Daily Current affairs and Questions from The Hindu & PIB - May 24

RBI announces nine additional measures for strengthening the Economy



The Governor has announced a reduction in major policy rates, in order to revive growth and mitigate the impact of COVID-19, while ensuring that inflation remains within the target.

  • The repo rate has been reduced by 40 basis points from 4.4% to 4.0%.
  • The Marginal Standing Facility rate and the Bank rate have been reduced from 4.65% to 4.25%.
  • The reverse repo rate has been reduced from 3.75% to 3.35%.

Measures to Improve the Functioning of Markets

  • Refinance Facility to SIDBI extended for another 90 days Relaxation of Rules for Foreign Portfolio Investment under Voluntary Retention Route (The VRR is an investment window provided by RBI to Foreign Portfolio Investors, which provides easier rules in return for a commitment to make higher investments. The rules stipulate that at least 75% of the allotted investment limit be invested within three months; considering the difficulties being faced by investors and their custodians, the time limit has now been revised to six months.)

Measures to Support Exports and Imports

  • Exporters can now Avail Bank Loans for Higher Period
  • Loan facility to EXIM Bank
  • More time for Importers to Pay for Imports

Measures to Ease Financial Stress

  • Extension of Regulatory Measures by another 3 Months
  • Provision to convert Interest on Working Capital into Interest Term Loan
  • Increase of Group Exposure Limit to Increase Fund Flow to Corporates

Measures to ease financial constraints faced by State Governments


  • States allowed to borrow more from Consolidated Sinking Fund
The Consolidated Sinking Fund is being maintained by state governments as a buffer for repayment of their liabilities. The rules governing withdrawal from this Fund have now been relaxed, in order to enable states to enable them to repay their borrowings from the market, which become due in 2020-21. The change in withdrawal norms will come into force with immediate effect and will remain valid till March 31, 2021. The Governor added that the relaxation is being done, while ensuring that depletion of the Fund balance is done prudently.




Centre's debt drops marginally by 0.1% in FY19: Finance Ministry

The central government has been publishing an annual Status Paper on Government Debt that provides a detailed account of the overall debt position of the country .

HIGHLIGHTS 0F 9th EDITION OF THE STATUS PAPER ON GOVERNMENT DEBT
  • The central government’s debt as a percentage of gross domestic product (GDP) dropped marginally by 0.1% from 45.8% in fiscal 2017-18 to 45.7% or Rs 86.73 lakh crore in FY19, according to the Status Paper on Government Debt for 2018-19, compiled by the finance ministry.
  • The general government debt to GDP ratio, which includes the combined debt of the Centre and states, declined by the same percentage from 68.7% in March 2018 to 68.6% or Rs 1.3 crore crore (Rs 130 trillion) in March 2019.
  • The government’s finances were largely protected from currency risks as external debt stood at 2.7% of GDP or Rs 5.12 lakh crore in FY19.
  • 94.1% of the Centre’s liabilities consisted of domestic debt in FY19, of which 84.4% or Rs 59.68 lakh crore was made up of marketable securities.
  • The holding pattern of these securities in March 2019 showed that 40.3% was held by commercial banks, 24.3% by insurance companies and 5.5% by provident funds.
  • The tenure of the longest security was 37 years.
  • The average interest cost (AIC) for the Centre remained unchanged over FY18 to FY19 at 7.1%. Thus nominal GDP growth net of AIC was 3.9% in FY19, however, this was within the limits of sustainable debt parameters.

Experiment in Antarctica hinting at parallel universe to be taken with a grain of salt: Experts

Researchers using NASA's ANITA have succeeded in finding "a fountain of high-energy particles erupting from the ice" in Antarctica which according to the researchers could be proof of a parallel universe.
The experiment was done to identify high energy particles using NASA’s Antarctic Impulsive Transient Antenna (ANITA), a balloon that can carry delicate electronic antennas above the frozen wastes of Antarctica.

  • The ANITA instrument is a radio telescope to detect ultra-high energy cosmic-ray neutrinos from a scientific balloon flying over the continent of Antarctica.
  • ANITA is the first NASA observatory for neutrinos of any kind. Neutrinos are of great interest to astrophysicist as they are the only particle that can reach earth unattenuated at all energies.
  • The ANITA instrument detects these ultra-high energy neutrinos by use of the Askaryan effect. This effect predicts the production of a coherent radio emission from the cascade of particles produced in a high-energy particle interaction.
  • ANITA-I was launched in 2006–07 and ANITA-IV was launched in 2016.


New plant species found in Western Ghats



A team of scientists of the Botanical Survey of India (BSI) have reported the discovery of three new plant species in the evergreen forest patches of the southern end of the Western Ghats in Kerala and Tamil Nadu.

The three species — Eugenia sphaerocarpa of the Myrtaceae or Rose apple family, Goniothalamus sericeus of the Annonaceae family of custard apple and Memecylon nervosum of the Melastomataceae (Kayamboo or Kaasavu in local parlance) family — were discovered during a recent exploration led by BSI

Eugenia sphaerocarpa
  • A good population of Eugenia sphaerocarpa is growing in the Kakkayam area of the Malabar wildlife sanctuary in Kerala above 800m.
  • The epithet ‘sphaerocarpa’ denotes to the large, showy lemonyellow spherical fruits.
  • The fruits of Eugenia species are known for their palatability.
Goniothalamus sericeus

  • A small number of Goniothalamus sericeus plants has been found in the Kanyakumari wildlife sanctuary in Tamil Nadu at an altitude of 1400m.
  • Mature flowers with characteristic greenish yellow to beige petals are fragrant while the fruits are very showy and an attractive golden yellow in colour.
  • Sericeus refers to the presence of dense silky hair on petals.
Memecylon nervosum

  • A small population of nervosum was also found at the same sanctuary at an altitude between 700-900m with more than 10 subpopulations located along the banks of a perennial rivulet.
  • The species has showy purplishblue flowers and mauve to purplish red fruits.
  • Nervosum refers to the presence of prominently raised lateral and intramarginal veins on the lower surface of the lamina.

                                                                      MCQ
1) 'Voluntary Retention Route (VRR)' sometimes seen in the news recently, is associated with which of the following?
a) The VRR is an investment window provided by RBI to Foreign Portfolio Investors
b) The VRR is an investment window provided by Commercial banks to Foreign Portfolio Investors
c) The VRR is an Indian government's initiative of sending flights to bring back Indians stranded             abroad
d) The VRR is an  first clinical trial in the United States to evaluate an experimental treatment for            COVID-19

2) Consider the following statement on Consolidated Sinking Fund (CSF)

   1 .CSF was set up in 1999-2000 by the RBI to meet redemption of market loans of the States  .
   2.The 12th Finance Commission (2005-10) recommended that all States should have sinking funds         for amortisation of all loans, including loans from banks, liabilities on account of NSSF .
   3. The fund should be maintained outside the consolidated fund of the States and the public                      account and should not be used for any other purpose, except for redemption of loans.   .

Identify the correct statement
a) 1 only
b) both 1 and 2 only
c) 1 both 3 only
d) 1,2,3


                                                                      Answer
1-a
2-d

Notes - Consolidated Sinking Fund (CSF)



  • Consolidated Sinking Fund (CSF) was set up in 1999-2000 by the RBI to meet redemption of market loans of the States. 
  • Initially, 11 States — Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Goa, Maharashtra, Meghalaya, Mizoram, Tripura, Uttaranchal and West Bengal — set up sinking funds.
  • The 12th Finance Commission (2005-10) recommended that all States should have sinking funds for amortisation of all loans, including loans from banks, liabilities on account of NSSF (National Small Saving Fund), etc. 
  • The fund should be maintained outside the consolidated fund of the States and the public account and should not be used for any other purpose, except for redemption of loans.
  • As per the scheme, State governments could contribute 1-3 per cent of the outstanding market loans each year to the Fund
  • The Fund is administered by the Central Accounts Section of RBI Nagpur.

As on December 31, barring Uttar Pradesh, Madhya Pradesh, Rajashthan, Jharkhand, Himachal Pradesh and Jammu & Kashmir (now a UT), all States have CSF. Maharashtra led the list with corpus of ₹37,252 crore in CSF, followed by Gujarat with ₹13,004 crore, Odisha with ₹12,759 crore, West Bengal with ₹10,503 crore and Bihar with ₹7,524 crore.


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