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ARTH (1stMAY-10th MAY)- Vol 17

These supplements are designed to help you in preparing from UPSC prelims and main

paper III, RBI Gr B prelims and ESI/Finance, SEBI/NABARD GA, and IBPS. These

supplements are free and can be downloaded from Maggubhai/economic affairs

1. Coronavirus is pulling millions back into poverty- World Bank

According to World Bank’s new forecasts, global poverty (the share of the world’s

population living on less than $1.90/day) is projected to increase from 8.2% in 2019 to

8.6% in 2020. Another way to put this is that the estimates suggest that COVID-19 will

push 49 million people into extreme poverty in 2020.

Keypoints-

• The World Bank estimates sub-Saharan Africa will see its first recession in 25

years & South Asia its worst downturn in 40 years. The gains the world was

making in fighting poverty are now at grave risk.

• The World Bank says that for the first time since 1998, global poverty rates will

rise.

• By the end of the year, 8% of the world’s population which constitutes half a

billion people -could be pushed into destitution, largely because of the wave of

unemployment brought by virus lockdowns.

• The developing world will be hardest hit like some of the biggest gains were

made in India, where 210 million people were lifted out of poverty from 2006 to

2016. Since 2000, Bangladesh lifted 33 million people which are 10% of its

population out of poverty.

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2. India 53rd in budget transparency, accountability in IBP survey

According to the Open Budget Survey,India has been placed at 53rd position among

117 nations in terms of budget transparency and accountability. The Open Budget

Survey is part of the International Budget Partnership's Open Budget Initiative, a global

research and advocacy program to promote public access to budget information and the

adoption of accountable budget systems.

Keypoints-

• The survey is conducted by International Budget Partnership (IBP).It has

provided India's Union Budget process a transparency score of 49 out of 100. It

is higher than the global average of 45.

• New Zealand tops the chart with a score 87.

• Some of the other large developing countries, with the exception of China, have

got much higher transparency scores compared to India.

• South Africa (87), Mexico (82) and Brazil (81) are among the top six countries

providing extensive information to public for scrutiny.

• India performs well in publishing timely and relevant information in the audit

reports and in-year reports and has scored well and above many other countries.

• However, the survey observed that absence of a published Pre-Budget

Statement and not bringing out a Mid-Year Review in 2018-19 pulled down the

transparency score for the Union Budget of India.

• Centre for Budget and Governance Accountability (CBGA), which contributed

research inputs towards developing an assessment of budget transparency for

the efforts by the Union Government, noted that IBP draws attention to the

importance of enhancing budget transparency and strengthening accountability

for government budgets.

• The survey rates the level of budget transparency across countries on a scale of

0-100, based on several normative, internationally comparable indicators.

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• It evaluates for each country, the availability of eight key budget documents of

the Central or Federal Government, and assesses whether these are made

public, in a timely manner, and provide comprehensive information.

• Providing adequate space for public participation for priority setting in its budgets

is also flagged by the OBS (Open Budget Survey) as an area of improvement

required for India. The CBGA said budget transparency is always an important

parameter of fiscal governance.

3. IEA: global energy demand to plunge in 2020 as a result of the biggest shock

since the Second World War

A new report released by the International Energy Agency provides an almost real-time

view of the COVID-19 pandemic’s extraordinary impact across all major fuels. Based on

an analysis of more than 100 days of real data so far this year, the IEA’s Global Energy

Review includes estimates for how energy consumption and carbon dioxide (CO2)

emissions trends are likely to evolve over the rest of 2020.

Keypoints-

• Amidst Corona’s pandemic the plunge in demand for nearly all major fuels is

staggering, especially for coal, oil and gas. Only renewables are holding up

during the previously unheard-of slump in electricity use.

• The report projects that energy demand will fall 6% in 2020 – seven times the

decline after the 2008 global financial crisis. In absolute terms, the decline is

unprecedented – the equivalent of losing the entire energy demand of India, the

world’s third largest energy consumer.

• Advanced economies are expected to see the biggest declines, with demand set

to fall by 9% in the US and by 11% in the EU.

• IEA found that each month of worldwide lockdown at the levels seen in early

April reduces annual global energy demand by about 1.5%.

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• Coal is particularly hard hit, with global demand projected to fall by 8% in 2020,

the largest decline since the Second World War.

• Renewables are set to be the only energy source that will grow in 2020, with their

share of global electricity generation projected to jump thanks to their priority

access to grids and low operating costs.

• Nuclear power, another major source of low-carbon electricity, is on track to drop

by 3% this year from the all-time high it reached in 2019.

4. Companies prefer pre-litigation mediation to force majeure

A swelling list of corporates has begun pre-litigation mediation discussions with law

firms for faster resolution and to save costs. Many are no longer keen on using force

majeure or the Doctrine of Frustration clauses, seeking the cheaper option instead.

Keypoints-

• Companies in the manufacturing, services and real estate sectors are looking at

mediation to end disputes with suppliers, vendors, consumers and even lenders.

• The Commercial Courts Act, 2015, allows corporates to settle disputes through

this.

Source-ET

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5. India's R&D expenditure on the rise

According to the R&D Statistics and Indicators 2019-20 based on the national S&T

survey 2018 brought out by the National Science and Technology Management

Information (NSTMIS), Department of Science and Technology (DST), India’s gross

expenditure in R&D has tripled between 2008 & 2018 driven mainly by Govt sector and

scientific publications have risen placing the country internationally among the top few.

The report shows that with the rise in publication, the country is globally at the

3rd position on this score as per the NSF database, 3rd in the number of Ph.D. in

science & engineering. The number of researchers per million population has doubled

since 2000.

6. RCEP urges India to return to negotiating table as Covid-19 wrecks economies

Regional Comprehensive Economic Partnership (RCEP) in the backdrop of Covid that

has wreaked havoc on economies has stated that it would welcome India’s return to the

negotiating table for entering the trade bloc.

Keypoints-

• The 29th RCEP Trade Negotiating Committee Meeting was held via video

conference attended by 15 RCEP Participating Countries (RPCs), that is, the

Member States of the Association of Southeast Asian Nations (ASEAN),

Australia, China, Japan, Korea, and New Zealand.

• The 15 RPCs reaffirmed their commitment to sign the RCEP agreement in 2020,

stressing that as a region-wide free trade area, RCEP will provide a more stable

and predictable economic environment to support the much-needed recovery of

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trade and investment in the region, which has been adversely affected by the

COVID-19 pandemic.

• The 15 RPCs also agreed to step up cooperation and accelerate global efforts to

enable a swift and resilient economic recorvery from the crisis brought about by

the COVID-19.

• Against this backdrop, the 15 RPCs reaffirmed their commitment to continue

working with India to address its outstanding issues, as instructed by RCEP

Leaders at the 3rd RCEP Summit.

India pulled out of the RCEP in November 2019 after years of negotiations. India has a

trade deficit with 11 out of the 15 RCEP countries. India decided to stay out of RCEP

because concerns about getting swamped by imports under the agreement.That will put

its domestic industry and agriculture at risk.

7. 5 more states including Bihar, Punjab join ‘One Nation-One Ration Card’

scheme

Five more states, including Bihar,Punjab,UP, Punjab, Himachal Pradesh and Daman

and Diu, have joined the ‘One Nation-One Ration Card’ system, taking the total ration

card portability to 17 states and Union territories helping 60 crore beneficiaries.

Under the ‘One Nation-One Ration Card’ initiative, eligible beneficiaries would be able

to avail their entitled foodgrains under the National Food Security Act (NFSA) from any

Fair Price Shop in the country using the same ration card.

Keypoints-

• 12 states were integrated among each other and now 17 states are on integrated

management of the public distribution system (PDS), also called ration shops/fair

price shops.

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• Andhra Pradesh, Telangana, Gujarat, Maharashtra, Haryana, Rajasthan,

Karnataka, Kerala, Madhya Pradesh, Goa, Jharkhand and Tripura are 12 states

where ration card portability has been implemented. The beneficiaries can lift 50

per cent of their entitlement.

8. Nearly 60% Indians see economy recovering in next 2-3 months: Survey

According to a survey by McKinsey & Company, Indian consumers are being careful

with their spending and are cutting back across most categories. McKinsey & Company

carried out a consumer sentiment survey in India over three different periods. Each

survey highlights a different aspect. The latest survey was conducted from April 10-13,

prior to this it was conducted from April 2-6 and from March 27-30 as the extent of the

virus began to unfold globally

Keypoints-

• Data suggests that with each passing week, consumer confidence is rising as

the economy recovers after novel coronavirus, or COVID-19, led lockdown.

• As per the latest survey, nearly 60 percent Indians are optimistic about an

economic recovery in two-to-three months.

• Over 50 percent Indians continue to feel that there will be a loss in income and

cut in savings while spending shrink further.

• Indian consumers expect to spend more time engaging with live news, movies,

reading news online and video content.

• Over 85 percent of surveyed Indians believes that the personal and financial

impact of COVID-19 will last longer than two months.

• Data suggest that In India, the safety of family and overall public health is one of

the top five concerns related to coronavirus.

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9. China is testing new digital currency

China’s central bank has started testing its official digital currency, pressing ahead with

its plan to roll out a virtual money payment system, days after Facebook-backed Libra

scaled back its ambitions to become a global currency.

The Digital Currency Research Institute of the People’s Bank of China (PBC), China’s

central bank, said that the research and development work of China’s official digital

currency, dubbed as DC/EP, is proceeding steadily, and the internal pilot tests are

carried out in four cities. China’s official digital currency is undergoing testing and has

not been officially released.

10. Niti Aayog questions Australian institute’s terror ranking of India

A report compiled by Niti Aayog has questioned the methodology adopted by an

Australian based institute to rank India as the seventh worst terrorism affected country

ahead of conflict-ridden countries such as the Democratic Republic of Congo, South

Sudan, Sudan, Burkina Faso, Palestine and Lebanon. Niti Aayog is going to track 32

such global indices to see how they could help drive reforms and growth. The GTI

report issued by the IEP is based primarily on the Global Terrorism Database (GTD)

collated by the National Consortium for the Study of Terrorism and Responses to

Terrorism (START) at the University of Maryland

Keypoints-

• India has moved to the seventh position from the previous year’s eighth in the

annual Global Terrorism Index (GTI) 2019. The countries ahead of it are

Afghanistan, Iraq, Nigeria, Syria, Pakistan and Somalia.

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• GTI scores are directly used in the Global Peace Index, the Global Slavery

Report published by the Walk Free Foundation, and indirectly used in computing

country scores in the World Economic Forum’s Travel and Tourism

Competitiveness and Global Competitiveness Indices and compilation of Safe

Cities Index by the Economist Intelligence Unit.

11. Co-operative banks can use Sarfaesi Act to recover dues: Supreme Court

A five-judge Constitution Bench of the Supreme Court (SC) ruled that all co-operative

banks in the country could make use of the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act (Sarfaesi) to make recovery

against defaulting persons.

Keypoints-

• The apex court held that all such cooperative banks involved in the activities

related to banking are covered within the meaning of ‘banking company’.

• The cooperative banks cannot carry on any activity without compliance of the

provisions of the Banking Regulation Act, 1949 and any other legislation

applicable to such banks relatable to banking.

• While there have been calls to notify non-scheduled urban cooperative banks as

‘financial institutions’ so they could make use of IBC to recover monies, the

government had clarified any institution which was owed money by any corporate

could approach the NCLT either as a financial or an operational creditor.

SARFAESI Act,2002

The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act,

2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institution to

auction residential or commercial properties (of Defaulter) to recover loans.

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12. Over 5 million people internally displaced in India in 2019- UNICEF

The ‘Lost at Home’ report, published by the UN Children’s Fund (UNICEF), said that

almost 33 million new displacements were recorded in 2019 — around 25 million were

due to natural disasters and 8.5 million as consequence of conflict and violence.

Keypoints-

• Of these, there were 12 million new displacements involving children, including

around 3.8 million of them caused by conflict and violence, and 8.2 million due to

disasters linked mostly to weather-related events.

• More than five million people were internally displaced in India due to natural

disasters, conflict and violence in 2019, constituting the highest number of new

internal displacements in the world during the period followed by the Philippines,

Bangladesh and China.

• The report said that natural disasters resulted in more new displacements than

conflict and violence.

• Almost 10 million new displacements in 2019 were recorded in East Asia and the

Pacific (39 %) — and almost the same number in South Asia (9.5 million).

13. RBI clears fog on special provisioning

The Reserve Bank of India (RBI) has cleared the fog on ‘special provisioning’ of loans

which are under moratorium — a clarification that has come as a relief to many banks.

The provisioning should be considered only for loans where principal or interest

payments are overdue between 61 and 90 days as on March 1, 2020. Such loans are

categorised as SMA2 — or, special mention accounts (SMA) -2. According to an

analyst’s estimate, total SMA loans were around ₹3.2 lakh crore in end September 2019

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— of which, SMA0 was ₹1.45 lakh crore. The normal provisioning of NPA is 15% for

secured loans and 25% of unsecured loans.

Source-ET

SMA loans — divided into three baskets (0, 1 and 2) — is a classification brought in by

the RBI five years ago to detect early signs of stress among bank borrowers and

monitor accounts which run the risk of turning into bad loans or non-performing assets

(NPAs).

SMA1 are loans where interest or principal is overdue between 31 and 60 days; while

SMA0 are loans where principal and interest are overdue for less than 31 days or

showing initial signs of stress.

14. 600 universities, 25,000 colleges are not accredited in India

According to the accreditation process of National Assessment and

Accreditation Council (NAAC), possibility of poor grades is the reason behind non-

participation of 22% of higher education institutions in the accreditation process of

National Assessment and Accreditation Council (NAAC) while 26% of institutions don’t

apply as they lack permanent faculty and 5.5% for not having a permanent head of the

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institution.

Keypoints-

• It said 72% of institutions are currently in the process of improving their quality

and resources to apply for NAAC accreditation.

• The government rolled out the revised accreditation framework (RAF) in 2017,

which came into effect in 2018 and has so far accredited 74 universities and

1,485 colleges.

• According to HRD ministry sources, at present there are 600 unaccredited

universities and 25,000 unaccredited colleges in the country.

• NAAC accreditation is a diagnostic tool. It helps institutions to understand

themselves and improve. The government had taken a good step by putting up

State -Level Quality Assurance Cell (SLQAC). State-level incentive for

accreditation will go a long way.

15. Daily usage of Aadhaar-enabled payment system doubles to 11.3 million in

lockdown

The average usage of Aadhaar-enabled payment system (AePS) doubled to 11.3

million per day during the lockdown period as one of the preferred banking modes for

beneficiaries of direct cash transfer under the Rs 1.7 lakh crore Prime Minister Garib

Kalyan Yojana (PMGKY). Total 430 million transactions worth Rs 16,101 crore has

taken place so far since the lockdown. The government has so far disbursed Rs 32,300

crore in bank accounts of 34 crore beneficiaries since the launch of Rs 1.7 lakh crore

welfare scheme under PMGKY.

AePS

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AePS is a payment service that uses a customer’s Aadhaar identity to access his or her

bank account and perform basic banking transactions such as balance enquiry, cash

deposit, cash withdrawal, Aadhaar to Aadhaar fund transfer and remittances through a

business correspondent (BC) in remote areas.

PMGKY

PMGKY scheme includes free distribution of wheat, rice and pulses, three cooking gas

cylinders and cash assistance to the poor for three months starting from April. It also

offers Rs 500 per month to 20 crore women Jan Dhan account holders for three months

so that they can run their households in the lockdown period without any disruption.

16. Delhi ranks top in Internet penetration, Kerala comes second

According to a study by Internet and Mobile Association of India (IAMAI), Delhi has

registered the highest Internet penetration, while Kerala ranks second.

Keypoints-

• While Delhi retains top spot in terms of penetration, at a city level, Mumbai has

highest number of Internet users at estimated 13 million, with Delhi coming is

second with 11.3 million.

• Significantly, eastern states together have seen a 24 per cent increase in the

Internet population in November 2019 compared with March 2019.

• In terms of age-wise demographics, two-third of Internet users in India are in the

age group of 12-29 years and this age group corresponds to more than 70 per

cent of Internet users in the rural.

17. DBS Bank slashes India’s FY21 GDP forecast to 1%

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Singapore-based DBS Bank has cut India’s FY21 GDP forecast to 1 per cent vis-a-vis

1.5 per cent projected on April 9. The report cautioned that the general government (the

Centre and States) deficit is likely to rise to 10-10.5 per cent of GDP in FY21 vs around

6 per cent of GDP earlier. This would entail the public debt level to rise from 70 per cent

of GDP to 75-80 per cent, with the shrinking GDP (denominator effect) also ballooning

the debt burden.

18. RBI cancels Mumbai-based CKP Co-op Bank's license

The RBI said the licence of The CKP Co-operative Bank Ltd., Mumbai, has been

cancelled with effect from the close of business on April 30, 2020. Consequent to the

cancellation of its licence, the Bank is prohibited from conducting the business of

‘banking’ which includes acceptance of deposits and repayment of deposits as defined

in the Banking Regulation Act, 1949 with immediate effect.The Reserve Bank of India

(RBI) said 99.2 per cent of the depositors of The CKP Co-operative Bank Ltd., Mumbai,

whose license has been cancelled, will get full payment of their deposits from the

Deposit Insurance and Credit Guarantee Corporation (DICGC).

19. Over $90-b support from central banks underscores systemic risks posed by

mutual funds, says Fitch Ratings

According to estimates by Fitch Ratings, central banks around the world have provided

facilities in excess of $90 billion to support mutual funds amid the coronavirus

pandemic. The scale of support shows regulators’ sensitivity to the potential systemic

risks that funds pose through potential spill-over effects to financial markets. However,

Fitch is sceptical about how effective the Reserve Bank of India’s support to MFs via the

special liquidity facility will be as India's banks have low capital headroom and could be

reluctant to extend liquidity to funds, given the lack of capital relief on the facilities.

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20. Amazon is world’s most valuable global brand, says BrandZ report

The third annual BrandZ ranking said Amazon has once again ranked as the world’s

most valuable global brand, followed by Alibaba and McDonald’s.

21. PhonePe launches Super Funds to help users in long-term wealth creation

PhonePe has launched Super Funds, which will help investors identifying top equity,

gold and debt funds of mutual fund companies. PhonePe has partnered with Aditya

Birla Sun Life Mutual Fund (ABSLMF), one of the leading investment managers in India

to launch this product.

22. Suryoday SFB launches new working capital product

Suryoday Small Finance Bank has rolled out a working capital product with a small

overdraft (OD) limit on a pilot basis in two branches – Trichy (Tamil Nadu) and Cuttack

(Odisha) to help its customers meet the urgent liquidity requirements during the

lockdown.To begin with, the bank has set a limit of ₹5,000 for this working capital

product.

23. SOLV launches Covid-19 emergency credit line for MSMEs

SOLV, a B2B digital platform for MSMEs backed by the Standard Chartered Group, has

launched a ‘COVID-19 Emergency Credit Line Program’ for Micro, Small and Medium

Enterprises (MSMEs). The programme had been launched in association with FICCI-

CMSME (Federation of Indian Chambers of Commerce & Industry’s Confederation of

Micro, Small and Medium Enterprises).

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24. Govt appoints Tarun Bajaj as Director on RBI Central Board

The government has appointed Economic Affairs Secretary Tarun Bajaj as a director on

the central board of Reserve Bank of India (RBI).

25. Nabard refinances close to Rs 13,000 crore to state co-op banks and RRBs to

assit farmers deal on-going lockdown

Nabard has disbursed Rs 12,767 crore to State Cooperative Banks (StCBs) and

Regional Rural Banks (RRBs) across the country to augment their resources during the

ongoing lockdown conditions for extending credit to farmers. It has extnded this facility

in 15 states so far including Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Karnataka,

Kerala, Madhya Pradesh, Odisha, Tamil Nadu, Telangana, Uttar Pradesh and West

Bengal.

26. Covid-19 crisis has highlighted e-commerce importance,cooperation in cross-

border goods, services movement: WTO

The World Trade Organization (WTO) has asked its members if there is a need to

consider new and practical e-commerce solutions to enable fast and secure cross

border movement of goods and services to help economic recovery and job creation

after the Covid-19 pandemic. The organisation has also raised questions related to the

assistance it can offer developing countries and LDCs to reduce the digital divide, aid

MSMEs and promote economies that are more resilient to possible future crises or

shock.

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27. Chhattisgarh tops states giving MGNREGS jobs amid COVID-19 lockdown

According to the Rural Development Ministry data,Chhattisgarh has emerged as the

best-performing state in the country when it comes to providing jobs under the

Mahatma Gandhi National Rural Employment Guarantee Scheme amid the

nationwide lockdown. It has generated employment for 18.52 lakh labourers as the

state stressed on extensive work to revive rural economy and safeguard the

livelihood of the people. Chhattisgarh accounts for nearly one-fourth of the total

MGNREGS jobs.

28. Mercom India Research has released a data report

India Solar Market Leaderboard 2020, which reveals the solar industry market leaders

that emerged during the calendar year (CY) 2019, features the industry’s leaders as

well as their market share and shipment rankings across the Indian solar supply chain.

India installed 7.3 GW of solar capacity in 2019 and secured its spot as the world’s

third-largest solar market in the world.

29. SIDBI Launches SME Service Platform To Boost Digitisation, Credit Access

The Small Industries Development Bank of India (SIDBI) is launching an SME service

platform to facilitate the digitisation of small businesses and make access to credit

easier for those caught in a cash crunch owing to the Covid-19 pandemic. The platform

would also include several features to help micro, small and medium enterprises

(MSMEs) resume their operations remotely.

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30. Private equity firm Silver Lake to invest Rs 5,655.75 crore in Reliance Jio

Platforms

US private equity firm Silver Lake will invest Rs 5,655.75 crore ($747 million) in Jio

Platforms for a 1.15% stake, the second deal after Facebook’s share acquisition plan.

31.IIT Hyderabad to collaborate with Hong Kong firm to create venture ecosystem

The Indian Institute of Technology (IIT), Hyderabad is going to collaborate with New

Frontier Capital Management, a financial firm based in Hong Kong with offices in Tokyo

and Singapore, to establish a global network for ventures as well as to create a venture

ecosystem.The core objective of this partnership will be to promote innovation, research

and incubation.

32.CAIT to launch national e-commerce marketplace 'bharatmarket' for retail

traders

Traders' body Confederation of All India Traders (CAIT) has announced to launch a

national e-commerce marketplace 'bharatmarket' soon for all retail traders in

collaboration with several technology partners. CAIT said the marketplace will

integrate capabilities of various technology companies to provide end-to-end

services in the logistics and supply chains from manufacturers to end consumers,

including deliveries at home. E-commerce portal will include a nationwide

participation by retailers and aims to bring 95 per cent of retail traders onboard the

platform, who would exclusively run the portal.

33.Public Sector Banks sanction loans worth Rs 5.66 lakh cr for more than

4181000 accounts during March-April

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Public Sector Banks have sanctioned loans worth 5.66 lakh crore rupees for more

than 41 lakh 81 thousand accounts during March-April this year. These borrowers

are from MSME, Retail, Agriculture and Corporate sectors, waiting for disbursal

soon after lockdown lifts. More than 27 lakh customers have contacted from March

20 and 2.37 lakh cases have been sanctioned loans worth 26,500 crore rupees.

34. SBI cuts benchmark lending rate by 15 basis points

The country's largest lender, State Bank of India slashed benchmark lending rate

by 15 basis points and introduced Special Deposit Scheme for senior citizens with

higher interest rate. With that, the marginal cost of funds based lending rate comes

down to 7.25 per cent, from 7.40 per cent with effect from 10th of May. But, to

safeguard the interests of senior citizens, the bank has introduced a new product

'SBI Wecare Deposit' in the retail term deposit segment. Under this new product,

an additional 30 basis points premium will be payable for senior citizen's retail term

deposits with Five Years and above tenure only.

35. SEBI, AMFI plan to deepen debt market

The Association of Mutual Funds in India plans to work with capital market regulator

SEBI to deepen debt markets to improve investor protection and participation. SEBI in

consultation with AMFI and Mutual Fund Advisory Committee had proposed calibrated

reduction in limits for investment in unlisted securities of mutual fund schemes. Listing

guidelines were suitably modified to facilitate listing for instruments such as commercial

paper which hitherto were always unlisted. Global experience has proved that listing on

exchange platform create better dissemination of information resulting in efficient price

discovery and improve liquidity in secondary markets.

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36.200 new mandis from seven states join e-NAM for marketing of agricultural

produce

Two hundred new mandis from seven states joined the e-NAM platform for

marketing of Agricultural produce. This will bring the total number of e-NAM mandis

in the country to 785. It is for the first time that Karnataka has been added to the

list of e-NAM states

37. Govt amends I-T rules for faster resolution of multinational corporations' tax

disputes under MAP

The government has amended income tax rules as per which Indian authorities would

"endeavour" to resolve mutual agreement procedure (MAP) disputes within a timeframe

of 24 months, a move aimed at speedy settlement of cases of multinational corporations

that have opted the alternative dispute resolution process. The Central Board of Direct

Taxes (CBDT) has amended Rule 44G dealing with application and procedure for giving

effect to MAP agreement, and also revised Form 34F with respect to making application

to the competent authority for invoking MAP.

MAP is an alternative dispute resolution process under the tax treaties, under which

competent authorities of two countries enter into discussions to resolve tax-related

disputes.

38. Energy efficiency schemes led to savings of around ₹90,000 crore: PWC

report

A report titled ‘Impact of energy efficiency measures for the year 2018-2019’ by PWC

Limited, who was engaged by the Bureau of Energy efficiency (BEE), that the

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implementation of energy efficiency schemes has led to savings worth about ₹90,000

crore in the FY19.

Keypoints-

• This study estimates that various energy efficiency measures have translated

into savings worth ₹89,122 crore (approximately) against last year’s (2017-2018)

savings of ₹53,627 crore.

• These efforts have also contributed in reducing 151.74 million tonnes (MT) of

CO2 emissions, whereas last year the emissions were lower by 108 MT of CO2.

39. India has more internet users in rural areas than urban: IAMAI report

According to the ‘Digital in India’ report by the Internet & Mobile Association of India

(IAMAI), internet users in rural areas surpassed those in urban areas for the first time.

Keypoints-

• As of last November, there were 227 million active internet users in rural areas

which is 10% more than around 205 million in urban areas. In total, India had 504

million active internet users.

• The report showed that in rural India, the number of people actively accessing

the internet on a daily basis increased by 30 million since March last year.

• However, the time spent on the internet is higher in urban India compared to the

rural areas.

• Almost 70% of the active internet users in India are daily users where nine out of

10 in urban India access it at least once a week.

• Accessibility to affordable devices and cheap data plans were a major boost

behind the growth of India’s internet users. Also, the preferred device for

accessing the internet was mobile in both urban and rural areas.

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• Another highlight from the report is that the increase in female internet users (26

million) was more than that of male internet users. It was an increase of 21%

which is much higher than the 9% increase in male internet users.

40. Fitch downgrades viability ratings of SBI, BoB, ICICI, Axis Bank

Fitch Ratings downgraded the viability ratings (VR) of State Bank of India (SBI), ICICI

Bank and Axis Bank to 'bb' from 'bb+' on account of deteriorating operating environment

for banks amid the COVID-19 pandemic. The global rating agency also downgraded

Bank of Baroda's (BOB) VR by one notch to 'bb-', from 'bb'. The agency affirmed the

long-term issuer default ratings (IDR) of SBI and BOB at 'BBB-' and those of ICICI Bank

and Axis Bank at 'BB+'. For SBI and BOB, the VR downgrades reflect the heightened

risks that weakening asset quality will pose to their less-than-satisfactory loss-

absorption buffers.

41.Defaults among fragile emerging market firms set to rise: Moody's

According to Moody, defaults by weaker emerging market companies will rise in 2020

and 2021 as the effect of the COVID-19 pandemic hampers business activity.The

ratings agency said the trailing 12-month speculative-grade default rate for emerging

market firms would rise to between 7.8% and 11.2% by the end of 2020, from the low

level of 2.2% in March. The rate will then rise further by March 2021 to the 8.3% to

13.7% range. The global spread of the coronavirus has led to business closures and

restrictions on social interactions in many countries. The collapse in domestic aggregate

demand and export demand has weakened EM (emerging market) corporate

profitability and liquidity.

42. Lockdown impact: Services PMI in April at all-time low of 5.4

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Services followed manufacturing in touching a historical low as the Purchasing

Managers’ Index (PMI) for Services dipped to a mere 5.4 in April as against 49.3 in

March. This is the largest contraction on a monthly basis since the collection of data

began 14 years ago.Based on PMI for manufacturing and services, the fear is that the

Indian economy would have contracted by at least 15 per cent on an annualised basis.

Source- Newspaper

43.COVID-19: NBFCs ask RBI for one-time restructuring of all loans till Mar 2021

Non-banking financial companies (NBFCs) have asked the Reserve Bank of India to

allow them one-time restructuring of all loans till March 2021, as their borrowers are

facing funding issues amid the coronavirus pandemic and the subsequent lockdown.

NBFCs have also demanded for extension of the Reserve Bank of India's moratorium to

them, relaxation on provisioning norms and additional funding from Small industrial

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Development Bank of India (SIDBI) and National Bank for Agriculture and Rural

Development (NABARD) through refinance mechanism. NBFCs want that the one-time

restructuring should be allowed for all other borrowers as well.

44. China-backed AIIB approves $500 million loan for India's COVID-19 response

Beijing-backed Asian Infrastructure Investment Bank (AIIB) had approved a $500 million

loan to India to help the country navigate the coronavirus pandemic. The loan is

intended to help India's government strengthen its public health system, prepare for

future outbreaks, and limit the transmission of cases, a statement from AIIB. The

project, which will be cofinanced by the World Bank, will also support medical

equipment purchases and research. The loan is part of a $10 billion funding facility the

AIIB has announced to help public and private sector entities deal with the pandemic.

45. Moody’s cuts India FY21 growth projection to 0%

Moody’s Investors Service revised downward its growth projection for India to 0% for

FY21 and cautioned that the country’s sovereign rating could be downgraded if its fiscal

metrics weaken materially. This follows similar warning from Fitch Ratings. This would

probably happen in the context of a prolonged or deep slowdown in growth, with only

limited prospects that the government would be able to restore stronger output through

economic and institutional reforms. Moody’s had revised its outlook for India’s sovereign

rating from stable to negative. Moody’s credit rating of Baa2, the second-lowest

investment grade score, is better than those of other agencies, such as S&P and Fitch,

which have assigned the lowest investment grade to India with a stable outlook.

46. Coir Board ropes in IIT-Madras for R&D

The Coir Board has signed an MoU with the Indian Institute of Technology-Madras to

establish a Centre of Excellence for the application of coir exclusively or in combination

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with other natural fibres.The IIT-Madras had earlier validated the research studies so far

were undertaken by the Coir Board and other agencies in India on Coir Geo-Textiles

(CGT) and recommended that CGT can be successfully used to prevent soil erosion in

slopes/embankments, river embankments, mine slope dumps stabilisation etc.

47. Nomura predicts Indian GDP to contract by 5.2% in FY21, more rate cuts

Nomura and Goldman Sachs have cut their growth projections for India in financial year

2020-21 (FY21) and expect the Reserve Bank of India (RBI) to cut rates sharply to stem

the economic rout caused by the national lockdown to contain

the coronavirus pandemic. Analysts at Nomura have lowered their GDP growth forecast

for India to a negative 5 per cent / 5 per cent contraction y-o-y (from -0.5 per cent

forecast earlier) for 2020, but raised it to 7.9 per cent (from 7.3 per cent forecast earlier)

for 2021.

48. Cash in circulation in January-April higher than in all of 2019: Report

According to a report of the Business Standard, rising economic uncertainty has seen

people hoard more cash in the first four months of 2020 than they did in all of 2019. The

Reserve Bank of India’s report said the increase in currency in circulation (CIC)

between January and May was Rs 2.66 trillion against Rs 2.4 trillion in 2019.

The RBI till May 5 held Rs 8.53 trillion as excess liquidity from banks despite interest

rate being a low 3.75 percent (largely due to long-term repo operations (LTRO).

49 . Bank credit up 6.74% to Rs 102.69 lakh crore; deposits rise 9.82%

According to the latest data, bank credit and deposits grew by 6.74 percent and 9.82

percent to Rs 102.69 lakh crore and Rs 137.11 lakh crore in the fortnight ended April

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24. In the year-ago fortnight, bank loans had stood at Rs 96.20 lakh crore and deposits

at Rs 124.83 lakh crore. In the previous fortnight which ended on April 10, 2020, bank

credit had grown by 7.20 percent and deposits by 9.45 percent. In March 2020, non-

food bank credit growth slowed to 6.7 percent from 12.3 percent in the year-ago month

due to a sharp decline in advances given by banks to industries and services sectors.

50. Centre to borrow ₹4.20-lakh crore more; fiscal deficit may widen to 5.4%

The government announced raising its borrowing by over 50 per cent of Budget

Estimate during the current fiscal. Additional borrowing means fiscal deficit during the

current fiscal could go up by 200 basis points (100 basis points is equal to 1 percentage

point). The estimated gross market borrowing in 2020-21 will be ₹12 lakh crore in place

of ₹7.80 lakh crore as per BE 2020-21. The government has also revised the borrowing

calendar for the first half period (April-September) and raised it to ₹6 lakh crore,

from ₹4.88 lakh crore. The Reserve Bank of India, in consultation with the Government

of India, reserves the right to exercise the green-shoe option to retain additional

subscription up to ₹2,000 crore each against any one or more of the above security,

which will be indicated in the auction notification

51. Amend RBI Act for non-collateralised reverse repo operations: SBI report

According to State Bank of India’s economic research report, ‘Ecowrap’, the time has

come to make amendments to the RBI Act so that the conduct of reverse repo and term

reverse repo operations are completely non-collateralised.

Keypoints-

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• As lending to the central bank has no credit risk, there is no need to provide

government securities as collateral when a market participant places its funds

with the RBI.

• Further, the report underscored, as the RBI inventory of government papers is

getting depleted and it is unable to increase the stock due to fiscal ramifications,

a low remunerated standing deposit facility needs to be introduced. This will

require amendment to the RBI Act and may replace reverse repo in the long run.

• Emphasising that complete non-collateralisation of reverse repo and term

reverse repo operations will have multiple benefits, the report said that,

1. non-receipt of government securities in reverse repo and term reverse

repo will boost the overall demand for government securities for

maintenance of requisite statutory liquidity ratio (SLR), since securities

obtained under reverse repo are eligible for SLR.

2. Second, this move might also ensure a lower supply of government bonds

through less issuance of CMBs (cash management bills).

3. Third, absorption of additional surplus liquidity at a lower rate through SDF

(standing deposit facility) will pull down the entire interest rate structure.