Prelim Booster News Discussion

LECTURE 11- ECONOMY

APRIL, 2019
 Corporate Equality Index

Why In • HRC Releases Annual Corporate Equality Index with

News 571 Top U.S. Companies Earning Perfect Scores

Human Rights Campaign Foundation

releases Corporate Equality Index (CEI)
annually.

It is the national benchmarking tool on

corporate policies and practices pertinent
to lesbian, gay, bisexual, transgender and
queer employees.
 Corporate Equality Index

CEI rating Non-discrimination policies across business

criteria entities;
have
three key Equitable benefits for LGBTQ workers and their
pillars: families;

Supporting an inclusive culture and corporate

social responsibility.
ATAL RANKING OF INSTITUTIONS ON INNOVATION ACHIEVEMENTS

• IIT Madras also emerged as the 'Top innovative Institution' in the

Why In country in the maiden edition of the Atal Ranking of Institutions on
News Innovation Achievements (ARIIA) released by the President of India Ram
Nath Kovind.

Atal Ranking of Institutions on Innovation

Achievements (ARIIA) is an initiative of
innovation cell of Ministry of Human Resource
Development (MHRD).
Objective: To rank all major higher educational
institutions and universities in India on indicators
related to “Innovation and Entrepreneurship
Development” amongst students and faculties.
 ATAL RANKING OF INSTITUTIONS ON INNOVATION ACHIEVEMENTS

Major Budget, Expenses to Support & Revenue Generated (20 Marks)

Indicators for
consideration: Infrastructures & Facilities to Support Innovations and Start-ups (10
Assessment Marks)
will be based Awareness Activities for Promoting Idea Generation and Innovation (20
on Seven Marks)
parameters
Promotion and Supporting Entrepreneurship Development (20 Marks)
with certain
weightages
Intellectual Property (IP) Generation, Technology Transfer and
allocated as Commercialization (14 Marks)
below.
Innovative Learning Methods & Courses (10 Marks)

Innovations in Governance of the Institution (6 Marks)

 Swiss Challenge Method

• Central Bank of India has recently put up its two non-

Why In
News
performing assets (NPAs) worth Rs 251 crore for sale through
the Swiss challenge method.

Swiss challenge method is a method of

bidding, often used in public projects, in
which an interested party initiates a proposal
for a contract or the bid for a project.
The government then puts the details of the
project out in the public and invites proposals
from others interested in executing it.
 Swiss Challenge Method

On the receipt of these bids, the original proposer gets an opportunity

to match the best bid.
In case, the original proposer fails to match the bid, the project is
awarded to the proposer of the best bid.
 IEPF AUTHORITY

• In a major success towards Investor Protection, the IEPF Authority has

Why In been able to enforce The Peerless General Finance and Investment
News Company Limited to transfer depositor’s money worth about Rs 1514
Crore to IEPF.

Set up under the Ministry of Corporate Affairs,

Government of India as a statutory body under
Companies Act 2013.
Mandate: To administer the Investor Education and
Protection Fund (IPEF) with the objective of promoting
Investor’s Education, Awareness and Protection.

Administration: Secretary Ministry of the Corporate

Affairs is the Chairperson of the Authority.
 Financing For Sustainable Development Report (FSDR)
2019
• According to the Financing for Sustainable Development Report (FSDR)
Why In 2019, Mobilizing sufficient resources to achieve the goals of the 2030
News Agenda for Sustainable Development continues to be a central challenge
at a global level.

The 2019 FSDR is the fourth report on

implementing the Financing for
Development outcomes and the means of
implementation of the Sustainable
Development Goals since the adoption of
the 2030 Agenda for Sustainable
Development and the Addis Ababa Action
Agenda.
 Financing For Sustainable Development Report (FSDR)
2019

The report is a joint product of the Inter-agency Task Force on Financing for
Development, which is comprised of more than 60 United Nations
Agencies and international organizations.
The Task Force was mandated by the Addis Ababa Action Agenda and is
coordinated by the United Nations Department of Economic and Social
Affairs.
 Financing For Sustainable Development Report (FSDR)
2019

Highlights of
the report

Good news is that Investment has gained strength in some countries

and interest in sustainable investing is growing, with 75 % of individual
investors showing interest in how their investments affect the world.

And yet, greenhouse gas emissions grew 1.3 % in 2017; investment in

many countries is falling; and 30 developing countries are now at high
risk or already in debt distress.
 RBI divest its share in NABARD

• The Reserve Bank of India (RBI) has divested its entire stake in Nabard and
Why In National Housing Bank (NHB). The move is part of ending the cross-holding
News in regulatory institutions and follows the recommendation of the second
Narasimham committee.

The Committee on Banking Sector Reforms

(Narasimham Committee II), inter-alia, observed that it
is inconsistent with the principles of effective
supervision that the regulator is also an owner of a bank
and this would require the Reserve Bank of India (RBI)
to divest its holding in banks and financial institutions.

With this divestment, the government now holds a 100

% stake in both these financial institutions.
 About NABARD

It was established on the recommendations of B.Sivaraman

Committee on 12 July 1982 to implement the National Bank
for Agriculture and Rural Development Act 1981.

It replaced the Agricultural Credit Department (ACD) and

Rural Planning and Credit Cell (RPCC) of Reserve Bank of India,
and Agricultural Refinance and Development Corporation
(ARDC).
It is one of the premier agencies providing developmental
credit in rural areas.

NABARD is India's specialised bank for Agriculture and Rural

Development in India.
 About NHB

It is an All India Financial Institution was set up

in 1988, under the National Housing Bank Act,
1987.

It is an apex agency established to operate as a

principal agency to promote housing finance
institutions.

RBI had 100% shareholding in NHB.

 Question

Consider the following about National Bank for Agriculture and Rural
Development (NABARD).
1. It was setup by an act of Parliament.
2. It took over the agricultural credit functions of RBI.
3. It provides refinance to lending institutions in rural areas.
4. It acts as a regulator for cooperative banks and Regional Rural Banks
(RRBs).
Select the correct answer using the codes below.
a) 1 and 4 only
b) 2 and 3 only
c) 3 only
d) 1, 2, 3 and 4
 Question

Solution: d)
 Credibility of Indian Statistical System

Context
• Recently, there have been
controversies and debates over
the credibility of data and
statistics published by different
agencies including government
bodies, independent think tanks
and private players.
 Statistical Architecture in India
• India‟s modern statistical system took shape even before independence
under the leadership of Prof PC Mahalanobis who was known as „father
of Indian Statistical System‟.
• Ministry of Statistics & Programme Implementation (MoSPI) later
created in
1. 1999 and the National Statistical Commission (NSC) was set up in
2005 in order to oversee the entire range of official statistics.
2. The Ministry has two wings, one relating to Statistics and the other
Programme Implementation. The Statistics Wing called the National
Statistical Office (NSO) consists of the Central Statistical Office
(CSO) and the National Sample Survey Office (NSSO).
• Although, India has the history of producing credible economic statistics,
but recently a group of 108 economists and social scientists called for
restoration of "institutional independence" and integrity to the statistical
organisations in India freeing critical data releases from „political
interference.‟
 Capital Account Liberalisation

Context
• Recently, RBI‟s Deputy Governor has
argued in favour of revisiting India‟s
policies with respect to Capital Account
Liberalisation.
 Capital Account Liberalisation

• Foreign exchange transactions are broadly classified into two types:

Current Account Transactions and Capital Account Transactions.

• The Current Account represents a country's current transactions

including exports, imports, interest payments, private remittances and
transfers.
• The Capital Account records the net change of assets and liabilities
which include external lending and borrowing, foreign currency
deposits of banks, external bonds issued by the Government of India,
Foreign Direct Investment (FDI), Foreign Portfolio Investments in India
(FPI) etc.
 Small Finance Bank

Context
• Recently data from the Reserve
Bank of India (RBI) show that the
Small Finance Bank Sector has
been seeing remarkable growth in
credit disbursement as well as
deposits.
 Small Finance Bank

• These are private financial institution for the objective of financial

inclusion without any restriction in the
• area of operations, unlike the Regional Rural Banks or Local Area Banks.
• They can provide basic banking services like accepting deposits and
lending to the unbanked sections such as small farmers, micro business
enterprises, micro and small industries and unorganised sector entities.
• Some of the operational Small Finance Banks in India are: Ujjivan SFB,
Janalakshmi SFB, Equitas SFB, AU SFB, and Capital SFB.
• They were proposed by the Nachiket Mor Committee of RBI, as one of the
differentiated banking system for credit outreach and announced in the
annual Budget of 2014.
• Currently, SFBs constitutes 0.2% of the total deposits of all scheduled
commercial banks and makes up 0.6% of the total lending undertaken by
the scheduled commercial banks in India.
Small Finance Bank
 Circular Trading

Context
• Recently Mumbai High Court granted bail to those arrested for circular
trading and evasion of GST.
 Circular Trading

• Circular trading refers to selling and buying of goods via shell

corporations to artificially inflate turnover.
• There is no actual change in ownership or movement of goods.
 Circular Trading

• For Example-
• a company “A” sold goods to another company “B”, which sold the
same goods to another company “C”. Now, the third company “C” sold
the goods to the first company “A”. All this while, the goods were kept at
a godown of first company.
• Here GST credits were paid on every lap of transaction.
• The series of sales helped the firms inflate turnover and avail larger
valuations and loans.
• This amounts to tax evasion.
• This is illegal under Prohibition of Fraudulent and Unfair Trade
Practices Regulations issued by SEBI.
• Ketan Parekh stock Market Scam of 1999 was also related to circular
trading.
 Finance Ministry has introduced changes into
E-Way Bill System

Context
• Recently the Finance Ministry has introduced changes in the e-way bill
system to crack down on GST evaders.
 E-Way Bill
• E-way bill or Electronic-way bill is a document introduced under the GST
regime that needs to be generated before transporting or shipping goods
worth more than INR 50,000 within state or inter-state.
• It was rolled out on April 1, 2018, for moving goods from one state to
another however for intra-state movement of goods it was rolled out in a
phased manner.
• The physical copy of e-way bill must be present with the transporter or
the person in charge of the conveyance and should include information
such as goods, recipient, consignor and transporter.
• Upon generation of the E-Way Bill, on the common portal, a unique E-
Way Bill number called „EBN‟ is made available to the supplier, the
recipient and the transporter.
• Portal has been developed by the National Informatics Centre (NIC).
 RBI allowed FPIs to invest in Municipal Bonds

Context
• The Reserve Bank of India (RBI) has allowed foreign portfolio investors
(FPIs) to invest in municipal bonds.
 Municipal Bonds

• They are debt securities issued by government or semi- government

institutions who need funding for civic projects.
• Normally, they are issued and redeemed at par & carry fixed interest rate.

• There are Two Types of Municipal Bonds

1. General obligation bonds are issued for enhancing civic amenities such
as water, sanitation, garbage disposal, etc. They generally are not backed
by revenue from a specific project.
2. Revenue bonds are issued for a specific purpose such as construction of
a toll road or a toll bridge.
• Bangalore Municipal Corporation was the first urban local body (ULB) to
issue Municipal Bond in India in 1997.
 National Urban Policy Framework (NUFP), 2018

Context
• The Ministry of Housing and Urban Affairs released its first draft of the
National Urban Policy Framework (NUFP), 2018.
 National Urban Policy Framework (NUFP), 2018
• India has been urbanized at a fast pace in the last two decades, yet despite
many efforts, India‟s cities are struggling to provide for their current
population.
1. The U.N. World Urbanization Prospects 2018 report states that about
34per cent India‟s population now lives in urban areas.
2. This shows an urgent need to revisit the country‟s urban strategy.
• Building both on the international frameworks as well as the national
missions, the National Urban Policy Framework (NUPF) outlines an
integrated and coherent approach towards the future of urban planning in
India.
• The NUPF is structured along two lines: (i) 10 core philosophical
principles of urban planning, and (ii) these principles are then applied to
ten functional areas of urban space and management.
• The framework provides recommendations on these functional areas.