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Daily Current Affairs – 2020

Topic: For Prelims and Mains

Ban on export of onion

2nd October 2019.

Why in news?

In a bid to tame onion prices, which have doubled in the domestic retail market since July, the government has taken the following decisions;

  1. Banned exports of all varieties of onion.
  2. Imposed stock limits on onion traders to facilitate release of stocks and prevent hoarding by traders.

In this regard, Commerce and industry ministry amended the export policy of onion, making it ‘prohibited’ from ‘free’ earlier.

Implications:

  • Retail traders across the country will now be able to stock only up to 100 quintals of onion while wholesale traders will be allowed to stock up to 500 quintals.

What do experts say?

  • A ban is an irrational and sub-optimal solution. Instead, efforts should be channelized into investing in scientific storage and processing facilities that will help augment supplies during a crisis.

Need of the hour:

  • Promote modern cold storages and develop a system similar to that of the warehouse receipt system for farmers.
  • States must launch a concerted intelligence drive to crack down on hoarders and bring the stocks to the market swiftly.
  • Encourage imports.
  • Set up onion dehydrating units and promote demand for dehydrated onions amongst large consumers.

Way ahead:

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.

 

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Sovereign Gold Bond scheme 

Why in news?       

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.

 About the Sovereign Gold Bond Scheme:

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.

 

Key facts:

 

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.

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Facts for Prelims:

HC guidelines on Article 25 :

  • HC of Karnataka has declared that Article 25 (Freedom to free profession, practice and propagation of religion), does not extend to public road and footpath.
  • It said that denial of permission to put up temporary structures on roads and footpaths for religious festivals or functions will not infringe upon the freedom granted Article 25.
  • It also observed that one cannot get rights to use public roads and streets just because it was for religious purpose.
  • It issued guidelines to all city municipal corporations on processing applications for temporarily using public roads and footpaths.

 

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