Daily Current Capsules – 11th December

2019

Economic Development

Bharat Bond Exchange Traded Fund

Relevance IN – Prelims ( about ETF ) + Mains ( GS III economic development)

What’s the NEWS

The Union Cabinet has recently approved launching a bond ETF

(Exchange Traded Fund).

Called the Bharat Bond ETF, this fund will track the index comprising

debt securities of Public Sector Undertakings with the highest credit

rating.

Know! more about Bharat Bond ETF

Unlike existing ETFs in India, the Bharat Bond ETF will have a defined

maturity date just like bonds and fixed maturity plans of mutual funds.

On maturity, investors will get the investment proceeds along with

returns.

Edelweiss MF is launching two series of Bharat Bond ETFs — one

matures in April 2023 and the other after 10 years (ie April 2030).

These ETFs will invest only in AAA-rated bonds issued by PSUs

maturing on or before the maturity of the ETFs.

The ETF will hold the bonds till maturity and coupons received from

those bonds will be reinvested in the fund.

Through demat accounts, investors can buy and sell units at the prevailing

market prices.

Bharat Bond ETF will be the first corporate bond debt ETF to be

launched in India.

An ETF or exchange traded fund invests in a basket of securities that

mostly tracks a certain index.

ETFs are similar to mutual funds, but the big difference is that can be

bought and sold only through the stock exchanges.

A bond ETF invests in a basket of bonds in the underlying index. It can

invest in the government, corporate, or public sector unit bonds.

Know! more about the First Corporate Bond ETF

It would be the first corporate bond ETF in the country. Initially, it will

constitute AAA -rated bonds.

Price will be kept at Rs.1,000 per unit to attract retail investors.

Each ETF will have a fixed maturity date. Initially they will be issued in

two series, of three years and ten years.

A bond ETF is cheaper than an actively-managed debt fund. For instance,

Bharat Bond ETF will charge 0.0005%.

The Asset Management Company Edelweiss charges an expense ratio of

0.0005% for managing the Bharat Bond ETF. This is the cheapest among

mutual funds schemes and ETFs in India

ETFs are passively managed mutual funds. These are traded on the BSE

and NSE.

Through demat accounts, investors can buy and sell units at the prevailing

market prices.

It is the cheapest mutual fund product in India and one of the cheapest

debt fund products in the world,” claims Edelweiss Mutual Fund.

Centre- State Relations

Lok Sabha passes the Citizenship (Amendment) Bill 2019

Relevance IN – Prelims ( about the bill) + Mains ( GS II Indian Constitution- historical

underpinnings, evolution, features, amendments, significant provisions and basic

structure. Functions and responsibilities of the Union and the States, issues and

challenges pertaining to the federal structure, devolution of powers and finances up to

local levels and challenges therein. Separation of powers between various organs

dispute redressal mechanisms and institutions.

What’s the NEWS

The Lok Sabha today passed the Citizenship (Amendment) Bill 2019.

The Bill seeks to grant Indian Citizenship to persons belonging to Hindu,

Sikh, Buddhist, Jain, Parsi and Christian communities who have migrated

to India after facing persecution on grounds of religion in Pakistan,

Afghanistan and Bangladesh, if they fulfil conditions for grant of

citizenship.

Highlights

At present, it is mandatory for a person to stay here for at least 11 years to

get citizenship of India.

The bill will reduce this period to six years. It will enable people from

these communities to get Indian citizenship in six years.

It will make some amendments to the Citizenship Act 1955 to provide

legal aid for citizenship.

Know! more about the bill and the government point of view regarding it

The provisions of the amendments to the Act would not apply to tribal

area of Assam, Meghalaya, Mizoram or Tripura as included in the Sixth

Schedule to the Constitution and the area covered under ‘The Inner Line’

notified under the Bengal Eastern Frontier Regulation, 1873.

The Bill also seeks to amend the Third Schedule to the Act to make

applicants belonging to the said communities from the aforesaid countries

eligible for citizenship by naturalisation if they can establish their

residency in India for five years instead of the existing eleven years.

Manipur would be brought under the Inner Line Permit (ILP) regime and

with that the problems of all the North Eastern States would be taken care

of.

The provisions from Constitutions of Afghanistan, Pakistan and

Bangladesh where they provide for a specific state religion.

These countries have had a history of persecution of religious minorities

viz., Hindus, Sikhs, Buddhists, Jains, Parsis and Christians.

The Bill contains provisions to grant Citizenship to such refugees on

reasonable grounds, which in no way go against any provision under the

Constitution of India and does not violate Article 14.

The Bill seeks to amend section 7D so as to empower the Central

Government to cancel registration as Overseas Citizen of India

Cardholder, after providing a reasonable opportunity of being heard, in

case of violation of any provisions of the Citizenship Act or any other law

for the time being in force.

Know! the concerns

Opposition parties said that this is a violation of Article 14 of the

Constitution, which speaks of the right to equality.

Know! about illegal migrants

Illegal migrants cannot get citizenship of India according to the

Citizenship Act, 1955

The people, who have entered India without valid travel documents like

passports and visas or have come to India with valid documents but stay

here longer than the period mentioned therein, are considered as illegal

migrants under this law.

Under the Foreigners Act, 1946 and the Passports (Entry into India) Act,

1920 these illegal migrants can either be kept in jail or sent back to their

country.

In the laws of 1920 and 1946 the central government has made some to

exempt Hindus, Sikhs, Buddhists, Jains, Parsi and Christians from

Afghanistan, Bangladesh and Pakistan so that they can stay in India.

So after the amendments if people belonging to these communities live in

India without valid documents, then they can neither be imprisoned nor

deported.

This exemption has given to those religious groups who have reached

India on or before 31 December 2014.

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