General Economics & Indian Economy - GS questions based on daily current affairs

ANSWER: Government procurement

Explanation:

• Government e-Marketplace (GeM) (gem.gov.in) is a very bold step of the Government with the aim to transform the way in which procurement of goods and services is done by the Government Ministries/Departments, PSUs, autonomous bodies etc.
• DGS&D with technical support of NeGD (MeitY) has developed GeM portal for procurement of both Products & Services.
• GeM is a completely paperless, cashless and system driven e-market place that enables procurement of common use goods and services with minimal human interface.
• Benefits of GeM to the Government, Sellers and the Indian industry and economy -
• Transparency -

1. GeM eliminates human interface in vendor registration, order placement and payment processing, to a great extent.
2. At every step, SMS and e-Mail notifications are sent to both buyer, his/her head of organization, paying authorities as well as sellers. Online, cashless and time bound payment on GeM is facilitated.

• Efficiency -
  1. Direct purchase on GeM can be done in a matter of minutes and the entire process in online, end to end integrated and with online tools for assessing price reasonability.
  
  2. For procurements of higher value, the bidding/RA facility on GeM is among the most transparent and efficient, in comparison to e-procurement systems in vogue within the Government sector.
  
  3. For creating a bid/RA, the buyer does not need to create his/her own technical specifications as they have been standardized on GeM. These would make GeM an extremely powerful tool in the hands of Government organizations to plan and procure.
  
  
• Secure and safe -
  
  1. GeM is a completely secure platform and all the documents on GeM are e-Signed at various stages by the buyers and sellers.
  
  2. The antecedents of the suppliers are verified online and automatically through MCA21, Aadhar and PAN databases.
  
  3. For high value bids/RA on GeM, an e-Bank Guarantee is also being introduced.
  
  4. GeM is a far better system than the existing one which relies more on financial instruments (EMD in case of tenders for large procurements only) to guarantee good conduct by the suppliers.
  
  5. In the existing system, there is zero check on the antecedents of the suppliers for small value procurements (upto Rs 1 lakh) whose cumulative value is huge across the Government organizations.
  
  6. GeM does a 100% online verification of all vendors irrespective of the value of procurement.
  
  
• Potential to support Make in India -
  
  1. On GeM, the filters for selecting goods which are Preferential Market Access (PMA) compliant and those manufactured by Small Scale Industries(SSI), enables the Government buyers to procure Make in India and SSI goods very easily.
  
  2. Easily accessible MIS also enables the administrators and policy makers to easily and effectively enforce the Government regulations on PMA and SSI sourcing.
  
  
• Savings to the Government -
  
  1. The transparency, efficiency and ease of use of the GeM portal has resulted in a substantial reduction in prices on GeM, in comparison to the tender, Rate Contract and direct purchase rates.
  
  2. The average prices on GeM are lower by atleast 15-20%, and in some cases even upto 56%.
  
  3. GeM is also doing Demand Aggregation for items that are to be procured by various Central/State Government Departments.
  
  4. Demand Aggregation is expected to further drive the prices south, by way of standardization of specifications and economy of scale.
  
  5. If pursued to its logical conclusion, GeM would eventually emerge as the National Public Procurement Portal, keeping in tune with the Global best practices.
  
  6. Most of the OECD countries, like USA, South Korea, UK, Singapore etc., have a single NPPP and as a result annual savings of billions of dollars are made in public procurement, besides giving a fillip to the domestic industry.

ANSWER: SBI

Explanation:

• INS Vikramaditya, the largest warship and latest aircraft carrier of the Indian Navy, has a strength of over 1500 personnel.
• A versatile national capability and a full-fledged township by herself, the ship has a new acquisition – an ATM machine installed on-board by the nation’s largest bank and banking network, the State Bank of India.
• The facilities offered by the State Bank of India to the ship include cash withdrawals, generation of mini-statements, access to bank balance details and change of PIN numbers.
• In the near future, the facility will be upgraded to a recycler machine with a cash deposit facility.
• Additionally, facilities like cash transfer, Card-to-Card transfer, Credit Card payment, mobile number registration and updating would also be available.
• The ATM machine is a unique floating banking system, and along with the Point of Sale machine that is also proposed to be installed on-board, would go a long way in supporting cashless transactions on the ship, in line with the government’s policy of digitising the India economy.
• It will enable personnel of the ship to manage their domestic financial requirements better and assist them in conducting their money transactions at their own convenience.

ANSWER: All of the above

Explanation:

• The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has given its ‘in principle’ approval for listing five Government owned General Insurance Companies in the stock exchanges.

These are -

1. The New India Assurance Company Ltd.
2. United India Insurance Company Ltd.,
3. Oriental Insurance Company Ltd.,
4. National Insurance Company Ltd. and
5. General Insurance Corporation of India.

• The shareholding of these Public Sector General Insurance Companies (PSGICs) will be divested from 100 percent to 75 percent in one or more tranches over a period of time.
• During the process of disinvestment, existing rules and regulations of Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI) will be followed.
• Listing of (PSGICs) is likely to yield the following benefits -
1. Listing on the Stock Exchange necessitates compliance with a number of disclosures and accounting requirements of SEBI which acts as an additional oversight mechanism.
2. The disclosures bring about transparency and equity in the companies functioning.
3. Listing is expected to lead to improved corporate governance and risk management practices leading to improved efficiency.
4. A greater focus on growth and earnings can also be expected.
5. Listing will open the way for the companies to raise resources from the capital market to meet their fund requirements to expand their businesses, instead of being dependent on the Government for capital infusion.
6. Public shareholding in Government-owned companies is a means of ensuring higher levels of transparency and accountability;

• To promote these objectives, the general insurance companies owned by the Government will be listed on the stock exchanges.

ANSWER: Neither 1 nor 2

Explanation:

• The Union Cabinet has given its approval to exclude State Governments of States/UTs (with Legislature) except Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh from National Small Savings Fund (NSSF) investments from 01.04.2016.
• It also approved providing a one-time loan of Rs. 45,000 crore from NSSF to Food Corporation of India (FCI) to meet its food subsidy requirements.
• Arunachal Pradesh shall be given loans to the tune of 100% of NSSF collections within its territory.
• Delhi, Kerala and Madhya Pradesh shall be provided 50% of collections.
• Once states are excluded from NSSF investments, the investible funds of NSSF with Gol will increase.
• Increased availability of the NSSF loan to Gol may reduce the Gol's market borrowings.
• The States will however, see an increase in market borrowings.
• Implementing the decision to exclude states from NSSF investments and extending the loan will entail no additional cost.
• Instead a reduction in the food subsidy bill of the Gol is anticipated.
• Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh will continue availing of NSSF loans.
• The Fourteenth Finance Commission (FFC) recommended that State Governments be excluded from the investment operations of the NSSF.
• The NSSF loans come at an extra cost to the State Government as the market rates are considerably lower.
• The involvement of States which are excluded from operations of National Small Savings Fund with effect from 1.4.2016 would be limited solely to discharging the outstanding NSSF debt obligations as on 31.3.2016 (FFC Recommendation).
• The loan contracted by States till 31.3.2016, from the National Small Savings Fund will stand completely repaid by the Financial Year 2038-39.
• NSSF shall extend a part of its collections to Food Corporation of India (FCI) to meet its food subsidy requirement.
• This will help the FCI reduce its interest cost.
• This savings on interest rate outgo will reduce the food subsidy burden of the Government of India.

ANSWER: Only 1

Explanation:

• A Mobile app named “SEZ India” has been launched
• The App would help the SEZ Units and Developers to find information easily and track their transactions on SEZ Online System.
• Now the SEZ Developers & Units can file all their transactions digitally through SEZ Online system and track the status on the go through the SEZ India mobile app.
• The app is available on Android Platform for use by SEZ Developers, Units, officials and others.
• The app has four sections i.e. SEZ Information, SEZ Online Transaction, Trade Information, and Contact details.
• SEZ INFORMATION - This is a compendium of the SEZ Act, 2005, SEZ Rules, 2006, MOCI Circulars, details of SEZs and Units etc.
• It gives up to date comprehensive details on all the above aspects.
• TRADE INFORMATION - This provision gives access to important information / tools such as Foreign Trade Policy, Hand Book of procedure, Duty Calculator, Customs & Excise Notification and MEIS Rates.
• CONTACT DETAILS - We see that the contact details of all Development Commissioners Office, DGFT, DG System, DGCI & S and SEZ online.
• SEZ online Transaction - This is a dynamic submenu that tracks the Bill of Entry / Shipping Bill processing status and also does verification.
• The app also helps the Importers / Exporters to track the status of 'Bill of Entry / Shipping Bill” integration and processing in the EDI system of the ICEGATE.

ANSWER: 1, 2

Explanation:

• With digital e-wallet Toka Paisa, which also has a smart-card version Assam became the first state in eastern India to have its own e-wallet.
• Until now (15^th January 2017) only Andhra Pradesh and Maharashtra have their own e-wallets.
• The E-wallet has a local language interface, which was developed by techies from the state-owned Assam Electronics Development Corporation Limited (AMTRON).
• The state has many river islands and riverbanks which are isolated due to poor internet connectivity.
• The offline smart card which can be used in POS (point of sale) terminals will be able to serve those areas.
• But young entrepreneurs who have been opening up various hyper-local digital start-ups are sceptical as they feel that it is difficult to convince people to change their old ways in specifically the rural areas.

ANSWER: Minimum wages amounts for labourers are only advisory in nature

Explanation:

• Union Minister of State for Labour and Employment has said that the Minimum Wages Act, 1948 will be amended to make minimum wages statutory and binding.
• Minimum wages for unskilled, semiskilled and skilled labourers currently remain only advisory in nature.
• The Payment of Bonus Amendment Act 2015 has been passed by the Parliament, providing for better coverage of Employees Provident Fund (EPF) and Employees State Insurance Corporation(ESIC) facilities.
• At present there are 43 central laws related to employees’ welfare, some dating back to the year 1925.
• All 43 laws will be simplified into four different codes on wages, industrial relations, social security and safe working conditions.
• The Centre is contemplating on amending Plantations Labour Act, 1951 to enable local bodies and State and Central governments to undertake development works inside private plantations to ensure the welfare of workers.

ANSWER: Both 1 and 2

Explanation:
Indian Railways launched the non-fare revenue policy, a first in Railways.

This policy will consider different areas ranging from advertising in trains and other areas such as bridges and other assets, setting up of ATMs at platforms to digital content for passengers.

Salient Features of the Policies:

• The policies are based on feedback from the key players in the industry. Some of the key inputs considered in the policies are:

1. Long Term Contracts - 10 years
2. Single Point of Contact within Indian Railways - Non-Fare Revenue Directorate

3. Credibility of Partner - including a technical and financial capability model

4. Transparent Process - E- Auction

5. Better media planning for Railway assets - Allowing zone/train/station wise packages

Key Policies are -

1. Non-Fare Revenue Policy - allow Indian Railways to consider unsolicited proposals of earnings through Non-Fare sources.

2. Out of Home Advertising Policy - allow monetisation of Railway Assets by means of advertising.

3. Train Branding Policy - augment advertising revenue of Indian Railways by allowing internal and external advertisement.

4. Content on Demand and Rail Radio Policy - allow monetization of entertainment based services on trains and stations. Entertainment services shall be provided through audio (P.A systems) and video systems (personal devices of the passengers) on trains and platforms.

5. ATMs Policy - allow setting up ATMs at major stations of the Indian Railways.

ANSWER: Rate charged to a merchant by the bank

Explanation:
Merchant Discount Rate (MDR) is the charge (rate) charged by the bank to the merchants for letting the merchants collect payments through swiping of credit and debit cards.

The merchant discount rate is expressed in percentage of the transaction amount.

The merchant needs to open an account with the bank.

The bank then provides the swipe machine. On swiping the cards, the money gets deposited in the account.

The merchant must agree to the rate before setting up his/her account.

RBI wants to encourage cashless transactions and so it as set upper limits for the MDR.

MDR for debit card transaction has been capped at 0.75% for transaction values up to Rs.2000 and at 1% for transaction values above Rs.2000.

ANSWER: Gandhinagar

Explanation:
Prime Minister Narendra Modi inaugurated the India International Exchange (INX) located at the International Financial Services Centre (IFSC), GIFT City (in Gandhinagar), terming it as momentous occasion for the country's financial sector.

The India INX is a wholly owned subsidiary of BSE Ltd is expected to start trading middle of January 2017.

The exchange plans to offer diversified portfolio of products and technology services at more competitive rates to Indian exchanges as well as other global exchanges like those in Dubai, London and Singapore.

The exchange can trade securities and products other than Indian rupees.

The securities and products that could be traded on the India INX are:

i. equity shares of companies incorporated outside India,
ii. depository receipts,
iii. debt securities,
iv. currency and interest rate derivatives,
v. index based derivatives,
vi. commodity derivatives and such other securities that may be allowed.

The exchange will offer the same state of the art T7 trading platform used by BSE with a speed of 6 microseconds - the fastest in the world.

India INX and the India Clearing Corporation (ICC) has already set up a fully functional office with a data centre and IT system at GIFT city.

The facilities in the India INX would enable a comprehensive single segment access for currency, commodities, equities and fixed income derivatives.

The exchange will ensure equitable distribution of market data to all members.