Current affairs- March 25,2016
Bill introduced in US
Congress to help India join APEC
Few influential American lawmakers have introduced a legislation
asking the Obama administration to help India join the APEC forum, saying an economically prosperous India benefits the US’
strategic goals in Asia.
What’s there in the legislation?
§ The legislation notes that US-India partnership
is vital to the US strategic interests in the Asia-Pacific region and across the globe, and is an integral aspect to the Administration’s Rebalance to Asia.
is vital to the US strategic interests in the Asia-Pacific region and across the globe, and is an integral aspect to the Administration’s Rebalance to Asia.
§ Observing that India enjoys a location within the Asia- Pacific
region which provides an avenue for continued trade and investment partnerships
with APEC member states, the legislation also asks Secretary of State to
develop a strategy to obtain membership status for India in APEC, including
participation in related meetings, working groups, activities and mechanisms.
§ It even directs the Secretary of State to actively ask APEC member
states to support such membership status for India and submit a report to the
Congress within two months of the passage of this legislation.
Benefits for India:
§ Membership in APEC (Asia Pacific Economic Cooperation) would
provide India a constructive forum to glean insight from other Asian countries
that have already taken significant steps to advance their economies.
§ India is also striving for major economic reforms to open India’s
markets, improve trade volume, and facilitate its growing population’s need for
continued job growth. Hence, APEC can be the right platform.
APEC:
The Asia-Pacific Economic Cooperation (APEC) is a regional
economic forum established in 1989 to leverage the growing interdependence of
the Asia-Pacific. APEC has 21 members.
Aim: to create greater prosperity for the people of the region by
promoting balanced, inclusive, sustainable, innovative and secure growth and by
accelerating regional economic integration.
Functions:
§ APEC works to help all residents of the Asia-Pacific participate
in the growing economy.
§ APEC projects provide digital skills training for rural
communities and help indigenous women export their products abroad.
§ Recognizing the impacts of climate change, APEC members also
implement initiatives to increase energy efficiency and promote sustainable
management of forest and marine resources.
§ The forum adapts to allow members to deal with important new
challenges to the region’s economic well-being. This includes ensuring disaster
resilience, planning for pandemics, and addressing terrorism.
Members:
§ APEC’s 21 member economies are Australia; Brunei Darussalam;
Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan;
Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The
Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand;
United States of America; Viet Nam.
§ APEC Members account for approximately 40% of the world’s
population, approximately 54% of the world’s gross domestic product and about
44% of world trade.
In APEC, all economies have an equal say and decision-making is
reached by consensus. There are no binding commitments or treaty obligations.
Commitments are undertaken on a voluntary basis and capacity building projects
help members implement APEC initiatives. The APEC process is supported by a
permanent secretariat based in Singapore.
Nepal joins SCO grouping
as dialogue partner
Nepal has become a dialogue partner of the Shanghai Cooperation Organisation
(SCO).
§ As a dialogue partner, Nepal is able to participate in the
multi-field cooperation of the SCO, which has an increasing presence in
international affairs.
§ Besides, as Nepal joins the SCO, it will create new opportunities
for the SCO’s mutually beneficial cooperation and benefit people living in the
extensive region that the SCO covers.
§ Recently, Azerbaijan also officially became a SCO dialogue partner.
About Shanghai Cooperation Organisation (SCO):
It is a Eurasian political, economic and military organisation
which was founded in 2001 in Shanghai by the leaders of China, Kazakhstan,
Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. These countries, except for
Uzbekistan, had been members of the Shanghai Five, founded in 1996; after the
inclusion of Uzbekistan in 2001, the members renamed the organisation.
§ The SCO is seen as a counter to the North Atlantic Treaty
Organisation (NATO).
§ It has eight members: China, Russia, Kazakhstan, Kyrgyzstan,
Tajikistan, Uzbekistan, India and Pakistan.
§ It also has Afghanistan, Iran, Mongolia and Belarus as observers.
§ The SCO has established relations with the United Nations, where
it is an observer in the General Assembly, the European Union, Association of
Southeast Asian Nations (ASEAN), the Commonwealth of Independent States and the
Organisation of Islamic Cooperation.
§ Its headquarters is located in Beijing, China.
New gen NBFCs to target
smaller cities
New generation Non-Banking Finance Companies (NBFCs) are
increasing their focus on tier-II and III cities to expand their businesses.
Why they are interested in these cities?
§ For NBFCs, tier-I cities are comfort zones. But due to compression
in interest rates and increasing competition in tier-I cities, NBFCs are
looking at tier-2 and 3 cities.
§ Also, the repayment capacity of professionals, such as doctors, in
tier–II and -III cities is better, as there is less competition for their
skill. Besides, lending to them is more beneficial as they can recommend more
borrowers/customers.
§ NBFCs are also trying to expand their reach to smaller cities as
they see business opportunities in the Micro, Small and Medium Enterprise
(MSME) sector and plan to tap the needs of the self-employed professionals,
manufacturers and traders to expand their business through secured loans i.e.
loan against property (LAP).
The profitability estimate indicates that NBFCs in tier-II and III
cities can break-even in 12 months compared to a time span of 18 months in tier
I cities. Tier-I cities generally have high quantum of loans and low numbers of
customer.
NBFCs:
What are they?
Non-bank financial companies (NBFCs) are financial institutions
that provide banking services without meeting the legal definition of a bank,
i.e. one that does not hold a banking license.
What they can’t do?
§ These institutions typically are restricted from taking deposits
from the public depending on the jurisdiction. Nonetheless, operations of these
institutions are often still covered under a country’s banking regulations.
§ 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, unlike in case
of banks.
Who supervises them?
The Reserve Bank of India is entrusted with the responsibility of
regulating and supervising the Non-Banking Financial Companies by virtue of
powers vested under Reserve Bank of India Act, 1934.
NBFCs lend and make investments and hence their activities are
akin to that of banks; however there are a few differences as given below:
§ 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, unlike in case
of banks.
Facts
1.
Seeking to attract more foreign
investment, the government has relaxed FDI norms for the insurance sector by
permitting overseas companies to buy 49% stake in domestic insurers without
prior approval. Currently, up to 26% FDI is
permitted through the automatic approval route. For FDI up to 49%, the approval
of the Foreign Investment Promotion Board is required.
2.
India Post recently released a
commemorative stamp on Hindustan Aeronautics Ltd., which recently completed 75
years. The tagline on the stamp says ‘HAL: the force behind the Forces’. This is also the first customised ‘My Stamp’ to be released by
India Post. The special logo depicts HAL’s first indigenous aircraft
programme from HT-2 to the Light Combat Aircraft as also its capabilities related to helicopters.
