Garg says : Government seeks Rs 13,000 crore surplus from RBI

The government has not asked the Reserve Bank to pay any special dividend and is only seeking Rs 13,000 crore of surplus lying with the central bank, Economic Affairs Secretary  Garg has said.

In August, the RBI had paid a dividend of Rs 30,659 crore for the fiscal ended June 2017. It was less than half the Rs 65,876 crore it had paid in 2015-16.

The government had budgeted for a Rs 58,000 crore dividend from the RBI in its Budget for this fiscal year.

“There is no proposal at this stage to ask for any special dividend. What is being discussed is to only ask for what the RBI earned this year but did not distribute. That is about Rs 13,000 crore. That’s what the government has suggested the Reserve Bank to transfer,” Garg told PTI.

RBI’s profit was about Rs 44,000 crore, of which Rs 30,000 crore has been distributed and Rs 13,000 crore it retained towards risks and reserves. So the government has made a suggestion that the Rs 13,000 crore may also be transferred, he said.

The government had last month announced an unprecedented Rs 2.11 lakh crore capital infusion in PSU banks, which are grappling with high non-performing assets (NPAs).

Asked about the contours of the recap bonds, Garg said “the recapitalisation package is in the final stages. The Department of Financial Services is working on it and soon we would see all these aspects being addressed”.

Of the Rs 2.11 lakh crore, Rs 1.35 lakh crore would be infused through recapitalisation bonds and the remaining Rs 76,000 crore through budgetary support and banks diluting equity in capital market.

Credit rating agency Moody’s had last week upgraded India’s sovereign rating after a gap of over 13 years citing reform push and steps being taken by the government to solve the high NPA problems in the banking sector.

Bad loans in the sector have neared Rs 10 lakh crore.

Garg said Moody’s has acknowledged the reform process and believes that India is in a position to control its debt and put its banking sector in order.

“The kind and quality of reforms, the boldness of reforms, the structural, fundamental needs of reform is what has persuaded them to believe that India is now on a longer term high growth path …That (reform) process will continue and I don’t see any slackening in reform effort,” he said.

The US-based rating agency cited government efforts to reduce corruption, formalise economic activity and improve tax collection and administration, including through demonetisation and GST, as well as improvements to the monetary policy framework and measures to clean up non- performing loans as reform steps which would foster sustained economic growth.

On privatisation of Air India, said it is progressing “reasonably steadily” and the plan about how to privatise has also been broadly worked out.

Asked if it would happen in the current fiscal, Garg said, “I won’t put a timeline on when this is likely. Air India is not just one company, there are other assets.”

The government has ‘in-principle’ decided to dis invest the Air India group as a whole or its constituents fully or part thereof through the strategic sale with transfer of management control.

Air India has a debt burden of more than Rs 50,000 crore.

The Cabinet, in June, had decided on strategic disinvestment of the loss-making Air India, which is staying afloat on taxpayers’ funds, and a ministerial panel is working on the modalities.

Source : Business Today


Jagmoha Garg News Delhi India has lost 550 jobs a day in last 4 years: Study

As many as 550 have disappeared every day in last four years and if this trend continues, employment would shrink by 7 million by 2050 in the country, a study has claimed.


Farmers, petty retail vendors, contract labourers and construction workers are the most vulnerable sections facing never before livelihood threats in today, the study by Delhi-based civil society group PRAHAR has said.


According to the data released by Labour Bureau early 2016, created only 1.35 lakh in 2015 in comparison to 4.19 lakh in 2013 and 9 lakh in 2011, the group said in a statement.


“A deeper analysis of the data reveals a rather scary picture. Instead of growing, livelihoods are being lost inon a daily basis. As many as 550 are lost inevery day (in last four year as per Labour Bureau data) which means that by 2050, in would have got reduced by 7 million, while population would have grown by 600 million,” the statement said.


The data clearly points to the fact that job creation in is successively slowing down, which is very alarming, it pointed out.


“This (rise in unemployment) is because sectors which are the largest contributor of are worst-affected. Agriculture contributes to 50 per cent of employment in followed by SME sector which employs 40 per cent of the workforce of the country,” the statement said.


The organised sector actually only contributes a minuscule less than one percentage of employment in India. has only about 30 million in the organised sector and nearly 440 million in the unorganised sector.


According to the World Bank data, percentage of employment in agriculture out of total employment in has come down to 50 per cent in 2013 from 60 per cent in 1994.


It said that the labour intensity of small and medium enterprises is four times higher than that of large firms.


It further said that the multinationals are particularly capitalistic a fact vindicated during investment commitments of $225 million made for the next five years during the Make in Week in February 2016.


However, what went unnoticed is that these investments would translate into creation of only 6 million jobs, it said.


needs to go back to the basics and protect sectors like farming, unorganised retail, micro and small enterprises which contribute to 99 per cent of current livelihoods in the country. These sectors need support from the Government not regulation. needs smart villages and not smart cities in the 21st century,” it added.
SOURCE: http://www.business-standard.com/article/current-affairs/7-million-jobs-can-disappear-by-2050-says-a-study-116101600378_1.html

Jagmohan Garg News Delhi PM’s new health insurance scheme may cost over Rs 8000 crore

Insurance agents: Exits outnumber entry

Prime Minister National Scheme, which is under consideration for providing up to Rs 1-lakh health cover to poor families, may bring Rs 8000 crore income for insurance companies.


Currently, the poor (below-poverty-line) families are covered under Rashtriya Swasthya Bima Yojana (RSBY) for up to Rs 30,000 expenses. There were 11.8 million hospitalisations under the RSBY scheme till the end of last the financial year. RSBY will be phased out once the PM’s new health scheme is rolled out.


“Health ministry will require at least Rs 4,000 crore to Rs 5,000 crore budgetary support in order to pay the insurance premium,” a health ministry official said. “The centre will be responsible for disbursing 60% of thefor the scheme, while the states will be responsible for the rest,” he said. This would mean higher contribution from most of the states who currently bear only 25% of the cost for cover under RSBY. The contribution of Northeastern states and Jammu & Kashmir to the for coverage under RSBY is even lower at 10%.


The health ministry is now preparing the guidelines for the scheme. It also plans to start the process to empanel insurance companies and hospitals for the scheme soon. A cabinet note is in the making to lay down all the rules for companies to participate in the scheme, said the official.


The scheme was first announced this year by the prime minister Narendra Modi on the independence day. The number of people covered under has crossed over 36 crore as per Insurance Regulatory and Development Authority, most of them are under government schemes.
SOURCE: http://www.business-standard.com/article/economy-policy/pm-s-new-health-insurance-scheme-may-cost-over-rs-8000-crore-116101600381_1.html