Term of the Day: Provisioning
When a bank gives loan, then it needs to keep in reserves certain funds (which it can’t lend) for the safety of the depositors. This is called provisioning against loan and is expressed as a percentage of loan given. For normal/standard loans the provisioning requirement may be very less but for loans which have turned NPAs, the provisioning requirement may be very high. If RBI says provisioning is 1% that means if a bank gives loan of Rs. 100 then it needs to keep Rs. 1 in a separate reserve fund which it cant lend.
Today there is a news in Indian Express regarding changing the framework on how Provisioning will be calculated. 'Expected Loss of Credit approach' from the current practise 'Incurred Loss approach'. These are operational things and not relevant for your exam.
When a bank gives loan, then it needs to keep in reserves certain funds (which it can’t lend) for the safety of the depositors. This is called provisioning against loan and is expressed as a percentage of loan given. For normal/standard loans the provisioning requirement may be very less but for loans which have turned NPAs, the provisioning requirement may be very high. If RBI says provisioning is 1% that means if a bank gives loan of Rs. 100 then it needs to keep Rs. 1 in a separate reserve fund which it cant lend.
Today there is a news in Indian Express regarding changing the framework on how Provisioning will be calculated. 'Expected Loss of Credit approach' from the current practise 'Incurred Loss approach'. These are operational things and not relevant for your exam.
Term of the Day: White Goods
White goods are large home appliances such as refrigerators, freezers, washing machines, tumble driers, dishwashers, and air conditioners etc.. They are (large) electrical goods for the house which were traditionally available only in white. Even though you can purchase them today in a wide range of different colors, they continue being called white goods.
Production Linked Incentive (PLI) Scheme is applicable on white goods like ACs, LED lights.
White goods are large home appliances such as refrigerators, freezers, washing machines, tumble driers, dishwashers, and air conditioners etc.. They are (large) electrical goods for the house which were traditionally available only in white. Even though you can purchase them today in a wide range of different colors, they continue being called white goods.
Production Linked Incentive (PLI) Scheme is applicable on white goods like ACs, LED lights.
Due to some issues i am not able to post news analysis...Collecting all information....Will continue posting after Diwali.
In the last few years (Post 2014)... there were lot of changes in Govt. (Economic) policy/programs/schemes/reforms. Now the focus of Govt. has shifted on its implementation and the Parliamentary elections are also due in the next six months. Because of these reasons not much is happening on policy/program front which is relevant for your syllabus. I will start posting the content on telegram but only that which is very relevant for your exam.
In the meantime you can revise the last one year posts which will be quite relevant for UPSC exam.
https://bit.ly/3SdghTR
In the meantime you can revise the last one year posts which will be quite relevant for UPSC exam.
https://bit.ly/3SdghTR
Source: Indian Express
Self explanatory.
An article for general reading.
Modern FTAs reduce tariffs but impose various types of Non-tariff Barriers (NTB). Look for the different types of NTBs highlighted in the above article.
https://bit.ly/3SdghTR
Self explanatory.
An article for general reading.
Modern FTAs reduce tariffs but impose various types of Non-tariff Barriers (NTB). Look for the different types of NTBs highlighted in the above article.
https://bit.ly/3SdghTR
Source: RBI
RBI has increased the 'Risk Weights' on various category of loans as RBI Governor thinks that these category of loans could be risky in future. Governor had also raised the issue of more lending by banks to NBFCs. (Just have a look, no need to go in detail)
How it will impact?
When Banks and NBFCs calculate 'Capital Adequacy Ratio (CAR)' then there is a 'risk weight' multiplied in the 'assets' in the denominator which increases the denominator and reduces the CAR. So Banks & NBFCs will now require more capital (equity and bond) to maintain the CAR as per BASEL III Norms.
CAR = Capital/Risk weighted Assets
https://bit.ly/3SdghTR
RBI has increased the 'Risk Weights' on various category of loans as RBI Governor thinks that these category of loans could be risky in future. Governor had also raised the issue of more lending by banks to NBFCs. (Just have a look, no need to go in detail)
How it will impact?
When Banks and NBFCs calculate 'Capital Adequacy Ratio (CAR)' then there is a 'risk weight' multiplied in the 'assets' in the denominator which increases the denominator and reduces the CAR. So Banks & NBFCs will now require more capital (equity and bond) to maintain the CAR as per BASEL III Norms.
CAR = Capital/Risk weighted Assets
https://bit.ly/3SdghTR
Source: Indian Express
Self explanatory: Read carefully each line
Hard Currencies are widely accepted for international transactions and are stable i.e. they do not loose much value with time (i.e. low and stable inflation). Since countries use hard currency for global transactions, so they also keep hard currencies in their (forex) reserves and hence it also becomes 'reserve currency'. Indian Rupee may become hard currency once our inflation is low and stable for long time, Debt is less, trade is balanced and fiscal and monetary stability. Since last few years Govt. and RBI is taking various measures to make Rupee a hard currency.
https://t.me/VivekSingh_Economy/4071
https://bit.ly/3SdghTR
Self explanatory: Read carefully each line
Hard Currencies are widely accepted for international transactions and are stable i.e. they do not loose much value with time (i.e. low and stable inflation). Since countries use hard currency for global transactions, so they also keep hard currencies in their (forex) reserves and hence it also becomes 'reserve currency'. Indian Rupee may become hard currency once our inflation is low and stable for long time, Debt is less, trade is balanced and fiscal and monetary stability. Since last few years Govt. and RBI is taking various measures to make Rupee a hard currency.
https://t.me/VivekSingh_Economy/4071
https://bit.ly/3SdghTR
Source: Indian Express
Edible Oil Production and Imports in Million Tonnes (MT)
2022-23
Domestic Prod.: 10.3 MT
Imports: 16.5 MT
Total Consumption: 26.8 MT
Imports = 16.5/26.8 = 61.5%
India is importing more than 60% of the edible oil which could pose a challenge for self sufficiency.
https://bit.ly/3SdghTR
Edible Oil Production and Imports in Million Tonnes (MT)
2022-23
Domestic Prod.: 10.3 MT
Imports: 16.5 MT
Total Consumption: 26.8 MT
Imports = 16.5/26.8 = 61.5%
India is importing more than 60% of the edible oil which could pose a challenge for self sufficiency.
https://bit.ly/3SdghTR
A Foreign Company purchasing shares (more than 10%) of a company registered in India (which is a subsidiary of another foreign company) will be treated as Foreign Direct Investment (FDI). [https://bit.ly/3SdghTR]
Final Results
76%
(a) TRUE
24%
(b) FALSE
The above statement is true. If a company is registered in India then it is treated as 'Resident Indian' ..... does not matter who owns it. So any investment (more than 10% shares) by a foreign company in an Indian registered company will be treated as FDI.
https://bit.ly/3SdghTR
https://bit.ly/3SdghTR
Source: Indian Express
Ministry of Finance (Dept. of Economic Affairs) publishes 'Monthly Economic Report'. The Oct. report says that Inflation has moderated but risks to growth and macroeconomic stability remain because we are not completely out of the inflation risk due to global risks. On a cumulative basis RBI has increased the repo rate by 250 basis points (2.5%) since April 2022. But it has not been fully transmitted into the lending rates. It may take some more time for the full transmission and if that happens then lending rate will further increase which may reduce (temper) the demand in the economy leading to risks for economic growth and we cannot reduce the repo rate right now because we are not sure about how the inflation situation will move because of the unpredictable geopolitical situation.
https://bit.ly/3SdghTR
Ministry of Finance (Dept. of Economic Affairs) publishes 'Monthly Economic Report'. The Oct. report says that Inflation has moderated but risks to growth and macroeconomic stability remain because we are not completely out of the inflation risk due to global risks. On a cumulative basis RBI has increased the repo rate by 250 basis points (2.5%) since April 2022. But it has not been fully transmitted into the lending rates. It may take some more time for the full transmission and if that happens then lending rate will further increase which may reduce (temper) the demand in the economy leading to risks for economic growth and we cannot reduce the repo rate right now because we are not sure about how the inflation situation will move because of the unpredictable geopolitical situation.
https://bit.ly/3SdghTR
Source: The Hindu
A good article on challenges in climate finance.
A good article on challenges in climate finance.
Source: The Hindu
Abhyudaya Cooperative Bank is an Urban/Primary Cooperative Bank.
https://bit.ly/3SdghTR
Abhyudaya Cooperative Bank is an Urban/Primary Cooperative Bank.
https://bit.ly/3SdghTR
Source: Indian Express
Govt. (National Biofuel Coordination Committee, NBCC) has set compulsory/mandatory blending of Compressed Biogas (CBG) with Compressed Natural Gas (CNG) for transportation and Piped Natural Gas (PNG) for households.
FY 2025-26: 1%
FY 20226-27: 3%
FY 2027-28: 4%
FY 2028-29: 5%
In another news, Govt. (National Biofuel Coordination Committee, NBCC) has also set an indicative target of blending of Sustainable Aviation Fuel (SAF) with Air Turbine Fuel (ATF). 1% in FY 2026-27 and 2% in 2027-28
https://bit.ly/3SdghTR
Govt. (National Biofuel Coordination Committee, NBCC) has set compulsory/mandatory blending of Compressed Biogas (CBG) with Compressed Natural Gas (CNG) for transportation and Piped Natural Gas (PNG) for households.
FY 2025-26: 1%
FY 20226-27: 3%
FY 2027-28: 4%
FY 2028-29: 5%
In another news, Govt. (National Biofuel Coordination Committee, NBCC) has also set an indicative target of blending of Sustainable Aviation Fuel (SAF) with Air Turbine Fuel (ATF). 1% in FY 2026-27 and 2% in 2027-28
https://bit.ly/3SdghTR
Source: The Hindu
Dollarization means replacing a country's currency with US Dollar. Argentina's new President has promised replacing its own currency 'Peso' with 'US Dollars'.
The article is self explanatory. You can just read the highlighted text.
Benefits:
1) Stable (foreign) Currency which will attract investment and growth
2) As the foreign currency can be earned only through exports (and foreign capital inflows), it would incentivize to promote exports and ease conditions for capital inflows
3) Previous governments could have forced Central banks to print money (monetization of deficit) and spend on wasteful expenditure but in case foreign currency they cant print and Govt. can earn money only through tax and other resources which will prevent inflation.
Negatives:
1) Central banks will loose control on monetary policy and can't influence the money supply
2) Central banks can't devalue currency to promote exports
https://bit.ly/3SdghTR
Dollarization means replacing a country's currency with US Dollar. Argentina's new President has promised replacing its own currency 'Peso' with 'US Dollars'.
The article is self explanatory. You can just read the highlighted text.
Benefits:
1) Stable (foreign) Currency which will attract investment and growth
2) As the foreign currency can be earned only through exports (and foreign capital inflows), it would incentivize to promote exports and ease conditions for capital inflows
3) Previous governments could have forced Central banks to print money (monetization of deficit) and spend on wasteful expenditure but in case foreign currency they cant print and Govt. can earn money only through tax and other resources which will prevent inflation.
Negatives:
1) Central banks will loose control on monetary policy and can't influence the money supply
2) Central banks can't devalue currency to promote exports
https://bit.ly/3SdghTR
Source: The Hindu
Share of Renewable power generation and fossil fuel based power generation between 2000 and 2022
https://bit.ly/3SdghTR
Share of Renewable power generation and fossil fuel based power generation between 2000 and 2022
https://bit.ly/3SdghTR
Source: The Hindu
Centre has approved a scheme in which Self Help Groups (SHGs) will be provided financial assistance to purchase drones for agricultural purposes (spraying nutrients & pesticides). Centre will provide financial assistance at 80% of the cost of drones. For example, if the cost of drone is Rs. 10 lakh and a SHG is purchasing a drone then Centre will give Rs. 8 lakh and then this drone can be rented by the SHGs to farmers and they (SHGs) can earn rental income.
https://bit.ly/3SdghTR
Centre has approved a scheme in which Self Help Groups (SHGs) will be provided financial assistance to purchase drones for agricultural purposes (spraying nutrients & pesticides). Centre will provide financial assistance at 80% of the cost of drones. For example, if the cost of drone is Rs. 10 lakh and a SHG is purchasing a drone then Centre will give Rs. 8 lakh and then this drone can be rented by the SHGs to farmers and they (SHGs) can earn rental income.
https://bit.ly/3SdghTR