SBI launched India’s first start-up focused bank branch SBI InCube

India’s largest bank, State Bank of India (SBI), on 14 January 2016 launched and inaugurated India’s first start-up focused bank branch called SBI InCube in Bangalore, Karnataka. The specialized branch aims to understand and address banking needs of a Start-up Business.

The bank also launched the wealth management service SBI Exclusif, which is targeted at the fast-growing affluent segment in the country.

About SBI InCube

• The SBI InCube branch will work towards fulfilling the specific financial needs of the start-ups.

• The service will provide advisory services to the budding entrepreneurs under one roof.

• It will assist start-ups in cash management, regulations, taxation, mentoring, foreign exchange and remittances and other financial services.

• The branch, in its current form, will not fund start-ups i.e. it will not provide loans. However, it will give them loans when they turn more mature.

• InCube branch in Bengaluru will be headed by an assistant general manager and a team of three other officers.

• SBI will soon launch InCube branches in Pune and National Capital Region (NCR).

Union Government formed NITI Aayog to replace Planning Commission

Union Government on 1 January 2015 set up the National Institution for Transforming India (NITI) Aayog. NITI Aayog that replaced the 65 year old Planning Commission will be headed by Prime Minister. It will have a governing council comprising Chief Ministers of all the states and Lt. Governors of Union Territories.

Apart from this, the NITI Aayog will also have a Vice-Chairperson and a Chief Executive Officer (fixed tenure, in the rank of Secretary to the Government of India), who will be appointed by the Prime Minister.

The NITI Aayog’s functions have been described as the Bharatiya approach to development. The Aayog has been tasked with a role of formulating policies and direction for the government and serving as a think-tank, it will provide a national agenda for Prime Minister and Chief Ministers. It will also provide relevant strategic and technical advice across the spectrum of key elements of policy, like economic matters of national and international importance.

Functions that will be undertaken by the NITI Aayog
• It will develop mechanisms for formulation of credible plans to the village level and aggregate these progressively at higher levels of government
• Special attention will be given to the sections of the society that may be at risk of not benefitting adequately from economic progress
• It will also create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and partners
• It will offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda
• It will also monitor and evaluate the implementation of programmes, and focus on technology upgradation and capacity building.

Other members of the NITI Aayog will be
Experts, specialists and practitioners with relevant domain knowledge as special invitees nominated by the Prime Minister
• Members - Full-time 
• Part-time members: Maximum of 2 from leading universities research organizations and other relevant institutions in an ex-officio capacity.  Part time members will be on a rotational basis.
• Ex Officio members: Maximum of 4 members of the Union Council of Ministers to be nominated by the Prime Minister. 
• Secretariat as deemed necessary

Difference between the NITI Aayog and Planning Commission
Under the Planning Commission centre-to-state one-way flow of policy existed, whereas, the NITI Aayog has planned a genuine and continuing partnership of states. Now, state governments can play an active role in achieving national objectives, as they have been empowered to provide with strategic and technical advice across the spectrum of policymaking.

Background
National Institution for Transforming India (NITI) Aayog has been created in accordance to the announcement made by the Prime Minister Narendra Modi on 15 August 2014. On the Independence Day, he announced that the government will replace the Planning Commission which was established on 15 March 1950 through a Cabinet Resolution. Further to revamp the Planning Commission, the Prime Minister met with Chief Ministers and Governors of various States on 7 December 2014 and discussed their opinions on the same to separate the process of governance from the strategy of governance.

Union Cabinet approved proposal to amend FDI policy in construction and real estate sector

Union Cabinet on 29 October 2014 approved the proposal to amend Foreign Direct Investment (FDI) policy in construction and real estate sectors. The proposals came in the backdrop of depleting FDI inflows in construction and real sector in last few years.

Union government decided to use relaxed rules for FDI in the construction sector by reducing minimum built-up area as well as capital requirement and easing the exit norms to boost the construction and real sector.

Proposals
• The proposal is the minimum capital requirement is brought down from 10 million US dollar to 5 million US dollar.
• In case of development of serviced plots, the condition of minimum land of 10 hectares has been completely removed. 
• In case of development of trunk infrastructure, though the lock in period has not reduced from 3-year lock-in period but permitted foreign investors to investors to exit on project completion or 3 years from the date of final investment.

Present status
Earlier in 2005, although 100 percent foreign direct investment was allowed in townships, housing and built-up infrastructure and construction developments, the government imposed certain conditions.

After the relaxation, the FDI inflows in the construction sector witnessed a steady rise during 2006-07 but have stared declining in 2009-10.

The construction sector received FDI worth 23.75 billion US dollar or 10 percent of the total FDI attracted by India during the period between from 2000 to 2014.

The investment in construction and real estate sector has a multiplier effect on the economy by way of infrastructure creation and employment generation which will also help to create demand for products of related industries like cement and steel.

Union Government decided to re-launch Direct Benefit Transfer scheme

Union Government on 19 October 2014 decided to re-launch the modified Direct Benefit Transfer (DBT) scheme in an effective manner.  The implementation of DBT will be made on a mission mode between 10 November 2014 and 1 January 2015 in 54 districts.

At Present, the beneficiaries having bank accounts under Aadhaar and the beneficiaries who have bank accounts under the Jan Dhan Yojana will now get subsidy on LPG directly in their accounts.  

The beneficiaries who are outside from the scheme i.e. who have neither an Aadhar identity nor a bank account through Jan Dhan Yojna will get old cylinder system for some time.

The 54 shortlisted districts fall under Andhra Pradesh, Goa, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Puducherry, Punjab and Telangana.

About Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking or Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Under the scheme, account holders will be provided zero-balance bank account with RuPay debit card, in addition to accidental insurance cover of 1 lakh rupees. Besides, after six months of opening of the bank account holders can avail 5000 rupees loan from the bank.

RBI released Gopalakrishna Committee report on Capacity Building in Banks and non-Banks

The Reserve Bank of India on 24 September 2014 released Gopalakrishna Committee report on Capacity Building in banks and non-banks.  The committee has recommended a 360-degree feedback for a transparent and comprehensive performance assessment exercise, one that ensures adequate performance differentiation between employees.

The key recommendations of the Report include and pertain to:
• Approach to capacity building in banks and non-banks
• Enhancing Human Resources Management practices
• Creation of position of Chief Learning Officer in banks and concept of return on learning
• Strategies for addressing issues of replacement or replenishment of talent in banks
• Process and steps for skill development
• Training strategy and need for expert trainers to help build capacities
• Coaching and mentoring including mentoring programme for Top Management of banks
• Entry point qualifications at recruitment stage, development of competency standards and certification or accreditation in various areas of training
• Conducting a common Banking Aptitude Test (BAT) at entry levels
• Qualifications for generalists and specialists
• E-learning as an important constituent for building capacity and imparting training
• Training and learning Infrastructure oriented to banking
• Proposal for setting up a Centre of Excellence for Leadership Development in banking sector
• Fostering research on skill development in banking sector and evolving a monitoring framework for capacity development in banking sector
• Creation of skills registry for the banking sector

About Gopalakrishna Committee
RBI constituted the Committee on Capacity Building in banks and non-banks headed by G Gopalakrishna. He is a former Executive Director of RBI and currently Director, Centre for Advanced Financial Research and Learning (CAFRAL).

The committee was constituted with an objective to implement non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) relating to capacity building in banks and non-banks, streamlining training intervention and suggesting changes thereto in view of ever increasing challenges in banking and non-banking sectors.

The objectives also included evolving an appropriate certification mechanism in the realm of training, where feasible, examining possible incentives for undertaking such certification and covering all stages of hierarchy-from the lowest rung to the Board level executives.

First set of defense sector FDI proposals gets FIPB nod

The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defence proposals. The Government had notified new norms allowing higher FDI in the defence sector on August 26. On 16th September FIPB cleared 21 of the 35 proposals brought for its consideration. The approved proposals are worth Rs 988 crore.

The 21 approved projects include those of Bharti Shipyard, Solar Industries and Kineco Kaman Composites India relating to the defense sector. Though another proposal, of Hatsoff Helicopter Training, came through the Civil Aviation Ministry, it involves the Defense Ministry. The board also gave its nod to two proposals, of IndusInd Bank and ANZ Capital, related to the financial sector.

SBI celebrated 150 years of its operations in Sri Lanka

State Bank of India (SBI) on 13 September 2014 celebrated 150 years of its operations in Sri Lanka. 

SBI Managing Director Krishna Kumar reaffirmed the bank's commitment to partner in Sri Lanka’s efforts in developing its economy. 

India has committed large resources for the progress of Sri Lanka. Indian assistance to Sri Lanka is in tune of 1.6 billion US dollars and one fourth of this is in form of direct grant assistance while the rest is soft long-term loans for development projects.

About State Bank of India, Colombo

State Bank of India, Colombo is operational since 1864. It was earlier a branch of Bank of Hindustan, which was taken over by Bank of Madras in 1867. In 1921, Bank of Madras was merged with the Imperial Bank of India. Subsequently in 1955, Imperial Bank of India became State Bank of India.

The branch was mainly opened to handle the business of export of coffee and the Government business. The branch is the oldest bank in the country.  

The branch is located in a heritage building in the Fort area of Colombo, which is the financial hub of Sri Lanka. 

The branch is fully equipped with modern technology and with modern communication facilities such as SWIFT etc. All the Branches are networked with each other. 

It's catering mainly to the Corporate and Retail clients and the product range from all types of deposit accounts, financing working capital, term loans, vehicle loans, housing loans and trade finance.

Financial support to the National Export Insurance Account for overseas project exports

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, gave its approval for financial support to the National Export Insurance Account (NEIA) for overseas project exports by increasing the authorized corpus of the NEIA Trust to Rs. 4000 crore with risk underwriting capacity upto 20 times of the actual corpus. This is against the present leverage of 10 times and allocation of US$ 5 billion for Foreign Currency (FC) funds to Exim Bank out of Forex reserves, for on-lending by way of buyer`s credit with NEIA cover. 

The proposal will increase the capacity of the NEIA Trust to underwrite more large size projects in difficult countries with reasonably significant Indian content. The project exports would give sustained export earning income of greater lifecycle durability and help in creation of jobs for foreign exchange earnings. 

Budgetary support to NEIA has been Rs. 956 crore. This will be augmented through further budget support. 

Background:- 

NEIA was set up in 2006 as a Public Trust by the Ministry of Commerce and Industry to promote project exports from India. NEIA also supports projects exports which have long credit period for repayment and which are beyond the underwriting capacity of the Export Credit Guarantee Corporation (ECGC). 

Approval of Phase-V of Unique Identification project

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, gave its approval for Phase-V of the Unique Identification (UID) scheme for undertaking enrolments in the four States of Uttar Pradesh, Bihar, Chhattisgarh and Uttarakhand. With this, the Unique Identification Authority of India (UIDAI) has been given the target of generation of 100 crore Aadhaars by 2015. This includes including UID numbers issued in respect of enrolments done under the National Population Register process in 12 States/UTs allocated to it. Comprehensive proposals regarding Aadhaar Sampark Kendra, Information, Education and Communication Campaigns, Document Management System and Rent Rates and Taxes etc., will be prepared by the UIDAI and a revised cost estimate submitted for appraisal of the Expenditure Finance Committee. 

Background 

The UIDAI was established in 2009 with a mandate to generate and assign UID numbers to residents of India. Under the UID scheme, enrolment is done by registrars through enrolment agencies, and the Government provides outcome based financial assistance to them. 

As on date, more than 67.38 crore Aadhaar numbers have been generated by the UIDAI since August 2010, when the first such Aadhaar was generated. The total expenditure incurred by UIDAI since inception is Rs. 4906 crore (as on 31 August 2014). The UID project aims to ensure inclusive growth by providing digital, online, verifiable identity to all residents, including marginalized sections of society. Besides strengthening equity, this will also enable more efficient delivery of services and effective governance. 

Disinvestment of 5 percent paid-up capital in Oil & Natural Gas Corporation Ltd. out of Government of India shareholding

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, approved the disinvestment of 5 percent paid-up capital in Oil & Natural Gas Corporation Ltd. (ONGC) out of the Government of India’s shareholding of 68.94 percent. 

This would further broad base the shareholding of the Company and would enhance disinvestment receipts. 

Background: 

ONGC is a "Maharatna" public sector undertaking under the administrative control of the Ministry of Petroleum & Natural Gas. It was established in August, 1956 to plan, promote, organize and implement programmes for development of petroleum resources and the production and sale of petroleum products by it. 

The paid-up equity capital of the company, as on 31st March, 2014 is Rs.4277 crore. The President of India holds 68.94 percent of the paid up capital in ONGC. In accordance with the Government of India`s disinvestment policy, the Government has decided to disinvest 5 percent paid-up equity in ONGC, out of its equity capital holding of 68.94 percent through Offer for Sale (OFS) method in the domestic market as per Securities and Exchange Borad of India (SEBI) Rules and Regulations. After this disinvestment, the Government of India’s shareholding in the company would come down to 63.94 percent. 

Disinvestment of 10 percent paid-up equity capital in Coal India Ltd. out of Government of India shareholding

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, approved the disinvestment of 10 percent paid-up equity capital in Coal India Ltd. (CIL) out of the Government of India’s shareholding of 89.65 percent. 

The decision to disinvest would help the Government to realize an optimum price for the offer for sale of 10 percent of the Government’s shareholding in the company. 

Background: 

CIL is a Public Sector Enterprise under the administrative control of the Ministry of Coal. Its objective is to produce and market the planned quantity of coal and coal products efficiently and economically, with due regard to conservation of resources, and safety and quality of life of the workforce.

The authorized capital of the CIL is Rs. 8904.18 crore (Rs. 904.18 crore of non-cumulative 10 percent redeemable preference shares plus Rs. 8000 crore of equity shares) of which the issued and subscribed equity capital as on 31.03.2014 is Rs 6316.36 crore. The President of India holds 89.65 percent of the paid up capital in CIL. In accordance with the Government of India`s disinvestment policy, the Government has decided to disinvestment 10 percent equity of CIL out of its holding of 89.65 percent as per the Securities and Exchange Board of India (SEBI) Rules and Regulations. After this disinvestment, the Government of India`s holding in the company would come down to 79.65 percent. 

Disinvestment of 11.36 percent paid-up equity capital of NHPC Ltd. out of Government of India shareholding

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, approved the disinvestment of 11.36 percent paid up equity capital of NHPC Ltd. out of the Government of India’s shareholding of 85.96 percent. 

Increase in public shareholding would provide greater opportunity for the investing public to participate. 

Background: 

NHPC Ltd. (formerly known as the National Hydroelectric Power Corporation Limited) is a Public Sector Undertaking under the administrative control of the Ministry of Power. NHPC has developed and constructed 20 hydroelectric power stations with a total installed capacity of 6,507 MW. NHPC is presently engaged in the construction of four additional hydroelectric projects. This is expected to increase the total installed capacity by 3,290 MW. 

The paid up equity capital of the company, as on 31.03.2014 is Rs.11,071 crore. The President of India holds 85.96 percent of the paid up capital in NHPC. In accordance with the Government of India`s disinvestment policy, the Government has decided to disinvest 11.36 percent equity in NHPC, out of its equity capital holding of 85.96 percent through an "Offer for Sale" of Shares through Stock Exchanges, as per SEBI Rules and Regulations. After this disinvestment, the Government of India’s shareholding in the company would come down to 74.60 percent and the company would become compliant to the revised Securities Contracts (Regulation) Rules (SCRR) norms of 25 percent for public shareholding in listed CPSEs. 

India Signed agreement with World Bank for MSRPII project

India on 29 August 2014 signed loan agreement with World Bank for Mizoram State Roads Project (MSRP II). As per the agreement, soft loan window of World Bank, International Development Agency (IDA) will provide assistance of 107 million US dollars for the Project.
The agreement was signed by Nilaya Mitash, Joint Secretary (MI), Department of Economic Affairs and Onno Ruhl, Country Director, World Bank, India.

The objective of the project is to enhance transport connectivity along regional trade corridors in Mizoram.The project will focus on improvement of priority cross-border roads connecting Myanmar and  Bangladesh , as also on trade related infrastructure. 
Thus, the MSRPII will be an important milestone in enhancing the connectivity for the state of Mizoram and the rest of North-East India with Myanmar and Bangladesh. 
The project is the first project facilitating regional connectivity in transport sector undertaken in India with Bank support.

CBDT set up four-member Committee to scrutinize retrospective tax amendment

The Central Board of Direct Taxes (CBDT) on 28 August 2014 set up a four-member high-level committee to scrutinize the retrospective tax amendments. 
The Committee will be headed by Joint Secretary of the Foreign Tax and Tax Research-I unit of the CBDT. The other members on the panel are Joint Secretary (tax planning and legislation-I), Commissioner of I-T appeals and the Director (foreign tax and tax research-I), who will also be the secretary of the committee.
The Committee was set up following the announcement made by Union Finance Minister Arun Jaitley in his budget speech on 10 July 2014.

The Terms of Reference of the Committee
It will decide on such cases within 60 days of receiving them from the assessing officer (AO) and it will be incumbent upon the AO to approach the committee when faced with an I-T case that is for the period before April 2012.
It would examine the proposed action of the AO and after providing an opportunity to the assessee, take a decision on the proposed action.
The Committee will submits its first report for period ending December 2014 and subsequently it should submit reports on half yearly basis (June 30 and December 31 every year)

Background
An amendment to the I-T Act with retrospective effect was undertaken by the UPA government in 2012 in lieu of the Vodafone tax case so as to protect revenue. However, it had evoked sharp reactions from domestic as well as global investors.

Cabinet Committee on Economic Affairs approved Urea Production from Naphta

The Cabinet Committee on Economic Affairs  on 27 August 2014 approved the continuation of production of urea from 3 plants by using existing feedstock Naphtha for three months beyond 30 June 2014, that is from 1 July 2014 to 30 September 2014.

The three plants are:
• Madras Fertilizers Limited (MFL) Manali
• Manglore Chemicals and Fertilizers Ltd (MCFL) Mangalore 
• Southern Petrochemical Industries Corporation (SPIC) Tuticorin

These three units would help Indian farmers in meeting the urea requirement in the ongoing Kharif season. This decision will ensure food security of the country. 
On the basis of NPS-III, total cost of production of urea is calculated. The selling price of urea is fixed at 5360 rupees per tonne. 

Background
Under the Modified New Pricing Scheme-Ill for existing urea units, only three naphtha based units that is MFL - Manali, MCFL-Mangalore and SPIC - Tuticorin were allowed to produce urea from naphtha as feedstock till 30 June 2014.
The Centre asked these firms to switchover to natural gas otherwise subsidy would not be given.
However, these fertilizers companies were unable to convert to gas from naphtha, as there were protests from farmers in Tamil Nadu who were against the laying of gas pipeline. Moreover gas was not available.

RBI issued drafted guidelines for implementation of Bharat Bill Payment System

The Reserve Bank of India (RBI) on 7 August 2014 issued draft guidelines for implementation of Bharat Bill Payment System (BPPS), an anytime anywhere bill payment system. The proposed guidelines describe the basic requirements of operating the BBPS.

Bharat Bill Payment System is intended for the implementation of a unified bill payment system across the country. It would enable the customers to pay the bills with the help of agents and getting instant confirmation of the payment made. School fees, municipal taxes and utility bills payments would become easier now.

This integrated bill payment system will comprise of two entities:

• Entity operating at Bharat Bill Payment System (BBPS) will be setting up the standards related to payments, clearance and settlement process
• Second entity would be Bharat Bill Payment Operating Units (BBPOUs). It will be carrying out the operations in adherence to the standards fixed by BBPS.

Authorised entities such as agents, banks, service providers, payment gateways would be the participants at the Bharat Bill Payment System.

Bill Payment in India

Generally, most of the retail transactions are carried out through bill payments. The G. Padmanabhan Committee was formed by RBI to study the Feasibility of Implementation of GIRO-based Payment Systems anticipated that around 30800 million bills amounting to more than 600000 crore rupees are paid each year in 20 Indian cities.

These payments are accepted in both cash and cheque. The existing bill payment systems are secure enough, but they do not address the concerns of the customers completely. The centralized Bharat Bill Payment System would be a appropriate solution for the same.

Union Government granted Navratna Status to CONCOR

Container Corporation of India Limited (CONCOR) on 23 July 2014 was accorded Navratna Status by the Department of Public Enterprises under Union Ministry of Heavy Industry and Public Enterprises. CONCOR is the 17th Central Public Sector Enterprise (CPSE) to achieve Navratna Status.
CONCOR gives multi-modal logistics support for the country's exim (exports and imports) and domestic trade and commerce.
The granting of Navratna status entitles the company boards to do investments up to 1000 crore rupees or 15% of their net worth on a single project or 30% of their net worth in the whole year (not exceeding 1000 crore rupees) without seeking government permission.

Besides, it also entitles the Boards of Navaratna enhanced powers in the areas of  (i) capital expenditure; (ii) equity investment in  joint ventures/subsidiaries in India or abroad,  (iii) human resources  development (iv) orgnaisational restructuring and (v) raising of  debt from the domestic capital markets and borrowings from international markets.

Major criteria of awarding Navratna Status are:
• A Central Public Sector Enterprise (CPSE) should be a Schedule A and Miniratna Category – I company.
• The CPSEs should have at least three Excellent or Very Good Memorandum of Understanding (MoU) ratings during the last five years.
• The CPSE should have a composite score of 60 or above out of 100 marks based on its performance during the last three years on the following six identified efficiency parameters:

Efficiency Parameters		Maximum Marks
Net Profit to Worth		25
Manpower cost to Cost of Production/Services		15
Gross Margin as capital employed		15
Gross Profit as Turnover		15
Earnings per Share		10
Inter-sectoral comparison based on Net profit to Net worth		20
Total	100

About CONCOR
CONCOR was incorporated in March 1988 under the Companies Act, 1956 and commenced operation from November 1989 taking over the existing network of 7 ICDs (Inland Container Depots) from the Indian Railways. It is now the market leader having the largest network of 62 ICDs or Dry ports in India. 
Its current Chairman and Managing Director (CMD) is Anil Kumar Gupta.

About Navratna
Navratna was the title given originally to 9 Public Sector Enterprises (PSEs) identified by the Government of India in 1997 as "public sector companies that have comparative advantages", giving them greater autonomy to compete in the global market so as to "support [them] in their drive to become global giants.

Poverty line redrawn, 3 in 10 Indians are poor

Nearly one in three Indians was poor in 2011-12, according to a new report that was commissioned following widespread criticism two years ago that the government grossly underestimated the number of poor in the country by choosing an unrealistic poverty line for such estimates.
The panel, headed by former RBI governor C Rangarajan who also was the chairman of the prime minister's economic advisory council in the UPA government, estimates there were 363 million people, or 29.5% of India's 1.2 billion population, who lived in poverty in 2011-12. The number is significantly higher that the official estimate of 269 million and the difference – of about 94 million – is attributed primarily to a change in the definition of the poverty line.

The Rangarajan panel considers people living on less than Rs. 32 a day in rural areas and Rs. 47 a day in urban areas as poor. In contrast, the official estimate- based on recommendations made by late economist Suresh Tendulkar -- defines people living on less than Rs. 27 a day rural areas and Rs. 33 a day in urban areas as poor. These figures, ever since they were adopted by the UPA government during its first term, have been criticized for being unrealistic and artificially seeking to lower the poverty numbers. The official estimates in use put the poverty ratio in 2011-12 at 21.9%, almost 8 percentage points lower than Rangarajan's estimates.

The new estimates were submitted to the NDA government last week. It is not clear whether these would be adopted as new official estimates on poverty. The sharp revision in the poverty line is partly a result of a change in methodology. For sustenance, the new methodology includes all such expenses on account of basic amenities that are often covered by public expenditure. The new numbers mean that 363 million Indians would have struggled to survive if there was no public spending," said a member of Rangarajan panel, who did not want to be named.

Although the new estimates push up the poverty numbers compared to the earlier methodology, what may come as a relief for the UPA is that the number of poor steadily declined during its rule, no matter which methodology is chosen. According to Rangarajan, the number of poor declined from 454.6 million in 2009-10 to 363 million in 2011-12 and the poverty ratio from 38.2% to 29.5% in the same period. India's poverty estimates are based on consumption expenditure surveys done by the National Sample Survey Office.

Economic Survey 2014

Economic Survey has pegged that India’s GDP growth rate would be around 5.4% to 5.9% in the current financial year. Finance Minister Arun Jaitley has said that India’s fiscal situation is worse that it appears. He emphasized subsidy reforms for the consolidation of fiscal situation. 

The highlights of the economic survey are as follows:

Fiscal Deficit

• Recommended raising tax-to-GDP ratio for fiscal consolidation
• Shortfall in revenues can be contained through better mobilisation and reforms

Fiscal deficit is the difference between the government’s expenditures and its revenues (excluding the money it’s borrowed). A country’s fiscal deficit is usually communicated as a percentage of its gross domestic product (GDP).

Growth

• Economic growth of 7-8 percent not seen before 2016/17
• Downward risk to economic growth due to poor monsoon, external factors

Inflation

• Government needs to move towards low and stable inflation through fiscal consolidation, wholesale Price Index (WPI) inflation expected to moderate by end-2014
• Consumer Price Index (CPI) inflation showing signs of moderation
• Needs to create a competitive national market for food

Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service

Current Account Deficit

• 2014/15 current account deficit may be contained to around $45 billion or to 2.1 percent of GDP

A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services it exports. The current account also includes net income, such as interest and dividends, as well as transfers, such as foreign aid, though these components tend to make up a smaller percentage of the current account than exports and imports. The current account is a calculation of a country’s foreign transactions, and along with the capital account is a component of a country’s balance of payment.

Subsidies
Rationalization of subsidies such as fertilizer and food essential, need to shift subsidy programme from price subsidies to income support

Taxation

• rnment needs to move towards simple tax regime, fewer tax exemptions and single rate of goods and services tax (GST)

The GST is an indirect tax that would replace existing levies such as excise duty, service tax and value-added tax (VAT). The states and the federal government will impose the tax on almost all goods and services produced in India or imported. Exports will not attract GST.

• ect Taxes Code (DTC) required to replace existing income tax laws; will reduce compliance costs and boost tax collection