Daily Financial News Analysis – 23rd Dec’19 – Free PDF Download

Financial Action Task Force (FATF)

• FATF: global watchdog for terror  financing
• It sought more clarifications and data  from Pakistan on actions taken by it  against madrassas belonging to the  banned outfits.
• FATF kept Pakistan on the Grey List for  an extended period till February 2020.
• Islamabad would be put on the Black List if it did not comply with the remaining 22 points in a list of 27 questions.

• Jamat-ud  Dawah:  300  seminaries and schools.
• March 2019: Punjab police said that government seized control of 160 madrassas, 32 schools, two colleges, four hospitals, 178 ambulances and 153 dispensaries associated with the JuD.
• At least 56 madrassas and facilities being run by the JuD and FIF in southern Sindh province were also taken over by authorities in the same month.
• Saeed-led JuD is believed to be the front organisation for the Lashkar-e-Taiba
• Pakistan has been given 08|Jan|2020  deadline to respond to the  150  questions.
• Next FATF meeting: 21-24|Jan|2020,  Beijing
• Pakistan expects another relaxation  probably up to June 2020 in the FATF’s  upcoming plenary review meeting.

Fiscal Stress

• Due to sluggish growth in tax revenues, state governments have been   compelled  to  cut  their  capex  in  the current fiscal.
• This could weaken that one pillar of  the economy — government  expenditure.
• In last 2 years, government  expenditure has provided much-  needed support to the economy.
• Two-thirds of the general government capex is contributed by the states.
• Slashing of capex by states from the  budgeted levels  could deepen  the  economic slowdown.
• Centre has accelerated its capital  expenditure amid weak growth in tax  revenues and  asked  the companies  owned by it to invest more to address  the demand slump in the economy.
• The delayed payments due to the  inadequacy of the relevant cess  proceeds.
• A big overall GST revenue shortfall.
• The states’ revenue from their own  taxes like stamp duty, registration  fee, sales tax etc is also down.
• Many states have already sought the  Centre’s consent to allow their fiscal  deficit to widen to 4% instead of 3%  mandated by the FRBM.

WEF’s 50th Annual Meeting

• Union ministers  Piyush Goyal and  Mansukh Mandaviya as well as three  chief ministers – Amarinder  Singh,  Kamal Nath and B S Yeddyurappa.
• Over 100 Indian CEOs and thousands  of rich and powerful from across the  globe will be in Davos.
• Over 3,000 global leaders  would  converge to discuss what requires to  make it a ‘cohesive and sustainable  world’.

• The WEF has said the 2020 meeting aims to give a concrete meaning to “stakeholder capitalism“, assist governments and international institutions in tracking progress towards the Paris Agreement and the Sustainable Development Goals, and facilitate discussions on technology and trade governance.

Methanol Blending

• The government is looking at introducing methanol-blended fuel pan India.
• It can potentially reduce one’s fuel bill by at least 10%.
• Lower vehicular pollution levels by over 30%.
• Save the exchequer Rs 5,000 crore in annual import bill.
• Currently, vehicles in India use up to 10% ethanol-  blended fuel.
• Cost  of  ethanol  production  is  comparatively  high  at Rs 42 a litre.
• Methonol, or methyl alcohol, is estimated to cost less  than Rs 20 a litre.
• NITI Aayog had projected annual reduction of $100  billion in crude imports by 2030 if the country moves  to 15% blended fuel both for transportation and  cooking.

• India is the third-biggest oil importer globally.
• Our crude oil import stands at close to  Rs 5 lakh crore annually with 2,900  crore litre petrol and  9,000 crore  litre diesel consumed.
• Methanol is currently being manufactured at Assam Petrochemicals.
• current production capacity is 100 tonnes per day
• Online Platforms Don’t Cooperate
• Government officials have told a Rajya  Sabha panel looking into the issue of  pornography on social media and its  effects on children.

1. Do  not  cooperate  with  law  enforcement  agencies.
2. End-to-end encryption excuse
3. They  don’t  even  honour  lawful  requisitions

• Earlier this month, an ad-hoc committee of the Rajya  Sabha  was  formed  by  the Upper  House  Chairman  M. Venkaiah Naidu on the “alarming issue” of pornography on social media and its effects on children and society as a whole.
•  The panel, which includes 14-members from ten  political parties, has held several meetings on the issue.
•  The committee, chaired by Congress MP Jairam  Ramesh, is expected to submit a report next month.
• Appearing before the panel, MEITY in a  note said the ministry faces many legal  challenges from social media platforms on  the issue of pornography as their servers  are abroad and they “claim to be governed  by laws of hosting country when  information for investigation is sought”.
• While in some cases, only meta data is  shared.
• For majority cases either mutual legal  assistance treaty or letter rogatory is  insisted upon which is a very time-  consuming process.

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