India Current Affairs 2017

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Cabinet approves of proposal to establish a Fund of Fund for Start-ups

The Union Cabinet has approved proposals to tweak Fund of Funds of Start-ups (FFS) rules to enable greater flow of resources. FFS was established in June 2016 with a corpus of Rs. 1,000 crores.

The proposals approved are
  • Alternate Investment Funds (AIFs) supported by FFS shall invest at least twice the amount of contribution received from FFS in Start-ups.
  • Further, if the amount committed for a Start-up in whole has not been released before a Start-up ceases to be so, the balance funding can continue thereafter.
  • The operating expenses for carrying out due diligence, legal and technical appraisal, convening meeting of Venture Capital Investment Committee, etc. will be met out of the FFS.
  • These expenses will be to an extent of 0.50% of the commitments made to AIFs and outstanding. This will be debited to the fund at the beginning of each half year i.e. April 1 and October 1.
  • The Union Cabinet in June 2016 had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs.10000 crore.
  • It was approved with contribution spread over the 14th & 15th Finance Commission (FC) cycles based on progress of implementation and availability of funds.
  • It was decided that the FFS shall contribute to the corpus of AIFs for investing in equity and equity linked instruments of various start-ups at early stage, seed stage and growth stages.
  • The FFS is being managed and operated by Small Industries Development Bank of India (SIDBI). It contributes to SEBI registered AIFs that may go up to maximum of 35% of the corpus of the AIF concerned.


Union Cabinet approves amendments to Customs and Excise Act to facilitate GST Regime

The Union Cabinet has approved amendments to the Customs and Excise Acts related to abolition of cesses and surcharges on various goods and services to facilitate implementation of GST Regime

Decision in this regard was taken by Union Cabinet meeting chaired by the Prime Minister Narendra Modi in New Delhi. It has approved the following proposals:

  • Amendment to Customs Act, 1962;
  • Amendment to Central Excise Act, 1944.
  • Amendments to Customs Tariff Act, 1975.
  • Repeal of Central Excise Tariff Act, 1985 and
  • Amendment/repeal of the provisions relating to Acts under which cesses are levied.
  • The amendments in Customs Act, 1962 will allow furnishing of information relating to import or export of goods by specified persons to enable analysis and detection of cases of under or over-valuation in imports and exports.
  • It also aims to check misuse of export promotion schemes, including Drawback Scheme and violations of provisions of Customs Act and various other laws which Customs officials have been authorised to implement.
  • The amendments or repealing of various provisions of other Acts which in the GST regime will result in cleansing of the irrelevant portions from the Statute Book and reduce multiplicity of taxes.


Cabinet approves amendments to NABARD Act, 1981

Union Cabinet has approved proposal for amending National Bank for Agriculture and Rural Development Act, 1981.

Decision in this regard was taken in the Union Cabinet meeting chaired by Prime Minister Narendra Modi in New Delhi.

Cabinet Approvals
  • Amendments in Act to increase authorized capital of NABARD from Rs. 5,000 crore to Rs. 30,000 crore and further increase it beyond Rs. 30,000 crore in consultation with RBI, as deemed necessary from time to time.
  • It also includes certain other amendments including changes in long title and certain sections to bring Handlooms and Medium Enterprises in NABARD’s mandate.
  • Transfer of 0.4% equity of RBI in NABARD amounting to Rs. 20 crores to the Union Government.
  • Increase in authorized capital will enable NABARD to respond to the its commitments undertaken, in respect of Long Term Irrigation Fund (LIF) and Government’s decision regarding on-lending to cooperative banks.
  • It will enable NABARD to augment its business and enhance its activities, thus facilitating promotion of integrated rural development and securing prosperity of rural areas by generating of more employment.
  • The transfer of entire shareholding of RBI held in NABARD to the Union Government will remove the conflict in RBI’s role as banking regulator and shareholder in NABARD.

About National Bank for Agriculture and Rural Development (NABARD)

  • NABARD is an apex development bank in India. The Union Government holds the majority stake in it.
  • Headquarters: Mumbai, Maharashtra.
  • Established: 1982 on the recommendations of Shivaraman Committee to implement the National Bank for Agriculture and Rural Development Act, 1981.
  • It has been entrusted with matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India.
  • It is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.
  • Mandate: Facilitate credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
  • Support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas.