Business, Economy & Banking Current Affairs - 2019
Business, Economy and Banking in Current Affairs 2019 with latest news and current affairs in Agriculture, Industry, Banking, Capital Markets, Import and Export and Government schemes in commercial sector.
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Viral Acharya Deputy Governor of Reserve Bank of India (RBI) has resigned from his position 6 months before the end of his term citing reason as unavoidable personal circumstances.
Acharya, who joined RBI on 23 January 2017 for a three-year term, was youngest deputy governor of RBI post economic liberalisation. He may now return to New York University Stern School of Business (NYU Stern) in August 2020 instead of February 2020.
RBI Deputy Governor Viral Acharya resignation is second high profile resignation at Reserve Bank of India (RBI). In December 2018 Urjit Patel former RBI governor, also resigned about nine months before end of his schedule term citing personal reasons.
Acharya’s resignation is also significant as he resigned shortly before Bimal Jalan committee is to submit its report on whether RBI reserves could be transferred to Centre government or not.
Mr. Acharya who was in charge of the monetary policy department, created a controversy in October 2018 by strongly alluding to encroachment on autonomy of apex bank of country by government. One of the main tension points he highlighted was treatment of RBI reserves.
RBI is left with only 3 Deputy Governors- N.S. Vishwanathan, B.P. Kanungo and M.K. Jain.
Conflict: Dr. Acharya has been differing with RBI Governor Shaktikanta Das in last two Monetary Policy Committee (MPC) meetings on both growth and inflation. In latest monetary policy meeting also, RBI Governor Das and Deputy Governor Acharya differed strongly on state of fiscal deficit and how to account for that. Acharya, who was in charge of monetary policy department while ending his term warned of wrath of markets if autonomy of a central bank was compromised.
About Reserve Bank of India
RBI is India’s central banking institution, which controls issuance and supply of Indian rupee.
The RBI began its operations on 1 April 1935 in accordance with Reserve Bank of India Act, 1934. RBI was nationalised on 1 January 1949, after India gained independence on 15 August 1947.
Until Monetary Policy Committee was established in 2016, it also controlled monetary policy in India.
Tags: B.P. Kanungo • Bimal Jalan Committee • Deputy Governor • M.K. Jain • N.S. Vishwanathan • New York University Stern School of Business • RBI Governor Shaktikanta Das • Reserve Bank of India • Urjit Patel • Viral Acharya • Viral Acharya Rresigns RBI
The Indian Public Sector Undertaking’s (PSUs) National Thermal Power Corporation Limited (NTPC Ltd) and Power Grid Corporation of India Limited (PGCIL) have signed an agreement to set up National Electricity Distribution Company Limited (NEDCL).
The forming of a joint venture to set up National Electricity Distribution Company by NTPC, a leading power generator, and Power Grid, which owns India’s largest power transmission network, paves way for two to get into consumer electricity supply business. As per the agreement NEDCL will be a joint venture of NTPC and PGCIL on 50:50 equity basis.
Objective: To undertake business for distribution of electricity in distribution circles in various states and Union Territories (UTs) and other related activities.
Significance: As the announcement about Joint venture comes at a time when existing reform scheme UDAY (Ujwal DISCOM Assurance Yojana) has been declared as a failure by several agencies, thus this move could also hint at another round of power distribution reforms.
Reform Includes: Separation of content and carriage businesses in power distribution which means that the infrastructure builder for power supply and supplier to consumers would be two separate companies. This would make power distribution sector more competitive as separating content and carriage will bring more competition with more than one power supplier.
These measures have been suggested in latest amendments to Electricity Act, 2003, which is yet to be tabled in Parliament.
Ujwal DISCOM Assurance Yojana was launched by government of India in 2015 with aim of turning around the state-owned discoms financially and operationally as well as finding a permanent solution to financial mess that power distribution is in. Although the financial part was concluded with states’ taking over losses of distribution companies and issuing bonds but operational front is still facing challenges.
Current Status: At the end of Financial Year 2019, Losses of state-owned discoms grew by more than 40% (Rs.21,658 crore) but at the same time, the dues of discoms to power Generation company (gencos) stood at Rs.38,023 crore.