2 Economy
Money, Banking, Finance & Insurance
T+0 Settlement Cycle
Why in News?
y SEBI has proposed a T+0 settlement cycle for clearing and settlement of funds and securities.
Key Points:
y Same-Day Settlement: T+0 allows for settlement on the same day (T+0).
y Optional Basis: T+0 and instant settlement will be optional, in addition to the existing T+1 cycle.
y Historical Changes: SEBI shortened settlement from T+5 to T+3 in 2002, then to T+2 in 2003.
y Scope: Initially available for the top 500 listed equities based on market capitalization.
y Benefits for Clients: Faster payouts of funds and securities.
y Market Impact: Enhances flexibility and efficiency in the securities market.
Pros Cons
Faster access to funds and assets Operational and technological challenges
Optional, offering flexibility Potential for increased market volatility
Pressure on participants’ decision-making,
Progression towards market efficiency
challenges to foreign investors
Enhanced market flexibility Liquidity management challenges
Immediate payout benefits Adjustment period for market adaptation
28 Economy
RBI Guidelines on Inoperative Accounts and Unclaimed Deposits
Why in News?
y The RBI has recently released guidelines for Inoperative Accounts and Unclaimed Deposits
which would be effective from 1st April 2024.
Approximately Rs 1-1.30 lakh crore in inoperative accounts and Rs 42,270 crore unclaimed
deposits are there in India, as per the RBI.
Key Points of Guidelines:
y Banks to annually review accounts with no transactions for over a year.
y Banks to notify account holders via letters, emails, or SMS about potential inactivity.
y Accounts classified as inoperative based on customer-induced transactions only.
y Accounts for government scheme beneficiaries and students with zero balance exempted from
inoperative classification.
y Requires submission of KYC documents; no charges for activation.
y No penal charges for non-maintenance of minimum balance in inoperative accounts; interest
on savings accounts is to be credited regularly.
y Depositor Education and Awareness Fund (DEA Fund): Unclaimed deposits for over ten years
are to be transferred to the DEA Fund maintained by RBI.
Levy 20-30% health tax on food high in sugar, salt fat
Why in News?
y A UNICEF-funded project has recommended imposing a health tax of 20-30% on foods high in
sugar, ( salt, and fat (HFSS), including sugar-sweetened beverages (SSBs) like colas and juices.
Key Points:
y The study recommends targeting bulk consumers like confectionery manufacturers, not regular
household sugar purchases.
y Price Elasticity: A study suggests a 10% price increase could reduce sugar demand by 2% for
consumers, and 13-18% for bulk buyers.
Economy 29
Price elasticity measures how much the quantity demanded of a good response to a change in
its price.
GST Impact:
y The current sugar tax at 18% GST; the proposed additional tax could raise it to 38-48%.
Demand Reduction Estimates:
y SSBs: A 10-30% health tax could lead to a 7-30% demand decline.
y HFSS products: A 10-30% health tax could result in a 5-24% demand decrease.
Benefits:
y Revenue Increase: Additional taxes could boost government tax revenues by 12-200%.
y Health Benefits: Aims to combat obesity, tooth decay, type 2 diabetes, cardiovascular diseases,
and certain cancers.
Global Context: Over 70 countries have implemented similar health taxes, with Mexico seeing
decreased SSB consumption and reduced BMI in younger groups post-taxation.
Balance of Payment & International Trade
China’s 2024 Economic Policy
Why in news?
y The 2023 Chinese Central Economic Work Conference (CEWC), was recently concluded.
Key Points:
y Economic Direction: The CEWC emphasized a stability-oriented pathway for the Chinese
economy in 2024.
y Shift in Growth Strategy: The focus is moving away from export-led growth towards domestic
demand-led growth.
y High-Quality Production: To expand the production process, with a particular emphasis on
achieving high-quality standards.
y Technological Self-Reliance: To achieve self-reliance in critical technologies like quantum
technology
y Collaboration with Trade Partners: While striving for self-reliance, China also recognizes the
importance of collaborating with trade partners when necessary.
y Financial Discipline: Emphasis on the importance of maintaining financial discipline.
KABIL Investment in Argentina
Agreement:
y An exploration and development agreement is expected to be signed with CAMYEN, a state-
owned miner in Argentina’s Catamarca province.
Economy 30
y Underground brine deposits, mineral ores, clays, seawater, and
Sources of Lithium
geothermal well brines or water.
Lithium Triangle y Argentina, Chile, and Bolivia make up the world’s “lithium triangle”.
y Chile and Argentina account for 30-35% of the world’s lithium
supplies.
y Chile, with 11% of the world’s lithium reserves, supplies 26% of the
Lithium Supplies
global requirements.
y Argentina, with nearly one-fifth of the global resources, supplies
around 6%.
y Also known as “white gold,” It is an alkaline mineral crucial for
modern energy storage solutions.
Importance of Lithium
y It is used in various sectors, including electric vehicles (EVs),
lithium-ion batteries, and mobile phones.
y Currently, India imports all of its lithium requirements, primarily
India’s Lithium
from China.
Requirements and
y Lithium is expected to play a vital role in India’s transition to green
Imports
energy and reduce the country’s carbon footprint.
y Exploration is ongoing for additional lithium blocks in states like
Auction and
Rajasthan and Karnataka.
Exploration of Lithium
y In J&K, the inferred lithium reserves are approximately 5.9 million
Blocks
tonnes, while exploration is yet to be carried out in Chhattisgarh.
Why in news?
y India’s KABIL (Khanij Bidesh India Ltd) will invest ₹211 crores ($25.712 million) over five years for
the exploration of five lithium blocks in the Fiambala area of Argentina.
Global trade to suffer as challenges arise in Red Sea Route and Panama Canal
Source: The Indian Express
Economy 31
Red Sea Attacks:
y Drone attacks by Yemen-based Houthi rebels on ships traveling to India through the Red Sea
are endangering the crucial Bab-el-Mandeb Strait near the Suez Canal, potentially disrupting
global trade and increasing shipping costs.
y In response, a US-led maritime security coalition is implementing measures to secure this vital
trade route.
Panama Canal Drought:
y The Panama Canal’s driest season in decades is forcing ships to take longer routes, leading to
increased transit times and costs.
Impact on India:
y Oil Flows: While global oil flows through the Red Sea have declined, India’s Russian oil imports
remain unaffected, thanks to geopolitical alignments. However, Brent crude prices have risen,
hovering around $80 per barrel.
y Freight Rates: Indian exporters face increased freight rates for shipments to Europe and Africa,
with potential surcharges due to the security risks in the Red Sea. This could impact India’s
exports to the European Union, one of its largest markets.
Global Implications:
y Trade Disruptions: Over 80% of global goods trade is carried by sea, making these disruptions
a significant concern for the world economy. The blockages at these crucial points could lead
to the rerouting of ships, higher freight rates, and increased prices for goods.
y Economic Impact: The disruptions come at a time of slowing demand in the West and a property
crisis in China, potentially exacerbating global trade challenges.
Why in News?
y Recent disruptions in two critical maritime routes – the Red Sea and the Panama Canal – pose
significant threats to global trade.
Infrastructure
Atal Setu Nhava Sheva Sea Link: India’s longest sea bridge
Economy 32
Key Points:
y Atal Setu Nhava Sheva Sea Link is a roughly 22 km long bridge that was conceptualized six
decades ago. It connects Sewri in Mumbai to Chirle in Raigad district.
y It significantly reduces travel time between Sewri and Chirle to under 20 minutes.
Benefits:
y Enhanced economic integration of Navi Mumbai with Mumbai and improved connectivity to the
Navi Mumbai International Airport and hinterland.
y Better access to Jawaharlal Nehru Port.
Why in News?
y The Mumbai Trans Harbour Link (MTHL), officially named Atal Setu Nhava Sheva Sea Link, was
inaugurated by Prime Minister Narendra Modi.
PM Suryodaya Yojana
Why in News?
y The Prime Minister has recently inaugurated the ‘Pradhan Mantri Suryodaya Yojana’.
Key Points:
y Background: This scheme builds upon the foundation laid by the Rooftop Solar Programme
initiated in 2014, which targeted a cumulative installed capacity of 40 GW by 2022, later
extended to 2026.
y Objective: The primary goal is to facilitate the installation of solar power systems on residential
rooftops, benefiting around one crore households. This move is designed to lower electricity
costs for the economically weaker sections and middle class while advancing India’s ambition
for energy self-sufficiency.
Economy 33
Eligibility Criteria:
y Must be a permanent resident of India.
y Annual income should not exceed Rs 1 or 1.5 lakh.
y Submission of all required documents accurately.
y Non-engagement in government service.
Interim Budget:
y It proposed that 10 million households will be enabled to get up to 300 units of free electricity
every month with an outlay of Rs 10,000 crore.
Key Benefits:
y Targeted support for economically disadvantaged groups, including those below the poverty
line, to alleviate electricity costs and lighting issues.
y A sustainable and long-term solution for a dependable electricity source for citizens.
y It will help households save up to ₹ 15000- 18,000 annually.
y Enable more EV charging, create entrepreneurship opportunities, and provide more employment
opportunities in manufacturing, installation, and maintenance.
Sectors of the Economy, GDP, Inflation
Revised Pharma Manufacturing Rule
Why in news?
y The Ministry of Health and Family Welfare notified revised rules under Schedule M of the Drugs
and Cosmetics Rules, 1945.
Economy 34
Schedule M of the Drugs and Cosmetics Rules, 1945 prescribes requirements to the manufacturing
plants of pharmaceutical companies for maintenance, manufacturing, control and safety testing,
storage and transport of material, written procedures and records, traceability, etc.
Background:
y Last year, India felt intense global scrutiny after the World Health Organization (WHO) issued an
alert about cough syrups being contaminated with toxic substances.
y This has led to the revision of the manufacturing of pharmaceutical standards for the companies.
y The Department of Pharmaceuticals comes under the Ministry of Chemicals and Fertilizers.
Key Revised Rules:
y Manufacturers are required to assume responsibility for the quality of pharmaceutical products.
y Companies must ensure that the products are suitable for use by consumers.
y Companies should conduct tests on the ingredients before marketing a finished product.
Benefits:
y It will ensure that the pharmaceutical sector produces safe, effective, and high-quality drugs.
y To ensure compliance with international quality standards.
y Benefits for Patients and Industry: By adhering to these standards, both patients and the
pharmaceutical industry can benefit.
y Addressing Backlash: The revision is a response to the criticism and negative attention India
has received due to reports of sub-standard medicine exports.
Human Resource Development, Health and Education
Ayushman Bharat Pradhan Mantri — Jan Arogya Yojana (AB PM-JAY)
About Ayushman Bharat-PMJAY:
Launch Year: 2018
Ministry: Ministry of Health and Family Welfare.
Beneficiary
As identified by the latest Socio-Economic Caste Census (SECC) data.
Identification:
y For each state and UT with its own legislature, the ratio is
60:40(Centre: State).
Funding of the scheme: y 90:10 in Northeast states and Jammu and Kashmir, Himachal, and
Uttarakhand.
y 100% Central funding for UTs without legislature.
y The National Health Authority (NHA)
Nodal Agency:
y At the state level, the State Health Agency (SHA)
Economy 35
Why in news?
y The Ministry of Health & Family Welfare has released statistics regarding Ayushman Bharat
Pradhan Mantri — Jan Arogya Yojana (AB PM-JAY).
Key Highlights of Statistics:
y Women account for approximately 49% of the total Ayushman cards created and approximately
48% of total authorized hospital admissions.
y 12 crore families are covered under the scheme.
y Some states and union territories, at their own expense, have expanded the beneficiary base.
The existing identification by the center is done through the Socio-Economic Caste Census
(SECC) data
HPV Immunization Programme in India
Why in News?
y India is preparing to launch an immunization campaign against Human Papillomavirus (HPV) to
reduce cervical cancer cases.
About the programme:
y The HPV Immunization Programme targets free vaccination for girls aged 9 to 14 years in three
phases over three years.
y After the testing phase, the HPV vaccine will be included in the routine immunization program
for 9-year-old girls.
y In the recent budget, the government has announced that it will encourage vaccination for girls
in the age group 9-14.
y The blueprint of how the government will support HPV vaccination hasn’t been finalized yet.
y Eligibility for HPV Vaccine: The vaccine is most effective when administered to adolescent girls
before they become sexually active.
y Vaccination for Older Women: Women up to 45 years old can receive the vaccine, though it’s
less effective for those already exposed to HPV.
y Over 95% of cervical cancer cases are linked to HPV.
y The vaccine’s effectiveness in preventing cervical cancer is about 97%.
Economy 36
About Human Papillomavirus (HPV):
Transmission y Primarily through sexual contact.
y Can cause genital warts.
Common Effects
y May lead to cervical, throat, and other cancers.
y HPV vaccine (recommended for preteens, can be given to adults).
Prevention y Regular cervical cancer screenings.
y Use of protection during sexual activity.
Mulya Pravah 2.0- An effort to prioritize values and ethics in higher education
y Released by the University Grants Commission (UGC) in India.
Mulya Pravah 2.0
y It is a modified version of the 2019 Mulya Pravah guideline.
y Inculcate respect for fundamental duties and constitutional values.
Objectives y Develop a culture of integrity and inclusiveness in higher education
institutions.
y Librarians and Registrars are seen indulging in corruption while
purchasing books and materials.
y There is political campaigning and groupism in both students and
Examples:
teachers.
y Gender inequality, fair wages, mistreatment, and sexual harassment
issue plague the higher education in India.
Why in news?
y UGC seeks to implement Mulya Pravah 2.0 in higher education.
NAAC- Accreditation system overhaul
Why is News?
The National Assessment and Accreditation Council (NAAC) recently announced significant reforms
in the accreditation system for higher education institutes.
Key reforms:
Before After
y Academic institutions will now be classified as “Accredited”
or “Not Accredited,” doing away with the previous rating
y Grading system of academic scheme.
institutions was in place. y Introduces a graded system based on maturity that allows
y Grading was from D (Not certified schools to advance from “level one” to “level five.”
Accredited) to A++. y Incentivizes improvement, with the ultimate goal of
achieving “Institution of Global Excellence for Multi-
Disciplinary Research and Education” status.
Economy 37
Significance:
y These changes are proposed in line with the global best practices set by leading countries in
the field of education.
y The new accreditation system is aimed at encouraging institutions to raise their bar by improving
the standard of imparting education.
National Assessment and Accreditation Council (NAAC):
y NAAC is an autonomous body established by the University Grants Commission (UGC).
y It was established in 1994 on the basis of recommendations made under the National
Education Policy (1986).
y It is registered under the Karnataka Societies Registration Act of 1960, and Karnataka Societies
Registration Rules of 1961.
Annual Status of Education Report (ASER), 2022 Report Released
Annual Status of Education Report (ASER):
ASER is an annual survey that aims to provide district-level information
About:
on children’s enrolment and basic learning.
Year of
2005
Establishment:
Published by: Pratham, a non-profit organization, (biennial publication).
Nature: It is a household-based survey rather than a school-based survey.
This enables all children to be included; those who have never been to
Coverage: school or have dropped out, as well as those who are in government
schools, private schools, religious schools, or anywhere else.
Economy 38
Key Findings of ASER 2022:
y Increased enrollment rates: The enrollment rate for the 6 to 14 age group has risen from 97.2%
in 2018 to 98.4% in 2022, indicating a positive trend in school participation.
y Rise in Government School Enrolment: There has been a notable increase in enrolment in
government schools, from 65.6% in 2018 to 72.9% in 2022.
y Decline in Reading and Arithmetic Skills: There has been a worrying decline in the ability of
Class 3 children to read at the Class 2 level, dropping from 27.3% in 2018 to 20.5% in 2022.
Why in News?
y Recently, the 2022 Report of Annual Status of Education Report was released.
Vaibhav Fellows- NRI Scholars ki Ghar Wapsi
About:
y The goal of the VAIBHAV Fellowship is to
enhance the higher education and scientific
research environment in India.
y With the fellowship, NRI scholars would
have the chance to work with an Indian
academic or research institution for a
minimum of one month and a maximum of
two months per year.
y The government is providing up to Rs 37
lakh to the scholars for the full three-year
duration of the fellowship.
y The Department of Science and Technology
(DST) is implementing the Vaishvik Bharatiya
Vaigyanik (VAIBHAV) Fellowship Program.
Why is News?
y The government of India has launched the Vaishvik Bhartiya Vaigyanik(VAIBHAV) fellowship
program.
Probable MCQs
Q. Consider the following pairs:
Swachh Survekshan Awards 2023 category: Winner
1. Cleanest city – Indore (Madhya Pradesh)
2. Cleanest Cantonment Board – Mhow (Madhya Pradesh)
3. Best Safaimitra Surakshit Sheher – Surat (Gujarat)
4. Cleanest Ganga Town – Haridwar (Uttarakhand)
How many pairs given above are correctly matched?
(a) Only one pair
(b) Only two pairs
Economy 39
(c) Only three pairs
(d) All four pairs
Answer: (b)
Q. The Annual Status of Education Report (ASER 2023) is released by:
(a) NGO Pratham Foundation
(b) NITI Aayog
(c) University Grants Commission
(d) All India Council for Technical Education
Answer: (a)
Q. Consider the following statements:
1. The distribution between the Union and the States of the net proceeds of taxes.
2. Evaluation of centrally sponsored schemes.
3. Evolve principles based on which funds are allocated among states.
4. To develop five-year plans.
How many of the above are the roles of the finance commission in India?
(a) Only one
(b) Only two
(c) Only three
(d) All four
Answer: (b)
Q. With reference to the Directorate General of Civil Aviation, consider the following statements:
1. It is the regulatory body in the field of Civil Aviation primarily dealing with safety issues.
2. It is responsible for the regulation of air transport services to/from/within India.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (c)
Economy 40
