Bima Sakhi Yojana

Context:

Recently, the Prime Minister of India launched the ‘Bima Sakhi Yojana’ of Life Insurance Corporation (LIC) from Panipat, Haryana

Bima Sakhi Yojana

It is designed to empower women aged 18-70 who are Class X pass.

LIC aims to enroll 100,000 Bima Sakhi in the next 12 months and 200,000 over three years to train them as LIC agents.

The women will receive specialized training and a stipend for the first three years to promote financial literacy and insurance awareness.

IRDAI may give training to these women to become permanent development agents after passing an exam.

25,000 women who have passed Class 10^th will be appointed Bima Sakhi.

The women will receive a stipend of Rs 7000 in the first year, Rs 6000 in the second year, and Rs 5000 in the third year. 

• Additionally, women agents can earn commissions based on the insurance policies they secure.

LIC is likely to spend Rs 840 crore in the first year of Bima Sakhi Yojana.

New RBI Governor

Context:

Recently, Sanjay Malhotra was appointed as the 26th Governor of the Reserve Bank of India (RBI).

RBI Governor

• The RBI Governor heads the RBI and plays a central role in formulating, implementing and monitoring India’s monetary policy.
• The RBI Act, of 1934 does not specify any particular qualification for the governor.
• The governor holds office for terms not exceeding five years. The term may be fixed by the government at the time of appointment.
• The governor is eligible for reappointment or extension (according to RBI Act).
• The Governor receives a salary and allowances determined by the Central Board, with the approval from the Central Government.
• Every note ever printed carries the Signature of the RBI Governor.
• Sir Osborne Smith was the first Governor of the Reserve Bank.

RBI Governor’s Appointment Process

The governor is appointed under the RBI Act, 1934 which states that the appointment is made by the Central government.

The Financial Sector Regulatory Appointment Search Committee (FSRASC) prepares a list of eligible candidates.

• This committee consists of the Cabinet Secretary, the current RBI Governor, the Financial Services Secretary, and two independent members.

The appointment is made by the Cabinet Committee on Appointments, under the Central Government, based on the recommendation of the FSRASC.

Foreign direct investment (FDI)

Context:

Recently, Foreign direct investment (FDI) inflows to India have crossed the $1 trillion milestone from April 2000 to September 2024.

More on the News

The Department for Promotion of Industry and Internal Trade (DPIIT), states the cumulative FDI, including equity, reinvested earnings, and other capital, stood at $1,033.40 billion from April 2000 to September 2024.

The major source of FDI to India

• Mauritius: $177.18 billion (25%)
• Singapore: $167.47 billion (24%) 
• U.S.: $67.8 billion (10%)

FDI equity inflows into the manufacturing sector over the past decade (2014-24) reached $165.1 billion, marking a 69% increase over the previous decade (2004 -14).

Foreign direct investment (FDI)

FDIs involve direct investments in Indian businesses, typically with a stake exceeding 10%, granting foreign investors a controlling interest in management and operations.

• FDIs are typically long-term and associated with setting up or expanding business facilities, creating jobs, and transferring technology and expertise.
• Due to their stable nature, FDIs contribute positively to economic growth and are less affected by short-term market fluctuations. 

FDI Route:

• Automatic Route: FDI is allowed through the automatic route in most sectors, requiring investors to inform the Reserve Bank of India (RBI) after the investment.
• Government Approval Route: For sectors like telecom, media, pharmaceuticals, and insurance, government approval is required before foreign investment.

FDI is prohibited in sectors such as lottery, gambling, betting, chit funds, Nidhi companies, real estate business, and the manufacturing of cigars, cheroots, cigarillos, and cigarettes using tobacco.