1

Blue Economy

|

India’s recent Interim Budget stressed on environment-friendly development through the promotion of ‘blue economy’.

  • Blue economy – It simply refer to economic activities related to the sea and the coasts with the element of sustainability in it.
  • Definition
    • European Commission – It refers to all economic activities related to oceans, seas, coasts and it covers a wide range of interlinked established and emerging sectors.
    • World Bank – It is the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem.
  • India’s Blue Economy – With long coastline, diversity in terms of fish & ocean produce, and multiple tourism opportunities, blue economy is highly significant.
  • It is a subset of national economy which comprises of 2 components
    • Ocean resources.
    • Human-made economic infrastructure in marine, maritime, and onshore coastal zones.
  • In 2022, a draft policy framework on India’s Blue Economy was 1st released.

Blue Economy

Blue Economy 2.0

  • Aim – To build resilience against the impacts of climate change while fostering sustainable growth in coastal regions.
  • Restoration and adaptation measures – Protecting the health of the oceans while carrying out economic activities.
  • Aquaculture – Farming of aquatic plants and animals.
  • Mariculture – Rearing and harvesting marine creatures in salt water.
  • Integrated & multi-sectoral approach – Harnessing collective efforts to achieve sustainable development goals in coastal areas.

Amrit Kaal Vision 2047 is the long-term blueprint for the Indian maritime blue economy for enhancing port, promoting sustainable practices and facilitating global collaboration.



Tax Buoyancy

|

The Finance Minister recently presented fiscal consolidation projections that surpass expectations for the current financial year and Budget Estimates (BE) for the next year, despite the conservative tax buoyancy in the estimates.

About Tax Buoyancy:

  • Tax buoyancy explains the relationship between the changes in the government’s tax revenue growth and the changes in Gross domestic product (GDP).
    • There is a strong connection between the government’s tax revenue earnings and economic growth.
    • As the economy achieves faster growth, the tax revenue of the government also goes up. Tax buoyancy explains this relationship.
  • It refers to the responsiveness of tax revenue growth to changes in GDP.
  • When a tax is buoyant, its revenue increases without increasing the tax rate.
  • It depends upon:
    • the size of the tax base;
    • the friendliness of the tax administration;
    • the rationality and simplicity of tax rates;
  • Tax buoyancy will be highest for direct taxes. Generally, direct taxes are more sensitive to the GDP growth rate.

What is tax elasticity?           

  • A similar-looking concept is tax elasticity. It refers to changes in tax revenue in response to changes in the tax rate.
  • For example, how tax revenue changes if the government reduces corporate income tax from 30 per cent to 25 per cent indicates tax elasticity.

What is the Laffer Curve?

  • It is an economic theory pioneered by economist Arthur Laffer.
  • Created in 1974, it visually shows the relationship between tax rates and the amount of tax revenue collected by governments.
  • It suggests that tax rates above a certain threshold reduce tax revenue since they incentivise people not to work.
  • It suggests there is an optimum tax rate which maximises total tax revenue.


Interim Budget 2024 – 2025

|

The interim Budget, a ‘stop-gap’ arrangement, will be presented by Union Finance Minister of India on February 1 2024 as a full Budget will be presented in June-July.

  • Definition – It is a shorter-term financial statement that allows for the smooth functioning of the government until a new administration can present a full budget for the entire fiscal year.

Budget or Annual financial statement is a statement of the estimated receipts and expenditure of the Government of India for a specific financial year according to Article 112 of the Indian Constitution.

  • Need – In an election year, the incumbent Government cannot present a full Budget as there may be a change in the executive.
  • Legality – There is no constitutional provision, so the Centre can seek the Lower House’s approval for the funds for the transition period via the vote on account provision.

Vote on Account
  • Article 116 – It allows the Lower House to make any grant in advance for the estimated expenditure for part of any financial year by voting and passing such a legislation.
  • Lok Sabha is empowered to authorise withdrawal of required funds from the Consolidated Fund of India for such expenditure.
  • Coverage – Centre’s fund requirements for salaries, ongoing projects and other expenditure for the transitional period.
  • Limitation – It cannot make any changes to tax rates.
  • Validity – Only for 2 months, can be extended up to 4 months.
  • Convention – It has been the trend for outgoing governments to present an interim budget instead of a vote on account.
  • Features – It will present the current state of the Indian economy, its fiscal status including India’s revised estimated growth in the next year and also detail the government’s planned and non-planned expenditure and receipts.
  • The government is allowed to revise tax rates.
Similarities of Interim Budget with Full Budget
  • It is presented by Union Finance Minister to both house of the Parliament and will be put to vote and then sent for Presidential approval.
  • It is also debated in the Lok Sabha before passage and is valid for the entire year though it is merely a transition arrangement.
Differences between Interim Budget and Full Budget
  • It would just be to meet with the expenditure till a new government enact a full Budget.
  • No spectacular announcements are made unlike full Budget.
  • In 2024 – India is likely go to polls in April-May, thus Interim Budget will be presented for the 1st 4 months of this fiscal year.

If the Budget is not passed by the Lok Sabha, the Prime Minister and his Cabinet will have to resign.



Payments Bank

|

The Reserve Bank of India (RBI) recently imposed restrictions on Paytm Payments Bank Ltd (PPBL), following a system audit report and subsequent compliance validation report of external auditors.

About Payments Bank:

  • A payments bank is like any other bank but operates on a smaller scalewithout involving any credit risk. 
  • It was set up based on the recommendations of the Nachiket Mor Committee.
  • Objective: To advance financial inclusion by offering banking and financial services to the unbanked and underbanked areas, helping the migrant labour force, low-income households, small entrepreneurs, etc.
  • It is registered as a public limited company under the Companies Act 2013 and licensed under Section 22 of the Banking Regulation Act 1949.
  • It is governed by a host of legislation, such as the Banking Regulation Act, 1949; RBI Act, 1934; Foreign Exchange Management Act, 1999, etc.
  • Features:
  • They are differentiated, and not universal banks.
  • These operate on a smaller scale.
  • The minimum paid-up equity capital for payments banks shall be 100 crores.
  • The minimum initial contribution of the promoter to the Payment Bank to the paid-up equity capital shall be at least 40% for the first five years from the commencement of its business.
  • Activities that can be performed:
  • It can take deposits up to Rs. 2,00,000. It can accept demand depositsin the form of savings and current accounts.
  • The money received as depositscan be invested in secure government securities only in the form of a Statutory Liquidity Ratio (SLR). This must amount to 75% of the demand deposit balance.
  • The remaining 25% is to be placed as time deposits with other scheduled commercial banks.
  • It can offer remittance services, mobile payments/transfers/purchases, and other banking services like ATM/debit cards, net banking, and third-party fund transfers.
  • It can become a banking correspondent (BC) of another bank for credit and other services which it cannot offer.
  • Activities that can be performed:
  • It cannot issue loans and credit cards.
  • It cannot accept time deposits or NRI deposits.
  • It cannot set up subsidiaries to undertake non-banking financial activities.


Economic Survey

|

Recently, the Ministry of Finance released a report titled “Indian Economy – A Review” as Economic Survey was not be released at this time.

The report ‘Indian Economy – A Review’ gives the top highlights in the Indian economy from the past 10 years.

  • ES – A comprehensive annual report which displays the performance of the Indian economy in the past fiscal year.
  • Prepared by – Department of Economic Affairs, ministry of Finance.
  • Presented in – Parliament, normally on 31st January, a day before the presentation of the Budget.

The 1st Economic Survey of India was presented in 1950-51 as a part of the Union Budget. However, since 1964, it has been decoupled from the Budget presentation.

  • ES in 2024 – Since the Lok Sabha elections are due in April, only interim budget will be presented before it.
  • Thus, a complete budget and the Economic Survey will be presented only in July 2024, after the results are declared.
  • Presented by – The Chief Economic Advisor (CEA).
  • Features – It summarises the performance of government’s initiatives and provides an outlook of the prospects of the Indian economy in the short to medium term.
    • Part A – Major economic developments in the year as well as a broad review of the economy.
    • Part B – It covers specific topics such as social security, poverty, education, healthcare and human development.
  • Importance – It helps the government in analysing the performance of various sectors, identifying the major impediments to economic growth and in formulating economic strategies for the coming year.
  Economic Survey Union Budget
Content It deals with economic policies and demonstrates forthcoming economic plans. It deals with yearly expenditures and income.
Presented on 31st January on non-election years. 1st February on non-election years.
Presented by Chief Economic Advisor Union Finance Minister

 



National Financial Reporting Authority (NFRA)

|

The National Financial Reporting Authority (NFRA) is going to inspect the Big Four audit firms as well as other top auditors of large listed entities in 2024.

About National Financial Reporting Authority (NFRA):

  • It is a statutory body constituted under Section 132 of the Companies Act, 2013.
  • It was established as an independent authority to regulate the auditing profession and accounting standards in India.
  • Its goal is to enhance the country’s financial statement quality and consistency and to guarantee that businesses and financial institutions report accurate and fair information.
  • Composition:
    • The Companies Act requires the NFRA to have a chairperson who will be appointed by the Central Government and a maximum of 15 members.
    • The appointment of such chairperson and members are subject to the following qualifications:
      • They should be having an expertise in accountancy, auditing, finance, or law.
      • They are required to make a declaration to the Central Government that there is no conflict of interest or lack of independence in their appointment.
      • All the members, including the chairperson, who are in full-time employment, should not be associated with any audit firm (including related consultancy firms) during their term of office and 2 years after their term.
  • The NFRA has the following responsibilities:
    • Make recommendations on the foundation and laying down of accounting and auditing policies and standards;
    • Monitor and enforce the compliance of the accounting standards and auditing standards:
    • Oversee the quality of service of the professionals (such as auditors, CFOs, etc.) and suggest measures required for improvement in the quality of service;
    • Perform other functions related to the above.
  • Powers:
    • NFRA has the power to investigate, either suo moto or on a referencemade to it by the Central Government, into the matters of professional or other misconduct committed by any member or firm of chartered accountants registered under the Chartered Accountants Act, 1949.
    • It has the same powers as are vested in a civil courtunder the Code of Civil Procedure, 1908, while trying a suit.
    • Where professional or other misconduct is proved, it shall have the power to impose punishment.
    • Any person who is not satisfied with the order of the NFRA can then make an appeal to the Appellate Authority.
  • Jurisdiction of NFRA:
    • The jurisdiction of the NFRA for the investigation of Chartered Accountants and their firms would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the Rules.
    • The Central Government can also refer such other entities for investigation where public interest would be involved.
  • Head Office: New Delhi


Halwa Ceremony

|

The Union Finance Minister participated in the ‘Halwa Ceremony’ recently, a tradition observed before the annual budget presentation.

About Halwa Ceremony:

  • It is a tradition performed every year ahead of the budget and signifies the official initiation of the printing process of various documents related to the budget.
  • It involves the preparation of the traditional dessert ‘halwa’ in a massive kadhai (wok), which is then served to all those who are directly associated with the budget-making process.
    • The finance minister gives the go-ahead by stirring the kadhai and serving the sweet to officials.
    • It takes place in the basement of the Finance Ministry’s North Block in Central Delhi, where a special printing press is located.
  • It serves as a formal ‘send-off’ for the ministry officials and staff engaged in preparing the Union government’s annual financial statement.
    • Subsequently, the top officials involved with the budget enter a designated ‘lock-in’ period, isolating themselves within the ministry premises and cutting off from their families to preserve the confidentiality surrounding the final budget document.
    • The officials are required to stay in the Finance Ministry till the finance minister finally presents the budget.


Universal Service Obligation Fund (USOF)

|

Telecom service providers have urged the Ministry of Finance to suspend the universal service obligation fund (USOF) levy until the existing corpus is exhausted.

About Universal Service Obligation Fund (USOF):

  • USOF was set up by an Act of Parliament in December 2003 by amending the Indian Telegraph Act, 1885.
  • The objective of the USOF is to provide access to telecom services in a non-discriminatory manner to people in rural and remote areas at affordable and reasonable prices, thereby bridging the rural-urban digital divide.
  • For commercially non-viable rural and remote areas, USOF provides subsidy support in the form of Net Cost or Viability Gap Funding (VGF) to incentivize telecom service providers for the expansion of telecommunications and broadband services in those areas.
  • Funding Mechanism:
    • The USOF is funded through a levy on the revenue earned by telecom operators.
    • The government imposes a Universal Service Levy (USL) on the gross revenue of the telecom companies, which is a percentage of their Adjusted Gross Revenue (AGR).
    • This levy is collected and deposited into the USOF.
  • Administration:
    • USOF is headed by the Administrator, USO Fund who is appointed by the Central Government, for the administration of the fund.
    • It is an attached office of the Department of Telecommunications (DoT), Ministry of Communications.

What is the Telecom Technology Development Fund (TTDF)?

  • USOF officially launched the TTDF Scheme on October 1st, 2022.
  • The TTDF Scheme is aimed at domestic companies and institutions involved in technology design, development, and commercialization of telecommunication products and solutions to enable affordable broadband and mobile services in rural and remote areas.
  • This initiative helps to connect schools with varied volunteers from the Indian Diaspora, namely, young professionals, retired teachers, retired Government officials, retired professionals, NGOs, Private Sector and Public Sector Companies, Corporate Institutions, and many others.
  • Under the scheme, USOF is also targeting to develop standards to meet countrywide requirements and create an ecosystem for research, design, prototyping, use cases, pilots, and proof-of-concept testing, among others. 
  • The scheme entails grants to Indian entities to encourage and induct indigenous technologies tailor-made to meet domestic needs.


Yen Denominated Green Bonds

|

REC Limited, a Maharatna and a Central Public Sector Enterprise (CPSE) under the Ministry of Power, has achieved a significant milestone by issuing its inaugural Japanese Yen (JPY) 61.1 billion green bonds under the Global Medium Term Notes Programme.

About the Yen Denominated Green Bonds:

  • It is REC Limited’s eleventh venture into the international bond market and inaugural Yen Bond issuance, which is also the first Yen Green Bonds issuance by any Indian PSU.
  • Time period: 5-year, 5.25-year and 10-year bonds issued at yield of 1.76%, 1.79% and 2.20% respectively
  • It is the largest ever Euro-Yen issuance in South and South East Asia.
  • It is the largest Yen-denominated issuance from India.
  • Largest non-sovereign Yen-denominated issuance ever from South and South East Asia.
  • The transaction witnessed interest from both Japanese and international accounts, with the number of orders from each at 50%, international allocation being one of the highest for any other Indian Yen deal.
  • These bonds will be rated Baa3/BBB–/BBB+ (Moody’s/Fitch/JCR) and will be listed exclusively on Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat.

Key facts about REC Limited

  • REC Limited (formerly Rural Electrification Corporation Limited) is a Central Public Sector Undertaking under the Ministry of Power involved in financing projects in the complete power sector value chain from generation to distribution.
  • It is registered with the RBI as a Non-Banking Finance Company (NBFC), a Public Financial Institution (PFI) and an Infrastructure Financing Company (IFC).


Difference between an Interim Budget and Vote-On-Account

|

The Finance Minister is all set to present her sixth Budget in a row and since it is a general elections year, the government will be allowed only to present an Interim Budget or Vote-on-account instead of a regular full Budget.

About Interim Budget vs Vote-On-Account:

  • An interim budget serves as a framework for managing provisional expenditures over a short duration, usually spanning a few months, until a new government takes office at the central level.
  • An interim budget generally includes the current state of the economy, plan and non-plan expenditures and receipts, changes in tax rates, revised estimates of the current financial year, and estimates for the coming financial year.
  • Despite being presented for the entire year, similar to a regular budget, the interim budget is subject to constraints imposed by the Election Commission.
    • These constraints aim to prevent the government from implementing policies that could unduly influence the general public before the commencement of voting.
  • The Parliament passes a Vote-on-account to meet essential expenditures such as salaries of central government staff, funding of ongoing projects, and other government expenditures.
    • In other words, it accounts for only expenditures to be borne by the outgoing government for a period of two months, which may be extended to four months on special circumstances.  
  • The interim budget serves as a financial plan during a transitional period, typically when there are only a few months left in the current government’s tenure. The vote-on-account can be approved within the framework of the interim budget.
  • Like a full budget, an interim budget will be discussed and passed in the Lok Sabha, and in the case of a vote-on-account, it will be passed without any formal discussion as such.
  • An interim budget can propose changes in the tax regime, whereas a vote-on-account cannot change the tax regime under any circumstances.
  • Vote-On-Account is a parliamentary approval for withdrawing money from the Consolidated Fund of India from April to June/July or until the new Government presents its full-fledged budget. 
    • It can be termed an advance grant, interim arrangement, and authorisation for the outgoing government to draw the money from the above-said fund and meet short-term expenditures.
  • As far as validity is concerned, the interim budget is valid throughout the year whereas the vote-on-account is valid only for a period of two to four months.


Windfall Tax

|

India cut its windfall tax on petroleum crude to 1,700 rupees ($20.53) a tonne from 2,300 rupees a tonne, according to a recent government notification.

About the Windfall Tax:

  • What is it? It is a tax levied by governments against certain industries when economic conditions allow those industries to experience significantly above-average profits.
  • The term “windfall” refers to an unexpected rise in profits, and the tax on windfall gains is known as the windfall tax. 
  • When is it imposed?
    • When the government notices a sudden increase in an industry’s revenue, they impose this tax.
    • However, these revenues cannot be linked to anything the company actively pursues, such as its business strategy or expansion.
    • Rather, it is related to a one-off external event for which the business is not responsible. 
    • Consequently, a Windfall Tax is imposed on an industry’s profits when it experiences a sharp increase in revenue due to unrelated external events.
    • A recent example is the sudden rise in the profits of the oil and gas industries due to the Russia-Ukraine conflict. 
    • The unexpected windfalls are taxed by the government over and above the normal tax rates.
  • The most common industries that fall target to windfall gains tax include oil, gas, and mining.
  • Purpose:
    • Redistribution of unexpected gains when high prices benefit producers at the expense of consumers;
    • To fund social welfare schemes;
    • As a supplementary revenue stream for the government;
    • As a way for the Government to narrow the country’s widening trade deficit.


Momentum investing

|

Many academic studies have shown that momentum investing can generate high returns that comfortably beat the benchmark indices.

About Momentum investing:

  • It refers to a style of investing wherein investors purchase assets such as stocks or bonds that are consistently rising in price while selling assets whose prices are falling.
  • Momentum investors buy assets with rising prices in the hope that the upward price momentum of these assets would continue, thus allowing them to sell these assets at higher prices in the future to make profits.
  • It is based on the philosophy that there can be discernible trends in asset prices and that these trends tend to persist over time.
  • The persistence of such trends gives investors an opportunity to recognise and participate in them early enough to make significant profits from their investments.
  • Similarly, they sell assets that are falling in price expecting the fall in prices to continue for some time.
  • Momentum investors generally do not conduct a deep analysis of the fundamental or intrinsic value of the assets in which they invest their money.
  • They invest purely based on whether the price of an asset is showing a strong trend, either upward or downward, that they can ride on.
  • The “buy high, sell higher” philosophy of momentum investing is in stark contrast to the traditional “buy low, sell high” advice given to investors.


REC Limited

|

REC Ltd. recently announced its ambitious plan to increase its financial sanctioning in the infrastructure space, including roads and highways, to ₹1 lakh crore in the current financial year.

About REC Limited:

  • REC Limited (formerly Rural Electrification Corporation Limited) is a Central Public Sector Undertaking under the Ministry of Power involved in financing projects in the complete power sector value chain from generation to distribution.
  • It is registered with the RBI as a Non-Banking Finance Company (NBFC), a Public Financial Institution (PFI) and an Infrastructure Financing Company (IFC).
  • History:
    • It was incorporated in 1969, in the backdrop of severe drought and famine in the country, to energise agricultural pump-sets for irrigation purposes, thereby reducing the dependency of agriculture on monsoons.
    • REC has evolved and expanded its financing mandate to cover the entire Power-Infrastructure sector, comprising Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc.
    • More recently REC has also diversified into the Non-Power Infrastructure sector comprising Roads & Expressways, Metro Rail, Airports, IT Communication, Social and Commercial Infrastructure (Educational Institution, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel, Refinery, etc.
  • Financing: REC provides long-term loans and other financing products to State, Centre, and Private Companies for creation of infrastructure assets in the country.
  • REC funds its business with market borrowings of various maturities, including bonds and term loans, apart from foreign borrowings. 
  • ECPDCL (REC Power Development and Consultancy Limited), the wholly owned subsidiary of REC, provides a range of value-added consultancy services in the power sector. 


National Housing Bank (NHB)

|

In a regulatory filing, LIC recently said the board has cleared the proposal to invest in a new company, promoted by the NHB, for residential mortgage-backed securities.

About the National Housing Bank (NHB):

  • NHB is an All-India Financial Institution (AIFl) established under the National Housing Bank Act, 1987.
  • It is wholly owned by the Government of India.
  • Objective: To operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions.
  • The main functions of NHB include:
    • Supervision and grievance redressal regarding Housing Finance Companies (HFCs).
    • Ensures that HFCs meet regulatory capital requirements as required by BASEL norms, have a proper risk management framework in place, have good governance practices, etc.
    • Financing in the form of extending refinancing options to primary lenders and lending directly with respect to projects undertaken by public housing agencies.
    • Promotion and Development.
  • NHB supervises HFCs, while regulation of HFCs is with the RBI.
  • Head Office: New Delhi
  • The general superintendence, direction, and management of the affairs and business of NHB vest in its Board of Directors.
  • NHB RESIDEX: It is the country’s first official housing price index (HPI). It captures movements in the prices of residential real estate prices.


Dynamic Asset Allocation (DAA)

|

Asset management company (AMC) PPFAS Mutual Fund recently filed for an open-ended dynamic asset allocation scheme with the capital market regulator, the Securities and Exchange Board of India (SEBI).

About Dynamic Asset Allocation:

  • DAA is an investment strategy that involves the frequent adjustment of the weights in a portfolio based on the overall market performance or the performance of certain securities.
  • Most of the funds in this category are invested and spread across various sectors, including equity funds, real estate, stocks, and bonds.
  • Under the dynamic allocation strategy, a portfolio manager assesses the current market conditions and the performance of each asset class. 
  • He uses the results of the assessment to reduce the weights of assets with bad performance and increase the weights of assets with strong performance.
  • Generally, a dynamic strategy is used in reaction to existing risks and market downturns.
  • Unlike the strategic asset allocation strategy, dynamic asset allocation does not involve a target mix of assets. Thus, portfolio managers enjoy a high degree of flexibility in their choice of investments.
  • Dynamic allocation requires active portfolio management. Therefore, the success of the strategy depends not only on the market conditions but also on the portfolio manager’s ability to make good investment decisions and to adequately respond to changes in the market.
  • Dynamic Asset Allocation Example:
    • Suppose global equities enter a six-month bear market.
    • An investment manager using dynamic asset allocation may decide to reduce a portfolio’s equity holdings and increase its fixed-interest assets to reduce risk.
    • For example, if the portfolio was initially equities heavy, the manager may sell some of its equity holdings and purchase bonds.
    • If economic conditions improve, the manager may increase the portfolio’s equity allocation to take advantage of a more bullish outlook for stocks.
  • Advantages:
    • Returns: The frequent adjustments in the mix of assets can possibly provide higher returns on the investment portfolio.
    • Adjustment to market changes: Unlike static asset allocation, dynamic allocation is highly flexible. The strategy can quickly respond to market changes and market risks.
  • Disadvantages:
    • Transaction costs: The frequent rebalancing the weights within the portfolio is associated with transaction costs.
    • Active management: It requires tight control of the investment portfolio and constant observation of emerging market trends. Therefore, the asset allocation strategy requires the skills and knowledge of a professional portfolio manager and may often demand extensive sources (e.g., employees for research).


National Real Estate Development Council (NAREDCO)

|

Real estate body NAREDCO recently said it plans to organise a builders’ conference in Ayodhya to tap its commercial and residential opportunities.

About the National Real Estate Development Council (NAREDCO):

  • It was established in 1998 under the Ministry of Housing and Urban Affairs of the Government of India.
  • It is the leading industry association for the real estate sector in the country.
  • Its primary objective is to provide a legitimate platform for the government, the real estate industry, and the general public to address their concerns and find effective solutions to the challenges faced by the real estate sector.
  • NAREDCO’s mission is to improve the real estate industry’s building, construction, and marketing standards.
  • It contributes to the development of national fiscal policies and acts as a catalyst for economic growth in the Indian real estate sector.
  • All major national developers and public sector organisations in the fields of housing and real estate development, finance, and marketing are members of NAREDCO.
  • Structure:
    • The organisational structure of NAREDCO includes National, State, and City Councils. 
    • The councils ensure that the policy recommendations accurately reflect the real conditions on the ground and cover the entire geography.
    • The National Council focuses on macro-level issues, the State Councils address state-level concerns, and the City Councils tackle local and on-ground issues.
    • The Union Minister for Housing and Urban Affairs, Govt. of India, serves as the Chief Patron of NAREDCO.


NHPC Limited

|

NHPC has inked an initial pact to invest Rs 4,000 crore in 750 MW Kuppa Pumped Hydro Storage Project at Chhota Udaipur in Gujarat.

About the NHPC Limited:

  • NHPC Limited (formerly known as National Hydroelectric Power Corp.) is a Government of India Mini Ratna Category-I Public Sector Enterprise under the Ministry of Power.
  • It was incorporated in the year 1975 under the Companies Act, 1956, with the objective of developing hydroelectric power in the country.
  • With an authorised share capital of Rs.15,000 crore. NHPC is a premier organisation in the country for the development of hydropower.
  • The company is mandated to plan, promote, and organise an integrated and efficient development of power in all aspects through conventional and non-conventional sources in India and abroad. 
  • NHPC is headquartered in Faridabad, Haryana.
  • The main functions of the NHPC include
    • Planning, execution, operation, and maintenance of hydroelectric power projects
    • Exploring new sites for hydroelectric projects
    • Development of small hydroelectric projects
    • Research and Development (R&D) in the field of hydroelectric power
  • Through long-term power purchase agreements, it sells electricity to utilities owned by state governments/private distribution companies on a wholesale basis.
  • It also carries out business operations, which include the planning of wind and tidal wave projects in the country, and has interests in various projects in the construction and under development phases.


National Internet Exchange of India (NIXI)

|

Recently, the National Internet Exchange of India (NIXI) celebrated its 20th Foundation Day, reaffirming its unwavering dedication towards building India’s internet infrastructure.

About the National Internet Exchange of India (NIXI):

  • It was established in 2003 as a not-for-profit organization under the Companies Act 2013.
  • It is tasked to increase Internet penetration and adoption in India by facilitating the various infrastructure aspects to enable the Internet ecosystem to be managed and used by the masses.
  • The four services which come under the NIXI:
    • Setting IXPs, towards Building Internet Exchange Points
    • .IN Registry towards building the .in domain digital identity
    • Indian Registry for Internet Names and Numbers (IRINN) towards Internet Protocol (IPv4 and IPv6) addresses adoption.
    • Data Centre services under NIXI-CSC towards data storage services.

Initiatives of NIXI

  • IPv6 Expert Panel (IP Guru):IP Guru is a group to extend support to all the Indian entities that are finding it technically challenging to migrate and adopt IPv6.
  • It’s a joint effort of DOT, MeitY & community to promote IPv6.
  • NIXI Academy: NIXI Academy is created to educate technical/non-technical people in India to learn and relearn technologies like IPv6 which are normally not taught in Educational Institutes.
  • NIXI-IP-INDEX: NIXI has developed an IPv6 index portal for the Internet community. This portal will showcase the IPv6 adoption rate in India and across the world


National Bank for Financing Infrastructure and Development (NaBFID)

|

Recently, the National Bank for Financing Infrastructure and Development (NaBFID) has raised ₹10,000 crores via the maiden issuance of listed bonds.

About NaBFID:

  • It was set up in 2021, by an Act of the Parliament (The National Bank for Financing Infrastructure and Development Act, 2021).
  • It is a specialized Development Finance Institution in India.
  • Objectives: Addressing the gaps in long-term non-recourse finance for infrastructure development, strengthening the development of bonds and derivatives markets in India, and sustainably boosting the country’s economy.
  • It shall be regulated and supervised by RBI as an All-India Financial Institution (AIFI) 

What is a Development Finance Institution (DFI)?

  • These are organizations owned by the government or public institutions to provide funds for infrastructure and large-scale projects, where it often becomes unviable for large banks to lend.
  • They provide two types of funds- Medium (1-5 years) and Large (< 5 years).


Non-Banking Financial Company (NBFC)

|

The Reserve Bank of India recently imposed ₹20 lakh monetary penalty on Manappuram Finance for non-compliance with certain provisions of Non-Banking Financial Company (NBFC).

About Non-Banking Financial Company (NBFC):

  • An NBFC is a company registered under the Companies Act 1956engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by the Government or local authority or other marketable securities of a like nature.
  • They offer various banking services but do not have a banking license. 
  • They provide banking services like loans, credit facilities, TFCs, retirement planning, investing and stocking in the money market.
  • Generally, these institutions are not allowed to take traditional demand deposits—readily available funds, such as those in checking or savings accounts—from the public. 
  • NBFCs also provide a wide range of monetary advice like chit-reserves and advances.
  • Regulation:
    • NBFCs are regulated by the Reserve Bank of India (RBI), the central bank of India.
    • The RBI has the authority to issue licenses to NBFCs, regulate their operations, and ensure that they adhere to the established norms and regulations.
  • Banks vs NBFCs: 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.
    • Unlike banks, NBFCs are not subjected to stringent and substantial regulations. 
  • Examples of NBFCs include investment banks, mortgage lenders, money market funds, insurance companies, equipment leasing companies, infrastructure finance companies,  hedge funds, private equity funds, and P2P lenders