Economy & Banking Current Affairs

Business, Economy and Banking in Current Affairs 2019 with latest news and current affairs in Agriculture, Industry, Banking, Capital Markets, Import and Export and Government schemes in commercial sector.

GoI amends General Financial Rules

On May 21, 2020, the Government of India amended General Financial Rules to make sure the goods and services that are of value less than Rs 200 crores are procured from domestic firms.

Highlights

The GFR 2017 (General Financial Rules) have been amended by the Central Government. Under the new amendment, global tenders henceforth will be disallowed in government procurement that are of value Rs 200 crores. This was announced in Atma Nirbhar Bharat Abhiyan.

General Financial Rules

The GFR are set of rules that deal with matters that involve public finances. They were first issued in 1947 bringing together all the existing orders. They are instructions that pertain to financial matters.

The GFRs were modified in 1963 and 2005.

GFR 2017

The GFR 2017 was revised in 2017 to make sure an organization manages its business without compromising its flexibility.

Global Tender

Tendering is a process where bids for a project are accepted. Now, global tendering is tenders from foreign countries or through foreign investment. “Disallowing Global Tenders” is stopping foreign investments to a particular threshold to boost indigenous companies.

GoI releases Rs 6,195 crores of funds to 14 states

On May 11, 2020, the Government of India released Rs 6,195 crores to 14 states. This is the second equated monthly installment of Post Devolution Revenue Deficit.

Highlights

The grant allocated to the states will act as additional source of income to the states. The grant was recommended by the 15th Finance Commission. The Central Government under the grant allocated Rs 1,276 crores to Kerala, Rs 952 crores to Himachal Pradesh, Rs 638 crores to Punjab, Rs 631 crores to Assam, Rs 491 crore to Andhra Pradesh, Rs 417 crore to West Bengal and Rs 423 crore to Uttarakhand.

Significance

The grant will help the states make preventive and mitigation measures to contain COVID-19. The funds will be used for sample collection, quarantine facility, screening and setting up of additional testing laboratories. The funds will also be used for purchase of PPE (Personal Protection Equipment), thermal scanners, air purifiers, ventilators, consumables in government hospitals.

Revenue Deficit

The revenue deficit covers the gap between revenue and expenditure of a state. According to Fiscal Responsibility and Budget Management Act, 2003, the states should maintain revenue deficit of zero. According to the Constitution of India, state cannot raise a loan without consent of the Centre. This is why, the Kerala Government in 2019 couldn’t claim the flood relief grants from Saudi Arabia. The centre did not permit.