Daily Current Affairs – 2020Topic: For Prelims and Mains
2nd October 2019.
In a bid to tame onion prices, which have doubled in the domestic retail market since July, the government has taken the following decisions;
In this regard, Commerce and industry ministry amended the export policy of onion, making it ‘prohibited’ from ‘free’ earlier.
More policy making and political attention should be devoted to raising onion output, or for that matter farm output in general.
Complacency on the farm front is wholly avoidable.
Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds.
The Bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
The sovereign gold bond was introduced by the Government in 2015.
Government introduced these bonds to help reduce India’s over dependence on gold imports.
The move was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.
Eligibility: The bonds will be restricted for sale to resident Indian entities, including individuals, HUFs, trusts, universities and charitable institutions.
Denomination and tenor: The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor will be for a period of 8 years with exit option from the 5th year to be exercised on the interest payment dates.
Minimum and Maximum limit: The minimum permissible investment limit will be 1 gram of gold, while the maximum limit will be 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March) notified by the government from time to time.
Joint Holder: In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.
Collateral: Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
Tenor: The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.
Interest rate: The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.