Direct cash through Aadhaar to save 0.5% of GDP for India: IMF

International Monetary Fund  quoted that integration of direct cash transfer with Aadhaar will take time but the scheme will help Indian government save 0.5 per cent of the GDP.

Benefits

  • Better targeting of spending on the poor
  • Indian government save 0.5 per cent of the GDP
  • The combination of schemes will eliminate the estimated 15 per cent leakage cited above for the programmes.
  • Direct cash transfers can bring down costs and diversion by phasing out middlemen and complex bureaucracies present in current subsidy programs.

Challenges

  • Timeframe for bringing India’s population of 1.2 billion into the Aadhaar programme could extend beyond 2014
  • Integrating this database with information on individuals eligible for subsidised fuel will take time

Current Subsidy programs

  • Food & kerosene- Available from Government Stores at below market prices
  • Fertilizers-  All fertilizers sales are at subsidized Prices
  • LPG Cylinders- distributed directly, with a limit on each household’s subsidised purchase

Pilot Projects

  • Pilot programmes delivering subsidised kerosene using Aadhaar-based identification have been set up in Rajasthan
  • Pilot scheme replacing subsidised LPG with direct cash transfers was also launched in Mysore, Karnataka

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MCX-SX to launch trading in F&O on SX40

MCX Stock Exchange will introduce trading in derivative contracts on its flagship index —SX40 from 15th May 2013.

SX40 is a free float based index of 40 large-cap liquid stocks representing diversified sectors of the economy

Benefit

It will take Indian markets closer to global investors and introduce global best practices in the domestic market as it is an adoption of Industry Classification Benchmark (ICB), the global company classification standard of the FTSE Group.

Key Info

  • Date of launch :       15th May 2013
  • Trade timings:         09:15 – 15:30 hrs.
  • Days:                           Monday – Friday
  • Products :                 Future & Options
  • Trading cycle:         Minimum of three contracts having maturity of 1-month, 2-month and 3-month.

 Potential Investors:

  • Retail
  • Institutional
  • Fund houses
  • Global Investors i.e. FII, international hedge funds etc.

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