Economy This Week (25th Sep to 1st Oct 2021)

Economy is an important part of the UPSC prelims and mains exams; this series titled ‘Economy This Week’ has been initiated to address the need to read and analyse economic articles in various business-related newspapers. The round-up of the Economy/Business section news for 25th Sep to 1st Oct 2021 is given below. Business news is essential for IAS exam preparation.


1. Quarterly Employment Survey (QES) (IE 28/9/21)
2. RBI allows banks to sell ‘fraud loans’ to ARCs (BL 25/9/21)
3. Govt withdraws the spending curbs (BL 25/9/21)
4. Govt notifies mechanism to issue duty credit for goods exported under RoDTEP scheme (BL 25/9/21)
5. Cost effective micro ATMs gain traction (BL 25/9/21)
6. Natural gas prices hiked by 62% (IE 1/10/21)
7. Panel to fix minimum wage reconstituted (ET 29/9/21)

1. Quarterly Employment Survey (QES) (IE 28/9/21)

  • Organised employment in nine sectors has increased to 3.08 Cr from 2.37 Cr in 2013-14 (base year based on the 6th economic census).
    • Employment has grown by 29% overall and annually by 4%.
  • The nine sectors chosen are –
    • Construction
    • Manufacturing
    • IT/BPO
    • Trade
    • Transport
    • Education
    • Health
    • Accommodation and restaurant
    • Financial services
  • The QES (April to June 2021) of All India Quarterly Establishment based Employment Survey (AQEES), will help in:
    • Data based policymaking
    • Execution based on statistics
  • Due to the pandemic, employment has decreased by 27% in establishments.
  • Overall participation of female workers has reduced from 31% to 29%.

2. RBI allows banks to sell ‘fraud loans’ to ARCs (BL 25/9/21)

  • RBI has allowed the banks to transfer the loans classified as fraud to the Asset Reconstruction Companies (ARCs).
  • Banks have reported fraud accounts of ₹ 3.95 lakh Cr between FY19 and FY21.
  • Stressed assets which are in default for over 60 days or classified as NPAs can be transferred to ARCs.
  • Transfer of such accounts however will not absolve the transferor/banks from fixing the accountability for issuing such a loan.
    • Until now if an account is declared as fraud then the banks were to make provision for 100%, now the banks can recover some amount by selling these assets to ARCs.

3. Govt withdraws the spending curbs (BL 25/9/21)

  • Tax collections have shown a rising trend and with this, the govt has withdrawn the spending curbs it had imposed on various ministries and departments.
  • On June 30th, the govt had imposed restrictions on expenditure under 82 of the 101 demands for grants for a three month period starting from July 1.
    • The ministries having these 82 demands for grants were asked to restrict their expenditure to 20% of the BE 2021-22 in the 2nd quarter.
    • The remaining 19 demands for grants had no curbs on the expenditures (health, fertiliser, railways, MSMEs, etc).
  • Accordingly, now the ministries or departments can spend as per their monthly or quarterly expenditure plan for the remaining period.
  • With this, the expenditures of the various ministries/departments are expected to increase in the remaining part of the fiscal.

4. Govt notifies mechanism to issue duty credit for goods exported under RoDTEP scheme (BL 25/9/21)

  • The exporters are to realise and repatriate the sale proceeds within a time period prescribed under FEMA (as on date it is within six months). If they fail to do so then based on the direction given by an authority/officer or by themselves they will have to repay the amount of duty credit along with interest.
  • Under RODTEP, the exporters are given duty credit (amount of credit of duty allowed against the claims under the scheme).
  • The rebate under this would be provided in the form of transferable duty credit/electronic scrips (e-scrip) which will be maintained in an electronic ledger by CBIC.
  • These scrips can be used to pay only the customs duty.
  • The export sectors ineligible such as SEZ, FTWZ, EOUs have also been notified.

5. Cost effective micro ATMs gain traction (BL 25/9/21)

  • The traditional ATMs face issues related to cost and infrastructure. The Micro ATMs are gaining favourability.
  • The micro ATMs –
    • Are portable devices that are used by merchants or business correspondents.
    • These can be used to connect to the bank, authenticate users and perform transactions.
    • These do not hold/store any cash but can be used by the merchant to authenticate the customer and then physically hand over the cash to the customer or collect deposits.
    • Many fin tech companies and banks are partnering to provide banking services and cash withdrawals through these.
  • As per RBI data micro ATMs have increased by over 60% to reach 4.94 lakh by August end (from 3.07 lakh a year ago).
  • In contrast to this there were 2.41 lakh ATMs by August end and have increased by just 3.4% from 2.33 lakh during the corresponding period.
  • Micro ATMs are cost effective.

6. Natural gas prices hiked by 62% (IE 1/10/21)

  • Govt has hiked the price of domestically produced natural gas by 62% to $2.9 mn British thermal units (mmbtu).
  • This is on account of the North American and European gas prices climbing up because of lower production and higher demand.
  • The new prices will be effective for six months starting October 1.
  • This could have adverse impacts –
    • For power and fertiliser industries
    • Spike inflation
    • Strain current account
    • It may also lead to higher fertiliser prices if the govt does not hike the subsidy.
  • The domestic gas prices are linked to weighted average price of four global benchmarks.

7. Panel to fix minimum wage reconstituted (ET 29/9/21)

  • The Labour Ministry has reconstituted the expert group set up for fixing national floor level wage.
  • This has been constituted under the Code on Wages.
  • The panel was headed by Ajit Mishra and now will be headed by S P Mukherjee.
  • Three more members have been added to the committee.

Economy This Week (25th Sep to 1st Oct 2021):- Download PDF Here

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ETW (25th Sep to 1st Oct 2021):- Download PPT Here

For more business news videos and PDFs, keep visiting the ‘Economy This Week’ segment regularly.


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