Business, Economy & Banking Current Affairs - 2020

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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Cabinet cleared revised Preferential Market Access (PMA) for electronic equipments

The Cabinet approved a revised version of the Preferential Market Access (PMA) policy that will apply to the supply of electronic and telecom equipment that has security implications. Preferential Market Access (PMA) policy linked to telecom equipment and other electronic products having security implications has been cleared.

What is Preferential Market Access (PMA) policy?

PMA policy will severely restrict the market participation opportunities for foreign companies in key sectors of the Indian economy. The policy requires certain domestic content percentages in public procurement contracts and in commercial transactions where electronic products raise security concerns. It will give support to Indian players and it will enable entrepreneurs to start their own product companies.

PMA provides for sourcing of sensitive telecom and electronic equipments and technology from domestic manufacturers over security concerns. PMA makes it mandatory for the Government to procure a certain percentage of its requirements from domestic manufacturers. The policy is designed keeping in mind the security issues and threat of cyber espionage. It is envisaged to push manufacturing capabilities in India itself, thus reducing dependence on imports, especially in strategic fields like defence and telecom.

What does Govt fear? Why need for PMA policy?

Govt fears that there is a possibility of malicious codes being implanted during manufacturing, after installation of the electronic items in the network, or some time in between. Thus, Department of Electronics and Information Technology (DeitY) has stressed that PMA applies to procurement for both government entities and entities that impact national security.  In January 2013, the Department of Telecom (DoT) circulated a list of 14 “security-sensitive” telecom products, and proposed to mandate its sourcing to Indian companies alone.

India’s telecom industry at present relies heavily on imports to meet its requirements. As per TRAI, India-made products form only 3% of the market. India imports about electronic items worth US $40bn every year. The National Electronics Policy forecasts such imports to touch a humongous USD 300 billion by 2020 if efforts are not made to produce hi-tech products in India.

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More regulatory reforms for insurance sector to spur growth: IRDA chief

As per Insurance Regulatory and Development Authority (IRDA) Chairman T. S. Vijayan, the insurance industry will undergo another round of regulatory reforms, particularly focused on distribution channel, to instill growth.

As per him, IRDA is focusing on bank channels and sub-broker level distribution and citizen service centres (CSCs) for better growth prospects. The insurance penetration is expected to rise substantially in the years to come.  The insurance industry was going to witness major changes in the coming days. Several insurance firms would be listed on stock exchanges and open up abundant opportunities in the segment.

IRDA is concerned about the product design and miss-selling aims to make sure that products approved by IRDA should have least chances of miss-selling.

What is Misselling?

Misselling is an intentional and ethically questionable practice of selling of products or services in circumstances where the contract is either misrepresented, or the product/service is unsuitable for the customer’s needs. For example, selling life insurance to someone with no dependents is regarded as misselling. In this case, the investor would arguably have little need for whole life insurance and, therefore, an insurance salesperson describing the product as something the investor urgently needed to protect his or her assets in the event of death could be considered a case of misselling.

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