BENEVOLENT IAS ACADEMY, COIMBATORE (DAILY CURRENT AFFAIRS)

BENEVOLENT IAS ACADEMY

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Dated 07.12.2019

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UPSC-IAS|IPS|IFS (PRELIMS + MAINS FOCUS)

IN NEWS Fifteen Finance Commission EXAM POINT OF VIEW: GS Prelims and GS-II – Polity

The 15th Finance Commission submitted its interim report on devolution formula for the financial year 2020-21 to President Ram NathKovind.

The devolution formula spells out how the Centre plans to share the taxes collected by it with the States.

Since, the formula is to be applied in the new Budget, the award has not been made public.

Now, the report will first be studied and then a final view will be taken by the Cabinet following which it will be tabled in Parliament just before the Union Budget next year. Only after that will the contents be made public.

Normally, the government accepts the award in toto, however, it is free to accept or reject other suggestions in the report.

BENEVOLENT IAS ACADEMY, COIMBATORE (DAILY CURRENT AFFAIRS)

Do You Know? The Finance Commission was constituted by the President of India under Article 280 of the

Constitution on 27th of November 2017 to make recommendations for a period of five years from 1st April 2020 to 31 March 2025.

However, the Gazette Notification dated 27 November 2019 mandated the Commission to submit the report for the financial year 2020-21 by 30 November 2019 and then the final report for the period 1 April 2021 to 31 March 2026 by 30 October 2020.

This extension has been necessitated after Article 370 of the Constitution was amended. Following this the State of Jammu & Kashmir was bifurcated into two Union Territories, Jammu & Kashmir and Ladakh. Thus, there was a need to change the terms of reference and extension of the term. The last time an interim report was submitted was during the term of 11th Finance Commission (2000-05), when the new States of Jharkhand, Uttarakhand and Chhattisgarh were created.

Finance Commission The Finance Commission was established by the President of India in 1951 under Article 280 of the Indian Constitution. It was formed to define the financial relations between the central government of India and the individual state governments. The current Finance Commission has been accused on working on the idea that the state that produces more taxes must be rewarded and supports the states that produce less revenue. This was interpreted as commission's sole duty is to not help South Indian states. The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission. As per the Constitution, the Commission is appointed every five years and consists of a chairman and four other members.

Article 280 of the Indian Constitution defines the scope of the commission:

1. The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.

2. Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.

3. The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.

BENEVOLENT IAS ACADEMY, COIMBATORE (DAILY CURRENT AFFAIRS)

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TNPSC|SSC|RRB|BANK

International Civil Aviation Day was celebrated on 7 December

International Civil Aviation Day is observed on 7

December 2019. It is celebrated every year. The day aims

to celebrate the unique role of the International Civil

Aviation Organization (ICAO) in helping States to cooperate

and realize a truly global rapid transit network at the service

of all mankind.

Aim:

The Day aims to create awareness about the importance of international civil aviation to

the social and economic development of States.

International Civil Aviation Organization (ICAO):

ICAO was formed in 1944. It is headquartered in Montreal, Canada. It functions under

the United Nations Economic and Social Council (ECOSOC) of the United Nations.

The specialized agency manages the administration and governance of the Convention

on International Civil Aviation or Chicago Convention.

Cabinet approved the creation of Bharat bond Exchange traded

Fund Bharat Bond ETF is issued by CPSE or CPSU or

CPFI or any other Government organization Bonds

will be tradable on the exchange.

Aim:

The move aimed to deepen the corporate bond

market and reduce the cost of borrowing in India.

BENEVOLENT IAS ACADEMY, COIMBATORE (DAILY CURRENT AFFAIRS)

Benefits:

♦ The introduction of Bond ETF will expand the investor base through retail and High

Networth Individuals (HNI) participation which can increase demand for their bonds.

♦ Bond ETF trading will improve better price discovery of the underlying bonds.

♦ ETF will increase retail investors' participation in bond markets who are not

currently participating due to liquidity and accessibility constraints.

RBI allow 24x7 NEFT transactions from 26 December

Reserve Bank of India (RBI) said that the online

money transfer allowed online money transfer

through National Electronic Funds Transfer

(NEFT) will be available 24x7 from 26 December

2019. The move by RBI aims to promote digital

transactions in the Country.

NEFT timings:

♦ The new NEFT transfer system will be available on all days of the year, including holidays.

♦ RBI has set the NEFT transactions in hourly batches.

♦ For weekdays, the timing set for the the batches are from 8.00 am to 7.00 pm.

♦ On the first and third Saturdays, the settlement will be allowed from 8 am to 1 pm.

♦ The first settlement will take place after 00:30 hours on 16 December 2019 (night of December 15,

2019).

♦ The RBI has asked the participating member banks to keep adequate liquidity in their current account

with the regulator at all times in order to facilitate the successful posting of NEFT batch settlements.

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