Karpathuias.blogspot.in
📝 CPI inflation slows to lowest since 2012
👉 Note4Students:
While inflation trend has been on lower side since a year but recent farmer protests in various states signify that there is a huge mismatch between government data and actual situation as the actual benefits of this slowdown have not trickled down to producers. A comprehensive policy in this regard is need of the hour.
From UPSC perspective, following things are important:
🔘 Prelims level:
CPI, IIP, their base years, factors affecting them.
🔘 Mains level:
Policy measures required by various stakeholders in order to provide benefits of lower inflation to everyone, from producers to consumers.
🔴 News:
Retail inflation at 2.18% in May, eased to its lowest level since the Centre began measuring it on a nationwide basis in 2012.
🔘 Separate data showed industrial output expanded by 3.1% in April.
🔴 Reasons behind this trend:
🔘 Slowdown in CPI inflation was driven in large part by cooling food prices.
🔘 Growth in the Index of Industrial Production (IIP) was spurred by the manufacturing sector within which the tobacco and the pharmaceuticals sectors grew the fastest.
🔴 Looming farmer crisis and desired RBI measures:
🔘 It reflects the crisis the farmers are facing because food prices have crashed as a result of bumper crops.
🔘 This does provide stronger grounds for the RBI to revise its interest rates downwards in its next review.
🔴 Upside risks to inflation:
It can be due to three factors-
🔘 Increase in the house rent component in CPI
Implementation of GST, and Announcement of large farm loan waivers and higher deficits of states.
👉 Back2Basics:
Know everything about inflation here.(Prelims worthy)
#GS3 #Economy
@UPSC_2018
📝 CPI inflation slows to lowest since 2012
👉 Note4Students:
While inflation trend has been on lower side since a year but recent farmer protests in various states signify that there is a huge mismatch between government data and actual situation as the actual benefits of this slowdown have not trickled down to producers. A comprehensive policy in this regard is need of the hour.
From UPSC perspective, following things are important:
🔘 Prelims level:
CPI, IIP, their base years, factors affecting them.
🔘 Mains level:
Policy measures required by various stakeholders in order to provide benefits of lower inflation to everyone, from producers to consumers.
🔴 News:
Retail inflation at 2.18% in May, eased to its lowest level since the Centre began measuring it on a nationwide basis in 2012.
🔘 Separate data showed industrial output expanded by 3.1% in April.
🔴 Reasons behind this trend:
🔘 Slowdown in CPI inflation was driven in large part by cooling food prices.
🔘 Growth in the Index of Industrial Production (IIP) was spurred by the manufacturing sector within which the tobacco and the pharmaceuticals sectors grew the fastest.
🔴 Looming farmer crisis and desired RBI measures:
🔘 It reflects the crisis the farmers are facing because food prices have crashed as a result of bumper crops.
🔘 This does provide stronger grounds for the RBI to revise its interest rates downwards in its next review.
🔴 Upside risks to inflation:
It can be due to three factors-
🔘 Increase in the house rent component in CPI
Implementation of GST, and Announcement of large farm loan waivers and higher deficits of states.
👉 Back2Basics:
Know everything about inflation here.(Prelims worthy)
#GS3 #Economy
@UPSC_2018
Karpathuias.blogspot.in
📝 What is Inflation?
Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. Under conditions of inflation, the prices of things rise over time. Put differently, as inflation rises, every dollar you own buys a smaller percentage of a good or service. When prices rise, and alternatively when the value of money falls you have inflation.
The value of a dollar (or any unit of money) is expressed in terms of its purchasing power, which is the amount of real, tangible goods or actual services that money can buy at a moment in time. When inflation goes up, there is a decline in the purchasing power of money.
👉 For example
If the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year. After inflation, your dollar does not go as far as it did in the past. This why a pack of gum cost just $0.05 in the 1940’s – the price has risen, or from a different perspective, the value of the dollar has declined.
#Prelims #GS3 #Economy
@UPSC_2018
📝 What is Inflation?
Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. Under conditions of inflation, the prices of things rise over time. Put differently, as inflation rises, every dollar you own buys a smaller percentage of a good or service. When prices rise, and alternatively when the value of money falls you have inflation.
The value of a dollar (or any unit of money) is expressed in terms of its purchasing power, which is the amount of real, tangible goods or actual services that money can buy at a moment in time. When inflation goes up, there is a decline in the purchasing power of money.
👉 For example
If the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year. After inflation, your dollar does not go as far as it did in the past. This why a pack of gum cost just $0.05 in the 1940’s – the price has risen, or from a different perspective, the value of the dollar has declined.
#Prelims #GS3 #Economy
@UPSC_2018
#KarpathuIAS
📝 India gets direct access to swiss accounts
🔴 What has Switzerland ratified?
Switzerland Friday ratified automatic exchange of financial account information (AEOI) with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money, even as it sought strict adherence to confidentiality and data security.
🔘 Adopting the dispatch on introduction of the AEOI, a global convention for automatic information exchange on tax matters, the Swiss Federal Council said the implementation is planned for 2018 and the first set of data should be exchanged in 2019.
🔘 The council, which is the top governing body of the European nation, will soon notify the Indian government about the exact date from which the automatic exchange would begin.
As per the draft notification approved by the council in its meeting on Friday, the decision is not subject to any referendum — which means there should be no further procedural delay in its implementation.
🔘 The council said the proposal to introduce AEOI with India and others “met with widespread approval from the interested parties who voiced their opinions in the consultations“.
🔘 “In concrete terms, the AEOI will be activated with each individual state or territory by means of a specific federal decree within the framework of this dispatch,” it added.
🔘 The exchange of information itself will be carried out based on the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information, which in turn is based on the international standard for the exchange of information developed by the Organisation for Economic Co-operation and Development (OECD).
The council said it will prepare a situation report before the first exchange of data, which is planned for autumn 2019.
🔴 Why is Switzerland forced to share information?
For decades, Switzerland was the place where money went to hide. Cash sent to its mountain sanctuaries was protected by some of the strictest secrecy laws in the world.
🔘 But the euro crisis of 2011 saw Switzerland's strict banking secrecy come under assault from countries such as Germany and Britain as never before.
🔘 The council that serves as Switzerland's executive branch had to start looking into steps toward banking transparency after having been threatened with painful isolation if it did not agree to reforms.
🔘 There have also been continuous global efforts to crackdown on illicit fund flows in the system and do away with banking secrecy practices.
#GS3 #Economy
@UPSC_2018
📝 India gets direct access to swiss accounts
🔴 What has Switzerland ratified?
Switzerland Friday ratified automatic exchange of financial account information (AEOI) with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money, even as it sought strict adherence to confidentiality and data security.
🔘 Adopting the dispatch on introduction of the AEOI, a global convention for automatic information exchange on tax matters, the Swiss Federal Council said the implementation is planned for 2018 and the first set of data should be exchanged in 2019.
🔘 The council, which is the top governing body of the European nation, will soon notify the Indian government about the exact date from which the automatic exchange would begin.
As per the draft notification approved by the council in its meeting on Friday, the decision is not subject to any referendum — which means there should be no further procedural delay in its implementation.
🔘 The council said the proposal to introduce AEOI with India and others “met with widespread approval from the interested parties who voiced their opinions in the consultations“.
🔘 “In concrete terms, the AEOI will be activated with each individual state or territory by means of a specific federal decree within the framework of this dispatch,” it added.
🔘 The exchange of information itself will be carried out based on the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information, which in turn is based on the international standard for the exchange of information developed by the Organisation for Economic Co-operation and Development (OECD).
The council said it will prepare a situation report before the first exchange of data, which is planned for autumn 2019.
🔴 Why is Switzerland forced to share information?
For decades, Switzerland was the place where money went to hide. Cash sent to its mountain sanctuaries was protected by some of the strictest secrecy laws in the world.
🔘 But the euro crisis of 2011 saw Switzerland's strict banking secrecy come under assault from countries such as Germany and Britain as never before.
🔘 The council that serves as Switzerland's executive branch had to start looking into steps toward banking transparency after having been threatened with painful isolation if it did not agree to reforms.
🔘 There have also been continuous global efforts to crackdown on illicit fund flows in the system and do away with banking secrecy practices.
#GS3 #Economy
@UPSC_2018