ECONOMY CURRENT AFFAIRS MONTHLY

General Awareness Updates – August 2011

Economy / Business:

Eminent economist and former chairman of the Prime Minister’s Economic Advisory Council, Professor Suresh Tendulkar (left), 72, died in Pune.

A member of the Central Board of Directors of the Reserve Bank of India , Mr Tendulkar was well known for his extensive work on poverty. He was Professor of Economics at the Delhi School of Economics, University of Delhi, from 1978 to 2004. He also served as a member of the Economic Advisory Council (EAC) to the Prime Minister from 2004 to 2008 and as its chairman from 2008 to 2009. He also chaired an expert group on the methodology for estimation of poverty constituted by the Planning Commission.

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The Free Trade Agreement (FTA) between India and Malaysia has come into effect from July 1, 2011, giving Indian professionals, like accountants, engineers and doctors, access to the key Southeast Asian nation.

The India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) envisages liberalisation of trade in goods, trade in services, investment and other areas of economic cooperation. Similarly, exports of items such as basmati rice, mangoes, eggs, trucks, motorcycles and cotton garments will attract lower or no duty inMalaysia , thus giving Indian exports a boost.

Sensitive sectors like agriculture, fisheries, textiles, chemicals and automobiles have been given protection from imports without duty or with significant cuts.

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Harish Manwani (right), 57, has been appointed the Chief Operating Officer of Unilever. At present, he heads Unilever’s Asia, Africa, and Central and Eastern Europe units and is also Non-Executive Chairman of Hindustan Unilever.

He began his career with then Hindustan Lever Ltd (now Hindustan Unilever) in 1976 as a management trainee and has spent his entire working life in the multinational. He pursued Master of Management Studies (MMS) from Jamnalal Bajaj Institute of Management Studies (JBIMS) in Mumbai.

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India’s exports registered a robust growth of 46.4 per cent year-on-year in June this year to U.S.$29.2 billion on account of increasing demand in Western markets. Imports, too, grew at a high rate of 42.4 per cent to U.S.$36.9 billion, leaving a trade deficit of U.S.$7.7 billion for the month.

During April-June (Q1 of 2011-12), exports grew by 45.7 per cent to U.S.$79 billion and imports shot up by 36.2 per cent to U.S.$110.6 billion. During the first quarter of the current fiscal, the trade deficit stood at U.S.$31.6 billion.

The exporting sectors that registered strong growth during the quarter include engineering, petroleum products, gems and jewellery, readymade garments, and electronics.

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Iconic American carmaker Chrysler officially came under the Italian flag when FIAT Auto announced it had obtained a majority share after buying out the U.S. government’s stake.

The takeover comes two years after FIAT took a 20 per cent stake in exchange for sharing its technology and providing trusted leadership as Chrysler emerged from a government-backed bankruptcy.

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Honeywell International has acquired EMS Technologies, which supplies communications equipment to the aerospace, defence and trucking industries, for U.S.$506 million.

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Greece fended off a bankruptcythat would have roiled global markets and threatened the future of the euro when lawmakers backed controversial austerity measures in the face of violent protests.

A Greek default would threaten the viability of the euro, the EU’s common currency, and send shock waves through global markets similar to those that kicked off the global financial meltdown after the collapse of Lehman Brothers in 2008.

Investors cheered the bill, which aims to cut spending and raise taxes by €28 billion and raise €50 billion in privatisations over five years – but, in Athens , the mood was dark. The bill - along with another that must be passed on implementing the austerity package - will release the next €12 billion (U.S.$17 billion) instalment of a €110 billion international bailout from the European Union and the International Monetary Fund. But many Greeks complain they have already paid dearly in a year that has seen public sector salaries and pensions cut and unemployment rise to above 16 per cent.

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Tata Motor had filed a writ petition in the Calcutta high court, challenging the Singur Land Rehabilitation and Development Act 2011 and seeking a directive from the court to declare it as unconstitutional and illegal.

The company also contested the manner in which the state government took possession of the land at the Singur site.

The Act provides for taking over the land that had been leased to the company for setting up the Tata Nano small car factory.

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