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Today’s Important Prelims Bits 21-05-2022 | UPSC Prelims Daily Current Affairs

FDI inflow & outflow

In News: The foreign direct investment (FDI) in the financial year 2021-22 has touched a “highest-ever” figure of $83.57 billion.


  • FDI or foreign direct investment is the investment made by a foreign entity (individual or firm) into a business based in another country.
  • Foreign direct investment is not to be confused with foreign portfolio investment. The two are distinguished by a notion of direct control.

FDI inflow

  • Foreign direct investment net inflow is defined as the total value of inward overseas direct investment made by foreign entities, including non-resident investors.
  • It is therefore, investment coming into the domestic country or reporting economy.
  • Inward foreign direct investments into the domestic country includes all assets and liabilities exchanged between the foreign investors and enterprises based in the domestic country, where the investment is being made.

FDI outflow

  • Foreign direct investment net outflow is defined as the total value of outward overseas direct investment made by the residents of the domestic country or reporting economy to businesses based in foreign economies.
  • Outward foreign investments includes assets and liabilities exchanged between investors based in a domestic country or reporting economy to foreign businesses based out in different countries. Inward direct investment is also referred to as direct investment abroad.

Key Initiatives

  • The steps taken by the Government during the last eight years have borne fruit as is evident from the ever-increasing volumes of FDI inflow being received into the country, setting new records.
  • The Government reviews the FDI policy on an ongoing basis and makes significant changes from time to time, to ensure that India remains attractive and investor friendly destination.
  • Government has put in place a liberal and transparent policy for FDI, wherein most of the sectors are open to FDI under the automatic route.
  • To further liberalise and simplify FDI policy for providing Ease of doing business and attract investments, reforms have been undertaken recently across sectors such as Coal Mining, Contract Manufacturing, Digital Media, Single Brand Retail Trading, Civil Aviation, Defence, Insurance and Telecom.

Guidelines for Safety Assessment of Genome Edited Plants, 2022

In News: The department of biotechnology has notified the guidelines for the safety assessment of genome-edited plants, which is expected to accelerate the genetic improvement of crops in the country.

What is genome editing?

  • Genome editing involves the use of technologies that allow genetic material to be added, removed, or altered at particular locations in the genome. Several approaches to genome editing have been developed.
  • A well-known one is called CRISPR-Cas9, which is short for clustered regularly interspaced short palindromic repeats and CRISPR-associated protein 9.
  • Gene editing can be used to make plants express properties not native to them.
  • The conventional breeding technique takes 8–10 years for the development of new agricultural crop varieties, while through genome-editing, the new varieties could be developed in two to three years.
  • Genome-edited plants are different from genetically-modified organisms (GMO) technology. Genome editing is a group of technologies that gives scientists the ability to change an organism’s DNA.

What are the new guidelines?

  • The new guidelines exempt researchers who use gene-editing technology to modify the genome of the plant from seeking approvals from the Genetic Engineering Appraisal Committee (GEAC), an expert body of the Environment Ministry.
  • The guidelines provide a road map for the sustainable use of genome editing technologies and applicable to public and private sector research institutions engaged in research and development and handling of genome edited plants.
  • The guidelines define various categories of genome-edited plants and determine regulatory requirements for appropriate categories and provide the regulatory framework and scientific guidance on data requirement in context of development of these crops.
  • On the other hand, in the case of GM technology, applicants have to apply to the GEAC, which follows time-consuming testing methods along with states. Till now, cotton is the only GM crop that has been approved for commercial cultivation in the country.

RBIs Dividend Payout

In News: The Reserve Bank of India (RBI) has approved the transfer of ₹30,307 crore as surplus to the Union government for the fiscal year 2021-22

Why does the RBI pay a dividend to the Government?

  • As the manager of Government finances, every year, the RBI pays a dividend to Government to help with the Government’s finances from its surplus profit.
  • The RBI was founded in 1934 and has been operating according to the Reserve Bank of India Act of 1934.
  • Chapter 4, section 47 of the Act, titled “Allocation of Surplus funds” mandates for any profits made by the RBI from its operations to be sent to the Centre.
  • Under Section 47 of the RBI Act, “after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds 2 [and for all other matters for which provision is to be made by or under this Act or which] are usually provided for by bankers, the balance of the profits shall be paid to the Central Government.”

How RBI earns profit?

  • The RBI earns its profits primarily from the interest it gets from the purchase and sale of government securities, the interest earned from lending to banks and an interest earned on bond holdings earned on open market principles.
  • From this amount, the net profit is calculated by subtracting the operation expenditures, and other expenses as stipulated in section 47 of the RBI Act.

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