Current Affairs - Finance

The revised Model Skill Loan Scheme introduced by the Centre offers collateral-free loans up to Rs. 7.5 lakh. This scheme aims to provide financial support for advanced skill development courses, removing financial barriers for the nation's youth. By including Non-Banking Financial Companies (NBFCs), NBFC-Micro Finance Institutions (NBFC-MFIs), and small finance banks as eligible lenders, the scheme seeks to expand access to high-cost skill courses that are essential for meeting the demands of emerging industries, thus empowering young people to enhance their skills without the burden of collateral requirements.

The MUDRA Yojana, which aims to provide financial support to non-corporate, non-farm small/micro enterprises, has increased the loan limit under the Tarun category to Rs 20 lakh for those who have repaid previous loans. This enhancement in the Union Budget is a significant boost to the MSMEs, allowing greater access to funds for business expansion and development.

The angel tax, introduced in 2012 under Section 56(2)(vii B) of the Income Tax Act, 1961, was designed to curb black money laundering through inflated share sales by taxing excess funds raised above fair market value at a rate of 30.9%. Recently, in the Union Budget 2024-25, the Union Minister for Finance proposed to abolish the angel tax for all classes of investors. This decision aims to boost investment in startups and simplify the tax landscape for emerging businesses.

The Small Industries Development Bank of India (SIDBI) received funding approval of $215.6 million from the Green Climate Fund to establish a $1 billion corpus for financing mitigation and adaptation projects for Medium and Small Enterprises (MSMEs). This fund aims to provide nearly 10,000 concessional loans to promote low-emission, climate-resilient technologies, contributing to substantial greenhouse gas emission reductions and benefiting millions of vulnerable communities.

India has released the first tranche of USD 2.5 million to the United Nations Relief and Works Agency (UNRWA) for Palestinian Refugees in the Near East as part of its annual contribution of USD 5 million for the year 2024-25. This financial support is part of India's ongoing commitment to aid and protect Palestinian refugees displaced by the 1948 conflict and their descendants, providing essential services such as education, healthcare, and social support.