Daily Current Affairs 21 May 2020 | UPSC Current Affairs 2020

Current Affairs Of Today Are

1) Rajiv Gandhi Kisan Nyaya Yojana

• Farmers in Chhattisgarh would get up to ₹13,000 ann acre a year under a new income support program announced by the State government.
• The Rajiv Gandhi Kisan Nyaya Yojana would kick off on, the 19th death anniversary of the former Prime Minister. 
• In the first installment, ₹1,500 crores would be distributed among 18 lakh farmers, more than 80% of the small and marginal
•  The annual cost of the scheme would be ₹5,700 crores.
• The scheme would cover rice, maize and sugarcane farmers to begin with, and would expand to other crops later. Rice and maize farmers would get ₹10,000 an acre, while sugarcane farmers would get ₹13,000. The money would be distributed in four installments. 
• This will help them through the agricultural cycle and hopefully help with extension activities. Chhattisgarh gets more than 50 inches of rain annually, but our irrigation facilities need improvement. Most farmers can cultivate only one season. That needs to change
• The additional income to farmers would increase rural demand and also act as a stimulus for the State’s economy
• Chhattisgarh had paid farmers above the Central Minimum Support Price (MSP) last year but the Centre disapproved of this. The State government was told that if it continued with the incentive, its rice would not be entirely picked up into the central pool. The State’s attempt was to meet the standards set by the Swaminathan Commission that farmers must get 150 percent of their cost of production as MSP. 

Source: The Hindu

2) The neurochemical principles of Alzheimer’s disease and ways of arresting it

• Researchers at the Indian Institute of Technology­Guwahati (IIT­G) have, after a five­year study, arrived at methods for preventing the accumulation of neurotoxic molecules in the brain, which leads to memory loss
• A war trick borrowed from Greek mythology, specifically poet Homer’s epic  Iliad, could help reduce short-term memory losses associated with Alzheimer’s disease
• One is the use of “trojan peptides” that does what the Trojan horse did for the ancient Greeks in their victory over Troy. 
• The other is the application of a low­voltage electric field toward preventing amyloid plaques from aggregating to cause memory loss.
• The cause of Alzheimer’s is the accumulation of amyloid­beta peptides in the brain
• This peptide is akin to the plaque that blocks arteries over some time, affecting blood supply and leading to cardiovascular diseases. Its aggregation, meaning the formation of one over the other deforms the cortex of the brain leading to Alzheimer’s
• The peptide molecules need to have a certain structure to aggregate. 
• The use of an external electric or magnetic field modulates these molecules to “pull back the possibility of Alzheimer’s to a certain extent”.
• The second approach has been to design a “deceitful” peptide with “negative syncretical points” for checking the plaque formation.
• The trojan peptide is roughly like the peptide in the body. But while it goes along with the other peptides, its function is contrary to aggregation. Through intravenous injection of the trojan peptide, we can retard the degeneration of nerve cells by 17­35%, translating into a 10­year delay in the onset of the disease
• The development of a cure for the disease is important for India, which is third behind China and the U.S. in the number of Alzheimer’s patients

Source: The Hindu

3) Partial Credit Guarantee Scheme (PCGS)

• The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Sovereign portfolio guarantee of up to 20% of first loss for purchase of Bonds or Commercial Papers (CPs) with a rating of AA and below (including unrated paper with original/ initial maturity of up to one year) issued by NBFCs/ MFCs/Micro Finance Institutions (MFIs) by Public Sector Banks (PSBs) through an extension of the Partial Credit Guarantee Scheme (PCGS).
• The Cabinet also approved modifications in the existing PCGS on purchase of pooled assets, increasing its coverage by
• Making NBFCs/HFCs reported under the SMA-1 category on technical reasons alone during the last one year period before 1.8.2018 eligible. Earlier NBFCs/HFCs reported as SMA-1 or SMA-2 during this period were ineligible under the Scheme.
• Relaxing the net profit criteria to the extent that the concerned NBFC/HFC should now have made a profit in at least one of the financial years of FY2017-18, FY 2018-19, and 2019-20. Earlier, the NBFC/HFC should have made a net profit in at least one of the financial years of FY 2017-18 and2018-19.
• Relaxing the criteria regarding the date of origination of assets to include new assets originating up to at least six months before the date of initial pool rating. Earlier, only assets originated up to 31.3.2019 were eligible under the Scheme.
• Extending the Scheme from 30.6.2020 to 31.3.2021 for the purchase of pooled assets.
• The existing PCGS was issued on 11.12.2019 offering a sovereign guarantee of up to 10% of the first loss to PSBs for purchasing pooled assets worth rated BBB+ or above worth up to Rs. 1,00,000 crore, from financially sound NBFCs/ MFCs. The outbreak of COVID-19 along with lockdown of business activity has now necessitated the adoption of additional measures to support NBFCs and HFCs - On the liabilities side by providing a sovereign guarantee to cover the purchase of Bonds/CPs issued by NBFCs/HFCs as well as MFIs which also play a critical role in extending credit to small borrowers; and on the assets side by modifying the existing PCGS to widen its coverage,

Implementation schedule:

• The window for this one-time partial credit guarantee offered by Gol will remain open till 31st March 2021 for purchase of pooled assets and for the period as specified under the Scheme for purchase of Bonds/CPs, or till such date by which Rs. 10,000 crores worth of guarantees, including both guarantees toward the purchase of pooled assets and Bonds/ CPs, are provided by the Government, whichever is earlier.

Impact:

• COVID-19 crisis and consequent lockdown restrictions are likely to hurt both collections and fresh loan disbursements, besides a deleterious effect on the overall economy. This is anticipated to result not only in asset quality issues for the NBFC/ HFC/ MFI sector, but also low loan growth as well as higher borrowing costs for the sector, with a cascading effect on Micro, Small and Medium Enterprises (MSMEs) which borrow from them. While the RBI moratorium provides some relief on the assets side, it is on the liabilities side that the sector is likely to face increasing challenges. The extension of the existing Scheme will address the liability side concerns. Also, modifications in the existing PCGS will enable wider coverage of the Scheme on the asset side. Since NBFCs, HFCs, and MFIs play a crucial role in sustaining consumption demand as well as capital formation in small and medium segment, they must continue to get funding without disruption, and the extended PCGS is expected to systematically enable the same.

Source: PIB

4) Scheme for the formalization of Micro Food Processing Enterprises (FME)

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval to a new Centrally Sponsored Scheme - "Scheme for Formalisation of Micro food processing Enterprises (FME)" for the Unorganized Sector on All India basis with an outlay of Rs.10,000 crore.  The expenditure will be shared by GOI and the States in the ratio of 60:40.

Details of the Scheme:

• Objectives:
• Increase in access to finance by micro food processing units.
• Increase in revenues of target enterprises.
• Enhanced compliance with food quality and safety standards.
• Strengthening capacities of support systems.
• The transition from the unorganized sector to the formal sector.
• Special focus on women entrepreneurs and Aspirational districts.
• Encourage Waste to Wealth activities.
• Focus on minor forest produce in Tribal Districts.
• Salient features:
• Centrally Sponsored Scheme. Expenditure to be shared by the Government of India and States at 60:40.
• 2,00,000 micro-enterprises are to be assisted with credit linked subsidy.
• The scheme will be implemented over 5 years from 2020-21 to 2024-25.
• Cluster approach.
• Focus on perishables
• Support for Individual micro-units:
• Micro enterprises will get credit-linked subsidy @ 35% of the eligible project cost with a ceiling of Rs.10 lakh.
• The beneficiary contribution will be a minimum of 10% and a balance from the loan.    
• On-site skill training & Handholding for DPR and technical upgradation.
• Support to FPOs/SHGs/Cooperatives:
• Seed capital to SHGs for a loan to members for working capital and small tools.
• Grant for backward/ forward linkages, common infrastructure, packaging, marketing & branding.
• Skill Training & Handholding support.
• Credit linked capital subsidy.

Implementation schedule:

• The scheme will be rolled out on an All India basis.
• Back ended credit linked subsidy will be provided to 2,00,000 units.
• Seed capital will be given to SHGs (@Rs. 4 lakh per SHG) for a loan to members for working capital and small tools.
• Grant will be provided to FPOs for backward/forward linkages, common infrastructure, packaging, marketing & branding.

Administrative and Implementation Mechanisms

• The Scheme would be monitored at Centre by an Inter-Ministerial Empowered Committee (IMEC) under the Chairmanship of Minister, FPI.
• A State/ UT Level Committee (SLC) chaired by the Chief Secretary will monitor and sanction/ recommend proposals for expansion of micro-units and setting up of new units by the SHGs/ FPOs/ Cooperatives.
• The States/ UTs will prepare Annual Action Plans covering various activities for implementation of the scheme, which will be approved by the Government of India.
• A third-party evaluation and mid-term review mechanism would be built in the program.

State/ UT Nodal Department & Agency

• The State/ UT Government will notify a Nodal Department and Agency for the implementation of the Scheme.
• State/ UT Nodal Agency (SNA) would be responsible for the implementation of the scheme at the State/ UT level including preparation and validation of State/ UT Level Upgradation Plan, Cluster Development Plan, engaging and monitoring the work of resource groups at district/ regional level, providing support to units and groups, etc.

National Portal & MIS

• A National level portal would be set-up wherein the applicants/ individual enterprise could apply to participate in the Scheme.
• All the scheme activities would be undertaken on the National portal.

Convergence Framework

• Support from the existing schemes under implementation by the Government of India and State Governments would be availed under the scheme.
• The Scheme would attempt to fill in the gaps, where support is not available from other sources, especially for capital investment, handholding support, training, and common infrastructure.

Impact and employment generation:

• Nearly eight lakh micro-enterprises will benefit through access to information, better exposure, and formalization.
• Credit linked subsidy support and hand-holding will be extended to 2,00,000 micro-enterprises for expansion and upgradation.
• It will enable them to formalize, grow, and become competitive.
• The project is likely to generate nine lakh skilled and semi-skilled jobs.
• The scheme envisages increased access to credit by existing micro food processing entrepreneurs, women entrepreneurs, and entrepreneurs in the Aspirational Districts.
• Better integration with organized markets.
• Increased access to common services like sorting, grading, processing, packaging, storage, etc.

Background:

• There are about 25 lakh unregistered food processing enterprises that constitute 98% of the sector and are unorganized and informal. Nearly 66 % of these units are located in rural areas and about 80% of them are family-based enterprises.
• This sector faces several challenges including the inability to access credit, high cost of institutional credit, lack of access to modern technology, inability to integrate with the food supply chain, and compliance with the health &safety standards.
• Strengthening this segment will lead to a reduction in wastage, creation of off-farm job opportunities, and aid in achieving the overarching Government objective of doubling farmers' income.

Source: PIB

5) Pradhan Mantri Matsya Sampada Yojana

• The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for implementation of the Pradhan Mantri Matsya Sampada Yojana (PMMSY) - A scheme to bring about Blue Revolution through sustainable and responsible development of fisheries sector in India under two components namely, Central Sector Scheme (CS) and Centrally Sponsored Scheme (CSS) at a total estimated investment of Rs. 20,050 crore comprising of (i) Central share of Rs. 9,407 crore, (ii) State share of Rs. 4,880 crore and (iii) Beneficiaries' share of Rs. 5,763 crore.   
• The Scheme will be implemented for 5 years from FY 2020-21 to FY 2024-25.
• The PMMSY will be implemented as an umbrella scheme with two separate Components namely (a) Central Sector Scheme (CS) and (b) Centrally Sponsored Scheme (CSS). The Centrally Sponsored Scheme (CSS) Component is further segregated into Non-beneficiary oriented and Beneficiary orientated sub­components/activities under the following three broad heads:
• Enhancement of Production and Productivity
• Infrastructure and Post-Harvest Management         
• Fisheries Management and Regulatory Framework

Funding Pattern:

PMMSY will be implemented with the following funding pattern: 

Central Sector Scheme (CS):

• The entire project/unit cost will be borne by the Central government (i.e. 100% central funding).
• Wherever direct beneficiary oriented i.e. individual/group activities are undertaken by the entities of central government including the National Fisheries Development Board (NFDB), the central assistance will be up to 40% of the unit/project cost for General category and 60% for SC/ST/Women category.

Centrally Sponsored Scheme (CSS):

• For the Non-beneficiary orientated sub-components/activities under CSS component to be implemented by the States/UTs, the entire project/unit cost will be shared between Centre and State as detailed below:
• North Eastern & Himalayan States: 90% Central share and 10% State share.
• Other States: 60% Central share and 40% State share.
• Union Territories (with the legislature and without legislature): 100% Central share.
• For the Beneficiary orientated i.e. individual/group activities sub­components/activities under CSS component to be implemented by the States/UTs, the Government financial assistance of both Centre and State/UTs governments together will be limited to 40% of the project/unit cost for General category and 60% of the project/unit cost for SC/ST/Women. The Government financial assistance will, in turn, be shared between Centre and State/UTs in the following ratio:        
• The North Eastern & the Himalayan States: 90% Central share and 10% State share.
• Other States: 60% Central share and 40% State share.
• Union Territories (with the legislature and without legislature): 100% Central share (No UT Share).

Benefits:

• Address the critical gaps in the fisheries sector and realize its potential.
• Augmenting fish production and productivity at a sustained average annual growth rate of about 9% to achieve a target of 22 million metric tons by 2024-25 through sustainable and responsible fishing practices.
• Improving the availability of certified quality fish seed and feed, traceability in fish, and including effective aquatic health management.
• Creation of critical infrastructure including modernization and strengthening of the value chain.
• Creation of direct gainful employment opportunities to about 15 lakh fishers, fish farmers, fish workers, fish vendors, and other rural/urban populations in fishing and allied activities and about thrice this number as indirect employment opportunities including enhancement of their incomes.
• Boost to investments in the fisheries sector and increase of competitiveness of fish and fisheries products.
• Doubling   of fishers, fish farmers and fish workers incomes by 2024
• Social, physical, and economic security for fishers and fish workers.

Source: PIB

6) Coir Geotextiles get the nod for Rural Road Construction

• Coir Geotextiles, a permeable fabric, natural, strong, highly durable, resistant to rots, molds, and moisture, free from any microbial attack, has finally been accepted as a good material for rural road construction.
• Coir Geotextiles will be used for the construction of rural roads under the PMGSY-III says communication from the National Rural Infrastructure Development Agency under Union  Ministry of Rural Development, Govt. of India.
• As per the PMGSY new technology guidelines for road construction, 15% length in each batch of proposals, is to be constructed using new technologies. Out of this 5% of roads are to be constructed using IRC accredited technology. The IRC has now accredited coir Geotextiles for construction of rural
• roads.
• As per these instructions, 5% length of the rural roads under PMGSY-III will be constructed using Coir Geotextiles.  Accordingly, 164 km of the road will be constructed using coir geotextiles in Andhra Pradesh, 151 km in Gujarat, 71 km in Kerala, 328 km in Maharashtra,470 km in Odisha, 369 km TN and 121 km in Telangana. Thus 1674 km road will be constructed using Coir Geotextiles in 07 states for which there will be a requirement of One Crore Sq. mtrs of coir Geo-textiles estimated cost of which would come to Rs.70 Crore.
• The decision opens up a huge market potential for Coir Geotextiles in the Country and will be a boon to the Covid-19 hit Coir Industry.

Source: PIB

7) Government of India launches scheme for 100 % solarisation of Konark sun temple

• The Ministry of New and Renewable Energy (MNRE) has taken up the Complete Solarisation of Konark sun temple and Konark town in Odisha. Speaking about the Scheme, Shri R K Singh, MoS(i/c) for Power and MNRE has said, "Government of India launched the Scheme to take forward the Prime Minister’s vision to develop the historical Sun temple town of Konark in Odisha as 'Surya Nagri', to convey a message of synergy between the modern use of solar energy and the ancient Sun Temple and the importance of promoting solar energy",.
• The Scheme envisages setting up of 10 MW grid-connected solar project and various solar off-grid applications like solar trees, solar drinking water kiosks, off-grid solar power plants with battery storage, etc with a 100% Central Financial Assistance (CFA) support of around Rs. 25 Crores from Government of India through Ministry of New & Renewable Energy (MNRE). The implementation of this project will be done by the Odisha Renewable Energy Development Agency (OREDA).
• The Scheme will meet all the energy requirements of Konark town with solar energy

Source: PIB

8) Agappe Chitra Magna

• The commercial launch of, Agappe Chitra Magna, a magnetic nanoparticle-based RNA extraction kit for use during testing for detection of COVID-19 developed by Sree Chitra Tirunal Institute for Medical Sciences and Technology (SCTIMST) - Trivandrum, an Institute of National Importance of the Department of Science and Technology (DST) along with Agappe Diagnostics Ltd, an in vitro diagnostics manufacturing company based in Cochin is being organized on May 21, 2020, at 4.30 PM.
• Inexpensive, fast, and accurate testing for the COVID-19 virus is the cornerstone of containing its spread and providing appropriate help to the infected. The Chitra Magna, an innovative RNA extraction kit developed by SCTIMST under the leadership of senior scientist, Dr. Anoopkumar Thekkuveettil, was transferred to Agappe Diagnostics in April 2020, and will now be available in the market as Agappe Chitra Magna RNA Isolation Kit. This product has been independently validated at the National Institute of Virology for Covid19 RNA isolation. Central Drugs Standard Control Organisation (CDSCO) has given approval for the commercialization of this kit. The kit can be used for RNA extraction for RT-LAMP, RT-qPCR, RT-PCR, and other isothermal and PCR based protocols for the detection of SARS-COV-2.
• It uses innovative technology for isolating RNA using magnetic nanoparticles to capture the RNA from the patient sample. The magnetic nanoparticle beads bind to the viral RNA and, when exposed to a magnetic field, give a highly purified and concentrated RNA. As the sensitivity of the detection method is dependent on getting an adequate quantity of viral RNA, this innovation enhances the chances of identifying positive cases.
• It is estimated that India would require about 8 lakh RNA extraction kits per month during the next six months, and Agappe Chitra Magna RNA Isolation Kit priced around Rs. 150 per kit is expected to reduce the cost of testing and the country’s dependence on imported kits which cost around Rs 300. Agappe Diagnostics has a manufacturing capacity of 3 lakh kits per month. 

Source: PIB

9) Second Addendum on Protocol on Inland Water Transit and Trade between India and Bangladesh, 2020

• The people’s republic of Bangladesh and the Republic of India has a long-standing and time-tested Protocol on Transit and Trade through inland waterways of both countries. This Protocol, which was first signed in 1972 (immediately after independence of Bangladesh), is a reflection of shared history and friendship between the two countries. It was last renewed in 2015 for five years with a provision for its automatic renewal for a further period of five years giving long term assurance to various stakeholders.
• The Standing Committee on the Protocol and the Shipping Secretary level Talks are the institutional arrangements between the two friendly neighbors to discuss and make the Protocol more effective. During the discussions between India and Bangladesh at these meetings held in October 2018 in New Delhi and in December 2019 in Dhaka, key decisions were taken on the extension of protocol routes, the inclusion of new routes, and declaration of new Ports of Call to facilitate trade between the two countries. These decisions have been made effective with the signing of 2nd Addendum to the Protocol 

Routes: 

• The number of Indo Bangladesh Protocol (IBP) routes are being increased from 8 to 10 and new locations are also added to the existing routes: -
• Inclusion of Sonamura- Daudkhandi stretch of the Gumti river (93 Km) as IBP route No. 9 & 10 in the Protocol will improve the connectivity of Tripura and adjoining States with Indian and Bangladesh`s economic centers and will help the hinterland of both the countries. This route shall be connecting all existing IBP routes from 1 to 8.
• The operationalization of Rajshahi-Dhulian-Rajshahi Routes and their extension up to Aricha (270 km) will help the augmentation of infrastructure in Bangladesh as it would reduce the transportation cost of stone chips/aggregate to the northern part of Bangladesh through this route. It will also decongest the Land Customs Stations on both sides.
• In Routes (1) & (2) [Kolkata-Shilghat-Kolkata] as well as in Routes (3) & (4) [Kolkata-Karimganj-Kolkata], Kolaghat in India has been added.
• Routes (3) & (4) [Kolkata-Karimganj-Kolkata] and Routes (7) & (8) [Karimganj-Shilghat-Karimganj] have been extended up to Badarpur in India. In these routes, Ghorasal in Bangladesh has also been added.

Ports of Call:

• Presently. There are six ports of Call each in India and Bangladesh under the Protocol. Five more Ports of Call and two more extended Ports of Call have been added, increasing the number to eleven Ports of Call and two extended Ports of Call in each country as listed below:
• (New Ports of Call/Extended Ports of Call in bold )
• Inclusion of Jogigopha in India and Bahadurabad in Bangladesh as a new Port of Call will provide connectivity to Meghalaya, Assam, and Bhutan. Jogigopha also becomes important, since, a Multimodal Logistics Park is proposed to be established there. The new Ports of Call would enable the loading and unloading of cargo transported on the Indo Bangladesh Protocol Route and provide a stimulus to the economic development of the new locations and their hinterland.

Movement on shallow draft mechanized vessels: 

• As a path-breaking development, both sides have agreed to introduce trade between Chilmari (Bangladesh) and Dhubri (India) through the use of shallow draft mechanized vessels, provided these are registered under Inland Shipping Ordinance 1976 of Bangladesh or Inland Vessels Act, 1917 of India as per provisions of Article 1.3 of the Protocol and conform to safety requirements. This initiative will allow the export of stone chips and other Bhutanese and North East cargo to Bangladesh and easy access for the traders to the hinterland of Bangladesh, enhancing the local economy in Bangladesh and the lower Assam region of India.

New opportunities on cargo movement: 

• Under this Protocol, Inland vessels of both the countries can ply on the designated protocol route and dock at Ports of Call in each country, notified for loading/unloading of cargo. There has been significant improvement in the movement of cargo vessels in an organized manner on the Protocol route carrying both the transit cargo to the North East(NE) region of India and vice-versa and export-cargo to Bangladesh. The Indian transit cargo is mainly coal, fly-ash, POL, and ODC for power projects in the NE region. The other potential cargo for movement is fertilizers, cement, food grains, agricultural products, containerized cargo, etc. The export cargo from India to Bangladesh is mainly fly-ash which is to the tune of 30 lakhs MT per annum. Around 638 inland vessels (including 600 Bangladeshi flag vessels) completed with approximately 4000 loaded voyages annually.

It is expected that the above modifications to the Protocol will further facilitate the trade between two countries with improved reliability and cost-effectiveness.

The 2nd Addendum to the Protocol on Inland Water Transit and Trade was signed at Dhaka on 20th May 2020 by the HE High Commissioner of India in Bangladesh on behalf of the Republic of India, and by Secretary (Shipping) on behalf of People’s Republic of Bangladesh.

Source: PIB

10) Special Liquidity Scheme for NBFCs/HFCs

• he Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval to the proposal of the Ministry of Finance to launch a new Special Liquidity Scheme for Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) to improve the liquidity position of the NBFCs/HFCs

Financial implication:

• The direct financial implication for the Government is Rs. 5 crores, which may be the equity contribution to the Special Purpose Vehicle (SPV). Beyond that, there is no financial implication for the Government until the Guarantee involved is invoked. However, on invocation, the extent of Government liability would be equal to the amount of default subject to the Guarantee ceiling. The ceiling of aggregate guarantee has been set at Rs. 30,000 crores, to be extended by the amount required as per the need.

Details of the Scheme:

• The Government has proposed a framework for addressing the liquidity constraints of Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) through a Special Liquidity Scheme. An SPV would be set up to manage a Stressed Asset Fund (SAF) whose special securities would be guaranteed by the Government of India and purchased by the Reserve Bank of India (RBI) only. The proceeds of the sale of such securities would be used by the SPV to acquire short-term debt of NBFCs/HFCs. The Scheme will be administered by the Department of Financial Services, which will issue the detailed guidelines.

Implementation schedule:

• A large public sector bank would set up an SPV to manage a stressed asset fund that would issue interest-bearing special securities guaranteed by the Government of India, to be purchased by RBI only. The SPV would issue securities as per requirement subject to the total amount of securities outstanding not exceeding Rs. 30,000 crore to be extended by the amount required as per the need. The securities issued by the SPV would be purchased by RBI and proceeds thereof would be used by the SPV to acquire the debt of at least investment grade of short duration (residual maturity of upto 3 months) of eligible NBFCs / HFCs

Impact:

• Unlike the Partial Credit Guarantee Scheme which involves multiple bilateral deals between various public sector banks and NBFCs, requires NBFCs to liquidate their current asset portfolio and involves the flow of funds from public sector banks, the proposed scheme would be a one-stop arrangement between the SPV and the NBFCs without having to liquidate their current asset portfolio. The scheme would also act as an enabler for the NBFC to get investment grade or better ratings for bonds issued. The scheme is likely to be easier to operate and also augment the flow of funds from the non-bank sector.

Benefits:

• It has been announced in the Budget Speech of 2020-21 that a mechanism would be devised to provide additional liquidity facility to NBFCs/HFCs over that provided through the PCGS. This facility would supplement the liquidity measures taken so far by the Government and RBI. The Scheme would benefit the real economy by augmenting the lending resources of NBFCs/HFCs/MFls.

Background:

• It has been announced in the Budget Speech of 2020-21 that a mechanism would be devised to provide additional liquidity facility to NBFCs/HFCs over that provided through the Partial Credit Guarantee Scheme (PCGS).  There is an urgency to implement the above Budget announcement to strengthen financial stability on account of the emerging situation of Covid-19.

Source: PIB