Daily Current Affairs – 20th April 2020

FDI Policy Review To Curb Acquisition Prospects Of Indian Companies

The government reviewed the Foreign Direct Investment (FDI) policy on 18 April. In this review, many new provisions have been made in the current FDI policy of the country. The new policy aims to curb the possibility of mergers and acquisitions of Indian companies, given the favorable opportunity amid the Kovid-19 epidemic.

Countries that share land borders with India include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan. This decision of the government may affect foreign investment coming from these countries.

In the wake of the Corona virus epidemic, the government has taken this step to stop domestic companies taking advantage of adverse conditions and looking for better opportunities.

Many New Provisions Of FDI Policy

The new policy clarifies that government approval will also be required for transfer of ownership and any change of ownership of Indian companies due to FDI coming from land sharing countries with India. This policy will also apply to companies whose owners are citizens of these countries or these companies are located in these countries.

Such condition is already applicable to investors of Pakistan. Any citizen of Pakistan or any company made in Pakistan can invest in other areas except restricted areas only through government approval. Foreign investment is restricted in defense, space, nuclear power, energy and some other sectors.

Switzerland Made The Tricolor On Its Highest Mountain Mount Matterhorn

On April 18, Switzerland made a tricolor lighted on its highest mountain, Matterhorn Mountain. This tricolor was created to show respect for India’s efforts to battle Corona. Switzerland’s famous light artist Gerry Hoffstetter illuminated the tricolor in the shape of a tricolor larger than 1000 meters through light projection.

Mount Matterhorn is the highest point of the Alps mountain range. Its height is 14690 feet. The Indian tricolor on Switzerland’s landmark means giving hope and strength to Indians in the war against Coronavirus.

COVID-19’s Impact on Banks’ NPAs

‘Public sector banks- PSBs’ expressed their concern to the central government over the conversion of loans of over Rs 50,000 crore into ‘Non-Performing Assets- NPAs’ in March 2020. Has

Main Point:

The Reserve Bank of India-RBI had rejected PSBs’ request to postpone the classification of assets during the epidemic.

The borrowers, who were classified as Special Mention Accounts-2 (SMA-2), converted over Rs 50,000 crore into NPAs by the end of March in the entire banking system. This NPA mainly deals with Micro, Small and Medium Enterprises- MSMEs.

(Special Mention Account- SMA):

The SMA account shows the initial stress of the loan when the borrower fails to meet the debt obligations. However this account is not yet classified as NPA.

Early identification of such accounts enables banks to initiate necessary remedial action before the asset is converted to NPA.

 Loan / Advance accounts are classified in SMA in the following ways:

RBI Package:

RBI has extended the repayment period of agricultural, retail and all types of crop loans to three months, along with credit card and working capital. These benefits will be available from March 1 to May 31.

A working capital loan is a loan that is taken to carry out the day-to-day operations of the company.

Banks Side:

Banks have requested the government to take an official explanation from the RBI that the prohibition imposed on the recovery of loans by the RBI as part of the relief package to deal with COVID-19 effect ‘Non-Banking Financial Companies’ (Non-Banking Financial Companies- NBFC).

The fact to be noted here is that RBI has extended the payment period for working capital and retail customers, whereas NBFCs do not have any concept of working capital, hence the payment rules will not apply to them.

About 10 Crore People Deprived Of Ration Distribution

According to well-known economists such as Jean Dreze and Reetika Khera, about 10 crore people are deprived of ration distribution under the public distribution system.

Key Points:

Ration distribution is done through the Public Distribution System to 67% of the total population under the National Food Security Act using the 2011 Census data. It comprises 75% of the people in rural areas and 50% in urban areas.

It is important to note that according to the 2011 census, India’s population is about 121 crores.

Presently about 80 crore people are being covered under the public distribution system.

However, by applying the ratio of 67% to the projected 137 crore population for the year 2020, we find that about 90 crore people should be covered under the public distribution system. This means that about 10 crore people will be deprived of ration distribution under the public distribution system.

It is noteworthy that people who have lost jobs due to lockdown are now dependent on public distribution system only. Amidst these circumstances, due to COVID-19, the lockdown has been revealed due to the public distribution system across the country.

Statistics Related To States:

According to experts, ration distribution under the National Food Security Act would deprive 28 million people in Uttar Pradesh and 1.8 crore in Bihar.

Estimated population growth rate and population have been calculated using birth and death rates since 2016, while the actual population is much higher.

(National Food Security Act-2013):

The National Food Security Act is a historic initiative through which food and nutritional security of the poor, women and children is ensured.

The Act also provides for a grievance redressal mechanism. If a public servant or an authorized person does not comply, a provision has been made to hear the complaint against him.

Under the National Food Security Act, 2013, arrangements have been made to provide Rs 2 per kg of wheat and Rs 3 per kg of rice to the poor. Under this law, there is a provision that the beneficiaries should get the foodgrains prescribed for them at any cost, for this, in case of non-supply of food grains, the rule of payment of food security allowance was implemented in January 2015.

Under this Act, every family of the poorest section of the society is given rice, wheat and coarse grains at subsidized rates of three rupees, two rupees, one rupee per kg respectively in the Antyodaya Anna Yojana every month.

Compensation For Postal Employees

In the context of the status of COVID-19, the Ministry of Communications and Information Technology has given Rs. 10 lakh to all postal employees including Gramin Dak Sevak-GDS for their illness while discharging their duties. Has decided to pay compensation of Rs. These guidelines will come into effect soon and COVID-19 will remain in force till the end of the crisis. It is noteworthy that the Ministry of Home Affairs has recognized the Department of Posts as essential services.

Postal employees including Gramin Dak Sevaks are carrying out various responsibilities like delivery of mail to customers, post office savings bank, post-life insurance. Apart from this, post offices are also distributing COVID-19 kits, food packets, ration, and essential medicines, etc. across the country by coordinating with local state administration and police officers. Thus, the postal department is contributing to the COVID-19 crisis in addition to discharging its normal duties.

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