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US Federal raises interest rates by 25bps, first in nine years

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The US Federal Reserve on Wednesday announced to increase the key interest rates by a quarter point, ending an extraordinary seven-year-long period of easy money and near-zero rates in the world’s biggest economy.

Federal Reserve Chairwoman Janet Yellen made the much-awaited announcement, lifting its key rate by a quarter-point to a range of 0.25 per cent to 0.5 per cent, the first hike in nearly a decade, signalling the US economy has finally recovered sufficiently from the severe recession that started with 2008 economic crisis.
In a statement, the Federal Reserve said economic activity has been expanding at a moderate pace and should accelerate by 2016.

“Given the economic outlook, and recognising the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 per cent,” the Federal Reserve said.

The move, which was widely expected, marks the end of near decade-long era of easy money when the Federal Reserve pumped billions of dollars in the US economy to fend off another Great Depression like situation in the country.

In a statement, the Federal Reserve said economic activity has been expanding at a moderate pace and should accelerate by 2016.

Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further; however, net exports have been soft, it added.

“The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labour market conditions and a return to 2 per cent inflation,” the statement said.

“With gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labour market indicators will continue to strengthen,” the Fed said in its official statement.

The statement also suggested that further rate hikes would be “gradual” and follow the pace of the US economic recovery, indicating the Central bank is planning to maintain historically low interest rates well into 2016 as well. The 0.25 per cent hike in its federal funds rate will be followed only by “gradual adjustments” and can be slowed if economic activity doesn’t expand at an expected pace, Yellen said.

Admitting, there still remain some risks to a full-throttled recovery of the US economy, Yellen said “these risks appear to have lessened since last summer”. The announcement also pushed US stocks a bit higher.

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BSNL employees plan hunger strike on Monday

Due to the delay in the 4G spectrum allotment and non-availability of funds, BSNL was unlikely to launch 4G services by the end of 2020, it said and added it was quite grim situation for employees.

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New Delhi, Feb 22 : The All Unions and Associations of BSNL (AUAB) has decided to organise a country-wide hunger strike on February 24 for early implementation of the cabinet decisions on the Bharat Sanchar Nigam’s revival.

The strike is also aimed at putting pressure for the expeditious settlement of employees’ grievances, according to an AUAB statement here on Saturday.

Last year the cabinet approved a Rs 69,000 crore revival package for both BSNL and MTNL. The salient features of the package included allotment of 4G spectrum, issuing sovereign guarantee for raising Rs 15,000 crore (Rs 8,500 for BSNL and Rs 6,500 for MTNL) funds via long-term bonds, monetisation of assets and implementation of voluntary retirement scheme.

Of these, only the VRS has been implemented and 78,569 BSNL employees have been sent home. The BSNL has not been allotted 4G spectrum. Similarly, the sovereign guarantee is awaited. The process of monetisation of BSNL’s assets is also moving slowly, according to the statement.

The Supreme Court’s recent judgement on the AGR calculation had created uncertainties in the telecom sector, due to which banks were unwilling to extend loans to BSNL, the AUAB said.

Due to the delay in the 4G spectrum allotment and non-availability of funds, BSNL was unlikely to launch 4G services by the end of 2020, it said and added it was quite grim situation for employees.

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OYO announces bug bounty programme to strengthen security

OYO has accordingly developed an improved responsible disclosure policy to encourage honest and responsible reporting of any potential risks.

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New Delhi, Feb 22 : Hospitality unicorn OYO has said that it will introduce a bug bounty programme towards ensuring that there is a credible and continuous flow of positive feedback from independent security groups and individual researchers to mitigate against any bug or shortfall in the company’s systems.

This is in line with the established practice of recognition and reward for ethical hackers who help responsibly investigate shortfalls within the tech architecture of several tech companies including the likes of Facebook, Google etc., OYO said in a statement this week.

OYO has accordingly developed an improved responsible disclosure policy to encourage honest and responsible reporting of any potential risks.

Additionally, OYO has partnered with a specialised cybersecurity startup, AppSecure/Hackerhive, that connects companies and ethical hackers to help the former discover and fix security vulnerabilities.

“In today’s digital world, a cyberattack is a real concern. Hence, in line with our efforts to continually improve, we are investing in ethical hacking programmes as well,” said Anil Goel, Group Chief Technology and Product Officer at OYO.

OYO said it has also joined hands with other technology companies to address the issue of increasing online frauds and save guests from cybercrimes.

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Fiscal deficit as GDP percentage touched 4.56% in Dec: Finance Ministry data

Out of total government expenditure of Rs 21.09 lakh crore, which is 76 per cent of the BE, revenue expenditure was Rs 18.54 lakh crore and capital expenditure Rs 2.55 lakh crore.

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National debt under Modi govt surges

New Delhi, Feb 21 : Fiscal deficit as a percentage of GDP touched 4.56 per cent as of December 2019 with total receipts pegged at Rs 11.77 lakh crore against a higher expenditure of Rs 21.09 lakh crore, data of government accounts showed.

For the fiscal 2019-20 (till March 31, 2020), the fiscal deficit has been revised to 3.8 per cent now.

Gross tax collection was Rs 13.83 lakh crore (53 per cent of the Budget estimates). The net tax revenue of the Central government was at Rs 9.04 lakh crore which was 55 per cent of the BE, after deducting devolution to the states to the tune of Rs 4.76 lakh crore and Rs 2,480 crore towards NDRF.

The non-tax revenue accrued to the Centre was Rs 2.41 lakh crore whereas other receipts were pegged at Rs 31,000 crore. The government released Rs 54,621.14 crore to the states as their share in central taxes and duties as well as Rs 6,989.38 crore as recommended by the Finance Commission in January.

In December 2019, the states received Rs 7,499.89 crore as recommended by the Finance Commission and the government released Rs 2,714.03 crore towards various schemes. In January 2020, the states received much lower Rs 101.29 crore.

Out of total government expenditure of Rs 21.09 lakh crore, which is 76 per cent of the BE, revenue expenditure was Rs 18.54 lakh crore and capital expenditure Rs 2.55 lakh crore.

Fiscal deficit was pegged at Rs 8.07 lakh crore, which was 11 per cent of BE.

“As a percentage of the GDP, fiscal deficit is 4.56 per cent. The revenue receipts are sufficient to cover only 56 per cent of the expenditure,” the Accounts Review Report of the Finance Ministry said.

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