Indian Economy: Current Affairs (July-Aug-Sep 2020)English Medium

1. Economy & Banking: Current Affairs
By Dr.B.B.Tiwari
July-2020
 United States continues to be the Top Trading Partner of India in
2019-20
As per the data from the Union Ministry of Commerce and Industry, the United States remains as the top
trading partner of India during the Financial Year 2019-20.
This is the second consecutive Financial Year that the United States has become the top trading partner of
India (in Financial Year 2018-19 United States surpassed the People’s Republic of China to become the top
trading partner of India), indicating the continuously increasing economic ties between both the
countries.
 India continues to maintain a trade surplus over the United States as the trade deficit of the
United States in Financial Year 2019-20 was USD 17.42 billion. In 2018-19 United States trade
deficit was USD 16.86 billion.
 India has become the Second Largest Source of FDI for the
United Kingdom
The statistics for the number of Foreign Direct Investment (FDI) projects in the Financial Year 2019-20 in
the United Kingdom was released on 10
th
July 2020 by the United Kingdom Government’s Department for
International Trade (DIT).
Highlights from the Statistics of DIT
 United States continues to be the number one source of FDI in the United Kingdom with 462
projects resulting in 20,131 jobs.

2.  Having invested in 120 projects, India has moved to second place. These 120 projects have
resulted in 5,429 jobs. In Financial Year 2018-19 India was in third place with 106 projects that
resulted in 4858 jobs.
 In Financial Year 2019-20, Germany, France, China, and Hong Kong were the 3
rd
, 4
th
, 5
th,
and the
6
th
largest source of FDI for the United Kingdom respectively.
 India-Sri Lanka: RBI extends 400 million USD of Currency Swap
On July 25, 2020, the Reserve Bank of India extended 400 million USD of currency swap with Sri Lanka.
The currency swap agreement is to remain till November 2022.
The arrangement is being made to address the economic slowdown.
What is Currency Swap?
A Currency Swap between two countries is an agreement to exchange currencies with predetermined
agreement. The Governments engage in currency swap to solve short term foreign exchange liquidity
requirements. Currency Swap is the exchange of interest (sometimes principal as well) in one currency for
the same in the other.
Current SAARC currency swap agreements
The current SAARC currency swap agreement was signed in December 2019. The agreement is to run till
2022. The major features of the agreement are as follows
 The Reserve Bank of India will offer swap arrangement with an overall corpus of 2 billion USD
 The RBI agreed to enter into bilateral swap agreements with SAARC central banks that wish to
avail swap facility.
 The withdrawals can be made in terms of USD, Indian Rupees or Euros
Why Currency Swap Arrangement?
The agreement is usually signed between two friendly countries that have increasing trade. Especially, the
countries pay for import and export trade at pre-determined rates of exchange. In these cases, no third
country currency is involved. This limits the concerns of exchange rate variations.
India: India has currency swap line with Japan and SAARC countries. India is currently negotiating similar
arrangements with the US.

3.  Walmart-owned Flipkart’s Samarth Programme supports 6 Lakh
artisans across India to sell their products online
Samarth is an initiative started by Flipkart in 2019 wherein, the e-commerce company had collaborated
with five non-governmental organisations (NGOs) to help local artisans use the online e-commerce
platform to sell their products. The programme helps around six lakh artisans (weavers, craftsmen etc.)
earn their bread and butter by selling their hand made art & craftwork across the country to a customer
base of nearly 200 million. After the partnership with NGO’s and Government the company has been able
to bring on board the artisans from the various remotest parts of Odisha, Andhra Pradesh, Uttar
Pradesh, Bihar, Gujarat, Punjab and Karnataka.
Other Initiatives
Over the course of the year in addition to Samarth programme, Flipkart has collaborated with a lot of
NGOs and governmental entities which includes, Gujarat State Handloom and Handicrafts
Development Corporation, Deendayal Antyodaya Yojana National Urban Livelihoods Mission (DAY-
NULM) and UP Khadi and Village Industries Board.
Walmart-owned Flipkart also supports MSMEs through a special initiate called, Walmart Vriddhi. It is a
make in India Initiative which empowers nearly 50,000 MSMEs to manufacture ‘Make in India’ product for
local and global markets. The company provides necessary training and support along with access to a
huge e-commerce ecosystem of its peers and mentors group.

4. Economy & Banking: Current Affairs
August, 2020
By Dr.B.B.Tiwari
 Sashidhar Jagdishan is the new CEO of HDFC Bank
Sashidhar Jagdishan who has been working with the HDFC bank since 1996 as the “change agent” will
succeed Aditya Puri.
About the Ex-CEO and MD
Aditya Puri who has been associated with the bank for the last 25 years and has immensely contributed in
building the bank from the scratch and making it the second-largest private sector bank in terms of
assets. Mr. Puri will officially retire on 20
th
October this year.
 India Imposes Import Restrictions on Color TV Sets
Following a ban on popular Chinese applications, the Indian Government has moved the import of Color
TV sets from free to restricted. India imports the majority of TV sets from China. This move by the
government is aimed to promote PM Modi’s vision of “Vocal for Local” which will boost domestic
manufacturing and balance the trade deficit the country is currently facing against China.
 Kamath Panel constituted by RBI to restructure loans
The Reserve Bank of India has constituted a panel under former ICICI bank CEO K V Kamath. The panel will
make recommendations on financial parameters that are to be considered to structure loans that are
impacted by COVID-19.
The Committee will recommend financial parameters that are required to be factored in the resolution
plans. Basically, the committee is to suggest parameters that will help in resolution of COVID-19 related
stressed assets. The five-member committee will make recommendations on required financial
parameters.

5. The restructuring of the loans is to be done based on Prudential Framework that was issued in 2019.
Prudential Framework
The Prudential Framework for Resolution of Stressed Assets, 2019 provides principle-based resolution
framework to address borrower defaults under normal scenario. Default means nonpayment of debt when
the part or whole installment of the debt has become due and payable and the debtor has not yet paid.
 RBI launches “Innovation Hub” for Financial Inclusion
On August 6, 2020, the Reserve Bank of India launched “Innovation Hub” for ideation and incubation of
new capabilities that can be leveraged to deepen financial inclusion.
About Innovation Hub
The hub is being launched to promote the start ups in the country. It will help in ideation and incubation
of new capabilities. This will in turn help to deepen financial inclusion in the country and promote efficient
banking services.
The hub is to act as a centre to create viable and innovative financial products. This will provide the
following benefits
 The hub will help achieve efficient banking
 Business continuity in times of emergency
 Strengthening consumer protection
The RBI has recently taken several similar initiatives to encourage responsible innovation. One such recent
initiative is the “Regulatory Sandbox”.
Regulatory Sandbox
A Regulatory Sandbox refers to live testing of new products and services in a controlled regulatory
environment where the regulators may permit regulatory relaxations to limit purpose of testing. This
framework will act as a boost for the financial technology startups that are looking to innovate. The main
aim of the sandbox is to foster responsible innovation in financial services, bring benefits to consumer and
promote efficiency.

6. Norms
RBI will launch Sandbox for the entities that meet the criteria of minimum net worth of Rs 25 lakh. The
entity should either be a company registered in the country or banks licensed to operate in India.
 India ranks first in Organic Farming
Sikkim was the first state in the world to become completely organic. The other states that have similar
targets include Uttarakhand and Tripura.
Measures by India to boost Organic Farming
India has launched two schemes to assist farmers in adopting organic farming. Also, the Agro-Export
Policy, 2018 gave simultaneous thrusts to organic farming. The schemes are as follows
 Mission Organic Value Chain Development for the North East Region
 Paramparagat Krishi Vikas Yojana
Organic Exports
The main Organic Exports from India include sesame, flax seeds, soya bean, medicinal plants, tea, rice and
pulses. These products contributed to 50% organic exports in 2018-19 touching Rs 5151 crores.
India is exporting its organic products to USA, UK, Italy and Swaziland.
 Farm Sector grows as GDP contracts for first time in India
The National Statistical Office is to release its data for this quarter on August 31, 2020. According to the
NSO officials, in spite of agricultural production going up in the country, the GDP is contracting. This is
the first time India is witnessing fall in GDP in spite of agricultural production going up.
The quarterly estimates of GDP began in 1996-97.
Highlights
The GDP of India registered at -5.2% in 1979-80. In the same year, the agriculture growth was at
0.12%. Similar reduction was seen in previous contractions as well. In 1957-58, GDP growth was -

7. 1.2% and agricultural growth was -4.5%. In 1965-66, GDP growth was -3.7% and the agriculture
growth was -11%.
India’s Agricultural Target
India is on the road of doubling farmers’ income by 2022.
Major Agricultural schemes in India
The following are the major agricultural schemes that are being implemented in India
 Pradhan Mantri Krishi Sinchai Yojana (Irrigation)
 National Agriculture Market
 Paramparagat Krishi Vikas Yojana (Organic Farming)
 Pradhan Mantri Fasal Bima Yojana (insurance)
 Mega Food Park Scheme
 Cold Storage scheme
 Soil Health Card
 Ramesh Chand Task Force recommends linking sugarcane prices
to sugar rates
Ramesh Chand task force by Niti Aayog has recommended to link sugarcane prices to sugar rates. The
task force highlighted that it is essential to keep the industry in a good financial health. In its report, the
task force has recommended for a one-time increase in the minimum sugar price at Rs 33 per kg. This
report of the task force was finalized in March 2020 and published on August 20.
Ramesh Chand Task Force Report on Sugarcane Prices
 As a major point, the panel recommended to link sugarcane prices to sugar rates.

8.  Areas under sugarcane cultivation should be shifted to less water-intensive crops by providing
incentives to farmers. At present area for sugarcane cultivation is about 3 lakh hectares and it
yields about 20 lakh tonnes of sugarcane.
 The panel suggested that the incentive to farmers from moving to less water-intensive crops
should be around Rs 6,000 per hectare.
 The minimum support price (MSP) of sugarcane must be reviewed in six months.
 The panel also recommended levying a cess of Rs 50 per quintal on sugar for a period of 3 years
to add about Rs 4,500 crore to the fund which could be used to improve financial conditions of
farmers.
NITI Aayog
National Institution for Transforming India or NITI Aayog is the think tank of the government of India
which was formed on January 1, 2015. The Chairperson of the Aayog is the Prime Minister and the Vice
chairperson at present is Rajiv Kumar.
 Chunauti: Next Generation Start Up Challenge contest
On August 28, 2020, the Government of India launched “Chunauti”, the next generation start up challenge
contest. Around 300 start ups working in select areas are to be identified and provided with seed fund up
to Rs 25 lakhs.
Highlights
The challenge is launched with a special focus on Tier-II towns. Chunauti is Challenge Hunt Under NGIS
for Advanced Uninhibited Technology Intervention. NGIS is Next Generation Incubation Scheme. The
main objective of the challenge is to address the challenges faced during pandemic. It is to look for
solutions that will support industries, Government and public at large.
National Startup Advisory Council was set up to boost Startups and Innovation.

9. Economy & Banking: Current Affairs
September, 2020
By Dr.B.B.Tiwari
 Economic Freedom of the World Report 2020
Global Economic Freedom Index 2020 report India witnessed a sharp fall of 26 spots and landed to the
105
th
position. As per the last year ranking the country was at the 79th spot.
About the report
It is an annual index created in 1995 first by the Heritage Foundation and the Wall Street Journal to gauge
the degree of economic freedom in the world’s nations. The ranking scores countries on an economic
freedom scale between 0 to 100 where zero meaning no economic freedom and 100 meaning total
economic freedom. There are twelve aspects divided into a total of four categories.
This year Singapore with a score of 89.4 ranked as first in the world’s freest economy among 42
other countries in the Asia-Pacific region. Hongkong stood second at the report. The interesting thing
about the index is that China ranked lower than India
Ranking in brief:
Ten lowest-ranked countries in the index are Algeria, Angola, African Republic, Democratic Republic of
Congo, Iran, Libya, Republic of Congo, Sudan, Venezuela, and Zimbabwe. Some other popular rankings
include Japan (20th), Germany (21st), Italy (51st), France (58th), Mexico (68th), Russia (89th) and Brazil
(105th).
 Indo-Pacific Business Forum to be held in Hanoi
The third annual Indo-Pacific Business Forum is to be held in Hanoi, Vietnam capital between October 28,
2020 and October 29, 2020. The forum is to be sponsored by US-ASEAN Business Council, Vietnam
Chamber of Commerce and Industry, US Chamber of Commerce and Government of Vietnam.

10. India in the Indo-Pacific
For India, the Indo-Pacific has strategic and geographic importance for the trade in the region and for
maritime security. Also, the region is important for fisheries, mineral resources and offshore oil. 40% of
world offshore oil production takes place in Indian Ocean.
 What is Kritagya Hackathon?
Kritagya (Krishi-Raknik-Gyan) Hackathon was launched by Indian Council of Agricultural Research (ICMR)
on September 23, 2020 under the National Agricultural Higher Education Project. It was launched with an
objective to promote Farm Mechanisation specially women friendly equipment’s.
Key Facts: Students from any university and college can apply and participate in the event.
 The event will distribute prizes as well:
1. first prize winner will receive Rs 5 lakhs,
2. second prize will receive Rs 3 lakh and
3. third prize winners will receive Rs 5 lakh.
 The hackathon aims to enhance the farm productivity and profitability by enhancing the
innovation in farm mechanization.
 This event is providing an opportunity to the students, faculties, innovators, entrepreneurs, and
other stakeholders to present their innovative approaches and technological solutions to promote
farm mechanization in India.
 The hackathon is in line with the high-quality higher education that provides equity and ensures
inclusion as is the target of National Education Policy( NEP) 2020.
National Agricultural Higher Education Project
The National Agricultural Higher Education project was launched in 2019. The total cost of the project was
Rs 1100 crores. World Bank provide the funding support to the project. The share of fund between GoI
and the World Bank is in the ratio of 50:50. The programme support ICAR and participating agricultural
universities.