inventory-based model Current Affairs - 2020

RBI launches OBICUS

On April 16, 2020, the Reserve Bank of India launched OBICUS. This is the 49th round of survey by the apex bank for the period January to March.

Highlights

The Capacity Utilisation declined to 68.6% from 69.1%.

What is OBICUS survey?

OBICUS is Order Books, Inventories and Capacity Utilization Survey (OBICUS). The survey provides an insight into the demands of the Indian manufacturing sector. The survey is conducted quarterly (4 times a year). It is being conducted since 2008.

Features of the Survey

The survey covers 2,500 companies both in public and private sector. The survey also provides ratio of total inventories to sales. Also, the survey provides ratio of raw materials to finished goods. It helps to measure economic activity in the country.

Data Collected in the Survey

The data collected in the survey includes quantitative data, pending orders, work in progress, backlog of orders and finished goods. The data is provided item-wise.

Ministry of Commerce clarifies on FDI rules in e-commerce

The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce has clarified that the Foreign Direct Investment (FDI) rules for e-commerce have not allowed foreign investment in the inventory-based model or multi-brand retailing.

Provisions for FDI in e-commerce

The DIPP has clarified on the following provisions:

  • FDI is allowed only in the business-to-business (B2B) e-commerce segment and not in the business-to-consumer (B2C) segment which in effect is the multi-brand retail or the inventory-based e-commerce model.
  • DIPP further has clarified that through FDI in B2B e-commerce, an e-commerce entity providing marketplace will not, directly or indirectly, influence the sale price of goods or services. If it does so, such renders such business would be rendered as an inventory based model.

The DIPP clarifies that an e-commerce platform operating an inventory based model does not only violate the FDI policy on e-commerce but also circumvents the FDI policy restrictions on multi-brand retail trading.