Banking, Financial and Economic Awareness
1. Splitting of GAIL (India) Ltd.’s pipeline business from natural gas marketing and petroleum production businesses
- Ministry of Petroleum and Natural Gas has sought approval for splitting GAIL (India) Ltd’s pipeline business from natural gas marketing and petroleum production businesses.
- After bifurcation, the government may sell GAIL (India) Ltd.’s pipeline business to a strategic investor in the future.
- GAIL (India) Limited:
- It is the Maharatna Central Public Sector Enterprise. It was established in 1984.
- It owns 70% of a 16,981-km long pipeline network of India.
- Ministry of Petroleum and Natural Gas exercises administrative control over GAIL (India) Limited.
- Currently, the government's stake in GAIL is 54.89%.
2. Government may offer lottery for GST bills
- The government may start lottery offers under Goods and Services Tax to ensure that customers take a bill at the time of purchasing.
- The amount of lottery offered for GST bills will be between Rs 10 lakh and Rs 1 crore. Lottery will be offered after the customers will upload their bills on a portal.
- Minimum limit for bills to be eligible for the proposed lottery will be decided by the GST council later.
- Lottery will be offered from the money available with the consumer welfare fund.
- Consumer welfare fund (CWF) is a fund that started under section 57 of the CGST Act, 2017 by the Department of Revenue. Ministry of Consumer Affairs, Food & Public Distribution operates CWF.
- Along with starting lotteries for GST bills, the government may also incentivize QR Code-based transactions to remove leakages in GST revenue collections.
- Under the GST regime, four different tax rates have been decided by the government. They are 5%, 12%, 18% and 28 %. Along with imposing these GST at four rates, the government also levies a cess on luxury, sin and demerit goods.
3. Request for Quote (RFQ) platform launched
- National Stock Exchange (NSE) has launched a single RFQ platform for a large number of debt securities including corporate bonds and government securities.
- The platform will be accessible to all regulated entities, listed corporate and institutional investors. It will help in further development and the electronification of the bond market in India.
- The platform will be managed by NSE and NSE Clearing Ltd (NCL) will settle eligible transactions.
- There will also be the reporting of details about eligible transactions to CBRICS (Corporate Bond Reporting and Integrated Clearing and Settlement Platform).
- On 3 February 2020, BSE has already started its Request for Quote Platform (RFQ).
4. Government cancels divestment of AITSL
- The government has cancelled plans for divestment or disinvestment of Air India Transport Services Limited (AITSL).
- It is a fully owned subsidiary of Air India that handles ground services like passenger, baggage, cargo and cabin cleaning. It was formed in 2013.
- Cancelling of plans for divestment of AITSL will have no effect on the selloff of Air India and Air India Express.
5. Steps being planned to take action against fraudulent imports through FTA route and review Rules of Origin requirements
- The government is planning steps to take action against fraudulent imports through the FTA route and review Rules of Origin requirements.
- In Budget 2020-21, the government has proposed that it will review Rules of Origin requirements and it is taking steps to add provisions in Customs act to check undue claims of benefits on imports under Free Trade Agreements (FTAs).
- The government may also set up a task force under the Department of Revenue Intelligence for recommending measures to check fraudulent imports through FTA route
- Rules of Origin requirements are criteria that help in deciding the origin of the imported product from an FTA partner country.
6. DICGC increases deposit insurance limit
- Deposit Insurance and Credit Guarantee Corporation (DICGC) has increased deposit insurance limit from the current Rs 1 lakh to Rs 5 lakh per depositor.
- Moody’s Investors Service has said that the increase is credit positive and will increase the confidence of depositors and help banks in collecting funds.
- Savings accounts, current accounts and term deposits will be covered under the new deposit insurance limit.
- DICGC is RBI's wholly-owned subsidiary. It was created in 1962.
Multiple Choice Questions (MCQs)
1. How much percentage of India's total pipeline network of India is currently owned by GAIL (India) Limited?
2. Which among the following is not a GST rate fixed by the government?
- 5 %
- 12 %
- 18 %
- 28 %
3. Which of the following has recently launched a Request for Quote (RFQ) platform?
- NSE Clearing Ltd (NCL)
- NSE IFSC Ltd
- India INX
- National Stock Exchange (NSE)
- Calcutta Stock Exchange(CSE)
4. Government has recently cancelled plans for divestment of
- Air India Transport Services Limited (AITSL)
- Air India
- Air India Express
- Air India Engineering Services Limited
- Alliance Air
5. Deposit Insurance and Credit Guarantee Corporation (DICGC) has increased deposit insurance limit from current Rs 1 lakh to
- Rs 3 lakh
- Rs 5 lakh
- Rs 7 lakh
- Rs 8 lakh
- Rs 9 lakh