April 9th Current Affairs

1.Meeting of International Monetary and Financial Committee (IMFC)

IN NEWS:

• Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today attended the Plenary Meeting of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund (IMF) at the virtual Spring Meetings 2021.
• The meeting was attended by Governors/Alternate Governors representing 190 member countries of the IMF.

Key highlights:

• The discussions at the meeting were based on IMF Managing Director’s Global Policy Agenda (GPA) titled, “Bolstering the Recovery, Countering Divergence”.
• The IMFC was updated by the members on the actions and measures taken by the member countries to combat Covid-19.
• India emphasised that the GPA’s suggestion to hasten the transition to a low-carbon economy for promoting growth that benefits all needs to be viewed in the context of its implications for the Emerging Market and Developing Economies and low-income economies.
• The burden of economic transformation to a low carbon economy would disproportionately be higher for these countries, and positive benefits may not accrue in the short run.
• The focus needs to remain on the agreed principles of equity and differentiated responsibility of climate action.

Important value addition:

International Monetary and Financial Committee

• It is the Ministerial-level committee of 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:

1. It discusses the management of the international monetary and financial system.
2. It advises the IMF on any other matters of common concern affecting the global economy.
3. IMFC has 24 members, drawn from the pool of 189 governors, and represents all member countries. India is one of the current members.
4. It operates on consensus, including on the selection of its chairman.

SOURCE:PIB (April 9th Current Affairs)

2. Copyright (Amendment) Rules, 2021.

Context:

The Government of India has notified Copyright (Amendment) Rules, 2021 vide Gazette notification under reference G.S.R. 225(E) dated 30th March, 2021.

Key highlights:

• In India, the copyright regime is governed by the Copyright Act, 1957 and the Copyright Rules, 2013.
• The Copyright Rules, 2013 were last amended in the year 2016.
• OBJECTIVE: bringing the existing rules in parity with other relevant legislations.
• AIM: to ensure smooth and flawless compliance in the light of the technological advancement in digital era by adopting electronic means as primary mode of communication and working in the Copyright Office.
• A new provision regarding publication of a copyrights journal has been incorporated, thereby eliminating the requirement of publication in the Official Gazette.
• The amendments have harmonised the Copyright Rules with the provisions of Finance Act, 2017 whereby the Copyright Board has been merged with Appellate Board.
• The time limit for the Central Government to respond to an application made before it for registration as a copyright society is extended to one hundred and eighty days, so that the application can be more comprehensively examined.
• To encourage accountability and transparency, new provisions have been introduced, to deal with the undistributed royalty amounts and use of electronic and traceable payment methods while collection and distribution of royalties.
• To reinforce transparency in working of copyright societies a new rule has been introduced, whereby the copyright societies will be required to draw up and make public an Annual Transparency Report for each financial year.

SOURCE:PIB (April 9th Current Affairs)

3.Monetary Policy Report:RBI

In News

The Reserve Bank of India (RBI) has released the Monetary Policy Report for the month of April 2021.

Key Points

Unchanged Policy Rates:

Repo Rate – 4%.

Reverse Repo Rate – 3.35%.

Marginal Standing Facility (MSF) – 4.25%.

Bank Rate- 4.25%.

GDP Projection:

Real Gross Domestic Product (GDP) growth for 2021-22 has been retained at 10.5%.

Inflation:

RBI has revised the projection for Consumer Price Index (CPI) inflation to:

5.0% in Quarter 4 of 2020-21.

5.2% in Quarter 1 of 2021-22.

5.2% in Quarter 2 of 2021-22.

4.4% in Quarter 3 of 2021-22.

5.1% in Quarter 4 of 2021-22.

Accommodative Stance:

• The RBI decided to continue with the accommodative stance as long as necessary to sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy, while ensuring that inflation remains within the target going forward.
• An accommodative stance means a central bank will cut rates to inject money into the financial system whenever needed.

Support to Financial Institutions:

• RBI would extend fresh support of Rs. 50,000 crore to the All India Financial Institutions for new lending in Financial Year (FY) 2021-22.
• National Bank for Agriculture and Rural Development (NABARD) will be provided a Special Liquidity Facility (SLF) of Rs. 25,000 crore for one year to support agriculture and allied activities, the rural non-farm sector and Non-Banking Financial Companies (NBFCs) – Micro-Finance Institutions (MFIs).
• An SLF of Rs. 10,000 crore will be extended to the National Housing Bank for one year to support the housing sector.
• Small Industries Development Bank of India (SIDBI) will be provided Rs.15,000 crore under this facility for up to one year for funding of Micro, Small and Medium enterprises (MSMEs).
• All three facilities will be available at the prevailing policy repo rate.

Review Committee for ARC’s:

• Signalling the importance of Asset Reconstruction Companies (ARCs) to deal with bad loans, the RBI would constitute a committee to undertake a comprehensive review of the working of ARCs in the financial sector ecosystem.
• The committee will recommend suitable measures for enabling such entities to meet the growing requirements of the financial sector.

Extension of Priority Sector Lending:

• A six-month extension to September 30,2021 for Priority Sector Lending (PSL) classification for lending by banks to NBFCs for ‘on-lending’ to sectors that contribute significantly to the economy in terms of export and employment — has been approved.
• On-lending means to lend (borrowed money) to a third party.
• This would provide an impetus to NBFCs providing credit at the bottom of the pyramid.

SOURCE:THE HINDU (April 9th Current Affairs)

4. GOVERNMENT SECURITIES ACQUISITION PROGRAMME (G-SAP)

IN NEWS:

RBI Governor has announced Government Securities Acquisition Programme (G-SAP), through which it will purchase government securities worth Rs 1 lakh crore in the first quarter of FY22.

KEY POINTS:

• It is part of RBIs Open Market Operations.
• Under the programme, the RBI will commit upfront to a specific amount of Open Market Purchases of government securities.
• The first purchase of government securities for an aggregate amount of Rs. 25,000 crore under G-SAP 1.0 will be conducted on 15th April, 2021.

Objective:

To avoid volatility in the G-sec market in view of its central role in the pricing of other financial market instruments across the term structure and issuers, both in the public and private sectors

Significance:

• It will provide certainty to the bond market participants with regard to RBI’s commitment of support to the bond market in FY22.
• The announcement of this structured programme will help reduce the difference between the repo rate and the 10-year government bond yield. That, in turn, will help to reduce the aggregate cost of borrowing for the Centre and states in FY 2021-22.
• It will enable a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions.
• A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates.
• The slope of the yield curve gives an idea of future interest rate changes and economic activity.

SOURCE:Indian Express. (April 9th Current Affairs)

5.NET-ZERO GOAL

CONTEXT:

Context:

In its bid to reclaim the global climate leadership, the US is widely expected to commit itself to a net-zero emission target for 2050 at the upcoming virtual Climate Leaders’ Summit convened by US President Joe Biden.

Net-Zero Goal

• Net-zero, which is also referred to as carbon-neutrality, does not mean that a country would bring down its emissions to zero.
• Rather, net-zero is a state in which a country’s emissions are compensated by absorption and removal of greenhouse gases from the atmosphere.
• Absorption of the emissions can be increased by creating more carbon sinks such as forests, while the removal of gases from the atmosphere requires futuristic technologies such as carbon capture and storage.
• This way, it is even possible for a country to have negative emissions, if the absorption and removal exceed the actual emissions.
• A good example is Bhutan which is often described as carbon-negative because it absorbs more than it emits.

The global target

• The goal of carbon neutrality is only the latest formulation of a discussion going on for decades, on having a long-term goal.
• A very active campaign has been going on for the last two years to get every country to sign on to a net-zero goal for 2050.
• It is being argued that global carbon neutrality by 2050 is the only way to achieve the Paris Agreement target of keeping the planet’s temperature from rising beyond 2°C compared to pre-industrial times.
• Current policies and actions being taken to reduce emissions would not even be able to prevent a 3–4°C rise by the turn of the century.
• Long-term targets ensure predictability, and continuity, in the policies and actions of the countries. But there has never been a consensus on what this goal should be.

Going beyond emission reduction

• Earlier, the discussions used to be on emission-reduction targets, for 2050 or 2070, for rich and developed countries.
• These unregulated emissions over several decades are mainly responsible for global warming and consequent climate change.
• The net-zero formulation does not assign any emission reduction targets to any country.
• Theoretically, a country can become carbon-neutral at its current level of emissions, or even by increasing its emissions, if it is able to absorb or remove more.

Global actions for net-zero

• Several other countries, including the UK and France, have already enacted laws promising to achieve a net-zero emission scenario by the middle of the century.
• The EU is working a similar Europe-wide law, while many other countries including Canada, South Korea, Japan and Germany have expressed their intention to commit themselves to a net-zero future.
• Even China has promised to go net-zero by 2060.
• India, the world’s third-biggest emitter of greenhouse gases, after the US and China, is the only major player holding out.

India’s position is unique

• India is the only one opposing this target because it is likely to be the most impacted by it.
• Over the next two to three decades, India’s emissions are likely to grow at the fastest pace in the world, as it presses for higher growth to pull hundreds of millions of people out of poverty.
• No amount of afforestation or reforestation would be able to compensate for the increased emissions.
• Most of the carbon removal technologies right now are either unreliable or very expensive.

Why does India object to net-zero emissions?

• The net-zero goals do not figure in the 2015 Paris Agreement, the new global architecture to fight climate change.
• The Paris Agreement only requires every signatory to take the best climate action it can.
• Countries need to set five- or ten-year climate targets for themselves, and demonstrably show they have achieved them.
• Implementation of the Paris Agreement has begun only this year.
• Most of the countries have submitted targets for the 2025 or 2030 period.
• India has been arguing that instead of opening up a parallel discussion on net-zero targets outside of the Paris Agreement framework, countries must focus on delivering on what they have already promised.

India is already doing more

• India is hoping to lead by example. It is well on its way to achieving its three targets under the Paris Agreement and looks likely to overachieve them.
• Several studies have shown that India is the only G-20 country whose climate actions are compliant with the Paris Agreement goal of keeping global temperatures from rising beyond 2°C.
• Even the actions of the EU, which is seen as the most progressive on climate change, and the US are assessed as “insufficient”.
• In other words, India is already doing more, relatively speaking, on climate than many other countries.

Fuss over developed countries contribution

• New Delhi also repeatedly points to the fact that the developed nations have never delivered on their past promises and commitments.
• No major country achieved the emission-cut targets assigned to them under the Kyoto Protocol, the climate regime preceding the Paris Agreement.
• Some openly walked out of the Kyoto Protocol, without any consequences.
• None of the countries has delivered on the promises they made for 2020.
• Even worse is their track record on their commitment to providing money, and technology, to developing and poor countries to help them deal with the impacts of climate change.

India’s way forward

• India has been arguing that the 2050 carbon-neutrality promise might meet a similar fate, although some countries are now finding themselves in law.
• It has been insisting that the developed countries should, instead, take more ambitious climate actions now, to compensate for the unfulfilled earlier promises.
• At the same time, it has been saying that it does not rule out the possibility of achieving carbon neutrality by 2050 or 2060.
• Just that, it does not want to make an international commitment so much in advance.

SOURCE:INDIAN EXPRESS (April 9th Current Affairs)