Finance Minister is scheduled to address
the post-budget meeting of the RBI’s central board. She will highlight the
key points of the Budget including the fiscal consolidation roadmap.
The government has lowered the fiscal
deficit target for 2019-20 at 3.3% of GDP from 3.4% set in the Interim
Budget presented on February 1, 2019.
Fiscal deficit is the amount of money that the government
needs to borrow in a given year because their expenses were more than
The Centre has also came out with a
roadmap to reduce the fiscal deficit to 3% of the gross domestic product (GDP)
by 2020-21 and eliminate the primary deficit.
Primary deficit refers to the deficit left after
subtracting interest payments from the fiscal deficit.
She would also address about the
announcements made in the Budget to spur growth by touching almost all
sectors of the economy with the objective of achieving a $5 trillion
economy by 2024-25.
The Budget has also announced opening up
of aviation, insurance and media sectors to foreign direct investment (FDI).
It has also proposed measures to improve
NBFCs access to funding by providing a limited backstop for the purchase
of their assets.
The government will provide a partial guarantee
to state banks for the acquisition of up to ₹1 lakh crore of highly-rated
assets from non-bank finance companies (NBFC).
The Reserve Bank of India has been made
regulator of housing finance firms as well replacing the National Housing
Bank(NHB).Apart from this, the government has also budgeted a dividend
from the Reserve Bank of India amounting to about ₹90,000 crore.
Government has released a draft law on
Environment Impact Assessment Notification (EIA), 2019. The draft law is
an update to the EIA 2006.
The law makes the District Magistrate (DM)
the chairperson of the District Environment Impact Assessment Authority (DEIAA)
that will accord environment clearance for minor mining projects.
Minor mining broadly refers to sand and
stone mining in plots smaller than 25 hectares.
However, State Environment Impact
Assessment Authority (SEIAA) have objected to the draft law.
They have said that making District
Magistrate (DM) the chairman of the DEIAA would be self-serving for grant
of environmental clearance. Also, the DM doesn’t have technical expertise
in matters of environment and ecology.
EIA is a process which studies all aspects
of the environment and seeks to anticipate the impact (positive and/or
negative) of a proposed project or development on the environment. EIA is
mandatory under the Environmental (Protection) Act, 1986 for 29 categories
of developmental activities involving investments of Rs. 50 crores and
African Countries will officially sign a
African Continental Free Trade Area agreement at an African Union (AU) summit
The agreement aims to create a single
unified market for the continent’s 1.3 billion people and to boost
The plans for the free trade zone received
a boost when Africa’s largest economy, Nigeria became the 25th country to
ratify the trade agreement.
The goal of the new free trade area is to
significantly increase trade within Africa. Currently, African countries
conduct only 16% of their trade with each other, compared to 65% among
African Union is a pan-Africa continental union
consisting of 55 countries. Its structure is loosely modelled on that of
European Union. It is headquartered in Addis Ababa, Ethiopia.
It was founded in May 2001 in Addis Ababa,
Ethiopia and launched in July 2002 in South Africa. It had replaced
Organisation of African Unity (OAU).
The objective of AU is to (a) achieve
greater unity and solidarity between the African countries and Africans
(b) to defend the sovereignty, territorial integrity and independence of
its Member States and (c) To accelerate the political and social-economic
integration of the continent.
Recently, the production of India’s first
semi high-speed train called as Vande Bharat Express (Train
18) has been stopped at the Integral Coach Factory (ICF) in
The reason is that the design of the Train
has been found to be violative of certain specifications.
The primary issue was that making of Train
had dozens of deviations from the specifications prescribed by Research
Designs and Standards Organisation (RDSO).
Further, investigation is also going on
into the allegations that one company was favoured in the making of the
Train 18 is India’s first indigenously built
engineless train capable of running at a speed of up to 160 kmph, It is
also being referred to as a successor to the 30-year-old Shatabdi Express.
The fully air-conditioned semi-high speed
train will cut travel time by 15% as compared to the Shatabdi. It has been
manufactured under ‘Make in India’ initiative by the Integral Coach
The features of the train include (a) modern
air-conditioned coaches (b) touch free automatic doors (c) GPS-enabled
passenger information system and (d) on board uninterrupted Wifi and
Finance Minister has proposed a 100%
foreign direct investment (FDI) in the insurance intermediaries in the
Union Budget 2019.
Insurance intermediaries are the backbone
of the industry. They help in distribution of insurance policies and also
help customers get attractive rates for the products.
Insurance intermediaries include insurance
brokers, insurance repositories, surveyors and loss assessors and
third-party administrators (TPA).
In 2014,a panel formed by the IRDAI under
Suresh Mathur had also suggested that 100% FDI be allowed over three
years. However, the suggestions of the panel were not implemented as FDI
cap in the overall insurance industry was raised from 26% to only 49%.
However, experts have said that this would
move will decimate most of the lndian brokers engaged in direct insurance
and reinsurance broking and who do not have a joint venture with any
On the other hand, some experts have said
that the hike in FDI will bring in more technology and efficiency in the
segment and boost insurance penetration.
The government in its Budget has allocated
₹45 crore for India’s building activities in the port of Chabahar Iran. This
is a reduction from the previous year’s allocation of ₹150 crore.
Experts have said that this reduction will
affect the India-Afghan trade, which is already hit by (a) Pakistan’s
decision to ban airspace rights to most flights to and from India and (b) U.S.
sanctions on Iran.
Earlier, the U.S. had issued India a
waiver to develop Chabahar port to promote trade with Afghanistan as a
part of its South Asia strategy. But the cancellation of all waivers for
oil and economic sanctions imposed by the US administration have halted
However, Afghan officials have said that
flights including commercial passenger airlines had carried cargo between
the two countries since June 2017 under an arrangement where the Afghan
government subsidies about 80% of the transport costs to promote
Chabahar port which was inaugurated in 2017 has been
built largely by India. It provides a key supply route for Afghanistan
while allowing India to bypass rival Pakistan to trade with Central Asia.