Current Affairs - Finance

The current share of central tax revenues allocated to states is 41%. However, the Union government is considering reducing this share to at least 40% from the fiscal year 2026-27, aiming to address rising expenditure needs at the Centre. This proposal will be presented to the Finance Commission of India, and if approved, it could increase the Centre's revenue by approximately ₹350 billion. This move is part of the Centre's broader fiscal strategy amidst growing spending demands.

The Small Industries Development Bank of India (SIDBI) has signed a Memorandum of Understanding (MoU) with Tata Capital Limited (TCL) to strengthen financial support for Micro, Small, and Medium Enterprises (MSMEs). The MoU aims to provide various funding options, such as machinery/equipment financing, working capital loans, and loans against property. It also explores co-lending and risk-sharing models to enhance MSME access to credit, which is crucial for their growth and development. This partnership is expected to significantly benefit the MSME sector by offering better financial opportunities.

The International Finance Corporation (IFC) decided not to approve a $40 million loan for waste-to-energy projects in Gujarat, India. The IFC is the private lending arm of the World Bank, established in 1956, and focuses on supporting economic development, particularly through financing and advisory services in developing nations. This particular loan was aimed at waste-to-energy projects in Gujarat but was not pursued.

Axis Securities was fined ₹10 lakh by SEBI for multiple regulatory violations, including discrepancies in reporting, mishandling client funds, improper penalty allocation, and inadequate grievance redressal. The penalty came after SEBI’s inspection covering the period from April 2021 to November 2022. The violations highlighted by SEBI reflect lapses in compliance, such as inaccurate reporting, failure to handle client funds properly, and transferring penalties to clients rather than absorbing them. This regulatory action is part of SEBI's ongoing efforts to ensure compliance and safeguard investor interests in the securities market.

SEBI’s MITRA (Mutual Fund Investment Tracing and Retrieval Assistant) platform was introduced to help investors track inactive or unclaimed mutual fund folios. It allows investors to search for overlooked investments, ensuring they are not missed. Additionally, MITRA encourages KYC (Know Your Customer) updates to prevent fraudulent redemptions. Developed by RTAs, MITRA provides a searchable database that aims to assist investors in managing their mutual fund investments more effectively, helping them stay informed about inactive or unclaimed assets.