Daily Current Affairs for UPSC Civil Services Exam – 07 August 2020

In Today’s News:

  1. Shri. G.C.Murmu has been appointed as the Comptroller and Auditor General of India.
  2. RBI broadens the scope of Priority Sector Lending by including Startups.

1.Shri.G.C.Murmu has been appointed as the Comptroller and Auditor General of India

News Summary

Former Lieutenant Governor of Jammu and Kashmir, Hon’ble Shri. G.C. Murmu has been appointed as the CAG of India.

Prelims GS – Polity

  • Article 148 of the Constitution of India deals with the Comptroller and Auditor General of India. (CAG)
  • CAG is the Supreme Audit Institution in India.
  • CAG is the head of the Indian Audit and Accounts Department.
Some important aspects of CAG:
  • CAG of India is appointed by the President of India by warrant under his hand and seal.
  • The administrative expenses of the office of the Comptroller and Auditor-General including all salaries, allowances, and pensions payable to or in respect of persons serving in that office, shall be charged upon the Consolidated Fund of India.
  • The Comptroller and Auditor-General shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office.
  • The reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the President, who shall cause them to be laid before each House of Parliament.
  • CAG holds office for a term of 6 years or till the age of 65 years whichever is earlier.

Mini Insights

Mains GS2 – Polity

Highlights of Duties and Powers of CAG:
  • CAG has the power to compile accounts of Union and States.
  • Comptroller and Auditor-General needs to prepare and submit accounts to the President, Governors of States and Administrators of Union Territories having Legislative Assemblies
  • Comptroller and Auditor-General shall give information and render assistance to the Union and States
  • It shall be the duty of the Comptroller and Auditor-General-
    • to audit all expenditure from the Consolidated Fund of India and of each State and of each Union territory having a Legislative Assembly and to ascertain whether the moneys shown in the accounts as having been disbursed were legally available for and applicable to the service or purpose to which they have been applied or charged and whether the expenditure conforms to the authority which governs it;
    • to audit all transactions of the Union and of the States relating to Contingency Funds and Public Accounts;
    • to audit all trading, manufacturing, profit and loss accounts and balance-sheets and other subsidiary accounts kept in any department of the Union or of a State; and in each case to report on the expenditure, transactions, or accounts so audited by him.
  • It shall be the duty of the Comptroller and Auditor-General to audit all receipts which are payable into the Consolidated Fund of India and of each State and of each Union territory having a Legislative Assembly and to satisfy himself that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue and are being duly observed and to make for this purpose such examination of the accounts as he thinks fit and report thereon.
  • He acts as a friend, guide and philosopher of the Public Accounts Committee of the Parliament.

For further information on the duties and powers of CAG, click here to visit the official website.

2. RBI broadens the scope of the Priority Sector Lending to include startups.

News Summary

The Reserve Bank of India has decided to broaden the scope of Priority Sector Lending (PSL) to include startups and has also decided to enhance the borrowing limits for renewable energy sectors. The RBI said, “With a view to align the guidelines with emerging national priorities and bring a sharper focus on inclusive development, the guidelines have been reviewed after wide-ranging consultations with all stakeholders.” RBI has not issued a detailed outlay of sub-target or restructuring guidelines in lending to startups.

Prelims GS – Economic Development

Priority Sector Lending:

Priority Sector includes the following categories:

(i) Agriculture
(ii) Micro, Small and Medium Enterprises
(iii) Export Credit
(iv) Education
(v) Housing
(vi) Social Infrastructure
(vii) Renewable Energy
(viii) Others

  • Now,  Startups will also be included in the Priority sector Lending Category.
  • This move will help in easier access to credit.
  • The central bank would also increase the targets for lending to ‘small and marginal farmers’ and ‘weaker sections’ under the PSL.
  • RBI also said that Banks are required to assign 40% of Adjusted Net Bank Credit or credit equivalent amount of off-balance sheet exposure, whichever is higher, to the priority sector, including agriculture and micro-enterprises.(Previously it was slightly different. Click here to view the targets and sub-targets under PSL).
Priority Sector Lending Certificates (PSLCs):
  • Priority Sector Lending Certificates (PSLCs) are a mechanism to enable banks to achieve the priority sector lending target and sub-targets by the purchase of these instruments in the event of a shortfall.
  • This also incentivizes surplus banks as it allows them to sell their excess achievement over targets thereby enhancing lending to the categories under the priority sector.
  • Under the PSLC mechanism, the seller sells fulfillment of priority sector obligation and the buyer buys the obligation with no transfer of risk or loan assets.

Click here to view the official RBI website regarding Priority Sector Lending.


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