UPSC Prelims Bits For Today 06 July 2022 | Daily Important Current Affairs For UPSC Prelims

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”UPSC Prelims Bits For Today” is every day published in the morning between 11:00 AM to 12:00 Noon and contains selective current affairs articles. ”UPSC Prelims Bits For Today” covers various topics from UPSC Prelims Syllabus and is very helpful and time managing for UPSC Aspirants. The framing of this daily current affairs compilation article is easy to read and understandable also.

In the ”UPSC Prelims Bits For Today” article, we focus on UPSC Preliminary exam-oriented current affairs covering various sections from leading National Newspapers, PIB, and other various official sources.

FPI Selling

Why is FPI Selling In News?

Foreign Portfolio Investors (FPIs) have been on a selling spree in India. June 2022 witnessed the worst sell-off since March 2020

What are FPIs?

Foreign portfolio investors are those that invest funds in markets outside of their home turf.
Their investments typically include equities, bonds and mutual funds.
They are generally not active shareholders and do not exert any control over the companies whose shares they hold.
The passive nature of their investment also allows them to enter or exit a stock at will and with ease.

What impact does an FPI sell-off have?

When FPIs sell their holdings and repatriate funds back to their home markets, the local currency takes a beating. After all, they sell rupees in exchange for their home market currency.
As supply of the rupee in the market rises, its value declines.
In this instance, the rupee has been seeing all-time lows recently. About a year ago, it was trading in the region of 73 to a U.S. dollar; it is now flirting with the 78 level.
With a weaker rupee, we have to shell out more funds to import the same unit of goods.
The most telling impact is on the cost of our crude oil imports that contribute to 85% of our oil needs.

China’s Belt and Road Initiative

Why is China’s BRI In News?

At the recently concluded summit of G-7 leaders in Germany, U.S. President Joe Biden and his allies unveiled their $600 billion plan called the Partnership for Global Infrastructure and Intelligence which is being seen as a counter to China’s Belt and Road Initiative (BRI).

China’s Belt and Road Initiative: Key Points

In 2013, Chinese President Xi Jinping, during his visits to Kazakhstan and Indonesia, expressed his vision to build a Silk Road Economic Belt (SERB) and a 21st Century Maritime Silk Road (MSR), to break the “bottleneck” in Asian connectivity. Thus, the Belt and Road initiative was born.
The biggest project under BRI is in Pakistan, the China Pakistan Economic Corridor (CPEC).
The initiative envisioned a Chinese-led investment of over $1 trillion in partner countries by 2025.
More than 60 countries have now joined BRI agreements with China, with infrastructure projects under the initiative being planned or under construction in Asia, Africa, Europe, and Latin America.
Bangladesh, which joined the BRI in 2016, has been promised the second-highest belt and road investment by China in South Asia after Pakistan.

State ranking Index for NFSA

Why is State ranking Index for NFSA In News?

Odisha, UP, AP emerge as top three states among General Category States in the 1st ‘State Ranking Index for NFSA’; Tripura, Himachal Pradesh and Sikkim take top three positions in the Special Category States/UTs.

About State ranking Index for NFSA

“State ranking Index for NFSA” attempts to document the status and progress of implementation of NFSA and various reform initiatives across the country, post consultation with states.
The National Food Security Act (NFSA) was enacted on July 5, 2013
It highlights the reforms undertaken by States and UTs and create a cross-learning environment and scale-up reform measures by all states and union territories.
The present Index is largely focused on NFSA Distribution and will include procurement, and PMGKAY Distribution in future.
The Index for ranking the states and UTs is built on three key pillars which covers the end-to-end implementation of NFSA through TPDS. These pillars are: i) NFSA— Coverage, targeting and provisions of the Act, ii) Delivery platform, and iii) Nutrition initiatives.

Index funds

Index funds are mutual funds that replicate a particular market index like saying the Nifty 50 or S&P BSE Sensex 30.
The replication is not only in terms of the companies present in the index but also its weightage.
This means an index fund will buy all the securities that are present in an underlying index in the same proportion as the underlying index.
For example, Let us consider an index fund that is based on the Nifty50 index. Such an index fund will buy all the Nifty50 stocks in the same weightage as that of the Nifty50 index. As and when the Nifty 50 is rebalanced, the index fund too will mimic the changes made.”
Given the passive nature of the index fund, there is no active decision made by the fund manager here.