Relevance IN - Prelims ( about the policy announcements made by RBI) + Mains ( GS III Economic development)
What's the News

• The International Monetary Fund has christened the ongoing economic crisis due to Covid-19 as "The Great Lockdown" and reckons it to be the worst recession that the world would have faced since the Great Depression that happened in the first half of the 20^th Century. The total estimated loss to global economic growth is pegged at $9 trillion - more than three times India's GDP.
• In this context, Reserve Bank of India Governor Shaktikanta Das has so far made two rounds of policy announcements to counter the debilitating effects of the spread of Covid-19 on the Indian economy.

• It makes it cheaper for the banks to borrow money from RBI. Thus banks are expected to pass the benefits by decreasing the interest rate charged on the loans to their customers.

• Banks have been dithering from extending credit to their customers and the total amount of money parked with the RBI is close to Rs 7 lakh crore as of April 15.
• In other words, cuts in the repo rate are largely failing to boost credit as banks are so risk-averse that they are preferring to keep the money with RBI, even if it pays them less than what they borrowed it for. Thus, by now decreasing the reverse repo rate, RBI intends to disincentivise the banks to park the excess liquidity back to the RBI.

• By further cutting reverse repo, the RBI is expecting that the banks understand that it is even more unremunerative for them to park their funds with the RBI.

• The benefits of this move are two-fold. One, it provides more liquidity. But more importantly, it also provides it targeted to those institutions that are most hit by the economic slowdown and, as such, most in need of funds to survive themselves and boost economic activity at the bottom of the pyramid (that is, the poorest customers).

• This will financially help the end consumer, especially in the rural sector, small industries, and housing finance companies.

• This will assist the states to mitigate the economic stress. This will provide the states the much needed liquidity, while fulfilling its role as "the lender of last resort".

• The WMA is essentially is a facility by which state governments borrow from the RBI to meet the shortfall between their revenues and their expenditure. But the WMA is a short-term measure, only meant for exigencies.
• On April 1, the RBI had said it will extend the WMA limit for states by 30 per cent. Today the Governor extended it to 60%. This will enable states to borrow from the RBI and spend that money to provide support (both monetary and otherwise) to the people most badly hit by Covid-19.

• The LCR essentially mandates the amount of cash that a bank is required to keep with itself. At 100 per cent LCR, a bank would have been required to keep 100 per cent of the net cash it expects to flow out of the bank over the next 30 days.

• With this being reduced to 80 per cent, banks would have more cash to deal with. However, the RBI said that this limit will gradually go back to 100 per cent by April 2021.
• Apart from easing liquidity in the system like in the past, the other focus has been to provide an easier regulatory regime.
• The global lockdown has almost completely halted the economic activity. Under the circumstances, it is natural that business will struggle to pay back their loans and there will be a steady accretion of non-performing assets (NPAs) across the board.

• In respect of all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall exclude the moratorium period, i.e., there would an asset classification standstill for all such accounts from March 1, 2020 to May 31, 2020.
• Similarly, the RBI has extended the deadline for large account NPAs by another 90 days.
• Also, to ensure that loans given to real estate projects, that are getting delayed due to the crisis, do not turn into NPAs, the RBI provided an extension of another year before they are recognised as NPAs.

Relevance IN - Prelims ( about TIFAC) + Mains ( GS II Government policies and interventions for development in various sectors and issues arising out of their design and implementation)
What's the NEWS

• The Technology Information, Forecasting and Assessment Council (TIFAC), an autonomous technology think tank under the Department of Science & Technology (DST), Government of India, by virtue of its mandate of thinking for future, is preparing a white paper to strategize revival of post-COVID 19 Indian economy.

Containment strategy and steps suggested to strengthen the Indian economy post-COVID-19 by TIFAC

• This document would mainly focus on
• Strengthening Make in India initiatives,
• Commercialization of Indigenous technology,
• Developing a technology-driven transparent Public Distribution System (PDS),
• Efficient rural health care delivery,
• Reduction of import
• Adoption of emerging technology domains like AI, Machine Learning, Data Analytics and many more.

Know! about Technology Information, Forecasting and Assessment Council (TIFAC)

• As per the recommendation of Technology Policy Implementation Committee (TPIC) in 1985, Cabinet approved the formation of TIFAC in mid 1986 and TIFAC was formed as a registered Society in February, 1988 under the Department of Science and Technology as an autonomous body.
• It was mandated to assess the state-of-art of technology and set directions for future technological development in India in important socio-economic sectors.
• As a unique knowledge network institution in India, TIFAC activities encompass a wide array of technology areas and fill a critical gap in the overall S&T system of India.
• The organization has carried out technology foresight exercise, facilitated and supported technology development; prepared technology linked business opportunity reports and implemented mission-mode programmes.

Prelims Factoids
COVID India Seva launched

Relevance IN - Prelims (about COVID India Seva and its objective)
What's the NEWS

• The Ministry of Health & Family Welfare launched the COVID India Seva, which provided an interactive platform to establish a direct channel of communication with millions of Indians amid the pandemic.

Know! more about it

• This initiative is aimed at enabling transparent e-governance delivery in real-time and answering citizen queries swiftly, at scale, especially in crisis situations like the ongoing COVID-19 pandemic.
• Through this, people can pose queries @CovidIndiaSeva and get them responded to in almost real time.
• @CovidIndiaSeva works off a dashboard at the backend that helps process large volumes of tweets, converts them into resolvable tickets, and assigns them to the relevant authority for real-time resolution.
• It is powered by a team of experts who are trained and equipped to treat and respond to each query uniquely, and at scale.
• This will enable to establish a direct channel with Indian citizens, connecting with them in real-time to provide authoritative health and public information.

Prelims Factoids
Saiyam Mobile App

Relevance IN - Prelims (about Saiyam Mobile app)
What's the NEWS

• In order to effectively track the home-quarantines citizens and ensure they are actually staying in the home, a mobile application named Saiyam has been developed by the Pune Municipal Corporation under Smart Cities Mission (SCM).

Know! more about the app

• The teams will check if those under home quarantine have downloaded the Saiyam Mobile Application.
• The Mobile Application has GPS tracking so that whenever quarantined citizens leave their homes, City Administration gets alerted and the local ward or the local police station gets informed, who then visit the family.

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