NOD FOR COMPANIES BILL
India on 8th August inched closer to bringing more contemporary issues, such as corporate governance, investor protection, corporate social responsibility and measures to check frauds, under the legislation. Companies Bill was passed by the Rajya Sabha. The Bill, vetted twice by a Parliamentary panel, had already got the approval of the Lok Sabha in December last year. Now, only the President’s assent will be required for it to become law. Once the new law is put in place, profit-making companies will be required to spend two per cent of their average net profit of three years on activities related to corporate social responsibility (CSR). Three years will be counted as preceding the one during which CSR was to be undertaken.
SUBSIDIES TO BE REDUCED:
The government on March 7th said it will reduce outgo on subsides from 2.6 percent of GDP in 2011-12 to 1.5 percent by the end of 12th Plan (2012-17) to contain the expenditure within a “pre-determined level of affordability”. The objective is not to eliminate subsidies. There is a role for targeted subsidies that advance the cause of inclusiveness but such subsidies should be contained within a pre-determined level of affordability.
EXTENSION OF SCHEME
The Union Cabinet has approved the extension of the health insurance scheme — Rashtriya Swasthya Bima Yojana (RSBY) — to over 88.57 lakh unorganised workers including rickshaw pullers, rag pickers, mine workers and auto/taxi drivers. The decision would cost an additional Rs. 209.95 crore to the exchequer in the current financial year and Rs. 419.89 crore in 2014-15.
ROSHNI FOR NAXAL AREAS
In a bid to further reach out to rural youth in the country’s 24 most critical Left-Wing-Extremism-affected districts, the Centre on 7th June introduced a placement-oriented skill-development scheme targeting 50,000 persons, mostly tribals. Launching “Roshni”, Rural Development Minister Jairam Ramesh said at least 50 per cent of the candidates covered under the scheme would be women and extra efforts would be made to proactively cover Particularly Vulnerable Tribal Groups (PVTGs) on a priority basis.
COMMON REGULATOR SUGGESTED
A government-appointed panel, on 22nd March, suggested a super regulator, merging oversight functions of market, commodity, insurance and pension regulators, while leaving the banking business regulation under the Reserve Bank of India. The Unified Financial Agency (UFA), as suggested by the Financial Sector Legislative Reforms Commission (FSLRC), would subsume the functions of key agencies such as the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority, the Pension Fund Regulatory and Development Authority and the Forward Markets Commission.
NORMS SET BY RBI
The Reserve Bank of India (RBI), on 1st April, said that any core investment company (CIC) registered with it needs minimum Rs.500 crore owned funds to set up a joint venture company for undertaking insurance business. Among other norms, the RBI said that the level of net non-performing assets shall be not more than 1 per cent of total advances.
RRB’s AMENDMENT BILL INTRODUCED IN PARLIAMENT
Regional rural banks may be allowed to get listed on stock exchanges if Parliament approves the Regional Rural Banks (Amendment) Bill. The Bill, introduced by Finance Minister P. Chidambaram in the Lok Sabha on 22nd April, aims to amend the Regional Rural Banks Act 1976. One of the proposed amendments seeks…..
v To make provisions for raising capital by regional rural banks from sources other than the Central Government, the State Government and the sponsor bank.
v According to the the RRB Act, 1976 the authorised capital of each such bank is Rs 5 crore and the issued capital, a maximum of Rs 1 crore.
v It has now been proposed to enhance the authorised capital of each RRB to Rs 500 crore and the issued capital to not less than Rs 1 crore. The new Bill also aims to make provision for shareholders to elect directors in view of the proposed provisions for raising private capital by RRBs.
DEFECTS FOUND IN MGNREGS
The Comptroller and Auditor General (CAG) has recommended a model format of accounts for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). In a report tabled in Parliament on 23rd April, the Government auditor asked the Rural Development Ministry to comply with rules and guidelines while releasing funds for the scheme to ensure transparency. The auditor said it had noticed non-payment of unemployment allowance and non-maintenance of essential records in all States during the audit.
REDUCTION IN POVERTY RATE
There has been a steep reduction in poverty rate in rural areas compared to urban areas. The number of people living below poverty is estimated at 217 million in rural areas and 52 million in urban areas in 2011-12 against 326 million and 81 million respectively in 2004-05. Poverty in India has declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05, according to the latest estimates of The Planning Commission.
NO CHANGE IN MONETARY POLICY
The Reserve Bank of India (RBI) on 30th July maintained the status quo on repo rate and cash reserve ratio (CRR) — leaving those unchanged at 7.25 per cent and four per cent, respectively. However, its unexpectedly dovish tone led to the rupee’s slide — to 60.49 a dollar — below the psychological 60-a-dollar level for the first time since July 9. On 30th July, RBI kept its March-end inflation forecast unchanged at five per cent, while it lowered its estimate for 2013-14 economic growth to 5.5 per cent, from 5.7 per cent projected in May.
26 FIRMS APPLIED FOR BANK LICENCES
26 private and public sector entities have applied to the Reserve Bank of India to set up banks. Besides the corporate titans, the applicants include two microfinance institutions (MFIs), two housing finance companies, two infrastructure finance firms, a gold loan company, a remittance outfit, and Venugopal Dhoot-promoted Value Industries. The Department of Posts and IFCI have also applied.
POVERTY RATES WILL DROP BY HALF
India is on the right track to eradicate extreme poverty and hunger, the UN’s new Millennium Development Goals Report 2013 notes. However, the achievements seen across the world in reducing poverty levels have not been replicated in all other goals. The report, launched on 5th July, finds that India was able to reduce its poverty rate from 49 per cent in 1994 to 42 per cent in 2005 and 33 per cent in 2010. “If the current pace continues, India will meet the poverty reduction target by 2015,” the report says. The deadline for the millennium development goals, which includes targets on poverty, hunger, health, gender equality, education and environmental indicators, will end in 2015.
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