India-Saudi Arabia Current Affairs - 2020

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.

G20: Video Conference of Energy Ministers

On April 10, 2020, the G20 Energy ministers held virtual meeting on ways to ensure stable energy markets. The energy markets are greatly affected by demand reduction due to the ongoing COVID-19 crisis.

Highlights

India’s Energy Minister Shri Dharmendra Pradhan represented the country. The following were iterated by the minister at the meet

  • As a part of 23 billion USD relief package allocated by India, 80.3 million poor families are to get free LPG cylinders.
  • The plan to fill half-empty strategic petroleum reserves were highlighted.

The G20 Energy Ministers Meet will adopt a Joint Statement to establish a Task Force.

India’s plan to fill petroleum reserves

India has signed pacts with Saudi Arabia’s ARAMCO and ADNOC to fill up its petroleum reserves. Also, several refineries are currently operating at 50% to 60% of their capacity. There are three strategic petroleum reserves in India. They are at Vizag (1.3 million tonnes), PAdur (2.5 million tonnes) and Mangalore (1.5 million tonnes).