Foreign Exchange Management (Overseas Investment) Rules 2022 Subject: Economy Section: External sector Context: Indian corporate entities can make overseas investments beyond the prescribed limit in strategic sectors such as energy and natural resources after obtaining necessary permissions. Concept: Foreign Exchange Management (Overseas Investment) Rules 2022: It has been notified under the Foreign Exchange […]
Import Hedging Subject: Economy Section: External Sector Context: Worried about India’s precarious external accounts and the weakening rupee, domestic importers are hedging a lot more of their currency exposures than they are required to. Details: Causes of currency depreciation- high oil import bill, high domestic inflation and the Federal Reserve’s aggressive interest rate […]
Declining State Financial Health Subject :Economy Section : Fiscal Policy Chief Ministers expressed their concern about dwindling State revenues in a NITI Aayog meeting chaired by the Prime Minister. Causes of worsening financial health of States: Schemes and exigency-implementation of the Ujwal DISCOM Assurance Yojana, farm loan waivers, the pandemic Revenue- expenditure mismatch- The […]
Overseas Investment Subject :Economy Section: External sector Why in the news? The finance ministry made it tougher for loan defaulters and those facing probe by investigative agencies to invest in overseas entities. Details: They need to secure a no-objection certificate (NOC) from their lenders, or the regulators or probe agencies concerned before making […]
The privatization of public sector banks Subject :Economy Section: Banking Context :India’s public sector banks have struggled with high levels of non-performing assets (NPAs) leading to restriction of normal functioning and decline in profitability Steps taken: RBI has put many Public sector banks under Prompt Corrective Action (or PCA) Recapitalisation of banks Privatisation […]
Overseas borrowing, a double-edged sword? Subject: Economy Section: External Sector Context: Allure of cheaper rates may be deceptive as foreign currency loans can actually prove to be expensive Multiple ways to boost companies’ capital The first method would be to infuse excess earnings into the company through retained earnings. The second would be […]