Banking, Financial and Economic Awareness
1. Rajiv Bansal appointed as new CMD of Air India
- Rajiv Bansal has been appointed as the new Chairman and Managing Director (CMD) of Air India.
- He is currently holding the post of additional secretary in the Ministry of Petroleum and Natural Gas.
- Before Rajiv Bansal, Ashwani Lohani was CMD of Air India.
2. The accounting year of RBI changed
- RBI has changed its accounting year from July-June to April- March.
- The changing of RBI's accounting year was recommended by the Bimal Jalan Committee on Economic Capital Framework (ECF).
- After changes in the accounting year, the next accounting year is expected to have a duration of nine months. This will begin from July 2020 and end on March 31, 2021. After that, the accounting year of RBI will begin in April.
- After the change, the accounting year of RBI will be similar to the fiscal year used by the government. So, RBI will be able to provide better estimates of the projected surplus transfers to the government for a financial year for budgeting.
- The change will also a lower need for an interim dividend that is currently paid by RBI to government and interim dividend will be paid in extraordinary situations.
- Economic Capital Framework (ECF) is used by RBI to take decisions on appropriate risk provisioning under Section 47 of the RBI Act, 1934 and surplus distributions.
- Bimal Jalan Committee on Economic Capital Framework (ECF):
- It was formed to review the existing Economic Capital Framework of RBI on December 26, 2018.
- It gave its report on August 27, 2019.
- It consisted of a chairman, a vice-chairman, and four other members.
3. India's forex reserves reach $473 billion
- India's forex reserves have shown the biggest increase in the last five months since September 20, 2019, and reach $473 billion on February 7.
- In the last three weeks before February 7, foreign exchange reserves have grown by $10.86 billion.
- After lowering of corporate tax rates from 30% to 22 %, the reserves have grown by $11.3 billion between September 20 and October 11.
- The increase in forex reserves is due to an increase in foreign currency assets to $439.18 billion. Gold reserves have decreased to $28.77 billion.
- The increase in forex reserves is due to the rise in FPI investment, falling crude oil prices and declining imports from China.
- Foreign Currency Assets of RBI, gold with RBI, Special Drawing Rights (SDRs) of Government of India and India’s Reserve Position (Reserve Tranche Position (RTP)) in IMF are part of India’s forex reserves as per RBI’s data on India’s forex reserves and some other sources.
- But, the Ministry of Statistics and Programme Implementation says that India’s Reserve Position in IMF is not included in India’s gross foreign exchange reserves as they are not available on immediate demand.
4. Increasing NPAs in the renewable energy sector
- Despite the increase in private funding to the power sector during the past six years, there is an increase in pending payments of power distribution companies and a rise in NPAs in the renewable energy sector.
- Currently, nearly half of the total credit to the infrastructure sector goes to the power sector. In terms of credit to infrastructure, the telecom sector follows the power sector.
- $3.22 billion FDI inflows have gone to the power sector in the last four years. As per Central Electricity Authority data, Rs 9,403.58 crore worth payments are pending by power distribution companies.
- At the end of August 2019, India's installed renewable power capacity was nearly 80.63 gig watts.
5. The government may give Rs 2 lakh crore tax collection target to I-T department
- The government may give Rs 2 lakh crore tax collection target to the I-T department under Vivad se Vishwas scheme by March 31, 2020.
- Earlier, the government has introduced Direct Tax Vivad Se Vishwas Bill, 2020.
- Vivad se Vishwas scheme ends in June 2020.
- In Budget 2020-21, the government has proposed Vivad se Vishwas scheme to settle pending direct tax disputes.
- Cabinet has brought an amendment to the bill. Now, the taxpayer will pay the total disputed tax amount if the tax dispute case was won by the tax department and assessee/ taxpayer has filed an appeal at the higher forum.
- But, the taxpayer will pay 50% of the total disputed tax amount if the tax dispute case was won by assessee/ taxpayer in lower forum and tax department appealed in higher forum and dispute is pending in Income Tax Appellate Tribunal (ITAT), High Courts and Supreme Court.
- Income Tax Appellate Tribunal (ITAT):
- It is a quasi-judicial body.
- It was formed in January 1941.
- There are 63 benches of ITAT.
Multiple Choice Questions (MCQs)
1. Who has been appointed as the new Chairman and Managing Director (CMD) of Air India?
- Rajiv Bansal
- Ashwani Lohani
- S S Deswal
- Madhukar Kamath
- Sharad Kumar Saraf
2. Currently, the accounting year of RBI starts from
3. India's forex reserves have recently shown the biggest increase in the last five months. On February 7, India's foreign exchange reserve was equal to
- $473 billion
- $439 billion
- $487 billion
- $495 billion
- $427 billion
4. Which of the following sector gets nearly half of total credit to the infrastructure sector?
5. When was Income Tax Appellate Tribunal (ITAT) formed?