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(Current Affairs & GK)

The task force report on micro, small and medium enterprises (MSME)

* headed T.K.A. Nair, Principal Secretary to the Prime Minister.
* The report of the task force on micro, small and medium enterprises (MSME) that has recommended changes in policies to help growth of the sector.
* also recommended a road map for the development and promotion of the sector crucial for economic growth and employment generation.
* The task force has called for an agenda for immediate action to provide relief and incentives to MSMEs, especially in the aftermath of the recent economic slowdown, accompanied by institutional changes and detailing of programmes, to be achieved in a time-bound manner.
* It has also suggested setting up of appropriate legal and regulatory structures to create a conducive environment for entrepreneurship and growth of MSMEs.
* The MSME task force has recommended extension of the stimulus package for the sector for one more year, besides suggesting a procurement policy and creation of separate fund for the industry.
* It has suggested that a standing review committee under Planning Commission Member Arun Maira be set up to monitor flow of credit to the MSME sector.
* It has also called for setting up an independent body at the national level for promoting MSMEs, which may provide financial and managerial support to set up industrial estates in partnership with the private sector.
* Small, medium units need Rs. 5,500 crore succor to help it recover from the aftermath of the global economic slowdown that has hit the sector hard.
* the MSME sector, which employs 4.2-crore people and contributes about 45 per cent to the total manufactured output and 40 per cent to our export.

SEBI acts tough on multi-class share entities

* SEBI has reportedly put on hold registration of close to 50 investors who are organised as ‘multi-class share entities’ in tax havens like Mauritius.
* A multi-class share entity is Similar to a mutual fund, a multi-class structure allows distinct pools of investments — just like the various schemes of an MF — under an umbrella asset management company. The investors putting money in the various pools, which are referred to as cells by market participants, can have different fund managers pursuing different investment strategies.
* Tough action is due to the fear that while the umbrella firm gets registered as an FII or a sub-account — a special purpose vehicle formed in Mauritius to access Indian stock exchanges — the regulator may have no control over the different pools or cells under the firm. And once a multi-class share entity is registered, it can go on adding new cells which, outside the regulatory radar, can be the conduits for round-tripping.
* It is worthwhile to note that SEBI had banned PCC (Protected Cell Company) structures in ’99-00; but foreign investors can set up multi-class structures which, as legal entities, are a little different from PCCs.

Difference between PCC & multi-class share entities-

* The similarity between the two is that each cell has separate accounts and losses suffered by one pool cannot be recovered from another. The key difference is: in a PCC, each cell is legally ring fenced and bankruptcy faced by one cell will not impact the other cells; but in a multiclass share entity anyone suing a cell has to sue the entire company and not the share class.

Third quarter review of monetary policy

* RBI pitches for recovery with price stability
* In its third quarter review of its monetary policy the Reserve Bank of India has retained the policy interest rates, the repo and the reverse repo, at 4.75 and 3.25 per cent, respectively.
* But hiked the cash reserve ratio by a substantial 0.75 percentage point to 5.75 per cent in two stages. The hike is expected to impound Rs.36, 000 crore.
* The Bank Rate, which has not been used for quite some time now, remains at 6 per cent.
* Through these measures the central bank expects to drain excess liquidity and thereby anchor inflationary expectations and support the recovery process without compromising on price stability. The calibrated exit will align policy statements with the current and evolving state of the economy.
* It raised the GDP growth estimates from 6% to 7.5% for the current year.

Much ado about tea logo

* GOI called for a replacement for the tea plucker logo introduced back in 1976 to represent and certify tea made in the country.
* India, the largest producer of tea, has been brewing the drink since the time of Valmiki and is mentioned in Ramayana.
* India exported 169.3 million kg of tea and had earned a foreign exchange of Rs 2311.13 crore in the first 11 months of 2009.

Change in base year

* Govt has done the revision in the base year for national accounts from 1999-2000 to 2004-05,
* This change will lead fiscal deficit for the current year is likely to drop to 6.5%, other things being equal.with this upward revision in the country’s income under the new series has brought down the fiscal deficit relative to the GDP.

World Economic Forum - Davos

* Amid the multiplicity of voices, opinions and often conflicting viewpoints, the vague contours of a new world order emerged.
* The new shape on economic recovery is LUV — the L-shaped recovery of other developed nations, U-shaped recovery of the US, and the V-shaped recovery of the emerging nations.

Subir Raha

* This former CMD of ONGC (2001-2006) died of cancer in New Delhi.

20 Indian banks make it to the list of big banks by brand value

* SBI’s brand value more than tripled to $4,551 million, up from $1,448 million in 2009 helping it grab the 36th spot in the list.
* ICICI Bank, the country’s largest private bank, joined it in the Top 100 list with a 130% jump in its brand value at $2,164 million.


* It stands for contingent convertible capital.
* It is a debt that converts into equity when banks run into trouble.

What is DSGE?

* It stands for Dynamic Stochastic General Equilibrium.
* It is a methodology reportedly used for the first time by IMF to model various ‘macrofinancial’ linkages, such as the exchange rate and inflation, in the conduct of monetary policy in India.
* Broadly speaking, the idea is to analyse activities in the ‘micro’ domain to explain aggregate economic phenomena, such as growth, business cycles, and the effects of monetary and fiscal policy.
* Besides, DSGE models are dynamic, looking at how the economy evolves over time. Also, they are stochastic, taking into account how the economy is affected by random shocks such as sub-optimal policy design, oil price spikes and technological change etc. The plan is to use a few key variables for more accuracy in models.


* The four-day ‘BioAsia-2010’ was inaugurated at HYDERABAD
* Leading companies proposed to invest Rs.1, 000 crore to create infrastructure of plug-and-play lab space in the third phase of Biotech Park near here.

Sen’s cautious path to stimulus rolls back

* Even as the Reserve Bank of India has given adequate feelers to the government to start the process of rolling back the stimulus measures, Chief Statistician Pronab Sen felt that a decision on this crucial issue should be taken on the basis of the actual growth scenario which would be available in May when the GDP (gross domestic product) data for the current fiscal is slated for release.

National awards for Power Grid

* The Power Grid Corporation of India has been conferred three gold shields and one silver shield in the national awards for meritorious performance in the power sector during 2008-09.
* The awards were presented by Union Power Minister Sushilkumar Shinde to Power Grid Chairman and Managing Director S. K. Chaturvedi at a function in the Capital.
* The gold shields went to Power Grid Corporation’s Western Region-I transmission system and the North-Eastern Region transmission system, and to the 220 kV D/C Pul-e-Khumri to Kabul Transmission Line in Afghanistan.

Time of iPad

* Apple Computer’s iconic Chief Executive Officer Steve Jobs has made another bid to create digital history.
* Following months of speculation, he unveiled the iPad, a 24.64 cm (9.7 inch) touch-screen tablet. This device, he proclaimed, lets people hold the internet in their hands. Mr. Jobs hopes to make the same game-changing impact on the digital world that he did with the iPod, which has sold 250 million units, and the iPhone.

Apple’s nifty new creation is posit ioned as a “third category” mobile device — between the laptop and the smartphone.

NABARD’s Managing Director- K.G. Karmakar


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