[Mission 2023] Current Affairs Quiz , 31 January 2023

Solution: b)

THE SURPLUS available with the Reserve Bank of India for transfer or the RBI dividend to the Union government is likely to remain low in the current financial year ending March 2023 because of higher expenditure incurred by the central bank due to rising interest rates and higher costs in managing surplus liquidity in the system.

The lower dividend could be due to higher interest paymeznts to banks which parked their surplus liquidity in the reverse repo window.

Under reverse repo, the RBI borrows from banks, while under the repo window, RBI lends to banks.

The RBI can bank on the Contingency Fund which was at Rs 3,10,986.94 crore as of March 2022 in the case of any emergency requirement. 

The RBI normally pays the dividend from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency, among others. The rupee depreciation against the dollar in recent months is also likely to weigh on the surplus transfer.

In the Investment Revaluation Account-Foreign Securities (IRA-FS), the foreign dated securities are marked-to market on the last business day of each week ending Friday and the last business day of each month and the unrealised gains or losses are transferred to the IRAFS.

The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met and as well as to transfer the profit of the RBI to the government.

Source

Solution: a)

• The Currency and Gold Revaluation Account (CGRA) is maintained by the Reserve Bank to take care of currency risk, interest rate risk and movement in gold prices.
• Unrealised gains or losses on valuation of foreign currency assets (FCA) and gold are not taken to the income account but instead accounted for in the CGRA.
• CGRA provides a buffer against exchange rate/ gold price fluctuations. It can come under pressure if there is an appreciation of the rupee vis-à-vis major currencies or a fall in the price of gold.
• When CGRA is not sufficient to fully meet exchange losses, it is replenished from the Contingency Fund (CF).

Source

Solution: b)

The Constitution confers fundamental and other rights on the people of India. But, as B R Ambedkar said, “All of us are aware of the fact that rights are nothing unless remedies are provided whereby people can seek to obtain redress when rights are invaded”. Thus, was born Article 32 of the Constitution, which confers the right to move the Supreme Court for their enforcement. Article 13(2) is a unique provision and provides that “the state shall not make any law that takes away or abridges the rights, conferred by this part and any law made in contravention of this clause shall, to the extent of the contravention, be void”.

The framers of the Constitution were clear in Articles 141 and 144. Article 141 states that the law declared by the Supreme Court is binding on all courts within the territory of India. Article 144 states that all authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court.

Source

Solution: b)

The Unemployment Rate (or UER) is the percentage of people in the labour force who demanded work but did not get it.

The labour force includes those who are employed and those who are looking for work but unable to get it (i.e. unemployed).

So, what has been happening over the past decade is that the Labour Force Participation Rate in India has been falling. As such, often when it appears that UER has fallen, it is not because more jobs have been created but because fewer people have demanded jobs (in other words, the LFPR has fallen).

Since millions do not formally “demand” work, there is an undercounting of unemployed people in India. This is why UER fails to adequately capture the unemployment distress in India.

Solution: d)

“Angel investor” means any person who proposes to invest in an angel fund and satisfies one of the following conditions, namely,

(a) an individual investor who has net tangible assets of at least two crore rupees excluding value of his principal residence, and who:

(i) has early stage investment experience, or

(ii) has experience as a serial entrepreneur, or

(iii) is a senior management professional with at least ten years of experience;

(‘Early stage investment experience’ shall mean prior experience in investing in start-up or emerging or early-stage ventures and ‘serial entrepreneur’ shall mean a person who has promoted or co-promoted more than one start-up venture.)