Recently, the opposition party in Maharashtra moved ahead with a no-confidence motion. This symbolic step is taken against the Speaker of the State’s Legislative Assembly (SLA). For those unfamiliar, a no-confidence motion implies that members of Parliament or the State Legislature have lost faith in their government.
This type of motion requires a member of Parliament or the SLA to move it in the LS or SLA. In order for it to go through, it needs the support of at least 50 Members of Parliament or Members of Legislative assembly. Upon acceptance, the ruling party must then demonstrate its majority in the House via a Floor Test.
Failure to prove a majority forces the governing party to resign. While this can be a shocking turn of events, it is an integral part of democratic procedures.
India-Saudi Mutual Legal Assistance Treaty:
On the international front, India and Saudi Arabia are negotiating a Mutual Legal Assistance Treaty (MLAT). The purpose of this treaty is to ensure formal aid between the two countries in investigating criminal cases. Essentially, an MLAT serves as a bridge for cooperation in preventing, investigating, and prosecuting crimes. It acts as a safeguard so that criminals cannot evade or interfere with the law.
India currently has MLATs with 45 different countries but Saudi Arabia is not among them. Countries that lack such a treaty serve summons, notices, and judicial processes on an assurance of reciprocity basis.
RBI’s Macro Stress Test:
The Reserve Bank of India (RBI) conducted macro-stress tests as part of its most recent Financial Stability Report (FSR). These tests, aimed to evaluate the robustness of the banking sector, showed a slight improvement in all Scheduled Commercial Banks’ Gross NPA ratio by September 2023.
Macro-stress tests systematically measure the ability of financial institutions to withstand adverse but plausible situations. This involves assessing credit risk, interest rate risk, liquidity risk and commercial banks’ resilience against these shocks.
The RBI typically uses three scenarios for these tests: baseline, medium adverse, and severe adverse. The baseline scenario comes from the forecast values of crucial macroeconomic variables like GDP growth, combined fiscal deficit-to-GDP ratio, CPI inflation, weighted average lending rate, export-to-GDP ratio, and current account balance-to-GDP ratio.
Increased Core Sector Output:
Lastly, production across eight core sectors saw a significant increase of 5.4% in November 2022, compared to a 3.2% increase in November 2021. These core sectors include Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizer, Steel, Cement, and Electricity. Their collective contribution is 40.27% towards the overall Index of Industrial Production (IIP).
These sectors’ contributions to the IIP, in decreasing order, are as follows: Refinery Products, Electricity, Steel, Coal, Crude Oil, Natural Gas, Cement, and Fertilizers. The recent spike in their production is a good sign of economic recovery.