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RBI to set up DIGITA to check illegal lending apps

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As part of its efforts to curb growing cyber fraud, the Reserve Bank is considering establishing a Digital India Trust Agency (DIGITA) to stop the mushrooming of illegal lending apps. The proposed agency will enable verification of digital lending apps and maintain a public register of verified apps, sources said.

Apps not carrying the ‘verified’ signature of DIGITA should be considered unauthorized for the purpose of law enforcement, sources said, adding that this will serve as a pivotal checkpoint in the fight against financial crimes in the digital realm. DIGITA, once in place, would be entrusted with the responsibility of vetting digital lending apps, they noted.

According to sources, a thorough verification process would help instill greater transparency and accountability within the growing digital lending sector, which has witnessed a surge in fraudulent activities and unscrupulous practices in recent times. Meanwhile, the Reserve Bank of India has shared a list of 442 unique digital lending apps with the IT Ministry to whitelist with Google. Besides, Google has removed over 2,200 digital lending apps (DLAs) from its app store from September 2022 to August 2023.

The search giant has updated its policy regarding the enforcement of loan apps on the PlayStore, and only those apps are allowed which are published by the RBI’s regulated entities (REs) or those working in partnership with REs. This policy change by Google has happened at the request of the Reserve Bank of India (RBI) and the Department of Financial Services (DFS) under the Finance Ministry.

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Economic

Kalanamak rice exports get boost as Govt waives duty on 1,000 tonnes

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The removal of the hefty 20% duty on overseas exports marks a significant shift in the government’s trade policy regarding Kalanamak rice.

In a significant move aimed at promoting trade of agricultural commodities, the government has lifted the duty on exports of the Kalanamak variety of rice. This exemption applies to shipments of up to 1,000 tonnes and is effective immediately from Wednesday, according to a notification issued by the Finance Ministry.

Previously subject to a hefty 20% duty on overseas exports, the removal of this tariff barrier marks a notable shift in the government’s trade policy concerning Kalanamak rice. The Directorate General of Foreign Trade (DGFT) paved the way for this initiative on Tuesday by authorizing exports of up to 1,000 tonnes of Kalanamak rice through six specified customs stations.

Kalanamak rice, a type of non-basmati rice renowned for its distinct aroma and taste, was previously prohibited for export. However, with this recent decision, it joins the ranks of exportable agricultural commodities, offering new avenues for Indian rice producers to tap into international markets.

Exporters can now utilize six designated customs stations for shipping Kalanamak rice abroad. These include Varanasi Air Cargo, JNCH (Jawaharlal Nehru Customs House) in Maharashtra, CH (Customs House) Kandla in Gujarat, LCS (Land Customs Station) Nepalgunj Road, LCS Sonauli, and LCS Barhni.

The government’s move to facilitate the export of Kalanamak rice underscores its commitment to boosting agricultural exports and diversifying the country’s trade portfolio. This decision is likely to open up new opportunities for farmers and exporters, while also enhancing India’s presence in the global rice market.

This strategic decision by the government comes amidst efforts to bolster India’s agricultural sector and enhance its competitiveness in the global market. Kalanamak rice, with its unique characteristics and cultural significance, holds immense potential for export growth. By lifting the duty on its overseas shipments, the government aims to capitalize on this potential and support the livelihoods of farmers involved in its cultivation.

Furthermore, the exemption of duty on Kalanamak rice exports aligns with the broader agenda of promoting agricultural trade and achieving the goals outlined in various government initiatives such as the Agricultural Export Policy and Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission). Encouraging exports of agricultural products not only contributes to economic growth but also fosters rural development and empowers farmers by providing them access to international markets.

As India strives to become a global powerhouse in agriculture, initiatives like these play a crucial role in strengthening the country’s position as a reliable supplier of high-quality agricultural commodities. Moreover, by tapping into niche markets with unique products like Kalanamak rice, India can carve out a niche for itself and establish a reputation for excellence in agricultural exports.

In conclusion, the removal of duty on Kalanamak rice exports signifies a significant step towards realizing the full export potential of India’s agricultural produce. It reflects the government’s commitment to fostering a conducive environment for agricultural trade and underscores its resolve to empower farmers and bolster rural economies. This move is poised to not only boost India’s export earnings but also enhance its stature as a key player in the global agricultural arena.

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Economic

World Bank projects Indian economy to grow 7.5% in FY24

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The Indian economy is projected to grow at a rate of 7.5 percent in 2024, as stated by the World Bank, marking a revision of its earlier forecasts by 1.2 percent. This growth is expected to be a key driver of South Asia’s overall economic performance, with the region anticipated to achieve a strong growth rate of 6.0 percent in the same year. India, being the largest economy in the region, is expected to play a significant role in driving this growth, with output growth projected to reach 7.5 percent in the fiscal year 2023-24, before moderating to 6.6 percent over the medium term. Despite the positive outlook for the region, the World Bank highlights persistent structural challenges that threaten sustained growth.

Fragile fiscal positions and increasing climate shocks are identified as potential obstacles on the horizon. To bolster growth resilience, the report emphasizes the need for policies aimed at boosting private investment and strengthening employment growth. The report also sheds light on the economic outlook for other countries in the region. Pakistan is expected to see a mild recovery, with growth projected at 2.3 percent in fiscal year 2024-25. Similarly, Sri Lanka is anticipated to experience an increase in output growth to 2.5 percent in 2025, driven by recoveries in reserves, remittances, and tourism. Meanwhile, Bangladesh is projected to witness a rise in output by 5.7 percent in the same period, albeit constrained by high inflation and trade restrictions. In light of these projections, the World Bank recommends a range of policy measures to stimulate firm growth and boost employment, including enhancing trade openness, improving access to finance, and fostering a conducive business climate.

Additionally, the removal of financial sector restrictions, improvements in education, and the elimination of barriers to women’s economic participation are suggested as means to drive growth and productivity while creating space for public investments in climate adaptation. The upbeat economic forecasts come amid a positive sentiment regarding India’s economic trajectory. Morgan Stanley recently revised its GDP growth forecasts upwards for both the ongoing financial year and the following year, citing optimism about India’s strength and stability as key factors driving growth in the current cycle. The World Bank projects India’s economy to grow at 7.5% in 2024, driving South Asia’s overall growth at 6.0%. Despite this optimism, persistent structural challenges loom, threatening sustained growth.

Fragile fiscal positions and increasing climate shocks pose potential obstacles. To bolster resilience, policies promoting private investment and employment growth are crucial. Pakistan expects a mild recovery at 2.3% growth, while Sri Lanka anticipates a rise to 2.5% in 2025. Bangladesh aims for 5.7% growth in FY24/25, hindered by high inflation and trade constraints. The World Bank advocates for policy measures to spur growth and create space for public investments in climate adaptation.

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Policy

Over 43.3 cr monthly digital transactions in India: FM Sitaraman

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Finance Minister Nirmala Sitharaman lauded the strong digital public infrastructure and access that has been given to all, which has brought India at the forefront of digital transactions. Speaking at the Viksit Bharat 2047 Ambassador Campus Dialogue at Pallavaram, the Finance Minister said that in India, 43.3 million transactions are being done every month through digital payment without any charge. “The country is becoming a hub of digital infrastructure. Digital public infrastructure has been designed in such a manner that it involves the seller, the buyer, and the payment system. 43.3 crore transactions are being conducted digitally per month,” she said.

Speaking at the event, the FM highlighted that today India is producing mobile phones not only for domestic consumption but also for exporting to other countries, and all this happened because of the efforts of the current Indian government. Finance Minister Sitharaman said, “The production-linked incentive (PLI) schemes have incentivized the industries to invest in the thorium, solar energy, and green hydrogen sectors. India has also joined hands with other countries to make progress in the renewable energy sector, and in the coming future, India will become a leader in the renewable energy sector.”

Highlighting the achievements of start-ups in India Sitharaman says that now the start-ups are coming to the space sector, the government has opened the space sector for private investment, and the Indian government is giving opportunities and assistance to the new players. In the interim budget, the government has also allocated 1 lakh crore rupees for science and research, which will give a further boost to the emerging start-ups in India.

Sitharaman highlighted the indicators of the Viksit Bharat. She said that better infrastructure, modern schools, and hospitals are the key indicators of Viksit Bharat. The FM said the focus of the Modi government is to achieve the Viksit Bharat goal through the development of infrastructure.

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Economic

Govt’s yearly gross GST revenue hits record Rs 20.14 lakh cr in March ‘24

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The Government’s yearly gross Good and Services Tax (GST) revenue for March 2024 witnessed the second highest collection ever at ₹20.18 lakh crore, with a 11.7 per cent year-on-year growth as strong consistent performance in FY 2023-24 paved the way for the milestone of total gross GST collection exceeding ₹20 lakh crore, the Finance Ministry said on Monday. This surge was driven by a significant rise in GST collection from domestic transactions at 17.6 per cent. The GST revenue net of refunds for March 2024 is ₹1.65 lakh crore which is growth of 18.4 per cent over same period last year.
The average monthly collection for this fiscal year stands at ₹1.68 lakh crore, surpassing the previous year’s average of ₹1.5 lakh crore. With continued double-digit growth, the CGST collections have exceeded the FY2024 revised estimate, albeit — Aditi Nayar, Chief Economist, ICRA – with a modest shortfall in the GST compensation cess inflows, which are now being used to repay the loans undertaken during the covid period. “With the CGST collections surpassing the FY2024 RE, the implicit growth needed to meet the interim budget estimate for FY2025 has come down to single-digits, which appears likely to be exceeded,” says Nayar.
The GST revenue net of refunds as of March 2024 for the current fiscal year is ₹18.01 lakh crore which is a growth of 13.4 per cent over same period last year. Recording positive performance across components, the Central goods and services tax (CGST): stands at ₹34,532 crore and state GST at ₹43,746 crore. The integrated GST (IGST) stands at ₹87,947 crore, including ₹40,322 crore collected on imported goods, cess of ₹12,259 crore (including ₹996 crore collected on imported goods). Similar positive trends are observed in the entire FY 2023-24 collections.
The CGST stands at ₹3,75,710 crore and SGST at ₹4,71,195 crore. The IGST collection is ₹10,26,790 crore, including ₹4,83,086 crore collected on imported goods and cess of ₹1,44,554 crore, including ₹11,915 crore collected on imported goods. Shravan Shetty, Managing Director at Primus Partners finds the growth in line with that estimated in the Budget for the coming year and feels maintaining this growth in the coming months will help the government meet its fiscal target. Such fiscal prudence combined with record reserves, notes Shetty, will “provide stability to the rupee and increase India’s attractiveness as a stable, high-growth economy in a sea of uncertainty seen across both developing and developed countries”.
As for inter-governmental settlement, in the month of March, 2024, the Central Government settled ₹43,264 crore to CGST and ₹37,704 crore to SGST from the IGST collected. This translates to a total revenue of ₹77,796 crore for CGST and ₹81,450 crore for SGST for March, 2024 after regular settlement. For the FY 2023-24, the central government settled ₹4,87,039 crore to CGST and ₹4,12,028 crore to SGST from the IGST collected.

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Tech

PM Modi Highlights AI Risks, Stresses Tech’s Role in Key Sectors in Talks with Bill Gates

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Modi showcases India’s AI innovations, from G20 Summit to speech translation, humorously integrating AI into daily life while advocating its responsible use.

India’s Prime Minister Narendra Modi emphasized the critical need for responsible use of AI technology during a discussion with Microsoft co-founder Bill Gates. Modi highlighted the risks of AI misuse in unskilled hands, advocating for clear guidelines and the use of watermarks on AI-generated content to combat misinformation and deepfake related harms in society. He underscored the importance of acknowledging AI-generated content and its source, suggesting watermarks as an initial step to prevent misinformation without devaluing AI creations.

Furthermore, Modi discussed India’s extensive leveraging of AI innovations, including its use during the G20 Summit and for translating speeches into multiple languages. He humorously noted the integration of AI terminology into everyday Indian life, emphasizing the need to view AI as a tool to enhance human efficiency within specific fields of expertise rather than relying on it lazily.

The Prime Minister outlined his vision for leveraging technology in key sectors like health, agriculture, and education. He highlighted initiatives such as the Aayushman Aarogya Mandir healthcare centers, efforts to provide quality education through technology, and the “Namo Drone Didi” scheme empowering women in agriculture. Modi also expressed confidence in India’s ability to lead in the fourth industrial revolution, driven by digital technology at its core. He emphasized the importance of bridging the digital divide and extending digital infrastructure to all villages, particularly focusing on the needs and preferences of women.

Moreover, Modi discussed India’s response to the COVID-19 pandemic, showcasing the CO-WIN platform for vaccine distribution and certification. Gates praised India’s commitment to accessibility and inclusivity in technology, particularly in bridging the digital divide. Overall, Modi’s conversation with Gates highlighted India’s proactive approach to technology adoption and the Prime Minister’s vision for leveraging it for societal benefit while mitigating potential risks.

Prime Minister Narendra Modi’s discussion with Bill Gates also delved into India’s efforts to address challenges in sectors such as healthcare, agriculture, and education through technology-driven initiatives. Modi underscored the transformative impact of digital platforms in democratizing access to quality healthcare, particularly in rural areas where traditional medical services are often lacking. He cited the example of Aayushman Aarogya Mandir, illustrating how technology connects remote health centers with specialized hospitals, enabling patients to receive accurate diagnoses and advice from distant healthcare professionals.

In the realm of education, Modi emphasized the importance of leveraging technology to provide high-quality learning experiences, especially catering to children’s interests in visual content and storytelling. Initiatives aimed at filling the gaps in teacher availability through digital means and creating engaging educational content reflect the government’s commitment to enhancing educational outcomes across the country. Regarding agriculture, Modi outlined ambitious plans to modernize and scientize the sector, with initiatives like the “Namo Drone Didi” scheme empowering women in rural areas and transforming their roles from traditional labour to skilled drone pilots.

These efforts not only aim to improve agricultural productivity but also seek to bring about a psychological shift within rural communities, fostering a sense of empowerment and technological advancement. Furthermore, Modi highlighted India’s commitment to extending support to African countries in enhancing their digital infrastructure, emphasizing the principles of democratization and equal opportunity in the digital age. By aligning technological advancements with the specific needs and preferences of marginalized communities, India aims to ensure that the benefits of technology reach those who need it the most.

The Prime Minister’s discussion with Gates also touched upon India’s response to the COVID-19 pandemic, showcasing the country’s technological prowess through platforms like CO-WIN for vaccine distribution and certification. Gates commended India’s approach to technology, particularly its focus on accessibility and inclusivity, which aligns with his foundation’s mission of global health and development. Overall, Modi’s dialogue with Gates reflects India’s proactive stance towards leveraging technology for social and economic development while addressing potential challenges and ensuring inclusivity in the digital revolution.

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Policy

Govt to borrow Rs 7.5 lakh cr from market in H1FY25

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This is 53.08 per cent of its gross market borrowing of Rs 14.13 lakh crore projected for FY 2024-25 in the Union Budget.

The Government has finalised its borrowing programme for the first half (H1) of FY 2024-25, setting a figure of Rs 7.50 lakh crore, in the first half of the next fiscal through dated securities. This is 53.08 per cent of its gross market borrowing of ₹14.13 lakh crore projected for FY 2024-25 in the Union Budget. The amount to be borrowed in H1 includes ₹12,000 crore through issuance of sovereign green bonds (SGrBs), the Finance Ministry said on Wednesday.

These bonds are essentially, a debt instrument involving significant fixed income borrowing by corporations, governments or institutions to fund green initiatives and promote ecological conservation. Based on market feedback and in line with global market practices, it has been decided to introduce a new dated security of 15-year tenor.

The decision has been taken in consultation with the Reserve Bank of India which has — to take care of temporary mismatches in Government accounts — also fixed the Ways and Mean Advances (WMA) limit for H1 of FY 2024-25 at ₹1.50 lakh crore. “The Reserve Bank of India may trigger fresh floatation of market loans when the Government of India utilises 75 per cent of the WMA limit.

“The Reserve Bank of India may trigger fresh floatation of market loans when the Government of India utilises 75 per cent of the WMA limit. The Reserve Bank of India, in consultation with the Government of India, retains the flexibility to revise the limit at any time taking into consideration the prevailing circumstances,”

The Reserve Bank of India, in consultation with the Government of India, retains the flexibility to revise the limit at any time taking into consideration the prevailing circumstances,” the Central Bank stated. Aditi Nayar, Chief Economist, ICRA observes that “GoI’s borrowings are relatively more back-ended in FY2025, with 46.9% of the gross issuances scheduled for H2 FY2025 as against 42.4% in H2 FY2024, in line with the expected ramping up of capital expenditure after the final Budget and the monsoons”.

The gross market borrowing of ₹7.50 lakh crore shall be completed through 26 weekly auctions. The market borrowing will be spread over 3, 5, 7, 10, 15, 30, 40 and 50 year securities. The share of borrowing (including SGrBs) under different maturities will be –4.80 per cent over 3-year, 9.60 per cent over 5-year, 8.80 per cent over 7-year, 25.60 per cent over 10-year, 13.87 per cent over 15-year, 8.93 per cent over 30-year, 19.47 per cent over 40-year and 8.93 per cent over 50- year period.

Meanwhile, the Government will continue to carry out switching of securities to smoothen the redemption profile. The Government will also continue to reserve the right to exercise greenshoe option to retain an additional subscription of up to ₹2,000 crore against each of the securities indicated in the auction notifications. We e k l y b o r r o w i n g through issuance of Treasury Bills in the first quarter (Q1) of FY 2024-25 is expected to be ₹27,000 crore for the first seven auctions and ₹22,000 crore for the subsequent six auctions with net borrowing of ₹(- )3,000 crore during the quarter.

There will be weekly issuance of ₹12,000 crore under 91 DTBs, ₹7,000 crore under 182 DTBs and ₹8,000 crore under 364 DTBs in the first seven auctions and weekly issuance of ₹10,000 crore under 91 DTBs, ₹5,000 crore under 182 DTBs and ₹7,000 crore under 364 DTBs in subsequent six auctions to be conducted during the quarter.

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