Current Affairs Current Affairs - 16 April 2018 - Vikalp Education

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Current Affairs - 16 April 2018

General Affairs 

25 Mobile Schools To Migrate With Nomads In Jammu and Kashmir
  • Ahead of the annual migration of nomadic Gujjars and Bakerwal families this month, authorities in Rajouri district of Jammu and Kashmir today said over two dozen schools would move with them to ensure proper educational facilities to students.

    A total of 25 schools having an enrolment of 801 students - 410 boys and 391 girls - will move with the migratory population.

    "These schools have been provided 45 teachers for running the schools in higher reaches during the annual migration to higher reaches in Kashmir, an official spokesman said.

    He said district development commissioner, Rajouri, Shahid Iqbal Choudhary finalised the plan at a meeting of senior officers from various departments and heads of migratory schools along with staff.

    The annual migration of nomadic Gujjars and Bakerwal families is beginning later this month.

    The spokesman said another 41 schools for tribal population would remain stationary which will cater to 1,451 students including 802 boy students and 651 girl students where 95 teachers have been posted.

    Mr Choudhary directed that books and uniform be provided to the students before migration. 

    It was decided in the meeting that apart from educational aids, the department will also provide sports equipment and first aid kits for each migratory school. 

    A comprehensive plan for self-defence training was also discussed and finalised. The students are also being provided scholarship by the Tribal Affairs Department, the spokesman said.

    He said the Chief Education Officer was directed to regularly monitor attendance in migratory schools during the period and the heads of schools were instructed to hold mandatory parent-teacher meetings twice a month during the period of migration. 

    A special squad would check the attendance. Record and pictures of such meetings and classes will have to be shared online, the spokesman said.

    He said Mr Choudhary directed that all girl students would be provided with special education kits this year and scholarship to meritorious students. He asked the departments to lay special focus on skill development and to organise courses for these students which would be monitored by his office.

    The schools migrating to Drass, Kargil, Ganderbal, Anantnag, Gurez, Budgam, Kangan, Dachigham and Sukhnai would be provided with gadgets, stationery, tents, ration and other requirements, the spokesman said. 

    He said other issues related to ration, training, examination, awards to best performers and ICDS support were also discussed in the meeting.

India Looks To China For Speeding-Up Of Bengaluru-Chennai Train Corridor
  • India has sought China's assistance to speed up Bengaluru-Chennai railway corridor besides redevelopment of Agra and Jhansi railway stations, a senior Indian official said today.

    The proposal was made at the Strategic Economic Dialogue (SED) held here between the two countries.

    "We offered them speeding up of Bengaluru-Chennai railway corridor," NITI Aayog Vice Chairman Rajiv Kumar said today.

    The SED was held between delegations headed by Mr Kumar and He Lifeng, the chairman of China's National Development and Reform Commission (NDRC).

    The proposal was made for increasing the speed of the corridor to 150 kmph.

    India previously made a proposal to China for the redevelopment of Agra and Jhansi railway station. It has been reemphasised at yesterday's talks, officials said.

    The Chinese side will respond after considering the proposals, they said.

    Mr Kumar said it was pointed out to the Chinese side that the railway station development plan is a big one involving about 600 of them. They can bid for any of them, he said.

    However, there was no discussion in the just concluded SED about the collaboration to build high speed trains by China in India, he said.

    China has been expressing interest to take up high speed train corridors in India and began conducting a feasibility study for New Delhi and Chennai high speed train corridor.

    The first high-speed train corridor in India between Mumbai and Ahmedabad has been bagged by Japan.

    China has the world's longest high-speed rail network, with 22,000 km within the country linking various top cities.

Top Army Commanders' Conference Starts Tomorrow, Focus On China And Pak
  • Top Army commanders will review the regional security architecture and deliberate on key challenges facing the nation, particularly along the borders with China and Pakistan, at a six-day-long conference beginning in Delhi tomorrow.

    Army officials said the conference, to be chaired by Army chief General Bipin Rawat, will also deliberate on "specific issues" relating to various frontline formations and explore ways to speed up infrastructure development along the border with China.

    There will be detailed discussions about the situation along the borders with China and Pakistan, they said.

    "Important issues that are likely to be discussed are management of the extant security dynamics, mitigation of future security threats and enhancement of combat edge over potential adversaries," Army PRO Colonel Aman Anand said.

    He said other issues like infrastructure development for capacity enhancement along the northern borders, review of strategic railway lines, optimisation of limited budget to ensure making up of critical deficiency in ammunition.

    Officials said a major focus of the conference will be to bolster the Army's overall operational preparedness along the nearly 4,000 km long border with China.

    Troops of India and China were locked in a 73-day standoff in Doklam from June 16 last year after the Indian side stopped building of a road in the disputed area by the Chinese Army. The standoff ended on August 28.

    Sources said India has deployed more troops and increased patrolling along the borders with China following the Doklam standoff.

    Col Anand said issues relating to projects being implemented by the Border Road Organisation as well as matters relevant to welfare of troops will be discussed in detail.

    The Army Commanders' Conference is held biannually for important policy decisions.

    Officials said the conference will discuss the security situation in Jammu and Kashmir.

    There will be subject-specific deliberations during the last three days of the conference which is also likely to discuss implementation of the modernisation process in the Army.

UN Official Tells Pak To Address Issues With India Through Peaceful Means

  • A top UN official has asked Pakistan to address the outstanding issues with India through peaceful means, reiterating Secretary-General Antonio Guterres' concern over heightening tensions along the Line of Control.

    UN Assistant Secretary-General for Political Affairs Miroslav Jenca made the remarks after concluding his visit to Pakistan on April 13.

    He held meetings with Foreign Secretary Tehmina Janjua and Special Secretary Tasnim Aslam in the Ministry of Foreign Affairs on April 12. He also met with representatives of the diplomatic community and members of the United Nations Country Team (UNCT).

    According to a statement released by the UN spokesperson's office, Mr Jenca reiterated that the Secretary-General is concerned about the "heightening tensions" along the Line of Control between India and Pakistan.

    He "echoed the Secretary General's calls for maximum restraint and efforts to de-escalate the situation. Any outstanding issues between the two countries should be addressed through peaceful means," the statement said.

    Mr Jenca underlined in his conversations in Islamabad that Pakistan's commitment to fostering multilateralism and cooperation is important for peace and stability in the region and beyond.

    He welcomed the decision of Pakistan and Afghanistan to increase cooperation through the implementation of the Afghanistan-Pakistan Action Plan for Peace and Solidarity.

    Mr Jenca underscored the importance of this positive momentum for the further advancement of the Afghan-led and Afghan-owned peace and reconciliation process.

    During the visit, Mr Jenca also participated at a medal parade of the UN Military Observation Group in India and Pakistan (UNMOGIP). The ceremony recognised the service of UN peacekeepers deployed to UNMOGIP.

    India maintains that the UNMOGIP has outlived its utility and is irrelevant after the Shimla Agreement and the consequent establishment of the Line of Control.

For Second Time In 12 Hours, Same Train In Madhya Pradesh Derails
  • Two coaches of a passenger train derailed on Sunday near a station in Madhya Pradesh's Katni district. This is the second such incident involving the same passenger train, 51675 Katni-Chopan Express, to have taken place in Katni in the last 12 hours.

    The train ran off the tracks near the Khanna Banjari Station. Five coaches of the same train had derailed last night between Salhna and Pipariyakala in Katni district, leaving six passengers injured, Katni's Sub-divisional officer of police, Hari Om Sharma said. The coaches derailed around 10 pm on Saturday.

    So far, there is no information about the casualties in today's derailment. According to railway officials, repairs are underway.

    The reason for the repeated derailments is not yet clear.

Business Affairs

I-T Dept seizes Rs 440 crore dividend income of Cairn Energy
  • The Income Tax Department has seized a further Rs 440 crore of dividend income due to Cairn Energy Plc to recover a part of the Rs 10,247 crore tax demand it had raised on the British firm using a retrospective tax legislation.

    The tax agency had previously seized Rs 666 crore of dividends due to Cairn from its 4.95 per cent residual holding in Vedanta Ltd. It has also refused to pay tax refund of Rs 1,594 crore due to Cairn as a result of overpayment of capital gains tax to recover the dues.

    Sources said Vedanta, owned by billionaire Anil Agarwal, had last month declared for shareholders a Rs 21.2 a share dividend and a 7.5 per cent payment on preference shares. For Cairn, the total receivable came to about Rs 440 crore. But due to an Income Tax Department order, Vedanta transferred that money to a separate account. This was then taken over by the department.

    The action comes ahead of the beginning of the final hearing in the arbitration initiated by Cairn to oppose the retrospective tax demand which was raised on a 2006 internal reorganisation of the firm's India unit, called Cairn India.

    Cairn India was in 2011 acquired by Vedanta but the British firm continued to hold 9.8 per cent share in the company. Cairn India was last year merged into Vedanta Ltd. On merger, Cairn Energy's holding in Vedanta came to 4.95 per cent.

    When contacted, a spokesperson of CBDT confirmed taking over the dividend saying its assessment order dated March 9, 2015 raised a tax demand of Rs 10,247 crore. "This order was confirmed by the Dispute Resolution Panel on December 31, 2015. However, no demand was paid by the taxpayer at that stage," the spokesperson said.

    Cairn filed an appeal before Income Tax Appellate Tribunal, which on March 9 last year upheld the assessment order.

    "As there is no stay of demand from any court or authority, the entire demand is enforceable. However, as the taxpayer did not pay the demand, the Assessing Officer adjusted the refund for AY 2012-13 amounting to Rs 1,594 crore. Dividend of Rs 666 crore was also adjusted against the pending demand in June 2017," the spokesperson said.

    Stating that the Cairn Energy's shares in Vedanta have been attached, dividend declared by Vedanta of about Rs 440 crore was also collected as tax in March 2018, the spokesperson said.

    "Total recovery in FY 2017-18 comes to Rs 2,700 crore of which the dividend amount is Rs 1,106 crore and recovery by way of refund adjustment is Rs 1,594 crore," the spokesperson added.

    The I-T had in January 2014 used a two-year-old law to raise a Rs 10,247 crore demand on Cairn Energy. The 2012 law gave the government powers to impose taxes retrospectively.

    Following the draft assessment order of January 2014, the tax department attached the company's residual 9.8 per cent shares in its erstwhile subsidiary, Cairn India, and confiscated dividend income it was due to receive. Also, a Rs 1,594 crore income tax refund was also confiscated.

    A final assessment order in January 2016 raised tax demand of Rs 10,247 crore plus an interest of Rs 18,800 crore. However, the interest demand was quashed by the Income Tax Appellate Tribunal in late 2016.

    Following that, the Income Tax Dept issued a revised demand including interest running from February 2016 -- 30 days after the date of the assessment order.

    While interest will be charged on the principal at a rate of 12 per cent a year from February 2016, penalties are assessed as 100 per cent of the principal tax due.

    A three-member international arbitration tribunal is to begin final hearing in August.

Banks' NPAs in Q4 to rise by Rs 8,000 crore on account of Gitanjali Gems
  • Non performing assets (NPAs) or bad loans in the banking sector are set to shoot up by at least Rs 8,000 crore as advances to the scam-hit Gitanjali Gems group have turned bad during the quarter ended March 31.

    Banks will have to make provisioning of Rs 8,000 crore for Gitanjali alone as there has been no servicing of the working capital loan during the fourth quarter of last fiscal, sources said.

    Gitanjali, among others, is the major account which has turned bad in the fourth quarter of 2017-18.

    Gross NPAs of all the banks in the country amounted to Rs 8,40,958 crore in December, led by industry loans followed by services and agriculture sectors, as per the government estimates.

    Gitanjali is promoted by Mehul Choksi, uncle of billionaire diamantaire Nirav Modi, who defrauded Punjab National Bank (PNB) of over Rs 13,000 crore by getting fake Letters of Undertaking/Credit (LoU/LoCs) issued from one of the bank's branches in Mumbai.

    A special CBI court in Mumbai has issued non-bailable warrants (NBWs) against Modi as well as Choksi.

    A consortium of 21 banks led by Allahabad Bank had first extended working capital loan to it in 2010-11. In 2014, ICICI Bank became the lead banker as it had highest exposure of about Rs 900 crore and in line with the revised guidelines of the Reserve Bank of India.

    Till December 2017, the loans to Gitanjali Gems were standard and regular debt servicing was being done. There is no servicing of debt in the last quarter ended March 31, so it has to be declared NPA by all banks, said a senior bank official of the consortium.

    In 2015, the consortium had restructured working capital loans given to Gitanjali under the joint lenders' forum (JLF) mechanism.

    The Gitanjali exposure was classified as a special mention account-2 (SMA-2) in 2014 after the company failed to fulfil its payment obligations for more than 60 days, triggering the formation of a JLF.

    As a result, the company announced consolidation of the business at the group level to improve cash flows and reduce costs in various activities such as sourcing, manufacturing, distribution, exporting and retailing.

    It proposed the merger of three of its subsidiaries Asmi Jewellery India and Spectrum Jewellery with Nakshatra Brands and also the merger of Gitanjali Jewellery Retail and Gitanjali Lifestyle with GILI India.

    Different investigating agencies, including CBI, I-T and Enforcement Directorate, are probing the fraud, which came to light in January, dubbed as the biggest banking scam in the country.

    PNB had issued as many as 1,590 LoUs to Modi, Choksi and their associates.

    The total number of LoUs issued to the companies of Modi, his relatives and the Nirav Modi Group are 1,213, while those to Choksi, his relatives and the Gitanjali Group are 377.

RBI docs from two years ago show no 'quid pro quo' in ICICI loans to Videocon
  • The Reserve Bank of India had two years back conducted a detailed scrutiny to probe allegations of impropriety in ICICI Bank extending loans to Videocon Group but found no proof of any "quid pro quo" or reciprocal benefits, according to RBI documents.

    The RBI had undertaken a scrutiny in mid-2016 after the Prime Minister's Office referred to it allegations of ICICI Bank CEO Chanda Kochhar's husband, Deepak reaping windfall gains from his association with businessman Venugopal Dhoot, whose Videocon Group is a large debtor to ICICI.

    The RBI, which is the regulator for the banking sector, in its first response, sometime in mid-July of 2016, stated that ICICI Bank had sanctioned a loan of Rs 1,730 crore to the Videocon Group in 2012 as part of a debt consolidation programme undertaken through a consortium of banks led by the State Bank of India, according to the documents and sources with direct knowledge of the matter.

    It went on to state that it was difficult to establish any conflict of interest in the sanctioning of the loan but flagged that it was not able to determine the sources of funding in some of the transactions involving Deepak Kochhar's renewable energy venture NuPower.

    The source of funding was critical for ascertaining the legitimacy of NuPower transactions, the RBI had said, adding that it was for investigative agencies to ascertain that.

    Later in December that year, RBI gave a detailed response to allegations of "quid pro quo" in loan sanctioned to the Videocon Group in 2007-08 and 2012, saying ICICI Bank was a part of the debt recast programme of Rs 20,195 crore by a consortium of banks led by SBI, where ICICI Bank's share was Rs 1,750 crore.

    RBI stated that 'quid pro quo' could not be established as ICICI Bank had to take a share like other banks in the consortium, they said.

    The central bank said the transfer of ownership of NuPower Renewables Ltd, which Deepak had set up with Dhoot family in December 2008, by Videocon was an unrelated event outside the banking domain. Such a transfer can only be examined by Sebi (Securities and Exchange Board of India) or Ministry for Corporate Affairs (MCA).

    On the investment in NuPower coming from Mauritius, the RBI had stated that the funds had come under the automatic route and reported to the central bank and no violation was reported.

    According to the RBI papers, the central bank had left it to the Department of Financial Services in the Ministry of Finance to investigate if there was a non-disclosure of related party transaction or if there were FEMA (Foreign Exchange Management Act) violations.

    The RBI, however, raised questions over the ownership of the Mauritius-based entity, First Land Holding, which had invested Rs 325 crore in NuPower. Also, there was no clarity over the alleged Rs 64-crore loan (unsecured fully convertible debentures) given to NuPower by Supreme Energy, which was 99.99 per cent owned by Videocon chief Venugopal Dhoot at that time.

    While Chanda Kochhar sat on the credit committee that approved the loan to Videocon, there are allegations of conflict of interest in her husband's brother, Singapore-based Rajiv Kochhar, performing debt-restructuring work on errant corporate borrowers from ICICI, including Videocon. The restructuring wasn't commissioned by the bank but by the borrowers.

    Last month, the board of ICICI Bank expressed full faith in Chanda Kochhar, whose current tenure as CEO is set to end on March 31, 2019. It had reviewed credit approval processes and found them to be robust, according to a March 28 filing by the Bank.

PNB scam: ICAI seeks explanation from statutory auditors of Brady House branch
  • The Institute of Chartered Accountants of India (ICAI) has sent notices to all statutory auditors of Punjab National Bank's Brady House branch, where the over Rs 13,000 crore scam involving Nirav Modi took place, to appear before its disciplinary board.

    The chartered accountants' apex body has made a list of the statutory auditors of the Brady House branch during 2011-12 to 2016-17, and asked them to appear before its Board of Discipline. Statutory auditors are members of ICAI and are governed by the apex body.

    "ICAI has issued notices to statutory auditors of the Brady House branch under the Chartered Account Act, 1949, to appear before Board of Discipline and offer an explanation," ICAI member S B Zaware told PTI.

    Eight statutory auditors, who had audited the lender's Brady House branch in Mumbai during that period, have been issued notices.

    This is a primary investigation and the board wants to ascertain whether the auditors were at fault.

    "At this point, we cannot say that statutory auditors are guilty. After the auditors appear before the Board and answer questions, is when we will be able to determine their role in the fraud, if any," Zaware added.

    In February, this year, the second largest public sector bank PNB had detected fraudulent transactions at the Brady House branch.

    The biggest ever banking fraud of more than Rs 13,000 crore was allegedly committed by billionaire diamantaire Nirav Modi and his uncle Mehul Choksi in connivance with some PNB officials.

    Following the disclosure of the fraud by PNB, ICAI had formed a high-level group to study systemic issues involved in the scam. The group, after completion of its study, will also suggest remedial measures for strengthening the banking system.

    Zaware said the 10-member group had to seek government's intervention after PNB refused to co-operate with the panel in providing information required to complete its report.

    PNB was issued a letter by Ministry of Corporate Affairs and Ministry of Finance to disclose information to the group.

    The high-powered group, however, is yet to get information from the bank, Zaware, who is also the convenor of the committee, said.

    In its preliminary conclusions, based on available information, the panel found out all possible lapses on part of the lender.

    Lapses in corporate governance and concurrent audit work as well as failure to take sufficient precautionary measures are among the factors flagged by the high-level panel.

    The fraud is being investigated by multiple agencies, including CBI, SFIO and ED.

World Bank's International Finance Corp may get invovled in Air India stake sale
  • As the government awaits expression of interest for Air India stake sale, International Finance Corp (IFC) has said it is "watching the process closely and may get involved at a later stage".

    IFC, part of the World Bank Group, made it clear that it is currently not involved in the Air India disinvestment process.

    The government has came out with a detailed preliminary information memorandum, detailing plans to offload up to 76 per cent stake in debt-laden Air India and transfer the management control to private players.

    However, the ambitious stake sale of Air India as well as its two subsidiaries seem to be hitting air pockets with two potential bidders -- IndiGo and Jet Airways -- deciding to keep away citing the contours of the process.

    While reports have mentioned that various entities, including quite a few global airlines, are interested in Air India disinvestment, there has been no official word about any particular entity.

    At present, IFC is not involved in the Air India disinvestment process, a spokesperson said, adding that normally it does not join the fray during the bidding phase.

    "However, we are committed to bridging development gaps in India and financing transport and logistics is one of our top strategic priorities, as it is for the country.

    "Therefore, we are watching the Air India process closely and may get involved at a later stage. Once the winning bidder is chosen, we will evaluate the situation to see if we have a role to play," the IFC spokesperson told PTI in an e-mailed statement.

    The response came to a query on whether IFC would be interested in the disinvestment process. A global development institution, IFC is focused on the private sector in emerging markets.

    When asked whether Lufthansa would be interested in participating in the disinvestment process, the German airline said, "your assumption is based on market speculation" and that it does not comment on speculation.

    "With a presence of over half a century, India is a strategic market for Lufthansa Group and we are committed to increase our offerings by introducing our latest and most innovative products and services and by providing unrivalled connectivity," it said.

    Queries sent to Britsh Airways, Malaysian Airlines, Etihad Airways and Qatar Airways on whether they are interested in Air India stake sale did not elicit any immediate response. Questions mailed to Air Arabia on whether it would be looking at Air India Express remained unanswered.

    According to the preliminary information memorandum, issued on March 28, the government will retain 24 per cent stake in Air India, while the winning bidder will be required to stay invested in the airline for at least three years.

    The proposed disinvestment will include profit-making Air India Express and joint venture AISATS. The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd.

    The existing debt and liabilities of Air India and Air India Express as on March 31, 2017 would be re-allocated, as per the memorandum.

    "It is expected that debt and liabilities, including net current liabilities of Rs 88,160 million, aggregating to Rs 3,33,920 million will remain with AI and AIXL (no change for AI-SATS except in normal course of business). This number shall be further adjusted to account for material business developments post March 31, 2017 for instance purchases/ delivery of aircraft etc.

    "The balance debt shall be allocated to Air India Asset Holding Limited which is 100 per cent owned by the Government of India subject to receipt of requisite approvals from lenders and regulators, as applicable," the memorandum said. Contingent liabilities will remain with Air India and Air India Express.

    Within the contingent liabilities, income tax, customs duty, as well as service tax and guarantee fee/ penal charges due to the government would continue to remain with Air India. There would be the "government commitment to make it good/ indemnify in case the liabilities are confirmed against Air India," the memorandum said.

    The last date for submission of Expression of Interest (EoI) is May 14 and intimation to the qualified interest bidders would be made on May 28.

    "We welcome the government move to privatise Air India. It is a bold step. However, considering the terms of offer in the information memorandum and based on our review, we are not participating in the process," Jet Airways Deputy CEO & CFO Amit Agarwal told PTI on April 10.

    Last month, sources had said that a consortium of Jet Airways, Air France-KLM and Delta Airlines was understood to have expressed interest in the disinvestment of Air India.

    On April 5, IndiGo President and Whole Time Director Aditya Ghosh said that from day one, the airline has expressed its interest primarily in the acquisition of Air India's international operations and Air India Express.

    "However, that option is not available under the government's current divestiture plans for Air India. Also, as we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India's airline operations," he had said in a statement.

    IndiGo was the first to evince interest in Air India disinvestment when the government had mooted the plan last year.

General Awareness

Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Inflation targeting

  • Context: Making a case for doing away with inflation targeting by the RBI, Economic Advisory Council to the Prime Minister (EAC-PM) member Surjit Bhalla recently said it has made zero impact on prices. Under the new policy framework, the RBI aims to contain inflation at 4% with a band of (+/-) 2%.


    Average inflation in 2017-18 was 3.5%. India’s real interest rate is higher by 2.5%, which is 3rd highest in the world.

    What is inflation targeting?

    Inflation targeting is a monetary policy in which a central bank has an explicit target inflation rate for the medium term and announces this inflation target to the public. It will have price stability as the main goal of monetary policy.
    Many central banks adopted inflation targeting as a pragmatic response to the failure of other monetary policy regimes, such as those that targeted the money supply or the value of the currency in relation to another, presumably stable, currency.

    Why it is good?

    It will lead to increased transparency and accountability.
    Policy will be linked to medium/long term goals, but with some short term flexibility.
    With inflation targeting in place, people will tend to have low inflation expectations. If there was no inflation target, people could have higher inflation expectations, encouraging workers to demand higher wages and firms to put up prices.
    It also helps in avoiding boom and bust cycles.
    If inflation creeps up, then it can cause various economic costs such as uncertainty leading to lower investment, loss of international competitiveness and reduced value of savings. This can also be avoided with targeting.

    Associated concerns:

    Inflation targeting puts too much weight on inflation relative to other goals. Central Banks Start to Ignore More Pressing Problems. Inflation target reduces “flexibility”. It has the potential to constrain policy in some circumstances in which it would not be desirable to do so.

    Not a panacea:

    Inflation targeting has been successfully practiced in a growing number of countries over the past 20 years, and many more countries are moving toward this framework. Over time, inflation targeting has proven to be a flexible framework that has been resilient in changing circumstances, including during the recent global financial crisis. Individual countries, however, must assess their economies to determine whether inflation targeting is appropriate for them or if it can be tailored to suit their needs. For example, in many open economies, the exchange rate plays a pivotal role in stabilizing output and inflation. In such countries, policymakers must debate the appropriate role of the exchange rate and whether it should be subordinated to the inflation objective.

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