Current Issues (October - November 2019)
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ACE Engineering Publications (A Sister Concern of ACE Engineering Academy, Hyderabad) Hyderabad Delhi Pune Bhubaneswar Bengaluru Chennai Vijayawada Visakhapatnam Tirupati Kolkata Ahmedabad ESE (Prelims) Current Issues (October - November 2019) ACE is the leading institute for coaching in ESE, GATE & PSUs Address: Sree Sindhi Guru Sangat Sabha Association, # 4-1-1236/1/A, King Koti, Abids, Hyderabad-500001. Ph: 040-23234418 / 19 / 20 / 21, 040 - 24750437 15 All India 1st Ranks in ESE 48 All India 1st Ranks in GATE Copyright © ACE Engineering Publications All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, digital, recording or otherwise, without the prior permission of the publishers. Published at: ACE Engineering Publications Sree Sindhi Guru Sangat Sabha Association, # 4-1-1236/1/A, King Koti, Abids, Hyderabad – 500001, Telangana, India. Phones: 040- 40044403 / 040-23234419 Website: aceengineeringpublications.com Email: [email protected] [email protected] Authors: Subject experts of ACE Engineering Academy, Hyderabad While every effort has been made to avoid any mistake or omission, the publishers do not owe any responsibility for any damage or loss to any person on account of error or omission in this publication. Mistakes if any may be brought to the notice of the publishers, for further corrections in forthcoming editions, to the following Email-id. Email : [email protected] Current Issues (October – November 2019) ECONOMY 1. BHIM UPI goes International: BHIM app has gone international with a pilot demo of BHIM UPI QR- based payments beginning at the Singapore FinTech Festival 2019. This QR code-based system would allow anyone with a BHIM app to scan the SGQR at NETS terminals for payments in Singapore.The project is being jointly developed by NPCI and NETS of Singapore. It is targeted to go live by Feb 2020. 2. ECONOMY REVIVAL MEASURES : Recently, various measures were announced to revive the economy. 1. Monetary Policy Measures: Repo rate cut - Repo rate has been brought down to 5.4% to spur credit growth 2. Monetary Policy Transmission: Linking floating rate loans extended to both retail consumers as well as MSMEs to external benchmarks (e.g. repo rates, yield on 3/6 months treasury bill) to improve monetary policy transmission 3. Higher flow of funds to NBFC sector: RBI relaxed liquidity norms to allow more lending to non-banking finance companies (NBFCs) by banks 4. Measures to boost exports, housing sector, manufacturing sector Impact of the reforms Improve private investment: Tax cuts, by putting more money in the hands of the private sector, can offer people more incentive to produce and contribute to the economy, which, in turn, will create employment. Helps to attract investors: A cut in corporate taxation rate will put India at parity with East Asian economies and will make India more competitive on the global stage Boost consumer demand: With lower tax rates in place, the firms may cut prices in order to attract consumers, which in turn will boost consumer demand Increase in fiscal capacity: The reforms have the potential to revive the economy, help boost tax collections and compensate for the loss of revenue. 3. PRADHAN MANTRI KISAN MANDHAN YOJANA (PM-KMY) : PM-KMY is an old age pension scheme for all land holding Small and Marginal Farmers (SMFs) in the country with a view to provide social security net as they have minimal or no savings to provide for old age and to support them in the event of consequent loss of livelihood. It is a voluntary and contribution-based pension scheme for farmers in the entry age group of 18 to 40 years and a monthly pension of Rs. 3000 will be provided to them on attaining the age of 60 years. The beneficiary is required to contribute Rs 100 per month in the pension fund at median entry age of 29 years, with matching contribution of Rs 100 by the Central Government. ACE Engineering Publications Hyderabad • Delhi • Pune • Bhubaneswar • Bengaluru • Chennai • Vijayawada • Vizag • Tirupati • Kolkata • Ahmedabad 2 Oct. – Nov. - 2019 The Life Insurance Corporation of India (LIC) will be the Pension Fund Manager and responsible for Pension pay out. In case of death of the farmer before retirement date, the spouse may continue in the scheme by paying the remaining contributions till the remaining age of the deceased farmer. If the farmer dies after the retirement date, the spouse will receive 50% of the pension as Family Pension. After the death of both the farmer and the spouse, the accumulated corpus shall be credited back to the Pension Fund. 4. URBAN COOPERATIVE BANKS (UCB) Recently, Reserve Bank of India (RBI) imposed restrictions on withdrawals from the Punjab and Maharashtra Cooperative (PMC) Bank, one of the largest urban cooperative lenders. Bank was put under regulatory restriction under Section 35A of the Banking Regulation Act, for a period of six months due to irregularities like fraudulent loans, excessive lending to Housing Development & Infrastructure Ltd (HDIL) etc. The bank has been barred from granting, renewing and loans and advances, make any investments and accept fresh deposits, without the prior written approval from the RBI. The financial robustness of UCBs has been assessed through CAMELS (capital adequacy; asset quality; management; earnings; liquidity; and systems and control) ratings. • With many of these banks failing, and the RBI encouraged weak ones to merge, the number of UCBs operating in India has shrunk from 1,926 in 2005 to 1,551 by 2018. About Urban Cooperative Banks (UCB) These banks were born out of the concept of cooperative credit societies where members from a community band together to extend loans to each other, at favourable terms. Broadly, co-operative banks in India are divided into two categories - urban and rural 5. BHARAT -22 ETF Recently, fourth tranche also known as Further Fund Offer-2 (FFO-2) of Bharat 22 Exchange Traded Fund (ETF) was launched. An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. The Bharat 22 ETF invests in 22 stocks of Central Public Sector Enterprises (CPSE), Public Sector Banks and private companies which are Strategic Holding of Specified Undertaking of Unit Trust of India (SUUTI). It is the second ETF from Govt. of India after CPSE ETF which comprises only state-run companies as its constituents. Proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year. ACE Engineering Publications Hyderabad • Delhi • Pune • Bhubaneswar • Bengaluru • Chennai • Vijayawada • Vizag • Tirupati • Kolkata • Ahmedabad 3 Current Issues - 2019 6. PRIVATE PLAYERS IN RAILWAYS India’s first private train, Tejas Express, was recently flagged off on the Lucknow-Delhi-Lucknow corridor. Indian Railways’ commercial tourism and catering arm, IRCTC has been given the task of operating two premium trains as a private entity. 2nd private train will soon be run on the Mumbai- Ahmedabad-Mumbai sector. • Additionally, the Government is in the process of forming a task force to draw a blueprint for handing over operations of 150 trains and 50 railway stations to private operators. Current status of FDI in Indian Railways 100% FDI is allowed under automatic route in most of areas of railway like high speed trains, railway electrification, passenger terminal, mass rapid transport systems, railway infrastructure etc. However, FDI are not allowed in train operations due to safety concerns. 7. STRATEGIC DISINVESTMENT The Union Cabinet headed by Prime Minister approved the new Strategic Disinvestment policy under which the Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance has been made the nodal department for the strategic stake sale. DIPAM and NITI Aayog will now jointly identify PSUs for strategic disinvestment Strategic Sale. The Disinvestment commission defines Strategic Sale as, “The sale of substantial portion of the Government shareholding of a central public sector enterprise (CPSE) of upto 50%, or such higher percentage as the competent authority may determine, along with transfer of management control”. Unlike the simple disinvestment, Strategic sale implies some sort of privatization 8. CONTRACT FARMING It involves agricultural production (including livestock and poultry) being carried out on the basis of a preharvest agreement (or forward contracts) between the buyers (such as food processing units and exporters) and producers (farmers or farmer organisations). Tamil Nadu has become the first State to enact a law on contract farming based on the lines of Model Contract Farming Act, 2018 of the Central Government. Model Contract Farming Act, 2018 The act lays special emphasis on protecting the interests of the farmers, considering them as weaker of the two parties entering into a contract. It ensures buying of entire pre-agreed quantity from producer at fixed pre-agreed price and quality standards as per the contract. It includes all categories of agronomic and horticulture crops, livestock, dairy, poultry and fishery. All services in the agriculture value chain, including pre-production, production (including extension services) and post-production services, are under its ambit. ACE Engineering Publications Hyderabad • Delhi • Pune • Bhubaneswar • Bengaluru • Chennai • Vijayawada • Vizag • Tirupati • Kolkata • Ahmedabad 4 Oct. – Nov. - 2019 9. NOBEL PRIZE IN ECONOMICS Indian-American economist Abhijit Banerjee has won the 2019 Nobel Prize in Economics, along with Esther Duflo of the Massachusetts Institute of Technology and Michael Kremer of Harvard University “for their experimental approach to alleviating global poverty.” INTERNATIONAL RELATIONS & ISSUES 1. QUAD (Quadrilateral Security Dialogue) : QUAD is an informal but increasingly being formalised, strategic dialogue between the United States, Japan, Australia and India for a free and open Indo-Pacific relation.