Daily Current Affairs
18 December, 2024
National Affairs
1. National Test Agency
Context:
National Test Agency will conduct only competitive entrance tests for admission into educational institutions from next year and won’t hold any recruitment exams, Union education minister Dharmendra Pradhan said Tuesday.
- To prevent cheating and impersonation in competitive examinations such as JEE and NEET, National Testing Agency (NTA) uses AI
2. India’s 2030 Clean Energy Vision
Context:
India is progressing well toward achieving its clean energy goals pertaining to solar power and battery energy storage systems by the year 2030.
Key Highlights:
- Solar Power & BESS Progress:
- India is on its way to meet its 2030 targets for solar energy and battery storage systems.
- Current government policies and subsidies are supporting growth in these areas.
- Urgent Need for Offshore Wind & Green Hydrogen Support:
- Deployment and competitiveness of offshore wind and green hydrogen require immediate government attention.
- Offshore Wind Challenges:
- Offshore wind faces the biggest cost gap, making it difficult to scale without sufficient support.
- Current government support for offshore wind is inadequate.
- Offshore wind is a renewable energy source that generates electricity from wind blowing across the ocean
- Required Financial Support for Offshore Wind:
- An additional ₹ 9,000 crore per GW of support is needed to unlock 71 GW of offshore wind potential in India.
- Global Competitiveness:
- Offshore wind and green hydrogen need urgent government intervention to become competitive in the international clean energy economy.
Banking/Finance
1. Banking Liquidity Deficit
Context:
The banking system cash deficit, as measured by banks’ borrowings from the Reserve Bank of India, was at 1.5 trillion rupees ($17.7 billion) as of Monday, the highest since June 24,
What is Banking Liquidity Deficit?
Liquidity means available cash that banks need to meet short-term business and financial needs.
- Reason of Liquidity Deficit?
- Increase in bank credit, corporate payment of advance tax, and growth in deposits not keeping pace with credit demand.
- Increased GST outflows and festive season cash withdrawals.
- The RBI is working continuously to avoid the depreciation of rupees against dollars.
- Only in case of a net borrowing of the banking system from the RBI under Liquidity Adjustment Facility (LAF) can the system liquidity be said to be in deficit.
Liquidity Adjustment Facility:
- The LAF refers to the operations of RBI under which it injects or absorbs liquidity into or from the banking system.
- How do banks mitigate the Liquidity Deficit?
- Commercial banks generally borrow from the Reserve Bank of India at repo rate.
- Banks raise the deposit rates for the customers; higher the rates for deposit; more holds the customer deposits in banks to gain more profit for banks.
2. Certificates of Deposit (CDs)
Context:
About trillion was mobilized this fiscal year through the issuing of Certificates of Deposit (CDs) mainly for the purpose of managing cost of funds with credit-to-deposit gap.
Key Highlights:
- The total CD issuances as on December 13 stood at ₹ 7.93 trillion; total issuances surpassed ₹ 81,000 crore in the first fortnight of December.
What is Certificates of Deposit (CDs)?
A certificate of deposit (CD) is a financial instrument that allows one to earn interest on a fixed amount of money that a person deposits with a bank for a set period of time:
- How it works: When a person leave money in the bank for a set period, such as one year, and in exchange, the bank pays the interest.
- Interest rates: CDs generally offer higher interest rates than savings accounts. The interest rate is fixed, but some institutions may offer CDs with variable rates.
- Safety: CDs are considered as a safest option for savings.
- Liquidity: Withdrawing money from a CD before the term attracts penalty.
- Maturity: When the term ends, you receive your original deposit plus the interest.
In India, CDs are issued by scheduled commercial banks, regional rural banks, small finance banks, and All India Financial Institutions. They are governed by the Reserve Bank of India (RBI) and are issued in dematerialized form.
3. Bank Fraud Cases
Context:
The Indian Banking Association recommends to the finance ministry to direct all public sector banks (PSBs) to conduct period training programs by CBI for improvement of vigilance and strengthening of efforts to curb frauds.
Key Highlights:
- Offences registered in bank frauds to 36,075 within the last five years.
- Main types of frauds were digital payments, showing an increase from 2,677 for FY20 to 29,082 for FY24.
Indian Banks’ Association
- This is a voluntary association of Indian banks and financial institutions.
- Established on September 26, 1946.
- Currently has a membership of 248 banking companies.
- Headquarter
- Mumbai
4. Sebi Prohibits FPIs from Issuing P-Notes
Context:
The Securities and Exchange Board of India (Sebi) barred foreign portfolio investors from issuing offshore derivative instruments (ODIs), locally referred to as participatory or P-notes, with derivatives as an underlying asset.
Highlights:
- The foreign portfolio investors (FPIs) were also asked to gather the holding information of all those investors on the other side of such instruments.
- The total outstanding ODIs as of end July amounted to ₹1.58 lakh crores. FPIs hold less than two percentage of this amount under the custody of India.
Participatory notes (P-notes)
Participatory notes (P-notes) are financial instruments that allow foreign investors to invest in India’s stock market without registering with the Securities and Exchange Board of India (SEBI). P-notes are issued by registered foreign institutional investors (FIIs) to overseas investors.
- How they work
- P-notes acts as a substitute for shares of Indian companies.
- History
- SEBI introduced P-notes back in 2000 to allow foreign investors to enter the Indian market without registering as FIIs.
Offshore Derivative Instruments (ODIs)
ODIs are vehicles that allow foreign investors to invest in Indian equities or equity derivatives without registering in the country.
Foreign Institutional Investors (FIIs)
Foreign Institutional Investors (FIIs) are investors or funds that invest in a country apart from the one where they are registered or headquartered. FIIs include investment banks, mutual funds, hedge funds, and pension funds.
- Improving capital flow:
- FIIs can increase the liquidity and depth of a country’s capital market by improving the flow of capital in the country.
- Bringing capital to businesses:
- FIIs can bring capital and funds to businesses in developing countries.
5. Digital Lenders
Context:
As the Reserve Bank of India (RBI) tightens screws on unsecured lending, digital lenders are diversifying into secured lending with products like micro loans against property, business loans for MSMEs and green financing.
Key Highlights:
- Fintech firms are opening their physical branches along having more feet in the street for physical checks and documentation of collaterals.
- Repeatedly RBI pointed toward the increased risks in the unsecured segment and gave directions for being careful in giving personal loans to consumers.
Digital lenders
Digital lenders are institutions that offer loans through digital channels, such as mobile apps or websites, rather than traditional in-person methods. Digital lending uses technology to automate and streamline the lending process, from application to repayment.
6. SME IPO rules on Sebi
Context:
The Securities and Exchange Board of India (Sebi) will take up proposals that will affect small and medium enterprises (SMEs), angel funds, and the broader securities market through IPO regulations, insider trading rules, and compliance for registered entities during its board meeting on 18 December.
Also Read:
Small and Medium Enterprise Initial Public Offering (SME IPOs):
SEBI: Regulation for Algorithmic Trading
Details of the Changes made by SEBI:
Economy
1. The Indian Rupee Fell
Context:
The Indian rupee fell an all-time low of 84.93 per US dollar, per mid-session on Tuesday.
Factors Affecting:
- Reasons:
- trade deficit, unreported gold imports, and outflow from local equities.
- However, most of the times, pressure was on the currency from the bolstering dollar index of the US and increasing US bond yields.
- Foreign portfolio investors are selling domestic equities at ₹64,098.8 crores.
- India’s cumulative foreign merchandise trade deficit for the month hit an all-time high of $37.84 billion.
Agri Business
1. MSP Needs Recognition
Context:
Parliamentary standing committee on agriculture, animal husbandry and food processing recommends a legally recognized minimum support price for farm produce.
Key Highlights:.
- MSP was one of the core demands of the agitating farmers in 2021, which led to the repealing of the three farm laws and the constitution of a committee on MSP.
- The panel contended that a legal guarantee for MSP would reduce farmer suicides and provide them some financial stability.
The Minimum Support price (MSP)
The minimum support price (MSP) is the minimum price that is set by the Government of India for certain crops to ensure a minimum profit as well as ensuring food security for farmers. The MSP is basically announced at the beginning of the sowing season for crops like wheat and paddy. The government fix the mount of MSP based on recommendations from the Commission for Agricultural Costs and Prices (CACP).
Aim of MSP:
- Protect farmers
- The MSP protects farmers from the rapid drops in farm prices, especially during bumper production years.
- Increase food security
- The MSP helps to increase food security in the country.
- Stabilize prices
- The MSP helps stabilize prices for agricultural products, assuring the affordability to costumers as well.
- Encourage production
- The MSP motivates farmers to increase their agricultural production by providing a fair and respected price for their produce.
The MSP is different from the procurement price and issue price. When the market price for a commodity falls below the MSP, the government buys the entire quantity of food grains by the farmers at the MSP.
2. 3.7 Million Farmer IDs under AgriStack
Context:
The government on Tuesday informed Parliament that more than 3.7 million identity cards of farmers have been created so far as part of the AgriStack project.
Providing APIs for AgriStack Initiative
3. MGNREGS Wages Hike
Context:
The parliamentary standing committee on rural development and panchayati raj has urged the government to consider revising and increasing wage rates under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) finding the current payment not in “consonance with the rising cost of living”.
Read about: Mahatma Gandhi National Rural Employment Guarantee Act ( MGNREGA )
4. The India Conformity Assessment Scheme (i-CAS)
Context:
The Centre has said the India Conformity Assessment Scheme (i-CAS) for Halal is mandatory with respect to the export of specified meat products destined to specified countries.
The India Conformity Assessment Scheme (i-CAS)
The India Conformity Assessment Scheme (i-CAS) is a certification scheme for Halal products that was developed in order to verify the process of certifying meat and meat products for export.
- Ministry
- Ministry of Commerce & Industry, Government of India, Directorate General of Foreign Trade (DGFT)
- Purpose
- The i-CAS was developed to enhance the certification process for meat and meat products for export.
- Who established it
- The Quality Council of India (QCI) established the i-CAS.
- How it works
- The i-CAS is a Certificate of Conformity that confirms that a product, process, or service meets Halal standards and regulations.
- Who is involved
- The National Accreditation Board for Certification Bodies (NABCB) accredits Halal Certification Bodies, and the Agricultural and Processed Food Products Export Development Authority (APEDA) monitors the scheme.
- Who it applies to
- The i-CAS is mandatory for the export of specified meat products to certain countries.
5. Namo Drone Didi
Context:
The Central Sector Scheme On Provision of Drones for Self-Help Groups (SHGs) of women with an Budget of Rs. 1261 Crores for 2023-24 to 2025-26.
- Ministry
- Ministry of Rural Development (MoRD), specifically under the Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM).
- Aim:
- This is a central scheme to Empower women SHGs using drone technology in provision of agricultural services.
- It aims to provide drones to over 15,000 selected Women SHGs from 2024-25 to 2025-2026.
- It promises an additional income of not less than Rs. 1 lakh per annum for each SHG.
- Other features include:
- Subsidizing Women DAY NRL-SHGs for drone purchase.
- AIF loan facility for residual cost of the drone.
- Drone pilot training.
- An opportunity to earn additional 1 lakh PA by drone.
Benefits:
- Women’s independence due to training in drone technology.
- Agriculture within the efficiency: through accurate spraying of pesticides and fertilizers.
- Builds an extra income: Training for drones broadens the range of skills and knowledge.
- Community and network opportunities for women to connect: Well-being networks.
Facts to Remember
1. Rural Electrification Corporation Ltd. (REC) raises Bond
Rural Electrification Corporation Ltd. (REC) on Tuesday said it has raised ₹ 2,195 crore through bonds of different maturities.
2. Unified Payments Interface (UPI) in Rural and Semiurban India: A Study
- Only 4% of the rural and semiurban Indian users prefer UPI as a payment mode, two of whom only prefer cash.
What is Unified Payments Interface (UPI)?
3. Only 6.68% of India’s population filed income tax returns in FY24
- There was an increase in filings, with over 80.9 million income tax returns filed in FY24, up from over 74 million in FY23.
4. Ukraine kills top Russian general in Moscow
- A senior Russian General Lt Gen Igor Kirillov, head of the Radiation, Biological and Chemical Defence Forces, accused by Ukraine of being responsible for the use of chemical weapons against Ukrainian troops was assassinated in Moscow by Ukraine.
