Current Affairs 27 November, 2024

Daily Current Affairs

27 November, 2024

Banking/Finance

1. Moody’s and Fitch take rating action against Adani cos

Global Rating Agencies Downgrade Adani Group Companies

• Moody’s and Fitch downgraded the outlook for several Adani group companies from “stable” to “negative” due to rising of legal and governance risks.
• Fitch has placed certain Adani firms under the “Rating Watch Negative (RWN)” status.
• The downgrade of company might have weaken the group’s access to external funding and increase its capital costs.
• Andhra Pradesh is more likely to suspend a power purchase deal which is linked to Adani Group due to the US indictment of the group’s founder over an alleged bribery scheme.

Moody’s Economic Predictions for India

Moody’s Investors Service is a rating agency, which offers credit ratings to Indian investors, assessing issuers’ creditworthiness through ratings on bonds, loans, and other financial instruments over 100 years ago.

Projects India’s economy to grow by 7.2% in 2024, 6.6% in 2025, and 6.5% in 2026.

Fitch Ratings Inc.

Fitch Ratings Inc. is a an American credit rating agency, one of the three nationally recognized statistical rating organizations (NRSRO) by the U.S. Securities and Exchange Commission.

• India’s Long-Term Foreign-Currency Issuer Default Rating (IDR) affirmed at ‘BBB-‘ with a stable outlook.
• India’s growth forecast increased to 7.2% for FY25 and 6.5% for FY26.

2. EPFO subscribers may soon get ETF fillip

Employees’ Provident Fund Organisation (EPFO) to Reinvest 50% of ETF redemption proceeds into equity

• The Central Board of Trustees (CBT) in a meeting has decided this.
• The remaining redemption proceeds will be invested in other asset classes like government securities and debt instruments.
• The decision-making body, chaired by Union Labour Minister Mansukh Mandaviya, will also consider increasing the ETF redemption period from four years to seven years over six years for better yields.
• The Labour Ministry has asked the EPFO to focus on boosting IT infrastructure and capacity building for the Employment Linked Incentive (ELI) scheme.

Source: Business Standard

The Central Board of Trustees (CBT)

The Central Board of Trustees (CBT) is a statutory body that administers the Employees’ Provident Fund Organisation (EPFO). The board is consist of representatives from the government, employers, and employees. The CBT is established by the Central Government under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The board’s term is five years. 

The CBT’s members include:

• Chairman:  Dr. Mansukh Mandaviya (The union labor minister) 
• Vice-chairman: The minister of state for labor and employment 

The Employment Linked Incentive (ELI) scheme is a part of the Union Budget 2024-25 aiming to create jobs and improve livelihoods in India. The scheme has three major components:

• Plan A: Provides one-month wage of up to Rs 15,000 to first-time employees who register with the Employees Provident Fund Organisation (EPFO)
• Plan B: includes Incentivizing employers and employees to hire first-time employees particularly in the manufacturing sector. Benefits are based on EPFO contributions during the first four years of employment.
• Plan C: Includes reimburses employers up to Rs 3,000 per month for up to two years for each additional employee with a salary up to a certain amount 

The ELI scheme also includes an internship program to skill 1 crore youth over five years. The program will provide a stipend of Rs 5,000 per month and a one-time assistance of Rs 6,000 to interns. 

The ELI scheme is intended to:

• Help workers displaced by automation transition into new industries 
• Provide financial support to mitigate risks associated with changing careers 
• Encourage workforce expansion, especially in industries with financial constraints 
• Formalize workers in the informal sector 

Ministry: The Ministry of Labour and Employment

3. Govt plans insurance law changes for unified licence & Banking liquidity back in deficit after two months

India’s Insurance Law Amendments and Insolvency Concerns

• The government is planning to amend insurance laws to facilitate a unified license for insurers and raise the foreign direct investment (FDI) limit to 100%.
• A unified license or “composite licence” that will allow insurers to provide life, general, and health insurance under a single entity.
• The banking system liquidity fell into deficit mode after two months due to a negative balance of payments in Q3FY25, a widening trade deficit, and increased foreign portfolio investors’ (FPIs) outflows since October.

Banking system liquidity

Banking system liquidity is the amount of cash that banks have in hand to meet their short-term financial and business needs. 

• Liquidity Adjustment Facility (LAF): Is the RBI’s operations that inject or absorb liquidity into the banking system. If the banking system is a net borrower from the RBI under LAF, the system liquidity is in deficit. 
• Statutory Liquidity Ratio (SLR): it is basically regulatory tool that requires banks to keep a certain percent of their liabilities in liquid assets. 
• Cash Reserve Ratio (CRR): A regulatory tool that requires banks to keep a certain percentage of their deposits reserve with the central bank. 
• Liquidity ratios: It is a company’s ability to pay off its short-term liabilities. A higher ratio means it’s easier to clear debts and avoid defaulting on payments. 
• Liquidity: The risk to a bank’s earnings and capital if it can’t meet obligations when they come due. Bank management must ensure that there are sufficient funds in hand to meet short terms as well as long terms potential demands. 

4. India signs final act of Riyadh Design Law Treaty; to strengthen IPs

India Signs Final Act of Riyadh Design Law Treaty

• India has signed the final Act of the Riyadh Design Law Treaty (DLT), reaffirming its commitment to strengthening inclusive growth and strengthening its intellectual property ecosystem.
• The treaty adopted after almost two decades of talks under the World Intellectual Property Organization (WIPO), which aims to harmonize industrial design protection processes globally.
• Key provisions of the act includes more flexible filing and submission deadlines, a mechanism to restore rights in case of lapses, and provisions for correcting or adding priority claims.
• The treaty encourages the countries to adopt electronic systems for design registration and also facilitate the digital exchange of priority documents.
• India ranks among the top 10 globally for patents, trademarks, and industrial designs, with a 15.7% rise in 2023.

Riyadh Design Law Treaty

• Adopted by WIPO member states.
• Aims to standardize and streamline industrial design registration globally.
• Features include simplified registration processes, relaxed time limits, reinstatement of lost rights, simplified record-keeping, multiple design filing options, and electronic system support.
• Signed by India to enhance global design protection competitiveness and design-driven innovation policy.

WIPO Adopts Design Law Treaty (DLT)

• The DLT, adopted by WIPO member states, aims to harmonize industrial design protection procedures, improving efficiency and accessibility.
• The treaty aims to reduce administrative burdens and promote global creativity in design.

Also Read: Intellectual property rights (IPR)

5. Government to revamp IFCI

• India plans to shut down non-bank lender IFCI Ltd, which was asked to stop lending in 2021-22 due to high bad loans.
• The government owns nearly 72% of IFCI.
• The revamp comes as India is investing more than three times in its infrastructure sector, with spending expected to reach ₹11.11 trillion ($131.89 billion) for 2024-25.

IFCI, or Industrial Finance Corporation of India, was established in 1948 to provide finance to industries. It became a Public Limited Company in 1993 and is now government-owned, with the Indian government owning 72% of its paid-up capital. IFCI is a recognized Public Financial Institution and registered with the Reserve Bank of India.

6. Cooperative banks expected to be digitised by March 2025: Nabard chairman

National Bank for Agriculture and Rural Development (Nabard) Chairman Shaji K V announces cooperative banks’ digitization by March 2025.

• The Reserve Bank of India (RBI) mandates all cooperative banks to adopt the Core Banking Solution (CBS), marking a significant step towards modernisation.
• Most cooperative banks are currently unable to invest in technology due to their size.
• Shaji urges fintechs to focus on the cooperative sector and Regional Rural Banks (RRBs), which are engaging with technology in a larger way.
• The finance ministry is also agreeing to consolidate RRBs, potentially leading to a ‘One State One RRB‘ situation.
• The consolidation of RRBs is expected to reduce the number of banks to 28 from 43.
• Nabard is proposing to set up a common shared services entity across the country for all rural cooperatives, requiring fintech collaboration.

“One State-One RRB” Strategy in India

• It aims to reduce Regional Rural Banks (RRBs) from 43 to 28.
• Benefits include improved cost efficiency, optimized technology use, increased capital base, and expanded operation area.
• Timeline: Consolidation to debut by end of FY25.
• Process: Consultation with National Bank for Rural and Agricultural Development (NABARD) for consolidation roadmap.

Core Banking Solutions

• Core banking solutions have enabled digital transformation of banking institutions, providing easier access to banking services.
• Core banking solutions are software systems used by banks to manage their primary operations.
• They allow customers to perform transactions from any branch, enabling real-time updates on account balances and other customer information.
• These solutions are crucial for modern-age banking, ensuring a customer’s account balance remains current and up-to-date.

Regional Rural Banks (RRBs)

Regional Rural Banks (RRBs) are commercial banks in India that were established to support the rural economy. The Government of India established RRBs in 1975 to:

• It provides credit to small and marginal farmers, agricultural laborers, and the socio-economically weaker section of the population
• Helps to develop agriculture, trade, commerce, small scale industry, and other productive activities in rural areas
• Also mobilizes resources and deploy them locally 

RRBs are jointly owned by the Government of India, the concerned State Government, and a Sponsor Bank. The ownership ratio is 50% for the Government of India, 35% for the Sponsor Bank, and 15% for the State Government. 

National Affairs

1. Indian Chemical Council Wins 2024 OPCW-The Hague Award

2024 OPCW The Hague Award Confirmed for Indian Chemical Council (ICC)

• The 2024 OPCW The Hague Award was presented to the Indian Chemical Council (ICC) at the 29th Session of the Conference of the States Parties (CSP) of the Organisation for the Prohibition of Chemical Weapons (OPCW) at the Hague.
• The award recognizes efforts of the chemical industry body, marking the first time the award recognizes the efforts of a chemical industry body.
• The OPCW is an implementing body for the Chemical Weapons Convention, was awarded the Nobel Peace Prize in 2013 for its efforts to eliminate chemical weapons.

Indian Chemical Council (ICC)

• It is an national body representing Indian chemical industry.
• Established in 1938 by Acharya P. C. Ray, Rajmitra B. D. Amin.
• Objectives: It promotes industry growth, respond to government policy, provide safety, health, and environmental information, monitor industry’s national and international scenario, promote exports, ensure a trained workforce, foster R&D culture, quality standards, and technology absorption.
• Supports the chemical industry through events, training, awards, policy advice, and other activities.
• Represents the chemical industry worth around USD 187 billion in India.

President: Mr. Rajen K. Mariwala

2. Number of Gram Panchayats connected by Optical Fibre Cable/Satellite link under the Bharat Net Project

BharatNet project is being implemented in a phased manner to provide broadband connectivity to all the Gram Panchayats (around 2.64 lakh) in the country.

BharatNet: A Central Public Sector Initiative

• BharatNet, also known as Bharat Broadband Network Limited (BBNL), is a public sector undertaking which was established by the Department of Telecommunications under the Ministry of Communications of India.
• It aims to provide a minimum of 100 Mbit/s broadband connectivity to all 250,000-gram panchayats in India, covering nearly 625,000 villages.
• BharatNet Phase-I, completed by December 2017, connected almost 100,000 village councils covering 300,000 villages.
• Phase-II, set to be completed by March 2023, will connect the remaining 150,000 village councils covering 325,000 villages in 16 states.
• The last mile connectivity includes 700,000 Wi-Fi hotspots, which is subsidized by a union government grant of ₹36 billion.
• BharatNet is the world’s largest rural broadband connectivity program, built under the Make in India initiative.

BharatNet Phase III: Job Creation and Strategy Shift

• The third phase of the government’s broadband project, BharatNet which is expected to create 25,000 direct and indirect jobs over the next two-three years.
• The phase III focuses on last-mile connectivity through various innovative solutions like Wi-Fi hotspots and fibre-to-the-home (FTTH) services.
• BharatNet’s rollout will boost job creation for roles like fibre technicians, NOC staff, installation and repair technicians, and customer support professionals.
• State-owned Bharat Sanchar Nigam Ltd (BSNL) opened bids for BharatNet phase III in August.

3. PM-Wani Scheme

The Prime Minister’s Wi-Fi Access Network Interface (PM-WANI) framework which aims to accelerate proliferation of internet services by setting up public Wi-Fi Access points in the country with the objective of building digital India and consequential benefits thereon. 

PM WANI

• The PM WANI (Prime Minister Wi-Fi Access Network Interface) Scheme aims to expand Wi-Fi hotspots across India.
• Ministry: The Department of Telecommunications (DoT)
• The scheme involves multiple locations like public data offices, similar to Public Call Offices, to set up Wi-Fi networks and access points.
• Public Wi-Fi is a low-cost solution to reach unserved citizens and boost the economy.
• The aim of the scheme is to connect a new wave of internet users to various sectors, including education, telehealth, and agriculture.
• The scheme aims to enable small shopkeepers to provide Wi-Fi services, boosting incomes and bolstering the Digital India mission.
• The government aims to eliminate bureaucracy and licenses, making it easier for service providers to register online.

4. Centre launches E-Daakhil across all states and union territories of India

E-Daakhil Portal Launch in India

• The Department of Consumer Affairs has successfully implemented the E-Daakhil portal in every state and union territory of India.
• The portal was introduced to address consumer concerns following the Consumer Protection Act 2019, on 20th July, 2020.
• E-Daakhil is an innovative online platform designed to streamline the consumer grievance redressal process.
• The portal offers easy interface, allowing consumers to file complaints with minimal effort.
• The portal was launched in 35 States/UTs except Ladakh by the end of 2023.
• The government is also working on launching E-Jagriti, which will further streamline case filing, tracking, and management.
• Minister of Consumer Affairs, Food, and Public Distribution: Pralhad Joshi