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UPSC Prelims Bits For Today|Daily Important Current Affairs Notes

UPSC Prelims Bits For Today


In News

Last month was the eighth on the trot that FPIs had sold net of their assets — i.e., sold more than they had purchased.

What are FPIs?

  • Foreign portfolio investors are those that invest funds in markets outside of their home turf.
  • Their investments typically include equities, bonds and mutual funds.
  • They are generally not active shareholders and do not exert any control over the companies whose shares they hold.
  • The passive nature of their investment also allows them to enter or exit a stock at will and with ease.

What impact does an FPI sell-off have?

  • When FPIs sell their holdings and repatriate funds back to their home markets, the local currency takes a beating.
  • After all, they sell rupees in exchange for their home market currency.
  • As supply of the rupee in the market rises, its value declines.
  • In this instance, the rupee has recently been seeing all-time lows. About a year ago, it was trading in the region of 73 to a U.S. dollar; it is now flirting with the 78 level.
  • With a weaker rupee, we have to shell out more funds to import the same unit of goods.
  • The most telling impact is on the cost of our crude oil imports that contribute to 85% of our oil needs


In News

In the near future “where growth is low, unemployment is at least up a little bit and inflation is still high, the world could call that stagflation”.

About Stagflation

  • The most difficult and messy problem for policymakers is when inflation runs high even as economic output either stagnates or, worse, shrinks.
  • The slowdown in economic activity, in turn, leads businesses to shed jobs and the resultant situation is termed as ‘stagflation’.
  • One of the classic instances when most economies including the U.S. faced ‘stagflation’ was during the ‘oil shock’ of the early 1970s when an embargo led by the oil producers’ cartel OPEC caused the price of crude to almost quadruple in a period of just under six months.

Economic Output and GDP are the same things?

  • Most economists typically focus on the three key macroeconomic gauges to assess the health of an economy.
  • Economic output measured by gross domestic product, the level of unemployment and thirdly inflation or the pace at which the prices of goods and services are rising in the economy.

Surrogacy Act

In News

On May 18, the Bombay High Court sought Mumbai-based Hinduja Hospital’s reply after a couple moved the court seeking to complete a surrogacy procedure, which commenced before Parliament passed the Assisted Reproductive Technologies (ART) Act and the Surrogacy Act in December 2021.

Key Points

  • The Surrogacy (Regulation) Bill was introduced in Parliament in November 2016, and passed in the Winter session of Parliament in 2021.
  • The Act sought to regulate the surrogacy part of a rather flourishing infertility industry in the country.
  • Defining ‘surrogacy’ as a practice where a woman undertakes to give birth to a child for another couple and agrees to hand over the child to them after birth, it allows ‘altruistic surrogacy’ — wherein only the medical expenses and insurance coverage is provided by the couple to the surrogate mother during pregnancy.
  • No other monetary consideration will be permitted.

Eligibility for Couple

  • Any couple that has ‘proven infertility’ are candidates.
  • The ‘intending couple’ as the Act calls them, will be eligible if they have a ‘certificate of essentiality’ and a ‘certificate of eligibility’ issued by the appropriate authority.
  • The former will be issued if the couple fulfils three conditions: One, a certificate of infertility of one or both from a district medical board; Two, an order of parentage and custody of the surrogate child passed by a Magistrate’s court; Thirdly, insurance cover for the surrogate mother.
  • An eligibility certificate mandates that the couple fulfil the following conditions: They should be Indian citizens who have been married for at least five years; the female must be between 23 to 50 years and the male, 26 to 55 years; they cannot have any surviving children (biological, adopted or surrogate); However, this would not include a ‘child who is mentally or physically challenged or suffers from life threatening disorder or fatal illness.’

Eligibility For Surrogate Mother

  • Only a close relative of the couple can be a surrogate mother, one who is able to provide a medical fitness certificate.
  • She should have been married, with a child of her own, and must be between 25 and 35 years, but can be a surrogate mother only once.

The National Asset Reconstruction Company Ltd. (NARCL)

In News

(NARCL), set up to take over large bad loans of more than ₹500 crore from banks, will pick up the first set of such non-performing assets (NPAs) in July.

Key Points about NARCL

  • The NARCL, announced in the Budget for 2021-22, is intended to resolve stressed loans of ₹2 lakh crore, of which fully provisioned assets of about ₹90,000 crore are expected to be transferred to it in the first phase.
  • The NARCL will acquire the bad loans from banks, and the India Debt Resolution Company Ltd. — which will then manage these assets and seek to enhance their value — have secured necessary approvals and permissions.

What is the national Asset Reconstruction Company Limited (NARCL)?

  • NARCL has been incorporated under the Companies Act and has applied to Reserve Bank of India for license as an Asset Reconstruction Company (ARC).
  • NARCL has been set up by banks to aggregate and consolidate stressed assets for their subsequent resolution.
  • PSBs will maintain 51% ownership in NARCL.

What is India Debt Resolution Company Ltd. (IDRCL)?

  • IDRCL is a service company/operational entity which will manage the asset and engage market professionals and turnaround experts.
  • Public Sector Banks (PSBs) and Public FIs will hold a maximum of 49% stake.

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