Daily Mains Practice Questions 01-04-2023

KEY POINTS

·        The Union Budget attracts a lot of media attention, as it sets the mood of the people as they prepare to enter the new financial year.

·        In the higher education sector, the overall sentiment post Budget 2023-24 has been positive.

·        IIMs receive financial assistance under the capital head for the development of infrastructure (buildings and other physical property) with Cabinet approval.

·        To begin with, the IMPRESS scheme was approved for use up to March 31, 2021, and it has since been implemented to promote social science research in higher education institutions.

·        The “Transfer to Reserve Fund” amount is subtracted once from the Gross Budgetary Allocation to arrive at the Net Budget Allocation, also known as the Actual Budget Allocation.

·        Only the Education Cess (MUSK) has decreased and, as a result, it appears that the Gross Budget Allocation has decreased as well.

·        In conclusion, an increase in the allocation every year is a common expectation of almost every industry or sector but a lot more goes into the art of effective budgeting.

·        Thus requiring the use of dynamic reallocation techniques as well, while still aiming for as much expansion of the allocation of funds to the key sector, as is possible.

KEY POINTS

·        The Biomass Co-firing Policy is a critical step towards meeting India’s renewable energy targets and lowering greenhouse gas emissions from the power sector. But still it has not been accepted widely.

·        Using biomass is still a cheaper option than imported coal and hence an economically viable alternative for all thermal power plants.

·        The State Generating Companies and Electricity Regulatory Commissions are still making slow progress in using biomass in their power plants.

·        All thermal power plants have been directed to use 5-7 per cent biomass pellets in their plants along with coal. So far about 1 lakh tonne of biomass has been co-fired in 42 thermal power stations.

·        The Mission has already published the Standard Operating Procedure for co-firing and Model Contract Document for pellet procurement in order to facilitate the thermal power plants.

·        The availability and quality of biomass vary across regions in India. While some regions have an abundance of biomass, others face a shortage.

·        Additionally, power plants need to be retrofitted to enable biomass co-firing. Therefore, there is a need to develop and deploy the necessary technology and equipment for biomass co-firing.

·        The Biomass Co-firing Policy needs to be backed by a strong policy and regulatory framework that provides incentives and support for biomass co-firing.

KEY POINTS

·        Though there was a small wobble last week when the STT hike was revealed, the Indian stock markets have been quite sanguine in the following sessions.

·        That could be due to the reason that the hike will not hurt options traders much. This is because the calculation for STT, while selling options, takes in to account the premium turnover

·        Profit margins of traders of stock futures will be impacted by this hike, but that will not dent volumes much. Stock options are the more popular since they need lower capital and entail lower risk.

·        Trading in stock options accounted for 99 per cent of stock derivative trading on the NSE in 2022-23.

·        With futures becoming less attractive, traders are likely to shift from futures to options.

·        Since these are machine generated trades being executed at high-speed, the margins are wafer thin and could be hurt by the increase in transaction cost.

·        As far as the larger question on the need for STT goes, the consensus is shifting towards imposing such taxes.

·        While transaction taxes are not equitable since they are also levied on loss making trades and are not linked to the return earned by the investor, they are easy to collect and hard to evade.