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IIP records 6.6% growth in July 2018

According to data released by Central Statistics Office (CSO), factory output measured in terms of the Index of Industrial Production grew at 6.6% in July 2018. This growth was on the back of good performance by manufacturing sector and higher offtake of capital goods and consumer durables. Besides, IIP growth for June 2018 was also revised downwards to 6.8% from the provisional estimate of 7% released in August 2018. The IIP growth in April-July 2018 period was 5.4% compared to 1.7% year ago.

July 2018 IIP

Manufacturing sector (Weightage: 77.6): It recorded 7% growth.

Electricity sector (Weightage: 7.9%): It recorded 6.7% growth.

Mining (Weightage: 14.3%): It recorded 3.7% growth.

Consumer durables sector: It recorded impressive growth of 14.4% as against dip of 2.4% in July 2017.

Capital goods production: It grew by 3% as against decline of 1.1% in July 2017.

Index of Industrial Production (IIP)

IIP is composite indicator that measures short-term changes in volume of production of basket of industrial products during given period with respect to chosen base period. It is compiled and published monthly by Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation (MoSPI).

Base year: The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in economy and improves quality and representativeness of indices. The revised IIP (2011-12) reflects changes in industrial sector and also aligns it with base year of other macroeconomic indicators like Wholesale Price Index (WPI) and Gross Domestic Product (GDP).

Sector wise items and weightages: IIP covers 407 item groups. Sector wise, the items included falls into 3 categories viz. Manufacturing (405 items), Mining (1 items) & Electricity (1 item). The weights of the three sectors are 77.63%, 14.37%, 7.9% respectively. The combined weightage of eight core Industries in IIP is 40.27%.

Month: Categories: Business & Economy Current Affairs 2018

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Government makes demat mandatory for issue and transfer of shares

Union Ministry of Corporate Affairs (MCA) has mandatory for unlisted public companies to issue new shares or transfer of all shares in dematerialised or demat (i.e. in electronic form) form beginning October 2, 2018. With this, major benefits of dematerialisation of securities will now be available to unlisted Public companies.

Key Facts

The Companies Act 2013, provides for government to mandate that as in case of listed public companies other classes of public companies should also issue securities only in dematerialised form. MCA’s latest step is seen as measure for further enhancing transparency, investor protection and governance in the corporate sector. It also comes at a time when the ministry is clamping down on shell companies that are suspected of being conduits for illicit fund flows

Major benefits of dematerialisation of securities

It will help in elimination of risks associated with physical certificates such as loss, theft, mutilation, fraud etc. It will help in improving corporate governance system by increasing transparency and preventing mal-practices such as benami shareholding, back dated issuance of shares, etc. It will also ease in transfer, pledge etc. of securities and provide exemption from payment of stamp duty on transfer.

Unlisted Companies

According to Companies Act 2013, a public company is formed by seven persons or more, while for private company this number is two or more. If shares of such companies are not traded on stock exchange, they are called unlisted companies.

Month: Categories: Business & Economy Current Affairs 2018

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