The Most Important Current Affairs April 2020
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The Monthly Hindu Review | Current Affairs | April 2020 The Most Important Current Affairs April 2020 Government of India reviews extant Foreign The above revision in the para 3.1.1 of the Direct Investment (FDI) policy “Consolidated FDI Policy, 2017” is supposed to be implemented from the date of Foreign Exchange The Government of India has reviewed the extant Management Act (FEMA) notification. Foreign Direct Investment (FDI) policy. This amendment in the FDI policy has been made to curb the RBI announces measures to mitigate impact of opportunistic takeovers/acquisitions of Indian companies COVID-19 due to the ongoing COVID-19 pandemic. To achieve this objective, the Government of India has amended the para Reserve Bank of India has announced a set of measures 3.1.1 of extant FDI policy as contained in “Consolidated to mitigate the effect of COVID-19. RBI has kept in view FDI Policy, 2017″. the following objectives in order to mitigate the impact of The Department for Promotion of Industry and Internal COVID-19 on Indian economy: Trade has officially issued a notice regarding the changes • To maintain adequate liquidity in the system and its in the para 3.1.1 of the “Consolidated FDI Policy, 2017” constituents in the face of Covid-19 related with “Press Note No. 3(2020 Series)”. Here is the old as dislocations. well as the new statements under para 3.1.1 of • To facilitate & incentivise bank credit flows. “Consolidated FDI Policy, 2017”. • To ease the financial stress. • About the existing rules: Present Position According • To enable the formal functioning of markets. to the Chapter:3 of the Consolidated FDI Policy, 2017, under the section titled “Eligible investors”, para To fulfill the above objectives, the Reserve Bank of 3.1.1 states that: A non-resident entity can invest in India has taken the following measures: India, subject to the FDI Policy except in those • RBI has decided to undertake targeted long-term sectors/activities which are prohibited. However, a repo operations (TLTRO-2.0) for total amount of Rs citizen of Bangladesh or an entity incorporated in 50,000 crore to begin with in tranches of appropriate Bangladesh can invest only under the Government sizes. RBI might increase this amount in future as per route. Further, a citizen of Pakistan or an entity requirement. incorporated in Pakistan can invest, only under the • The funds availed by banks under TLTRO-2.0 should Government route, in sectors/activities other than be invested in grade bonds, Commercial Papers, Non- defence, space, atomic energy and sectors/activities Convertible Debentures of NBFCs with at least 50% prohibited for foreign investment. going to mid-sized NBFCs and MFIs. • After the amendement in the Para 3.1.1 of the • RBI has announced the allocation of Rs 50,000 crore Consolidated FDI Policy, 2017, para 3.1.1 (2020 as special refinance facilities to All India financial Series) states that: Revised Position institutions (AIFIs) such as NABARD, SIDBI, NHB to 3.1.1(a) A non-resident entity can invest in India, subject enable them to meet sectoral credit needs. These to the FDI Policy except in those sectors/activities which advances to the above organizations will be charged are prohibited. However, an entity of a country, which as per the RBI policy repo rate of 4.40%. shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment. 3.1.1(b) In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the para 3.1.1(a), such subsequent change in beneficial ownership will also require Government approval. 1 www.bankersadda.com | www.sscadda.com | www.careerpower.in | Adda247 App The Monthly Hindu Review | Current Affairs | April 2020 • Out of total allocation of Rs 50,000 crore, National Foreign Trade Policy 2015-2020 extended for Bank for Agriculture and Rural Development one year (NABARD) will receive the amount of Rs 25,000 The Government of India has granted the extension to crore for the refinancing of Regional Rural Banks, the Foreign Trade Policy (FTP) by another one year i.e. cooperative banks and microfinance institutions. up to 31st March, 2021. The FTP was implemented on • Out of total allocation of Rs 50,000 crore, Small 1st April, 2015 for 5 years and was valid upto 31st March, Industries Development Bank of India (SIDBI) will 2020. The decision to extend the validity of the Foreign Trade Policy (FTP) was taken in view of the receive Rs 15,000 crore or on-lending and unprecedented current situation arising out of the refinancing to scheduled commercial banks, non- pandemic Novel COVID-19. banks and microfinance institutions. Some key changes made by Union Commerce and • The National Housing Bank will receive Rs 10,000 Industry Ministry in the FTP are as follows: crore to support housing finance companies. • Benefit under all the Export Promotion Schemes • RBI has also decided to reduce the reverse repo except SEIS, available as on date, will remain available rate under the liquidity adjustment facility (LAF) by for another 12 months i.e. upto 31st March, 2021. 25 basis points from 4% to 3.75% with immediate • Validity period of the Status Holder Certificates is also effect while the policy repo rate will remain extended. unchanged at 4.4%, Marginal Standing Facility (MSF) • Exemption from payment of IGST and Compensation rate and the Bank rate will remain unchanged at Cess on the imports made under Advance/EPCG 4.65%. Authorisations and by EOUs etc. has been extended till 31st March, 2021. • To provide greater comfort to the states for • The scheme for providing “Transport Marketing undertaking COVID-19 containment and mitigation Assistance on the specified Agricultural Products” has efforts, the RBI has increased the ways and means been extended for one year. advances (WMA) limit of states by 60% over and • Extension in time has been allowed for filing various above the level as on March 31, 2020. The increased Reports/Returns etc. under various provisions of the limit will be available till September 30, 2020. FTP. • In respect of all accounts for which lending • Last dates for applying for various duty credit Scrips institutions decide to grant moratorium or deferment, (MEIS/SEIS/ROSCTL) and other Authorisations have and which were standard as on March 1, 2020, it has been extended. been decided that the 90-day NPA norm shall Asian Development Bank releases Asian exclude the moratorium period. It indicates that there Development Outlook 2020 would an asset classification standstill for all such accounts from March 1, 2020 to May 31, 2020. • The Asian Development Bank has released its • RBI decides to extend the period for resolution plan annual economic publication “Asian Development by 90-days, citing the challenges faced during the Outlook 2020”. In its annual flagship economic publication “Asian Development Outlook 2020”, the resolution of stressed assets in the current volatile Asian Development Bank has projected India’s environment. growth to slow down to 4% in the current fiscal year • In view of the COVID-19 related economic shocks, the i.e. 2020-2021. The ADB has cited weak global RBI has refrained the scheduled commercial banks demand and the government’s novel coronavirus and cooperative banks from making any further containment efforts for the slow down in Indian dividend payouts from profits pertaining to the economy. financial year ended March 31, 2020 until the further • While for fiscal year 2021-2022, the Asian instructions. Development Bank has projected India’s growth to strengthen to 6.2%, boosted by government reforms. To ease the liquidity position at the level of individual The Asian Development Bank has also estimated the institutions, the RBI has brought down the Liquidity growth in South Asia to decelerate to 4.1% in the Coverage Ratio (LCR) requirement for Scheduled fiscal year 2020-2021, hence will face a milder slowdown. Although, the bank expects the growth in Commercial Banks from 100% to 80% with immediate South Asia to recover to 6% in the fiscal year 2021- effect. 2022. 2 www.bankersadda.com | www.sscadda.com | www.careerpower.in | Adda247 App The Monthly Hindu Review | Current Affairs | April 2020 PM, President and MPs Salary Cut by 30% , • The cabinet also approved temporary suspension of MPLAD funds suspended for 2 years MPLAD (Member of Parliament Local Area Development) fund scheme during 2020-21 and • The Union Cabinet approved an ordinance amending the salary, allowances and pension of Members of 2021-22, and the funds will be used for managing Parliament Act, 1954, to reduce the allowances and health services and the adverse impact of COVID-19 pension by 30% starting April 1, 2020, for a year. pandemic in the country. All Members of Parliament (MPs), including Prime • Rs 7,900 crore from the MPLADS scheme will go to Minister Narendra Modi and his Council of Consolidated Fund of India. The Rs 10 crore from each Ministers, would be taking a 30% salary cut due to MPLAD fund will now go to the Consolidated Fund of the impact of the novel coronavirus. India for “managing health and the adverse impact of • Indian President, Vice President and all state the outbreak of COVID-19 in India”.