General Awareness

BUSINESS AND ECONOMY - August 2020

Aug 2020

Dec 28, 2020

Dubai Ruler Approves $15.5 bn Budget for 2021

Dubai, the business and financial hub of the United Arab Emirates (UAE), has approved a 57.1 billion dirham ($15.55 billion) budget for 2021, when the economy is expected to recover from a contraction this year.
The statement did not give a comparison to actual spending in 2020, but was slightly higher than a revised spending figure of nearly 56.16 billion dirhams quoted in Dubai's sukuk prospectus in August.
However, the size of the 2021 budget is 14% below the 66.4 billion dirhams the government had initially planned for 2020.
The 2021 budget, which was approved by Dubai's ruler Sheikh Mohammed bin Rashid Al Maktoum, takes into account the exceptional economic conditions of the fiscal year 2020 and the repercussions of the pandemic on the global economy.
Dubai, with its diversified trade and tourism economy, was hit hard by a lockdown and suspension of flights earlier this year. The economy is expected to contract 6.2% in 2020 before growing 4% in 2021, supported by the continued recovery of economic activities.

FM Allows Rajasthan to Borrow Rs. 2,731 cr more Post Ease of Doing Business Reform

The Finance Ministry permitted Rajasthan to borrow an additional Rs. 2,731 crore after the state successfully undertook ease of doing business reforms.
Rajasthan has now joined the five other states namely, Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu and Telangana, which have completed the reform facilitating ease of doing business to be eligible for additional borrowing. These six states have been granted additional borrowing permission of Rs. 19,459 crore.
The ease of doing business is an important indicator of the investment friendly business climate in the country. The government had in May decided to link grant of additional borrowing permissions to states who undertake the reforms to facilitate ease of doing business.

Dec 27, 2020

India to Become 5th Largest Economy in 2025, 3rd Largest by 2030: CEBR

According to Centre for Economics and Business Research, India, which appears to have been pushed back to being the world's sixth biggest economy in 2020, will again overtake the UK to become the fifth largest in 2025 and race to the third spot by 2030.
India had overtaken the UK in 2019 to become the fifth largest economy in the world but has been relegated to 6th spot in 2020.
The CEBR forecasts that the Indian economy will expand by 9 per cent in 2021 and by 7 per cent in 2022.
The UK-based think tank forecast that China will in 2028 overtake the US to become the world's biggest economy.

DLF Rental Arm to buy Hines Stake in Commercial Project in Gurgaon

Realty major DLF's rental arm DCCDL has entered into an agreement to acquire the stake of US-based Hines in a premium commercial project in Gurugram for Rs. 780 crore.
DLF Cyber City Developers Ltd (DCCDL), the joint venture firm of DLF and Singapore's sovereign wealth fund GIC, has entered into a securities purchase agreement with funds managed by Hines for acquisition of their stake in Fairleaf Real Estate, which owns and operates 'One Horizon Center'.
The purchase consideration for this acquisition is approximately Rs. 780 crore, subject to customary closing adjustments.

Honda Halts Production at Noida Facility

Honda Cars India Ltd (HCIL) formally announced closure of manufacturing operations at its Greater Noida facility in Uttar Pradesh.
The automaker said that the decision to cease production at the plant, which came up in 1997, has been taken as part of realignment of manufacturing operations with the goal of improving business efficiency.
With the closure of Greater Noida facility, HCIL has also discontinued CR-V and Civic models in the country. Both the models were being manufactured at the plant.

Dec 26, 2020

Reliance to Buy IMG from Sports Management Joint Venture

Reliance Industries (RIL) has agreed to buy out IMG Worldwide LLC from their sports management joint venture for Rs. 52.08 crore.
The nation's biggest company by market value said that it will buy IMG Worldwide's 50% stake in IMG-Reliance Ltd (IMG-R) for no more than Rs. 52.08 crore in cash. RIL will rebrand the company after the closure of the deal.
RIL had formed an equal joint venture with IMG Worldwide, an international sports marketing and management company, in 2010 to develop, market and manage sports and entertainment in India.

Gujarat to Host India's First Lithium Refinery

India's first Lithium refinery which will process Lithium ore to produce battery-grade material will be set up in Gujarat.
Manikaran Power Limited, one of the country's largest power trading and renewable energy company will be investing over Rs. 1,000 crore to set up this refinery.
Lithium is a rare element not usually found in India. The company will be importing Lithium ore from Australia and will be processing it here.
Last year, Manikaran Power had collaborated with Australian firm Neometals to tap the Mount Marion Lithium mine in Western Australia.
The proposed project is expected to help Gujarat secure the raw material supply for domestic manufacturing of Lithium batteries as it looks to promote electric vehicles.

Coal Import System

The Government of India is to implement Coal Import Monitoring System (CIMS). The system will require the importers to submit advance information online and obtain an automatic registration number to handle coal imports in the country.
The importers of Bituminous coal, anthracite coal, coking coal and steam coal are to be monitored under the system.
Under the system, the importers should submit advance information about the import items online.
It will also monitor steel products being dumped in India. The CIMS is to monitor the compliance of dumping duty to be imposed on cheap, less quality steel products.
The importer should enter the registration number and expiry date of registration in the bill of entry.
The system is to come into effect from February 1, 2021.
The monitoring system is launched to make the recently auctioned commercial coal mining viable in the country.

Dec 25, 2020

China asks Pakistan for Additional Guarantees for $6 bn Loan for Rail Project

China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country's weakening financial position.
China has also proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad's wishes of 'cheapest lending'.
The issue of additional guarantees was raised during the third joint ML-1 Financing Committee Meeting held ten days ago (December 13), The Express Tribune newspaper reported, quoting official documents.
The ML-1 project includes dualisation and upgrading of the 1,872-km railway track from Peshawar to Karachi and is a major milestone for the second phase of the China-Pakistan Economic Corridor (CPEC).

LG and Magna Announce Joint Venture in Electric Car Gear

South Korea-based LG Electronics Inc and automotive supplier Magna International Inc are launching a joint venture that will make key components for electric cars.
The joint venture, tentatively called LG Magna e-Powertrain and valued at $1 billion, will manufacture e-motors, inverters and onboard chargers, according to LG Electronics.
The deal expands a wave of consolidation among suppliers aiming to capture a growing market for electric vehicle, e-axle systems, which combine electric motors, power controls and driving gears in one unit.
LG Electronics is an affiliate of South Korea's fourth-largest conglomerate, with interests ranging from electronics, including smartphones, to home appliances. LG Group's major affiliates include LG Display Co Ltd, which counts Apple Inc as its customer, as well as LG Chem Ltd, whose wholly owned LG Energy Solution subsidiary provides EV batteries to Tesla Inc.

Cabinet Approves 100% FDI in DTH Sector

The Union Cabinet approved revised guidelines for Direct-to-Home (DTH) broadcasting services, allowing 100 per cent foreign direct investment (FDI) as well as increasing the licence period to 20 years.
Under the revised guidelines the licenses will be issued for a period of 20 years, compared to 10 years at the moment, and will be renewed for a 10-year period. The license fee has been revised from 10 per cent of gross revenue (GR) to 8 per cent of adjusted gross revenue (AGR), which will be calculated by deduction of GST from GR.

Google Invests in Glance and VerSe Innovation

Google has invested in two Indian start-ups, Glance and VerSe Innovation, as part of its USD 10 billion Google for India Digitisation Fund to enable them to further scale up availability of content in different formats across various Indic languages.
As per reports, Google has participated in Glance's USD 145 million (about Rs. 1,071.5 crore) and VerSe Innovation's USD 100 million (about Rs. 739 crore) funding rounds.
In July this year, Google's Sundar Pichai had announced a USD 10 billion (Rs. 75,000 crore) Google for India Digitisation Fund that will be invested over the next five to seven years to help accelerate the adoption of digital technologies in the country.

Dec 24, 2020

RBI to introduce 'Positive Pay System'

The Reserve Bank of India is to introduce "Positive Pay System" from January 1, 2021 for cheque transactions above Rs. 50,000. This is to be done to enhance safety and eliminate frauds.
'Positive Pay System' is a process of reconfirming key details of large-value cheques. The large value cheques are those where the transactions are above 50,000 INR. It basically involves reconfirmation of key details of cheques. It is not mandatory for the banks to implement the system.
The cheque issuer electronically submits certain details of the cheque to the bank via SMS, ATM, mobile app, etc. These are cross-checked by the Cheque Truncation System and discrepancies are flagged to the drawee and presenting banks. The facility is to be developed by the National Payments Corporation of India.

India, Japan Come up with Mechanism for Cooperation in Steel Industry

India and Japan have devised a mechanism for cooperation in the steel industry at the joint secretary level and will see both sides discussing a number of issues in the sector including international trade. India, which is the second-largest producer of steel, still lags behind Japan and China in terms of per capita consumption. The dialogue mechanism will see New Delhi-Tokyo cooperating to increase this.
Both sides signed a Memorandum of Cooperation to herald the cooperation. It was signed by the Secretary of India's Steel Ministry Pradip Kumar Tripathi and Vice-Minister for International Affairs, Tanaka Shigehiro representing Japan's Ministry of Economy, Trade, and Industry.
India and Japan's collaboration come even as both sides are increasing cooperation in many areas including alternate supply chains in a post-pandemic world.

Wipro to Acquire IT Verticals of Metro AG

Wipro signed a $700-million digital and IT partnership deal with Metro AG, that will see over 1,300 employees of the German wholesaler move to the Indian IT major.
The estimated deal value for the duration of the first five years is approximately $700 million. With the intention to extend up to four additional years, it can be a potential spend of up to $1 billion," Wipro said in a statement.
As a part of this transaction, Wipro will take over the IT units of Metro AG — Metro-NOM GMBH in Germany and Metro Systems Romania S.R.L.

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