Insights Daily Current Events, 04 February 2015
RBI cuts SLR by 50 basis points to provide liquidity
The RBI has reduced the statutory liquid ratio by 50 basis points to 21.50% from 22%. This will provide more liquidity to the banking system.
- It will also pump up Rs.45, 000 crore to the system and hence banks may go for a cut in lending rates.
- The other tools are kept unchanged: Repo rate at 7.75% and CRR at 4%.
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
Repo Rate is the rate at which the RBI lends money to commercial banks. It is an instrument of monetary policy. Whenever banks have any shortage of funds they can borrow from the RBI. A reduction in the repo rate helps banks get money at a cheaper rate and vice versa. The repo rate in India is similar to the discount rate in the US.
Reverse Repo rate is the rate at which the RBI borrows money from commercial banks. An increase in reverse repo rate can prompt banks to park more funds with the RBI to earn higher returns on idle cash. It is also a tool which can be used by the RBI to drain excess money out of the banking system.
Sources: The Hindu, RBI.
In a first, Britain gives nod to ‘three-parent’ babies
After it received an approval from the parliament, Britain became the first country to allow a “three parent” IVF technique.
- Doctors have welcomed this move which will help them prevent some inherited incurable diseases. But, critics see this as a step towards creating designer babies.
- Under the change to the laws on IVF, as well as receiving the usual “nuclear” DNA from its mother and father, the embryo would also include a small amount of healthy so-called mDNA from a woman donor.
- The change could apply to up to 2,500 women of reproductive age in Britain with hereditary mitochondrial diseases.
About the treatment:
The treatment is known as “three parent” in vitro fertilisation (IVF) because the babies, born from genetically modified embryos, would have DNA from a mother, a father and from a female donor.
- It is designed to help couples with mitochondrial diseases, incurable conditions passed down the maternal line that affect around one in 6500 children worldwide.
- The process involves intervening in the fertilisation process to remove mitochondria, which act as tiny energy-generating batteries inside cells, and which, if faulty, can cause inherited conditions such as fatal heart problems, liver failure, brain disorders, blindness and muscular dystrophy.
Mitochondrial DNA is separate from DNA found in the cell nucleus and does not affect Human characteristics such as hair or eye colour, appearance or personality traits. Mitochondrial DNA (mDNA) is passed through the mother and mitochondrial diseases cause symptoms ranging from poor vision to diabetes and muscle wasting.
- Health officials estimate around 125 babies are born with the mutations in Britain every year. The law will allow Britain’s Human Fertilisation and Embryology Authority to authorise the procedure.
But many Britons are still against the proposed change despite years of consultation by health authorities with the public and the scientific community.
Sources: The Hindu.
Cyber laws not meant to curb free speech: Centre
The government recently clarified before the Supreme Court that its laws were meant to fight cyber crime and not curb free expression.
A bunch of petitioners had filed petitions challenging the constitutionality of certain legal provisions in the Information Technology Act, especially Section 66 A. This Section prescribes a punishment of up to three years in jail if found guilty of causing “annoyance or inconvenience” on the Internet, including social media.
What the government says?
- The government has been saying that it has no intention to curb the freedom of speech and expression. It says that Section 66 A pertains to only certain Cyber Crimes and not freedom of speech.
- The government also says nobody can file a complaint saying something caused me annoyance or inconvenience. The provisions of the Act require a serious obstruction. But who decides the seriousness of the obstruction is the issue.
Cyber Attacks posed a clear and present danger to the security apparatus. The court is yet to decide on the matter.
Sources: The Hindu.
Centre reviews swine flu control measures
The Centre recently reviewed the steps being taken by States to control and treat H1N1 (swine flu) cases.
- The Centre reviewed the availability of medicines, personal protective equipment and the functioning of isolation wards.
- There were also pointers for doctors, rapid response teams and paramedical staff at various district and other government hospitals.
- While most States reported adequate stock of Tamiflu along with syrup for children and personal protective equipment, some requested for additional supply of personal protective equipment.
- The Centre has stressed on creating awareness among the masses as part of the IEC campaigns, which includes engagement at the community level through inter-personal communication.
All about the Flu:
Sources: The Hindu.
Most parties have no records of donors
The black money report prepared by the National Institute of Public Finance and Policy (NIPFP) reveals that only three parties declared that they received more than 50 per cent of their funding in amounts above Rs. 20,000 during financial years 2009-2010 and 2010-2011 — meaning donations where the names and addresses of the donors are known. Notably, these are small parties and their receipts through donations are also marginal.
What the report says?
- It says that such donations have become a major opaque source of income for these parties. Large cash amounts are being credited by parties in their books of accounts as coupon sales or cash donations received from anonymous/unknown sources. Since the identity of the donors is not known, there is no possibility of the names being disclosed or even of a verification of their genuineness.
- The report recommends that the Income Tax rules be amended so that exemption is available to a political party only if it has not received any donation/contribution/fee etc exceeding Rs. 10,000 in a year, except through account payee cheques, from a single person or entity.
- It also recommends that rules be framed for curbing the use of opaque avenues for funding. The alternatives could be machine numbered receipts or depositing cash collections in banks.
What the law says?
- Section 29C of the Representation of the People Act (RoPA) requires all political parties to furnish an annual statement of all contributions in excess of Rs. 20,000 to the Election Commission of India (ECI), giving the names and addresses of the donors.
- Cash donations/coupon sales below Rs. 20,000 per donor are an opaque avenue for parties to introduce any amount in their books of account, if they are so inclined to, and also avail themselves of exemption from tax, no questions asked.
- Contributions and incomes from house property, capital gains and such other sources are exempt from tax if parties maintain books of accounts and records of all contributions exceeding Rs. 20,000, giving the names and addresses of donors, submits them to the ECI and get their accounts audited by chartered accountants.
Sources: The Hindu.
RBI raises forex limit
The central bank has doubled the amount of foreign exchange that an individual can remit in a year under a scheme that allows asset purchase outside India.
- Now, a person can remit up to $250,000 a year under the Liberalised Remittance Scheme, which was started in 2004 with a view to simplify foreign exchange avenues available to Indians.
- This is the second time the limit has been raised.
- Earlier in August 2013, the RBI had gone for a drastic 62.5 per cent cut in the limit to $75,000, when the RBI was fighting hard to stem the free fall in rupee against the dollar.
- Since, the rupee has strengthened against the dollar in 2015 the RBI has raised the limit.
Sources: The Hindu.