Daily Quiz: UPSC Prelims Marathon (Economy)|October 27, 2020

The framework is being drafted by the Department of Investment and Public Asset Management (DIPAM). The policy framework lays down the Institutional framework for monetization of the following:
•Identified non-core assets of CPSEs under strategic disinvestment;
•Immovable Enemy Property under the custody of Custodian of Enemy Property (CEPI), MHA as per sub section 6 of section 8A of the Enemy Property Act, 1968;
•This framework is also available for use to monetize assets of other CPSEs/PSUs/other Government Organizations with the approval of the Competent Authority;
•Sick/Loss making CPSEs under closure normally follow the DPE closure guidelines dated 14.06.2018 in this regard. However, any sick/loss making CPSE can also adopt this framework with the approval of Competent Authority.
The objective of the asset monetization programme of the Government of India is to unlock the value of investment made in public assets which have not yielded appropriate or potential returns so far.
Source: The Hindu

Venture capital funds are investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential.
•These investments are generally characterized as high-risk/high-return opportunities.
•In the past, venture capital investments were only accessible to professional venture capitalists, although now accredited investors have a greater ability to take part in venture capital investments.
Source: Economic Survey

Market Stabilisation Scheme or MSS is a tool used by the Reserve Bank of India to suck out excess liquidity from the market through issue of securities like Treasury Bills, Dated Securities etc. on behalf of the government.
•The money raised under MSS is kept in a separate account called MSS Account and not parked in the government account or utilized to fund its expenditures.
•The Reserve Bank under Governor YV Reddy initiated the MSS scheme in 2004, to control the surge of US dollars in the Indian market; RBI started buying US dollars while pumping in rupee.
•This eventually led to over-supply of the domestic currency raising inflationary expectations. MSS was introduced to mop up this excess liquidity.
Source: Ramesh Singh

A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation.
Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more).
In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).
G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.
•Treasury Bills (T-bills): Treasury bills or T-bills, which are money market instruments, are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day.
•Cash Management Bills (CMBs): In 2010, Government of India, in consultation with RBI introduced a new short-term instrument, known as Cash Management Bills (CMBs), to meet the temporary mismatches in the cash flow of the Government of India. The CMBs have the generic character of T-bills but are issued for maturities less than 91 days.
•Dated G-Secs: Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on half-yearly basis. Generally, the tenor of dated securities ranges from 5 years to 40 years.
Source: RBI

Mission Purvodaya in steel sector envisions creating an integrated steel hub in Eastern India.
•With abundance of raw materials, strategic geographical location and strong and developing connectivity, Odisha is well poised to be the heart of this eastern steel hub.
•The Mission is rolled out by Union Petroleum and Natural Gas & Steel Ministry.
•More than 75% of India‘s envisioned incremental steel capacity will come from eastern India, with Odisha alone crossing 100 MTPA.
•In Odisha, Kalinganagar will be developed as the epicenter of Mission Purvodaya.
Source: The Hindu

Asian Development Bank (ADB) had prepared Conceptual Development Plan (CDP) for Vizag-Chennai Industrial Corridor (VCIC).
•The Andhra Pradesh government has mooted development of nodes in Visakhapatnam, Machilipatnam, Donakonda and on the Yerpedu-Srikalahasti stretch.
•The VCIC has been identified for development in the first phase of Kolkata-Kanyakumari East Coast Economic Corridor.
•The ADB, which prepared the concept paper, has agreed to give $500 million towards multi-tranch financing facility and policy-based loan worth $125 million.
Source: The Hindu

An FPO, formed by a group of farm producers, is a registered body with producers as shareholders in the organization.
•It deals with business activities related to the farm produce and it works for the benefit of the member producers.
•Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs.
•NABARD has dedicated Funds like Producer Organisation Development Fund (PODF) and PRODUCE for promotion of FPOs.
•Financing FPOs through NABARD’s subsidiary NABKISAN Finance Ltd., digitisation of FPO data, development of performance measurement tool, etc. have also contributed to the ongoing efforts.
•Besides, NABARD is running an awareness campaign on the role of FPOs in building resilience against climate change, increase in productivity and optimal efficiency in the agri value chain.
Source: SFAC

Invisible hand.
•Scottish Enlightenment thinker Adam Smith introduced the concept Invisible hand in several of his writings, but it found this economic interpretation in his book An Inquiry into the Nature and Causes of the Wealth of Nations published in 1776.
•The invisible hand is part of laissez-faire, meaning “let do/let go,” approach to the market. In other words, the approach holds that the market will find its equilibrium without government or other interventions forcing it into unnatural patterns.
•The invisible hand is a metaphor for the unseen forces that move the free market economy. Through individual self-interest and freedom of production as well as consumption, the best interest of society, as a whole, are fulfilled.
•The constant interplay of individual pressures on market supply and demand causes the natural movement of prices and the flow of trade.
Source: Investopedia

The Economic Census is being conducted by Ministry of Statistics and Programme Implementation (MoSPI) to provide disaggregated information on various operational and structural aspects of all establishments in the country.
All entrepreneurial units in the country which are involved in any economic activities of either agricultural or non-agricultural sector which are engaged in production and/or distribution of goods and/or services not for the sole purpose of own consumption.
Source: MoSPI

When the government decides to transfer the ownership and control of a public sector entity to some other entity, either private or public, the process is called strategic disinvestment.
•The Department of Investment and Public Asset Management (DIPAM) which comes under the Finance Ministry defines Strategic disinvestment as follows:
•“Strategic disinvestment would imply the sale of a substantial portion of the Government shareholding of central public sector enterprises (CPSE) of up to 50%, or such higher percentage as the competent authority may determine, along with transfer of management control.”
•The Cabinet Committee on Economic Affairs (CCEA) approves the strategic divestment of government holdings.
Source: Indian Express