Goaltide Daily Current Affairs 2021

Aug 05, 2021

Current Affair 1:
e-RUPI: A voucher system

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When I used to work in IBM (Bangalore), our company used to give us "food coupons" worth some Rupees let us say (Rs. 50). We used to give this food coupon to the various food contractors (IBM had selected those contractors) who used to supply food in the IBM campus and in return we used to get lunch. So, here there are three parties... the IBM employees (beneficiaries), IBM (the Sponsor) and the Contractor (Service provider).

IBM gave us 'food coupons' rather than money (rupee note) because IBM wanted to give its employees some benefit BUT only in the form of consumption of lunch/dinner. If IBM would have given us Rs. 50... then we would have consumed something else also. So, these food vouchers are not Rupee notes rather they are BACKED by rupee and can be used only for specific purpose. So, these two things 'specificity' and 'not rupee but backed by rupee' makes these food vouchers different from 'Indian Rupee'.

So, IBM was giving us Rs. 50 benefits on a daily basis (in the form of food coupons). If this kind of voucher (food coupons) is given by Govt. to all the farmers through which they can purchase fertilizers from specific shops at the market price. So, let us say if Govt. wants to give Rs. 3000 fertilizer subsidies to every farmer then it can give 'fertilizer vouchers' to all farmers and the farmers can use these vouchers to purchase fertilizer from specific shops. (Right now, shops sell fertilizers at below market price and govt transfers money into shops account). Fertilizers prices will be deregulated and leakage will also get removed.

Now, e-RUPI is just a digital form of 'voucher'. e-RUPI can be in the form of 'QR Code' or 'SMS String' and will be delivered to the mobile phones of individuals, to whom the benefit/subsidy has to be given.

So, now if Ministry of Fertilizer wants to give fertilizer subsidy to Indian farmers, then, the Ministry will approach partner banks and the ministry will have to provide the farmers mobile no. to the banks and the banks will deliver these vouchers (e-RUPI) to the farmers mobile in the form of 'QR Code' or 'SMS String'. Whatever value of 'e-RUPI' (vouchers) will be allocated to the farmers, the same amount Ministry will have to transfer to partner banks.  Now, when the farmers will go to the specific shops to purchase fertilizers and rather than paying cash, they will scan the 'e-RUPI' (SMS String or QR code), then the fertilizer shops will receive the payment from the partner banks and farmers will be able to purchase the fertilizer.

e-RUPI has been developed by National Payments Corporation of India (NPCI) on its UPI platform.

Current Affair 2:
New polyhouse technology to help cultivate off-season crops

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A polyhouse is a specially constructed structure like a building where specialised polythene sheet is used as a covering material under which crops can be grown in partially or fully controlled climatic conditions. It is covered with a transparent material as to permit the entry of natural light. Polyhouses are also helpful in reducing threats such as extreme heat and pest attacks in crops.

Why it is important?

With rapidly rising temperatures due to mounting greenhouse gases in the atmosphere from human activities, crops are increasingly facing both threats — extreme heat and pest attacks — simultaneously.

This is especially important for crops growing in the open field with no protection from the weather, and therefore its yield, quality, and crop maturity timings are changed. A combination of open field conditions and conventional greenhouse conditions is a more robust way to deal with climate change and associates problems in the future. Crop losses in India due to insect pests is about 15 per cent at present and this loss may increase as climate change lowers the plant defense system against insects and pests.

What was problem with Conventional structure?

Conventional greenhouses have a stationary roof to reduce the effect of weather anomalies and pests. However, there are still disadvantages due to roof covering which sometimes lead to excessive heat and insufficient light (early morning). Besides this, they are also prone to insufficient levels of carbon dioxide, transpiration and water stress.

“Retractable Roof Polyhouse Technology will have an automatic retractable roof which will be operated based on weather conditions and crop requirements from the conditional database using PLC software. This ongoing development will be useful in our country with its 15 different agro-climatic zones and will help farmers to cultivate off-season crops that can fetch higher value and income

Current Affair 3:
Factoring Regulation (Amendment) Bill, 2021


Recently Parliament passed "Factoring Regulation (Amendment) Bill, 2021". You do not need to go into the details of the Bill  but you must understand the term 'factoring'.

First understand 'Receivables': If I have sold some product to a company (my customer) and I have raised a bill for the same then the bill amount (dues) which I am expecting to receive from the company is called 'Receivables'.

Factoring is a transaction where an entity (like MSMEs) sells its receivables (the dues from the corporate) to a third party (a 'factor' like a bank or NBFC) for immediate funds. So, the bank/NBFCs will provide immediate funds to MSMEs and they purchase the receivables of MSMEs, and the banks/NBFCs will be able to get the money from the corporate through the receivables that they (banks/NBFCs) will now be holding. Note that credit facilities provided by a bank against the security/collateral of receivables are not considered as factoring business. In case of 'factoring' the receivables (the dues) are sold rather than kept as collateral to raise finance.

Factoring is done on an online TReDS (Trade Receivables Discounting System) platform initiated by RBI.

Earlier Factoring could be done by the banks or NBFCs that have a factoring licence ( those who do over 50 per cent of business through factoring). Now, all NBFCs have been allowed to do factoring business, irrespective of proportion of income from factoring. This, therefore, will bring liquidity into factoring business.

NBFCs’ lending to MSMEs is typically against the balance sheet strength of these smaller companies, leading to interest rates that can be higher than 16 per cent. But in the case of  factoring, the NBFC is taking a risk on the customer of the MSME who is larger corporate, leading to lower (nearly halving) interest costs.

Current Affair 4:
Public Float

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Company's shares are held by its owners and the owners can be promoters (having control of the company), company officers, governments or other investors. When a company gets listed on the stock exchange then at least some percentage of shares must be allowed for trade on the stock exchange. The percentage of shares that are traded on the stock exchange is called 'Public Float' and the investors holding these shares are called 'Public Investors'; rest of the shares remain locked-in (not traded) and may be held by promoters, governments, company officers etc.

'Public Float' is an indication of how many shares are actually available to be bought and sold by the general investing public. There is an inverse correlation between the size of a company's public float and the volatility of the stock's price. This is because greater the number of shares available for trade, the less volatility the stock will experience because the harder it will be for a smaller number of shares to move the price. So, more 'public float' enables better share price discovery and liquidity (easily bought and sold).

As per SEBI, all listed companies are required to comply with the minimum public shareholding requirement of 25% within three years of their listing and those launching an IPO need to sell at least 10% of the shares outstanding in the IPO initially.

Last year, the government had proposed to increase the minimum public float from the current 25 per cent to 35 per cent. It had met with opposition, forcing the government to drop the plan.

As per latest news, "Central government may, in the public interest, exempt any listed public sector company from any or all of the provisions of this rule” of increasing minimum public shareholding to 25 per cent.


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