As India's quality of schooling plummets, here's how Budget 2019 can help

The school education system in India is facing a shortage of trained teachers and a lack of proper infrastructure.

 

Interim Budget 2019: India stepped up its spending on school education by 9.35% from 2014-15 (Rs 45,722.41 crore) to 2018-19 (Rs 50,000 crore). But education’s share in the total union budget fell from 2.55% to 2.05% in this period, according to an IndiaSpend analysis of budgetary data.

On February 1, 2019, when the ruling Bharatiya Janata Party (BJP) presents its last budget before general elections, it will have to address a critical issue in India’s school education: Its quality compares poorly with many south Asian and BRICS nations even though India spends a higher percentage of its gross domestic product (GDP) on education.

In rural India, almost half of grade V students cannot read a grade II text and more than 70% them cannot do division, said the Annual Status of Education Report (ASER) 2018. These numbers indicate a fall in standards over the last 10 years.

Twin problems of school funding: low allocation and underutilisation

Till April 2018, school education in India was mostly covered by three centrally-sponsored schemes:

• Sarva Shiksha Abhiyan (SSA or education for all) that aims to provide universal education to all children between the ages of 6 to 14 years.
• Rashtriya Madhyamik Shiksha Abhiyan (RMSA or national middle education mission) which facilitates secondary education.
• Teacher Education which aims to create sound institutional infrastructure for pre-service and in-service training of elementary and secondary school teachers.

Read full News → Budget 2019 Expectations

Govt's intent to present 'regular budget' serious, grave: Congress

Tewari said the NDA-BJP government does not have the electoral mandate and it does not have the electoral legitimacy to present six full budgets in five years.

 

 

Interim Budget 2019: The Congress on Thursday said it will strongly oppose both inside and outside Parliament the presentation of a "full budget" by the BJP-led NDA government as it has "no electoral legitimacy" and the step will go against set precedents and Parliamentary traditions.

Congress spokesperson Manish Tewari termed as "serious and grave" reports claiming that the BJP-led Government was planning to present a "regular budget" and demanded that it should follow constitutional propriety and only presents a vote-on-account on February 1, 2019 ahead of general elections.

BJP sources have indicated that the Modi government is likely to present a full-fledged budget with a slew of announcements on welfare measures relating to farmers, youth and women.

"A budget is budget. The government is likely present a full-fledged budget. There is no such rule that the government before elections should not present a budget for the entire year. The new government may make changes after the polls if it so wishes," a sources in BJP said.

Tewari said if the reports in public space are correct then it would be "a flagrant violation" of all parliamentary conventions, procedures and traditions that have been followed over the past seven decades since the Constitution of India came into effect.

Read full News → Budget 2019 Expectations 

What 2019 Budget can do to help India clean its air, reduce coal addiction

Addressing policy issues are important if India is to fulfill its commitment to the Paris Climate Agreement 2015 to install 175 giga watt (GW).

 

Interim Budget 2019: India has one of the world’s largest programmes to expand renewables--a doubling of capacity over the next four years--but India’s ambitious 2022 target of generating enough non-coal energy to replace the equivalent of 175 coal-powered plants is veering off track

On February 1, 2019, the ruling Bharatiya Janata Party (BJP) has a chance to get things back on track, help India reduce its addiction to coal, help clean the country’s air and meet the global climate-change commitments of the world’s fourth-fastest growing carbon polluter

After record growth in the installed capacity of renewables over the four years to 2017, capacity addition slowed down in 2018. The main reasons: an anti-dumping duty imposed by the government on imported solar modules to aid domestic manufacturing, higher rates of taxation under the goods and service tax (GST) and unclear policy.

So, the last budget before 2019 general elections is of particular significance to the renewables sector, which comprises electricity from solar, wind, hydro and bio power.

The upcoming budget can help remove policy uncertainties from the sector and provide “long-term indications”, Daanish Verma, executive vice president, sustainable investment banking, YES Bank, told IndiaSpend.

Read full News → Budget 2019 Expectations 

Explainer: What is an interim budget? What FM Jaitley can and cannot do

This will be the last Budget of the current BJP-led NDA government before the 2019 General Elections.

Interim Budget 2019: With just a few months left before the Narendra Modi government formally completes its tenure, Finance Minister Arun Jaitley will present NDA regime's first interim budget on February 1, 2019.

As this will be the ruling BJP government’s last budget before the upcoming Lok Sabha elections, here's an explanation of what an interim budget actually means.

What is an interim budget?

An interim budget is presented by a government which is going through a transition period or is in its last year in office ahead of the general elections. Traditionally, an incumbent government cannot present a full-fledged Union Budget in the election year. Instead, the Finance Minister presents an interim budget during the joint sitting of Rajya Sabha and Lok Sabha in the Parliament, the livemint reported.

With an interim budget, the incumbent government seeks a vote of approval from the Parliament to draw money from the Consolidated Fund of India to meet its budget expenses before the end of the financial year, i.e; March 31st, 2019. It is a traditional practice which takes place in the run-up to every general election, according to an India Today report.

The full-fledged Union Budget is presented by the newly-elected government after Lok Sabha polls. In recent times, interim budgets have been instrumental for the incumbent governments to list out their achievements to draw voters' support.

Read full news here → Union Budget 2019

To bridge fiscal deficit, RBI likely to pay govt $5.8 bn interim dividend

The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections.

Interim Budget 2019: The Reserve Bank of India (RBI), having changed management last month following a clash with the government, is likely to transfer an interim dividend of Rs 300-400 billion ($4.32 billion-$5.8 billion) to the government by March, according to three sources with direct knowledge of the matter.

The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections, and would come after the government pushed the RBI for the additional funds ahead of a national election due by May.

Former finance ministry official Shaktikanta Das was appointed as the new governor of the Reserve Bank of India (RBI), following resignation of Urjit Patel last month amid tensions over the dividend payout and other issues.

The government and RBI have now appointed a panel to look into the issue around the sharing of the RBI's reserves.

"We are absolutely sure that an interim dividend of more than 300 billion rupees would be paid before March end," one of the sources told Reuters.

Read the full news here → Union Budget 2019

99.3% of demonetised notes are back; Rs 15.31 trillion returned: RBI

500- and 1000-rupee notes worth Rs 15.41 trillion were demonetised.

DeMonetisation News: As many as 99.3 per cent of the old 500 and 1,000 rupee notes, that was banned overnight in November 2016, have been returned, the Reserve Bank of India said in its annual report.

Of the Rs 15.41 trillion worth 500 and 1,000 rupee notes in circulation before November 8, 2016, notes worth Rs 15.31 trillion have been returned.

The "humungous task of processing and verification of specified bank notes (SBNs) was successfully achieved," it said.

The SBNs received were verified, counted and processed in the sophisticated high-speed currency verification and processing system (CVPS) for accuracy and genuineness and then shredded, it added.

SBNs refer to the demonetised old 500 and 1,000 rupee.
RBI said the processing of SBNs has since been completed. "The total SBNs returned from circulation is Rs 15,310.73 billion".

Read the annual report on → DeMonetisation

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News Source: BS

It's official! PM Narendra Modi to launch India Post Payments Bank on August 21

IPPB would become one of the largest banking networks in India. India Post has 154,000 post offices, of which 139,000 are in rural areas.

Latest News: Prime Minister Narendra Modi will launch India Post Payments Bank (IPPB) on August 21. The event will take place at the capital's Talkatora stadium.

The bank is running pilot services in Raipur and Ranchi. It will tie up with other banks and financial companies to offer loans, mutual funds and insurance policies, said sources. The Department of Posts was one of the 11 entities to get the in-principle nod from the Reserve Bank of India (RBI) in 2015 for setting up a payments bank. Many private firms such as Airtel, Fino, Paytm, etc, have launched these services. But IPPB missed the September 2017 deadline to open 650 branches because it failed to get a system integrator (SI) on board.

India Post Payments Bank

IPPB would become one of the largest banking networks in India. India Post has 154,000 post offices, of which 139,000 are in rural areas. The government is planning to utilise 650 branches to serve as controlling offices for servicing and monitoring post offices. These branches will be linked to IPPB by the end of this year.

An account holder can deposit up to Rs 100,000, withdraw cash, and make payments just like a savings bank account in any other commercial bank. However, to overcome the limitation of Rs 100,000, the bank has received permission to link around 170 million post office saving banks (POSB) account. Whenever a deposit in IPPB account exceeds Rs 100,000, it can be transferred to POSB. There are 370 million different types of accounts at post offices, which will be linked to IPPB gradually, according to sources.

The IPPB will also provide doorstep banking services. These will be chargeable. There are around 250,000 dak sevaks and another 50,000 postmen available in the network. Initially, 11,000 postmen will provide these services and…continue reading

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News Source : BS

Do you have an EMI? RBI rate hike to make your borrowings more expensive

The RBI raised interest rates to the highest in 2 years to tackle inflationary pressures.

RBI Policy: Planning to take a loan? You should not wait any longer. EMIs (equated monthly installments) on home, personal, auto and other loans are set to get costlier as the Reserve Bank of India (RBI) increased the repo rate by 25 basis points to 6.5 per cent from the previous rate of 6.25 per cent. The RBI has also raised the reverse repo rate by 25 basis points to 6.25 per cent. The decision was taken during the RBI’s Monetary Policy Committee’s (MPC) bi-monthly meeting on Wednesday.

In its last monetary policy meeting on June 6, the RBI had already increased the repo rate by 25 bps (basis points). Headed by governor Urjit Patel, the central bank raised key policy rates to the highest in two years for the second time in a row in last two months to tackle inflationary pressures. Over the last two bi-monthly MPC review meetings; there has been a total of 50 bps increase in the repo rate. The second-consecutive increase in repo rate comes as a shocker for those who are already paying EMIS, taken loans from banks or are planning to borrow in future.  RBI Rate Hike

You should be concerned about repo rate hike because it will directly affect your EMIs as banks will soon increase their lending rates. The repo rate has a direct impact on bank’s cost of borrowing from the central bank, that means the banks will raise their MCLR (Marginal Cost of Funds based Lending Rate) or charge more interest on loans. Hence, it makes costlier for lenders (banks) to borrow money. As the interest rate of loans is linked to the MCLR, repo rate surge causes a hike in interest or lending rates. Home loan borrowers will be affected to a great extent as housing loans are taken for a longer duration. In fact, since the beginning of this year, several banks have been increasing their MCLR rates, said a Livemint report.

New loan borrowers will have to bear the impact of increased interest rates on loans. RBI's second consecutive rate hike since October 2013, is likely to prompt action by banks or react to the policy decision, hence, EMIs will become expensive for potential loan seekers to borrow funds in future. If you cannot afford to pay higher EMIs, then you can prefer to borrow loan under the...continue reading

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News Source: BS

RBI Policy Review: RBI increases repo rate by 25 bps to 6.25%; maintains neutral stance

The central bank’s April policy tone was dovish and it had actually lowered inflation forecasts for the first and second half of 2018-19.

 

RBI Monetary Policy → The six-member monetary policy committee (MPC) unanimously voted for a rate hike, citing the fear of inflation, partly flared by the recent spike in crude oil prices. The hike in policy repo rate to 6.25 per cent from 6 per cent was contrary to market expectation that the central bank will hold rates and the unanimous decision came as a surprise to the markets.

The central bank’s April policy tone was dovish and it had actually lowered inflation forecasts for the first and second half of 2018-19. On Wednesday, the inflation outlook was revised up once again.

With the hike in the June policy, the Reserve Bank of India (RBI) has reversed the rate cutting cycle it had engaged in since January 15, 2015. The last rate hike happened on January 28, 2014, when the repo rate was increased to 8 per cent. The last policy action was in August 2017, when the central bank had lowered the repo rate by 25 basis points (bps).

Even as the central bank kept its stance ‘neutral’, the bond market saw the policy statement as hawkish, expecting at least one more rate hike soon. The 10-year gilt yield, which had already factored in a 25-bp repo rate hike in rates, jumped 8 bps after the policy announcement. The 10-year gilt yield closed at 7.92 per cent, up from its previous close of 7.83 per cent.

Wednesday’s policy statement showed that the MPC was clearly concerned about rising prices, and, importantly, households’ expectations about the future course of prices. The May 2018 round of the RBI’s survey of households reported a significant rise in households’ inflation expectations of 90 bps and 130 bps, respectively, for three-month and one-year ahead horizons.

This “significant rise” in households’ expectations, “could feed into wages and input costs in the coming months”, the RBI’s policy statement noted.

Once again changing its inflation forecast, from 4.7-5.1 per cent for the first half and 4.4 per cent in the second half, to 4.8-4.9 per cent and 4.7 per cent, respectively, the RBI said it had not anticipated a 12 per cent rise ($66 to $74 a barrel) in the Indian basket of crude oil between the April and June policies.

Retail inflation rose sharply to 4.6 per cent in April from 4.3 per cent in March. Core inflation, which includes food and fuel, remained consistently high at 5.8 per cent in April, up from 5.23 per cent in March.

Also Read → RBI Policy Review

RBI may be holding back Rs 2,000 notes or stopped printing them

High-value notes worth Rs 2.46 lakh cr not released, says the report

 

The Reserve Bank of India (RBI) may either be holding back Rs 2,000 notes or could have stopped printing high denomination currency, says a SBI Research report.

Juxtaposing the data presented in the Lok Sabha recently with the one provided by RBI in its Annual Report earlier, the SBI Ecoflash report said today, “we observe” that the value of small denomination currency in circulation up to March 2017 was Rs 3,501 billion.

This implies that the value of high denomination notes was equivalent to Rs 13,324 billion as on December 8, after netting out the small denomination notes from the currency in circulation on that day, it said.

The report further said that as per the Ministry of Finance in the Lok Sabha recently, the RBI has printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes as on December 8. The total value of such notes translates into Rs 15,787 billion.

“This means that the residual amount of high currency notes (Rs 15,787 billion Rs 13,324 billion) of Rs 2,463 billion may have been printed by the RBI but not supplied in the market,” said the report authored Soumya Kanti Ghosh, group chief economic adviser, SBI.

Interestingly, the report added, “it is safe to assume” that Rs 2,463 billion may be on the lower side as the RBI must have printed notes of small denomination in the interregnum (Rs 50 and Rs 200).

“As a logical corollary, as 2000 denomination currency led to challenges in transactions, it thus indeed seems that RBI may have either consciously stopped printing the 2000 denomination notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation,” said Ecoflash.

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Tweaks in Insolvency and Bankruptcy Code to block wilful defaulters

Cabinet clears ordinance to make it difficult for many promoters to take back insolvent firms

 

Business News India : Wilful defaulters, dubious promoters as well as those involved in fraudulent transactions would not be able to bid for companies going insolvent, with the Centre deciding to amend the Insolvency and Bankruptcy Code.

The Cabinet approved an ordinance on Wednesday. The amendments would come in force with immediate effect (after the President promulgates it), Finance and Corporate Affairs Minister Arun Jaitley said after the meeting.

The ordinance was necessitated as the winter session of Parliament will begin in the middle of December, and a number of insolvency cases are coming up for bidding. Apart from adding a new section that tightens bid guidelines, the government has tweaked a few other sections in the existing Code.

Wilful defaulters, responsible for non-performing assets (NPAs) for over a year, would be prohibited from taking over an insolvent company again. Experts say it usually takes one year after an account is declared NPA to term a promoter a wilful defaulter. The one-year NPA clause was not standard in the Reserve Bank of India’s definition.

However, a senior banker said investigations and follow-ups before declaring someone a wilful defaulter usually takes more than a year. The ordinance could be formalising the timeframe, so that banks cannot arbitrarily declare someone a wilful defaulter before due process is over.

An account is termed NPA when an interest rate or instalment on the principal of a term loan is not paid for over 180 days. There are specific timeframes for non-payment of agricultural dues, overdraft, bills, etc, to term an account as bad debt. A wilful defaulter is the one who does not pay back even when he is able to do so, diverts the loan for other uses or disposes off the collateral without the knowledge of lenders.

Click to Know → ‪Insolvency and Bankruptcy Code of India

RBI rejects Islamic banking in India, says equal access available to all

Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

In a major move, the Reserve Bank of India (RBI) has decided not to pursue a proposal for introduction of Islamic banking in the country.

Replying to an RTI query, the central bank said the decision was taken after considering "the wider and equal opportunities" available to all citizens to access banking and financial services.
Islamic or Sharia Banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

The issue of introduction of Islamic banking in India was examined by the RBI and the government of India, it said.

"Taking into account, the wider and equal opportunities available to all citizens to access banking and financial services, it has been decided not to pursue the proposal further," the central bank said in its reply to the RTI application filed by this PTI correspondent.

The RBI was asked to provide details of steps being taken for the introduction of Islamic or 'interest-free' banking in India.

Prime Minister Narendra Modi had on August 28, 2014, launched Jan Dhan Yojana, a national mission to bring about comprehensive financial inclusion of all the households in the country.

In late 2008, a committee on Financial Sector Reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country.

Note ban: You can withdraw Rs 50,000 from your savings accounts from today

Govt, RBI had imposed limits on withdrawal of money due to shortage of currency following note ban

 

 

Breaking News - The weekly limit on withdrawal of cash from savings bank accounts will be increased to Rs 50,000, from the current Rs 24,000, from Monday, and the limit will be removed from March 13.

"Effective February 20, 2017, the limits from cash withdrawal limit from savings bank accounts will be enhanced to Rs 50,000 per week from the current limit of Rs 24,000 per week (and) effective March 13, 2017, there will be no limits prescribed by RBI on cash withdrawal from savings bank accounts."

The Government and RBI had imposed limits on withdrawal of money from ATMs and bank branches in view of the currency shortage following demonetisation.

These limits, however, are being gradually eased, with RBI pumping in new notes of Rs 500 and Rs 2,000. (read more...)

Full text: RBI exempts all KYC accounts from Rs 5,000 deposit norms

Central bank Withdraws provisions for questioning deposits in in fully KYC-compliant bank accounts

News Latest The Reserve Bank of India on Wednesday exempted Know Your customer (KYC) compliant accounts from the new rules on deposits of above Rs 5000 .

No questions will be asked for deposits of old notes of Rs 500 and Rs 1,000 above Rs 5,000 for KYC accounts.

Breaking news, In a message sent to all banks,  the RBI said it had reviewed its instructions and decided that the rule will not apply to KYC-compliant accounts.

RBI had earlier imposed restrictions on the quantum of old notes that can be deposited in bank accounts.Old notes up to the Rs 5,000 limit received across the counter would be allowed to be credited into bank accounts in the normal course until December 30, the RBI had clarified. In the due course of Demonetisation, RBI had also said that the depositor has to give an explanation as to why the old notes were not deposited earlier. The amount will be credited in the bank account only after receiving a satisfactory explanation.

Analysts had said the move would add to the woes of those still waiting to deposit old notes. However, officials said people with money that was accounted for had no cause to worry.

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What will RBI do with scrapped currency notes?

With about Rs 8.45 lakh crore worth of scrapped notes of Rs 500 and Rs 1,000 bank notes deposited in bank accounts across India over 20 days from Prime Minister Narendra Modi’s demonetisation announcement on November 8, banks are plush with cash and depositing it with the Reserve Bank of India (RBI). And RBI has been supplying banks newly printed Rs 500 and Rs 2,000 notes, besides other valid currency notes, to meet the demand of people queueing up at banks and ATMs for cash.

Related Story: Petrol pumps, airlines will accept banned Rs 500 notes only till Dec 2

But, what will RBI now do with the humongous stock of scrapped currency notes? It has already chalked out a plan. Even as sorting, verification and shredding of banned notes are underway at multiple centres of the central bank, a Kerala-based plywood company has received the contract to pulp these notes. The company has already accepted tonnes of currency notes over the past three weeks.

An Economic Times report quoted P K Mayan Mohamed, managing director of Western India Plywood (WIPL) as saying that the plywood company had received “over 140 tonnes of Rs 500 and Rs 1,000 notes for pulping over the past three weeks”.

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Paytm payments bank to miss Diwali date

Mobile wallet company Paytm is likely to miss the Diwali target for commercial launch of its payments bank as it is still awaiting the final clearance from the Reserve Bank of India (RBI).

“We’re awaiting the final application approval from RBI. We have everything ready. As soon as the approval comes, we will do a ‘beta’ launch of the bank, which is within the company. By the end of the year, we will have a commercial launch of the payments bank,” Vijay Shekhar Sharma, founder and chief executive officer of Paytm, told Business Standard in a telephone interview.

Paytm has shifted its deadline for opening its payments bank thrice since April. Sharma, who has got the licence in his name, is expecting the launch by the year-end.

Paytm, which was among the 11 recipients of payments bank licence, plans to start the project with an initial capital of Rs 300 crore. After the initial euphoria, three out of the 11 recipients withdrew their applications. However, Paytm hopes to make it one of the biggest businesses in its portfolio and the second largest revenue earner after wallets.

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Digital signature can make life easier

With the Reserve Bank of India permitting payments banks and small finance banks to rely upon electronic authentication while opening accounts and for other transactions, there is an incentive for more people to get digital signatures.

It will help reduce costs and bridge the gap between the customer and service provider, says Paytm Payments Bank chief executive Shinjini Kumar.

One way of electronic authentication is through digital signatures, which can be obtained from certifying authorities. Individuals use them for electronic filing of income tax returns.

A digital signature eliminates the need for exchange of documents to complete any transaction. It is also used by heads of companies while applying for loans, among other things. But there is a cost involved. It can range from Rs 1,000 to Rs 2,000, depending on the kind of signature and the validity. It is valid for one or two years and has to be renewed after that.

The kind of signatures varies depending on the security. For instance, Class-I signature will confirm the user's name and email address. Class-II will confirm that the information provided by the subscriber does not conflict with information in consumer databases. Class-III will be issued only if the individual appears before the certifying authorities. To get a digital signature, customers need documents to show proof of identity and proof of address.

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RBI to announce monetary policy review today

The Reserve Bank of India will announce its monetary policy review on Tuesday.

It will be announced in the afternoon at 2:30 pm against the existing practice of 11 am.

This will be Urjit Patel's maiden policy announcement as the RBI Governor.

Unlike his predecessor Raghuram Rajan who had the final say on interest rate cut decisions, Patel will have to go by the advice of a newly set up six-member monetary policy committee (MPC).

This is for the first time that decision-making on interest rates will shift to the six-member panel which has equal representation from RBI and the government.

Since January 2016, the RBI has cut the repo rate - the rate at which RBI lends to banks - five times. India's retail inflation has touched a five-month low of 5.05 per cent in August, triggering hopes of a rate cut.

The RBI and the government have set a retail inflation target of four per cent for the next five years with an upper tolerance level of six per cent and lower limit of two per cent.

Most analysts expect a status quo on rates. Mounting bad loans will remain another focus area of Patel's debut policy review.

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