Economy Current Affairs

JNPT signs ECB Agreement worth $400 Million with SBI and Development Bank of Singapore

India’s premier container port, Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai has signed 400 Million US Dollar agreement with State Bank of India (SBI) and Development Bank of Singapore (DBS) for External Commercial Borrowing (ECB).

The agreement was signed by JNPT officials in the presence of the Union Minister for Shipping, Road Transport & Highways Nitin Gadkari in Mumbai, Maharashtra.

Key Facts

  • With this ECB Agreement, JNPT becomes the first major port in the country to take loans in dollars to improve the infrastructure.
  • The ECB of 400 Million dollars will be primarily utilised for expansion of JNPT’s existing road network connecting to its port project. It will help JNPT to double its existing capacity.
  • JNPT was able to take loans in dollars as it has US dollar denominated foreign currency earnings which can be leveraged for a low cost foreign currency borrowing.

Why Ports are opting for low cost foreign currency borrowing?

  • Port projects, including connectivity infrastructure projects are critical to developing cargo handling capacity of the country.
  • With Central Government’s thrust on port led development under the Sagarmala programme, improving viability of port projects is critical.
  • One of the primary factors that impacts viability of port projects is the interest rate on borrowings to fund projects.
  • While Ports have surplus funds, they also need to borrow to achieve a quantum jump in the investment.
  • Thus, ECBs is an innovative means of raising low-cost particularly when the port had revenues in foreign exchange, which provided a natural hedge to the ports.
  • This would substantially help to eliminate the requirement of hedging the forex risk and would reduce the cost of borrowing.
  • The step is also considered as another milestone in infusing dynamism into the functioning of the ports, both in their operations and financing.
For more information: External Commercial Borrowings


Urjit Patel appointed as 24th Governor of RBI

Union Government has appointed Urjit Patel (52) as new Governor of Reserve Bank of India (RBI). He will be 24th Governor of RBI

He will have tenure of three years and shall succeed Raghuram Rajan. Prior to this appointment (elevation) he was Deputy Governor of RBI. He will be the eighth Deputy Governor to be elevated as Governor at RBI.


The Appointment Committee of Cabinet (ACC) has appointed Urjit Patel based on the recommendation of the Financial Sector Regulatory Appointments Search Committee (FSRASC), headed by the Cabinet Secretary. The Committee undertook an extensive exercise to suggest a panel of names to the ACC.

About Urjit Patel

  • Born on October 28, 1963. He had received his doctorate in economics from Yale University in 1990) and M Phil from Oxford (1986).
  • By profession he is an eminent economist, consultant and banker. He has two decades of rich experience across sectors including financial, energy and infrastructure sectors.
  • He has worked with the International Monetary Fund (IMF) covering the US, India, Bahamas and Myanmar desks between 1990 and 1995.
  • For first time, he was appointed as the Deputy Governor of RBI in January 2013 for three year term and was later reappointed on January 2016.
  • He had headed committee to review the monetary policy framework and had proposed monetary policy committee to set interest rates (currently solely decided by the RBI governor).
  • It also had recommended targeting consumer inflation to control volatile prices by shifting the current focus away from wholesale prices.
  • Besides, he also had worked closely with several union and state government committees especially those on market studies, direct taxes, anti-trust laws, Prime Minister’s Task Force on Infrastructure and sectors like telecom, aviation, power and pensions.

Note: The RBI is central bank of India. It regulates banks, prints money and prevents volatility in the foreign exchange market. It is also the government’s banker and lender of last resort.


India ranks 66th in 2016 Global Innovation Index

India has ranked 66th in the 2016 Global Innovation Index (GII). In this edition, India has jumped up by 15 spots from 81st position in 2015 GII.

The annual index was released by France-based international business school INSEAD and World Intellectual Property Organisation (WIPO), a specialized agency of the United Nations.

The index ranks world economies since 2007 according to their innovation capabilities using more than 80 indicators.

Key Facts

  • India’s better performance in the 2016 GII readings was due to its strengths in tertiary education, corporate R&D, software export and market sophistication.
  • India has starting to excel in ICT and creative goods exports. It is setting a good example highlighting how its policy is improving the innovation environment.
  • Among the middle income countries, India (25th) came second after China (17th) in innovation quality by overtaking Brazil (27th).
  • China has figured at the 25th position (29th in 2015 GII) is the only middle-income country in the top 25.

Global Innovation Index 2016

Image Source: Economics Times