• Current Affairs, 18 April 2020

    TO EASE SITUATION, RBI TO PUMP IN RS. 1 LAKH CRORE

    RELEVANT FOR: INDIAN ECONOMY | TOPIC: ISSUES RELATING TO GROWTH & DEVELOPMENT – BANKING, NPAS AND RBI

    • Das also said onion prices have continued to decline while PDS kerosene prices have slumped by 24% in the first fortnight of April and domestic LPG prices declined by 8%.
    • “In the period ahead, inflation could recede even further, barring supply disruption shocks and may even settle well below the target of 4% by the second half of 2020-21,” he said. He added that such an outlook would make policy space available to address the intensification of risks to growth and financial stability brought on by COVID-19.
    • “This space needs to be used effectively and in time,” Mr. Das commented. The RBI had reduced the repo rate by 75 bps to 4.4% on March 27.
    • The central bank has also reduced the reserve repo rate — while keeping the repo rate unchanged — by 25 bps to 3.5%. This was to discourage banks from parking their excess liquidity with RBI at the reverse repo rate.
    • Observing that the surplus liquidity in the banking system has risen significantly in the wake of government spending and the various liquidity enhancing measures by RBI, Mr. Das said banks parked Rs. 6.9 lakh crore on April 15 through the reverse repo window.

     

    CONVALESCENT PLASMA THERAPY FOR COVID-19

    RELEVANT FOR: DEVELOPMENTAL ISSUES | TOPIC: HEALTH & SANITATION AND RELATED ISSUES

    • Joy Varghese
    • Convalescent plasma treatment involves injecting the COVID-19 patient with convalescent sera of people who recovered from the infection recently. The patient cured of the disease will have antibodies that drive coronavirus away, says the report of the WHO-China Joint Mission on COVID-19.
    • The serum of COVID-19 cured individuals will have virus-neutralising antibodies which will act as a passive antibody therapy. It is called convalescent sera of COVID-19.
    • We can collect it in two ways:
    • Using routine blood withdrawal followed by centrifuge technique. Here we can collect 180 ml to 220 ml of convalescent sera and we can store it in -60 degree C up to one year.
    • Using aphresis machine/cell separator machine, we can collect even 600 ml of convalescent sera at one time and safely store for a year.
    • Those who are suffering from SARS-CoV-2 infection with moderate/severe sepsis with or without ventilator support.
    • At present, there is no available literature in the World. Based on our previous experience (more than 5 years in hepatitis B virus), I would recommend 180 ml to 220 ml of convalescent sera of COVID 19, once a day for a minimum three to five consecutive days.
    • The process of removal of abnormal substances from circulation which are either present in plasma or are tightly bound to plasma proteins is known as therapeutic plasma exchange. In COVID-19 patients, their plasma will contain enormous inflammatory mediators which cause severe lung injury.
    • Based on previous experiences with other diseases, in COVID-19 severe cases, a combination of therapeutic plasma exchange technique using convalescent sera will reduce the “cytokine storm” which will help recovery.
    • Advantages of the therapy are that it is the viable option in our healthcare system; it is quickly doable and there are no major side effects. The most important thing is that convalescent sera is easily transportable to any part of the country/worldwide by maintaining adequate cold-chain process similar to vaccine
    • Adding therapeutic plasma exchange in tertiary care centres using convalescent sera of COVID-19 will be the more effective way of therapy in COVID-19 patients.
    • Varghese has been working in the field of plasma exchange therapy for over five years

     

    HELPING A LENDING HAND: THE HINDU EDITORIAL ON RBI’S SECOND LOCKDOWN STIMULUS

    RELEVANT FOR: INDIAN ECONOMY | TOPIC: ISSUES RELATING TO GROWTH & DEVELOPMENT – BANKING, NPAS AND RBI

    • The RBI has infused oxygen into the financial system with a second set of measuresannounced on Friday by Governor Shatikanta Das to combat the lockdown impact on the economy. Most are aimed at maintaining liquidity, the economy’s lifeblood, though there are some regulatory proposals aimed at making life easier for banks, NBFCs and borrowers. It is now clear the bank prefers to calibrate its moves based on constant feedback from the ground — the way it should be. In what should be reassuring for the markets, Mr. Das was categorical that the RBI would do what it takes to support the economy and also monitor the evolving situation. Indeed, the RBI has been very generous in its liquidity maintenance measures in recent times and particularly so after the lockdown began in March. There will surely be consequences for the economy but that is a worry for another day. The overarching objective now should be to keep the economy afloat by deploying all the instruments at the RBI’s command.
    • The central bank has learnt from its experience of the Targeted Long Term Repo Operations (TLTRO) till now when banks preferred to deploy the funds in bonds of PSUs and large corporates. The RBI has called out this risk-off attitude of the banks while announcing a further ₹50,000 crore TLTRO — all of this has to be invested in bonds and paper of NBFCs and microfinance institutions. The response to the next round of TLTRO will be interesting to watch. Similarly, by reducing the reverse repo rate by another 25 basis points to 3.75%, the RBI has made it furthermore unattractive for banks to indulge in ‘lazy banking’ by parking excess funds with the central bank rather than lend. As much as ₹6.9-lakh crore was parked with the RBI as on April 15. This is the time when banks will have to be liberal in extending help for working capital loans and overdrafts to their borrowers, including MSMEs. The government could help here by extending a scheme of credit assurance cover that will encourage banks to be more liberal in their risk outlook. By clarifying that there will be an asset classification standstill during the moratorium period for accounts that were not already NPAs as of March 1, the RBI has brought relief to borrowers who were worried that opting for the moratorium may turn them into NPAs. State finances have got some breathing space through the increase of WMA (Ways and Means Advances) limit to 60% over the level as on March 31. The special refinance facility of ₹50,000 crore extended to NABARD, SIDBI and NHB will help these institutions to prop up their respective constituents. The central bank has done what it can. It is now over to the government for the fiscal support package.

     

    KISAN RATH TO LINK FARMERS TO TRANSPORT OPTIONS

    RELEVANT FOR: INDIAN ECONOMY | TOPIC: E-TECHNOLOGY IN THE AID OF FARMERS

    • Union Minister Narendra Singh Tomar launching the application in Delhi.
    • In a bid to ease the disruption of agricultural supply chains, especially for perishable produce, the Agriculture Ministry has launched a Kisan Rath mobile application, which will connect farmers and traders to a network of more than 5 lakh trucks and 20,000 tractors.
    • How the coronavirus crisis is affecting food supply|?
    • Reducing farm distress during a pandemic
    • The application, developed by the National Informatics Centre, is meant to help farmers and traders who are searching for vehicles to move produce. This includes primary transport from the farm to the mandis, local warehouses or the collection centres of farmer producer organisations, as well as the secondary transport from the local mandis to intra-and inter-State mandis, processing units, railway stations, warehouses or wholesalers.
    • COVID-19 outbreak could help agri exports: Agriculture Ministry analysis
    • The application will lead to on-boarding of over 5 lakh trucks through transport aggregators as well as 20,000 tractors from the custom hiring centres run by farmer groups. Refrigerated vehicles will also be available.
    • “It will be a stepping stone towards provision of timely transportation service at competitive rates for farmers and traders, besides achieving a reduction in food wastage,” said a Ministry statement.
    • Farmers are among the heroes of the COVID-19 pandemic

     

    LIQUIDITY BOOST TO NBFCS

    RELEVANT FOR:- INDIAN ECONOMY / TOPICS:-  BANKING SECTOR & NBFCS, INCLUSIVE GROWTH, MOBILIZATION OF RESOURCES

    The Reserve Bank of India (RBI) has announced a host of measures to provide liquidity support to Non-Banking Financial Companies (NBFCs), apart from giving them certain benefits for loans extended to the commercial real estate sector.

    Important Points

    TLTRO 2.0

    • The RBI would conduct Targeted Long-term Repo Operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore,in installments of appropriate sizes.
    • The banks have to invest the funds availed under TLTRO 2.0, in investment grade bonds, commercial paper, and non-convertible debentures of NBFCs.
    • RBI stipulated that small and mid-sized NBFCs and Micro Finance Institutions (MFIs)should receive at least 50% of these funds.
    • The investments made by banks under this facility would be classified as ‘Held-to-Maturity’ (HTM),even in excess of 25% of the total investment permitted to be included in the HTM portfolio.
    • Held to Maturity securities are securities that companies purchase and intend to hold until they mature.
    • This will help in easing the liquidity problem faced by NBFCs and MFIsto some extent.
    • NBFCs are facing liquidity pressure since banks have not extended any repayment moratoriumto these entities even if NBFCs have to provide the same for their borrowers.
    • Refinance facility:The RBI has also decided to provide a special refinance facility of ₹50,000 crore to National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and National Housing Bank (NHB) to enable them to meet sectoral credit needs. This would comprise:
    • ₹25,000 crore to NABARD for refinancing Regional Rural Banks (RRBs), cooperative banks and Microfinance Institutions (MFIs).
    • ₹15,000 crore to SIDBI for on-lending/refinancing.
    • ₹10,000 crore to NHB for supporting Housing Finance Companies (HFCs).
    • Extension of loans to the Real Estate Sector:The RBI has allowed extension of the loans by NBFCs to delayed commercial real estate projects by a year without restructuring.

    Targeted Long-term Repo Operations

    • LTRO is a tool that lets banks borrow one to three-year funds from the RBI at the repo rate, by providing government securities with similar or higher tenure as collateral.
    • It is called ‘Targeted’ LTRO as in this case, the RBI wants banks opting for funds under this option to be specifically invested in investment-grade bonds.
    • The TLTRO was introduced by the RBI to help companies, including financial institutions, manage their cash flow issues in the wake of the Covid-19 outbreak.

    National Housing Bank

    • NHB is a statutory organization that was established on July 9, 1988 under the National Housing Bank Act, 1987.
    • It is the apex level financial institution for the housing sector in the country.
    • It is a government-owned entity.
    • The governmnet took over the NHB from the RBI after buying entire stake of Rs. 1,450 crore in 2019.
    • The move follows the recommendation of Narasimham-II committee report of October 2001.
    • Earlier, RBI sold its stake in NABARD as well.
    • NHB aims to facilitate the promotion of Housing Finance Institutions and provides financial and other support to such institutions.

    Non-Banking Financial Company

    • NBFC is a company registered under the Companies Act, 1956.
    • It is 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, it 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 immovable property.
    • A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

    Features of NBFCs

    • NBFC cannot accept demand deposits.
    • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.
    • Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.

    WMA BORROWINGS OF STATES

    RELEVANT FOR :- INDIAN ECONOMY/ TOPICS :-  FISCAL POLICY

    Recently, states like Kerala, Punjab and Bihar have said that the Reserve Bank of India’s (RBI) decision to allow 60% higher borrowing under Ways and Means Advances (WMA) compared March 30, 2020 limit, is inadequate given the mounting expenses of states to counter the Covid-19 pandemic.

    Important Points

    • The states welcomed the RBI move to allow 60% higher borrowing under Ways and Means Advances (WMA), but said it is a temporary relief and will have only a marginal impact upon the fiscal crisis the states are facing.
    • They are saying that they can not go long for ways and means and have to slash their expenditureto a large extent because they do not have many avenues left for revenue augmentation.
    • They said banks are not willing to lend for the long term large amounts of money because of their liquidity preference.
    • They demanded from the Central government toraise the fiscal borrowing limits of states currently capped at 3% of the GSDP (Gross State Domestic Product) under the Fiscal Responsibility and Budget Management (FRBM) Act.
    • The Centre can invoke Section 5(3)of Fiscal Responsibility and Budget Management Act, 2003 which allows the RBI to “subscribe to the primary issues of Central Government securities” under very specific grounds.
    • Those cover, among other things,“act of war” and “national calamity”.
    • The RBI can also undertake increased secondary market purchasesand sales of Central as well as state government securities.

    Ways and Means Advances (WMA)

    • The WMA areshort-term loan facilities which allow the Centre and states to borrow funds from the RBI to bridge their temporary mismatch between expenditure and receipts.
    • The interest rate on WMA is the RBI’s repo rate.
    • Repo rate is basically the rate at which RBI lends short-term money to banks.
    • The WMA loans have a three-month tenure.
    • States are allowed an overdraft facility(to borrow in excess of WMA limit) of 21 days.

    Fiscal Responsibility and Budget Management (FRBM) Act, 2003

    • The FRBM Act was enacted by the Parliament in 2003 to institutionalize fiscal discipline, reduce fiscal deficit, and improve macroeconomic management.
    • The government was supposed to wipe out revenue deficit and cut fiscal deficit to 3% of GDP by 2008-09, thus bringing much needed fiscal discipline.
    • Fiscal deficit is the total expenditure excluding revenue receipts, loan recoveries and receipts from disinvestment etc. It is a measure of the government borrowing in a year.
    • The Act applies only to the central government and the States have to enact suitable legislation to adopt the rules under the FRBM Act.
    • The implementation of the Act was put on hold in 2007-08 due to the global financial crisis and the need for fiscal stimulus.
    • In 2012, the FRBM Act was amended and it was decided that the FRBM Act would target an effective revenue deficit in place of revenue deficit.
    • Effective revenue deficit excludes capital expenditure from revenue deficit and thus provides space to the government to spend on formation of capital assets.
    • In 2017, the FRBM Review Committee headed by former Revenue Secretary, NK Singh submitted its report to the Central Government. Few important recommendations being-
    • A debt to GDP ratio of 60% should be targeted with a 40% limit for the centre and 20% limit for the states;
    • Creation of an autonomous Fiscal Council;
    • An “escape clause”, i.e. the government can deviate from the targets in case of a national calamity, national security, etc.
    • The government used an escape route in its Budget for FY20, by taking a deviation of 0.5 percentage points from the fiscal deficit targets set out earlier.
    • During the presentation of the Budget 2020-21, the government fixed the fiscal deficit target for the year 2020-21 at 3.5% of the GDP.

    INDIA’S WATER WOES

    RELEVANT FOR:- BIODIVERSITY & ENVIRONMENT/ TOPICS :- PHYSICAL GEOGRAPHY, WATER RESOURCES, FEDERALISM, CENTRE-STATE RELATIONS, INTER-STATE RELATIONS, GOVERNMENT POLICIES & INTERVENTIONS, HEALTH, INDIAN CONSTITUTION, CONSERVATION ,ENVIRONMENTAL POLLUTION & DEGRADATION

    Recently, the Ministry of Health and Family Welfare (MoHFW) has issued an advisory to state governments asking them to ensure safe drinking water supply and management during the nationwide lockdown that has been extended to 3rd May, 2020.

    Important Points

    Advisory:

    • State governments need to assess the requirements of water purifying chemicals,including chlorine tablets, bleaching powder, sodium hypochlorite solution and alum and use them wherever necessary.
    • These purifying products are classified under the list ofessential commodities (Essential Commodities Act, 1955)
    • For ensuring social distancing,states are recommended to increase water supply hours if demand goes up and people come to fetch water from the public stand post.

    Reasons Behind the Advisory

      • The urgent need to ensure the availability of safe potable water to all citizens, mainly in the rural areas where medical sanitisers may not be available, has been highlighted in the wake of the Covid-19 pandemic.
      • In the list of preventive measures for controlling the spread of coronavirus, frequent washing of hands with frothing soaps is the most efficient and effective measure.

    Water Crisis of India

    • India has been facing the challenge of lack of access to clean waterfor several years.
    • Falling groundwater levels, drought, increasing demand from agriculture and industry, pollutionand poor water resource management are few other challenges which will intensify with the changing climate.
    • According to the data of the Ministry of Water Resources in 2017, (merged into the Ministry of Jal Shaktiin 2019) average annual per capita water availability fell from 1820 cubic meters assessed in 2001 to to 1545 cubic meters in 2011.
    • The data also highlighted the possibility of itreducing further to 1341 and 1140 in the years 2025 and 2050 respectively.
    • The ministry also held that thewater availability of water stressed/water scarce regions of the country is much below the national average due to the high temporal and spatial variation of precipitation.
    • Water Stressed Condition:Where annual per-capita water availability is less than 1700 cubic meters.
    • Water Scarcity Condition:Where annual per- capita water availability is below 1000 cubic meters.
    • According to the Global Annual Report, 2018 by the WaterAid,the water and sanitation advocacy group, India ranked at the top of 10 countries with lowest access to clean water close to home, with 16.3 crore people not having such access.
    • However, the government’s efforts (such as Jal Jeevan Mission) in solving the water crisis have been appreciated as well. It has been highlighted that despite facing several challenges, India is one of the world’s most-improved nations for reaching the most people with clean water.

    Water in the Constitution

    • In the Constitution, water is a matter included in Entry 17 of List-II i.e. State List. This entry is subject to the provision of Entry 56 of List-I i.e. Union List.
    • Under Article 246, the Indian Constitution allocates responsibilities of the States and the Centre into three lists– Union List, State List and Concurrent List.
    • Most of the rivers in the country give rise to inter-state differences and disputes (Article 262) on the regulation and development of waters of these rivers.

    GODAVARI VALLEY AREA AND COVID-19

    RELEVANT FOR:- GEOGRAPHY/ TOPICS :-  WATER RESOURCES

    Recently, a petition has been filed in the Supreme Court for directing the Andhra Pradesh government to conduct Covid-19 tests among the tribal population living along the Godavari river valley area.

    Important Points

    • The petition said the Godavari river valley area, where the tribal people live is close to the Polavaram irrigation project area.
    • The Godavari river valley area spreads across Andhra Pradesh, Telangana, Odisha and Chhattisgarh.
    • The Covid-19lockdown has been blatantly violated for the construction of the Polavaram irrigation project on Godavari river in Andhra Pradesh.
    • A large number of migrant workers are still working on the project site without sanitisers and masks. These workers lived in close proximity to the tribal population.
    • Lack of awareness among the tribal people,who live in dense forest and other scheduled areas of the river valley, made them more prone to Covid-19 infections.
    • Konda reddis,Koyas and Kolam are the popular tribes living in godavari valley.
    • Konda reddis and Kolam are part of Particularly Vulnerable Tribal Groups (PVTG).

    Polavaram Irrigation Project

    • Polavaram Projectis located in Andhra Pradesh on the river Godavari, near Polavaram village.
    • It is a multi-purpose irrigation projectas the project once completed will provide Irrigation benefits and will generate HydroElectric Power. In addition, this project will also supply drinking water.
    • It will facilitate an inter-basin transfer to the Krishna river basin through its Right canal.
    • It will also provide indirect benefits such as development of Pisciculture (breeding and rearing of fish), tourism and urbanisation.
    • The Project has been accorded national project status by the union government in 2014(under Section-90 of Andhra Pradesh Reorganization Act, 2014).

    Godavari River

    • Source:Godavari river rises from Trimbakeshwar near Nasik in Maharashtra and flows for a length of about 1465 km before outfalling into the Bay of Bengal.
    • Drainage Basin:The Godavari basin extends over states of Maharashtra, Andhra Pradesh, Chhattisgarh and Odisha in addition to smaller parts in Madhya Pradesh, Karnataka and Union territory of Puducherry.
    • Tributaries:Pravara, Purna, Manjra, Penganga, Wardha, Wainganga, Pranhita (combined flow of Wainganga, Penganga, Wardha), Indravati, Maner and the Sabri.

    RENTAL WAIVERS TO STPI UNITS

    RELEVANT FOR:- GOVERNANCE/ TOPICS :-GOVERNMENT POLICIES & INTERVENTIONS, WELFARE SCHEMES

    • The Ministry of Electronics and Information Technology (MeitY) has decided to provide rental waiver to small Information Technology (IT) units operating out of the Software Technology Parks of India.
    • This would provide a major boost to the IT and IT-enabled services (ITeS) sector amid Covid-19 lockdown.

    Important Points

    • Most of the IT units are either MSMEs (Micro, Small, and Medium Enterprises)or startups.
    • Benefit of the Rental Waiver:
    • This initiative will provide benefit to nearly 200 IT-ITeS MSMEs,operating from the 60 STPI centres.
    • This effort is also in the larger interest of around 3,000 IT-ITeS employeeswho are directly supported by MSME and startup units.
    • Cost to the Government:The total cost of the rent waiver to these units for the four months from March 1 to June 30, 2020 is estimated to be around Rs. 5 crore.

    Software Technology Parks of India

    • Software Technology Parks of India was set up in 1991 as an autonomous societyunder the Ministry of Electronics and Information Technology (MeitY).
    • STPI’s main objective has been the promotion of software exportsfrom the country.
    • The services rendered by STPI for the software exporting community have been statutory services, data communications services, incubation facilities, training and value added services.
    • STPI has played a key developmental role in the promotion of software exports with a special focus on SMEs and startup units.
    • STPI has been implementing the Software Technology Park (STP) schemeand the Electronics Hardware Technology Park (EHTP) scheme for the promotion of IT/ITES industry.
    • STP Scheme is a unique scheme, designed to promote the software industry and growth of startups and SMEs without any locational constraints.A company can set up an STP unit anywhere in India.
    • The EHTP Scheme is a 100% Export Oriented Schemefor undertaking manufacturing of electronic hardware equipment and other items in India.
    • At present, more than 5,000 units are registered with STPI.
    • It has 60 centres across the countryincluding a mix of tier 1 cities like Bengaluru, Chennai, Mumbai, and Kolkata and tier 2 cities like Nagpur, Warangal, and Surat.

    EXPORT CURBS ON PARACETAMOL FORMULATIONS REMOVED

    RELEVANT FOR :- INDIAN ECONOMY/ TOPICS :- HEALTH, GOVERNMENT POLICIES & INTERVENTIONS

    • The Centre has permitted the export of formulations (medicinal products) made from Paracetamol.However, the restriction on export of Paracetamol Active Pharmaceutical Ingredients (APIs) will continue.
    • The APIis the part of any drug that produces the intended effects.

    Important Points

    • Paracetamol and its formulations were among the 13 APIs and their formulations that figured in the March 3,2020 notification by the Directorate General of Foreign Trade (DGFT).
    • The formulations made from Paracetamol, including FDC (Fixed Dose Combinations), under anyITCHS code have been made free for export with immediate effect.
    • FDC:Two or more drugs contained in a single dosage form, such as a capsule or tablet.
    • An exampleof a FDC HIV drug is Atripla (a combination of efavirenz, emtricitabine, and tenofovir disoproxil fumarate). By reducing the number of pills a person must take each day, fixed-dose combination drugs can help improve adherence to an HIV treatment regimen.
    • ITCHS codesare better known as Indian Trade Clarification (ITC) and are based on the Harmonized System (HS) of Coding.
    • These were adopted in India for import-export operations.
    • Indian custom uses an eight digit ITC (HS) code to suit the national trade requirements.
    • The decision allowing export of formulations made from Paracetamol has come after permitting shipment of antimalarial drug Hydroxychloroquine (HCQ)to the United States (US) and several other countries.
    • The Pharmaceutical Export Promotion Council (Pharmexcil)of India wanted the Centre to resume export of Paracetamol APIs too.
    • The Pharmaexcil was established in 2004 by the Ministry of Commerce and Industry,Government of India, to promote pharma exports.

    Paracetamol

    • Paracetamol is a common fever medication globally.
    • Paracetamol is the most sought after and widely used drug ever since the Covid-19 outbreak.
    • According to sources, India is among the leading manufacturers of Paracetamol globally.
    • The production capacity is estimated to be 5,000 tonnes a month.
    • From an export perspective, it is a low value, high volume product.
    • Directorate General of Foreign Trade
    • DGFT is the main governing body in matters related to Exim (Export-Import) Policy.
    • It is an attached office of the Ministry of Commerce and Industry
    • The main objective of it under the Foreign Trade (Development and Regulation) Act, 1992 is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India.
    • Foreign Trade Act has replaced the earlier law known as the Imports and Exports (Control) Act 1947.

    PLENARY MEETING OF IMFC

    RELEVANT FOR:- INTERNATIONAL RELATIONS/ TOPICS :- GOVERNMENT POLICIES & INTERVENTIONS, HEALTH, IMPORTANT INTERNATIONAL INSTITUTIONS, GROUPINGS & AGREEMENTS INVOLVING INDIA AND/OR AFFECTING INDIA’S INTERESTS

    Recently, the Union Minister of Finance & Corporate Affairs attended the plenary meeting of the International Monetary and Financial Committee (IMFC) through video-conferencing.

    Important Points

    • This meeting’s Global Policy Agendawas “Exceptional Times – Exceptional Action”.
    • The IMFC was updated by the memberson the actions and measures taken by the member countries to combat Covid-19.
    • The members remarked on IMF’s crisis-response packageto address global liquidity and members’ financing needs.
    • India also highlighted that the IMF has always played a pivotal role in maintaining stability of the international monetary and financial systemand that it should continue rendering this critical role to the global financial architecture.
    • Measures taken by Indiato respond to the health crisis and to mitigate its impact were highlighted. Few of them are:
    • India Covid-19 Emergency Response and Health System Preparedness Package:Allocation of $2 Billion (₹15,000 crore) by the Government of India for strengthening the healthcare
    • Pradhan Mantri Garib Kalyan Yojana:Announcement of a scheme of social support measures amounting to $23 Billion (₹1.70 lakh crore) to alleviate the hardship of the poor and the vulnerable.
    • Provision of relief to firmsin statutory and regulatory compliance matters.
    • Easing of monetary policyby the Reserve Bank of India (RBI) and three-month moratorium on loan instalments.
    • Creating a Covid-19 Emergency Fundfor the SAARC

    International Monetary and Financial Committee

    • It is the Ministerial-level committeeof the International Monetary Fund (IMF).
    • It meets twice a year,once during the Fund-Bank Annual Meetings in October and once during the Spring Meetings in April.
    • This year, due to the Covid-19 outbreak, the meeting took place through video-conference.
    • Functions:
    • It discusses themanagement of the international monetary and financial system.
    • It advises the IMFon any other matters of common concern affecting the global economy.
    • IMFC has 24 members,drawn from the pool of 189 governors, and represents all member countries. India is one of the current members.
    • It operates on consensus,including on the selection of its chairman.

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