Current afffairs 5th Jan 2014

New Zealand’s Corey Anderson smashes quickest ODI century

January 5, 2014     No comments

New Zealand’s cricket player Corey Anderson created a record by hitting the fastest century in One-Day International (ODI), reaching 100 in just 36 balls against the West Indies. Prior to Anderson, Pakistan’s Shahid Afridi had this record who took 37 deliveries to hit century against Sri Lanka in 1996.

In his unbeaten 131, Anderson hit 14 sixes, the third highest number of sixes in an ODI innings. India’s Rohit Sharma smashed 16 sixes against Australia two months ago and Australia’s Shane Watson hit 15 against Bangladesh in 2011.

FDI in high speed trains expected soon

The Government is expected to permit Foreign Direct Investment (FDI) in high speed trains and other projects including development of rail lines between project sites and existing network. The Department of Industrial Policy and Promotion (DIPP) has proposed 100% FDI through automatic route along with the proposal to de-license and de-reserve few areas of the cash-deficient railway sector. However, FDI will not be permitted in train operations and safety. At present, (FDI) in the railways sector is completely forbidden except mass rapid transport systems.

What are the key points in the proposal for allowing FDI in Indian Railways?

As per the proposal, government should:

Allow 100% FDI through automatic route

De-license and de-reserve few areas

Allow FDI in railways sub-urban corridor, high speed train systems and dedicated freight line projects implemented in PPP mode.

Expand the definition of ‘infrastructure’ by including railway line and railway sidings.

Allow foreign companies to control 100% stake in the Special Purpose Vehicle (SPV) that will build and maintain rail lines linking ports, mines and industrial centers with the existing rail network.

Why do we need FDI in Railways?

Indian Railways are facing a cash problem. This requirement of cash can be met to a great extent by allowing FDI in the sector.  When foreign firms would be allowed to control SPVs that will construct rail lines linking ports, mines and industrial centers with the existing rail network it would facilitate smooth movement of raw materials from mines to ports. Industrial development and exports have been suffering due to poor infrastructure which hinders output and increases the cost of production. Railways can play a significant role in providing a reliable transport facility needed for industrial growth.

RBI to review banks’ single, group borrowing exposure limit norms

Considering the serious risks from ever enlarging pool of corporate stressed loans – bad loans and restructured advances, the Reserve Bank of India is likely to revise its extant single and group borrower limits. RBI’s Financial Stability report (FSR) released in December 2013 has suggested review of current limits to improve stability of the banking sector. As per existing norms, a bank can take single borrower exposure upto 25% of bank total capital and upto 55% for group exposure.

If we compare India’s existing exposure norms with global norms, we find India to be on the higher side. As per the proposal made by the Basel committee in March 2013, threshold defining large exposure should be set at 5% of banks eligible capital. The large exposure limit may be pegged at 25% of common equity tier I (as against the currently used total capital). As per World Bank’s financial sector assessment program of India in 2011-12, the large group exposure limit (upto 50%) in India is considerably higher than 25% norm which is healthy international practice.

According to RBI’s impact study, the contagion losses are significant and could exceed the direct loses caused by failed group. The failure of large corporate group could result in a total loss of over 60% of the banking system’s capital. The performance of the corporate sector in the present economic condition has been a matter of concern. The defaults by corporate or business makes two impact on a bank:

Direct loss in tune with exposure

Loss on account of the effect of contagion.

The share of corporate loans is quite big in gross Non-Performing Assets (NPA). Besides, pool of restructured advances, which is preponderantly corporate loans, has also grown considerably.

CPI rose by 2 points in November 2013

The Consumer Price Index for Industrial Workers or CPI-IW increased slightly by 2 points to 11.47% and pegged at 243 in November 2013 compared to 11.06% in October and 9.55% in the same month last year on account of higher prices of food items.

On one month percentage change, it rose by 0.83% between October and November compared with 0.46% between the same two months in 2012.  Food inflation was estimated at 16.175 against 15.02% of the previous month and 10.85% during the same month of year 2012. As per official data, inflation in food items was the largest contributor to the upward movement of the current index contributing 2.23% points to the total change.

Among food commodities the main contributors to the rise in index were rice, wheat, wheat atta, milk, pure ghee, garlic, potato, tomato, other vegetable items and Tea readymade. However, the rise in index was moderated to some extent by groundnut oil, fresh fish, poultry, onion, ginger, electric charges, medicine (allopathic), petrol putting downward force on the index. At centre level, Bokaro registered the highest surge of 11 points followed by Giridih, Kodarma, and Angul—Talcher (9 points each), Munger—Jamalpur (8 points) and Rourkela, Sholapur and Raniganj (7 points each).

On the other hand, Surat reported a fall of 6 points followed by Amritsar, Bhavnagar and Vadodara (4 points each), Coonoor and Nagpur (2 points each) and Ahmedabad centre one point. At national level, the indices of 40 centres are above the all India Index and other 38 centres’ indices are below national average.

What is CPI-IW (Consumer Price Index for Industrial Workers)?

The CPI-IW or Consumer Price Index for Industrial Workers is an economic indicator used by the government in India to gauge inflation for a particular segment of the consumer market. To do this, it sets up a baseline for the purchasing power of industrial workers at a particular point in time and comparing what the same amount of money can purchase in following years. If purchasing power falls, inflation has rendered the prices of consumer goods to increase. The percentage rise in prices over the baseline is considered the country’s rate of inflation.

Estimating CPI is part of the economic policy of most countries. Developed nations such as the US and the UK, track CPI for the whole population. Developing nations, like India, find it less useful to track the purchasing habits of the entire population as a whole, because there is great extent of inequality in the standard of living between urban and rural workers. To track CPI, India classifies its population into four classes, these are: 

Urban non-manual employees

Agricultural Laborer

Rural Laborer

Industrial Worker

Google ties up with Election Commission for voters’ registration

The Election Commission of India (EC) has tied-up with US-based internet heavyweight, Google, to assist it manage online voter registration and facilitation services ahead of the India’s General Election 2014. Google will provide EC its resources, including its search engine, to facilitate voters to check their enrolment status online and locate their polling station, complete with directions using Google Maps.  In this exercise, Google will put its global network and resources at the EC’s disposal until June 2014 to help it manage online registration of new voters and enable the enrolled ones to check the address at which they are registered, and get directions to the polling station. With the new rolls with reference to January 1, 2014, slated to be out by January 6, 2014, the voters’ queries on the Commission website are expected to be managed by Google for the next 6 months.

How much would Google charge for these services?

Zero. Google will not charge the EC for these services, estimated to cost $50,000 (over Rs 30 lakh), and fund the same from its Corporate Social Responsibility (CSR) budget.

How would Google’s services to EC help voters?

The EC intends to use Google’s technological expertise to manage online enrolment of voters and help voters search their name in electoral rolls along with the polling station. If any voter wants to know about his enrolment and poll station, he will only have to type his/her name/EPIC no and address on the Google Search engine, which will quickly generate results matching the voters’ name with his assembly/Lok Sabha constituency, and pinpointing the location of his polling station. Besides, Google Maps will show exact directions to the voter on how to reach the right polling station on the polling day.

EC is also considering the option of using the global network and servers of Google for airing of results for the 2014 general election expected to be held in May 2014. In the recently held Assembly Polls in the five states also, EC had joined hands with US-based IT company Akamai for putting out results.

Current affairs 3rd Jan 2014

FII inflow in Indian equities reaches Rs 1.13 lakh crore

The Foreign Institutional Investors (FIIs) are figured to have made a net inflow of over Rs. 1.13 lakh crore in the Indian equity market in 2013. At gross level, FIIs purchased stocks worth Rs 7.96 lakh crore in 2013 and sold equities to the tune of Rs 6.84 lakh crore; translating into a net inflow of Rs 1,13,136 crore.

Nevertheless, overseas investors pulled out Rs 50,847 crore from the bond market in 2013. This takes the overall investment by FIIs into the debt and equity market together to Rs 62,288 crore. Despite their unpredictable ‘hot money’ investment, these overseas entities are amongst the most important drivers of Indian stock markets.

As per the experts, FIIs are looking forward to a stable government that can move reforms process faster, irrespective of which political party comes to power at the Centre next year. Likewise, a strong performance by BJP in the recent assembly elections has promoted the chances of a stable government at the Centre.

RBI: Banks to continue accepting scribbled notes

The Reserve Bank of India (RBI) stated that banks will continue to accept currency notes with anything written on them and it has not issued any such instructions regarding discontinuity of scribed notes.

Nevertheless, the central bank reiterated that writing or scribbling on banknotes works against its ‘clean note policy’ and sought co-operation from public, institutions and others in keeping the banknotes clean by not writing anything on them.

Note: This announcement came on the wake of rumours that RBI issued a notification that from January 1, 2014, banks will not accept bank notes with scribbling. 

Finance Minister called financial sector regulators to implement FSLRC proposals

The Union finance minister, P Chidambaram stated the regulators must implement proposals of the Finance Sector Legislative Reforms Commission (FSLRC).

The FSLRC report contains 12 key proposals and these do not require legislative changes. It also included a draft Indian Financial Code that is expected to replace the current financial sector legislations but is unlikely to be tabled in Parliament soon.

About FSLRC report                                                                                                     

The financial sector regulators will take serious action with high penalties on violators and time bound investigations that would act as deterrents and improve consumer protection.

The proposals that called for penalties discourage the future violations as a multiple of the illegitimate gain of violations.

Regulators should also put in place internal manuals on conducting investigations. The investigating officer would be kept different from the officer who would decide the penalty for the crime.

Note: The Financial Stability and Development Council on October 2013 decided to finalize an action plan for implementation of all FSLRC principles on regulatory governance, transparency and improved operational efficiency that do not require legislative action.

Pakistan appoints a female judge to Sharia Court for the first time

Ms Ashraf Jehan (56) appointed as the first female judge of Shariah Court (Pakistan), which hears cases under the Islamic legislation. Ms Jehan was earlier serving as an additional judge at the high court in Sindh.

Note: The Shariah Court was established in 1980 during the rule of military dictator Ziaul Haq as part of his policy towards Islamisation of Pakistan’s institutions. It examines the country’s laws to check them for conformity with Islamic injunctions and hears appeals under religious legislation known as the “Hudood Laws”, which run parallel to the penal code.

PETA’s Person of the Year: Dr Shashi Tharoor

The Union Minister of State for Human Resource Development, Dr. Shashi Tharoor named as the Person of the Year by the animal rights body PETA (People for the Ethical Treatment of Animals) – India for taking steps to advance animal protection. Mr. Tharoor recommended the National Council for Teacher Education (NCERT) to ban the use of animals, viz. for dissection, etc, in training teachers.

By his initiative, in 2012, the Ministry of Environment and Forests issued a directive instructing all the institutes or establishments associated with teaching of medical, pharmacy and other courses in life sciences to follow UGC guidelines for discontinuation of dissection and animal experimentation in universities and colleges and introduce use of alternatives to animal experimentation.

 About People for the Ethical Treatment of Animals (PETA) - India

Based in Mumbai, launched in January 2000.

Operates under the simple principle that animals are not ours to eat, wear, experiment on or use for entertainment.

Focuses primarily on the areas in which the greatest numbers of animals suffer the most: in the food and leather industries, laboratories and the entertainment industry.

Responsible for the ending of animal experiments by the West Bengal Board of Secondary Education in 2008.

RBI eases gold dore import norms; allows refineries to import 15% of their annual requirements in first two months

In consultation with the Government of India, the Reserve Bank of India (RBI) partially eased restrictions on import of gold dore after taking into account representations from refiners. As per the new norms -

Refineries are allowed to import dore up to 15% of their gross average feasible quantity based on their license entitlement in the first two months for making this available to the exporters on First in First out (FIFO) basis. Following to this, the quantum of gold dore to be imported should be determined lot-wise on the basis of export performance.

Before the next import, not more than 80% should be allowed to be sold domestically.

The dore so imported shall be refined and shall be released based on FIFO basis following 20:80 principle.

The imports will be allowed only up to 5 times the quantum for which proof of export has been submitted.

Note: In August, the RBI had imposed curbs on gold imports and linked it with exports. Consequently, 20%  of every lot of gold imported had to be exclusively made available for exports and the balance for domestic use.

What is Gold Dore?

Gold doré (pronounced gold doh-rey) is a bar of semi-purified gold (e.g. bullion). After being mined, the first stage in the purification process of the gold ore produces a cast bar (gold dore) that is approximately 90% gold. The other 10% is mostly metals like silver and copper.

Current affairs 3rd Jan 2014

FII inflow in Indian equities reaches Rs 1.13 lakh crore

The Foreign Institutional Investors (FIIs) are figured to have made a net inflow of over Rs. 1.13 lakh crore in the Indian equity market in 2013. At gross level, FIIs purchased stocks worth Rs 7.96 lakh crore in 2013 and sold equities to the tune of Rs 6.84 lakh crore; translating into a net inflow of Rs 1,13,136 crore.

Nevertheless, overseas investors pulled out Rs 50,847 crore from the bond market in 2013. This takes the overall investment by FIIs into the debt and equity market together to Rs 62,288 crore. Despite their unpredictable ‘hot money’ investment, these overseas entities are amongst the most important drivers of Indian stock markets.

As per the experts, FIIs are looking forward to a stable government that can move reforms process faster, irrespective of which political party comes to power at the Centre next year. Likewise, a strong performance by BJP in the recent assembly elections has promoted the chances of a stable government at the Centre.

RBI: Banks to continue accepting scribbled notes

The Reserve Bank of India (RBI) stated that banks will continue to accept currency notes with anything written on them and it has not issued any such instructions regarding discontinuity of scribed notes.

Nevertheless, the central bank reiterated that writing or scribbling on banknotes works against its ‘clean note policy’ and sought co-operation from public, institutions and others in keeping the banknotes clean by not writing anything on them.

Note: This announcement came on the wake of rumours that RBI issued a notification that from January 1, 2014, banks will not accept bank notes with scribbling. 

Finance Minister called financial sector regulators to implement FSLRC proposals

The Union finance minister, P Chidambaram stated the regulators must implement proposals of the Finance Sector Legislative Reforms Commission (FSLRC).

The FSLRC report contains 12 key proposals and these do not require legislative changes. It also included a draft Indian Financial Code that is expected to replace the current financial sector legislations but is unlikely to be tabled in Parliament soon.

About FSLRC report                                                                                                     

The financial sector regulators will take serious action with high penalties on violators and time bound investigations that would act as deterrents and improve consumer protection.

The proposals that called for penalties discourage the future violations as a multiple of the illegitimate gain of violations.

Regulators should also put in place internal manuals on conducting investigations. The investigating officer would be kept different from the officer who would decide the penalty for the crime.

Note: The Financial Stability and Development Council on October 2013 decided to finalize an action plan for implementation of all FSLRC principles on regulatory governance, transparency and improved operational efficiency that do not require legislative action.

Pakistan appoints a female judge to Sharia Court for the first time

Ms Ashraf Jehan (56) appointed as the first female judge of Shariah Court (Pakistan), which hears cases under the Islamic legislation. Ms Jehan was earlier serving as an additional judge at the high court in Sindh.

Note: The Shariah Court was established in 1980 during the rule of military dictator Ziaul Haq as part of his policy towards Islamisation of Pakistan’s institutions. It examines the country’s laws to check them for conformity with Islamic injunctions and hears appeals under religious legislation known as the “Hudood Laws”, which run parallel to the penal code.

PETA’s Person of the Year: Dr Shashi Tharoor

The Union Minister of State for Human Resource Development, Dr. Shashi Tharoor named as the Person of the Year by the animal rights body PETA (People for the Ethical Treatment of Animals) – India for taking steps to advance animal protection. Mr. Tharoor recommended the National Council for Teacher Education (NCERT) to ban the use of animals, viz. for dissection, etc, in training teachers.

By his initiative, in 2012, the Ministry of Environment and Forests issued a directive instructing all the institutes or establishments associated with teaching of medical, pharmacy and other courses in life sciences to follow UGC guidelines for discontinuation of dissection and animal experimentation in universities and colleges and introduce use of alternatives to animal experimentation.

 About People for the Ethical Treatment of Animals (PETA) - India

Based in Mumbai, launched in January 2000.

Operates under the simple principle that animals are not ours to eat, wear, experiment on or use for entertainment.

Focuses primarily on the areas in which the greatest numbers of animals suffer the most: in the food and leather industries, laboratories and the entertainment industry.

Responsible for the ending of animal experiments by the West Bengal Board of Secondary Education in 2008.

RBI eases gold dore import norms; allows refineries to import 15% of their annual requirements in first two months

In consultation with the Government of India, the Reserve Bank of India (RBI) partially eased restrictions on import of gold dore after taking into account representations from refiners. As per the new norms -

Refineries are allowed to import dore up to 15% of their gross average feasible quantity based on their license entitlement in the first two months for making this available to the exporters on First in First out (FIFO) basis. Following to this, the quantum of gold dore to be imported should be determined lot-wise on the basis of export performance.

Before the next import, not more than 80% should be allowed to be sold domestically.

The dore so imported shall be refined and shall be released based on FIFO basis following 20:80 principle.

The imports will be allowed only up to 5 times the quantum for which proof of export has been submitted.

Note: In August, the RBI had imposed curbs on gold imports and linked it with exports. Consequently, 20%  of every lot of gold imported had to be exclusively made available for exports and the balance for domestic use.

What is Gold Dore?

Gold doré (pronounced gold doh-rey) is a bar of semi-purified gold (e.g. bullion). After being mined, the first stage in the purification process of the gold ore produces a cast bar (gold dore) that is approximately 90% gold. The other 10% is mostly metals like silver and copper.

Current affair 1st jan 2014

Scientists discovered Phosphorous in remnants of Supernova

Astronomers have, for the first time, discovered phosphorous — one of the vital elements for life — in the cosmic remains from a supernova explosion.

It has been found that phosphorus is 100 times more abundant in the leftovers of a supernova than elsewhere in the galaxy, affirming the hypothesis that massive exploding stars are the churning factories of the element.

While researches have calculated the abundance of essential life elements like carbon, nitrogen, oxygen and sulphur in supernovae remains, supernova remnant Cassiopeia A disclosed the first measurement of the relatively scarce phosphorus. The new observations of the object were made with a spectrograph positioned on a 5-meter telescope at Palomar Observatory at the California Institute of Technology.

What are Supernovae and Supernova remnant?

A supernova is a celestial event which happens when massive stars exhaust their nuclear fuel and explode in a spectacular fashion. Being extremely luminous, they briefly outshine an entire galaxy, before fading from view over several days.

During a short period of some weeks or months, a supernova can radiate as much energy as the Sun is expected to emit over its entire life span. Once it fades away, what remains is an expanding shell of gas and dust called a supernova remnant.

What is the scientific thought on the formation of essential life elements?

As per astronomers, these elements are formed in the stars and are dissipated throughout our galaxy when the star explodes, and they become part of other stars, planets and ultimately, humans.

Scientists are of the view that when a star with mass several times the mass of the Sun runs out of the hydrogen that it combusts to produce energy, the core of the star goes through a sequence of collapses, synthesising heavier elements with each collapse.

OIL signs pact with IRMA for studying the feasibility of Project ‘Kamdhenu’

PSU (Public Sector Unit) Oil India Ltd. has inked an agreement with Institute of Rural Management, Anand (IRMA) to conduct a feasibility study for the company for its plan to set up dairy production facility in Assam. The project which has been named ‘Kamdhenu’ aims to set up big milk production centre in Upper Assam.

Why OIL intends to enter dairy sector?

OIL wants to set up dairy production facility under its project ‘Kamdhenu’ as part of a Corporate Social Responsibility (CSR) initiative. The project would seek to boost milk production in Upper Assam by providing employment opportunity to the people of the state. In future, the project aims to enhance the production to supply milk and dairy products in the whole North-East region. The project derives inspiration from the ‘Amul’ model which has been very successful in Gujarat.

What is the role of IRMA in this project?

As per the agreement with Institute of Rural Management, Anand (IRMA) in Gujarat, the institute has the task of conducting feasibility study and prepare a Detailed Project Report (DPR) after the study in Dibrugarh and Tinsukia districts of Assam where Oil India Ltd (OIL) has significant presence. The DPR will help the company to devise a roadmap and a long-term broad vision plan for the project.

What is CSR?

As mentioned in the new Companies Act 2009, CSR or Corporate Social Responsibility is the obligation of the companies to spend 2% of their net profit in philanthropic activities every year.

The law was meant to be applicable for all companies with

a net worth of Rs 500 crore or more, or

a turnover of Rs 1,000 crore or more, or

a net profit of Rs 5 crore or more

Responding to the objections raised by corporate sector against this mandatory provision, the government has recently diluted it. Now, if a company is unable to do so, it will have to explain in its report as to why it could not fulfill its CSR obligations.

India’s e-commerce market rose 88% in 2013: Survey

As per the survey, India’s e-commerce market grew by 88% in 2013 to $16 billion. The increased internet penetration and availability of more payment options boosted the e-commerce industry in 2013. The survey was conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Highlights of the survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM)

Approximately 3,500 dealers and organized retailers participated from Delhi, Mumbai, Chennai, Bangalore, Ahmedabad and Kolkata. Mumbai topped the list of online shoppers followed by Delhi and Kolkata.

As per the age-wise analysis, 35% of online shoppers are aged between18-25 years, 55 % between 26-35 years, 8 % between 36-45 years, while only 2 % are in the age group of 45-60 years. In addition, 65 % of online shoppers are male while 35 % are female.

The online shopping arose at a rapid pace in 2013, owing to online discounts, high fuel prices and availability of abundant online options.

The products that are sold most are in the tech and fashion category, viz. mobile phones, I-pads, accessories, MP3 players, digital cameras, jwellery, etc.

Those who are unwilling to shop online quoted reasons viz. prefer research products and services online, find delivery cost too high, fear to share personal financial information online, lack of trust on whether products would be delivered in good condition , people have no credit or debit card facility, etc.

As per the rising online retail, the survey forecasts the country’s e-commerce market to reach $56 billion by 2023.

About the Associated Chambers of Commerce and Industry of India (ASSOCHAM)

Represents the interests of trade and commerce in India, and acts as an interface between industry, government and other relevant stakeholders on policy issues and initiatives.

Founded: 1920

Headquarters : New Delhi, India

President: Dr. Rana Kapoor

Aim: To promote both domestic and international trade, and reduce trade barriers while fostering conducive environment for the growth of trade and industry of India.

Mr. Pradeep Kumar: New MD (Corporate Banking) of SBI

The Country’s biggest lender, State Bank of India (SBI) appointed Mr. P.Pradeep Kumar as its Managing Director and group executive in charge of corporate banking. The seat was lying vacant as of Ms. Arundhati Bhattarcharya became the Chairman of SBI in October 2013.

Previously, Mr. Kumar was the deputy managing director and group executive of the corporate banking group of SBI, which looks after corporate accounts and project finance of the bank.  The other three managing directors are K Krishna Kumar (national banking), Hemant Contractor (global banking) and A Vishwanathan (subsidiaries and associates).

Note: The top management at SBI consists of a chairman, four managing directors, over a dozen deputy managing directors and about 35 chief general managers.

Delhi CM Arvind Kejriwal announces free water

Delhi Chief Minister Arvind Kejriwal delivered on the AAP’s promise of its poll manifesto by announcing 20 kilo litres of free water a month to all metered households. The decision was questioned by Congress, saying every citizen of Delhi must be provided 700 litres of free water per day.

However, there is a condition that those consuming above this limit will have to pay as per tariff, increased by 10%, effective Jan 1, 2014. The promise of 700 litres of free water to every Delhi household was made in the AAP poll manifesto. The cost of providing the free water would be borne by the Delhi Jal Board (DJB) for the first three months. Though AAP were to provide for 700 litres of water per day to every household but the DJB in its final calculations arrived at the figure of 667 litres per day or 20 kilo litres a month to be provided to those households with regular connections.

In another step, the AAP government, which had promised to go over the problems of auto-rickshaw drivers, new Transport Minister Saurabh Bharadwaj decided to issue 5,500 inter-state permits for them to commute within the National Capital Region.

amil Nadu government launches free CFL scheme

In a bid to promote power saving, Tamil Nadu government began the first phase of distributing free Compact Fluorescent Light (CFL) bulbs to over 14 lakh hut-dwellers in the state. The scheme is aimed at saving 40 mw of electricity.

The government will implement the scheme in phases. The first phase costing Rs 8.77 crore will cover 7 lakh domestic consumers. The Chief Minister also unveiled various sub-stations in the capacity of 230 kv, 110 kv and 33 kv, build in different parts of the state at an overall expense of Rs 509.88 crore.

Millionaire Tax” approved by the French constitutional council

The French Constitutional Council approved the government’s controversial “millionaire tax” proposal for companies to pay 75% tax on annual salaries exceeding €1 million  ($1.375 million USD), in line with President Francois Hollande’s drive to limit executive pay at a time of economic hardship. To reduce France’s budget deficit, the increase in tax raised discontent among the business leaders and the football clubs.

About Millionaire Tax

The super tax is one of the President Francois Hollande’s signature policies, to pull out France from its economic crisis.

The tax will include a 50% levy on the portion of wages exceeding €1 million paid in 2013 and 2014. It will be levied on companies, not the individual.

The tax, for earnings in 2013 and 2014, will hit around 470 companies and a dozen football clubs. It is expected to raise €210 million a year.

Including social contributions, the rate will effectively remain about 75%, though the tax will be capped at 5% of a company’s turnover

RBI extends deadline to issue inflation-indexed bonds

The Reserve Bank of India (RBI) extended the time for issuance of Inflation Indexed National Savings Securities Cumulative (IINSS-C) bonds (or inflation linked bonds) by three months to March 31, 2014, from December 31, 2013. The issuance can be closed earlier than March 31, 2014 with a prior notice.

Why RBI extended the deadline to issue inflation-indexed bonds?

The operational guidelines (internal to banks) for selling these certificates at the branch level are still in the works.

Secondly, it will take time to create awareness among customers in relation to inflation linked bonds.

Inflation linked bonds

The limit for investment per applicant per annum: Rs 5,000 – Rs 5 lakh.

Eligibility for subscription: Individuals, Hindu Undivided Family, charitable institutions and universities.

The interest rate on these bonds would be linked to the Consumer Price Index (CPI).

The interest rate would comprise two parts — a fixed rate of 1.5% per annum and inflation rate based on CPI with a lag of three months. It would be compounded on the principal on half-yearly basis and paid at the time of maturity.

For senior citizens (65 years and above of age),  early repurchase will be allowed after one year from date of issue and other investors can redeem them after three years but with penalty of 50 per cent of the last coupon paid.

RBI will act as a central depository, as these securities will be issued in the form of Bonds Ledger Account (BLA) and held with RBI.

Distribution or sale of bonds would be through banks: SBI, nationalized banks and three private banks HDFC Bank, ICICI Bank and Axis Bank  and Stock Holding Corporation of India.

Note: Inflation linked bonds are launched as instruments that will protect savings from inflation, especially the savings of the poor and middle classes.

Lativa becomes the 18th state to join the Eurozone

The Baltic nation, Latvia joined the Euro Zone, with the expectation that the euro will lower its borrowing costs and encourage investors by eliminating currency risk. It became the 18th member of the European Union, which uses the Euro as its currency and the fourth smallest economy in the euro zone after Malta, Estonia and Cyprus.

The euro switchover ceremony took place at a site where Latvia’s crisis began – the former headquarters of the collapsed Parex bank, now headquarters of state-owned Citatele bank, which emerged from Parex’s ruins. The official conversion rate is 1 EUR = 0.702804 LVL.

About the Euro

Established by the provisions in the 1992 Maastricht Treaty.

Central bank: European Central Bank.

Official currency of the Eurozone.

The Eurozone is an economic and monetary union (EMU) of 18 European Union (EU) member states that have adopted the euro (€) as their common currency and sole legal tender.

Member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

Latvia joined the Eurozone on January 1, 2014.