day

2021-01-09 19:53

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