Daily Current Affairs for UPSC Civil Services Exam – 02 June 2021

Daily Current Affairs for UPSC Civil Services Exam – 02 June 2021

In Today’s News:

  1. NBFC and second wave of the pandemic.
  2. FDI inflows at peak.
  3. NCPCR and data on orphans.
  4. SATAT initiative.

1. NBFC and second wave of the pandemic

News Summary

The heat of the second wave of the pandemic is hitting the NBFC’s collection of loans and this will soon lead to an increase in the overdue of loans as recoveries from overdue are impacted due to the lockdown in many parts of the country.

Prelims GS – Economic Development

NBFC:
  • A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of the immovable property.
Difference between NBFCs and Banks:
  • NBFCs lend and make investments and hence their activities are akin to that of banks; however, there are a few differences as given below:
    • NBFC cannot accept demand deposits;
    • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves;
    • the Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in the case of banks.
Registration of NBFCs:
  • In terms of Section 45-IA of the RBI Act, 1934, no Non-banking Financial company can commence or carry on the business of a non-banking financial institution without a) obtaining a certificate of registration from the Bank and without having a Net Owned Funds of ₹ 25 lakhs (₹ Two crores since April 1999).
  • However, in terms of the powers given to the Bank, to obviate dual regulation, certain categories of NBFCs that are regulated by other regulators are exempted from the requirement of registration with RBI
    • viz. Venture Capital Fund/Merchant Banking companies/Stockbroking companies registered with SEBI,
    • Insurance Company holding a valid Certificate of Registration issued by IRDA,
    • Nidhi companies as notified under Section 620A of the Companies Act, 1956,
    • Chit companies as defined in clause (b) of Section 2 of the Chit Funds Act, 1982,
    • Housing Finance Companies regulated by the National Housing Bank,
    • Stock Exchange, or a Mutual Benefit company.

Click here to know more about NBFCs in RBI FAQs.

2. FDI Inflows at peak.

News Summary

As per the data released by the Ministry of Commerce and Industry, India has attracted the highest ever total FDI inflow of US$ 81.72 billion during the financial year 2020-21 and it is 10% higher as compared to the last financial year 2019-20 (US$ 74.39 billion). Computer Software & Hardware’ has emerged as the top sector during F.Y. 2020-2021.

Prelims GS – Economic Development

FDI:
  • Foreign Direct Investment takes place when an investor establishes foreign business operations or acquires foreign business assets, and establishes ownership or controls interest in a foreign company.
  • FDI brings in long-term capital for the economy.
  • FDI is not only bringing money but also knowledge, skills, and technology.
Routes of FDI:
  • Automatic Route: Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from the Government of India for the investment.
  • Government Route: Under the Government Route, prior to investment, approval from the Government of India is required. Proposals for foreign direct investment under the Government route, are considered by respective Administrative Ministries/Departments.

Click here to know more about FDI.

Mini Insights

Mains GS3 – Economic Development

Benefits of FDI:
  • Increased Employment and Economic Growth
  • Human Resource Development
  • Exchange Rate Stability
  • Development of Backward Areas
  • Increase in Exports
  • Improved Capital Flow
  • Creation of a Competitive Market
  • Provision of Finance and Technology
  • Stimulation of Economic Development

Click here to visit the Invest India website and know more about these points in detail.

3. NCPCR and data on orphans

News Summary

NCPCR has tracked the orphans’ data during the pandemic through Bal Swaraj, an online tracking portal of a national child rights body. The NCPCR has informed the Supreme Court that these children have the risk of being pushed into trafficking and flesh trade. Around 9346 children have been abandoned or orphaned since the pandemic first hit the country in 2020.

Prelims GS – Polity/Governance

NCPCR:
  • National Commission for Protection of Child Rights is a statutory body established under the Commissions for Protection of Child Rights (CPCR) Act, 2005.
  • NCPCR is under the Ministry of Women and Child Development.
  • Mandate: To ensure that all Laws, Policies, Programmes, and Administrative Mechanisms are in consonance with the Child Rights perspective as enshrined in the Constitution of India and also the UN Convention on the Rights of the Child.
  • The child refers to the people who are between the age of 0-18 years.
  • As per section 31 of the Right of Children to Free and Compulsory Education Act, 2009 NCPCR has the mandate to examine and review the safeguards of the rights provided under the act and to recommend measures for its effective implementation and also to inquire into complaints relating to the violation of child’s right to free and compulsory education and to take necessary steps as provided under Section 15 of the Commission for Protection of Child Rights, 2005.

Click here to know more about NCPCR.

4. SATAT initiative

News Summary

Union Minister of Petroleum and Natural Gas & Steel Shri Dharmendra Pradhan presided over a virtual ceremony in which a number of initiatives were launched to provide a major fillip to the SATAT initiative.

Prelims GS – Economic Development

SATAT:
  • SATAT refers to the Sustainable Alternative Towards Affordable Transportation.
  • The SATAT scheme aims to set up Compressed Bio-Gas production plants and make CBG available in the market for use as a green fuel.
  • ‘ SATAT’, launched on 1.10.2018, envisages targeting production of 15 MMT of CBG from 5000 plants by 2023
  • This initiative holds great promise for efficient municipal solid waste management and in tackling the problem of polluted urban air due to farm stubble-burning and carbon emissions.
  • The use of CBG will also help bring down dependency on crude oil imports and in realizing the Prime Minister’s vision of enhancing farmers’ income, rural employment, and entrepreneurship.

Click here to know more about SATAT in the PIB release.

 

 

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