1. FOREIGN DIRECT INVESTMENT
- News: Foreign direct investment (FDI) inflows into India in the first five months of 2020-21 have hit a record high, despite a sharp 60% contraction in the first quarter, with July and August raking in over $20 billion of equity FDI.
- About Foreign Direct Investment:
- A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
- Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.
- However, FDIs are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies.
- Foreign direct investments are commonly made in open economies that offer a skilled workforce and above-average growth prospects for the investor, as opposed to tightly regulated economies.
- Foreign direct investment frequently involves more than just a capital investment.
- It may include provisions of management or technology as well.
- The key feature of foreign direct investment is that it establishes either effective control of or at least substantial influence over the decision-making of a foreign business.
- Types of Foreign Direct Investment:
Foreign direct investments are commonly categorized as being horizontal, vertical or conglomerate.
- A horizontal direct investment: refers to the investor establishing the same type of business operation in a foreign country as it operates in its home country, for example, a cell phone provider based in the United States opening stores in China.
- A vertical investment: is one in which different but related business activities from the investor’s main business are established or acquired in a foreign country, such as when a manufacturing company acquires an interest in a foreign company that supplies parts or raw materials required for the manufacturing company to make its products.
- A conglomerate type of foreign direct investment: is one where a company or individual makes a foreign investment in a business that is unrelated to its existing business in its home country. Since this type of investment involves entering an industry in which the investor has no previous experience, it often takes the form of a joint venture with a foreign company already operating in the industry.
- There are two routes by which India gets FDI:
- Automatic route: By this route FDI is allowed without prior approval by Government or Reserve Bank of India.
- Government route: Prior approval by government is needed via this route. The application needs to be made through Foreign Investment Facilitation Portal, which will facilitate single window clearance of FDI application under Approval Route. The application will be forwarded to the respective ministries which will act on the application as per the standard operating procedure. The work relating to processing of applications for FDI and approval of the Government is handled by the concerned Ministries/Departments in consultation with the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce.
- Automatic Route sectors in India:
||Mining and Exploration of metal and non – metal ores
||Broadcasting Carriage Services
||Airports – Greenfield and Brownfield
||Trading – Wholesale and E – Commerce
||Asset Reconstruction Companies
||Pharmaceuticals – Greenfield
||Petroleum and Natural Gas exploration
- Fact about India:
- The World Investment Report 2020 by the UN Conference on Trade and Development (UNCTAD) said that India was the 9th largest recipient of FDI in 2019, with $51 billion of inflow during the year, an increase from $42 billion of FDI received in 2018, when India ranked 12 among the top 20 host economies in the world.
2. ELECTION SPENDING LIMITS
- News: The Law Ministry has increased the ceiling on poll expenditure for Assembly and Lok Sabha elections by 10%. The move follows a recommendation by the Election Commission in view of curbs imposed during the coronavirus (COVID-19) pandemic.
- The ceiling on poll expenditure varies across States, with candidates in Assembly elections in bigger States like Bihar, Uttar Pradesh, and Tamil Nadu now allowed to spend up to ₹30.8 lakhs as against ₹28 lakhs earlier.
- For a candidate contesting a Lok Sabha poll in these States, the revised ceiling on poll expenditure is now ₹77 lakh instead of the earlier amount of ₹70 lakh.
- About the Election Spending Limit:
- Under Rule 90 of the Conduct of Election Rules, 1961, a candidate contesting Lok Sabha polls can spend up to Rs 77 lakh and up to Rs 30.8 lakh in an assembly election depending on the state in which s/he is contesting polls.
- Under Section 77 of the Representation of the People Act, 1951, every candidate shall keep a separate and correct account of all expenditure incurred between the date on which he has been nominated and the date of declaration of the result.
- All candidates are required to submit their expenditure statement to the ECI within 30 days of the completion of the elections.
- An incorrect account or expenditure beyond the cap can lead to disqualification of the candidate by the ECI for up to three years, under Section 10A of the Representation of the People Act, 1951.
- It can be noted that there is no cap on a political party’s expenditure, which is often exploited by candidates of the party.
- However, all registered political parties have to submit a statement of their election expenditure to the ECI within 90 days of the completion of the elections.
3. WILDLIFE INSTITUTE OF INDIA
- News: A recommendation by the Finance Ministry to divest the Dehradun-based Wildlife Institute of India (WII) of its status as an autonomous body of the Ministry of Environment, Forests and Climate Change has triggered anxiety among scientists at the organisation.
- About Wildlife Institute of India:
- The Wildlife Institute of India (WII), an autonomous institution under the Ministry of Environment Forest and Climate change, Government of India, was established in 1982.
- WII carries out wildlife research in areas of study like Biodiversity, Endangered Species, Wildlife Policy, Wildlife Management, Wildlife Forensics, Spatial Modeling, Ecodevelopment, Ecotoxicology, Habitat Ecology and Climate Change.
- WII has a research facility which includes Forensics, Remote Sensing and GIS, Laboratory, Herbarium, and an Electronic Library.
4. NEW START
- News: Russia said on Tuesday it was ready to offer the U.S. a mutual one-year freeze on the number of nuclear warheads held by both countries in order to extend a landmark arms reduction deal due to expire next year.
- About New START:
- New START (Strategic Arms Reduction Treaty) (Russian: СНВ-III, SNV-III) is a nuclear arms reduction treaty between the United States and the Russian Federation with the formal name of Measures for the Further Reduction and Limitation of Strategic Offensive Arms.
- It was signed on 8 April 2010 in Prague, and, after ratification, entered into force on 5 February 2011.
- It is expected to last at least until 2021.