Interest Coverage Ratio
- ICR is also known as times interest earned ratio. Interest Coverage Ratio = Company’s earnings before interest and taxes (EBIT)/interest expense. It measures how easily an entity could pay the interests against the outstanding dues it has. It allows investors, financial institutions and the market to understand the current ability of the firm to pay accumulated debts. Thus, in a way it depicts the financial health of a company.
- Earnings before interest and taxes (EBIT) is an indicator of a company’s profitability. EBIT defines a business’s net income and does not include its income tax or interest expenses.
- Lenders, investors, and creditors often use interest coverage ratio to determine a company’s riskiness relative to its current debt or for future borrowing.
- A low interest coverage ratio means company is less likely to pay its debt. Thus, a falling interest coverage ratio may give signal for future risk associated with a company.
- Higher the interest coverage ratio, healthier the financial situation of company i.e., it is more likely that company will pay its debts.
Generally, a higher coverage ratio is better, although the ideal ratio may vary by industry.
Article 292 and 293 of the Indian Constitution
Article 292 – Borrowing by the Government of India
The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed.
Article 293 – Borrowing by States
(1) Subject to the provisions of this article, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits, if any, as may be so fixed.
(2) The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under article 292 are not exceeded, give guarantees in respect of loans raised by any State, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India.
(3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any p art of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.
(4) A consent under clause (3) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.
Base borrowing limit of state governments vary from 3-4% of Gross State Domestic Product (GSDP) during FY18-24. During the period, additional borrowing of 0.5-1% of GSDP was also provided to states based on outcome related to prescribed targets and reforms.
International Civil Aviation Organisation
- ICAO is a United Nations (UN) specialized agency, established in 1944, which laid the foundation for the standards and procedures for peaceful global air navigation.
- The Convention on International Civil Aviation was signed on 7th December 1944 in Chicago commonly as the ‘Chicago Convention’.
- It established the core principles permitting international transport by air, and also led to the creation of the ICAO.
Mission on Advanced and High Impact Research (MAHIR)
Ministry: Ministry of Power and Ministry of New and Renewable Energy jointly
Aim:
- To identify emerging technologies pertaining to energy sector.
- To support indigenous technologies.
- To make India among the leading countries in the power system.
Span
- From 2023-24 to 2027-28