According to a congressional watchdog’s decision which was released on Thursday, the White House has violated the federal law by holding on security aid to Ukraine.
The Government Accountability Office(GAO) which is a nonpartisan organization that directly reports to Congress found out that the Trump administration violated a law that governs how the money approved by Congress is disbursed by the White House.
This decision from the GAO comes in as the Senate prepares to begin the impeachment trial of President Trump on Thursday. The decision says that if the law was executed faithfully, then the President is not permitted to substitute his/her own policy for that the Congress has enacted into law. It further added that under the Impoundment Control Act, it is not allowed that the OMB withholds funds for a policy reason.
On the other hand, the White House disagrees to the charge claiming that the agency’s decision is trying to overreach while attempting to be a part of the ‘media’s controversy of the day,’ Rachel Semmel, the spokesperson of OMB said that the OMB uses its authority to make sure that every taxpayer’s dollars are properly spent along with being consistent with the President’s priorities as well as the law.
Last month, Trump gets impeached by the Democratic-controlled House for abusing the power of the President’s office to create a kind of pressure campaign against Ukraine. Even though Trump claims that the impeachment charges are politically motivated, White House budget officials defend and argue for their power to stop and change the direction of money flow away from the Defense Department by demanding regular delays on funding which was already signed into law.
This report has brought the light of scrutiny to the series of events last year at the White House’s Office of Management and Budget. After the White House officials gave orders to Pentagon to withheld aid, two officials resigned with concerns about Ukraine’s money. This happened while Trump pressurized Ukraine’s new leader to announce an investigation into Joe Biden’s son. Released emails from December suggest that the aid was held off after the call between Trump and Ukraine’s President Volodymyr Zelensky on July 25th.
FM Nirmala Sitharaman announces Rs 1.7 lakh crore assistance package for poor people
Finance minister Nirmala Sitharaman has announced to provide a measures to deal with the economic distress caused due to the coronavirus pandemic and the subsequent lockdown announced to deal with the situation.
The finance minister had already announced some measures on Tuesday that included extension of tax deadlines, easing minimum balance norms for savings account, and increasing threshold of insolvency filing to Rs 1 crore from Rs 1 lakh.
PM Gareeb Kalyan Scheme will entail Rs 1.7 lakh crore.
Finance minister said in announcement that “It will include both cash transfer and food security. Provide insurance cover worth Rs 50 lakh for sanitation workers, ASHA workers, doctors, nurses, paramedics in case they need it as they are on the frontlines of the corona battle. Over and above 5kg of rice/wheat that is already given, another 5 kg per person will be given free to around 80 crore people through PDS. Besides, one kg of preferred and region specific choice of pulse will also be given.
For Farmers first instalment of Rs 2,000 of Pradhan Mantari Kisan will be given in first week of April. 8.69 cr farmers will get immediate benefit out of it.
For MNREGA there will be Increase in wage rate from Rs 182 to Rs 202 amounting to increase of Rs 2000 per worker leading to benefitting 5 crore people.
For Old age and widows an ex-gratia amount of Rs 1,000 for next three months available in two instalments. It will benefit 3 crore widows and senior citizens.
Women Jan Dhan account holders will get Ex gratia of Rs 500 per month for next three months. This will benefit 20 crore women.
Women Ujjawala sheme beneficiaries will get three months, free cylinders. Will benefit 8.3 crore BPL families.
Women Self Help Groups Under the Deen Dayal National Livelihood Mission, collateral free loan will be given up to Rs 20 lakh from Rs 10 lakh earlier. Impact on 7 crore holders through 63 lakh SHGs.
For Organised sector Government of India will pay the EPF contribution both of the employer and the employee put together 24% for next three months. This is for those establishments with up to 100 employees, 90% of them earning less than Rs 15,000.
For organised sector, EPFO regulation will be amended so that workers can draw up to 75% for their contingency expenditure non-refundable advance or three months of wages in advance whichever is less. This will benefit 4.8 cr workers.
Construction workers will get State government have been directed to use the welfare fund for building & construction labourers which has around Rs 31,000 crore to help those who are facing economic disruption because of the lockdown.
Utilise the funds available under the district mineral fund for testing activities, medical screening, providing health attention needed to fight the coronavirus pandemic.
It is expected that another relief package for the industry will come up soon. The Confederation of Indian Industry (CII) lobby group, had sought a stimulus of about 1% of the GDP or Rs 2 lakh crore, has sought a three-month moratorium on all loans and said all repayment obligations should be suspended for this period.
The Prime Minister had announced an Economic Task Force to be chaired by the finance minister.
Covid-19 effect makes Foreign portfolio investors
Foreign portfolio investors (FPIs) have withdrawn a whopping Rs 37,976 crore on a net basis from the Indian markets in March so far amid the coronavirus pandemic triggering fears of a global recession.
Overseas investors pulled out a net sum of Rs 24,776.36 crore from equities and Rs 13,199.54 crore from the debt segment between Mar 2-13, depositories data showed.
Himanshu Srivastava, senior analyst manager research, Morningstar Investment Adviser India said “The spread of coronavirus outbreak, which has now been declared a pandemic, and continued slowdown in the global economy, has created a vicious cycle which is consuming investors worldwide” . “Global markets reeled last week after the World Health Organization (WHO) declared the coronavirus outbreak a pandemic, and expressed deep concern over the “alarming levels of inaction”.
He added “Given the ongoing scenario, foreign investors have taken a flight to safer investment options, such as dollar denominated asset classes and gold as against fixed income securities of emerging markets like India.
Himanshu said “Going forward, as coronavirus crosses boundaries and affects other countries, it may have a more serious impact on the already slowing global economy and on foreign flows into emerging markets such as India”.
Harsh Jain, co-founder and COO at Groww said “The markets have been very volatile all over the globe. Many countries are expected to announce stimulus packages and tax breaks to support various industries as they deal with the effects of this virus’ outbreak. When such announcements are made, investors’ sentiments are expected to change”.
Will trading in Cryptocurrencies like Bitcoin be valid in India again? Check SC take on it
The Supreme Court of India on Wednesday dismissed the two-year-old circular of the Reserve Bank of India (RBI). The Supreme Court has now allowed trading in cryptocurrencies. On 6 April 2018, the RBI had banned cryptocurrency transactions. It had instructed all banks and financial institutions not to deal in cryptocurrency and provide no platform for its transactions. The Internet and Mobile Association of India (IAMAI) challenged the RBI circular in the Supreme Court on behalf of cryptocurrency exchanges. IAMAI argued that there is no law in the country under which a ban on cryptocurrency is applied. In such a situation, RBI cannot ban the use of banking channels for cryptocurrency-related transactions. RBI said that it had been telling people about the dangers of cryptocurrency since 2013. This should be stopped in the beginning so that there is no risk to the payment system of the country. The Reserve Bank had also said that it has the authority to ban cryptocurrencies.
What is cryptocurrency?
Cryptocurrency is a digital currency. It can be transacted worldwide through online medium. Encryption technology is used to regulate it. It is not issued by any central bank, lending institution or any e-paisa institution. In this sense, virtual currency is a kind of uncontrolled digital money. Only those who make it an issue and control it. As of February 2018, there were 5 million traders and 24 exchanges active in the cryptocurrency business in India. Many of the world’s regulatory bodies have warned against trading in major cryptocurrency bitcoins, while some countries support it. In 2017, Japan gave Bitcoin legal currency status.
What was the status of trading cryptocurrencies in India Previously?
An Inter-Ministerial Committee on Cryptocurrency submitted the report to the Ministry of Finance last year. The committee had recommended the government to bring Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019. The committee in its report had also recommended the launch of digital currency. The committee had said that Indian consumers have to be protected from cryptocurrencies or bitcoins, as many consumers have been cheated by this. The report also recommended that every action related to cryptocurrency be called a crime. If you are found to be involved in any activity related to selling or possessing cryptocurrencies, you should be imprisoned for one to ten years. Also, a fine of lakhs of rupees should also be imposed.
What is Bitcoin?
Bitcoin is the most run and valued cryptocurrency in the world. This year it has gained 50%. The attractive feature of cryptocurrency is that it is a digital currency that you can use in any country. Its value is equal in all countries because no country’s government has control over it. Cryptocurrency is not the currency of any country, so it does not affect the economic situation of any country.
Bitcoin, being a digital currency and the government of any country having no control over it is its deficiencies. Therefore, sharp fluctuations in its value can result in a lot of profit or loss for investors. It can also be misused. Cryptocurrency can be used to buy weapons or drugs.
IIP reduce by 0.3% in Dec 2019, inflation rises to 7.59% in Jan 2020: Govt data
The country’s factory output, which is measured in terms of Index of Industrial Production (IIP) reduce by 0.3 per cent on-year to 133.5 during the month of December 2019, according to the latest data released by the Ministry of Statistics & Programme Implementation (MoSPI).
According to data “The IIP had grown by 2.5 per cent in December 2018. The industrial growth during the period of April-December 2019 rise 0.5 per cent from the corresponding period year ago. The IIP growth was 4.7 per cent during the same period last year, the data showed”.
As per the data, the manufacturing sector output declined by 1.2 per cent on-year to 134.2, and the electricity generation slipped by 0.1 per cent to 150.2. Mining sector output, however, grew by 5.4 per cent on-year to 120.6. Retail inflation (CPI) spikes 7.59 per cent
The retail inflation, which is measured by the Consumer Price Index (CPI) climbed to a 68-month high after it rose 7.59 per cent in the month of January 2020, a separate data by MoSPI showed.The CPI was 7.35 per cent in December 2019 and 1.97 per cent in January last year.
For the second month in a row, the retail inflation data exceeded the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the central bank to keep inflation within the range of 4 per cent with a margin of 2 per cent on either side. Prior to this high, retail inflation had witnessed a spike of 8.33 per cent in May 2014.
The Consumer Food Price Index (CFPI) or the inflation in the food basket rose to 13.63 per cent in January 2020 against 14.19 per cent in the preceding month. In January 2019, the CFPI saw a negative growth of (-)2.24 per cent, the MoSPI data showed. In its bi-monthly monetary policy meeting held last week, the RBI had kept its key interest rates unchanged while maintaining an “accommodative stance”.
The retail inflation has risen primarily due to a spike in vegetable prices that saw a 50.19 per cent year-on-year rise in January 2020. This apart, the pulses and products segment saw a rise of 16.71 per cent, while that of meat and fish rose 10.50 per cent and egg prices gained 10.41 per cent.
The key highlights from Nirmala Sitharaman’s Union Budget 2020
On February 1, 2020, Nirmala Sitharaman, the Finance Minister, announced the Union Budget 2020. The Union Budget was dedicated more towards raising the wages and purchasing power of the people. This was done in order to revive the domestic economic growth.
The key highlights from Nirmala Sitharaman’s Union Budget 2020:
The Government has approved an amount of Rs. 2.83 lakh crore which will be allocated to agriculture and allied activities. They are planning to double the income of farmers by the year 2022. National laws such as APMC 2017, Contract Farming 2018 and Model Agriculture Land Leasing Act 2016 need to be properly implemented all over the country. The Government will take extensive steps for 100 water-stressed districts. 20 lakh farmers will be provided with solar pumps. In order to help the farmers, “Kisan Rail” will be set up which will help in the easy transportation of goods.
Health and Sanitation:
The Government has allocated Rs. 69,000 crore for the Healthcare sector and Rs. 12,000 crore for the Swachh Bharat mission this fiscal year under the Union Budget 2020. Under the Union Budget, the government plans to set up hospitals in Tier-2 and Tier-3 cities. It plans to further expand the Jan Aushadhi scheme Under this, 2000 medicines and 300 surgical will be provided to all hospitals by 2024.
The government has come up with a new voluntary tax regime, wherein those who want to pay tax according to the old regime can do so by utilizing the exemptions and paying at the old rates while the ones who are ready to forego the exemptions can pay according to the new tax rates.
Following is the table with new tax slabs:
|Taxable income slabs||Tax Rates|
|Upto Rs.5 lakhs||Nil|
|Rs.5 – Rs.7.5 lakhs||10%|
|Rs.7.5- Rs. 10 lakhs||15%|
|Rs.10- Rs. 12.5 lakhs||20%|
|Rs.12.5- Rs.15 lakhs||25%|
|Rs.15 lakhs and above||30%|
Education and skills:
Rs. 99,000 crore and Rs. 3,000 crore has been allocated for the education sector and skill development respectively in the Union Budget 2020. In order to benefit the underprivileged students, the online education system will be set up which will be a program with NIRF rankings top 100 educational institutions. A National Recruitment Agency will be set up which will conduct an admission test for the non-gazetted posts. SAT exams similar to those of the US will be held in Asian and African countries to promote “Study in India”.
Rs. 1.7 lakh crore has been allocated for the transport infrastructure under Union Budget 2020. 5 new Smart cities are planned to be set up under the PPP model. The government is aiming to achieve the electrification target of 27,000 km of lines. The Bengaluru Suburban Rail Project has been allocated Rs. 18,600 crores. Under the UDAN scheme, 100 more airports will be open by 2024.
Economy and Finance:
Taking forward the divestment plan, the government plans to sell its stake in LIC and IDBI to the private sector. The insurance cover for bank deposits has been increased to Rs.5 lakh from Rs.1 lakh. In order to help the NBFCs, a partial credit guarantee scheme has been formulated.
To Protest Macron’s Economic Policies French Firefighters Light Themselves Up On Fire
On Tuesday, thousands of firefighters marched through the streets of Paris to protest against the government’s recently announced pension reforms. Some were even bold enough and set themselves on fire to display of anger. These firefighters rejected President Emmanuel Macron’s proposed government pension system. Their demands include maintenance of staff levels, receive a premium that would reflect the risks they take at work and keep the old pension system.
Frederic Perrin the head of the union SPASDIS-CFTC, said that they are the final link in the chain of emergency aid in France and they are usually overwhelmed by callouts which refers to the fact that in France firefighters usually respond to general emergency calls. He even says that they require staffing and means to respond with a guarantee that they can just concentrate on their core missions and not serve to fill in the gaps left by absent health services.
According to Reuters’ reports, the workers were in their uniform some even clashed with the riot police who even fired tear gas at crowds. Several accounts also claimed that security forces hit few protestors with batons. A video of a firefighter under flames that have charred their uniforms goes viral on Twitter. They were under flames for around 15 seconds before one of the other firefighters sprayed themselves with a fire extinguisher.
These striking firefighters in Paris lit themselves on fire today to protest the government's attacks on their pensions.pic.twitter.com/nqTgYULtKd
— Eric Blanc (@_ericblanc) January 28, 2020
Macron’s overhaul of the government pension system would bring in 42 currently existing pensions schemes and bring it under one single system. According to a Paris-based Journalist Cole Stangler, this would be the deepest overhaul of the country’s pension system since its birth after the second world war. Though it could save money, critics say it would hurt France’s retirement system which currently is the best in the world (93 per cent of old people in France are secure from poverty which is the highest in the European Union). the reforms would also increase the minimum age from 62 to 64.
Over the last several years France has witnessed strikes and protests along with the popular yellow vest movement. In December 2019, the strikes even added workforce from students and teachers to truckers, judges and nurses. Macron has been criticised severely as he cut unemployment benefits in 2017 and replaced it with wealth tax along with a property holdings tax that would benefit the super-rich. Just before the new year, he vowed to drop this proposal but later he said that it would be carried out asking people to cooperate.
Cooking gas prices may hike and oil subsidies end by 2022
According to Sources that taking advantage of low oil prices, government may give instruction to state oil marketing companies to increase price of subsidy LPG cylinder.
The oil marketing companies (OMCs) incurred gross under-recoveries of Rs 43,300 crore in 2019, of which LPG accounted for Rs 31,500 crore in same year. The price of subsidy cooking gas rise by Rs 10 per cylinder in the July-January period of current fiscal year. Due to the development in past few months, government is looking to completely eliminate oil subsidy by 2022. If this will happen then the , that the cooking gas price would increase by another Rs 100-150 per cylinder over the next one year.
As Sources said that taking advantage of low oil prices, government may give order to state-run oil marketing companies to increase price of subsidy LPG cylinder so that entire subsidy paid under direct benefit transfer scheme to eligible consumers is eliminated in one year’s time. By July 2019-January 2020, the Oil Marketing Company will increased the price of subsidized LPG by Rs 63 per cylinder. At current global oil prices, if oil companies raise the rate of subsidized LPG cylinder by just about Rs 10 per cylinder per month, in 15 months time there would not be any need to extend Central support.
The price of a subsidy LPG cylinder (14.2 kg) currently works to around Rs 557 with government providing Rs 157 as subsidy directly into the account of consumers. The subsidy level may fall if oil prices slides further and remains below $60 a barrel in most parts of 2021.
In latest report on oil and gas sector Motilal Oswal said “Raising prices of subsidized LPG cylinder augurs well for the OMCs, especially keeping in mind the intended privatization of BPCL. However, the resolve of the government would be tested if oil prices spike.”
Expectations from Union Budget 2020
The Union Budget is set to be announced on 1st February 2019. People in the whole nation are talking about it and are eagerly waiting to see what the government has for them. Indian economy is facing a slowdown in this financial year and the GDP growth has gone as low as approximately 4.5% in the July-September quarter the last year. With so much happening around, let’s see what expectations do people hold for this budget.
There have been talks about raising the government expenditure in the infrastructure sector and a cut in personal tax in this budget. This will be done in order to spur the growth rate of the Indian economy. Despite the tax rate cuts and monetary easing, investment has not been able to pick up. Adding to this, the government is also worried about the on-going protests over a proposed citizenship law.
According to a few economists and investors, increased spending in the rural, railways and road sectors could help in reviving the growth. This would provide a small boost to the economy’s growth rate. But at the same time, it will put a lot of pressure on the bond yields and the yields will start rising, which makes borrowing more costly. Approximately $1.48 trillion is expected to be the budget that will be set for the infrastructure sector. The budget can be seen to further push the idea of privatization of the various PSUs. The government has already initiated the idea of divestment of Air India and Bharat Petroleum Corp. Ltd.
In order to boost domestic manufacturing and reduce the current account deficit, it is expected that the import duties will be increased for more than 50 items like chemicals and electronics.
At the same time, people expect a rate cut on income tax after the government has reduced the corporate tax rate.
Economists who participated in the Reuters poll for the budget predicted that in such a situation the Government will raise the target for fiscal deficit to 3.6% in 2020-21 from 3.3% in 2019-20.
Will Modi Government 2.0 bring Indian Railway on Fast-track mode in Budget 2020
Modi government 2.0 Railway Budget 2020 will be presented by Finance Minister Nirmala Sitharaman on 1st February in Parliament. There will be no separate Rail Budget and both the budgets will be presented in a merged form on February 1. This time Expectations are quite high from Railway Budget 2020 due to crisis on Economy. The Piyush Goyal-led Indian Railway has been on a world-class infrastructure creation drive to push national transporter into an elite league in the world. Rail Budget 2020 is likely to play a vital role in Indian Railways infrastructure also to help drive to a fast-track mode.
Since the year 2017, Railway Budget has been merged with the Union Budget. The NDA government did away with the 92-year-old colonial-era practice and made the rail budget a part of the general budget. In 2018, former Finance Minister Arun Jaitley had announced the largest-ever allocation of Rs 1.48 lakh crore capital expenditure for the Indian Railways in 2018-19.
Stakes are high, as Railways which is one of India’s major sectors is in a bad shape, as it is losing money on keeping its existing operations going. To put the railway back on its feet, an informed debate is required, however, due to the merger of rail budget with Union budget, the time available to focus on the railway has reduced.
But this year there is an expectation in the Rail Budget to increase emphasis on public-private partnerships. It may also boost the infrastructure building program of the Indian Railways. Private players may be roped in for the upgradation and modernisation of the railways including setting up of railway stations. It may also include the operation of technologically advanced trains for better convenience of passengers.
The chances of a hike in passenger fares are low this time, experts have said, “as they have recently been raised while keeping the hikes delinked from the budget and freight rates may also not increase at the time of an economic slowdown”. As per reports, “the freight revenue is anyway running behind the target by Rs 17,600 crore till November”.
Must know things about Budget 2020
Budget Date: The first time after 2015-16, the budget will be presented on a Saturday, February 1, 2020. The Modi government shifted the budget announcement date from March to February in order to have a better implementation of the budget presented. This gives the government 12 months to exercise the expenditure starting from April 1 as the process related to the budget will be completed by March 31.
Parliament’s Budget Session:
The government has decided to hold the budget in two phases this year: January 31 to February 11 and March 2 to April 2. There is a 19-day gap between the two phases which will provide the time to the government to think about the demands of various Ministries and Departments. The budget session this time will be stressful as topics like the economic slowdown and Citizenship (Amendment) Act (CAA) will be discussed.
When compared to last year, India was the fastest-growing country in the world. But during the third quarter, India’s GDP grew only by 4.5% when compared from last year. Moreover, consumer confidence is the lowest since 2014. The unemployment rate reached a 45-year high of 6.1%. The rate cuts done by the RBI have not been properly transferred into the economy.
The challenge here is to restore the twin engines of growth: investment and consumption.
Things were done so far:
In September, the government has announced few fiscal measures costing approximately, Rs. 1.45 lakh crore and will focus on the reduction of fiscal deficit. There has been a corporate base tax rate cut to 22% from 30% and for manufacturing companies who will start its operations after October 1, 2019, but before March 31, 2020, to 15% from 20%. RBI has reduced the interest rates by 135 bps in the past one year. Moreover, in order to boost the growth of start-ups, the government decided to do away with the ‘angel tax’ only for the companies which were registered with the Department for Promotion of Industry and Internal Trade.
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