Current Affairs – August 2015

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Govt caps kerosene subsidy at Rs 12 per litre and Rs 18 per kg for LPG

On 10 August Central government has capped the subsidy payout on kerosene at Rs. 12 per litre and Rs. 18 per kg for LPG and notifies the upstream companies to bear about Rs 5,000-6,000 crore kerosene subsidy for the fiscal year.

Subsidy for Kerosene

  • In public distribution system (PDS) Kerosene is sold at Rs. 14.96 per litre against its actual cost of Rs 29.91 in the market leaving burden of Rs. 14.95 per litre on government which is also called as under-recovery or revenue loss.
  • Initially this under-recovery loss Rs. 14.95 per litre was paid by government to state owned retailer (ONGC and Oil India Ltd), but according to this new cap set at Rs 12 per litre these upstream companies will have to bear the difference of Rs. 2.95 per litre on them i.e. Rs. 5000 -Rs. 6000 crore for fiscal year.

Subsidy for LPG cylinder

  • For LPG government has fixed subsidy at Rs. 18 per kg for a 14.2 Kg LPG cylinder and provides 12 LPG cylinders to every household at the subsidised rate for Rs. 417.82 against Rs. 585 in market.
  • The difference of Rs. 167.18 per cylinder is paid by government to consumer through newly launched direct benefit transfer (DBT) scheme in their bank account so that they can pay to the retailer and avail the cylinder at market price Rs. 585.
  • Thus government bears the entire under-recovery loss for LPG subsidy.

Note: The Government has provided Rs. 22,000 crore towards LPG subsidy and Rs. 8,000 crore on Kerosene in the budget 2015-16.

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India’s social security pact with Canada comes into force

The social security pact between India and Canada which was approved by Union Cabinet in 2013 comes into force after two years of long waiting.

According to the pact the employees posted by Indian entities in Canada are not required to contribute towards Canada’s social security schemes for period of 60 months and similarly the Canadian employees posted in India would enjoy the same benefit.

The employees on both the countries will be able to enjoy this benefit only when they produce a certificate of coverage that specifies that they are contributing towards social security schemes such as PF and pension in their home country.

This pact was sign to enable Indian as well as Canadian employees to avoid double social security contribution and to enhance competitiveness of their services and products.

Government has authorised Employment Provident Fund Organisation (EPFO) to implement social security agreements in India and to issue certificate of coverage to the employees posted by Indian entities to Canada.

Note: Currently India’s Social Security Agreements is operational in fourteen countries – France, Germany, Switzerland, Belgium, South Korea, Denmark, Netherlands, Luxembourg, Sweden, Finland, Czech Republic, Norway, Hungary and Austria.

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China’s Phicomm to invest $1 billion to set up India units

Phicomm, a Shanghai-based smartphone maker has announced to invest around 6400 crore rupees in India by 2017.

The company has decided to set up five business units in phased manner which includes units of – Mobile phones, Cloud services, Enterprise, SOHO- Small Office Home Office networking products and Intelligent Cities in India.

Accordingly the company would set up an R&D unit in Gurgaon or Bengaluru, local brownfield assembly unit and contract manufacturing units in India.

By October 2015, Company plans to launch its SOHO products such as routers in which it leads in China and aims to sell 1,00,000 Smart phones by the end of the year.

About Phicomm:

It is Shanghai-based smartphone manufacturer incorporated in 2008. It manufactures some notable brands like ZTE’s Nubia, Vivo, Coolpad’s Dazen, Meizu.

Phicomm entered in India in India in June 2015 and has launched smart phones and 4G devices. In China it competes with Apple where as it has to face Samsung the top player in India.

Note: Recently the Taiwan-based Foxconn, that manufactures Apple’s iPhone and iPad has signed a MoU with Maharashtra government to set up facility in the state and will invest over 5 billion dollars in period of three years.

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