August 12, 2023 | Your One-Stop Solution for Daily Preparation
Bond Yield, Bond Price, and Interest Rate | Explained
Explore the intricate dance of bond yield, bond price, and interest rate in the world of finance. Uncover how these fundamental concepts interplay, influencing investment returns and market valuations. Dive into real-world examples to understand how changes in interest rates can impact bond prices and yields. Gain insights into the complexities of financial markets and empower your investment decisions with a comprehensive grasp of these essential dynamics.
Highlights of the Day
1. Centre Introduces Bills for Comprehensive Legal Reforms in Lok Sabha
Union Home Minister Amit Shah introduced three bills in the Lok Sabha aimed at overhauling India's legal framework. The Bharatiya Nyaya Sanhita Bill, 2023, proposes severe penalties for mob lynching and false promise-based sexual misconduct. Notably, it excludes consensual intercourse within marriage from rape charges. Sedition laws have been repealed, and the bills define terrorism and related offenses more precisely. Confiscation of property will follow court orders. Absconding criminals like Dawood Ibrahim will face trial in absentia. The bills suggest 313 amendments to the criminal justice system, prioritizing timely justice and victim consultation. The bills replace outdated acts, emphasizing video-recorded survivor statements, community service, limited chargesheet timelines, and stronger evidence collection. The bills intend to increase conviction rates and deter political interference in sentencing [1].
2. Parliament Passes Amendments for 28% GST on Casino Bets and Online Gaming
The Indian Parliament has approved changes to the Goods and Services Tax (GST) laws, allowing a 28% GST on bets in casinos, horse-racing, and online gaming. Both Central and Integrated GST laws were amended, and states are required to adjust their GST Acts accordingly. The amendments also mandate offshore online gaming firms catering to Indian users to register and pay taxes. Despite industry concerns, the GST Council maintained the 28% tax rate. The move has sparked lay-offs and closures among online gaming companies. These amendments aim to clarify the tax implications of such activities and promote compliance [2].
3. India's Industrial Growth Hits 3-Month Low at 3.7% in June, Manufacturing Sector Slows
India's industrial production growth hit a three-month low at 3.7% in June, primarily due to weak manufacturing performance. The Index of Industrial Production (IIP) had soared at 12.6% in June 2022 due to a lower base effect. In Q1 2023-24, IIP growth stood at 4.5%, a drop from 12.9% in the same period the previous year. The COVID-19 pandemic's influence since March 2020 affects year-on-year comparisons. The manufacturing sector's output grew by 3.1%, down from 12.9% last year. Consumer durables declined by 6.9%, while infrastructure/construction goods increased by 11.3% compared to 9.4% a year ago [3].
4. Urgent Action Needed to Address Drug-Resistant Tuberculosis in India
India faces a significant challenge with drug-resistant tuberculosis (DR-TB), holding a quarter of global cases. Despite new diagnostic advancements, the country's response remains inadequate. The WHO estimates 119,000 new cases of multidrug/rifampicin resistant TB annually in India. However, the TB program reported only around 64,000 cases in 2022. Improved rapid molecular diagnostics are available but underutilized. The WHO recommended standardizing access to such tests. Shortening DR-TB treatment duration to 6 months is a notable advance, yet varied treatment options persist. The cost-effective BPaLM/BPaL regimen offers potential savings and better outcomes. Wider access to advanced diagnostics and treatments is essential [4].
5. New Variant EG.5 Raises Concerns: Potential Global Spread and Impact on COVID-19 Cases in India
The WHO designates EG.5, a descendant of the Omicron lineage, as a variant of interest. Although its rise might not directly correlate with increased disease severity, its rapid global spread is alarming. Despite improved diagnostic tools, the testing and detection rate remains low. EG.5's prevalence is notably increasing in comparison to other variants. While it carries lower individual mortality risk, its potential to affect vulnerable populations and contribute to long COVID is concerning. Researchers believe EG.5's emergence is driven by unexplored factors. India's testing rates are decreasing, highlighting the importance of sustained surveillance [5].
Source: The Hindu | Indian Express | DownToEarth
Practice Questions for Prelims
Q1: Who among the following can participate in the deliberations of the Lok Sabha, even though not being a member?
a) Vice President
b) Attorney General of India
c) Chief Justice of India
d) Comptroller and Auditor General
Q2: Which of the following is NOT a function of the Reserve Bank of India (RBI)?
a) Issuance of currency notes
b) Regulation of money supply
c) Conducting monetary policy
d) Fiscal policy formulation
Q3: Which of the following statements about the Indian President's power to issue ordinances is correct?
Statement A: The President can issue an ordinance only when both Houses of Parliament are in session.
Statement B: The validity of an ordinance is six months from the date it is issued.
a) Only Statement A is correct.
b) Only Statement B is correct.
c) Both Statement A and Statement B are correct.
d) Neither Statement A nor Statement B is correct
Q4: Which of the following statements about 'Black Holes' is true?
Statement A: Black holes are regions in space where gravity is weaker compared to the surrounding space.
Statement B: The boundary around a black hole beyond which nothing can escape is known as the event horizon.
a) Only Statement A is true.
b) Only Statement B is true.
c) Both Statement A and Statement B are true.
d) Neither Statement A nor Statement B is true.
Q5: Consider the following statements about the 'Anti-Defection Law' in India:
Statement A: The Anti-Defection Law was added to the Constitution through the 91st Amendment Act, 2003.
Statement B: The Law disqualifies a Member of Parliament or a State Legislature if they voluntarily give up the membership of their political party.
a) Only Statement A is correct.
b) Only Statement B is correct.
c) Both Statement A and Statement B are correct.
d) Neither Statement A nor Statement B is correct.
Today’s Question for Mains Answer Writing
Examine the socio-economic impacts of the gig economy on the labor market in India. Discuss the advantages and disadvantages of gig work, its implications for job security, social protection, and regulatory framework. Also, suggest measures to ensure fair and equitable conditions for gig workers. (Word limit: 250 words)
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