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Why in News?

  • The Ministry of Road Transport and Highways recently released the annual report on road accidents in India.

What does the Report Say?

  • More than 1.5 lakh people lost their lives in road crashes in the country in 2018, registering an increase of 2.4% as compared to the year before, when there were 1.47 lakh fatalities.
  • It shows a daily average of 1,280 road crashes and 415 deaths which is 53 crashes and the loss of 17 lives every hour.
  • Road traffic injuries constitute the eighth leading cause of deaths in India in 2018.
  • Geneva-based World Road Federation’s World Road Statistics 2018 says India is the most unsafe country in the world for road users across 199 countries. It’s followed by China (63,000 deaths) and the U.S. (37,000 deaths).
  • The annual report also reveals that of the total people killed in road crash deaths in 2018, 48% were between 18 years and 35 years old. Minors involved in road crash deaths were at 6.6% of the total deaths.
  • Among the States, Tamil Nadu (13.7%) topped the country in terms of the total number of road crashes, followed by Madhya Pradesh (11%) and Uttar Pradesh (9.1%).
  • The highest road fatalities were observed In Uttar Pradesh (22,256) followed by Maharashtra (13,261) and Tamil Nadu (12,216).

What is the Cause for Accidents?

  • Over-speeding is a major cause, accounting for 64.4% of the persons killed.
  • This category was followed by driving on the wrong side of the road, which accounted for 5.8% of the accident related deaths.
  • Use of mobile phones accounted for 2.4% of the deaths and drunken driving accounted for 2.8% of the persons killed.

What is the Cause for Death?

  • Not wearing helmets and seat belts are not causes of crashes, but are critical for avoiding grievous injuries and fatalities.
  • As many as 43,614 deaths or 28.8% of total road accident deaths in the country last year were caused due to “non-wearing of helmets”.
  • “Non-wearing of seat belts” was linked to 24,435 deaths or 16.1% of total road accident deaths in the country.

What do Experts Say?

  • Lot of States have opposed the implementation of the Motor Vehicles Amendment Act or have reduced the fines are amongst the States with the highest road crash fatalities.
  • Uttar Pradesh, Gujarat and Uttarakhand were among the States that heavily slashed the penalties levied under the amended law.
  • The latest data highlights the urgent need on part of the States to implement key road safety provisions of the Motor Vehicles Amendment Act, 2019


Why in News?

  • Govt has scrapped this year’s NSOs Consumer Expenditure survey Over Data Quality.

Consumer Expenditure Survey:

  • The Consumer Expenditure Survey (CES) is usually conducted at quinquennial intervals and the last survey on consumer expenditure was conducted in the 68th round (July 2011 to June 2012).
  • It is conducted by National Statistical Office (NSO), MoSPI.
  • It generates estimates of household Monthly Per Capita Consumer Expenditure (MPCE) and the distribution of households and persons over the MPCE classes.
  • It is designed to collect information regarding expenditure on consumption of goods and services (food and non-food) consumed by households.
  • The results, after release, are also used for rebasing of the GDP and other Macro-Economic Indicators.

Highlights of the 2018-19 survey:

  • Consumer spending is falling and the report has been withheld due to its ‘adverse’ findings.
  • There was a significant increase in the divergence in not only the levels in the consumption pattern but also the direction of the change when compared to the other administrative data sources like the actual production of Goods and Services.

Why is the Survey not Published?

  • In view of the data quality issues, the Ministry has decided not to release the Consumer Expenditure Survey results of 2017-2018.
  • Concerns were raised about the ability/sensitivity of the survey instrument to capture consumption of social services by households especially on health and education.
  • The Advisory Committee on National Accounts Statistics has also separately recommended that for rebasing of the GDP series, 2017-18 is not an appropriate year to be used as the new base year.
  • The MoSPI is separately examining the feasibility of conducting the next Consumer Expenditure Survey in 2020-2021 and 2021-22 after incorporating all data quality refinements in the survey process.
  • The survey allegedly showed that the average amount spent by an Indian in a month fell 3.7% to Rs 1,446 in 2017-18 from Rs 1,501 in 2011-12.
  • While consumer spending declined 8.8% in 2017-18 in India’s villages, it rose 2% over six years in cities, it said.


Why in News?

  • Researchers assert that extrapolation of RTI data show only 31% of eligible mothers got benefits.

About Maternity Benefit Scheme:

  • Pradhan Mantri Matru Vandana Yojana (PMMVY) is a maternity benefit programme being implemented in all districts of the country with effect from 1st January, 2017.
  • It is a centrally sponsored scheme being executed by the Ministry of Women and Child Development.
  • Cash benefits are provided to pregnant women in their bank account directly to meet enhanced nutritional needs and partially compensate for wage loss.
  • Beneficiaries receive a cash benefit of Rs. 5,000 in three instalments on fulfilling the following conditions:

1.Early registration of pregnancy
2.Ante-natal check-up
3.Registration of the birth of the child and completion of first cycle of vaccination for the First Living Child of the Family.

  • The eligible beneficiaries also receive cash incentive under Janani Suraksha Yojana (JSY). Thus, on an average, a woman gets Rs. 6,000. Implementation of the scheme is closely monitored by the central and state governments through the Pradhan Mantri Matru Vandana Yojana – Common Application Software (PMMVY-CAS). PMMVY-CAS is a web based software application that enables tracking the status of each beneficiary under the scheme, resulting in expedited, accountable and better grievance redressal.

Who are the Beneficiaries?

  • All Pregnant Women and Lactating Mothers (PW&LM), excluding those who are in regular employment with the Central Government or the State Governments or PSUs or those who are in receipt of similar benefits under any law for the time being in force.
  • All eligible Pregnant Women and Lactating Mothers who have their pregnancy on or after 1st January 2017 for the first child in the family.

What does the RTI Extrapolation say?

  • A vital programme to support lactating mothers and pregnant women by compensating them for loss of wages during their pregnancy has been able to reach only less than a third of the eligible beneficiaries.
  • Almost 61% of beneficiaries registered under the Pradhan Mantri Matru Vandana Yojana (PMMVY) between April 2018 and July 2019 (38.3 lakh out of the total 62.8 lakh enrolled) received the full amount of ₹6,000 promised under the scheme.
  • The scheme brings under its ambit 23% of all births and pays full benefits to a mere 14% of all births, which was at 270.5 lakh for 2017.
  • The data extrapolated from the RTI reply is also consistent with a survey coordinated by three development economists.
  • The survey team covered a district each in six States — Chhattisgarh, Himachal Pradesh, Jharkhand, Madhya Pradesh, Uttar Pradesh and Odisha — in 2019 to interview women and inspect anganwadis. A total of 706 women were interviewed, including 342 pregnant and 364 lactating women. 

Inadequate Awareness:

  • The study found that only 50% of pregnant women and 57% of nursing women surveyed were eligible for the scheme.
  • It also throws light on the need for higher awareness among the pool of beneficiaries — only 66% of pregnant women and 69% of nursing women knew about the scheme.
  • Only 8% of pregnant women and 23% of nursing mothers received some benefits.
  • Several factors impeded proper implementation of the programme that aims to fight malnutrition among children.
  • These include an application form of about 23 pages, a slew of documents such as mother-child protection card, Aadhaar card, husband’s Aadhaar card and bank passbook aside from linking their bank accounts with Aadhaar.
  • The requirement to produce the husband’s Aadhaar card results in excluding women who may be living with men they are not married to, single mothers and those who may be staying at their natal home.
  • Women must also have the address of their marital home on their Aadhaar card, which often results in newlyweds being either left out or forced to go from door-to-door when pregnant and needing rest and care.
  • The survey findings also highlight the need to pay greater attention to the special needs of pregnancy — good food, extra rest and health care.
  • Only 22% of the nursing women surveyed reported that they had been eating more than usual during their pregnancy and the average weight gain was barely 7kg when it should be at least 13-18kg.
  • Almost all the respondents had done household work regularly during their last pregnancy — 21% of nursing women said that they had no one to help them with domestic chores and 63% said that they had been working right until the day of delivery.


Why in News?

  • The central government now plans to raise the cover of deposit insurance after the failure of the Punjab and Maharashtra Co-operative (PMC) Bank on the low level of insurance for deposits held by Customers in Banks.

About Deposit Insurance:

  • Currently, in the event of a bank going bust in India, a depositor has claim to a maximum of Rs 1 lakh per account as insurance cover — even if the deposit in their account far exceeds Rs 1 lakh. This amount is termed ‘deposit insurance’.
  • Depositors holding more than Rs 1 lakh in their account have no legal remedy in case of the collapse of the bank.
  • The cover of Rs 1 lakh per depositor is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a fully owned subsidiary of the Reserve Bank of India.
  • The Rs 1 lakh-cover is for deposits in commercial banks, regional rural banks (RRBs), local area banks (LABs), and cooperative banks.

How Depositors Claim the Money from the Failed Bank?

  • The DICGC does not deal directly with depositors. The RBI (or the Registrar), on directing that a bank be liquidated, appoints an official liquidator to oversee the winding up process.
  • Under the DICGC Act, the liquidator is supposed to hand over a list of all the insured depositors (with their dues) to the DICGC within three months of taking charge.
  • The DICGC is supposed to pay these dues within two months of receiving this list.
  • In FY19, it took an average 1,425 days for the DICGC to receive and settle the rest claims on a de-registered bank.

What is the Issue?

  • As per DICGC data, over the years the level of insured deposits as a percentage of assessable deposits has declined from a high of 60.5% in 2007-08 to 28.1% in 2018-1.
  • At the end of March 2019, the number of registered insured banks with DICGC stood at 2,098 — comprising 103 commercial banks, 1,941 cooperative banks, 51 RRBs, and three LABs.
  • DICGC last revised the deposit insurance cover to Rs 1 lakh on May 1, 1993 — raising it from Rs 30,000, which had been the cover from 1980 onward.
  • DICGC charges 10 paise per Rs 100 of deposits held by a bank. The premium paid by the insured banks to the Corporation is required to be borne by the banks, and not be passed on to depositors.
  • As per DICGC data, commercial banks paid a total premium of Rs 11,190 crore in 2018-19, while cooperative banks paid a premium of Rs 850 crore to cover deposits against the risk of default.
  • As for cooperative banks, only 44.5% of their assessable deposits were covered in 2018-19, while for commercial banks this ratio was 25.7%.
  • Commercial banks account for the largest share of bank deposits in India.


Why in News?

  • The Supreme Court has recently given its judgement in the Essar Insolvency case that has paved the way for ArcelorMittal and Nippon Steel to take over debt-laden Essar Steel.

What is the Issue?

  • In March 2019, National Company Law Tribunal (NCLT) approved global steel-giant ArcelorMittal’s bid for Essar Steel.
  • The Committee of Creditors (CoC) approved the resolution plan offered by the ArcelorMittal. Under the resolution plan, ArcelorMittal offered an advance cash payment of about ₹42,000 crore to the financial creditors and capital infusion of ₹8,000 in the next few years.
  • However, the offer did not have much for operational creditors to Essar Steel.
  • In 2019, the National Company Law Appellate Tribunal (NCLAT) cleared the CoC’s plan but changed the financial distribution plan by ordering an equal recovery plan for all creditors, including financial and operational creditors.

What did SC Say?

  • Wisdom of CoC: It is the commercial wisdom of the requisite majority (66%) of the CoC under the Insolvency and Bankruptcy Code (IBC) to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors.
  • Principle of Equality: The Court held that the equality principle cannot be stretched to treating unequal’s equally.
  • This will destroy the very objective of the IBC to resolve stressed assets. Equitable treatment is to be accorded to each creditor depending upon the class to which it belongs: secured or unsecured, financial or operational.
  • Restriction on Tribunals: Tribunals have no “residual equity jurisdiction” to interfere in the merits of a business decision taken by the CoC. This implies that the NCLT and NCLAT cannot interfere with the commercial decisions taken by the CoC.
  • Financial vs. Operational Creditors: The Court upheld the primacy of financial creditors over operational creditors in the distribution of funds received under the corporate insolvency scheme.
  • The Court explained that financial creditors are capital-providers for companies, i.e. help companies to purchase assets and run business operations.
  • Operational creditors, in a way, are beneficiaries of amounts lent by financial creditors.
  • Relaxation of Resolution Deadline: The Supreme Court has done away with the 330-day mandatory deadline for the resolution of insolvency and bankruptcy cases after which liquidation is invoked. The bench allowed a bit of flexibility by allowing exceptions where the resolution plan is on the verge of being finalised.
  • The 330-day mark is violation of Article 14 (right to equal treatment) of the Constitution and Article 19(1)(g) ( Right to carry any business) of the Constitution.

Insolvency Resolution Process in India:

  • Eligibility: Under IBC, companies (both private and public limited company) and Limited Liability Partnerships (LLP) can be considered as defaulting corporate debtors.
  • A corporate debtor is any corporate organization which owes a debt to any person.
  • Default Amount: The Insolvency and Bankruptcy Code can be triggered if there is a minimum default of Rs 1 lakh.
  • This process can be triggered by way of filing an application before the National Company Law Tribunal (NCLT).
  • Resolution Initiation: The process can be initiated by two classes of creditors which would include financial creditors and operational creditors.
  • Creditors: A Creditor means any person to whom a debt is owed and includes a financial creditor, an operational creditor, etc.
  • Financial Creditors: The financial creditor in simple terms is the institution that provided money to the corporate entity in the form of loans, bonds etc. E.g. banks.
  • Operational Creditors: An operational creditor is the entity who has a claim for providing any of the four categories to the defaulted corporate- goods, services, employment and Government dues (central govt, state or local bodies).
  • Appointment of Interim Resolution Professional: As soon as the matter is admitted by the NCLT, the NCLT proceeds with the appointment of an Interim Resolution Professional (IRP) who takes over the management of the defaulting debtor.
  • Committee of Creditors (CoC): A committee consisting only of the Financial Creditors i.e. the CoC is formed by the IRP.
  • Only operational creditors having aggregate dues of at least 10% of the total debt are invited into the meeting CoC (Operational creditors are not a member of CoC). The operational creditors don’t have any voting power.
  • Corporate Insolvency Resolution Process (CIRP): The Corporate Insolvency Resolution Process (CIRP) process includes necessary steps to revive the company such as raising fresh funds for operation, looking for new buyer to sell the company as going concern, etc.
  • The CoC takes a decision regarding the future of the outstanding debt owed to it. The resolution plan can be implemented only if it has been approved by 66% of the creditors in the CoC
  • Liquidation Proceedings: In the event a resolution plan is not submitted or not approved by the committee of creditors (COC), the CIRP process is deemed to have failed. In such a situation the liquidation proceedings commences subject to the order of the tribunal.



Why in News?

  • At a time when India is facing an economic slowdown in GDP growth the Ministry of Statistics and Programme Implementation announced that the new base year for the GDP series will be decided in a few months.

Base Year:

  • The base year of the national accounts is chosen to enable inter-year comparisons.
  • It gives an idea about changes in purchasing power and allows calculation of inflation-adjusted growth estimates.
  • The last series has changed the base to 2011-12 from 2004-05.
  • The base year is a benchmark with reference to which the national account figures such as gross domestic product (GDP), gross domestic saving, gross capital formation are calculated.

How is a Base Year calculated?

  • In India, the first estimates of national income were published by the Central Statistical Organisation (CSO) in 1956 taking 1948-49 as the base year.
  • With the gradual improvement in availability of data, the methodology was revised.
  • Earlier, CSO depended on the population figures in the National Census to estimate the workforce in the economy.
  • Therefore, the base year always coincided with the census figures like 1970-71, 1980-81 etc.
  • Subsequently, CSO decided that the National Sample Survey (NSS) figures on the workforce size were more accurate and hence, the base year would change every five years when the NSS conducted such survey.
  • This system was started from 1999 when the base year was revised from 1980-81 to 1993-94.

Need and Changes:

  • The base year prices are termed as at constant prices. This reduces all the data to a comparable benchmark, base year price.
  • The base year is a representative year which must not experience any abnormal incidents such as droughts, floods, earthquakes etc.
  • It is a which is reasonably proximate to the year for which the national accounts statistics are being calculated.
  • The base year has to be revised periodically in order to reflect the structural changes taking place within an economy, such as increasing share of services in GDP.
  • The more frequently the base year can be updated, the more accurate the statistics will be.


Why in News?

  • According to official data released recently, Industrial activity in September contracted sharply by 4.3%, a historical low, driven by major slowdowns in the capital goods, mining, and manufacturing sectors.

Historical Shrinkage:

  • The contraction in the Index of Industrial Production (IIP) in September was compared with the contraction of 1.1% in August. The Index had grown 4.3% in September of the previous year.
  • “This is the first time after November 2012 that all three broad-based sectors have contracted and the lowest monthly growth in the 2011-12 base year series. “In the old (2004-05) base, IIP in October 2011 contracted by 5%.”
  • Various SectorsGrowth rate in September (%)Growth rate in August (%)
    Capital Goods SectorDecreased by 20.7Decreased by 21
    Mining SectorDecreased by 8.5Increased by 0.1
    Manufacturing SectorDecreased by 3.9Decreased by 1.2
    Electricity SectorDecreased by 2.6Decreased by 0.9
    Consumer Durables SectorDecreased by 9.9Decreased by 9.1
    Consumer Non-durables SectorDecreased by 0.4Increased by 4.1
  • “The Indian economy is presently facing a structural growth slowdown originating from declining household savings rate, and low agricultural growth”.
  • “Low agricultural growth is feeding into low agricultural and non-agricultural wage growth in rural areas, which is impacting rural demand adversely.”

About IIP:

  • IIP is a composite indicator measuring changes in the volume of production of a basket of industrial products over a period of time, with respect to a chosen base period.
  • It is compiled and published on a monthly basis by the Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation with a time lag of six weeks from the reference month.
  • Base year for IIP is 2011-2012 (Earlier 2004-05) i.e. it is calculated on the basis of their share of GDP at factor cost during 2011-12.
  • The revised IIP (2011-12) reflects the changes in industrial sector and also aligns it with base year of other macroeconomic indicators like Wholesale Price Index (WPI) and Gross Domestic Product (GDP).
  • IIP covers 865 (Older series 682) items comprising :

1.Manufacturing (809 items, Older series 620 items) – 77.63%

2.Mining (55 items, Older Series 61 items) – 14.37%

3.Electricity (1 item) – 7.99%

  • The eight Core Industries comprise nearly 40.27 % of the weight of items included in IIP. They are :

1.Coal (10.33%)

2.Crude oil (8.98%)

3.Natural gas (6.88%)

4.Refinery products (28.04%)

5.Fertilizers (2.63%)

6.Steel (17.92%)

7.Cement (5.37%)

8.Electricity (19.85%)


Why in News?

  • Ministry of Steel has issued the Steel Scrap Recycling Policy.


  • Steel Ministry’s endeavor is to develop a globally competitive steel industry by adopting state of the art environment friendly technologies.
  • Ferrous Scrap being the primary raw material for electric arc furnace (EAF) and induction furnace (IF) based steel production, the policy envisages a framework to facilitate and promote establishment of metal scrapping centers in India. This will ensure scientific processing & recycling of ferrous scrap generated from various sources and a variety of products.
  • The policy framework shall provide standard guidelines for collection, dismantling and shredding activities in an organized, safe and environmentally sound manner.
  • Steel is a material most conducive for circular economy as it can be used, reused and recycled infinitely.
  • While iron ore remains the primary source of steel making, used or re-used steel in the form of Scrap is the secondary raw material for the steel industry.
  • Indian steel industry is characterized by the presence of a large number of small steel producers who utilize scrap with other inputs in EAF/IF for steel making.


  • To promote circular economy in the steel sector.
  • To promote a formal and scientific collection, dismantling and processing activities for end of life products that are sources of recyclable (ferrous, non- ferrous and other non-metallic) scraps which will lead to resource conservation and energy savings and setting up of an environmentally sound management system for handling ferrous scrap.
  • Processing and recycling of products in an organized, safe and environment friendly manner.
  • To evolve a responsive ecosystem by involving all stakeholders.
  • To produce high quality ferrous scrap for quality steel production thus minimizing the dependency on imports.
  • To decongest the Indian cities from end-of-live vehicle (ELVs) and reuse of ferrous scrap.
  • To create a mechanism for treating waste streams and residues produced from dismantling and shredding facilities in compliance to Hazardous & Other Wastes (Management & Trans boundary Movement) Rules, 2016 issued by MoEF & CC.
  • To promote 6Rs principles of Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture through scientific handling, processing and disposal of all types of recyclable scraps including non-ferrous scraps, through authorized centers / facility.


  • The availability of scrap is a major issue in India and in 2017 the deficit was to the tune of 7 million Tons. This was imported at the cost of more than Rs. 24,500 crores (approx.) in 2017-18.The gap between demand and supply is can be reduced in the future and the country may be self-sufficient by 2030.This is mainly because with the increase in consumption of steel in the recent past and ELVs, the generation of scrap is likely to be increased considerably.This scrap has to be channelized so that the same can be utilized for steel production in an environmentally friendly manner.
  • The scrapping policy shall ensure that quality scrap is available for the steel industry.

National Steel Policy 2017:

  • National Steel Policy 2017 (NSP-2017) aims to develop a globally competitive steel industry by creating 300 Million TPA Steel production capacity by 2030 with a contribution of 35-40% from EAF/IF route.
  • The availability of raw materials at competitive rates is imperative for the growth of the steel industry and to achieve NSP-2017 target. Thus, the availability of right quality of scrap, in adequate quantity is one of the critical factors for the future growth for both EAF/IF sector & primary sector.
  • Scrap based steel making technologies have been envisaged as one of the important options to reduce GHG emission intensity. This shall feature as an important initiative of the steel sector to minimize Green House Gas (GHG) emissions.


Why in News?

  • Global ratings agency Moody’s Investors Service has recently cut India’s ratings outlook to ‘negative’ from ‘stable’ but affirmed the Baa2 foreign-currency and local-currency long-term issuer ratings.

Reason behind Moody’s Rate Cut:

  • A crunch that started out in the non-banking financial institutions (NBFIs) spreading to retail businesses, car makers, home sales and heavy industries has made India’s growth outlook deteriorated this year,
  • Government’s policy ineffectiveness in addressing economic weakness has led to an increase in debt burden which is already at high levels.
  • A breach of the government’s target of 3.3 per cent, as slower growth and a surprise corporate-tax cut affects revenue.


  • Reduction in outlook is the first step towards an investment downgrade, as India is now just a notch above the investment grade country rating.
  • An actual downgrade in country ratings can lead to massive foreign fund outflows.
  • However, if the government is able to address fiscal deficit concerns through higher fund raising from stake sales, the rating agencies tend to revise up their outlook.

About Moody’s Investor Service:

  • Moody’s Investors Service, often referred to as Moody’s, is the bond credit rating business of Moody’s Corporation.
  • They provide international financial research on bonds issued by commercial and government entities.
  • Moody’s, along with Standard & Poor’s and Fitch Group, is considered one of the Big Three credit rating agencies.

Credit Rating Categories:

1.       AAAHighest credit quality that denotes the lowest expectations of default risk.
2.      AA+/AA/AA-Very high credit quality. ‘AA’ ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments.
3.      A+/A/A-High credit quality that denotes expectations of low default risk. The capacity for payment of financial commitments is considered strong, however, vulnerability to adverse business or economic conditions exists.
4.      BBB+/BBB/BBB-Good credit quality that indicates that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.
5.      BB+/BB/BB-This rating indicates an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists that supports the servicing of financial commitments.
6.      B+/B/B-This rating indicates that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
7.       CCC+/CCC/CCC-Substantial credit risk exists in this rating, where the default is a real possibility.
8.      CCThis rating shows a very high level of credit risk with a possibility of defaults.
9.      CThis rating shows that a default or default-like process has begun, or the issuer is in a standstill.
10.  DDD/RD/SD/DD/DThis indicates that the issuer has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure or has ceased business.


Why in News?

  • In 2018, Infrastructure Leasing and Financial Company (IL&FS), a core Investment company (CIC) with over 300 subsidiaries, defaulted on its payment following which over Rs 90000 crore worth of combined banking sector exposure was declared as non-performing or bad asset in the subsequent months.
  • Experts have been seeking a review of CIC guidelines ever since.
  • A working group formed by Reserve Bank of India has now suggested simplified structure for CICs.

Core Investment Companies (CIC):

  • A core investment company is a non-banking financial company (NBFC) which carries on the business of acquisition of shares and securities and holds not less than 90 per cent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group
  • In August 2019, there were 63 CICs registered with RBI.


  • Unlike NBFCs which are required to constitute board level committees, no such standards are mandated for CICs.
  • The same director could be part of boards of multiple companies in a group, including CICs.
  • In a few cases, the working group said, “it has been observed that the CIC had lent funds to group companies at zero percent rate of interest with bullet repayment of 3-5 years and without any credit appraisal”.

Rules for Core Investment Companies as suggested by the RBI Panel:

  • It is suggested that such entities should only have a two-tier structure, and stronger boards, with at least 50% independent directors.
  • The group has also recommended formation of board level committees for audit and remuneration for CICs as well as group risk management committees to address the   concerns over corporate governance that were compromised over the years with opaque ownership structures in large conglomerates.
  • At least one third of the board should comprise of independent members if chairperson of the CIC is non-executive, otherwise at least half of the board should comprise of independent member.
  • It was also suggested that Audit Committee of the Board should be chaired by an independent director and the committee should meet at least once a quarter.
  • It is suggested that capital contribution by a CIC in a step-down CIC, over and above 10% of its owned funds, should be deducted from its adjusted net worth.
  • Step-down CICs should not be permitted to invest in any other CIC, but can ‘freely’ invest in other group companies. The number of layers of CICs in a group should be restricted to two. As such, any CIC within a group shall not make investment through more than a total of two layers of CICs, including itself.


Why in News?

  • The Union Cabinet has recently approved the creation of an Alternative Investment Fund (AIF) of Rs. 25,000 crores for the realty sector. This is to provide last-mile funding for stalled affordable and middle-income housing projects across the country.

Key Features of the Decision:

  • The fund size is of Rs. 25,000 crores with the government providing Rs. 10,000 crore and the State Bank of India and the Life Insurance Corporation providing the balance.
  • The fund was set up as Category-II Alternative Investment Fund registered with the SEBI and will be managed by SBICAP Ventures Limited.
  • The open-ended fund is expected to increase in time. The government is also in talks with sovereign bonds and pension funds to put in money in this fund further.
  • The Cabinet also approved the establishment of a ‘Special Window’ to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector.

What is Alternative Investment Fund:

  • AIFs refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP).
  • In India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India, since it does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities.


Why in News?

  • In a strongly-worded order, the Supreme Court of India upheld the Department of Telecom (DoT)’s interpretation of “adjusted gross revenue” (AGR).
  • This came as a huge blow to telecom service providers.
  • Following the order, the telcos are now staring at dues of an estimated ₹1.4 lakh crore, which needs to be paid to the government within three months.
  • Most industry players and analysts have argued that the payout of the huge amount could be the final straw for the already distressed sector.


  • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
  • It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.
  • The definition of AGR has been under litigation for 14 years.
  • While telecom companies argued that it should comprise revenue from telecom services, the DoT’s stand was that the AGR should include all revenue earned by an operator, including that from non-core telecom operations.
  • The AGR directly impacts the outgo from the pockets of telcos to the DoT as it is used to calculate the levies payable by operators.
  • Currently, telecom operators pay 8% of the AGR as licence fee, while spectrum usage charges (SUC) vary between 3-5% of AGR.

Why do telcos need to pay out Large Amounts?

  • Telecom companies now owe the government not just the shortfall in AGR for the past 14 years but also an interest on that amount along with penalty and interest on the penalty.
  • While the exact amount telcos will need to shell out is not clear, as in a government affidavit filed in the top court, the DoT had calculated the outstanding licence fee to be over ₹92,000 crore.
  • However, the actual payout can go up to ₹1.4 lakh crore as the government is likely to also raise a demand for shortfall in SUC along with interest and penalty.
  • Of the total amount, it is estimated that the actual dues is about 25%, while the remaining amount is interest and penalties.


  • The telecom industry is reeling under a debt of over ₹4 lakh crore and has been seeking a relief package from the government.
  • Even the government has on various occasions admitted that the sector is indeed undergoing stress and needs support.
  • Giving a ray of hope to the telecom companies, the government recently announced setting up of a Committee of Secretaries to examine the financial stress in the sector, and recommend measures to mitigate it.


Why in News?

  • The Economist Intelligence Unit has released the 2019 edition of “Global Microscope: The enabling environment for Financial Inclusion report”.
  • The report assessed 55 countries based on enabling environment for financial access.
  • The report is a benchmarking index that assesses enabling environment for financial access in 55 countries.

Key Findings of the Report with Respect to India:

  • As per the report, India was placed at the 5th spot in the nations having the most conducive environments for inclusive finance.
  • The overall environment for financial inclusion has improved globally with India, Colombia, Peru, Uruguay and Mexico having the most favourable conditions for inclusive finance.
  • India is among top nations with most conducive environment for financial inclusion in terms of allowing non-banks to issue e-money, proportionate customer due diligence and effective consumer protection.

Government Interventions in this Aspect:

  • RBI has released the Enabling Framework for Regulatory Sandbox (RS), which creates the basis for a regulatory sandbox that will allow fintech start-ups to live-test innovative products and services.
  • Reserve Bank has prepared a draft National Strategy for Financial Inclusion to deepen financial services coverage in the country.
  • The long-awaited strategy is expected to be finalised in 2019 and will cover a five-year period.
  • The RBI has set up a high-level committee to review the existing status of digitisation and devise a medium-term strategy for increasing digital payments.

 About the Report:

  • Produced by Economist Intelligence Unit (EIU), the research and analysis division of The Economist Group.
  • It is created in 1946 and is the world leader in global business intelligence.
  • The 2019 edition of Global Microscope report features 11 new gender focussed indicators that measure financial inclusion for both women as well as men.

Domains Covered under the Survey:

  • Government and Policy Support
  • Products and Outlets
  • Stability and Integrity
  • Consumer Protection
  • Infrastructure


Why in News?

  • In an effort to revive the beleaguered state-owned telecom firms BSNL and MTNL, the Union Cabinet on Wednesday approved a package worth nearly ₹70,000 crore. The Cabinet, chaired by Prime Minister Narendra Modi, also gave an in-principle nod for the merger of the two entities.

The Crisis:

  • BSNL is in extreme financial trouble. The company has been in this situation for a while and the condition has worsened to an extent that it is not able to pay salaries to its employees.
  • BSNL has been in trouble since the last 10 years due to poor government policies and delays in bringing new infrastructure. The inferior infrastructure, as well as the company structure, have further resulted in this situation. Even the Department of Telecommunications has asked BSNL not to go to banks for getting more loans.
  • Main reasons are stiff competition in mobile segment, high employee cost and absence of 4G services (except in few places for BSNL) in the data-centric telecom market which is eroding the competitive strength. Human resource comprises 5% of cost for other telecom operators, for BSNL and MTNL the number is over 70%.

Recent Cabinet Decisions:

  • Administrative allotment of spectrum for 4G services to BSNL and MTNL so as to enable these PSUs to provide broadband and other data services.
  • The said Spectrum will be funded by the Government of India by capital infusion in these PSUs at a value of Rs 20,140 Cr in addition; the GST amount of Rs 3,674 Cr to this spectrum value will also be borne by the Government of India through Budgetary resources.
  • By using this spectrum allotment, BSNL and MTNL will be able to deliver 4G services, compete in the market and provide high speed data using their vast network including in rural areas.
  • BSNL and MTNL will also raise long-term bonds of Rs 15,000 Cr for which sovereign guarantee will be provided by the Government of India (GoI). With the said resources, BSNL and MTNL will restructure their existing debt and also partly meet CAPEX, OPEX and other requirements.
  • BSNL and MTNL will also offer Voluntary Retirement to their employees, aged 50 years and above through attractive Voluntary Retirement Scheme (VRS), the cost of which will be borne by the Government of India through budgetary support. The ex-gratia component of VRS will require Rs. 17,169 Cr in addition, GoI will be meeting the cost towards Pension, Gratuity and Commutation. Details of the scheme will be finalised by BSNL/MTNL.
  • BSNL and MTNL will monetise their assets so as to raise resources for retiring debt, servicing of bonds, network upgradation, expansion and meeting the operational fund requirements.
  • In-principle merger of BSNL and MTNL


  • It is expected that with the implementation of said revival plan, BSNL and MTNL will be able to provide reliable and quality services through its robust telecommunication network throughout the country including rural and remote areas.


Why in News?

  • India climbed 14 ranks in the World Bank’s Ease of Doing Business 2020 survey to stand at 63, among 190 countries, making it the one of world’s top 10 most improved countries for the third consecutive time.


  • Ease of Doing Business report is an annual report published by the World Bank which ranks countries based on their performance in easing the rules and regulations to start a business.
  • Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
  • Even this year New Zealand has topped the rank followed by Singapore and Hong Kong with 2nd and 3rd rank respectively.
  • US and China are placed at 6th and 31st position respectively where both has been improved when compared to last year.

Indicators of Ease of Doing Business:

  • A Nation’s ranking on the index is based on the average of 10 Sub-Indices:
  • Starting a business – Procedures, time, cost, and minimum capital to open a new business.
  • Dealing with construction permits – Procedures, time, and cost to build a warehouse.
  • Getting electricity – procedures, time, and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse.
  • Registering property – Procedures, time, and cost to register commercial real estate.
  • Getting credit – Strength of legal rights index, depth of credit information index.
  • Protecting investors – Indices on the extent of disclosure, extent of director liability, and ease of shareholder suits.
  • Paying taxes – Number of taxes paid, hours per year spent preparing tax returns, and total tax payable as share of gross profit.
  • Trading across borders – Number of documents, cost, and time necessary to export and import.
  • Enforcing contracts – Procedures, time, and cost to enforce a debt contract
  • Resolving insolvency – The time, cost, and recovery rate (%) under bankruptcy proceeding.

Ease of Doing Business with India’s Perspective:

  • Last year, India jumped 23 places to reach 77th position. In the last five years, India’s ranking has improved 79 places – to 63 in 2019 from 142 in 2014 – a record for a major economy.
  • Compared with last year, India’s ranking deteriorated on only two parameters — “protecting minority investors” (from 7th to 13th position) and “getting electricity” (from 22nd to 25th) — and remained unchanged in “enforcing contracts”.
  • Among the BRICS countries only Russia and China are ahead of India with their rankings at 28 and 31 respectively.
  • Among the SAARC countries India is the topper in rankings.


Why in News?

  • The Khadi and Village Industries Commission (KVIC) and the Goa State Government have joined hands with an aim to generate employment opportunities in Goa.

Khadi and Village Industries Commission (KVIC):

  • KVIC is a statutory body established by an Act of Parliament in 1956.
  • The body is charged with the planning, promotion, organisation and implementation of programs for the development of Khadi and other village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.

Objectives of KVIC:

  • The social objective of providing employment.
  • The economic objective of producing saleable articles.
  • The wider objective of creating self-reliance amongst the poor and building up of a strong rural community spirit.
  • Its functions also comprise building up of a reserve of raw materials and implements for supply to producers, creation of common service facilities for processing of raw materials as semi-finished goods and provisions of facilities for marketing of KVI products.
  • It also imparts training to artisans engaged in these industries.
  • It also engages in research of production techniques and equipment employed in the Khadi and Village Industries sector.
  • It also provides financial assistance to institutions and individuals for the development and operation of Khadi and village industries and guides them through the supply of designs, prototypes and other technical information.
  • It functions under the Ministry of Micro, Small and Medium Enterprises, and is headquartered in Mumbai.


  • Khadi, also called khaddar, is a hand-spun, hand-woven natural fibre cloth. It is woven from cotton. It may also include silk or wool. It originates from India and Bangladesh. It is associated with the freedom struggle and Mahatma Gandhi, who urged people to use Khadi and ditch foreign imported cloth.


Why in News?

  • Department of Animal Husbandry & Dairying releases 20th Livestock Census; Total Livestock population increases 4.6% over Census-2012, Increases to 535.78 million

Livestock Census:

  • The Livestock Census has been conducted in the country periodically since 1919-20.
  • The Livestock Census covers all domesticated animals and its headcounts.
  • So far 19 such censuses have been conducted in participation with State Governments and UT Administrations.
  • The 20th Livestock Census was conducted in participation with all States and Union Territories.
  • The enumeration was done both in rural and urban areas. Various species of animals (Cattle, Buffalo, Mithun, Yak, Sheep, Goat, Pig, Horse, Pony, Mule, Donkey Camel, Dog, Rabbit and Elephant)/poultry birds (Fowl, Duck, Emu, Turkeys, Quail and other poultry birds) possessed by the households, household enterprises/non-household enterprises and institutions have been counted at their site.

Features of 20th Livestock Census:

  • The major thrust given to 20th Livestock Census is the collection of data through tablets computers. The 20th livestock census is indeed a unique attempt as for the first time such a major initiative has been take to digitise household level data through online transmission from the field. National Informatics Centre (NIC) has developed a mobile Application software and was used for data collection as well as online transmission of data from the field to the NIC server.

20th Livestock Census:

  • The total Livestock population is 535.78 million in the country showing an increase of 4.6% over Livestock Census-2012
  • Total Bovine population (Cattle, Buffalo, Mithun and Yak) is 302.79 Million in 2019 which shows an increase of about 1% over the previous census.
  • The total number of cattle in the country in 2019 is 192.49 million showing an increase of 0.8 % over previous Census.
  • The Female Cattle (Cows population) is 145.12 million, increased by 18.0% over the previous census (2012).
  • The Exotic/Crossbred and Indigenous/Non-descript Cattle population in the country is 50.42 million and 142.11 million respectively.
  • The Indigenous/Non-descript female cattle population has increased by 10% in 2019 as compared to previous census.
  • The population of the total Exotic/Crossbred Cattle has increased by 26.9 % in 2019 as compared to previous census.
  • There is a decline of 6 % in the total Indigenous/ Non-descript cattle population over the previous census. However, the pace of decline of Indigenous/ Non-descript cattle population during 2012-2019 is much lesser than as compared to the 2007-12 which was about 9%.
  • The total buffaloes in the country is 109.85 million showing an increase of about 1.0% over previous Census.
  • The total milch animals (in-milk and dry) in cows and buffaloes is 125.34 million, an increase of 6.0 % over the previous census.
  • The total sheep in the country is 74.26 million in 2019, increased by 14.1% over previous Census.
  • The Goat population in the country in 2019 is 148.88 million showing an increase of 10.1% over the previous census.
  • The total Pigs in the country is 9.06 Million in the current Census, declined by 12.03% over the previous Census.
  • The other livestock including mithun, yak, horses, ponies, mule, donkeys, camel together contribute around 0.23% of the total livestock and their total count is 1.24 million.
  • The total poultry in the country is 851.81 million in 2019, registered an increase of 16.8% in the total poultry.
  • The total birds in the backyard poultry in the country is 317.07 million. The backyard poultry has increased by around 46% as compared to previous Census.
  • The total Commercial Poultry in the country is 534.74 million in 2019, increased by 4.5% over previous Census.


Why in News?

  • The Services Export Promotion Council (SEPC), set up by the Ministry of Commerce & Industry, has brought out the India Intellectual Property (IP) Guide at Cannes in MIPCOM 2019 for the Media and Entertainment (M&E) industry.

India Intellectual Property (IP) Guide:

  • The guide features a catalogue of over 60 Indian IPs, popular in over 160 countries.
  • It tries to comprehensively break the narrative of only low-end work being done in India.
  • IP is the most important asset for its creators in the media and entertainment sector.
  • Intellectual Property (IP) is vital to a large number of SEPC’s stakeholders. Creation, protection and expansion of IP products alone will bring huge benefits to the sector.
  • SEPC will also be setting up a committee to help small and medium entertainment companies to navigate critical aspects of IP creation.
  • The aim is to assist companies and content creators to maximise the value that IPs can provide.


  • MIPCOM stands for Marché International des Programmes de Communication (French). In English, it can be translated as the International Market of Communications Programmes.
  • It is a trade show held annually primarily geared towards the television/entertainment industry. It is held in Cannes, France.
  • It is the world’s largest exhibition of studios and distributors, and also the top showcase for content across all platforms and genres.
  • Many important personalities from the global entertainment industry participate in the 4-day event.It also serves as a global premier for highly anticipated programmes.
  • A spinoff event called the MIPJunior also takes place prior to MIPCOM, which is targeted towards the children’s television industry.
  • MIPCOM 2019 is being attended by some of the top renowned Indian media and entertainment companies.
  • The Indian exhibitors and visiting companies are participating to buy, sell, serve and partner with companies present at MIPCOM from over 111 countries across the world.
  • The India Pavilion is the one-stop place to meet content creators, audio-visual service providers in animation, VFX, AR/VR, gaming, new media services, film production services and much more.
  • Many of the Indian companies are at Cannes with their completed IPs or pitch for their in-production properties.

Services Export Promotion Council (SEPC):

  • SEPC is an Export Promotion Council set up by the Ministry of Commerce & Industry, Government of India, in 2006.
  • It is an apex trade body which facilitates service exporters of India.
  • As an advisory body, it actively contributes to the formulation of policies of the Government and acts as an interface between the Services Industry and the Government.
  • SEPC has been instrumental in promoting the efforts of the Indian service exporting community, and in projecting India’s image abroad as a reliable supplier of high-quality services.
  • It organizes a large number of promotional activities such as buyer-seller meets (BSM) – both in India and abroad, overseas trade fairs/exhibitions, and India pavilion/information booths in selected overseas exhibitions to demonstrate the capabilities of the Indian Services Industry.
  • It currently has a membership base of over 3000 companies from 14 service sectors including accounting/auditing/bookkeeping, advertising, architectural, consultancy, distribution, educational, entertainment, environmental, healthcare, hotel and tourism, legal, maritime, market research/management, printing and publishing services.



  • International Monetary Fund (IMF) has released its report “World Economic Outlook” (WEO)- 2019 recently.

About the Report:

  • The World Economic Outlook is a biennial report that is released in April and October of every year. According to the report released recently, the global economy is at its slowest pace of growth at 3%. This is a serious climb down from 3.8% in 2017.

Key Findings of the Report:

  • The world economy is projected to grow only 3 per cent this year and 3.4 per cent next year amid a synchronised slowdown.
  • The Global growth rate is projected to improve to 3.4% by 2020. The growth of advanced economies is projected to slow down by 1.7%.
  • The emerging and developing economies are projected to experience a growth pick up from 3.9% in 2019 to 4.6% in 2020.
  • Reasons for slowdown: rising trade barriers, uncertainty surrounding trade and geopolitics, and structural factors, such as low productivity growth and an aging population in Developed Countries.

India- Specific Observations:

  • India retains its rank as the world’s fastest-growing major economy, tying with China.
  • It has a projected growth rate of 6.1 per cent for the current fiscal year, despite an almost one per cent cut in the forecast.
  • The report downgraded India’s growth projections to 6.1% in 2019, however, India’s economy is projected to pick up and grow by 7 per cent in the 2020 fiscal year.
  • According to the report, China is projected to grow at 6.1% in 2019 and 5.8% in 2020. The trade volume reached the lowest since 2012. It reduced by 1% since 2012.

Reasons behind the downgraded growth projection of India:

  • India’s economy decelerated further in the second quarter, as its growth is held back by sector-specific weaknesses in the automobile sector and real estate as well as lingering uncertainty about the health of non-bank financial companies.
  • Corporate and environmental regulatory uncertainty are part of the factors that weighed on the demand.
  • The reduction in India’s growth projection for this year “reflects a weaker-than-expected outlook for domestic demand”.

Way Ahead:

  • India should make use of the following measures to improve its overall growth:
    • It must make use of its monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence.
    • A credible fiscal consolidation path is needed to bring down India’s elevated public debt over the medium term.
    • This should be supported by subsidy-spending rationalisation and Tax-Base Enhancing Measures.

About IMF:

  • The International Monetary Fund (IMF) is the inter-governmental organisation established to stabilize the exchange rate in the international trade.
  • It helps the member countries to improve their Balance of Payment (BOP) condition thorough the adequate liquidity in the international market, promote the growth of global monetary cooperation, secure financial stability, facilitate international trade.
  • It is one of the Bretton woods twins, which came into existence in 1945, is governed by and accountable to the 189 countries that make up its near-global membership.
  • HQ – Washington
  • Official language – Chinese, English, French, Russian, Spanish, Arabic


Why in News?

  • Telecom Regulatory Authority of India (TRAI) has decided to review the scrapping of interconnect usage charge from January 2020.

What is IUC?

  • Interconnect Usage Charge or IUC is a cost paid by one mobile telecom operator to another, when its customers make outgoing mobile calls to the other operator’s customers. These calls between two different networks are known as mobile off-net calls.
  • The objective of this calling-party pays regime (CPP) is to allow operators cover network usage costs. Since it needs infrastructure investment, the IUC ensures that operators make enough operations to keep their business viable.
  • The IUC charges are fixed by Telecom Regulatory Authority of India (TRAI).

Implications and Criticism

  • As IUC directly impacts the call tariff, reduction in IUC is likely to yield consumer benefits through low call charges.
  • Scrapping IUC helps to deploy new technologies like VoLTE (Voice over Long Term Evolution), migration to Internet Protocol networks by operators, wherein there are no interconnection charges. This is due to the fact the charges in 2G is higher than the 4G technologies.


Why in News?

  • The new Economics Nobel laureates – Abhijit Banerjee, Esther Duflo and Michael Kremer – are considered to be instrumental in using randomised controlled trials to test the effectiveness of various policy interventions to alleviate poverty.

What is a Randomised Controlled Trial?

  • A randomised controlled trial is an experiment that is designed to isolate the influence that a certain intervention or variable has on an outcome or event.
  • A social science researcher who wants to find the effect that employing more teachers in schools has on childrenʼs learning outcomes, for instance, can conduct a randomised controlled trial to find the answer.
  • The use of randomised controlled trials as a research tool was largely limited to fields such as biomedical sciences where the effectiveness of various drugs was gauged using this technique.
  • Banerjee, Ms. Duflo and Mr. Kremer, however, applied RCT to the field of economics beginning in the 1990s. Mr. Kremer first used the technique to study the impact that free meals and books had on learning in Kenyan schools.
  • Banerjee and Ms. Duflo later conducted similar experiments in India and further popularised RCTs through their book Poor Economics, published in 2011.

Significance of RCTs:

  • RCTs allow economists and other social science researchers to isolate the individual impact that a certain factor alone has on the overall event.
  • For instance, to measure the impact that hiring more teachers can have on childrenʼs learning, researchers must control for the effect that other factors such as intelligence, nutrition, climate, economic and social status etc., which may also influence learning outcomes to various degrees, have on the final event.
  • Randomised controlled trials promise to overcome this problem through the use of randomly picked samples.

Criticisms against RCTs:

  • A popular critic of randomised controlled trials is economist Angus Deaton, who won the economics Nobel Prize in 2015.
  • Deaton has contended in his works, including a paper titled “Understanding and misunderstanding randomised control trials” that simply choosing samples for an RCT experiment in a random manner does not really make these samples identical in their many characteristics.
  • While two randomly chosen samples might turn out to be similar in some cases, there are greater chances that most samples are not really similar to each other.
  • Other economists have also contended that randomised controlled trials are more suited for research in the physical sciences where it may be easier to carry out controlled experiments.
  • They argue that social science research, including research in the field of development economics, may be inherently unsuited for such controlled research since it may be humanly impossible to control for multiple factors that may influence social events.


Why in News?

  • The Royal Swedish Academy of Sciences has decided to award the 2019 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, popularly called the Nobel Prize in Economics, to Abhijit Banerjee, Esther Duflo, and Michael Kremer “for their experimental approach to alleviating global poverty”.

About the Awardees:

  • While Dr.Banerjee (Indian-born American economist) and Dr.Duflo are both affiliated with the Massachusetts Institute of Technology, Dr.Kremer is with Harvard University. Dr. Banerjee and Dr. Duflo, who are incidentally married to each other, have had a long history of conducting research together, often collaborating with Dr. Kremer as well.
  • The three will equally share the prize money of 9 million Swedish krona (about $916,798 and ₹6.53 crore).

Achievements of the Awardees:

  • The laureates have, since the mid-1990s, sought to introduce a new approach to obtaining reliable answers about the most effective ways to combat global poverty.
  • Rather than focussing on big-picture questions, they divided the issue into smaller, more manageable and measurable questions.
  • They then showed that these smaller questions could be best answered through carefully designed experiments among the people who are most affected.
  • This thought process has resulted in what are called randomised control trials, previously used in the pure sciences and in clinical drug trials, to be deployed in the social sciences.

Resultant of their Work:

  • The resultant of their tiring work was a large number of concrete results on specific mechanisms behind poverty and specific interventions to alleviate it.


1.On schooling, strong evidence now shows that the employment of contract teachers is generally a cost-effective way to improve student learning, while the impact of reduced class size is mixed, at best.

2.On health, poor people’s investment in preventive care has been shown to be very sensitive to the prices of health products or services, giving a strong argument for generous subsidies to such investments,” the paper added.

3.On credit, growing evidence indicates that micro-finance programmes do not have the development effects that many had thought when these programmes were introduced on a Large Scale.

About Nobel Prize:

  • Alfred Nobel, a Swedish chemist, engineer, industrialist, and the inventor of dynamite, in his last will and testament in 1895, gave the largest share of his fortune to a series of prizeswhich were collectively came to be known as the “Nobel Prizes”.
  • The awards are started from the year of 1901 for five different fields and in the year 1969, the field of Economic sciences was also included.
  • The Nobel Prizes are widely regarded as the most prestigious awards given for intellectual achievement in the world.
  • The Nobel Memorial Prize in Economic Sciences, officially known as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is an award funded by Sveriges Riksbank and is annually awarded by the Royal Swedish Academy of Sciences to researchers in the field of economic sciences. The first prize was awarded in the year 1969.
  • The various awards that forms the group of “Nobel Prizes” are as follows:

1.Nobel Prize for Physics

2.Nobel Prize for Chemistry

3.Nobel Prize for Physiology or Medicine

4.Nobel Prize for Literature

5.Nobel Prize for Peace.

6.Nobel prize for Economic Sciences (added only in the year 1969)


Why in News?

  • The annual Global Competitiveness Index (GCI) compiled by Geneva-based World Economic Forum (WEF) is released.
  • India slipped to 68th rank in the annual Global Competitiveness Index 2019. It was ranked 58th in the 2018 edition.
  • The GCI was launched in 1979, maps the competitiveness landscape of 141 economies through 103 indicators organised into 12 pillars.


  • The Global Competitiveness Index 2019 ranks 140 countries on the basis of 98 indicators organised into 12 pillars.
  • Singapore with a score of 84.8 took the top spot in this year’s index, pushing the United States to the second spot.The top-five economies in the Global Competitiveness Index 2019 included Singapore, US, Hong Kong, Netherlands and Switzerland.
  • Japan took up the 6th spot, Germany ranked 7th, Sweden ranked 8th, UK ranked 9th and Denmark ranked 10th to complete the top ten economies in the index.
  • China was ranked at the 28th spot, while Hong Kong was ranked 3rd and Taiwan, which it claims as its own territory, also ranked higher at the 12th

Global Competitiveness Index 2019: India

  • According to the World Economic Forum, the major reason for the fall in India’s rank is due to improvements witnessed by several other economies.
  • India was ranked second in shareholder governance and third in terms of market size and renewable energy regulation.In corporate governance also, India was ranked considerably higher at the 15th In macroeconomic stability also, India was ranked high at the 43rd rank. However, India was performed poorly in pillars including Information, communication and technology adoption (120 rank), health (110), skills (107), product market (101), labour market(103) and stability (103).
  • In terms of healthy life expectancy, India was ranked 109 out of 141 countries. In meritocract and incentivization also, India was ranked at the 118th position, largely due to its low ratio of wage and salaried female workers to male workers, in which it was ranked 128Among its neighbours, India was ranked ahead of Sri Lanka, Pakistan, Bangladesh and Nepal. Only China ranked better at the 28th position.


Why in News?

  • The Union Cabinet decided to increase the Dearness Allowance (or DA) that it pays its current employees and existing pensioners by 5 percentage points.
  • Accordingly, 50 lakh central government employees and 65 lakh pensioners will henceforth receive 17% of their basic salary as DA instead of 12%.

What is DA and how is it calculated?

  • DA is provided by the government to its employees to cushion the impact of the rising cost of living. Inflation (or rate of increase in prices) eats away the buying power of money; hence the justification for DA.
  • For instance, if the annual inflation is 5%, it means that a commodity that cost Rs 100 in the first year, would cost Rs 105 in the second. If the employee has a salary that allows her to spend Rs 100 on that commodity, she will be able to buy that commodity in the first year.However, in the second year, that Rs 100 will no longer be enough for the employee to buy that commodity, which now costs Rs 105, thanks to the inflation rate. It is to compensate for this gap that the government pays DA to its employees.
  • To calculate DA, the government typically uses the All India Consumer Price Index-based inflation rate as a broad marker. For greater effectiveness, the DA is revised twice a year.

Possible Positive Impacts on the Economy:

  • An increase in DA provides additional money in the hands of government employees. If all this additional money is spent, it will have a positive impact on the sagging consumption demand, which the biggest problem in the economy right now.
  • However, the impact will depend on whether — and to what extent — employees actually spend this money. It is possible that given the prevalent sentiment of insecurity, they may choose to simply save it in their bank accounts. But given that deposit rates on short-term savings are being cut, it seems likely that people would choose to spend, rather than save.
  • But even if all this money is simply kept in the banks, it will help the economy by bolstering the flow of funds to the banking system.

Possible Negative Impacts on the Economy:

  • This money will come out of the government’s coffers. And to the extent that this will hit the resources available with the government, it will constrain economic activity.
  • For example, under the current circumstances, when government is finding it difficult to raise revenues, an additional outgo for DA will either push the government to borrow money from the market — thus leaving less money to be lent to private businessmen and businesswomen — or it will come as the cost of some other expenditure such as the spending that could have built more roads or more schools.


Why in News?

  • Putting in place a speedier approval mechanism, Competition Commission has introduced a green channel route for clearing certain categories of mergers and acquisitions.

The Green Channel Concept:

  • Mergers and Acquisitions (M&As) or combinations beyond a certain threshold are required to have mandatory approval from the fair trade regulator.
  • The green channel is aimed to sustain and promote a speedy, transparent and accountable review of combination cases, strike a balance between facilitation and enforcement functions, create a culture of compliance and support economic growth.
  • This concept recommended by the high level panel that reviewed competition law — would allow for an automatic system for speedy approval of combinations subject to certain conditions.
  • Under this process, the combination is deemed to have been approved upon filing the notice in the prescribed format.
  • Parties to a combination can avail the green channel route subject to various conditions, including that there is no horizontal overlap or vertical relationship.


  • The amended regulation provide for a single summary of the proposed combination.
  • Earlier, entities had to provide both a short as well as a long summary.
  • This system would significantly reduce time and cost of transactions.


Why in News?

  • In a significant judgment, the Supreme Court has held that supply of food, drinks and beverages by an incorporated members’ club to its permanent members is not liable for sales or service tax.


  • The Bench was answering a reference on the question of whether the doctrine of mutuality highlighted in the Young Men’s Indian Association judgment of the Constitution Bench would survive the 46th Constitutional Amendment, which introduced Article 366 (29-A) into the Constitution.
  • The particular Article dealt with the taxation of sale of goods. Its clauses said that the supply or service of ‘goods’ like food or drink by an “unincorporated association or body of persons’ would be taxable.


  • The Supreme Court has ruled that the doctrine of mutuality continues to be applicable to incorporated and unincorporated members’ clubs.
  • The doctrine of mutuality, based on common law principles, is premised on the theory that a person cannot make a profit from himself.
  • An amount received from oneself, therefore, cannot be regarded as income and is not taxable.
  • Thus, Sales Tax cannot be levied on Clubs, whether incorporated or unincorporated for the supply of food and drinks to permanent members.
  • The Court said such supply of goods lacks the essential aspect of a sale — a seller and a buyer.It was said that the legal entity called the club and its members are one and the same. The club, though a distinct legal entity, is only an agent of its members.
  • The Supreme Court has held that, in the case of sales tax, both incorporated and un-incorporated members’ clubs are exempt from liability of paying sales tax.
  • The Bench referred to the Constitution Bench judgment in the Young Men’s Indian Association case and held that the doctrine of mutuality between the club and its members would dominate the relationship between an incorporated members’ club and its permanent members.
  • The rendering of service by the petitioner-club to its members is not taxable service under the Finance Act, 1994, the court held.


Why in News?

  • The Ministry of Textiles, Government of India, is participating in the World Cotton Day event being observed from 7th October to 11th October 2019 in Geneva.

World Cotton Day:

  • It is being organised by the World Trade Organisation (WTO) in collaboration with the Secretariats of the United Nations Food and Agriculture Organization (FAO), the United Nations Conference on Trade and Development (UNCTAD), the International Trade Centre (ITC) and the International Cotton Advisory Committee (ICAC).
  • WTO is hosting the event at the request of the Cotton – 4 countries – Benin, Burkina Faso, Chad and Mali to celebrate their official application for the recognition of 7th October as World Cotton Day by the United Nations.
  • World Cotton Day will celebrate the many advantages of cotton, from its qualities as a natural fibre, to the benefits people obtain from its production, transformation, trade and consumption.World Cotton Day will also serve to shed light on the challenges faced by cotton economies around the world because cotton is important to least developed, developing and developed economies worldwide.
  • Cotton occupies just 2.1 % of the world’s arable land, yet it meets 27% of the world’s textile need.
  • In addition to its fibre used in textiles and apparel, food products are also derived from cotton, like edible oil and animal feed from the seed.
  • Cotton is a drought-resistant crop ideal for arid climates.
  • A sculpture of Mahatma Gandhi made out of cotton will be displayed to commemorate the 150th birth anniversary of Mahatma Gandhi, at the event.
  • The Cotton Textiles Export Promotion Council (TEXPROCIL) will be displaying India’s high-quality cotton textiles at the exhibition.
  • Between 2011 and 2018, India implemented a Cotton Technical Assistance Programme (Cotton TAP-I) of about USD 2.85 million for seven African countries namely Benin, Burkina Faso, Mali and Chad and also Uganda, Malawi and Nigeria.
  • The technical assistance focused on improving the competitiveness of the cotton and cotton-based textiles and apparel industry in these countries through a series of interventions that had significant outcomes leading to a demand for a follow on project


Why in News?

  • The Insurance Regulatory and Development Authority of India has constituted a working group that will revisit the product structure of title insurance.


  • The group will study the structure of title insurance products available in the current Indian Market and analyse the reasons for its sluggish demand.
  • The 12 member working group is tasked with:
    • Developing a standard product.
    • Coming out with recommendations to spur demand.
    • Examining the legal and regulatory framework in place and its impact on the marketability of title insurance.
    • Studying the structure of such products available and analyse reasons for sluggish demand.
    • Suggesting augmentation of reinsurance capacity.
  • The group has been asked to submit its recommendations within 12 weeks.

Title Insurance:

  • Title insurance is a form of indemnity insurance that protects the holder from financial loss sustained from defects in a title to a property.
  • It basically provides indemnity to developers and the subsequent homeowners of the property against losses and risks related to defects in the title of the property.
  • It even covers issues which are not discovered prior to the commencement date of the policy.
  • A few general insurers offer title insurance.
  • Their product features vary in policy terms and conditions and scope of coverage depending on the support received from their reinsurers.


  • The number of title insurance policies sold is minimal, despite availability for the last one and half years and the obligation cast under the Real Estate (Regulation and Development) Act, 2016 upon promoter/developers to obtain the said policy.
  • The decision comes in the backdrop of a less-than-desired response to title insurance products.
  • Feedback received from the Government of India revealed that stakeholders, especially developers associations, had flagged the need for standardisation in title insurance products.


Why in News?

  • The Further Fund Offer 2 (FFO 2) of Bharat 22 Exchange-Traded Fund (ETF), which is part of the government’s divestment programme, will be open for subscription for investors.

Bharat 22:

  • Bharat 22 is an ETF that will track the performance of 22 stocks, which the government plans disinvest.
  • The ETF unit represents a slice of the fund, issued units are listed on exchanges for anyone to buy or sell at the quoted price.
  • The B22 will span six sectors, such as basic materials, energy, finance, FMCG, industrials and utilities.
  • Besides public sector banks, miners, construction companies, and energy majors, the ETF will also include some of the government’s holdings in SUUTI (Specified Undertaking of Unit Trust of India).
  • The B22 ETF will be managed by ICICI Prudential AMC while Asia Index will be the index provider.
  • The index will be rebalanced annually.

Exchange Traded Funds (ETFs):

  • ETFs are mutual funds listed and traded on stock exchanges like shares.
  • The ETF simply copies an index and endeavours to accurately reflect its performance.
  • In an ETF, one can buy and sell units at a prevailing market price on a real-time basis during market hours.
  • There are four types of ETFs already available — Equity ETFs, Debt ETFs, Commodity ETFs and Overseas Equity ETFs.
  • The Bharat 22 ETF to be offered now allows the Government to park its holdings in selected PSUs in an ETF and raise disinvestment money from investors at one go.


Why in News?

  • Ministry of Power launched PRAKASH (Power Rail Koyla Availability through Supply Harmony)

About PRAKASH (Power Rail Koyla Availability through Supply Harmony) Portal:

  • The Portal aims at bringing better coordination for coal supplies among all stakeholders viz – Ministry of Power, Ministry of Coal, Coal India, Railways and power utilities.
  • The Portal is designed to help in mapping and monitoring entire coal supply chain for power plants, viz:
    • Coal Stock at supply end (mines),
    • coal quantities/ rakes planned,
    • coal quantity in transit and
    • coal availability at power generating station.

Benefits of Portal to the Stakeholders:

  • The portal makes available following information on a single platform:
    • Coal company will be able to track stocks and the coal requirement at power stations for effective production planning.
    • Indian Railways will plan to place the rakes as per actual coal available at siding and stock available at power stations.
    • Power stations can plan future schedule by knowing rakes in pipe line and expected time to Reach.
    • Stock at power generating station
    • Ministry of Power /Ministry of Coal/ Central Electricity Authority/ Power System Operation Corporation (POSOCO) can review overall availability of coal at thermal power plants in different regions.
  • PRAKASH Portal is developed by NTPC and sources data from different stakeholders such as Central Electricity Authority (CEA), Centre for Railway Information System (CRIS) and coal companies. All reports are available in PDF/Excel format. However, to present information in a user friendly method, the Portal gives graphical representation of reports with details shown on the map of India.
  • Currently, the Portal will make available four reports as detailed below:
    • Daily Power Plant Status: This report gives Station data related to power generation, coal receipt, consumption and stock. Report can be generated utility wise, state wise and sector wise (default utility-wise).
    • Periodic Power Plant Status: Report gives Station data related to power generation, coal receipt, consumption and stock for selected period. Coal materialisation based on dispatch by coal company is available.
    • Plant Exception Report: This report gives materialisation and rakes in pipeline through Rail.
    • Coal Dispatch Report: Report gives coal subsidiary wise dispatch for particular period. It also gives source wise details of coal dispatch. Dispatch trend is also shown. Plant wise and siding wise details are available.

Present Mechanism:

  • Present mechanism to review coal supply situation consists of an inter-ministerial group which has officials from Ministries of Power, Coal, Railways, CEA, power utilities and coal companies.
  • This group holds weekly meetings to review coal supply situation as well as railway logistics.
  • It was observed that this mechanism faced several issues such as scattered information, correctness of data from different organizations, timely availability of data etc. This often led to difficulties in decision making
  • To address such situations, Ministry of Power asked CEA for establishment of a transparent mechanism to monitor the coal availability at loading site (CIL,SCCL), placement of rakes by Railways (CRIS) and availability of coal at power stations (NTPC / DVC /State utilities) and also directed NTPC to facilitate CEA for portal development.


Why in News?

  • The Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds.

Sovereign Gold Bond Scheme:

  • The SGB will be issued in six tranches from October 2019 to March 2020
  • The Bonds will be sold through:
    • Scheduled Commercial banks (except Small Finance Banks and Payment Banks)
    • Stock Holding Corporation of India Limited (SHCIL)
    • Designated post offices
    • Recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited
  • The main features of the SGB are:
    • It will be issued by Reserve Bank India on behalf of the Government of India.
    • The Bonds will be restricted for sale to resident individuals, Universities, Charitable Institutions, HUFs and Trusts
    • The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.
    • The minimum permissible investment will be 1 gram of gold.
    • The maximum limit of subscribed shall be 4 KG for individual and HUF each and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.
    • In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.The investors will be compensated at a fixed rate of 2.50 % per annum payable semi-annually on the nominal value.
    • Bonds can be used as collateral for loans.


Why in News?

  • Prime Minister Narendra Modi at the Climate Action Summit in New York announced India’s ambitious aim to increase its renewable energy target to 450 GW (gigawatts). A senior official in the Union Environment Ministry has pointed out that there is not yet a deadline for when this target would be achieved.


  • India had previously set a target for increasing the non-fossil fuels to 175 GW in 2022.
  • India’s plan for installing 175 GW of renewable energy capacity by 2022 was first announced in 2015.
  • It included 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power.
  • Recent announcements highlight India’s aim to achieve 450 GW target, with no particular deadline.


  • Given that the country right now has an installed renewable energy capacity of 80.47 GW, of which 29.55 GW is solar, 36.37 GW is wind, 9.81 GW is biomass and 4.6GW is small hydropower, achieving the 450 GW target, which is a more than 460 per cent jump from the current level, in 3-5 years is an extremely tough task. For the record, India’s renewable power capacity had jumped nearly 150 per cent in the past five years.
  • The announcement comes at a time when commissioning of projects has slowed and states are raising red flags.Slow project allocation and financial stress have halted wind power projects.Solar projects have been facing land crunch and grid connectivity issues.
  • As India expands it renewables portfolio, wind power seem to be losing steam. Leading domestic wind turbine manufacturers, with more than 80 per cent market share, are staring at a weak order pipeline, financial losses and regulatory niggles. Foreign companies, including some Chinese ones, are increasing footprint in India.
  • Commissioning from wind power projects has slowed to historic lows.
  • In solar, the challenge is the low capacity of domestic solar panels and increased influx of imports from China.

Way Forward:

  • The renewable energy ministry is planning to introduce a standard power-purchase agreement (PPA) for projects.
  • The terms of the PPA will ensure any default from the procuring state would lead to stringent penalty. A letter of credit-type system of payment would be made mandatory.
  • To sort out land-acquisition issues, the ministry plans to change the project-award system.
  • The government will acquire the land.
  • Special-purpose vehicles (SPVs) will be formed by state-owned companies.
  • The land will then be allotted to private companies bidding for projects
  • The government should implement anti-dumping duty on a priority to deal with cut-throat competition from international players.
  • In order to boost Make in India, the renewable power ministry has asked the Ministry of Finance to impose


Why in News?

  • States’ gross fiscal deficit (GFD) has remained within the Fiscal Responsibility and Budget Management Act (FRBM) threshold of 3% of gross domestic product (GDP) during 2017-18 and 2018-19, a Reserve Bank of India report on State Finances said.


  • Fiscal Responsibility and Budget Management (FRBM) Act enacted in 2003 by the Indian parliament aims at bringing financial discipline on government expenditure.
  • Aimed primarily to bring a check on revenue deficit, the act strives to improve the overall management of public finance by controlling unchecked borrowings and imparting financial discipline.
  • When it was introduced for the first time, its target was to bring down the fiscal deficit to 3 percent of the GDP by 2008.
  • However, the act suffered several challenges, such as the global financial crisis of 2007, when it came to implementation due to several reasons.
  • On more than one occasion, the target planned to be achieved was relaxed or time frame was extended.

NK Singh Committee:

  • A committee was set up under NK Singh in 2016 to review the act.
  • The committee on its part recommended that the government should target a fiscal deficit that is 3 percent of the GDP by 2020 and bring it down to 2.5 percent by 2023.

Report Highlights:

  • “States’ gross fiscal deficit (GFD) has remained within the FRBM threshold of 3 per cent of gross domestic product (GDP) during 2017-18 and 2018-19. This has, however, been achieved by sharp retrenchment in expenditures, in particular, capital expenditure.
  • For 2019-20, states have budgeted for a consolidated GFD of 2.6 per cent of GDP with a marginal revenue surplus (as against revenue deficits in the previous three years).
  • The report said sharp reduction in capital expenditure by states has potentially adverse implications for the pace and quality of economic development, given the large welfare effects of a much wider interface with the lives of people at the federal level.
  • “Currently, states employ about five times more people and spend around one and a half times more than the Centre. Moreover, public expenditure by states influences the quality of physical and social capital infrastructure of the economy
  • “States’ revenue prospects are confronted with low tax buoyancies, shrinking revenue autonomy under the GST framework and unpredictability associated with transfers of IGST and grants.


Why in News?

  • Union ministry of commerce and industry amended export policy of onion from free to prohibited, which amounts to banning of onions from export, with immediate effect.

    Reasons behind the Decision:

  • The prohibition by the government comes amid rising prices of onions across the country.
  • The commerce and industry ministry amended the export policy of onion, making it ‘prohibited’ from ‘free’ earlier.
  • The decision has:
    • banned exports of all varieties of onion in a bid to tame prices.
    • imposed stock limits on onion traders to facilitate release of stocks and prevent hoarding by traders.

Impact of the Decision:

  • Retail traders across the country will now be able to stock only up to 100 quintals of onion while wholesale traders will be allowed to stock up to 500 quintals.
  • In the past, the Centre had authorised states to impose stock limits but this time it has imposed the limits on its own.
  • Sudden export bans shut off the possibility of the farmer getting a bumper price for his crop, something that he feels he is entitled to, as the obverse of the distress sale he often has to undertake.

Way Ahead:

  • States must act expeditiously and launch a crackdown on hoarders to bring the stocks to the market swiftly.
  • Promote modern infrastructure facilities like cold storages and warehouses to use it as buffer stock.
  • Instead of banning exports, the government should encourage export of onion in its raw and processed forms.
  • The government must invest in food technology that would permit farmers to increase output without fear of distress sales, onion offtake assured because of its storage in a processed state
  • More policy making and political attention should be devoted to raising onion output, or for that matter farm output in general. Complacency on the farm front is wholly avoidable.


Why in News?

  • The eight core sectors that form the bellwether for the Indian economy slumped in August to their lowest growth in four years and four months as per the Index of Eight Core Industries.

About the Slump:

  • The index for these industries contracted 0.5%, the weakest since April 2015. Growth in five sectors of the Index of Eight Core Industries fell into the negative zone in August.
  • Within the Index, the coal sector saw the sharpest contraction, with the sector contracting 8.6% in August 2019 compared with a contraction of 1.6% in the previous month. This is the sector’s worst performance in three years.
  • It is an indication of a continuing slowdown and weak demand in the system. The core sectors reflect demand from the power and infrastructure sectors, where the government’s own demand is important and public sector spending has been also low.

About Index of Eight Core Industries (ICI):

  • It is monthly production volume index considered as lead indicator of monthly industrial performance. It measures performance of production in selected eight core industries viz. Natural Gas, Coal, Crude Oil, Fertilizers, Petroleum Refinery Products, Steel, Cement and Electricity.
  • It is compiled and released by Office of Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry.
  • The eight infrastructure sectors, constitute 40.27% of total index of industrial production (IIP)
  • Base year taken as reference for ICI is 2011-12.

Components of Eight Core Industries (ICI)

S.NoEight core IndustriesContribution to IIPDescription
1. Coal4.38 %It includes coal production excluding coking coal.
2.Crude Oil5.22 %It includes total crude oil production.
3.Natural Gas1.71 %It includes total natural gas production.
4.Refinery Products5.94%It includes total refinery production (in terms of crude throughput).
5.Fertilizers1.25%It includes production of Urea, Calcium Ammonium Nitrate (CAN), Ammonium Sulphate (A/S), Diammonium Phosphate (DAP), Ammonium chloride (A/C), Complex Grade Fertilizer and Single superphosphate (SSP).
6.Steel6.68%It includes production of alloy and non-alloy steel only.
7.Cement2.41%It includes production of both large plants and mini plants.
8.Electricity10.32%It includes actual electricity generation of thermal, nuclear, hydro, imports from Bhutan

What is IIP?

  • Index of Industrial Production (IIP) is a composite indicator measuring changes in the volume of production of a basket of industrial products over a period of time, with respect to a chosen base period. Currently, the base year is 2011-12.
  • It is computed and published by the Central Statistical Office (an office under the Ministry of Statistics and Programme Implementation) on monthly basis with a time lag of six weeks from the reference month.


Why in News?

  • Central government has notified changes in Apprenticeship Rules (1992) with an aim to increase skilled manpower in the country, and raise monetary compensation of apprentices.

Key Highlights:

  • As per the notified Apprenticeship (Amendment) Rules, 2019, the hiring limit of apprentices has been raised to 15 per cent of total strength of an establishment.
  • Minimum stipends have been doubled to between Rs 5,000 and Rs 9,000 per month.
  • The stipend for graduate apprentices or degree apprentices has been increased to Rs 9,000 per month.
  • For school pass outs, between Class 5th and 9th, the stipend has been increased to Rs 5,000 per month.
  • The Centre has also lowered the size limit of an establishment with a mandatory obligation to engage apprentices on an optional basis from 40 to 30, and reduced the size-limit of an establishment wanting to engage apprentices from 6 to 4.


  • In India, less than 0.1% of the employed workforce or just 0.3 million people are apprentices.
  • In comparison, the UK has 1.5% or 0.5 million, China has 2.5% or 20 million, and Germany has 5% or 2.5 million apprentices.


  • The new rules will allow smaller companies to hire more trainees and give more youths an opportunity to get into the apprenticeship fold.
  • Though it will add to the cost of firms, the government believes apprenticeship is one of the most sustainable models globally for skill training as it allows the youth to earn while they learn.


Why in News?

  • A Pilot Project for ushering in ‘Industry 4.0’ in the country, is launched for implementation at the Modern Coach Factory (MCF), Raebareli.

Industry 4.0:

  • ‘Industry 4.0’ commonly referred to as the fourth industrial revolution, is a name given to the current trend of automation, interconnectivity and data exchange in manufacturing technologies to increase productivity.
  • Industry 4.0 is a complex Cyber-Physical Systems which synergizes production with digital technologies, the Internet of Things, Artificial Intelligence, Big Data & Analytics, Machine Learning and Cloud Computing.
  • Therefore, the architecture to be conceptualized and formulated in MCF initially would be gradually expanded in a phased manner to encompass all complexities that constitute Industry 4.0 in all manufacturing spheres in the country.
  • Full transition to the digital factory using ‘Industry 4.0’ across entire value chain from design to production will help enhance productivity hugely by providing insight into production process and also make the decisions in real-time basis.
  • This will also help in minimizing human errors by effective monitoring to ensure that resources are put to the best utilization measured by, what is called the Overall Equipment Effectiveness (OEE).
  • Such a National Policy for Advanced Manufacturing envisages that manufacturing sector should contribute at least 25% to GDP.
  • All over the world, countries who have been able to achieve phenomenal growth, could do that with the advent of rapid strides in manufacturing sector. This initiative in Railways may have wider ramifications to spur growth in defence production as well as in private manufacturing sector also.



Why in News?

  • Labour’s share to national incomes has been declining in both developing and developed countries for around four decades now, highlighted the latest United Nations Conference on Trade and Development (UNCTAD) report.

Key Stats of the Report:

1.Decline in the Labour’s share to national incomes:

  • The report stated that Labour’s share to national incomes has reduced to around 54 per cent in 2018 from 61.5 per cent in 1980 in developed countries.
  • In developing economies, the labour share dipped to 50 per cent in 2018 from 52.5 per cent in 1990.
  • In the same period, more than 10 per cent of GDP was transferred from workers to capitalists.
  • The report also showed that labour wages did not grow at the same pace as the cost of living, but the profit share of corporations increased.

Effect of the decline:

  • Affecting living conditions can decrease productivity and further cause erosion of social security, growing market concentration and spread of outsourcing through global value chains, highlighted the UNCTAD report.
  • In developing countries, labour market liberalisation weakened the prospects of full-time and regulated employment. This made workers lose bargaining power and borrow money for household expenditure. All this finally slowed down demand and led to a recession-like situation.

2.Decline in Public spending:

  • Public spending has been on a declining trend in both developed and developing countries since the 1970s. But public spending is more important for social protection system and long-term asset creation.
  • The spending, which included stimulus packages and corporate and banking bailouts, increased inequalities, according to the UNCTAD report.

3.Weak Investment Growth

  • Globally, both developed and developing economies tried to increase profit share and cut down corporate taxes to promote productive investment but it didn’t work out.
  • Credit has been expanding since 1980s without productive investment. The global financial system is going in the wrong direction, which neither encourages productive investment nor creates an environment of productive investment.

4.Growing stock of Carbon Dioxide

  • The current financial mechanism is also at odds with the growing stock of atmospheric carbon dioxide that increases temperature. The prevailing economic pattern where big corporations have a say over carbon-free technology is making it costlier to adopt a solution.The report added that in the last one decade, production of carbon dioxide from developing economies has accelerated, but per capita production of CO2 is less. Developing countries produce around 80 per cent less CO2 when compared with per capita production, read the report.
  • The report also established a link between rising inequality and rising temperatures. The threat of rising temperatures from high levels of atmospheric carbon is in large part due to emissions from the richest 10 per cent of people in the world.

Conclusion of the Report:

  • Impact on SDGs: Reducing labour share, erosion of public spending, weakening of productive investment and rise in stock of carbon dioxide are factors that stand in the way of countries achieving Sustainable Development Goals (SDGs), according to the UNCTAD findings.
  • Misplaced Structural Reforms: The report highlighted the fact that there are underlying structural challenges that stand in the way of revival of global economy.
  • The global market, instead of pondering over challenges, brought some misplaced structural reform that further targets liberalisation in labour, products and financial markets, found the UNCTAD.


  • United Nations Conference on Trade and Development (UNCTAD) was established in 1964 as a permanent intergovernmental body.
  • UNCTAD is the principal organ of the United Nations General Assembly dealing with trade, investment, and development issues.
  • The organization’s goals are to: maximize the trade, investment and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis.
  • Permanent secretariat — Geneva.
  • Other Reports: World Investment Report, Trade and Development Report, Technology and Innovation Report, Commodities and Development Report



  • A persistent slowdown has dragged economic growth in India down to 5% in the fiscal first quarter, weakest in more than six years.
  • Recent weeks have seen the possible reasons for the slowdown, as well as the government’s policy measures to ostensibly help revive the economy being put under the spotlight, the missing demand is yet to be addressed in a direct and concerted manner.
  • As data from the National Statistical Office show, private consumption expenditure, which contributes more than half the gross domestic product and is the mainstay of demand, has decelerated so sharply that at 3.1%, the expansion is at an 18-quarter low.
  • Automobile sales continued to plunge in August, posting their worst drop since the Society of Indian Automobile Manufacturers (SIAM) started collating wholesale vehicle sales data in 1997-98.The absence of demand pervades almost every key sector: from consumer durables to biscuits and housing.

What Has Caused This Demand Drought?

  • Multiple factors have contributed to the demand drought.
  • Lack of jobs, or even where jobs are available — like in the new or digitally enabled “gig” economy — a tenuousness about the incomes from such work, the abiding rural distress, widening inequality and, interestingly, in the opinion of some economists, even the Reserve Bank of India’s successful targeting of inflation are all cited as contributors.
  • For an economy such as India’s, the central bank’s remit of containing consumer price index-based inflation within a 2-6% band may be proving less than ideal, especially if monetary policy makers fix their sights on trying to peg inflation at or less than 4% — even it means retarding growth as a fallout.
  • Low inflation extracts costs in the form of lower nominal growth (growth measured in current prices) that could crimp tax receipts and in turn lead to cuts in government spending.
  • With wage/salary increases most often linked to inflation, slower price gains result in smaller annual increments that leave the earners more wary of spending on discretionary or non-essential purchases.
  • The crisis of demand in the rural hinterland has snowballed to the point where sellers of consumer goods including Hindustan Unilever (HUL) and ITC have seen appreciable slowing in sales growth in recent quarters.
  • Rural growth rates — which were almost double those in urban areas earlier — have eased to the point where they are now almost at par with those in urban areas, according to HUL’s first-quarter results statement.

What Can Be Done to Revive Demand?

  • Consumer sentiment is a key ingredient affecting consumption and it is vital for policy makers to address weakness in consumer sentiment through a mix of measures in the economic realm, both monetary and fiscal, as well as ensuring a congenial socio-political climate that enhances the ‘feel-good’ factor.
  • On the monetary side, ensuring lower borrowing costs as well as adequate availability of credit are crucial to helping create an enabling environment for consumers to consider taking out loans to fund their purchases.
  • However, fiscal measures are in many ways far more crucial. Targeted tax breaks or non-tax sops that incentivise consumption is one option.
  • The government’s latest decision to cut baseline corporate tax rates is certainly a good move, aimed at incentivising and spurring sluggish capital investment by businesses.
  • However, companies may balk at adding capacity when demand for their manufactured goods is still weak and it is therefore imperative that the revival of demand stays front and centre of any new policy measures.
  • As far as rural demand goes, the government must go beyond the Pradhan Mantri KIsan SAmman Nidhi, or PM-KISAN income supplementing scheme and tackle the crisis of low real farm incomes by radically recalibrating its approach to the agrarian economy.
  • As an immediate and necessary measure, the Mahatma Gandhi National Rural Employment Guarantee Scheme needs to be reinvigorated by ensuring timely and adequate funding and the fixing of appropriate wage levels.
  • As studies have shown, in its first five years, the scheme gave a big fillip to rural incomes and consumption in the hinterland.

What, if any, are the Risks?

  • Any economic stimulus package that the government may come up with would necessarily assume a short-term loosening of the fiscal deficit goals, whether from enhanced spending or from reduced tax revenues as the corporate tax cut may engender.
  • If the stimulus also entails a large expenditure component, there could also be second-order inflationary consequences.
  • However, the risks of failing to revive demand, at a juncture when the economy is heading for a stall, are far greater in the long run.
  • Once, the economy has been reflated and demand revives, revenue buoyancy is bound to return and prudent management can ensure a gradual return to normal service on long-run fiscal goals.


Why in news?

  • Union Minister Shri Nitin Gadkari inaugurated the 16th Global SME Business Summit 2019 in New Delhi on 24th September.

Global SME Business Summit:

  • The Summit is organised every year by the Ministry of MSME and the Confederation of Indian Industries (CII) for bringing together stakeholders and leaders in the MSME sector.
  • Theme for 2019: “Making Indian MSMEs Globally Competitive”.
  • The summit will help:
    • Disseminate knowhow on assessing the export potential of the products and services of Indian MSMEs.
    • Identify suitable markets.
    • Develop strategies to penetrate new markets through trade associations, multi-lateral agencies, international business forums and E-Commerce platforms.
    • The event will also help participating Indian MSMEs to single out avenues for joint ventures, franchising, cross-marketing, buyer-seller meets, etc.
    • The Minister, speaking on the occasion, said that the Government’s target is to increase MSME’s present share of 29 percent of GDP to 50 percent in the next five years and raise its export contribution from 49 percent to 60 percent.


Why in News?

  • The National Conclave on Energy Efficiency in MSME sector was inaugurated by Union Ministers in Hyderabad.


  • The two-day Conclave was organized by the Bureau of Energy Efficiency (BEE) with participation from MSME entrepreneurs, industry associations, technology and service providers, sectoral energy experts and senior officials from the Government.
  • The Ministers also released Energy Conservation Guidelines for MSMEs.
  • They also launched the Knowledge Management Portal “SIDHIEE” under the BEE’s MSME Programme.
  • The SIDHIEE portal will host useful information including fifty videos of multimedia tutorials for MSMEs for early adoption of energy-efficient technologies.
  • The Conclave is expected to be useful in creating a platform for pooling the knowledge and synergising the efforts of various stakeholders.
  • The participantsdiscussed various issues such as strategies to promote energy efficiency, technical and financial capabilities of MSMEs, capacity-building and awareness programmes.

Bureau of Energy Efficiency (BEE):

  • It is a statutory body under the Ministry of Power, Government of India.
  • It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.
  • It coordinates with designated consumers, designated agencies, and other organizations to identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the Energy Conservation Act.


Why in News?

  • Chairperson of the Food Safety and Standards Authority of India (FSSAI) said on the sidelines of a function of Food and Agriculture Organisation (FAO) and the World Health Organisation’s (WHO’s) Coordinating Committee for Asia (CCASIA) in Panaji that she expects the Union Agriculture Ministry’s Participatory Guarantee Scheme (PGS) to incentivise more farmers to grow organic food.

About Participatory Guarantee System (PGS):

  • PGS is a process of certifying organic products, which ensures that their production takes place in accordance with laid-down quality standards. The certification is in the form of a documented logo or a statement.
  • pgsindia-ncof.gov.in is web based platform to simplify the process of certifying organic products in accordance with the standards laid down for organic products for export purpose. Thus it seeks to curb third party certification.
  • Implemented: by the Department of Agriculture and Cooperation under the aegis of Union Ministry of Agriculture.

Guiding Principles of PGS:

  • PGS India system is based on participatory approach, a shared vision, transparency and trust. In addition it gives PGS movement a National recognition and institutional structure.


  • Participation is an essential and dynamic part of PGS. Participation embodies the principle of collective responsibility for ensuring the organic integrity of the PGS. This collective responsibility is reflected through:
    • Shared ownership of the PGS
    • Stakeholder engagement in the development and operation process
    • Understanding of how the system works and
    • Direct communication between producers and consumers and other stakeholders

Shared Vision:

  • Collective responsibility for implementation and decision making is driven by common shared vision. All the key stakeholders (producers, facilitating agencies, NGOs, social organizations, State Governments and state agencies) support the guiding principles and goals, PGS is striving to achieve and this is achieved initially through their participation and support in the design and then by joining it. This may include commitment in writing through signing an application and pledge that includes the vision.


  • Transparency is created by having all stakeholders, including producers and consumers, aware of exactly how the guarantee system works to include the standards, the organic guarantee process (norms) with clearly defined and documented systems and how decisions are made.


  • The integrity base upon which PGS-India programme is built, is rooted in the idea that producers can be trusted and that the organic guarantee system can be an expression and verification of this trust. The foundation of this trust is built from the idea that the key stakeholders collectively develop their shared vision and then collectively continue to shape and reinforce their vision through the PGS. The idea of ‘trust’ assumes that the individual producer has a commitment to protecting nature and consumers’ health through organic production.


  • PGS India is intended to be non-hierarchical at group level. This will reflect in the overall democratic structure and through the collective responsibility of the PGS group with sharing and rotating responsibility, by engaging producers directly in the peer review of each other’s farms; and by transparency in decision making process.

National Networking:

  • PGS India while keeping the spirit of PGS intact aims to give the entire movement an institutional structure. This is achieved by networking the groups under common umbrella through various facilitating agencies, Regional Councils and Zonal Councils.
  • National Centre of Organic Farming shall be the custodian of data, define policies and guidelines and undertake surveillance through field monitoring and product testing for residues. Regional councils and facilitating agencies facilitate the groups in capacity building, training, knowledge/ technology dissemination and data uploading on the PGS website.


Among the advantages of PGS over third-party certification, identified by the government document, are:

  • Procedures are simple, documents are basic, and farmers understand the local language used.
  • All members live close to each other and are known to each other. As practising organic farmers themselves, they understand the processes well.
  • Because peer appraisers live in the same village, they have better access to surveillance; peer appraisal instead of third-party inspections also reduces costs
  • Mutual recognition and support between regional PGS groups ensures better networking for processing and marketing.
  • Unlike the grower group certification system, PGS offers every farmer individual certificates, and the farmer is free to market his own produce independent of the group.


  • PGS certification is only for farmers or communities that can organise and perform as a group within a village or a cluster of contiguous villages, and is applicable only to farm activities such as crop production, processing, and livestock rearing, and off-farm processing “by PGS farmers of their direct products”.
  • Individual farmers or group of farmers smaller than five members are not covered under PGS. They either have to opt for third party certification or join the existing PGS local group.
  • PGS ensures traceability until the product is in the custody of the PGS group, which makes PGS ideal for local direct sales and direct trade between producers and consumers.



  • In order to revive the economy from the economic slowdown, the Finance Minister has announced a slew of major changes in corporate income tax rates. This has been made through an ordinance – the Taxation Laws (Amendment) Ordinance 2019 that amends Income Tax Act of 1961 and the Finance Act of 2019.

Key provisions of the ordinance:

  • The central government slashed corporate tax rates for domestic firms from 30% to 22% and for new manufacturing companies from 25% to 15% to boost economic growth.
  • Effective corporate tax rate after surcharge and cess on this companies would be 25.17 percent. No Minimum Alternate Tax (MAT) applicable on such companies.
  • Local companies incorporated after October 2019 and till March 2023, will pay tax at 15 percent.
  • That effective tax for new companies shall be 17.01 percent, including cess and surcharge.
  • Companies enjoying tax holidays would be able to avail concessional rates post the exemption period.
  • MAT relief for those companies opting to continue paying surcharge and cess. MAT has been reduced to 15 percent from 18.5 percent for companies who continue to avail exemptions and incentives.
  • Enhanced surcharge announced in Budget 2019 will not apply on capital gains arising on sale of any security, including derivatives by foreign portfolio investors (FPI).

Pros associated with the above move:

  • Lower taxes will result in higher profit margins. This will bolster their books, and some of these companies should be able to pass on the higher margins in the form of lower product prices to consumers.
  • Lower corporate income tax rates and the resultant increase in profitability of the company will definitely prompt companies to invest more, raising their capital expenditure (capex).
  • Increase in the capacities of the company will eventually result in the increased employment opportunities for the youngsters.
  • Given the substantially lower rates would imply that many corporates will break even much ahead than what would have been the case with the earlier rates.
  • The ultimate goal of turning India into investors’ darling, demonstrating the government’s intent to walk the talk on economic management, restoring investors’ confidence and boosting sentiments and demand will be definitely meet its success point.
  • It is expected that it will give a great stimulus to ‘Make in India’, attract private investment from across the globe, improve the competitiveness of the private sector, create more jobs.
  • The reduction in corporate tax, effectively, brings India’s ‘headline’ corporate tax rate broadly at par with an average of 23% rate in Asian countries.

Impacts of the Rate Cut:

  • The latest corporate income tax will result in the revenue foregone to the tune of Rs 1.45 lakh crore a year to the government.
  • The government has set a fiscal deficit target of 3.3 percent of GDP for 2019-20. So the latest move has raised concerns of fiscal slippage, given that tax collections have been far below the budgeted estimates.

Corporate tax – A Global Scenario

  • The new corporate income tax rates in India will be comparatively lower than USA (27 percent), Japan (30.62 percent), Brazil (34 percent), Germany (30 percent) and is similar to China (25 percent) and Korea (25 percent).
  • Effective tax rate of 17 percent on newly incorporated companies in India with is almost equivalent to what corporates pay in Singapore (17 percent).

What is Revenue Foregone?

  • Foregone earnings are the difference between earnings actually achieved and earnings that could have been achieved with the absence of specific fees, expenses or lost time.


Why in News?

  • The 37th GST Council met on 20th September 2019 in Goa under the chairmanship of Union Finance Minister.

Key Recommendations:

  • Relaxations in annual returns filing for MSMEs for the financial year 2017 – 18 and 2018 – 19.
  • A committee of officers would be appointed for examining the simplification of forms for annual return and reconciliation statement.
  • Extension of the last date for filing of appeals against orders of the Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional.
  • The new return system would be introduced from April 2020 instead of the previously proposed October 2019.
  • Suitable amendments would be made to the CGST Act, UTGST Act and corresponding SGST Acts in view of the creation of the union territories of Jammu & Kashmir and Ladakh.Integrated refund system with disbursal by a single authority to be introduced from 24th September 2019.
  • The Council also took an in-principle decision to link Aadhaar with the registration of taxpayers under GST and also to examine the possibility of making the 12-digit unique identification number mandatory for claiming refunds.
  • Changes were also made to the GST rates for various goods and services.

GST Council:

  • The Goods and Services Tax Council is a constitutional body for making recommendations to the Union and State Governments on issues related to Goods and Service Tax.
  • It is chaired by the Union Finance Minister.
  • The other members are the Union State Minister of Revenue or Finance, and Ministers in-charge of Finance or Taxation of all the States.


Why in News?

  • To enhance the loan availability of exporters, and the MSME sector the Export Guarantee Corporation of India (ECGC) has launched a new scheme called ‘Nirvik’.
  • To revive the export sector, Commerce Ministry also launched the common digital platform for the issuance of certificates of origin

Nirvik Scheme:

  • If there is any loss, then ECGC provided credit guarantee of up to 60% loss approximately.
  • Now under new scheme Nirvik consumers and exporters will covered up to 90% and if there is any loss then in that case ECGC will refund 90% to the banks including principal and interest.
  • Both pre and post shipment credit will also be covered under the new scheme.
  • Banks will get up to 50 % within 30 days of complain lodge.
  • Enhanced cover will ensure that Foreign and Rupee export credit interest rates will be below 4% and 8% respectively for exporters.
  • The scheme envisages simplified procedure for settlement of claim and for provisional payment up to 50% within 30 days on production of proof of end-use of the advances in default by the Insured Bank.

Electronic Certificates of Origin (CoO):

  • This platform will be a single access point for all exporters, for all Free Trade Agreements (FTAs)/ Preferential Trade Agreements (PTAs) and for all agencies concerned.
  • As we know, for exports to countries with which India has free trade agreements (FTA), exporters have to show a certificate that the consignment originated in India.
  • With the launch of this platform, these certificates can be obtained online and all the issuing authorities will be on the same portal.
  • Certificate of Origin will be issued electronically which can be in paperless format if agreed to by the partner countries.Authorities of partner countries will be able to verify the authenticity of certificates from the website.


Why in News?

  • Last week the Houthis, a rebel Shia group of Yemen that is backed by Iran, bombed the Abqaiq plant as well as the Khurais oil field in Saudi Arabia.
  • The attack, executed by drones is the largest-ever disruption in crude oil production in Saudi Arabia, which supplies 10 per cent of global world supply and is the world’s largest crude oil exporter.

Global Impacts:

  • Saudi Aramco, the state-owned oil companysuspended the production of almost 6 million barrels per day (about 6 per cent of global oil supply) and also restricted the use of 2 mbd of spare capacity.
  • This is the largest-ever disruption in crude oil production and therefore oil prices across the world are expected to rise.

Impacts on India:

  • India imports 80 per cent of the oil it consumes, which means there are multiple ways in which the country will be impacted by this disruption.
  • The first issue is supply. India is already trying to make up for the loss of supply from Iran after US-imposed sanctions.
  • After Iraq, Saudi Arabia is India’s second-largest supplier of crude oil — it accounts for almost 17 per cent of the country’s imports.
  • Although Saudi Arabia has assured that there will be no loss of supply, if the process of restoration takes more time than anticipated, India would have to look for alternatives. This may not be easy since the global supply has been fairly volatile because of disruptions in some of the other big suppliers such as Venezuela, Libya and Nigeria.
  • India is expected to import 1.6 billion barrels of crude oil in the current financial year. So an increase in oil prices by just one dollar essentially means an increase of $1.6 billion in the import bill. That’s an additional Rs 11,500 crore at the current exchange rate.
  • But supply constraints and rising oil prices would mean that the rupee will weaken further against the dollar — that’s because, as the dollar prices of crude oil rise, India would need to buy more dollars for the same amount of oil, thus depreciating the value of the rupee vis-a-vis the dollar.
  • Rising oil prices will worsen the Indian government’s fiscal balance.
  • higher crude oil prices would also lead to higher domestic oil prices, which, in turn, will further depress the demand for all things, especially those that use oil as the primary inputsay, cars.
  • This dip in consumption demand, which is already under strain as the recent growth slowdown has shown, would likely mean lower economic activity and consequently lower revenues for the government.


Why in News?

  • The Ministry of Commerce and Industry has proposed to reduce the fees for various IPRs (Intellectual Property Rights).


  • The fee structure reduced is for both e-filing and physical filing.
  • The reduction in fees ranges from a 50% decrease to a 100% reduction (waiver of fees) for different sectors.
  • Geographical Indications have been given a 100% reduction in the fees.
  • Domestic filing for patents has increased from 22% in 2013-14 to 34% in 2018-19.
  • Awareness programmes for IP are being conducted at schools, colleges, universities, R&D institutes and industry clusters.
  • To address the issue of pendency in IP applications, the government has streamlined the process, and also increased manpower in this field.


Why in News?

  • In continuation of Finance Minister announcements to revive the export sector, Commerce Minister has launched the common digital platform for the issuance of certificates of origin and a steel import monitoring system (SIMS).

What is a certificate of origin?

  • The Certificate of Origin is used to certify that the export products are obtained, produced or manufactured in India. Currently, it is issued by various notified agencies around the country through manual processes after vetting of the rules of origin criteria as per the respective Free Trade Agreement /Preferential Trade Agreement. India has 15 FTAs/PTAs with various partner countries, under which Indian exporters avail reduced import tariffs in the destination country. The exporters are required to produce a certificate that the consignment originated in India to claim the tariff and other benefits.

Digital Certificate of Origin System:

  • The common digital platform will be a single access point for all exporters, for all Free Trade Agreements (FTAs)/Preferential Trade Agreements (PTAs) and for all agencies concerned.Exporters can register on this platform and apply for the Certificate of Origin to any of the designated agency.If the partner countries agree to this, the Certificate of Origin will be issued electronically and the authorities of partner countries will be able to verify the authenticity of certificates from the website.
  • The system provides administrative access to the Department of Commerce for reporting and monitoring purposes.

About the other New Schemes:

1.Enhanced Export Credit Insurance Scheme:

  • The minister has provided more details about the enhanced export credit insurance scheme for banks that lend working capital to exporters. The new export credit insurance scheme will be called “Nirvik”.
  • The Export Credit Guarantee Corporation (ECGC) gives a cover of 60% of the loss to banks. The new scheme will give 90% coverage of the principal and interest of the loan for pre- and post-shipment credit, and half of this will be provided in 30 days.”
  • He said claim inspection would be waived for up to ₹10 crore. For claims higher than this amount, inspection of bank documents and records by ECGC officials will be mandatory. The previous limit for document inspection was ₹1 crore.
  • The minister added that the existing premium rate would be lowered, and loans categorised into two broad categories of those below ₹80 crore and those above that amount. Loans above ₹80 crore will be further divided into those that are not for gold, jewellery or diamonds, and those that are.

2.Steel Import Monitoring System (SIMS).

  • The Commerce and Industry Ministry on Monday launched Steel Import Monitoring System (SIMS) which will provide advance information about steel import to government and other stakeholders, including producers and consumers, to have effective policy interventions.
  • In this system, the importers of specified steel products will register in advance on the web portal of SIMS, providing necessary information.
  • Commerce and Industry Minister said that registration will be online and automatic, and no human intervention will be required.The importer can apply for registration not earlier than 60th day and not later than 15th day before the expected date of arrival of import consignment.
  • The automatic registration number thus granted shall remain valid for a period of 75 days.The information about the steel imports provided by the importers on SIMS will be monitored by the steel ministry.
  • There has been complaints from officials that collecting data on what grade of steel was being imported, how much was being imported, from where, and what the domestic market potential is quite difficult.
  • The government wants to assure the export community that the SIMS is not a licensing mechanism, and that nobody will be stopped from importing.


Why in News?

  • Finance Minister Nirmala Sitharaman has announced a fresh set of measures worth around 70,000 crore rupees to boost exports and housing sector.
  • The government will provide a 10,000 crore rupees special window with an aim to help complete ongoing affordable and middle-income housing projects.


  • As part of the third stimulus package for the economy, Finance Minister unveiled a set of stimulus measures to boost exports and the housing sector.
  • New Booster dose for the economy comes at a time when the country had reported its weakest growth in more than six years at 5 per cent in the June quarter.
  • The previous low in GDP growth was recorded at 4.3 percent in Jan-Mar quarter of 2012-13. The economic slowdown has particularly been harsh on the automobile sector with domestic passenger vehicle sales having skidded for the 10th consecutive month in August, registering a 31.57 percent decline.
  • The International Monetary Fund (IMF) said that Indian economy was “much weaker” than expected. This was attributed to the corporate and environmental regulatory uncertainty and lingering weakness in some non-banking financial companies.
  • The new package of measures for exports sector came in six different silos and covered steps that would address comprehensively tax and duties refunds for exporters; improve credit flow to the export sector and launch of a special free trade agreement (FTA) utilisation mission. India will also now host annual mega shopping festivals in 4 places.

Steps to Boost Exports:

  • Government announced the introduction of a new attractive scheme for Remission of Duties or Taxes on Export Product (RoDTEP) to replace the existing Merchandise Exports from India Scheme (MEIS) from January 2020 and revised priority sector lending norms for export credit that will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit under priority sector.
  • It was made clear that RoDTEP would span all the sectors and the revenue foregone could be about Rs 50,000 crore.
  • The duty remission will vary from sector-to-sector. With the introduction of RoDTEP, all the uncertainty over continuation of MEIS is over.

Steps to Boost Housing Sector:

  • New measures to boost housing sector were brought in owing to the fact that nearly 3.5 lakh dwelling units (non NPA and non NCLT) in the country are plagued with last mile funding problem.
  • Rs 20,000 crore fund (Rs 10,000 crore from Government and roughly same amount from outside investors) would be set up to provide last mile funding for affordable and middle-income housing.
  • This fund will be used to support projects that are non-NPA and non-NCLT projects and the objective is to focus on construction of unfinished units.
  • The fund would be set up as a Category-II AIF trust and would be professionally run with experts from housing and banking sector.
  • It was made clear that the Government was “open” to bring in sovereign wealth funds as investors. Besides the Government, the other investors who are likely to contribute to the fund include LIC and other institutions and private capital from banks and DFIs.
  • External Commercial Borrowing (ECB) guidelines will be relaxed to facilitate financing of home buyers who are eligible under the PMAY, in consultation with RBI.
  • This will be in addition to the existing norms for ECB for affordable housing.
  • Also, the Finance Minister came up with some good news for government servants, stating that interest rates on house building advance will be lowered and linked with the 10-year G-sec yields.


Why in News?

  • The government has imposed a minimum onion export price of 850 US dollars per tonne to curb its exports and help bring down Domestic Prices.
  • A notification to this effect was issued by the Directorate General of Foreign Trade. This is the first time that a MEP has been imposed on onions this year.
  • During the financial year 2018-19, India had exported 21.82 lakh tonnes of onion.

What is Minimum Export Price?

  • Minimum Export Price (MEP) is the price below which an exporter is not allowed to export the commodity from India.
  • MEP is imposed in view of the rising domestic retail/wholesale price or production disruptions in the country.
  • MEP is a kind of quantitative restriction to trade.
  • Government fixes MEP for the selected commodities with a view to arrest domestic price rise and augment domestic supply.
  • This is intended to be imposed for short durations and is removed when situations change.
  • The removal of MEP helps farmers / exporters in realising better and remunerative prices and would also help in earning valuable foreign exchange for the country.

What Does Such Imposition Mean?

  • Simply put, henceforth exports will not be allowed if the consignments are priced below $ 850 per tonne. The steep MEP will, in a way, stop all outbound shipment of onions from India.

Reason Behind the Imposition:

  • This move comes after the state-owned MMTC Ltd had floated a tender for import of onions from “Pakistan, Egypt, China, Afghanistan or any other origin”, triggering criticism from farmers in Maharashtra.
  • The inclusion of Pakistan in the tender list had evoked extreme criticism from various quarters.
  • The MMTC, however, issued a fresh corrigendum to its tender, excluding Pakistan as the country of origin, thereby making bids from the neighbouring country ineligible.
  • Prices in mandis of Maharashtra — the largest onion Growing State which accounts for over 33 per cent of national produce — has been on the rise since April.
  • Imposition of the MEP are steps taken by the Centre to prevent further rise in prices.


Why in News?

  • Kashmir’s famed apple is battling to get exported outside the State this year as militants are campaigning against the fruit’s trade.
  • The government is planning to procure almost 12 lakh metric tonnes of apple this season, under the MISP, with the help of the National Agriculture Cooperative Marketing Federation of India (NAFED).

Market Intervention Price Scheme:

  • MIP is a price support mechanism implemented on the request of State Governments for procurement of perishable and horticultural commodities in the event of a fall in market prices.
  • The Scheme is implemented when there is at least 10% increase in production or 10% decrease in the ruling rates over the previous normal year.
  • MIP works in a similar fashion to Minimum Support Price based procurement mechanism for food grains, but is an adhoc mechanism.
  • Its objective is to protect the growers of these horticultural/agricultural commodities from making distress sale in the event of bumper crop during the peak arrival period when prices fall to very low level.
  • Thus, it provides remunerative prices to the farmers in case of glut in production and fall in prices.


  • Proposal of MIP is approved on the specific request of State/UT Government, if the State/UT Government is ready to bear 50% loss (25% in case of North-Eastern States), if any, incurred on its implementation.
  • Further, the extent of total amount of loss shared is restricted to 25% of the total procurement value which includes cost of the commodity procured plus permitted overhead expenses.

Implementation of MIS:

  • The Department of Agriculture & Cooperation is implementing the scheme.
  • Under MIP, funds are not allocated to the States.
  • Instead, central share of losses as per the guidelines of MIP is released to the State Governments/UTs, for which MIP has been approved, based on specific proposals received from them.
  • Under the Scheme, a pre-determined quantity at a fixed Market Intervention Price (MIP) is procured by NAFED as the Central agency and the agencies designated by the state government for a fixed period or till the prices are stabilized above the MIP whichever is earlier.
  • The area of operation is restricted to the concerned state only.
  • The MIS has been implemented in case of commodities like apples, kinnoo/malta, garlic, oranges, galgal, grapes, mushrooms, clove, black pepper, pineapple, ginger, red-chillies, coriander seed etc.



  • NAFED has been tasked with purchasing all the apples that growers bring to sell at mandis in the Kashmir Valley.


  • The National Agricultural Cooperative Marketing Federation of India (NAFED) has not bought a single kilogram of apples for the last three decades or more.
  • This trade was always in private hands and the government didn’t think it necessary to intervene.


  • A bumper crop, for which there would hardly be any private buyers with all the current movement restrictions, makes it all the more challenging.
  • There is no MSP for apple.
  • The state government will fix the procurement prices for different grades (A, B and C) and varieties.
  • It is expected that we will pay 5 per cent more than the market price prevailing last year.
  • The total cost of procurement operations is tentatively assessed at Rs 5,000 crore.
  • Apple harvesting is now on mainly in HP, where an estimated 50-60 per cent of the fruit in the main belt of Shimla, Narkanda, Sainj and Rohru are still on the trees.
  • Currently, Royal Delicious apple is fetching an average modal price of Rs 3,300 per quintal in Shimla, as against Rs 7,800-7,900 at this time last year. That has mainly to do with a bigger crop, likely in Kashmir as well.

Why Such Move:

Kashmir unrest

  • Apple cultivation is the mainstay of Kashmir’s economy with revenue of around Rs1,200 crore a year, and has been hit due to the clampdown post abrogation of the state’s special status guaranteed under Article 370 of the Constitution.
  • The move is aimed at helping farmers, and comes in the backdrop of New Delhi imposing long-pending retaliatory tariffs on 29 US products.
  • Key items imported by India from the US include almond and fresh apples worth $645 million and $165 million, respectively.


  • Jammu & Kashmir accounts for about 18 lakh tonnes (lt) out of India’s total annual apple production of 23-24 lt, which also includes 4.5-5 lt from Himachal Pradesh and 50,000-60,000 tonnes from Uttarakhand.
  • This year, the country’s output is projected to touch 26 lt due to good snowfall, with J&K alone harvesting 20 lt or so.

What is National Agriculture Cooperative Marketing Federation of India?

  • The objectives of the NAFED shall be to organize, promote and develop marketing, processing and storage of agricultural, horticultural and forest produce, distribution of agricultural machinery, implements and other inputs, undertake inter-state, import and export trade, wholesale or retail as the case may be and to act and assist for technical advice in agricultural, production for the promotion and the working of its members, partners, associates and cooperative marketing, processing and supply societies in India.
  • NAFED is the central agency assigned to procure directly from farmers and is expected to play a pivotal role in helping double farmers’ income by 2022.

Apple Economy:

  • J&K apple production contributes 10 per cent to the total state income of $20 billion.
  • India is the fifth largest producer of apples in the world, even though its share in global apple production is just 3 per cent.
  • More than two thirds of the National Apple Production comes from the Valley of Kashmir.
  • Absence of Logistics and Infrastructure
    • The complete concentration of production and area under apple cultivation is matched only by a complete absence of infrastructure; only 0.3 per cent of national storage capacity is in the state.
    • There are just 36 cold storages in J&K out of the 6,000 in the country. In addition to this, there is no logistics infrastructure.

About Apple:

  • Around 20 Lakh tonnes of Apple is produced in India every year.
  • The top apple producing states of India are Jammu & Kashmir, Himachal Pradesh, Uttarakhand & Arunachal Pradesh with their respective shares of 70%, 21.5%, 6.4% and 1.6%.
  • Further, apple is also produced in Mizoram, Sikkim, Tamil Nadu and Nagaland also. Key apple varieties include: Michal, Mollies Delicious, Maayan, Anna, Chaubattia Anupam, Rich-e-Red, Gala, Firdous, Lal ambri , Kinnauri Apple etc.


Why in News?

  • The Prime Minister dedicated to the nation India’s second riverine Multi-Modal terminal built at Sahibganj in Jharkhand
  • This is the second of the three Multi-Modal Terminals being constructed on river Ganga under Jal Marg Vikas Project (JMVP).

Jal Marg Vikas Project (JMVP):

  • Jal Marg Vikas Project (JMVP) for capacity augmentation of navigation on National Waterway-1 (NW-1) is being implemented with the technical assistance and investment support of the World Bank.
  • One of the major problems for commercially viable and safe navigation on NW-1 is low depth upstream of Farakka due to low discharges from tributaries and difficult hydro morphological characteristics of river Ganga.
  • A pilot study on the Allahabad-Ghazipur stretch was commissioned by Inland Waterways Authority of India (IWAI) to find solutions to this problem.
  •  Based on the findings of this study, a proposal for development of NW-1 was taken up for seeking technical assistance and investment support from the World Bank
  • Finance Minister announced JMVP in Budget Speech in July 2014, to enable commercial navigation of at least 1500 tonnes vessels in Ganga.
  • States that come under this project are: Uttar Pradesh, Bihar, Jharkhand, West Bengal

Significance of the Project:

  • The alternative mode of transport will be Environment-Friendly and Cost-Effective. The project will contribute to bringing down the logistics cost in the Country.
  • Mammoth Infrastructure development like multi-modal and inter-modal terminals, rollon –Roll off (Ro-Ro) facilities, ferry services, navigation aids.
  • Socio-economic impetus; huge Employment Generation


Why in News?

  • An international conference ANGAN (Augmenting Nature by Green Affordable New-habitat) focussed on Energy Efficiency in Building Sector
  • The Conference is being organised by the Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India in collaboration with GIZ under the Indo German Technical Cooperation.


  • The International Conference will provide a platform to deliberate on interdependence between organizations, systemic sustainability and feedback loops for better resource efficiency.Given the formidable challenge of providing adequate energy of desired quality to the consumers at reasonable costs, improving the efficiency in high energy consumption sectors like buildings have become important component of our integrated energy policy.
  • Due to lack of awareness and knowledge about latest technologies, financial assistance, suppliers and purchase of energy-efficient equipment, etc. efforts on energy efficiency and conservation in this sector have been moderate and therefore require greater push.
  • This event aims to provide thrust in this direction so as to address such challenges faced by the stakeholders.


  • The BEE is a statutory body under the Ministry of Power, Government of India. It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.
  • BEE coordinates with designated consumers, designated agencies, and other organizations to identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the Energy Conservation Act.


Why in News?

  • To achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs. 100 lakh crore) over these years on infrastructure.
  • To achieve this task, a Task Force under the chairmanship of Secretary (DEA) has been constituted by Union Finance Minister to draw up a National Infrastructure Pipeline for each of the years from FY 2019-20 to FY 2024-25.


  • In the past decade (FY 2008-17), India invested about $1.1 trillion on infrastructure.
  • The challenge is to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy.
  • Hon’ble Prime Minister in his Independence Day speech highlighted that Rs.100 lakh crore would be invested on infrastructure over the next five years.
  • Infrastructure projects will include social and economic infrastructure projects. To implement an infrastructure program of this scale, it is important that projects are adequately prepared and launched.

National Infrastructure Pipeline:

  • The National Infrastructure Pipeline would include greenfield and brownfield projects costing above Rs 100 crore each.
  • Other qualifications for inclusion in the pipeline for the current year will include availability of a DPR, feasibility of implementation, inclusion in the financing plan and readiness/ availability of administrative sanction.
  • Each Ministry/ Department would be responsible for monitoring of projects so as to ensure their timely and within-cost implementation.
  • The Task Force will also enable robust marketing of the pipeline of projects requiring private investment through the India Investment Grid (IIG), National Investment & Infrastructure Fund (NIIF), etc.


Why in News?

  • Union Minister of Food Processing Industries today inaugurated the first Mega Food Park in Telangana promoted by M/s Smart Agro Food Park Pvt. Ltd. at Village Lakkampally, Nandipet Mandal of Nizamabad District, Telangana state.

Mega Food Park:

  • The Mega Food Park will leverage an additional investment of about Rs. 250 crores in 22 food processing units in the park and generate a turnover of about Rs. 14000 crores.
  • The Park will also provide direct and indirect employment to 50,000 youth and benefit about 1 lakh farmers.
  • Mega Food parks shall facilitate doubling of farmer’s income by 2022 which is a primary agenda of Govt in the field of agriculture.
  • Telangana government also providing financial support to farmers, ultimately farmers will be benefitted.


  • Mega Food Parks shall further complement the Govt’s scheme by reducing post-harvest losses and hedging the farmer’s risk.
  • Mega Food Park shall provide gainful employment to women and hence help support their livelihood.
  • The Mega Food Park Scheme is being implemented in order to give a major impetus by adding value and reducing food wastage at each stage of the supply chain with particular focus on perishables.
  • Mega Food Parks create modern infrastructure facilities for food processing along the value chain from farm to market with strong forward and backward linkages through a cluster-based approach.
  • Common facilities and enabling infrastructure are created at Central Processing Centre and facilities for primary processing and storage is created near the farm in the form of Primary Processing Centers (PPCs) and Collection Centers (CCs).
  • Under the Scheme, Government of India provides financial assistance upto Rs. 50.00 Crore per Mega Food Park project.

The Smart Agro Mega Food Park:

  • It will benefit the people of Nizamabad District and the people of nearby Districts of Nirmal, Jagtial, RajannaSircilla Kamareddy of Telangana &Nanded district of Maharashtra state.
  • This Mega Food Park has been set up in 78 acres of land at a cost of Rs. 108.95 crore.
  • The facilities being created by the developer at Central Processing Centre (CPC) of this Mega Food Park include
    • Raw Material Warehouse of 5000 MT,
    • Finished Good Warehouse- 5000 MT,
    • Multi Commodity Cold Storage-5000 MT,
    • Deep Freeze Store-500 MT,
    • Turmeric-Curcumin,
    • Oleoresin Extraction unit-5 MT/Day,
    • QC Laboratory and other related food processing facilities.
  • The Park also has a common administrative building for office and other uses by the entrepreneurs and 3 PPCs at Medak, Gouraram and Nandipet having facilities for primary processing and storage near the farms.
  • The modern infrastructure for food processing created at Park will benefit the farmers, growers, processors and consumers of Telangana and adjoining areas.


Why in News?

  • The RBI has made it mandatory for all banks to link floating rate loans — to retail customers and loans to micro, small and medium enterprises (MSME) — to an external benchmark.
  • Some banks have already started to link home and auto loan rates to the repo rate, which is an external benchmark.
  • Banks can choose from one of the four external benchmarks — repo rate, three-month treasury bill yield, six-month treasury bill yield or any other benchmark interest rate.
  • The interest rate under external benchmark shall be reset at least once in three months.

Why Such Move?

  • At present, interest rates on loans are linked to a bank’s marginal cost of fund-based interest rate (MCLR).
  • It has been observed that due to various reasons, the transmission of policy rate changes to the lending rate of banks under the current MCLR framework has not been satisfactory.
  • The RBI, therefore, has issued a circular making it mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark effective October 1, 2019.
  • The move is aimed at faster transmission of monetary policy rates.

Repo wasn’t Useful:

  • Even before RBI had made it mandatory, several banks had launched repo-linked lending rate products.
  • This was done in an effort to ensure faster transmission of policy rate cuts to borrowers.
  • The repo (or repurchase) rate is the rate at which the Reserve Bank of India (RBI) lends money to other banks.
  • Hence, cuts in the repo rate are meant to lead to cuts in home loan and other lending rates as banks get to borrow money cheaply from the RBI.
  • By pegging the rate to an external benchmark RBI is hoping for a faster transmission of rate cuts than has happened so far under the MCLR system.


  • MCLR (Marginal Cost of funds-based Lending Rate) replaced the earlier base rate system to determine the lending rates for commercial banks.
  • RBI implemented MCLR on 1 April 2016 to determine rates of interests for loans.
  • It is the minimum interest rate that a bank can lend at.
  • MCLR is a tenor-linked internal benchmark, which means the rate is determined internally by the bank depending on the period left for the repayment of a loan.
  • MCLR is closely linked to the actual deposit rates and is calculated based on four components: the marginal cost of funds, negative carry on account of cash reserve ratio, operating costs and tenor premium.


Why in News?

  • The Human Resource Development Ministry has awarded the status of Institute of Eminence to the IIT-Madras, the IIT-Kharagpur, Delhi University, Benares Hindu University and the University of Hyderabad.

Scheme & Objective:

  • Institutions of Eminence scheme has been launched in order to implement the commitment of the Government to empower the Higher Educational Institutions and to help them become world-class teaching and research institutions.
    • To provide for higher education leading to excellence and innovations in such branches of knowledge as may be deemed fit at post-graduate, graduate and research degree levels and award degrees, diplomas and other academic distinction
    • To engage in areas of specialization to make distinctive contributions to the objectives of the university education system wherein the academic engagement is clearly distinguishable from programmes of an ordinary nature.
    • To develop the capacity of the students and the researchers to compete in the global tertiary education marketplace through the acquisition and creation of advanced knowledge in those areas
    • To provide for high-quality teaching and research and for the advancement of knowledge and its dissemination through various research programmes undertaken in-house by substantial number of full-time faculty and research scholars in diverse disciplines
    • To pay special attention to teaching and research in unique and emerging areas of knowledge, including interdisciplinary areas, which are regarded as important for strategic needs of the country but are not being pursued by conventional or existing institutions so far, and award degrees, diplomas and other academic distinctions.
    • To aim to be rated internationally for its teaching and research as a top hundred Institution in the world over time.


Why in News?

  • Government of India launches ‘Eat Right India’ to tackle lifestyle diseases.

Need for Such Campaign:

  • India is passing through an epidemiological shift from communicable to non-communicable diseases, and the burden of diet-related diseases such as diabetes, hypertension, and obesity is rising rapidly.
  • The new “food systems approach” judiciously combines the regulatory and capacity building measures with consumer empowerment initiatives

About Eat Right India:

  • Eat Right India’, built on two broad pillars of ‘Eat Healthy’ and ‘Eat Safe’, aims to engage, excite and enable citizens to improve their health and well-being.
  • Led by FSSAI, it is a collective effort to make both the demand and supply-side interventions through the engagement of key stakeholders.
  • It is a part of the vision of the Hon. Prime Minister Shri Narendra Modiji, that the month of September is being celebrated all across the country as “Poshan Maah” (Nutrition Month) to sensitize the public towards healthy eating, address the twin issues of malnutrition/undernutrition and problem of obesity in some sections of the population, and also intensifying the campaign towards a ‘Malnutrition Free India.
  • This movement is aligned with the Government’s flagship public health programmes such as POSHAN Abhiyaan, Ayushman Bharat Yojana and Swachh Bharat Mission to lead us to the New India, which our Prime Minister wishes to deliver to all citizens by 2022.


  • To improve public health in India and combat negative nutritional trends to fight lifestyle diseases.


  • The strength of the ‘The Eat Right Movement’ lies in its holistic and collaborative approach, with stakeholders on both the demand and supply-side joining to make a difference through some clearly identified steps.
  • On the demand side, the Eat Right Movement focuses on empowering citizens to make the right food choices.
  • On the supply side, it nudges food businesses to reformulate their products, provide better nutritional information to consumers and make investments in healthy food as responsible food businesses.
  • Social and behavioural change: Eat Right India movement is a crucial trigger for the much needed social and behavioural change.

The Eat Right Movement’ brings together three ongoing initiatives of FSSAI:

  1. Safe and Nutritious Food Initiative, focused on social and behavioural change around food safety and nutrition at home, school, workplace and on-the-go;
  2. The Eat Healthy Campaign focused on reduction of high fat, sugar and salt foods in the diet; and
  3. Food Fortification, focused on promoting five staple foods-wheat flour, rice, oil, milk and salt that are added with key vitamins and minerals to improve their nutritional content.

Other Measures:

  • Government has prescribed a limit for Total Polar Compounds (TPC) at 25% in cooking oil to avoid the harmful effects of reused cooking oil.
  • Standards for five fortified staples -wheat flour, rice, oil, milk and salt to reduce large-scale deficiencies of vitamins and minerals have been notified, in addition to standards for health supplements, nutraceuticals, prebiotics and probiotics products.
  • To facilitate informed consumer choices Regulations on Advertising and Claims and mandatory menu labelling has been notified.
  • In addition, labelling provisions have been made for appropriate use of sweeteners for children and pregnant women.
  • To reach the target of Trans-fat Free India by 2022, regulations to reduce trans-fat to less than 2% in all oils, fats and food products are in place.
  • Robust material in the form of a Pink Book, Yellow Book, DART Book, informative videos, are in place, and can be accessed through a video library on FSSAI’s website.
  • First ever state-of-the-art National Food Laboratory of Delhi, NCR and to strengthen the Eat Right Movement a network of food testing laboratories is being establish.

WHO on Eat Right India:

  • The Eat Right campaign is a true example of multi-sectoral collaborative approach that WHO has been advocating for to address non-communicable diseases such as heart diseases, high blood pressure, diabetes, obesity, malnutrition.

About FSSAI:

  • Food Safety and Standards Authority of India (FSSAI) is an autonomous statutory body established under Food Safety and Standards Act, 2006 which consolidates various acts & orders that have hitherto handled food related issues in various Ministries and Departments.
  • FSSAI has been created for laying down science-based standards for articles of food and to regulate their manufacture, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption.
  • Establishment of the Authority
  • Ministry of Health & Family Welfare, Government of India is the Administrative Ministry for the implementation of FSSAI.


Why in News?

  • The Central Board of Direct Taxes (CBDT) has entered into 26 Advance Pricing Agreements (APAs) in the first 5 months of the financial year (April to August, 2019).
  • Out of these 26 APAs, 1 is a BAPA entered into with the United Kingdom and the remaining 25 are Unilateral Advance Pricing Agreements (UAPAs).


  • An advance pricing agreement (APA) is an ahead-of-time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology (TPM) for a set of transactions at issue over a fixed period of time.

Bilateral and Multilateral APAs:

  • Bilateral APAs (BAPA) are those that also include agreements between the taxpayer and one or more foreign tax administrations under the authority of the mutual agreement procedure (MAP) specified in Income Tax Treaties.
  • The taxpayer benefits from such agreements since they are assured that income associated with covered transactions is not subject to Double Taxation.


  • The progress of the APA scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime.
  • The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.


Why in News?

  • The Cabinet Committee on Economic Affairs has given its approval for fixing higher ethanol price derived from different raw materials under the EBP Programme for the forthcoming sugar season 2019-20 during ethanol supply year from 1st December 2019 to 30th November 2020.

What is Ethanol?

  • Ethanol is basically alcohol of 99%-plus purity, which can be used for blending with petrol. The normal rectified spirit used for potable purposes has only 95% alcohol content.
  • Both ethanol (also called anhydrous alcohol) and rectified spirit are produced mainly from molasses, a by-product of sugar manufacture.
  • Mills typically crush cane with a total fermentable sugars (TFS) content of about 14%. Much of this TFS — sucrose plus so-called reducing sugars (glucose and fructose) — gets crystallised into sugar.
  • The un-crystallised, non-recoverable part goes into what is called ‘C’ molasses. The latter, constituting roughly 4.5% of the cane, has a TFS of 40%. Every 100 kg of TFS, in turn, yields 60 litres of ethanol.
  • Thus, from one tonne of cane, mills can produce 115 kg of sugar (at 11.5% recovery) and 45 kg of molasses (18 kg TFS) that gives 10.8 litres of ethanol.
  • But rather than produce sugar, mills can also ferment the entire 14% TFS in the cane. In that event, they would end up making 84 litres of ethanol and zero kg of sugar. In between these two extreme cases, there are intermediate options as well, where the cane juice does not have to be crystallised right till the final ‘C’ molasses stage.
  • The molasses can, instead, be diverted after the earlier ‘A’ and ‘B’ stages of sugar crystal formation. Mills, then, would produce some sugar, as opposed to fermenting the whole sugarcane juice into ethanol.
  • If ethanol is manufactured using ‘B’ heavy molasses (7.25% of cane and with TFS of 50%), around 21.75 litres will get produced along with 95 kg of sugar from every 1 tonne of cane.

About Ethanol Blended Petrol Programme:

  • Ethanol Blended Petrol programme was launched in 2003 on a pilot basis and has been subsequently extended to all states & UTs except Andaman & Nicobar and Lakshadweep Islands.
  • The programme sought to promote the use of alternative and environment friendly fuels and to reduce import dependency for energy requirements.
  • The government has been notifying the administered price of ethanol since 2014.
  • India has set a target of 10 percent ethanol blending in petrol by 2022.
  • Government has notified administered price of ethanol since 2014. For the first time during 2018, differential price of ethanol based on raw material utilized for ethanol production was announced by the Government.
  • These decisions have significantly improved the supply of ethanol thereby ethanol procurement by Public Sector OMCs has increased from 38 crore litre in ethanol supply year 2013-14 to estimated over 200 crore litre in 2018-19.
  • With a view to limit sugar production in the Country and to increase domestic production of ethanol, Government has taken multiple steps including, allowing diversion of B heavy molasses and sugarcane juice for ethanol production.
  • As the ex-mill price of sugar and conversion cost have undergone changes, there is a need to revise the ex-mill price of ethanol derived from different sugarcane based raw materials.
  • There is also a demand from the industry to include sugar and sugar syrup for ethanol production to help in solving the problem of inventory and liquidity with the sugar mills.


Why in News?

  • Banking details of Indians with accounts in Switzerland will be available to tax authorities as the automatic exchange of information regime kicks off between the two countries.
  • In 2016, India and Switzerland had signed an information-sharing deal on bank accounts, which was to come in effect from September 2019.
  • Both countries intend to start collecting data in accordance with the global AEOI standard in 2018 and to exchange it from 2019 onwards.


  • This automatic exchange of information (AEOI) is to be carried out under the Common Reporting Standard (CRS), the global reporting standard for such exchange of information.
  • It takes care of aspects such as confidentiality rules and data safeguards.
  • The CRS has been developed by the Organisation for Economic Cooperation and Development (OECD).
  • Under the agreement, India will not receive information on bank accounts prior to 2018.
  • Under the agreement both jurisdictions will inform each other of any relevant developments in respect to the implementation of the OECD Common Reporting Standard in their respective domestic laws.
  • Each jurisdiction confirms that it has informed the other jurisdiction about the modalities made available to persons making a voluntary disclosure of their Financial Assets.

Benefits of the Regime:

  • In 2018, data from Zurich-based Swiss National Bank (SNB) had shown that after declining for three years, money parked by Indians in Swiss Banks rose 50 per cent to CHF (Swiss Franc) 1.02 billion (Rs 7,000 crore) in 2017 over the previous year.
  • The step is likely to shed more light on the wealth Indians have stashed away in Swiss bank accounts, for so long governed by strict local rules of secrecy.
  • It is a significant step in the government’s fight against black money and the era of “Swiss bank secrecy” will finally be over.


Why in News?

  • The Steering Committee on Fintech related issues constituted by the Ministry of Finance, Department of Economic Affairs, submitted its Final Report.

Fintech Companies:

  • Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. ​​​
  • At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.
  • Fintech, the word, is a combination of “financial technology”.
  • When fintech emerged in the 21st Century, the term was initially applied to the technology employed at the back-end systems of established financial institutions.
  • Fintech now includes different sectors and industries such as education, retail banking, fundraising and non-profit, and investment management to name a few.


  • The report outlines the current landscape in the Fintech space globally and in India, studies the various issues relating to its development and makes recommendations focusing on how fintech can be leveraged to enhance financial inclusion of MSMEs.
  • The Committee report also identifies application areas and use cases in Governance and financial services and suggests regulatory upgrades enabling fintech innovations.
  • The Committee has recommended that the RBI may consider development of a cash-flow based financing for MSMEs.
  • It has also recommended that Insurance companies and lending agencies to be encouraged to use drone and remote sensing technology for crop area, damage and location assessments to support risk reduction in insurance/lending business.
  • The Committee has highlighted the positive impact of Fintech innovations on sectors such as Agriculture and MSMEs.
  • And it has recommended NABARD to take immediate steps to create a credit registry for farmers with special thrust for use of fintech along with core banking solutions (CBS) by agri-financial institutions, included Cooperative societies.
  • The Committee recommends a special drive for modernisation and standardisation of land records by setting up a dedicated National Digital Land Records Mission based on a common National Land Records Standards with involvement of State Land and Registration departments.
  • The Committee also recommends a comprehensive legal framework for consumer protection be put in place early keeping in mind the rise of fintech and digital services.
  • It has also recommended adoption of Regulation technology (or RegTech) by all financial sector regulators to develop standards and facilitate adoption by financial sector service providers to adopt use-cases making compliance with regulations easier, quicker and effective.
  • Similarly, it has also recommended that financial sector regulators develop an institutional framework for specific use-cases of Supervisory technology (or SupTech), testing, deployment, monitoring and evaluation.


Why in News?

  • From September 1, India will start receiving information on all financial accounts held by Indian residents in Switzerland, for the year 2018.
  • In a tweet on August 31, the Income Tax Department said: “India will receive information of the calendar year 2018 in respect of all financial accounts held by Indian residents in Switzerland. This will be a significant step in the Government’s fight against black money as the era of Swiss bank secrecy will finally be over.”


  • The Income Tax department’s announcement follows a meeting between Switzerland’s Nicolas Mario Luscher, Deputy Head of Tax Division, State Sectt for International Finance, with Revenue Secretary Ajay Bhushan Pandey and senior officials of the Central Board of Direct Taxes (CBDT), on August 29-30.
  • However, this is not a new measure. In 2016, India and Switzerland had signed an information-sharing deal on bank accounts, which was to come in effect from September 2019.
  • In November 2016, the Embassy of India to Switzerland in a statement had said: “Switzerland and India signed a joint declaration on the introduction of the automatic exchange of information (AEOI) in tax matters on a reciprocal basis. Both countries intend to start collecting data in accordance with the global AEOI standard in 2018 and to exchange it from 2019 onwards.”
  • This automatic exchange of information (AEOI) is to be carried out under the Common Reporting Standard (CRS), the global reporting standard for such exchange of information, which takes care of aspects such as confidentiality rules and data safeguards.
  • The CRS has been developed by the Organisation for Economic Cooperation and Development (OECD).
  • Under the agreement, India will not receive information on bank accounts prior to 2018.
  • According to the Indian Embassy statement, under the agreement, “both jurisdictions will inform each other of any relevant developments in respect to the implementation of the OECD Common Reporting Standard in their respective domestic laws.
  • Each jurisdiction confirms that it has informed the other jurisdiction about the modalities made available to persons making a voluntary disclosure of their financial assets for a smooth transition to the system of automatic exchange of information.”
  • The step is likely to shed more light on the wealth Indians have stashed away in Swiss bank accounts, for so long governed by strict local rules of secrecy. In 2018, data from Zurich-based Swiss National Bank (SNB) had shown that after declining for three years, money parked by Indians in Swiss Banks rose 50 per cent to CHF (Swiss Franc) 1.02 billion (Rs 7,000 crore) in 2017 over the previous year.



  • Shifting gears in the transition to electric vehicles (EVs), the NITI Aayog, in May this year, proposed to ban the sale of all internal combustion engine (ICE) powered three-wheelers post March 2023.It also suggested that all new two-wheelers below 150cc sold after March 2025 should be electric.
  • In consonance with these proposals, the Union Budget 2019-2020 announced tax incentives for early adopters. Even as the automobile industry had objected to the think-tank’s proposal and called for a practical approach in framing electric vehicle-related policies, there has been the worry that EVs are still not financially viable because of various costs associated with their manufacture and use.

Cost Structures of Conventional Vehicles and Electric Vehicles:

  • The portion of the costs of the drivetrain of EVs — the system in a motor vehicle which connects the transmission to the drive axles — in comparison to the cost of the entire vehicle is four percentage points lower when compared to ICE vehicles.
  • This is primarily due to less parts in the electric drivetrain. However, the battery pack takes up nearly half the cost of an electric vehicle. For any meaningful reduction in the physical value of EVs, the cost of battery packs needs to reduce significantly.

Components of A Battery Pack and How Much Do They Cost?

  • The predominant battery chemistry used in EVs is lithium-ion batteries (Li-ion). No new technologies are on the horizon for immediate commercial usage.
  • The cost of the materials or key-components of the battery, namely the cathode, anode, electrolyte, separator, among others, contribute the most (60%) to the total cost. Labour charges, overheads and profit margins account for the rest.
  • Labour is a relatively minuscule component of the overall cost. Any reduction in the cost of the battery pack will have to come from a reduction in materials cost or the manufacturing overhead.
  • The price of these battery packs has consistently fallen over the past few years. This decrease is in part due to technological improvements, economies of scale and increased demand for lithium-ion batteries. Fierce competition between major manufacturers has also been instrumental in bringing down prices.
  • Given that raw materials account for 60% of the cost of the battery pack, the room for further cost reduction is rather limited.

Where Does India Stand on EV Adoption?

  • In India, EV adoption will be driven by two-wheelers rather than cars in high numbers on because India’s mobility market is driven more by two wheelers. According to the NITI Aayog, 79% of vehicles on Indian roads are two-wheelers.
  • Three-wheelers and cars that cost less than ₹10 lakh account for 4% and 12% of the vehicle population, respectively.
  • Two-wheelers will also need smaller batteries when compared to cars and hence the overall affordable cost. India needs to manufacture Li-ion cells in-house. Now, cells are imported and “assembled” into batteries. Setting up a Li-ion manufacturing unit requires high capital expenditure. But battery manufacturing in India is expected to grow as electric vehicles grow.

Are EV Vehicles Completely Environment Friendly?

  • In conventional ICEs, petrol or diesel fuels the engine. However, in EVs, batteries are not the fuel; electrons supplied by the battery fuel the vehicle. The battery is a device that stores electrons/energy which is sourced from electricity.
  • Presently, most of India’s electricity is generated using conventional sources. In 2018-19, over 90% of India’s electricity was generated from conventional sources, including coal, and around 10% was produced from renewable sources such as solar, wind and biomass. While the rate of electricity generated from renewable sources has increased over the years, more needs to be done for their adoption.
  • This is because the EV-charging infrastructure needs to be powered through renewable sources to make it truly sustainable.


Why in News?

  • The Centre’s recently announced 100% foreign direct investment (FDI) in the coal sector.


  • India is one of the largest importers of thermal coal. Government allowing 100% FDI in coal mining will attract global miners. This will result in FDI inflow along with updated technology, and increase India’s coal production.
  • It is believed that the Centre’s announcement allowing 100% foreign direct investment (FDI) in the coal sector should enhance Coal India Limited’s (CIL) competitiveness and efficiency.
  • 100% FDI in mining is believed to send a positive signal to global investors and give a significant push to the economy.
  • Increased mining will also lower “avoidable imports of coal that India has to make due to the prevalent demand-supply gap.


  • It is opined that the government has taken a slew of measures, but more needs to be done.
  • The FDIs look for large mines and a simplified single-window for mining leases and environmental and forest clearances.
  • While the announcement would kindle the interest of global miners, they would need increased ease-of-doing business and time-bound approvals before they invest here.
  • In India, it takes at least six years from getting a mine allocation to actually starting mining operations.This has now been fixed at 66 months. The Coal Ministry is taking steps such as doing away with the need for prior approval before a State government hands over the mining lease, which typically takes 6-12 months.
  • Overseas investors usually do not view such long timelines favourably.


  • Context: The Centre has announced a mega amalgamation plan, aimed at improving their financial health and enhancing their lending capacity to support growth.


  • The merger announcement was followed by an equity infusion move of Rs 55,250 crore in these banks to enable them to grow their loan book. With these series of mergers, the number of state-owned banks is down to 12 from 27.
  • There are four new sets of mergers — Punjab National Bank, Oriental Bank of Commerce and United Bank of India to merge to form the country’s second-largest lender; Canara Bank and Syndicate Bank to amalgamate; Union Bank of India to acquire Andhra Bank and Corporation Bank; and Indian Bank to merge with Allahabad Bank.

The Logic Behind the Mergers:

  • According to the government, banks have been merged on the basis of likely operating efficiencies, better usage of equity and their technological platform.
  • But the move marks a departure from the plan to privatise some of the banks or bringing in a strategic investor to usher in reform in the sector.
  • The government, after consultations, decided that amalgamation is the “best route” to achieve banking sector scale and to support the target of achieving a $5 trillion economic size for India in five years.
  • Analysts note that the amalgamations will help banks to meaningfully scale up operations but will not lead to any immediate improvement in their credit metrics.

Previous Experience with the Mergers:

  • Last year, the government had merged Dena Bank and Vijaya Bank with Bank of Baroda, creating the third-largest bank by loans in the country.
  • The government said this merger has been “a good learning experience” as profitability and business of the merged entity has improved.
  • Earlier, the State Bank of India had acquired its associate banks. Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab and Sind Bank, which have strong regional focus, will continue as separate entities.
  • In a presentation on the proposals, the government said profitability of public sector banks has improved and total gross non-performing assets have come down.

Will the Merger Help Improving the Performance?

  • According to the analysts, while the announced consolidation of PSU banks is credit positive as it enables the consolidated entities to meaningfully improve scale of operations and help their competitive position, at the same time, there will not be any immediate improvement in their credit metrics as all of them have relatively weak solvency profiles.
  • In the present case, the mergers are mostly among larger banks, with absorbing bank not necessarily in strong health.
  • However, given the merged banks are on similar technology platform, the integration should be smoother.
  • Also, it is likely that management attention and bandwidth of the entities being merged could get split impacting the loan growth and reduce focus on strengthening asset quality in the short term.


Why in News?

  • The Union Cabinet has approved the proposal for Review of Foreign Direct Investment on various sectors.


  • Foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
  • Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company.
  • FDI are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies.

Major decisions on FDI by the Cabinet:

  1. 100% FDI under automatic route in coal mining and associated infrastructure
    • It will attract international players to create an efficient and competitive coal market.
  2. 100% FDI in contract manufacturing under automatic route
    • Manufacturing through contract contributes equally to the objective of Make in India.
    • FDI now being permitted under automatic route in contract manufacturing will be a big boost to Manufacturing sector in India.
  3. Relaxing FDI rules for single brand retail; expands definition of 30% domestic sourcing
    • It will lead to greater flexibility and ease of operations for SBRT entities, besides creating a level playing field for companies with higher exports in a base year.
  4. Online retailing under single-brand retail; relaxing rule of mandatory brick-and-mortar store
    • Permitting online sales prior to opening of brick and mortar stores brings policy in sync with current market practices.
    • Online sales will also lead to creation of jobs in logistics, digital payments, customer care, training and product skilling.

Significance of the move:

  • The above amendments to the FDI Policy are meant to liberalize and simplify the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to growth of investment, income and employment.
  • It will result in making India a more attractive FDI destination, leading to benefits of increased investments, employment and growth.


Why in News?

  • The Union Ministry for Micro, Small and Medium Enterprises (MSME) has launched a project named ‘Tech Saksham’ to accelerate MSME growth through technology enablement.


  • It is a Ministry of MSME and Confederation of Indian Industry (CII) partnered project which brings together technology majors Dell Technologies India, HP India, etc to address technological gaps faced by MSMEs in their growth.
  • The Vision is to bridge the gap in technology adoption for MSMEs so as to provide an impetus for them to be competitive on a global scale, increase their contribution to country exports and leverage cost efficiencies.
  • It is a three-year-long comprehensive project which, in its first phase, will focus on sectors that are labour-intensive and have the propensity to respond positively to tech-adoption, and will spark a larger discussion in other MSME clusters.
  • Through various policy recommendations, knowledge sessions, mentoring initiatives, and useful resource banks for MSMEs, the project will help in addressing critical barriers in the MSME ecosystem such as awareness and cost of technology purchase/maintenance, resources and manpower required to run the technologies, return on investments, etc.



  • The Reserve Bank of India (RBI) will transfer ₹1.76 trillion to the government this fiscal.


  • RBI Board accepted the recommendations of a committee headed by former Governor Bimal Jalan on transfer of excess capital.
  • Based on the panel’s report, the Central Board decided to transfer a surplus of Rs 1.23 lakh crore and Rs 52,637 crore of excess provisions made over the years.
  • This marks the first time the RBI will be paying out such a huge amount, a one-off transfer.
  • Earlier, the government had budgeted for Rs 90,000 crore from the RBI as dividend for this fiscal year.
  • This practice was that started in 2016-17, only under exceptional circumstances.

Bimal Jalan Committee:

  • The committee recommends that the framework may be periodically reviewed every five years. Nevertheless, if there is a significant change in the RBI’s risks and operating environment, an intermediate review may be considered.
  • The Jalan panel recommended a surplus distribution policy, which targets the level of realized equity to be maintained by RBI within the overall level of its economic capital, a statement by RBI said on Monday.
  • The committee defines economic capital as a combination of realized equity and revaluation reserves.

On what rationale was such a huge payout approved?

  • The level of surplus or profits the RBI pays to the government has been an issue of conflict two for long.
  • Over the last decade or more, the government had sought higher payouts saying the RBI was maintaining reserves or capital buffers that were much higher than many other global central banks’ buffers.
  • The government has argued that such relatively lower transfers crimped public spending for infrastructure projects and social sector programmes, considering the pressure to meet deficit targets and to provide space for private firms to borrow.
  • With the government amplifying its demand for a higher transfer, the Jalan committee reviewed the capital structure, statutory provisions and other issues relating to the RBI balance sheet.
  • After making a distinction on the RBI’s capital structure especially on unrealised gains (which are essentially gains not booked) and taking into account the role of the central bank in ensuring financial stability, potential risks and global standards, the committee suggested a total transfer of Rs.1.76 lakh crore.

How does the RBI generate surplus?

  • A significant part comes from
        • RBI’s operations in financial markets, when it intervenes for instance to buy or sell foreign exchange;
        • Open Market operations, when it attempts to prevent the rupee from appreciating;
        • as income from government securities it holds;
        • as returns from its foreign currency assets that are investments in the bonds of foreign central banks or top-rated securities;
        • from deposits with other central banks or the Bank for International Settlement or BIS;
        • besides lending to banks for very short tenures and management commission on handling the borrowings of state governments and the central government.
  • RBI buys these financial assets against its fixed liabilities such as currency held by the public and deposits issued to commercial banks on which it does not pay interest.
  • The RBI’s expenditure is mainly on printing of currency notes, on staff, besides commission to banks for undertaking transactions on behalf of the government and to primary dealers that include banks for underwriting some of these borrowings.
  • The central bank’s total costs, which includes expenditure on printing and commissions forms, is only about 1/7th of its total net interest income.

Why are these called transfers to the Government, rather than dividends?

  • That is because the RBI is not a commercial organisation like banks and other companies owned or controlled by the government to pay a dividend to the owner out of the profit generated.
  • Though it was promoted as a private shareholders’ bank in 1935 with a paid-up capital of Rs 5 crore, the government nationalised it in January 1949, making the sovereign the “owner”.
  • What the RBI does is transfer the surplus — excess of income over expenditure —to the government.
  • Under Section 47 of the RBI Act, “after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and for all other matters for which provision is to be made by or under this Act or which are usually provided for by bankers, the balance of the profits shall be paid to the Central government”.

Globally, what are the rules relating to payment of dividends by central banks?

  • In many top central banks — US Federal Reserve, Bank of England, German Bundesbank, Bank of Japan— the laws make it clear that profits have to be transferred to the government or the treasury.
  • The quantum of profits or percentage to be distributed is also specified in the laws.

So, what is the difference in India now and compared to the past?

  • The quantum is discussed and decided between the government and RBI.
  • Periodically, this has been guided by policies set out internally, as last time when a committee headed by Y H Malegam recommended distributing 100% of the profits made during Raghuram Rajan’s time.
  • The difference now is that the Jalan committee’s recommendation on a profit distribution policy has been endorsed by the Central Board.
  • That will mean a more transparent and rule-based payout from next year, as in many other central banks, which could help narrow differences between the government and RBI.

What can the government do with this huge surplus?

  • Normally, the money is transferred to the Consolidated Fund of India from which salaries and pensions to government employees are paid and interest payments done, besides spending on government programmes.
  • The large payout can help the government cut back on planned borrowings and keep interest rates relatively low.
  • Besides, it will provide space for private companies to raise money from markets.
  • And if it manages to meet its revenue targets, the windfall gain can lead to a lower fiscal deficit.
  • The other option is to earmark these funds for public spending or specific projects, which could lead to a revival in demand in certain sectors and boost economic activity.

What are the Potential Issues relating to a Higher Payout?

  • That has been articulated by former Governor Rajan.
  • According to him, much of the surplus the RBI generates comes from the interest on government assets (securities or bonds) or from capital gains made off other market participants.
  • When this is paid to the government, the RBI is putting back into the system the money it made from it; there is no additional money-printing or reserve creation involved, he says.
  • But when the RBI pays additional dividend, it has to create additional permanent reserves or, more colloquially, print money.
  • So, to accommodate the special dividend, the RBI will have to withdraw an equivalent amount of money from the public by selling government bonds in its portfolio, he says.

Why do central banks hold back on Transferring Large Amounts?

  • Especially after the global financial crisis when central banks had to resort to unconventional means to revive their economies, the approach has been to build adequate buffers in the form of higher capital, reserves and other funds as a potential insurance against future risks or losses.
  • A higher buffer enhances the credibility of a central bank during a crisis and helps avoid approaching the government for fresh capital and thus maintain financial autonomy.

Given conflict in the past, how was the distribution of profits settled this time?

  • In his memoir, former RBI Governor D Subbarao had written how arguments on this would go on year after year but a settlement would be reached with some flexibility shown by both sides.
  • “Even though contentious, (it) has never turned acrimonious,” he wrote a couple of years ago.
  • That wasn’t the case last year and in the first half of this year.
  • As the government’s nominee on the Jalan committee, Garg had submitted a dissent note.
  • His exit from the Finance Ministry and the entry of the new Governor, Shaktikanta Das, and Garg’s successor Atanu Chakraborty and backroom talks, may have led to the flexibility of approach that Subbarao indicated in his book, and the resultant decision on a record payout.


Why in News?

  • The Reserve Bank of India (RBI) has decided to transfer Rs 1.76 lakh crore to the Central government, which may help the government in dealing with the economic slowdown.


  • The Rs 1.76 lakh crore includes the central bank’s 2018-19 surplus of ₹1.23 lakh crore and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (recommended by Bimal Jalan Committee).
  • The government already had revised downward the fiscal deficit target to 3.4% from 3.3% and initiated a slew of measures that are being dubbed as mini-budget.

Economic Capital Framework:

  • The RBI had formed a committee chaired by former Governor Bimal Jalan to review its economic capital framework and suggest the quantum of excess provision to be transferred to the government.
  • The panel recommended a clear distinction between the two components of the economic capital of RBI i.e. Realized equity and Revaluation balances.
  • Revaluation reserves comprise of periodic marked-to-market unrealized/notional gains/losses in values of foreign currencies and gold, foreign securities and rupee securities, and a contingency fund.
  • Realized equity, which is a form of a contingency fund for meeting all risks/losses primarily built up from retained earnings. It is also called the Contingent Risk Buffer (CBR).
  • The Surplus Distribution Policy of RBI that was finalized is in line with the recommendations of the Bimal Jalan committee.
  • The Jalan committee has given a range of 5.5-6.5% of RBI’s balance sheet for Contingent Risk Buffer.
  • Adhering to the recommendations, the RBI has decided to set the CBR level at 5.5% of the balance sheet, while transferring the remaining excess reserves worth ₹52,637 crore to the government.
  • If CBR is below the lower bound of requirement, risk provisioning will be made to the extent necessary and only the residual net income (if any) transferred to the Government.


Why in News?

  • The government has proposed to set up a Development Financial Institution (DFI) to solve the infrastructure financing needs of the country.


  • The establishment of such an institution is considered as a positive step as banks do not have the long-term funds to finance such projects.
  • Banks cannot afford to lend for such projects because that would shrink their lending capacity as the funds get locked up in such projects for that time period.
  • Reasons for DFIs to Fund Infrastructure:
  • To boost economic growth which would increase capital flows and energise capital markets.
  • To improve long term finances.
  • To provide credit enhancement for infrastructure and housing projects
  • As India does not have a development bank, DFI would fulfil the need for us to have an institutional mechanism.
  • Debt flow towards infrastructure projects would be improved.
  • The RBI had specified in 2017 that specialised banks could cater to the wholesale and long-term financing needs of the growing economy and possibly fill the gap in long-term financing.

Development Finance Institution:

  • These are specialized institutions set up primarily to provide development/ Project finance especially in developing countries.
  • These DFIs are usually majority-owned by national governments.
  • The source of capital of these banks is national or international development funds.
  • It ensures their creditworthiness and their ability to provide project finance in a very competitive rate.
  • It strikes a balance between commercial operational norms as followed by commercial banks on the one hand, and developmental responsibilities on the other.
  • DFIs are not just plain lenders like commercial banks but they act as companions in the development of significant sectors of the economy.

Classification of development Financial Institutions:

  • Sector specific financial institutions: These financial Institutions focusses on a particular sector to provide project finance. Ex: NHB is solely related to Housing projects, EXIM bank is oriented towards import export operations.
  • Investment Institutions: These are specialized in providing services designed to facilitate business operations, such as capital expenditure financing and equity offerings, including initial public offerings (IPOs). Ex: LIC, GIC and UTI.


Why in News?

  • In 2018, India failed to comply with multiple requirements prescribed in the Special Data Dissemination Standard (SDDS) mandatory for all IMF members.

Special Data Dissemination Standard (SDDS):

  • The SDDS is an IMF standard to guide member countries in the dissemination of national statistics to the public.
  • It was established in 1996 to guide members that have, or might seek, access to international capital markets in providing their economic and financial data to the public.
  • It is a global benchmark for disseminating macroeconomic statistics to the public. Its subscription indicates that a country meets the test of “good statistical citizenship.
  • Countries that subscribe to the SDDS agree to follow good practices in four areas: the coverage, periodicity, and timeliness of data; public access to those data; data integrity; and data quality.
  • India subscribed to the SDDS on December 27, 1996.

Indian datasets not Updated:

  • India failed to comply with multiple requirements prescribed in the SDDS — a practice mandatory for all IMF members.
  • Whereas comparable economies comprising the BRICS grouping of Brazil, China, South Africa and Russia, have maintained a near impeccable record in the same period.
  • Also, India’s non-compliance in multiple categories in 2018 and to an extent in 2017 breaks with an otherwise near perfect dissemination record.
  • When contacted, the IMF acknowledged India’s deviations but termed them “non-serious”.
  • However, independent observers see these deficiencies as a result of indifference to data dissemination procedures.

Importance of SDDS:

  • The IMF launched the SDDS initiative in 1996 to guide members to enhance data transparency and help financial market participants with adequate information to assess the economic situations of individual countries.
  • The yearly observance report for each member country lists the compliances and deviations from the SDDS under each data category for that year.
  • There are over 20 data categories which IMF considers for this report to capture a nation’s economic health including national accounts (GDP, GNI), production indices, employment, and central government operations.

A Recent phenomenon:

  • India’s non-compliance with IMF standards is a recent phenomenon.
  • When asked for the reason for the delays in 2018, Deputy Director in the Department of Economic Affairs termed it as a “one off event due to technical glitches”.
  • They were made available on other (Indian) government websites on a timely basis through links on the NSDP to these websites”.

Implications of Non-Compliance:

  • The IMF document states that monitoring observance of the SDDS is central to maintaining the credibility of the IMF’s data standards initiatives and its usefulness to policymakers.
  • It further states that if the IMF staff considers a non-observance as a “serious deviation” then procedures would be initiated against the member country.
  • When the IMF was asked to explain why India’s non-observance was deemed as non-serious, their statistical department persisted that this was due to “information availability in other government websites”.
  • It added that “the forthcoming harmonisation of the NSDPs for all SDDS countries with those for SDDS Plus and e-GDDS countries (other similar standards)” will solve this issue.


Why in News?

  • A two-day National Conference on Capacity Building of Sustainable Food Value Chains for Enhanced Food Safety and Quality organized by National Productivity Council (NPC) in collaboration with Asian Productivity Organization, Tokyo, Japan began in New Delhi

National Productivity Council:

  • NPC is a national level organization to promote productivity culture in India.
  • Established by the Ministry of Industry, Government of India in 1958, it is an autonomous, multipartite, non-profit organization with equal representation from employers’ & workers’ organizations and Government, apart from technical & professional institutions and other interests.
  • Currently National Productivity Council (NPC) is an autonomous registered society under Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry.
  • NPC is a constituent of the Tokyo-based Asian Productivity Organisation (APO), an Inter-Governmental Body, of which the Government of India is a founder member.


  • NPC teams up with its clients to work out solutions towards accelerating productivity, enhancing competitiveness, increasing profits, augmenting safety and reliability and ensuring better quality.
  • It provides reliable database for decision-making, improved systems and procedures, work culture as well as customer satisfaction both internal & external. The solutions can be all-encompassing or specific depending on the nature of the problem.
  • The council also helps monitor, review and implement the identified strategies. Promotional and catalytic in nature, NPC’s services have bearings on economic growth and quality of life.
  • The Council promotes a comprehensive view of productivity focused on improving triple bottom line – economic, environmental and social and adds value for all the stakeholders through generation & application of advanced knowledge for inclusive Growth.


Why in News?

  • Onions for retailing by Safal is being made available at present from the government stock built under Price Stabilisation Fund (PSF). It was decided that retail price of onion at Safal would not be allowed to exceed Rs 23.90/- per kg

Price Stabilisation Fund:

  • Price Stabilisation Fund (PSF) refers to any fund constituted for the purpose of containing extreme volatility in prices of selected commodities.
  • The amount in the fund is generally utilised for activities aimed at bringing down/up the high/low prices say for instance, procurement of such products and distribution of the same as and when required, so that prices remain in a range.
  • Accordingly, the Government of India in 2015, approved the creation of a Price Stabilization Fund (PSF) with a corpus of Rs.500 crores as a Central Sector Scheme, to support market interventions for price control of perishable Agri-horticultural commodities during 2014-15 to 2016-17.
  • Initially the fund was proposed to be used for market interventions for onion and potato only and pulses were added subsequently.

Procurement of Commodities:

  • Procurement of these commodities will be undertaken directly from farmers or farmers’ organizations at farm gate/mandi and made available at a more reasonable price to the consumers. Losses incurred, if any, in the operations will be shared between the Centre and the States.
  • PSF Scheme provides for advancing interest free loan to State Governments/Union Territories (UTs) and Central agencies to support their working capital and other expenses they might incur on procurement and distribution interventions for such commodities.
  • Hence, the actual utilisation of the fund depends on the willingness of the state governments / union territories to avail of such loans for these purposes. Further, the actual detection of the period when support is required and the deployment of price support measures are left to the states.
  • For this purpose, the States will have to set up a ‘revolving fund’ (a fund which is constantly replenished and not limited by the fiscal year considerations) to which Centre and State will contribute equally (50:50).
  • The ratio of Centre-State contribution to the State level corpus in respect of North-East States will, however, be 75:25. Central Agencies will set up their revolving fund entirely with the advance from the Centre.

Management of Price Stabilization Fund:

  • The Price Stabilization Fund will be managed centrally by a Price Stabilization Fund Management Committee (PSFMC) which will approve all proposals from State Governments and Central Agencies.
  • The PSF will be maintained as a Central Corpus Fund by Small Farmers Agribusiness Consortium (SFAC), a society promoted by Ministry of Agriculture for linking agriculture to private businesses and investments and technology. SFAC will act as Fund Manager.
  • Funds from this Central Corpus will be released in two streams, one to the State Governments/UTs as a onetime advance to each State/UT based on its first proposal and the other to the Central Agencies.
  • The one time advance to the States/UTs based on their first proposal along with matching funds from the State/UT will form a State/UT level revolving fund, which can then be used by them for all future market interventions to control prices of onions and potatoes based on approvals by State Level Committee set up explicitly for this purpose.
  • The Price Stabilization Fund (PSF) was set up under the Department of Agriculture, Cooperation & Famers Welfare (DAC&FW), Ministry of Agriculture. The PSF scheme was transferred from DAC&FW to the Department of Consumer Affairs (DOCA) w.e.f. 1st April, 2016.



  • SEBI has relaxed the FPI norms to check the outflows of FPIs from India.
  • SEBI relaxes Foreign Portfolio Investors (FPI) norms by easing the regulatory framework for FPI with simplifies KYC requirements for them and allow FPIs to carry out an off-market transfer of securities.
  • Apart from this SEBI classified FPIs into two categories instead of three. SEBI relaxes the norms on the basis of a committee headed by H R Khan (Former RBI Deputy Governor).

What are Foreign Portfolio Investors (FPI)?

  • FPI are those investors who hold a short-term view of a company, unlike Foreign Direct Investors who invest with a long-term view. They participate in the stock markets in the economy. FPI doesn’t have direct control over the businesses. FPIs are easier to sell than the FDIs due to high liquidity. Generally, the FPI route is preferred for laundering black money. In India, FPIs are regulated by SEBI.

Need of Committee:

  • Both the FPIs and the investors had serious concern over the SEBI norms and want to review the norms by SEBI. FPIs shows concern over that the FPIs norms will result in restrictions on investments however SEBI dismissed any such fears.
  • Accordingly, SEBI constitutes H R Khan Committee to review FPI norms and concern raised by the investors.

Recommendation of H R Khan Committee:

  • The committee categorized the recommendation into four buckets i.e. FPI Registration process, KYC and documentation, Investment permission and limits and other aspects.
  • The committee recommends that OCIs, NRIs, and RIs should be allowed for holding a non-controlling stake in FPIs and no restrictions should be imposed on them for managing non-investing FPIs or SEBI registered offshore funds.
  • The committee recommends for easing KYC requirements for beneficial owners in case of government-related FPIs.
  • The committee recommended that erstwhile PIOs should not be subjected to any restrictions and clubbing of investment limits should be allowed for well-regulated and publicly held FPIs that have common control.
  • The committee also suggests that the time for compliance with the new norms should be extended by six months after the finalization and the non-compliant investors should be given another 180 days to reconcile their existing positions.
  • According to the committee, NRI will be allowed to invest as FPIs if the single holding is under 25% and group holding under 50% in a fund.
  • The panel also recommends that the new rules should be equally applied to the investors using participatory notes (P-notes).
  • The panel also suggested for changes in the norms pertaining to the identification of senior managing officials of FPIs and for beneficial owners of listed entities.

New FPI norms by SEBI:

  • SEBI rationalizes the requirements for issuance and subscription of offshore derivative instruments (ODIs).
  • SEBI said that the offshore funds floated by the mutual funds would be allowed to invest in the country after the registration.
  • Those entities which are established under the International Financial Services Centre must meet the criteria for FPIs.
  • SEBI permits FPIs for off-market transfer of securities which are unlisted, suspended or illiquid to a domestic or foreign investor.
  • Structure for Multiple Investment Manager also has been simplified.
  • Those central banks who are not the members of Bank for International Settlements would be eligible for registration as FPIs to attract more overseas funds to the market.
  • The FPIs are classified into two categories earlier it was two.
  • SEBI said it would rationalize the framework for issuance of participatory notes (P-notes)
  • The board also clarified on the debt to equity ratio, companies need to maintain it as 2:1 to be eligible for buybacks however the Non-banking financial companies (NBFC) arms would be exempt from the rule.
  • To crack down insider trading a new whistleblower mechanism will be implemented.
  • Rewarding informants up to Rs. 1 crore for providing “credible and original information” on insider trading.
  • Mutual funds are now allowed to invest in unlisted non-convertible debentures.

Reasons for Outflow of FPIs from India:

  • India is the fastest-growing country in the world and there are certain issues which stress the overall economic performance of the country. One of the main challenges recently is the outflow of FPIs from India. Reasons for the outflow of FPIs are:
  • Introducing Higher tax surcharge in the Budget 2019 by the government.
  • Continue Depreciation of Indian Rupee
  • The trade war between the U.S and China
  • Reduced rating and default of NBFCs
  • Rising of crude oil prices


  • Easing of FPI norms could give a boost to the overseas investment in the country which is an important source of economic growth and development in India. These changed norms will make the regulatory framework more investor-friendly for FPIs and a multidimensional approach is needed to resolve the concerns of FPIs and reasons of outflows.


Why in News?

  • A National Conference on Capacity Building of Sustainable Food Value Chains for Enhanced Food Safety and Quality was organized by National Productivity Council (NPC) in collaboration with the Asian Productivity Organization, Tokyo, Japan.

National Productivity Council (NPC):

  • NPC is a national level organization to promote productivity culture in India.
  • Established by the Ministry of Industry, Government of India in 1958, it is an autonomous, multipartite, non-profit organization with equal representation from employers’ & workers’ organizations and Government, apart from technical & professional institutions and other interests.
  • NPC is a constituent of the Tokyo-based Asian Productivity Organisation (APO), an Inter-Governmental Body, of which the Government of India is a founder member.
  • NPC teams up with its clients to work out solutions towards accelerating productivity, enhancing competitiveness, increasing profits, augmenting safety and reliability and ensuring better quality.
  • It provides a reliable database for decision-making, improved systems and procedures, work culture as well as customer satisfaction both internal & external.
  • The solutions can be all-encompassing or specific depending on the nature of the problem. The council also helps monitor, review and implement the identified strategies. Promotional and catalytic in nature, NPC’s services have bearings on economic growth and quality of life.
  • The Council promotes a comprehensive view of productivity-focused on improving the triple bottom line – economic, environmental and social and adds value for all the stakeholders through generation & application of advanced knowledge for inclusive Growth.


Why in News?

  • The Centre has removed Debenture Redemption Reserve (DRR) requirement for listed companies, NBFCs and housing finance companies (HFCs).

Debenture redemption reserve (DRR):

  • A debenture redemption reserve (DRR) is a provision stating that any Indian corporation that issues debentures must create a debenture redemption service in an effort to protect investors from the possibility of a company defaulting.
  • In 2002, the then government said that for NBFCs registered with the Reserve Bank of India, the reserve had to be at least 50 percent of the value of debentures issued via public issuance.
  • A 2013 revision brought this down to 25% of the value of publicly issued debentures
  • A debenture redemption reserve is meant to protect the interests of retail bond holders in the event of a company going through financial stress. It was introduced in company law for the first time in 2000.


  • The Corporate Affairs Ministry (MCA) has now amended its share capital and debenture rules to remove the requirement for creation of a DRR of 25 per cent of the value of outstanding debentures in respect of listed companies, NBFCs registered with the RBI and for HFCs registered with National Housing Bank (NHB) both for public issue as well as private placements
  • For unlisted companies, the DRR has been reduced from the present level of 25 per cent to 10 per cent of the outstanding debentures. Hitherto, listed companies had to create a DRR for both public issue as well as private placement of debentures, while NBFCs and HFCs had to create DRR only when they opted for public issue of debentures.


  • Context: Government has launched the pilot project for the inter-state portability of ration cards between Telangana and Andhra Pradesh, and between Maharashtra and Gujarat, as part of its ‘One Nation, One Ration Card’ scheme.

What is A Ration Card?

  • A ration card is issued to the head of the family, depending on the number of members in a family and the financial status of the applicant.
  • It is used by households to get essential food grains at subsidised prices from designated ration shops (also called fair price shops) under the Targeted Public Distribution System (TPDS).
  • Over the years, different types of ration cards were issued depending on the level of deprivation. Later, in 2013, when the National Food Security Bill was passed, different ration cards were compressed to just two — priority and Antyodaya (for the poorest).
  • The responsibility of identifying eligible families and issuing ration cards to them rests with the state/UT government.

What is a Ration Shop?

  • Ration shops can be privately owned or owned by cooperative societies or by the government. Ownership licenses are issued by the concerned state government.
  • Presently, commodities including wheat, sugar, rice and kerosene are being allocated as part of the TPDS. State governments have the discretion to provide additional commodities.

What is the ‘One Nation, One Ration Card’ Scheme?

  • Since Ration Cards are issued by State Governments, this implied that beneficiaries could procure food grains only from the designated ration shops within the concerned state.
  • If a beneficiary were to shift to another state, he/she would need to apply for a new ration card in the second state. There were other complications.
  • For instance, after marriage, a woman needed to get her name removed from the ration card issued to her parents, and get it added to the ration card issued to her husband’s family.
  • The ONORC scheme attempts to address this gap in TPDS delivery. Essentially, the scheme has been launched keeping in mind the internal migration of our country, since people keep moving to different states in search of better job opportunities and higher standards of living.
  • As per Census 2011, 4.1 crore people were inter-state migrants and 1.4 crore people migrated (inter and intra-state) for employment.
  • With the ONORC scheme being implemented in Telangana and Andhra Pradesh, the beneficiary can buy food grains from ration shops located in either of the states.
  • The same is the case with Maharashtra and Gujarat. The government hopes to implement the scheme across India by June 1, 2020.


  • Context:National energy major NTPCis planning to set up an ultra-mega solar park in the Kutch region of Gujarat that will produce up to 5,000 megawatts and involve an investment of Rs20,000 crore or more.
  • Objective: This move is aimed at scaling up the renewable portfolio of India’s largest power producer with 55,786 MW of installed capacity.


  • The National Solar Mission (NSM) was launched in 2010 as a major initiative of the Government of India with active participation from states to promote ecologically sustainable growth while addressing India’s energy security challenges.
  • It will also constitute a major contribution by India to the global effort to meet the challenges of climate change


  • The mission targets include deployment of 20,000 MW of grid-connected solar power by 2022 to be achieved in three phases which include 2,000 MW of off-grid solar applications including 20 million solar lights by 2022 and 20 million sq. m. solar thermal collector area.

Major Schemes of The Central Government:

  • The government of India has launched several schemes to achieve the target of 100 GW
  • Grid Connected:
    • Scheme for setting up of over 300 MW of Grid connected solar PV projects by Defence establishments and para military forces
    • Scheme for development of Solar parks and Ultra Mega Solar power projects of 40,000 MW
    • 750 MW VGF scheme under JNNSMM Phase II Batch I
    • 2,000 MW VGF scheme of NSM Phase II Batch III
    • 5,000 MW VGF Scheme Batch IV Phase II
    • Setting up of 1000 MW of Grid connected solar PV Power project by CPSUs, Government organizations
    • 15,000 MW grid connected solar PV power plants through NTPC
    • Grid connected rooftop and small solar plants of 4,200 MW
    • Development of 100 MW Grid connected solar PV power plants on canal banks and tops
  • Off Grid
    • Capital subsidy scheme for providing basic lighting needs through solar charging stations (with lanterns) to be implemented in 100 villages in each of 60 LWE affected districts
    • Off grid & Decentralized solar application scheme in 2nd phase of JNNSM-Solar cooker programme
    • Capital subsidy scheme for installation of solar thermal systems
    • Solar water heating Solar air heating
    • Solar steam generation/ pressurized hot water/air systems
    • Solar thermal refrigeration/cooling
    • Solar Thermal Power Park (including hybrid with Solar PV)
    • Installation of 10,000 nos. of solar photovoltaic water pumping systems for irrigation purpose implemented through NABARD

The Current Status of Solar Park Development in India:

  • The Ministry of New and Renewable Energy (MNRE), Government of India, is already implementing a scheme for development of solar parks which was launched in December 2014.
  • The capacity of the solar park scheme has been stages of development. Solar projects of aggregate capacity 2,151 MW have already been commissioned in 5 Solar Parks up to August 31, 2017
  • The total capacity when operational will generate 64 billion units of electricity per year which will lead to abatement of around 55 million tonnes of CO2 per year over its life cycle.
  • It would also contribute to the long-term energy security of the country and promote ecologically sustainable growth by a reduction in carbon emissions and carbon footprint, as well as generate large direct and indirect employment opportunities in solar and allied industries, such as glass, metals, heavy industrial equipment, etc.

Challenges & Way Forward:

  • Solar irradiance in the State, availability of conducive State policy for solar, and business environment, such as the willingness of DISCOMs to purchase the solar power, payment security, power evacuation infrastructure, etc., are the challenges envisaged.
  • In India, one of the biggest challenges faced is land allotment.
  • Then, there is the revenue department, the issue of private land conversion, all these are time-consuming and challenges.
  • The other challenges are matching the timelines between the development of solar parks including power evacuation arrangements of central transmission utility (CTU) or state transmission utilities (STU) and setting up of solar projects.
  • However, with active involvement and making concerted efforts in consultation with State Governments and different stakeholders these challenges are getting easier to deal with. Overall, the solar parks project has been very positive and the response from developers has been encouraging.
  • As a result, energy storage, hybrid project, and large grid connected wind–solar PV system in India for optimal and efficient utilization of transmission infrastructure and land; there has been reduction of the variability in renewable power generation and thus achieving better grid stability and improved power quality projects initiated



  • The Government of India is working out a plan to double farmers’ income by 2022.
  • The government plans to take up a number of measures and expand into allied sectors, promote zero-budget farming, organic farming, etc to double the income of the exiting farmers.

What Prime Minister’s Economic Advisory Council, said:

  • “One of the best ways to double farmers’ income is to halve the number of farmers.”

Importance of Agriculture in Indian economy

  • Agriculture is the mainstay of the Indian economy even though it contributes less than 15 per cent of the Gross Domestic Product.
    Almost 50 per cent of Indian families are dependent on farms for their livelihood and they have made India a food-surplus country.

Surplus food production issue

  • surplus production in some of the irrigated pockets — by canals, lift irrigation from rivers and groundwater — has not only made farming unsustainable for the small segment of farmers who have attained some sort of a success and achieved a good amount of income, but has also destroyed ecology and local food diversity.

Issue with cost of production

  • At this point of time, while the so-called ‘successful’ farmers are struggling to maintain their income, which essentially means putting in more and more investment, the other farmers are busy struggling for subsistence.

Shift to other sectors:

    • The small and marginal land-holders should shift to other sectors as wage labourers as their farms are fit only for subsistence and their land holding is so small and fragmented that it is difficult to go for intensive agriculture.
    • That is the reason the youth in the villages are no more interested in farming. According to the 2011 Census figures, 2,000 farmers are giving up farming each day. In 2016, the average age of an Indian farmerwas 50.1 years and that’s worrying.

Issue of Food Security

  • If the trend of farmers moving out of their original occupation continues like this, it will be a great challenge to meet our food requirements by the year 2050 when the food demand is expected to double than what it is now as because our population is expected to touch 1.9 billion, more than two thirds of which will be in the middle-income group.
  • Food imports will be too costly and if farm distress continues the way it is, we can’t anyway keep all farmers in villages and in their farms anyway.
    • Whether they will be gainfully employed in other sectors is another big question and we are not dealing with that at this moment.

Farming class

  • While average statistical figures don’t actually tell us as to which category of farmers — the intensive agriculture segment or the subsistence segment — is gradually vanishing from the farms, experience tells us that the small farmers are more vulnerable to migration. And that’s exactly where we have a big problem.
  • Stats
    • We have about 83 per cent rural people who are either entirely landless or own less than one hectare (ha) of land.
    • Another 14 per cent own less than three ha, and that is as good as a small and non-profitable farm holding depending on the irrigation status and other factors.
    • Only about 0.25 per cent of rural households own more than 10 ha of land and a minuscule 0.01 per cent own over 20 ha.
    • In terms of national per capita income parameters, the majority of small farmers — let’s say more than 80 per cent — cannot stick to agriculture if they are not provided with other supports and social security measures.
  • Their younger generations would have no motivation to stay with farming anyway and will gradually move out.

Farmers are also forest protectors

  • There is a specific segment of farmers who live in and with forests. Most of these small and marginal farmers, including the indigenous communities, who live in and around our forests, do another big job for all of us.
  • They protect our natural forests, besides adding to the country’s food security.
  • There are thousands of villages in India that are protecting local natural forests for various reasons.
  • Many of these indigenous communities consider the forests as their ancestors, part of their family; and protect them for fuelwood, household timber, food, nutrition, medicinal plants and various other profits which they derive.
  • Stats
    • In fact, globally, such communities are said to own or manage at least a quarter of the world’s land surface.
    • While a recent global study says that as much as 22 per cent of income for the rural people living in and around forests comes from timber and non-timber forest resources, my own assessment from several villages spread across India’s central highlands finds out this to be up to 50 per cent or even more.

Benefits of people staying in forest

  • They help absorb a huge amount of our carbon emission.
  • New analysisreveals that indigenous peoples and local communities manage 300,000 million metric tons of carbon in their trees and soil — 33 times the energy emissions from 2017.

Doubling of income for this section of farmer

  • For this segment of farmers, therefore, the doubling of income would need different strategies.
  • Rights to the forests, better systems to support them for the ecosystem services — including water conservation through forestry — they are providing, improved market and augmented price for the various forest produce they market as a major livelihood support system, and provide them with better amenities.

Way forward

  • In her budget speech, India’s Finance Minister said the government is considering zero budget farming as a key tool in their strategy to double farmers’ income.
  • These communities can take a lead in organic farming and even zero budget farming as most of them are still practicing low external input farming in their rain-fed farms.


Context: India’s Livestock Export Potential Can’t Be Realised Till We Eradicate Foot-and-Mouth Disease


  • In India, livestock contributes over 4% to the country’s total GDP. As per estimates of the Central Statistics Office (CSO), the value of output from livestock and fisheries is estimated to be close to Rs 5 lakh crore.

Livestock in India

  • India has the privilege of having the largest population of livestock in the world.
  • India’s milk production is highest in the world.
  • And yet, the sector has been neglected for years.

Issue with foot-and-mouth disease (FMD) and brucellosis.

  • It is actually the presence of FMD in India that has stopped us from realising the true potential of this sector.
  • Trade barriers are put using this as an excuse, while totally putting aside the fact the OIE (The World Organisation for Animal Health) has endorsed our FMD vaccination programme.
  • While Andhra Pradesh and Telangana have reported no outbreak of FMD in the last few years, states like UP, Maharashtra and Punjab need extra focus as major trade emanates from there.

What is Foot and mouth disease (FMD)

  • Foot and mouth disease (FMD) is a severe, highly contagious viral disease of livestock that has a significant economic impact. The disease affects cattle, swine, sheep, goats and other cloven-hoofed ruminants.
  • Intensively reared animals are more susceptible to the disease than traditional breeds. The disease is rarely fatal in adult animals, but there is often high mortality in young animals due to myocarditis or, when the dam is infected by the disease, lack of milk.

Importance of Livestock to Indian Farmer

  • In India, 75% of the poor control the country’s livestock, which in turn becomes a major source of their income.
  • The direct losses to a farmer due to these diseases comes from a loss in milk production and reduction in the working ability of the animals.
  • Export issue
    • The bigger economic losses, however, are the non-acceptance of our milk and milk products, meat and its products in certain parts of the world, making the value realisation of our agri exports not at par with countries like Brazil, Australia, New Zealand and so on. Hence, it’s important that we as a nation give top priority for the control, prevention and eradication of this disease.
  • Income:
    • Livestock is a source of subsidiary income for many families in India especially the resource poor who maintain few heads of animals.
    • Cows and buffaloes if in milk will provide regular income to the livestock farmers through sale of milk.
    • Animals like sheep and goat serve as sources of income during emergencies to meet exigencies like marriages, treatment of sick persons, children education, repair of houses etc.
    • The animals also serve as moving banks and assets which provide economic security to the owners.
  • Employment:
    • A large number of people in India being less literate and unskilled depend upon agriculture for their livelihoods.
    • But agriculture being seasonal in nature could provide employment for a maximum of 180 days in a year.
    • The land less and less land people depend upon livestock for utilizing their labour during lean agricultural season.
  • Food:
    • The livestock products such as milk, meat and eggs are an important source of animal protein to the members of the livestock owners.
    • The per capital availability of milk is around 355 g / day; eggs is 69 / annum;
  • Social security:
    • The animals offer social security to the owners in terms of their status in the society.
    • The families especially the landless which own animals are better placed than those who do not. Gifting of animals during marriages is a very common phenomenon in different parts of the country.
    • Rearing of animals is a part of the Indian culture. Animals are used for various socio religious functions.
    • Cows for house warming ceremonies; rams, bucks and chicken for sacrifice during festive seasons; Bulls and Cows are worshipped during various religious functions. Many owners develop attachment to their animals.
  • Draft :
    • The bullocks are the back bone of Indian agriculture. The farmers especially the marginal and small depend upon bullocks for ploughing, carting and transport of both inputs and outputs.
  • Dung:
    • In rural areas dung is used for several purposes which include fuel (dung cakes), fertilizer (farm yard manure), and plastering material (poor man’s cement).

Government intervention

  • First cabinet meeting of sanctioning Rs 13,500 crore towards the eradication of this disease in the next five years is commendable and praise worthy.
  • or years, this problem has kept our dairy and meat products on the back foot in the global markets.

Past eradication of disease

  • In the past, India has successfully eradicated
  • We must learn from this and have an exclusive set-up on the same lines to ensure, monitor and set timelines.
  • We have experts in the country who have vast experience of FMD control, whom the government should engage for initiating an effective beginning.

What need to be done

  • Establishing of adequate check posts to monitor animal movement, and identification of animals will be important and will have tremendous benefits.
  • Farm holdings also need to be registered and monitored.
  • Keeping in mind the size and scale of our country, the low hanging fruit would be to establish disease-free zones in some prospective economic zones like Andhra-Telangana, Maharashtra-Punjab, Gujarat-MP-Delhi, Haryana and UP.
  • The advantages of setting up of these zones will be near elimination of losses on account of FMD morbidity and mortality of livestock, increase in superior quality milk production, skill development of farmers through awareness and competence building programmes, increased contribution to national economy from dairy, meat sectors, more market access options, better and higher utilisation of existing infrastructure.
  • The unique strength of India’s livestock market economy need to be achieved positively and effectively by reaching FMD-free status.
  • We already do not import any FMD-susceptible animals from countries that could pose possible risk. The only risk from outside the country is the illegal movement of pigs from Myanmar to Northeastern region, but with effective check posts, this can be controlled easily .

Vaccination issue

  • It is extremely critical to keep a check on the quality of vaccine as the requirement will be in hundreds of millions per annum.
  • It has to meet Indian Pharmacopeia and OIE standards, and it will be important to have an expert committee to monitor, visit and track the manufacturing facilities of the same.


  • Eradication of FMD will be a giant step towards doubling of farmers income, better value realisation of dairy and meat and effective utilisation of the privilege of having the largest livestock population in the world.
  • It will all depend on how well we use these funds, and how much of established timelines we follow or else this will be another scheme which came and went.


Why in news?

  • In pursuance of the announcement made in the Union Budget 2019-20 the Government has issued a scheme regarding partial credit guarantee on 10.8.2019.

Scheme Highlights:

  • The Scheme would enable the public sector banks (PSBs) to purchase pooled assets of financially sound NBFCs amounting to Rs. one lakh crore.
  • It is expected that this measure would provide liquidity to the NBFC Sector and, in turn, enable them to continue to play their role in meeting the financing requirements of the productive sectors of economy including MSME, retail and housing.

Details of the Scheme:

  • Name of the Scheme: ‘Partial Credit Guarantee offered by Government of India (GoI) to Public Sector Banks (PSBs) for purchasing high-rated pooled assets from financially sound Non-Banking Financial Companies (NBFCs)/Housing Finance Companies (HFCs)’.
  • Objective: To address temporary asset liability mismatches of otherwise solvent NBFCs/HFCs without having to resort to distress sale of their assets for meeting their commitments.
  • Validity of the scheme: The window for one-time partial credit guarantee offered by GoI will open from the date of issuance of the Scheme by the Government for a period of six months, or till such date by which Rupees One lakh crore assets get purchased by banks, whichever is earlier.


Why in News?

  • Government has given ‘in-principle’ approval for strategic disinvestment of 23 Central Public Sector Enterprises (CPSEs) including subsidiaries, units and joint ventures.

Difference Between Disinvestment and Strategic Disinvestment:

  • In case of disinvestment, the Govt.  sells shares of a company so that it can fetch some money. But strategic disinvestment involves sale of substantial volume of shares so that, part of the control of the company and or management passes to the private shareholder.

Why government plan strategic disinvestment?

  • The government should not be in the business
  • When a turnaround has been attempted but was unsuccessful

Types of Disinvestment Methods in India:

  •  Minority Disinvestment/Token Disinvestment: A minority disinvestment is one  the government retains a majority stake in the company, typically greater than 51%, thus ensuring management control.
  •  Majority Disinvestment/Strategic Disinvestment: The government  retains a minority stake in the company i.e. it sells off a majority stake. It is also called Strategic Disinvestment.
  • Complete Privatisation: Complete privatisation is disinvestment wherein 100% control of the company is passed on to a buyer.


  •  Central public sector enterprises (CPSEs) are those companies in which the direct holding of the Central Government or other CPSEs is 51% or more.


Why in News?

  • The Reserve Bank of India (RBI) has issued the final framework for regulatory sandbox in order to enable innovations in the financial technology.

Regulatory Sandbox:

  • A regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may permit certain regulatory relaxations for the limited purpose of the testing.
  • The objective of the sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.
  • It provides a secure environment for fintech firms to experiment with products under supervision of a regulator.
  • It is an infrastructure that helps fintech players live test their products or solutions, before getting the necessary regulatory approvals for a mass launch, saving start-ups time and cost.
  • The concept of a regulatory sandbox or innovation hub for fintech firms was mooted by a committee headed by then RBI executive director Sudarshan Sen.
  • The panel submitted its report in Nov 2017 has called for a regulatory sandbox to help firms experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.
  • If the product appears to have the potential to be successful, it might be authorised and brought to the broader market more quickly.

What are New RBI Norms?

  • RBI will launch the sandbox for entities that meet the criteria of minimum net worth of ₹25 lakh as per their latest audited balance sheet.
  • The entity should either be a company incorporated and registered in the country or banks licensed to operate in India.
  • While money transfer services, digital know-your customer, financial inclusion and cybersecurity products are included, crypto currency, credit registry and credit information have been left out.
  • Meeting norms on customer privacy, data protection, security and access to payment data, the security of transactions, KYC, anti-money laundering will be mandatory.


Why in News?

  • Shri Injeti Srinivas, Secretary (Corporate Affairs) presented the Report of the Competition Law Review Committee


  • The Government constituted a Competition Law Review Committee on 1st October, 2018 to review the existing Competition law framework and make recommendations to further strengthen the framework to inter alia meet new economy challenges.
  • The Committee was chaired by Shri Injeti Srinivas


  • Introduction of a ‘Green Channel’ for combination notifications to enable fast-paced regulatory approvals for vast majority of mergers and acquisitions that may have no major concerns regarding appreciable adverse effects on competition. The aim is to move towards disclosure based regime with strict consequences for not providing accurate or complete information.
  • Combinations arising out of the insolvency resolution process under the Insolvency and Bankruptcy Code will also be eligible for “Green Channel” approvals.
  • Introducing a dedicated bench in NCLAT for hearing appeals under the Competition Act.
  • Introduction of express provisions to identify ‘hub and spoke’ agreements as well as agreements that do not fit within typical horizontal or vertical anti-competitive structures to cover agreements related to business structures and models synonymous with new age markets.Additional enforcement mechanism of ‘Settlement & Commitments” in the interests of speedier resolution of cases of anti-competitive conduct.
  • Enabling provisions to prescribe necessary thresholds, inter alia, deal-value threshold for merger notifications.
  • CCI to issue guidelines on imposition of penalty to ensure more transparency and faster decision making which will encourage compliance by businesses.
  • Strengthening the governance structure of CCI with the introduction of a Governing Board to oversee advocacy and quasi-legislative functions, leaving adjudicatory functions to the Whole-time Members.Merging DG’s Office with CCI as an ‘Investigation Division’ as it aids CCI in discharging an inquisitorial rather than adversarial mandate. However, functional autonomy must be protected.
  • Opening of CCI offices at regional level to carry out non-adjudicatory functions such as research, advocacy etc. and interaction with State Governments and State regulators.


Why in News?

  • Shri Injeti Srinivas, Secretary (Corporate Affairs), presented the Report of the High Level Committee on CSR to the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman.


  • The main recommendations include, making Corporate Social Responsibility (CSR) expenditure tax deductible, provision for carry forward of unspent balance for a period of 3 – 5 years.
  • The other recommendations include developing a CSR exchange portal to connect contributors, beneficiaries and agencies, allowing CSR in social benefit bonds, promoting social impact companies, and third party assessment of major CSR projects.
  • The Committee has emphasized on not treating CSR as a means of resource gap funding for government schemes.
  • It has emphasized on CSR spending as a board driven process to provide innovative technology based solutions for social problems.
  • The Committee has also recommended that companies having CSR prescribed amount below Rs. 50 lakh may be exempted from constituting a CSR Committee.
  • The Committee has also recommended that violation of CSR compliance may be made a civil offence and shifted to the penalty regime.


  • Context: Negative rate policy – once considered only for economies with chronically low inflation such as Europe and Japan – is becoming a more attractive option for some other central banks to counter unwelcome rises in their currencies.

What is Negative Rate Policy:

  • A negative interest rate policy (NIRP) is an unconventional monetary policy tool employed by a central bank whereby nominal target interest rates are set with a negative value, below the theoretical lower bound of zero percent.
  • A NIRP is a relatively new development (since the 1990s) in monetary policy used to mitigate a financial crisis.

Why have some Central Banks adopted Negative Rates?

  • To battle the global financial crisis triggered by the collapse of Lehman Brothers in 2008, many central banks cut interest rates near zero.
  • A decade later, interest rates remain low in most countries due to subdued economic growth.
  • With little room to cut rates further, some major central banks have resorted to unconventional policy measures, including a negative rate policy.
  • The euro area, Switzerland, Denmark, Sweden and Japan have allowed rates to fall slightly below zero.

How does it work?

  • Under a negative rate policy, financial institutions are required to pay interest for parking excess reserves with the central bank.
  • That way, central banks penalise financial institutions for holding on to cash in hope of prompting them to boost lending.
  • The European Central Bank (ECB) introduced negative rates in June 2014, lowering its deposit rate to -0.1% to stimulate the economy.
  • Given rising economic risks, markets expect the ECB to cut the deposit rate, now at -0.4%, in September.
  • The Bank of Japan (BOJ) adopted negative rates in January 2016, mostly to fend off an unwelcome yen spike from hurting an export-reliant economy.
  • It charges 0.1% interest on a portion of excess reserves financial institutions park with the BOJ.

What are the Pros, Cons:

  • Aside from lowering borrowing costs, advocates of negative rates say they help weaken a country’s currency rate by making it a less attractive investment than that of other currencies.
  • A weaker currency gives a country’s export a competitive advantage and boosts inflation by pushing up import costs.
  • But negative rates put downward pressure on the entire yield curve and narrow the margin financial institutions earn from lending.
  • If prolonged ultra-low rates hurt the health of financial institutions too much, they could hold off on lending and damage the economy.
  • There are also limits to how deep central banks can push rates into negative territory – depositors can avoid being charged negative rates on their bank deposits by choosing to hold physical cash instead.

What are central banks doing to Mitigate the Side-Effects?

  • The BOJ adopts a tiered system under which it charges 0.1% interest only to a small portion of excess reserves financial institutions deposit with the central bank.
  • It applies a zero or +0.1% interest rate to the rest of the reserves. The ECB is also expected to take “mitigating measures”, such as a partial exemption from the charge in the form of tiered deposits rates, if it were to deepen negative rates from the current -0.4%, analysts say.
  • But designing such a scheme won’t be easy in a bloc where cash is distributed unevenly among countries.
  • It could even backfire by pushing rates up in certain countries, rather than down.


  • Context: Researchers at Morgan Stanley have alerted that if US and China continue to heap increasing tariff and non-tariff barriers over the next four to six months, the world economy could enter a recession within the next three quarters.

Origin of the US-China dispute:

  • The US and China have been slugging it out since Trump slapped heavy tariffs on imported steel and aluminum items from China in March last year, and China responded by imposing tit-for-tat tariffs on billions of dollars’ worth of American imports.
  • The dispute escalated after Washington demanded that China reduce its $375 billion trade deficit with the US, and introduce “verifiable measures” for protection of Intellectual Property Rights, technology transfer, and more access to American goods in Chinese markets.

What is a Global Recession?

  • In an economy, a recession happens when output declines for two successive quarters (that is, six months). However, for a global recession, institutions such as the International Monetary Fund tend to look at more than just a weakness in the economic growth rate; instead, they look at a widespread impact in terms of the impact on employment or demand for oil etc. The long-term global growth average is 3.5 per cent. The recession threshold is 2.5 per cent.

What has Triggered the Alarm?

  • On August 1, trade tensions between the two biggest economies of the world escalated further when the US announced that it would impose 10 per cent tariff on imports from China.
  • These measures are to come in to effect from September 1.

China threatened to take Countermeasures:

  • In retaliation, China threatened to take countermeasures.
  • The US has also declared China a “currency manipulator”.
  • In other words, the US accuses China of deliberately weakening the yuan to make Chinese exports to the US more attractive and undercut the effect of increased tariffs that the US is employing.

What is Currency manipulation?

    • Currency manipulation refers to actions taken by governments to change the value of their currencies relative to other currencies in order to bring about some desirable objective.
    • The typical claim – often doubtful – is that countries manipulate their currencies in order to make their exports effectively cheaper on the world market and in turn make imports more expensive.
  • The renewed trade tensions threaten to derail the already struggling global economy.
  • For instance, the global manufacturing Purchasing Managers’ Index and new orders sub-index have contracted for the second consecutive month in July; they are already at a seven-year low.
  • Further, the global capital expenditure cycle has “ground to a halt”; since that start fo 2018, there’s been a sharp fall-off in nominal capital goods imports growth.
  • Central banks around the world are cutting interest rate in a bid to shore up global economic activity.
  • To some extent, that cheap money policy is countering the adverse impacts of trade wars and all-round global uncertainty, thanks to Brexit and geopolitical tensions in West Asia, and between the US and North Korea.

How do higher tariffs affect growth?

  • According to Morgan Stanley, two-thirds of the goods being lined up for increased tariffs are consumer goods. Higher tariffs are not only likely to douse demand but, most crucially, hit business confidence.
  • The apprehension is that the latest US tariffs and similar countermeasures by China could start a negative cycle wherein businesses do not feel confident to invest more, given the lower demand for consumer goods.
  • Reduced capital investment would reflect in fewer jobs, which, in turn, will show up in reduced wages and eventually lower aggregate demand in the world.
  • What makes this scenario tricky is that fact that monetary policy is already loose.
  • Ideally, the global economy should not risk reaching a recession at a time when the monetary levers may not have a lot to offer.
  • In fact, at present, the trade tensions and uncertainty is negating the positives that a cheap money policy could provide to the world economy.

How India is impacted by US-China trade war?

  • There could be a short-term impact on the stock markets.
  • The benchmark Sensex at the Bombay Stock Exchange has been falling in line with global markets that have been spooked by the escalating trade war between the US and China.
  • In the longer run, while a slowdown in the US economy does not augur well for emerging markets, the trade war could have a silver lining for some countries.
  • India is among a handful of economies that stand to benefit from the trade tensions between the world’s top two economies, the United Nations has said in a report.
  • Other countries set to benefit from the trade tensions include Vietnam, with 5% export gains, Australia (4.6%), Brazil (3.8%), India (3.5%), and Philippines (3.2%), the UNCTAD study said.

The value of the Indian Rupee:

  • In the last one month, the value of the rupee has dropped to an all-time low, when in some occasions it was hovering around the mid 68s against the US dollar.
  • This coincided with Donald Trump’s threat of imposing a fresh round of tariffs on exports worth $200 billion.
  • This trend can be traced to the weakening of the US dollar, which automatically creates a negative impact on the trade deficit of India, causing a chain reaction of sorts.

India-US duties

  • As the United States of America imposed duties on steel and aluminium, India now has to pay approximately $241 million worth of tax to the US.
  • India, on the other hand, as a counter-measure has proposed imposing duties on 30 different types of goods.
  • This will ensure that the US has to pay about $238 million as duties to India.
  • However, this will make life more difficult for the end consumers as everything that falls under the tariff scanner is expected to become more expensive.


  • Context: The Centre is planning to mandate uniform certification by pushing through a replacement to the Seeds Act, 1966.


  • More than half of all seeds sold in India are not certified by any proper testing agency, and are often of poor quality.
  • The existing legislation that was enacted over half a century ago and therefore there is a need for revival.

Proposed Changes in The New Bill:

  • The 1966 Act starts with these words: “An Act to provide for regulating the quality of certain seeds for sale…” The new Bill removes the word “certain”, and aims to regulate the quality of all seeds sold in the country, as well as exported and imported seeds.
  • The new law will also raise the stakes by increasing penalties for non-compliance. Currently, the fine ranges from ₹500 to ₹5,000.


  • New changes could increase overall agricultural productivity by up to 25%.
  • It will also bring uniformity to the process of quality regulation.


Why in News?

  • The Government has launched a scheme namely “Financial Support to MSMEs in ZED Certification Scheme”.


  • The objective of the scheme for promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst micro, small and medium enterprises (MSMEs)
  • The ZED Assessment for their certification so as to:
    • Develop an Ecosystem for Zero Defect Manufacturing in MSMEs.
    • Promote adaptation of Quality tools/systems and Energy Efficient manufacturing.
    • Enable MSMEs for manufacturing of quality products.
    • Encourage MSMEs to constantly upgrade their quality standards in products and processes.
    • Drive manufacturing with adoption of Zero-Defect production processes and without impacting the environment.
    • Support ‘Make in India’ campaign.
    • Develop professionals in the area of ZED manufacturing and certification.
    • There are 50 parameters for ZED rating and additional 25 parameters for ZED Defence rating under ZED Maturity Assessment Model.
  • The MSMEs are provided financial assistance for the activities to be carried out for ZED certification i.e., Assessment / Rating, Additional rating for Defence angle, Gap Analysis, Handholding, Consultancy for improving the rating of MSMEs by Consultants and Re-Assessment / Re-Rating.
  • Quality Council of India (QCI) has been appointed as the National Monitoring & Implementing Unit (NMIU) for implementation of ZED.


Why in News?

  • The Vice President of India, Shri M. Venkaiah Naidu has called for introducing structural reforms in the agricultural sector along with financial assistance schemes like Direct Benefit Transfer to make agriculture profitable and sustainable.
  • He inaugurated the Mukhya Mantri Krishi Ashirwad Yojna of the Jharkhand Government.


  • Under the scheme, all the small and marginal farmers of the state, who have arable land up to a maximum of 5 acres, will be given a grant-in-aid at the rate of Rs. 5000 / – per acre per year, which will also reduce their dependence on loans.
  • This amount would be given in two instalments through Direct Benefit Transfer to the beneficiary’s bank account.
  • This is in addition to PM Kisan Nidhi Yojana under which each small & marginal farmer’s family having combined landholding/ ownership of up to two hectares is paid Rs. 6,000 per year.
  • Direct Benefit Transfer would eliminate middlemen and ensure that every penny of the financial assistance given by the government reaches the beneficiaries.
  • Government of India has taken a firm resolve to double the income of farmers by 2022.


Why in News?

  • The Indian Council for Research on International Economic Relations (ICRIER) study suggests the need to empower the Farmer Producer Organizations (FPOs) to trade in the commodities futures market.


  • For futures market to achieve the objectives of price discovery and risk mitigation and have an impact on Indian agriculture, it is necessary that more farmers and farmer-producer organisations (FPOs) participate in it.
  • The concept of ‘Farmer Producer Organizations (FPO)’ consists of collectivization of producers, especially small and marginal farmers so as to form an effective alliance to collectively address many challenges of agriculture such as improved access to investment, technology, inputs, and markets.
  • The FPO can be a production company, a cooperative society or any other legal form which provides for sharing of benefits among the members. In some forms like producer companies, institutions of primary producers can also become a member of PO.
  • The FPOs are generally mobilized by promoting institutions/ resource agencies (RAs). Small Farmers Agribusiness Consortium (SFAC) provides support for the promotion of FPOs.
  • The resource agencies leverage the support available from governments and agencies like NABARD to promote and nurture FPOs, but attempting an assembly line for mass production of FPOs has not given the desired results.

Future Market:

  • Futures contracts are used as hedging instruments in agricultural commodities. Hedging is a common practice that insures the farmer against a poor harvest by purchasing futures contracts in the same commodity.
  • Forward Markets Commission (FMC) was a regulatory authority for commodity futures market in India. Forward Markets Commission (FMC) has been merged with Securities and Exchange Board of India (SEBI) with effect from September 28, 2015.


Context: The PM-KMY was launched by Agriculture Minister which entitles eligible farmers for monthly pension of ₹3,000 per month on attaining the age of 60.

About PM-KMY:

  • Aim: Welfare of small and marginal farmers across the country.

Key Highlights of the Scheme:

  • It is a voluntary and contributory scheme for farmers and the entry age is between 18 to 40 years.
  • Eligible farmers will be provided with a monthly pension of Rs. 3000/- per month on attaining the age of 60 years.
  • The farmers will have to make a monthly contribution of Rs.55 to Rs.200, depending on their age of entry, in the Pension Fund till they reach the retirement date i.e. the age of 60 years.
  • The Central Government will also make an equal contribution of the same amount in the pension fund.
  • The spouse is also eligible to get a separate pension of Rs.3000/- upon making separate contributions to the Fund.
  • The Life Insurance Corporation of India (LIC) shall be the Pension Fund Manager and responsible for Pension pay out.
  • In case of death of the farmer before retirement date, the spouse may continue in the scheme by paying the remaining contributions till the remaining age of the deceased farmer.
  • If the spouse does not wish to continue, the total contribution made by the farmer along with interest will be paid to the spouse.
  • If there is no spouse, then total contribution along with interest will be paid to the nominee.
  • If the farmer dies after the retirement date, the spouse will receive 50% of the pension as Family Pension.
  • After the death of both the farmer and the spouse, the accumulated corpus shall be credited back to the Pension Fund.
  • The beneficiaries may opt voluntarily to exit the Scheme after a minimum period of 5 years of regular contributions.
  • On exit, their entire contribution shall be returned by LIC with an interest equivalent to prevailing saving bank rates.
  • The farmers, who are also beneficiaries of PM-Kisan Scheme, will have the option to allow their contribution debited from the benefit of that Scheme directly.
  • In case of default in making regular contributions, the beneficiaries are allowed to regularize the contributions by paying the outstanding dues along with prescribed interest.
  • The initial enrollment to the Scheme is being done through the Common Service Centres in various states.
  • Later on, alternative facility of enrollment through the PM-Kisan State Nodal Officers or by any other means or online enrollment will also be made available.
  • The enrollment is free of cost. The Common Service Centres will charge Rs.30/- per enrolment which will be borne by the Government.
  • There will be appropriate grievance redressal mechanism of LIC, banks and the Government. An Empowered Committee of Secretaries has also been constituted for monitoring, review and amendments of the Scheme.



  • The Indian economy is facing one of its most challenging times in years, and policymakers are responding to the crisis through monetary measures, such as tweaking key interest rates.

RBI Monetary Policy:

  • The Reserve Bank of India, in its bi-monthly monetary policy meeting, lowered its growth projection for the current financial year to 6.9%, from its earlier forecast of 7%.
  • India has already lost its tag as the world’s fastest-growing major economy after GDP growth in the March quarter of financial year 2019 slipped to 5.8%.
  • Taking note of the sagging growth, the central bank cut the repo rate – at which it lends to commercial banks – by 35 basis points to 5.4%, the lowest level since 2010.
  • A basis point is one-hundredth of a percentage point. This marks the fourth consecutive time the key interest rate has been slashed since February 2019.

Why RBI cutting Repo Rate:

  • The reasoning is that lower interest rates will reduce the cost of loans and stimulate falling consumption.
  • The current economic slowdown has been widely attributed to tepid demand, which has, in the past been the key driver of growth.

Weak Consumption:

  • Weak consumption is evidenced by muted demand for automobiles, air travel and fast-moving consumer goods in recent times.
  • The automobile industry, in particular, has witnessed a long-drawn slowdown, resulting in significant job losses.

NBFCs Shadow banking:

  • One reason for the weak demand is the crisis in the shadow banking sector, or the non-banking financial companies.
  • The lack of credit for big-ticket spending may have played a significant role in the slump in automobile sales, for instance.
  • The RBI is, therefore, attempting to increase liquidity flows to non-banking financial companies by allowing banks to invest more in shadow banks.

Limitation of Monetary Policy:

  • It seems appropriate that a crisis, which has its origins in the financial system, should be solved through monetary measures.
  • However, the dynamics of a modern economy may mean that monetary policy moves alone will not be enough, and fiscal policy tools, too, will have to be deployed to deal with the situation.

US similar Situation:

  • Parallels of today’s economic situation can be seen in the US experience of 2008. That year, the recession began in the mortgage industry.
  • The inability of consumers to repay their loans resulted in financial stress for the mortgage firms.
  • This later spread to all major banks and financial institutions that had invested in assets backed by these mortgages.
  • A good part of monetary policy was initially focused on introducing substantial amounts of liquidity into the system.
  • The official interest rate was reduced until it hit zero and could be reduced no more.
  • Failing banks were propped up through interventions by the US Federal Reserve.
  • Monetary policy took the form of large-scale quantitative easing.
  • The Federal Reserve bought stressed assets and securities from banks by simply creating money, in an attempt to increase liquidity and clean up banks’ balance sheets and get them to lend again. Yet, these measures were inadequate. Interest rates remained close to zero for years, with the economy being slow to respond.
  • Quantitative easing might have helped limit the extent of the recession but did not revive growth significantly.
  • Ultimately, fiscal policy measures were needed for a full recovery.

Why financial crises cannot always be solved through monetary and financial measures alone:

  • The reason why financial crises cannot always be solved through monetary and financial measures alone is because of the knock-on effect unemployment can have in an economy.
  • The current fall in demand for automobiles in India has led to about 350,000 workers losing their jobs since April. These workers may not be consumers of cars, but they will reduce their purchases of clothing and other consumer durables, for instance.


  • And those who otherwise earn their incomes from the sale of vehicles, such as owners of showrooms or retailers, might choose not to purchase cars due to their businesses facing reduced demand, even if interest rates are low and non-banking financial companies resume lending.
  • Unemployment can have a multiplier effect, on various spheres of the economy. On seeing reduced demand, manufacturers and business-owners might reduce their expectations of future profits and might cut back on investment plans.
  • In financial year 2018, unemployment in India stood at a 45-year high of 6.1%. An increase in the availability of credit to consumers, therefore, may not necessarily be enough to induce spending again.

John Maynard Keynes said:

  • Monetary policy in the face of serious economic crisis becomes similar to “pushing on a string,” unable to exert any effect on demand.

The need for fiscal policy:

  •  To be sure, there are differences between the 2008 crisis and India’s current problems.
    • For one, the US suffered negative growth rates, while India is still growing, albeit at slower rates.
    • Secondly, Indian interest rates still have sufficient space for further reductions, unlike US rates which reached near zero and could not be reduced further.
  •  Yet there are grounds to be concerned. The current crisis compounds the problem of record unemployment the economy is already facing.
  •  It is imperative that fiscal policy is used and demand be revived, through public spending to shore up the economy.


  • Adhering to a strict fiscal deficit target may prove to be counter-productive in the face of a widespread reduction in demand.
  • The world has enough experience to see how crises that start in financial sectors can rapidly spread outwards, and it is imperative to take all steps to combat the problems the economy currently faces.



  • Federation of Automobile Dealers Associations has stated that nearly 2 lakh jobs have been cut in the last three months due to the slowdown. The slowdown continued in July, which reflected in the decline in domestic sales of up to 50 per cent announced by leading automobile manufacturers.
  • Players from the auto sector petitioned the government for assistance, including a reduction of GST from 28 per cent to 18 per cent on vehicles.
  • And called for a temporary relief on GST by way of modification in slabs or removal of cess to put the industry back on track.


  • The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest manufacturer of commercial vehicles in 2018.
  • The Two Wheelers segment dominates the market in terms of volume owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided the growth of the sector.

Recent Issue:

Slowdown in Sale of Automobile:

  • As per SIAM figures, vehicle sales across all categories declined by 12.35 per cent to 60,85,406 units between April and June 2019 against 69,42,742 units in same period of last year.
  • FADA has stated that nearly 2 lakh jobs have been cut in the last three months due to the slowdown.
  • The slowdown continued in July, which reflected in the decline in domestic sales of up to 50 per cent announced by leading automobile manufacturers.

Loss of jobs in the sector:

  • As a result of the cuts in production, companies have now resorted to reducing headcounts, industry insiders say.
  • The job losses have begun across the value chain, including in showrooms, suppliers, and other stakeholders, and companies are now considering reducing their headcount — starting with contractual employees.

Demand for quick resolution:

  • Making a case for quick resolution and a cut in GST rates.
  • Auto industry contributes revenues of over of Rs 1,80,000 crore to government treasuries, and the current slowdown in the auto industry poses a major threat to the financial arithmetic of the government.
  • According to SIAM estimates, the slowdown has resulted in an 8% loss in GST collection in the first six months of 2019.
  • Hinting that decline in the auto sector may hurt the economy,
  • Automobile sector has a huge multiplier effect.
    • Auto Sector constitutes 7.1 per cent of the GDP, and 49% of the manufacturing GDP in the country, and it supports almost 37 million jobs (inclusive of its value chain).
  • Alongside a cut in GST rates, the industry has also been demanding that banks and other lenders pass the cut in rates by the Reserve Bank of India to the consumers so that demand is revived.

Previous Initiatives of Government in Automobile sector:

  • The Government of India encourages foreign investment in the automobile sector and allows 100 per cent FDI under the automatic route.
  • Some of the recent initiatives taken by the Government of India:
  • The government aims to develop India as a global manufacturing centre and an R&D hub.
  • Under National Automotive Testing And R&D Infrastructure Project (NATRIP), the Government of India is planning to set up R&D centres at a total cost of US$ 388.5 million to enable the industry to be on par with global standards
  • The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the country for introduction of electric vehicles (EVs) in their public transport systems under the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme. The government will also set up incubation centre for start-ups working in electric vehicles space.
  • In February 2019, the Government of India approved the FAME-II scheme with a fund requirement of Rs 10,000 crore (US$ 1.39 billion) for FY20-22.



  • In a bid to augur economic activity amidst slowing consumption demand, the monetary policy committee of Reserve Bank of India on Wednesday unanimously decided to go for its fourth cut this year.


  • With a 35 basis point cut (highest this year) the repo rate, at which RBI lends to commercial banks, stood at a 9-year low of 5.4 per cent, since July 2010 when it was 5.25 per cent.
  • The previous three cuts this year were 25 basis points each. Alongside a cut in the repo rate, the central bank also lowered its GDP growth projection from 7 per cent in June policy to 6.9 per cent now.

Why the Rate Cut?

  • While inflation is a key consideration for a rate cut and it provided RBI the comfort to go for a cut, the decision was also taken to boost aggregate demand especially private investment.
  • The monetary policy statement said that “inflation is currently projected to remain within the target over a 12-month ahead horizon”.
  • The RBI statement further said that
    • Domestic Economic activity continues to be weak,
    • With the global slowdown and
    • Escalating Trade Tensions posing downside risks.
  • It added that while private consumption, the mainstay of aggregate demand, and investment activity remain sluggish.

Why Has Growth Been Revised Downwards GDP?

  • This is the second consecutive policy statement where the RBI has lowered its GDP growth projection for 2019-20.
  • While in June statement it revised it projection downward from 7.2 per cent (stated in April 2019) to 7 per cent.
  • This time it further revised the growth projection further down to 6.9 per cent.
  • The RBI said that “various high frequency indicators suggest weakening of both domestic and external demand conditions…business expectations Index of the Reserve Bank’s industrial outlook survey shows muted expansion in demand conditions in Q2, although a decline in input costs augurs well for growth”.
  • It said that the monetary policy easing since February 2019 is expected to support economic activity, going forward.

Significance of Monetary Policy:

  • It influences the interest rate in the economy — which is the cost of money when you don’t have it, and the reward for parting with it when you have it.
  • In any economy, economic activity, which is measured by gross domestic product or GDP, happens by one of four ways.
    • One, private individuals households spend money on consumption.
    • Two, the government spends on its agenda.
    • Three, private sector businesses “invest” in their productive capacity.
    • And four, the net exports — which is the difference between what all of them spend on imports as against what they earn from exports.
  • At the heart of any spending decision taken by any of these entities lies the question: What is the cost of money?
  • Monetary policy essentially answers that question
  • In every country, the central bank is mandated to decide the cost of money, which is more commonly known as the “interest rate” in the economy.
  • While various factors make it difficult for a central bank to exactly dictate interest rates, as a thumb rule, RBI’s decision on the repo rate sets the markers for the rest of the economy. In other words, the EMI for your car or home is determined by what the RBI decides.

What Is the Repo Rate?

  • Repo and Reverse repo are short for Repurchase agreements between the RBI and the commercial banks in the economy.
  • In essence, the repo rate is the interest rate that the RBI charges a commercial bank when it borrows money from the RBI.
  • As such, if the repo falls, all interest rates in the economy should fall. And that is why common people should be interested in the RBI’s monetary policy.

But the interest rate for consumer loans has not reduced by 110 bps since February. Why?

  • In the real world, the “transmission” of an interest rate cut (or increase) is not a hundred per cent.
  • And that is why, even though when the RBI cut by 35 bps lay consumers may only receive a much lower reduction in the interest rate on their borrowings.
  • This is due to a lot of factors — but primarily, it has to do with the health of the concerned commercial bank.

Issues with Commercial Bank

  • Over the past few years, almost all banks, especially the ones in the public sector, have seen their profits plummet because many of their past loans have turned out to be non-performing assets (in other words, they are not getting repaid).
  • To cover for these losses, the banks have to use their existing funds, which would have otherwise gone to common consumers for fresh loans.
  • Lag in monetary policy
    • The reduced repo rate applies only to new borrowings of banks. The banks’ cost of existing funds is higher. Of course, funding costs would eventually come down — but this process would take time.
    • This “lag” in monetary policy is a key variable in determining the efficacy of any rate cut by the RBI.
    • It could take anywhere between 9 and 18 months for the full effect of an RBI decision to reflect in interest rates across the economy.

Will the rate cut bring Investments?

  • Investments depend essentially on the “real” interest rate.
  • The real interest rate is the difference between the repo rate and retail inflation.
  • When making an investment decision, it is this interest rate that matters.
  • As a variable, it allows an investor to compare the attractiveness of different economies.
  • Real interest rates in India have been rising, and that is one of the biggest reasons why investments are not happening.
  • The RBI’s move would reduce the real interest rate and hopefully attract more investment.

Monetary Policy Committee Composition

  • Governor of the Reserve Bank of India – Chairperson, ex officio; (Shri Shaktikanta Das)
  • Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy- BP Kanungo (Member, ex officio).
  • One officer of the Reserve Bank of India to be nominated by the Central Board – Member, ex officio; (Dr. Michael Debabrata Patra)
  • Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmedabad – Member.
  • Professor Pami Dua, Director, Delhi School of Economics – Member
  • Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member.



  • The Trump administration formally labeled China a currency manipulator, further escalating its trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation for new US tariffs.


  • It’s the first time that the US labeled a country a manipulator since the 1990s, when China was also the target.While Trump promised to declare China a currency manipulator during his presidential campaign in 2016, Treasury had so far declined to take the step.

What Is Currency Manipulation and Who Determines It?

  • Currency manipulation refers to actions taken by governments to change the value of their currencies relative to other currencies in order to bring about some desirable objective.
  • The typical claim – often doubtful – is that countries manipulate their currencies in order to make their exports effectively cheaper on the world market and in turn make imports more expensive.
  • The US Department of the Treasury publishes a semi-annual report in which the developments in global economic and exchange rate policies are reviewed.
  • If a US trade partner meets three assessment criteria, the US labels it a currency manipulator.
  • The US then tries to solve it via bilateral talks.

How Are Countries Identified for The Currency Manipulation List?

  • The US Treasury has established thresholds for the three criteria.
    • First, a significant bilateral trade surplus with the US is one that is at least $20 billion;
    • Second, a material current account surplus is one that is at least 3% of GDP; and
    • Third, persistent, one-sided intervention reflected in repeated net purchases of foreign currency and total at least 2% of an economy’s GDP over a year.
  • The Treasury’s goal is to focus attention on those nations whose bilateral trade is most significant to the US economy and whose policies are the most material for the global economy.

What is the impact of US treasury labels China a ‘currency manipulator’

  • While the Treasury Department’s determination is largely symbolic
  • The potential penalties are less punitive than the steps Trump has already taken against China.
  • It underscores how rapidly the relationship between the world’s two largest economies is deteriorating.
  • Under the designation, Treasury Secretary Steven Mnuchin “will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions,
  • If there is no progress a year after the designation, China could face possible sanctions including its firms being prohibited from competition for US government contracts and excluded from getting financing from an American government agency for development projects.

China’s Stand:

  • The US’s manipulator announcement followed a declaration by China’s central bank chief, Yi Gang, that his nation wouldn’t use the yuan as a tool to deal with trade disputes.

Why US did this Now:

  • The Trump administration in May moved to let US-based companies seek tariffs on products from countries found by Treasury to be engaging in competitive devaluation of their currencies.

Assessment Criteria Used By US:

  • The US Treasury has established thresholds for the three criteria.
    • First, a significant bilateral trade surplus with the US is one that is at least $20 billion;
    • Second, a material current account surplus is one that is at least 3% of GDP; and
    • Third, persistent, one-sided intervention reflected in repeated net purchases of foreign currency and total at least 2% of an economy’s GDP over a year.
  • The Treasury’s goal is to focus attention on those nations whose bilateral trade is most significant to the US economy and whose policies are the most material for the global economy.


Why in News?

  • Bureau of Indian Standards (BIS) has published an Indian Standard for identification, marking and labelling of Pashmina products to certify its purity.


  • Pashmina is a fine type of cashmere wool. The textiles made from it were first woven in Kashmir.
  • The wool comes from a number of different breeds of the cashmere goat; such as the changthangi or Kashmir pashmina goat from the Changthang Plateau in Tibet and part of the Ladakh region and few parts of Himachal Pradesh.
  • Often shawls called shahmina are made from this material in Kashmir and Nepal; these shawls are hand spun and woven from the very fine cashmere fibre.
  • Traditional producers of pashmina wool are people known as the Changpa.


  • The certification will help curb the adulteration of Pashmina and also protect the interests of local artisans and nomads who are the producers of Pashmina raw material.
  • It will also assure the purity of Pashmina for customers.
  • It will ensure better prices for the goat herding community in Ladakh as well as for the local handloom artisans producing genuine Pashmina products.

Pashmina Goat:

  • The Changthangi or Pashmina goat is a special breed of goat indigenous to the high-altitude regions of Ladakh in Jammu and Kashmir.
  • They are raised for ultra-fine cashmere wool, known as Pashmina once woven. The Textiles are handspun and were first woven in Kashmir.
  • The Changthangi goat grows a thick warn undercoat which is the source of Kashmir Pashmina wool – the world’s finest cashmere measuring between 12-15 microns in fiber thickness.
  • These goats are generally domesticated and reared by nomadic communities called the Changpa in the Changthang region of Greater Ladakh.
  • The Changthangi goats have revitalized the economy of Changthang, Leh and Ladakh region.

Bureau of Indian Standards (BIS):

  • The BIS is the national Standards Body of India working under the aegis of Ministry of Consumer Affairs, Food & Public Distribution.
  • It is established by the Bureau of Indian Standards Act, 1986 which came into effect on 23 December 1986.
  • The Minister in charge of the Ministry or Department having administrative control of the BIS is the ex-officio President of the BIS.


Why in News?

  • A joint venture company namely Khanij Bidesh India Ltd. (KABIL) is to be set up to ensure a consistent supply of critical and strategic minerals to Indian domestic market.
  • It would also help in realizing the overall objective of import substitution.

Khanij Bidesh India Ltd. (KABIL):

  • A joint venture company namely Khanij Bidesh India Ltd. (KABIL) is to be set up with the participation of three Central Public Sector Enterprises namely, National Aluminium Company Ltd.(NALCO), Hindustan Copper Ltd.(HCL) and Mineral Exploration Company Ltd. (MECL).
  • The equity participation between NALCO, HCL and MECL is in the ratio of 40:30:30.
  • The KABIL would carry out identification, acquisition, exploration, development, mining and processing of strategic minerals overseas for commercial use and meeting country’s requirement of these minerals.
  • The sourcing of these minerals or metals is to done by creating trading opportunities, G2G collaborations with the producing countries or strategic acquisitions or investments in the exploration and mining assets of these minerals in the source countries.
  • The new company will help in building partnerships with other mineral rich countries like Australia and those in Africa and South America, where Indian expertise in exploration and mineral processing will be mutually beneficial bringing about new economic opportunities.


  • The sustained source of mineral and metal commodities is imperative for the transportation and manufacturing segment. R Recalling the commitment at the UN Climate Change Conference, Pairs, 2015, where India has pledged to reduce greenhouse gas emissions and opting a greener mode of transportation by emphasizing upon Electric Vehicle Mobility.It is therefore important to ensure energy storage through batteries.
  • Among such twelve minerals identified as strategic minerals, which have meagre resource base, Lithium Cobalt are significant.


Why in News?

  • The Department of Revenue, Ministry of Finance, as part of its strategic commitment to improve global trade, is conducting India’s first National Time Release Study (TRS) between 1st – 7th August.

National Time Release Study:

  • The TRS is an internationally recognized tool advocated by World Customs Organization to measure the efficiency and effectiveness of international trade flows.
  • This initiative for accountable governance, will measure rule based and procedural bottlenecks (including physical touchpoints) in the clearance of goods, from the time of arrival until the physical release of cargo.
  • The aim is to identify and address bottlenecks in the trade flow process and take the corresponding policy and operational measures required to improve the effectiveness and efficiency of border procedures, without compromising efficient trade control.

How it will be done:

  • Previously individual customs formations had been independently conducting TRS studies at the port level. The national TRS has taken this a step further and evolved a uniform, multi-dimensional methodology which measures the regulatory and logistics aspects of the cargo clearance process and establishes the average release time for goods.
  • The exercise will be conducted at the same time across 15 ports including sea, air, land and dry ports which cumulatively account for 81% of total Bills of Entries for import and 67% of Shipping Bills for export filed within India. The national TRS will establish baseline performance measurement and have standardized operations and procedures across all ports.
  • Based on the results of the TRS, government agencies associated with cross border trade will be able to diagnose existing and potential bottlenecks which act as barriers to the free flow of trade, and take remedial actions for reducing the cargo release time. The initiative is on ground lead by the Central Board of Indirect Tax and Customs.


  • Expected beneficiaries of this initiative will be export oriented industries and MSMEs, who will enjoy greater standardization of Indian processes with comparable international standards.
  • This initiative will help India maintain the upward trajectory on Ease of Doing Business, particularly on the Trading Across Borders indicator which measures the efficiency of the cross-border trade ecosystem. Last year India’s ranking on the indicator improved from 146 to 80.


Why in News?

  • Union Minister of Commerce & Industry and Railways, held a meeting with senior managers of IT companies in New Delhi

IT Industry Challenges:

  • India’s IT industry contributed 7.7% to the country’s GDP in FY 2017 and is expected to contribute 10% of India’s GDP by 2025.
  • The United States account for 2/3rds of India’s IT services exports.
  • India is the largest exporter of IT services in the world and exports dominate the Indian IT industry and constitutes about 79% of the total revenue of the industry.
  • India’s IT service sector is now gearing up to be the digital partner of intelligent automation like smart algorithms, bots and AI tools, which are fast becoming a part of every industry and an increasingly digital world.

    Challenges and support:

  • The representatives of the companies informed that although the Chinese IT services market is the third largest in the world India’s investments and business have not been able to grow in China.
  • This is due to various non-tariff barriers and challenges faced by Indian companies to set up their entity in China. Market access issues that create hurdles for Indian companies to open their business in China was also discussed.
  • Government of India will give all support for the global growth of India’s flagship industry and will make all efforts to facilitate the IT service industry and for that it is ready to engage with China and also Japan and Korea
  • Commerce and Industry Minister urged India’s IT services companies to explore other markets and not be inhibited in operating in countries that are non-English speaking.


Why in News?

  • The Insurance Regulatory and Development Authority of India (IRDAI) will soon allow the use of regulatory sandbox (RS) to promote new, innovative products and processes in the industry.

Regulatory Sandbox:

  • A sandbox approach provides a secure environment for fintech firms to experiment with products under supervision of a regulator. It is an infrastructure that helps fintech players live test their products or solutions, before getting the necessary regulatory approvals for a mass launch, saving start-ups time and cost.
  • The concept of a regulatory sandbox or innovation hub for fintech firms was mooted by a committee headed by then RBI executive director Sudarshan Sen.
  • The panel submitted its report in Nov 2017 has called for a regulatory sandbox to help firms experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.
  • If the product appears to have the potential to be successful, it might be authorised and brought to the broader market more quickly.
  • The sandbox will enable fintech companies to conduct live or virtual testing of their new products and services.


  • The RS allows the regulator, the innovators, the financial service providers (as potential deployers of the technology) and the customers (as final users) to conduct field tests to collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks.
  • India accounts for approximately 6 per cent of insurance premium in Asia and around 2 per cent of the global premium volume.

IRDAI sandbox:

  • For the IRDAI sandbox, an applicant should have a net worth of Rs 10 lakh and a proven financial record of at least one year.
  • Companies will be allowed to test products for up to 12 months in five categories.
  • It has said applicants can test products for up to a period of one year in five categories – insurance solicitation or distribution, insurance products, underwriting, policy and claims servicing.


Why in News?

  • Ministry of Skill Development & Entrepreneurship (MSDE), Government of India announced that a 48-member contingent will represent India at the biggest showcase of skills excellence in the world, called WorldSkills International Competition 2019.


  • WorldSkills International Competition referred to as the ‘Olympics for Skills’, is scheduled in Kazan, Russia.
  • More than 1,500 competitors from 60 countries will compete in 55 skill competitions at this mega event. India will participate in 44 skills.
  • National Skill Development Corporation (NSDC) under the aegis of MSDE has been leading India’s delegation at this biennial event since 2011
  • Through WorldSkills Competition, we aim to provide opportunities to the youth in our country to compete with, and learn from, their peers across the globe.
  • Such initiatives also help us benchmark our skills to international standards and will improve the quality of vocational training in India.



  • The Cabinet Committee on Economic Affairs (CCEA), gave its nod for raising the subsidized prices of sulphur-based fertilizers.


  • The move is aimed at discouraging rampant use of nitrogen-phosphorous-potassium (NPK) fertilizers, which impacts soil quality.

Sulphur fertilizer contains:

  • Sulphur: Amino acids, vitamins. Imparts dark green color.
  • Stimulates seed production.

Fertilizer Basics:

  • 15 of the essential nutrients are supplied by the soil to plants. Out of them, Nitrogen, Phosphorus and Potassium are called primary nutrients or macronutrients.
  • Three more elements viz. Calcium, Magnesium and Sulphur are known as secondary nutrients because the deficiency of them is less likely to be a growth limiting factor. Calcium and Magnesium are generally added to soil to adjust soil pH.
  • Sulphur generally gets added to soil via rain and release from organic matter in soil.

Indiscriminate use of Fertilizers in India:

  • Indiscriminate use of synthetic fertilizers can result in soil contamination by heavy metals; reduction in the nutritional value of crops, reduction in soil fertility etc.
  • Fertilizers contaminate the soil with impurities, which come from the raw materials used for their manufacture.
  • Over use of NPK fertilizers reduce quantity of vegetables and crops grown on soil over the years.
  • It also reduces the protein content of wheat, maize, grams, etc., grown on that soil.
  • The carbohydrate quality of such crops also gets degraded.
  • Excess potassium content in soil decreases Vitamin C and carotene content in vegetables and fruits.
  • The vegetables and fruits grown on overfertilized soil are more prone to attacks by insects and disease.

What are the major issues of Fertilizer Subsidies?

  • The objective of the government is to support the farmers but the question is exactly how much of that really goes to the pocket of the farmers and how much is siphoned by the companies.
  • It has been debated that the beneficiaries have been the large farmers and not small & marginal farmers.
  • While deciding on the subsidy regime, it has to be kept in mind that Urea accounts for almost 50 per cent of fertiliser application and India is NOT self-sufficient in Urea production. At the same time, distorted subsidy regime may deplete the NPK use ratio. The normally accepted ratio is 4:2:1.



  • New study finds firms that have adopted green bonds benefit from both positive financial and environmental outcomes.

What Are Green Bonds:

  • A green bond is like any other regular bond but with one key difference: the money raised by the issuer are earmarked towards financing `green’ projects, i.e. assets or business activities that are environment-friendly.
  • Such projects could be in the areas of renewable energy, clean transportation and sustainable water management.

What Are Benefits of Green Bonds?

  • Green bonds enhance an issuer’s reputation, as it helps in showcasing their commitment to wards sustainable development.
  • It also provides issuers access to specific set of global investors who invest only in green ventures.With an increasing focus of foreign investors towards green investments, it could also help in reducing the cost of capital.
  • Green bonds present the opportunity for investors to feel as if they’re making a difference for the environment while earning a respectable return in the process.

Green Bond in India

  • CLP India, was the first Indian company to tap this route. So far, Rs 7,200 crore has been raised via green bonds.

Key Findings of Study

  • Green bonds offer financial benefits to companies in the long run in terms of better returns on assets and equity.
  • Green bonds fulfil their intended goal of better environmental outcomes: companies issuing green bonds saw a significant reduction in their CO2 emissions and a boost in their environmental ratings.
  • Though green bonds are only a small share of the larger bond market, they have grown rapidly over the last decade.
  • Most of these green bonds were issued by governments, financial and utility companies.
  • The green bond market is dominated by three countries – China ($83 billion worth of green bonds issued over the last decade), United States ($58 billion) and France ($57 billion) have been the largest issuers of green bonds.
  • India still lags behind these countries ($5.2 billion in 2018), it is one of the fastest-growing green bond markets in Asia.

Way Forward:

  • There are neither uniform standards to classify a green bond nor a governing body to regulate the market.
  • There is need to address this is critical issue for green bond markets to flourish which has good amount of potential.


Why in News:

  • Finance Minister in her budget speech referred to “back to basics “approach while speaking about Zero Budget Natural Farming.

What is Zero Budget Natural Farming?

  • Zero budget natural farming (ZBNF) is a method of chemical-free agriculture drawing from traditional Indian practices.
  • It was originally promoted by Maharashtrian agriculturist and Padma Shri recipient Subhash Palekar, who developed it in the mid-1990s as an alternative to the Green Revolution’s methods driven by chemical fertilizers and pesticides and intensive irrigation.
  • It is argued that the rising cost of the external inputs was a leading cause of indebtedness and suicide among farmers, while the impact of chemicals on the environment and on long-term fertility was devastating.
  • Without the need to spend money on these inputs — or take loans to buy them — the cost of production could be reduced and farming made into a “zero budget” exercise, breaking the debt cycle for many small farmers.
  • Instead of commercially produced chemical inputs, the ZBNF promotes the application of jeevamrutha — a mixture of fresh desi cow dung and aged desi cow urine, jaggery, pulse flour, water and soil — on farmland. This is a fermented microbial culture that adds nutrients to the soil, and acts as a catalytic agent to promote the activity of microorganisms and earthworms in the soil.
  • A similar mixture, called bijamrita, is used to treat seeds, while concoctions using neem leaves and pulp, tobacco and green chillis are prepared for insect and pest management.
  • The ZBNF method also promotes soil aeration, minimal watering, intercropping, bunds and topsoil mulching and discourages intensive irrigation and deep ploughing.

Why does it Matter?

  • According to National Sample Survey Office (NSSO) data, almost 70% of agricultural households spend more than they earn and more than half of all farmers are in debt.
  • In States such as Andhra Pradesh and Telangana, levels of indebtedness are around 90%, where each household bears an average debt of ₹1 lakh.
  • In order to double farmers income by 2022, one aspect being considered is natural farming methods such as the ZBNF which reduce farmers’ dependence on loans to purchase inputs they cannot afford. Meanwhile, inter-cropping allows for increased returns.
  • The Economic Survey has also highlighted the ecological advantages.

Is it Effective?

  • A limited 2017 study in Andhra Pradesh claimed a sharp decline in input costs and improvement in yields.
  • However, reports also suggest that many farmers, have reverted to conventional farming after seeing their ZBNF returns drop after a few years, in turn raising doubts about the method’s efficacy in increasing farmers’ incomes.
  • ZBNF critics, including some experts within the Central policy and planning think tank NITI Aayog, note that India needed the Green Revolution in order to become self-sufficient and ensure food security.
  • They warn against a wholesale move away from that model without sufficient proof that yields will not be affected.
  • Sikkim, which has seen some decline in yields following a conversion to organic farming, is used as a cautionary tale regarding the pitfalls of abandoning chemical fertilizers.

Which are the States with big plans?

  • According to the Economic Survey, more than 1.6 lakh farmers are practising the ZBNF in almost 1,000 villages using some form of state support, although the method’s advocates claim more than 30 lakh practitioners overall.
  • The original pioneer was Karnataka, where the ZBNF was adopted as a movement by a State farmers’ association. Large-scale training camps were organised to educate farmers in the method.
  • In June 2018, Andhra Pradesh rolled out an ambitious plan to become India’s first State to practise 100% natural farming by 2024. It aims to phase out chemical farming over 80 lakh hectares of land, converting the State’s 60 lakh farmers to ZBNF methods.
  • Himachal Pradesh, Chhattisgarh, Kerala, Karnataka and Uttarakhand have also invited Mr. Palekar to train their farmers.

Is the Budgetary Support Enough?

  • Despite the ZBNF buzz caused by the Budget speech, the Finance Minister did not actually announce any new funding to promote it.
  • Last year, the Centre revised the norms for the Rashtriya Krishi Vikas Yojana- Remunerative Approaches for Agriculture and Allied sector Rejuvenation (RKVY-RAFTAAR), a flagship Green Revolution scheme with an allocation of ₹3,745 crore this year, and the Paramparagat Krishi Vikas Yojana, which has an allocation of ₹325 crore and is meant to promote organic farming and soil health.
  • Under the revised guidelines, both Centrally-sponsored schemes now allow States to use their funds to promote the ZBNF, vedic farming, natural farming, cow farming and a host of other traditional methods.
  • Andhra Pradesh says it has utilised ₹249 crore from these schemes to promote the ZBNF over a two-and-a-half-year period.
  • The State estimates it will need ₹17,000 crore to convert all of its 60 lakh farmers to the ZBNF over the next 10 years.
  • However, this is only a fraction of the spending on Central government subsidies for fertilizers, pesticides and mass irrigation that has driven the Green Revolution model.

Way Ahead:

  • NITI Aayog has been among the foremost promoters of ZBNF method.
  • However, its experts have also warned that multi-location studies are needed to scientifically validate the long-term impact and viability of the model before it can be scaled up and promoted country-wide.
  • The Indian Council of Agricultural Research is studying the ZBNF methods practised by basmati and wheat farmers in Modipuram (Uttar Pradesh), Ludhiana (Punjab), Pantnagar (Uttarakhand) and Kurukshetra (Haryana), evaluating the impact on productivity, economics and soil health including soil organic carbon and soil fertility.
  • If found to be successful, an enabling institutional mechanism could be set up by NITI Aayog to promote the technology.
  • The Andhra Pradesh experience is also being monitored closely to judge the need for further public funding support.


Why in news?

  • The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2019 and the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019.

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2019:

  • The amendments specify the process for withdrawal of applications before constitution of committee of creditors (CoC), after constitution of CoC but before issue of invitation for expression of interest, and after issue of invitation for expression of interest.
  • While approving a resolution plan or deciding to liquidate the corporate debtor, the CoC may:
  • approve a plan providing for contribution for meeting the liquidation costs
  • recommend sale of the corporate debtor or sale of business of the corporate debtor as a going concern, and
  • fix, in consultation with the RP, the fee payable to the liquidator, if an order for liquidation is passed by the Adjudicating Authority

Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019:

  • The amendments specify the process for (i) sale of corporate debtor as going concern, and (ii) sale of business of corporate debtor as going concern under liquidation. These also provide that where a corporate debtor is sold as a going concern, the liquidation process shall be closed without dissolution of the corporate debtor.
  • The amendments require completion of liquidation process within one year of its commencement, notwithstanding pendency of applications for avoidance transactions.
  • To ensure that the liquidation process completes at the earliest, it:
    • provides a model timeline for each task in the liquidation process
    • specifies a maximum time of 90 days from the order of liquidation for completion of compromise or arrangement, if any, proposed by the stakeholders under section 230 of the Companies Act, 2013.
  • The amendments require the financial creditors, who are financial institutions, to contribute towards the liquidation cost, where the corporate debtor does not have adequate liquid resources to complete liquidation, in proportion to the financial debts owed to them by the corporate debtor, in case the CoC did not approve a plan for such contribution during corporate insolvency resolution process. However, such contribution along with interest at bank rate thereon shall form part of liquidation cost, which is paid in priority.
  • The amendments provide for constitution of a Stakeholders’ Consultation Committee, whose advice is not binding on the liquidator.
  • The amendments require that a stakeholder may submit its claim or update its claim submitted during the corporate insolvency resolution process, as on the liquidation commencement date.
  • The amendments have introduced a comprehensive compliance certificate to be submitted along with the final report to the Adjudicating Authority


Why in News?

  • North Eastern Region Vision 2020 document provides an overarching framework for the development of the North Eastern Region.
  • The main objective is to bring the north eastern region at par with other developed regions under which different Ministries, including the Ministry of Development of North Eastern Region have undertaken various initiatives.

Reasons for resource flow:

  • Mandatory earmarking of at least 10% of GBS of Central Ministries/Departments for North Eastern Region (NER).
  • Creation of Non-Lapsable Central Pool of Resources (NLCPR).
  • There has been a sharp rise in provisional expenditure (subject to final vetting by Ministry of Finance) by Central Ministries in NER by 83%.

Major initiatives:

  • Strengthening infrastructure and connectivity is a major thrust area identified by the Vision document. Several connectivity initiatives have been undertaken in the recent past.
  • In the last five years under the schemes of Ministry of DoNER funds were released for road projects, bridges, ISBT, airports, railway in North Eastern Region.
  • Moreover, Regional Connectivity Scheme (RCS-UDAN) has been launched to provide connectivity to unserved and underserved Airports within the country.
  • Also, to promote regional connectivity, airfare has been made affordable through Viability Gap Funding (VGF). The North East has been kept as a priority area under RCS-UDAN.
  • In respect of Rail Connectivity, during the last four years the entire North East Region has been converted to the Broad Gauge (BG) network.

Other major initiatives taken:

  • Promotion of MSMEs in North Eastern Region and Sikkim
  • Comprehensive Telecom Development Project (CTDP) for the North-Eastern Region
  • Comprehensive Scheme for strengthening of Transmission and Distribution Systems (CSST&DS).
  • North Eastern Region Power System Improvement Project (NERPSIP)
  • Mission Organic Value Chain Development for North Eastern Region scheme
  • North East Region Textile Promotion Scheme (NERTPS).
  • National Sports University at Imphal, Agartala-Akhaura Rail-Link to connect the existing Agartala station in Tripura to Akhaura Station of Bangladesh Railways
  • Development of Brahmaputra and 19 new waterways including Barak.


Why in News?

  • The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal in respect of Determination of ‘Fair and Remunerative Price’ of sugarcane payable by sugar mills to the cane growers.
  • Price of sugarcane is fixed by the centre/State, while the price of sugar is market determined.


  • Fair and remunerative price (FRP) is the minimum price at which rate sugarcane is to be purchased by sugar mills from farmers.
  • The FRP is based on the recommendation of the Commission of Agricultural Costs & Prices (CACP).
  • The approval will ensure a guaranteed price to cane growers. The ‘FRP’ of sugarcane is determined under Sugarcane (Control) Order.
  • This will be uniformly applicable all over the country. Determination of FRP will be in the interest of sugarcane growers keeping in view their entitlement to a fair and remunerative price for their produce.
  • Fair and remunerative price (FRP) is the minimum price at which rate sugarcane is to be purchased by sugar mills from farmers.

Sugar buffer stock:

  • The Cabinet has also approved the creation of buffer stock of 40 lakh Metric Tonnes of sugar for one year from the 1st of next month.
  • The decision will lead to an improvement in the liquidity in sugar inventories and stabilization in sugar prices.


Why in News?

  • A special session was held to discuss India’s Research and Development (R&D) expenditure eco-system report during the Global launch of Global Innovation Index (GII) – 2019 in New Delhi. The report has been compiled by Economic Advisory Council to the Prime Minister (PMEAC).


  • Investments in R&D are key inputs in economic growth. The impact of this is proven on productivity, exports, employment and capital formation.
  • India’s investment in R&D is a fraction of India’s GDP. It has remained constant at around 0.6% to 0.7% of India’s GDP.
  • This is below the expenditure of countries like the US (2.8), China (2.1), Israel (4.3) and Korea (4.2). Government expenditure, almost entirely the Central Government, is the driving force of R&D in India which is in contrast to the advanced countries where private sector is the dominant and driving force of R&D spend.
  • The report is to address the data gaps in compiling R&D data so that up to date data on R&D is available in order to reflect India’s true rank globally.
  • To examine expenditure trends in various sector and their short coming.
  • To lay down the road map for achieving the desire target of R&D spend by the year 2022.


  • There is a need for greater participation of State Governments and private sector in overall R&D spending in India especially in application-oriented research and technology development.
  • The growth in R&D expenditure should be commensurate with the growth of GDP and should reach at least two percent of GDP by 2022.


Why in News?

  • The Kempegowda International Airport (KIA) rolled out a biometric-based self-boarding facility.


  • The passengers had the option of boarding a flight without producing travel documents at each touch point.
  • To avail this facility, a passenger has to enrol their ID, biometric data and flight details before entering the terminal.
  • The passenger will be authenticated and verified at every touch point by biometric technology.

Paperless Biometric System:

  • The Bangalore International Airport Limited (BIAL), the operator of the KIA, is expected to deploy the paperless biometric system at over 350 passenger touch points in Terminal 1 with the final phase of the project.
  • In the final stage, this technology will be integrated with the Digi Yatra Central Platform that is currently being architecture by the central government’s Digi Yatra Foundation.

User Data Privacy:

  • The BIAL maintains that biometric data is used only for authentication and verification of passengers to assist the boarding process, and not for recognition.
  • The process offers the highest degree of safety and security while ensuring stringent standards of safety.
  • Passenger data will be deleted within a few hours of completion of air travel.
  • Vision Box, the company that developed and installed One – ID biometric platform technology, is compliant with the European Union’s General Data Protection Regulation (GDPR), which adopts privacy by design principles.


  • Context: India climbs five ranks in global innovation index to the 52nd position
  • Union Minister of Commerce & Industry and Railways launched the Global Innovation Index (GII) 2019 in New Delhi
  • GII theme of this year: Creating Healthy Lives – The Future of Medical Innovation
  • It is focusing on not just curative but preventive healthcare where wellness becomes a part of society.

About Global Innovation Index:

  • The GII has been jointly developed by Cornell University, Paris-based business school Insead and WIPO.
  • It includes more than 80 indicators exploring a broad vision of innovation, including political environment, education, infrastructure and business sophistication.
  • Aim: It is aimed at helping policy makers better understand how to stimulate and measure innovative activity.
  • Highlights: This is the first time that the GII has been launched in Asia or in an emerging economy.
  • Ranking: Switzerland continued to top the index in 2019 while Israel made its way into the top 10. China, too, improved its ranking to 14th from 17th last year.

India’s Scenario:

  • India maintains its top place in the Central and Southern Asia region as the 52nd ranked economy this year.
  • India jumped five places to improve its position from 57th last year to 52nd in 2019.
  • From 81 in 2015, India’s 29-place move up the GII represents the biggest jump by any major economy.
  • Thanks to its high-quality scientific publications and universities, India remains 2nd among middle-income economies in the quality of innovation.
  • This year India reaches the 15th spot in global companies’ R&D expenditures.
  • It also features in the GII ranking on the world’s top science and technology clusters, with Bengaluru, Mumbai and New Delhi included in the global top 100 clusters.
  • India exhibited strengths in indicators such as graduates in science and engineering, global R&D companies expenditure, quality of universities and market sophistication,
  • It lagged behind in education, ecological sustainability, females employed with advanced degrees, ICT access and use and environmental performance.


  • Context: Rajya Sabha was informed by the Minister of Finance informed about the mechanisms in place to deter wilful defaulters, curb incidence of wilful defaults, and effect recovery from wilful defaulters.

What is wilful defaulter?

  • Under Indian law, wilful defaulters are classified as firms or individuals who own large businesses and deliberately avoid repayments.


  • India’s state-owned banks had classified ₹1.50 trillion worth of loans as “wilful defaults” in 2018-19, with the biggest lender State Bank of India accounting for nearly a one third.
  • The State Bank of India saw the highest number of wilful defaults at ₹46,158 crore, while Punjab National Bank stood second at ₹25,090 crore, with Bank of India at ₹9,890 crore,

Government Action on Wilful Defaulter:

  • Wilful defaulters are not sanctioned any additional facilities by banks or financial institutions, and they are debarred from launching ventures for five years.
  • The government has debarred wilful defaulters and companies with wayward borrowers from accessing capital markets to raise funds or participate in insolvency resolution process.
  • Bank chiefs can also authorise look-out notices for defaulters to prevent them from leaving the country.

Mechanisms in Place to Deter Wilful Defaulters:

  • PSBs have been asked to examine all accounts exceeding Rs. 50 crores, if classified as Non-Performing Asset (NPA), from the angle of possible fraud and to immediately initiate examination of the issue of wilful default once a fraud is reported.
  • For effective action against wilful defaulters fleeing Indian jurisdiction, the Fugitive Economic Offenders Act, 2018 has been enacted to provide for attachment and confiscation of property of fugitive offenders and has disentitled them from defending any civil claim.
  • Government has advised PSBs to decide on publishing photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board-approved policy.


  • Context: Minister of Home Affairs informed Lok Sabha today about the steps being taken to combat Terror Financing and circulation of Fake Indian Currency Notes (FICN) in the country.

    What Is Terror Financing:

  • Terrorist financing provides funds for terrorist activity. It may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion.
  • Terrorists use techniques like those of money launderers to evade authorities’ attention and to protect the identity of their sponsors and of the ultimate beneficiaries of the funds.

The Government has taken various steps to combat terror financing in the country, which inter alia, include: –

  • Strengthening the provisions in the Unlawful Activities (Prevention) Act, 1967 to combat terror financing by criminalizing the production or smuggling or circulation of high-quality counterfeit Indian currency as a terrorist act and enlarge the scope of proceeds of terrorism to include any property intended to be used for terrorism.
  • A Terror Funding and Fake Currency (TFFC) Cell has been constituted in National Investigation Agency (NIA) to conduct focused investigation of terror funding and fake currency cases.
  • Fake Indian Currency Notes (FICN) network is one of the channels of terror financing in India. FICN Coordination Group (FCORD) has been formed by the Ministry of Home Affairs to share intelligence/information among the security agencies of the states/centre to counter the problem of circulation of fake currency notes.

Government has also taken some other measures to check the smuggling and circulation of Fake Indian Currency Notes (FICN) in the country, which inter alia, include:

  • Security at the international borders has been strengthened by using new surveillance technology, deploying additional manpower for round the clock surveillance, establishing observation posts along the international border, erection of border fencing and intensive patrolling.
  • A Memorandum of Understanding (MoU) has been signed between India and Bangladesh to prevent and counter smuggling and circulation of fake currency notes.
  • Training programmes are conducted for the Police officials of Nepal and Bangladesh to sensitize them about smuggling/ counterfeiting of Indian currency.


Why in News?

  • Speaking at the International conference cum awards on civil aviation and cargo, the Minister of State(I/c) for Civil Aviation, Housing & Urban Development said that the Ministry would not tolerate any compromise on Air Safety and standards.
  • The event organised by ASSOCHAM.


  • The first National Air Cargo Policy’s (NACP) outline was released at the Global Aviation Summit in January 2019.
  • It aims to achieve fundamental re-engineering of the whole-of-the-value-chains for domestic and export-import air freight for reaching the target of handling 10 million tonnes by 2026-27.

National Civil Aviation Policy:

  • A comprehensive National Civil Aviation Policy (NCAP) was announced in 2016, covering 22 areas of the Civil Aviation sector.
  • It was framed to boost regional air connectivity, establish an integrated ecosystem to promote tourism and generate employment.

National Air Cargo Policy’s (NACP):

  • The National Air Cargo Policy unveiled at the Global Aviation Summit 2019, seeks to make India among the top five air freight markets by 2025, besides creating air transport shipment hubs at all major airports over the next six years.
    The policy aims at encouraging code sharing/inter-line agreements between foreign and Indian carriers.
  • The policy seeks to establish agreements between national carriers/ freighters and integrators to improve domestic connectivity as well as encourage the establishment of agreements between national and international carriers/freighters and other airline operators to provide access to key global cargo hubs.
  • It also aims to promote the development of a last mile/first mile connectivity program at international/regional gateways. As part of the security strategy under the policy, the strategy will address security related to the physical cargo, people handling the cargo, data and information related to shipments within and across all chains of custody transfers.
  • To increase process transparency while decreasing shipment delays, costs and dwell time, a fully automated paperless trade environment with minimum face-to-face interactions will be implemented
  • The policy assured that The GST and other economic legislation would be reviewed by the appropriate government agencies to ensure effective measures are in place to support the national air cargo development strategies.


Why in News?

  • The defence industry sector was opened up to 100% for private sector participation in May 2001 through licensing.


  • Defence Procurement Procedure (DPP) had been revised in 2016 wherein specific provisions have been introduced for stimulating growth of the domestic defence industry.
  • A new category of procurement ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ has been introduced in DPP-2016 to promote indigenous design and development of defence equipment.
  • ‘Buy (Indian)’, ‘Buy and Make (Indian)’ & ‘Make’ categories of capital acquisition have been given preference over ‘Buy (Global)’& ‘Buy & Make (Global)’categories.
  • The ‘Strategic Partnership (SP)’ model has been notified by the government to establish longstanding strategic partnerships with Indian entities through a transparent and competitive process, in order to tie up with Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.
  • The ‘Make’ Procedure has been simplified with provisions for funding of 90% of development cost by the Government to Indian industry and reserving projects not exceeding development cost of Rs.10 crore (Government funded) and Rs.3 crore (Industry funded) for MSMEs.
  • Separate procedure for ‘Make-II’ subcategory has been notified wherein a number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual, etc. have been introduced.
  • The Government will establish two defence industrial corridors to serve as an engine of economic development and growth of defence industrial base in India.
  • An innovation ecosystem for Defence titled Innovations for Defence Excellence (iDEX) has been launched in April, 2018. iDEX is aimed at creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia and provide them grants/funding and other support to carry out R&D.
  • The Mission Raksha Gyan Shakti has been introduced to encourage IPR culture in indigenous defence industry.
  • A Policy for indigenisation of components and spares used in Defence Platforms has been notified in April 2019.
  • A Defence Investor Cell has been created in the Defence Ministry to provide all necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector.
  • FDI is now allowed under automatic route up to 49% and beyond 49% through Government route.
  • Export clearance process has been streamlined and a scheme for the promotion of defence exports has been notified.
  • Technology Development Fund (TDF) has been set up by the GOI to encourage participation of public/private industries especially MSMEs, through provision of grants.
  • Offset guidelines have been made flexible by allowing change of Indian Offset Partners (IOPs) and offset components, even in signed contracts. Foreign Original Equipment Manufacturers (OEMs) are now not required to indicate the details of IOPs and products at the time of signing of contracts. ‘Services’ as an avenue of offset have been reinstated.


Why in News?

  • Raksha Mantri inaugurated the One-kilometre long Ujh bridge in Kathua district, 617.40-Metre-long Basantar bridge in Samba district of Jammu & Kashmir today and dedicated these to the Nation.


  • One Km long Ujh bridge is the longest bridge constructed by BRO.
  • These bridges will provide smooth connectivity and are vital for the Army for deployment on border areas.
  • These bridges will be a big relief for the local people of border villages of Kathua and Samba sector as road connectivity used to get disrupted during Monsoon.

Border Roads Organisation:

  • The Border Roads Organisation develops and maintains road networks in India’s border areas and friendly neighboring countries.
  • Currently, the organisation maintains operations in twenty-one states, one UT (Andaman and Nicobar Islands), and neighboring countries such as Afghanistan, Bhutan, Myanmar, and Sri Lanka.
  • The Border Roads Organisation works under the Ministry of Defence.


  • Context: The committee headed by finance secretary Subhash Chandra Garg has proposed a draft bill “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019″

Highlights of The Committee Recommendations:

  • Proposed banning of private cryptocurrencies in India by enacting a law and imposing fines and penalties for carrying on activities related to cryptocurrencies.
  • Proposed a draft bill “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019″, which has been placed in the public domain.
  • The committee has, taken a lenient view on the government launching an official digital currency, asking it to keep an open mind on the matter
    It suggested the use of distributed-ledger technology (DLT) or blockchain in India, by banks and other financial firms for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance and reconciliation systems in the securities market.

The committee identifies the potential use cases for blockchain technology in areas such as:

  • Payments systems including cross-border and small value payments;
    Data identity management or know-your-customer requirements by various financial entities.
  • Insurance
  • Collateral and ownership (including land) registries
  • Loan issuance and tracking
  • e-stamping
  • Trade financing
  • Post-trade reporting
  • Securities and commodities and
  • Internal systems of financial service providers.
  • The advantages of using DLT are mainly seen in terms of reducing administration and transaction costs, obviating duplication and improving accuracy of data, improving the speed and efficiency of transactions and detecting fraud.


Why in News?

  • The Cabinet Committee on Economic Affairs has approved the expenditure on pre-investment activities and various clearances for Dibang Multipurpose Project (MPP) in Arunachal Pradesh for an amount of Rs. 1600 crore.
  • Dibang Multipurpose Project:
  • Dibang Multipurpose Project (Dibang MPP) is envisaged as a storage-based hydro-electric project with flood moderation as the key objective.
  • The construction of Dibang MPP shall prevent the sizeable downstream area from floods. After implementation of master plan of Brahmaputra Board for flood moderation of all rivers contributing to river Brahmaputra, of which Dibang MPP is one of the components, sizable area will be protected from flooding and help in mitigating the perennial damage due to floods in Assam.
  • The project shall generate 2880MW (12x240MW) power to produce 11223MU of energy in a 90% dependable year.
  • This is the largest ever Hydro Electric Projects to be constructed in India.
  • The dam is 278 metres high and will be the highest dam in India once completed.


Why in News?

  • Seva Bhoj Yojna’ is a Central Sector Scheme of the Ministry of Culture, Government of India.
  • It envisages to reimburse the Central Government share of Central Goods and Services Tax (CGST) and Integrated Goods and Service Tax (IGST) so as to lessen the financial burden of such Charitable Religious Institutions who provide Food/Prasad/Langar (Community Kitchen)/Bhandara free of cost without any discrimination to Public/Devotees.
  • The scheme is being implemented from 01.08.2018 with a total outlay of Rs. 325.00 Crores for Financial Years 2018-19 and 2019-20.


  • Under the Scheme of ‘Seva Bhoj Yojna’ Central Goods and Services Tax (CGST) and Central Government’s share of Integrated Goods and Services Tax (IGST) paid on purchase of specific raw food items by Charitable Religious Institutions for distributing free food to public shall be reimbursed as Financial Assistance by the Government of India.

Type of activities supported under the scheme:

  • Free ‘prasad’ or free food or free ‘langar’ / ‘bhandara’ (community kitchen) offered by charitable religious institutions like Gurudwara, Temples, Dharmik Ashram, Mosques, Dargah, Church, Mutt, Monasteries etc. Financial Assistance will be provided on First- cum-First Serve basis of registration linked to fund available for the purpose in a Financial Year.

Criteria for Financial Assistance:

  • A Public Trust or society or body corporate, or organisation or institution covered under the provisions of section 10 (23BBA) of the Income Tax Act, 1961 (as amended from time to time) or registered under the provisions of section 12AA of the Income Tax Act, 1961, for charitable/religious purposes, or a company formed and registered under the provisions of section 8 of the Companies Act, 2013 or section 25 of the Companies Act, 1956, as the case may be, for charitable/ religious purposes, or a Public Trust registered as such for charitable/religious purposes under any Law for the time being in force, or a society registered under the Societies Registration Act, 1860, for charitable/religious purposes can apply under Seva Bhoj Yojna.
  • The applicant Public Trust or society or body corporate, or organisation or institution, as the case may be, must be involved in charitable/religious activities by way of free and philanthropic distribution of food/prasad/langar(Community Kitchen)/ bhandara free of cost and without discrimination through the modus of public, charitable/religious trusts or endowments including maths, temples, gurdwaras, wakfs, churches, synagogues, agiaries or other places of public religious worship.
  • The institutions/organizations should have been distributing free food, langar and prasad to atleast 5000 persons in a calendar month can apply under the scheme.
  • Financial Assistance under the scheme shall be given only to those institutions which are not in receipt of any Financial Assistance from the Central/State Government for the purpose of distributing free food.
  • The Institution/Organization blacklisted under the provisions of Foreign Contribution Regulation Act (FCRA) or under the provisions of any Act/Rules of the Central/State shall not be eligible for financial assistance under the scheme.


  • Context- Govt is thinking of formation of National Rural Bank of India in order to consolidate in Regional rural Banks (RRB).

Parliamentary Standing Committee on Finance (2003)

  • The Parliamentary Standing Committee on Finance (2003) in its 55th Report recommended that Government may consider the setting up of an apex body viz. National Rural Bank of India.

Why there is need of formation of National Rural Bank of India.

  • National Rural Bank of India can act as apex body to monitor the Regional Rural Banks (RRBs)

Steps taken by the Government to strengthen the RRBs:

  • Government had initiated the process of structural consolidation of RRBs in 2004-05 by amalgamating RRBs of the same Sponsor Bank within a State.
  • Recapitalization support is provided to RRBs to augment their capital so as to comply with regulatory capital requirements.
  • Periodic review of financial performance of RRBs,
  • Regular Capacity building efforts are undertaken by NABARD like training at Bankers Institute of Rural Development (BIRD), conduct of Organizational Development Initiative (ODI), exposure visits, etc.
  • NABARD provides regular policy support to RRBs in matters relating to human resources and an arrangement has been made for redressal of grievances through Joint Consultative Committee (JCC).

What is Regional Rural Banks (RRBs)

  • Regional Rural Banks (RRBs) are financial institutions which ensure adequate credit for agriculture and other rural sectors .
  • Regional Rural Banks were set up on the basis of the recommendations of the Narasimham Working Group (1975), and after the legislations of the Regional Rural Banks Act, 1976.
  • The first Regional Rural Bank “Prathama Grameen Bank” was set up on October 2, 1975.At present there are 82 RRBs in India.

Equity in RRBs

  • The equity of a regional rural bank is held by the Central Government, concerned State Government and the Sponsor Bank in the proportion of 50:15:35.


  • The RRBs combine the characteristics of a cooperative in terms of the familiarity of the rural problems and a commercial bank in terms of its professionalism and ability to mobilise financial resources.
  • The main objectives of RRB’s are to provide credit and other facilities‚ especially to the small and marginal farmers‚ agricultural labourers artisans and small entrepreneurs in rural areas with the objective of bridging the credit gap in rural areas, checking the outflow of rural deposits to urban areas and reduce regional imbalances and increase rural employment generation.


  • The Sagarmala is a series of projects to leverage the country’s coastline and inland waterways to drive industrial development.
  • It was originally mooted by the Vajpayee government in 2003 as the waterways equivalent of the Golden Quadrilateral.
  • Sagarmala, integrated with the development of inland waterways, is expected to reduce cost and time for transporting goods, benefiting industries and export/import trade.

Four Broad Areas:

  • 1. Modernise port infrastructure, add up to six new ports and enhance capacity.
  • 2. Improve port connectivity through rail corridors, freight-friendly expressways and inland waterways.
  • 3. Create 14 coastal economic zones or CEZs and a special economic zone at Jawaharlal Nehru Port Trust in Mumbai with manufacturing clusters to enable port-led industrialisation.
  • 4. Develop skills of fishermen and other coastal and island communities.


  • Supporting and enabling Port-led Development
  • Port Infrastructure Enhancement, including modernization and setting up of new ports
  • Efficient Evacuation to and from hinterland.

Why is it important?

  • India is located along key international trade routes in the Indian Ocean and has a long coastline of over 7,000 km. Yet, capacity constraints and lack of modern facilities at Indian ports tremendously elongates the time taken to ship goods in and out of the country and has held back India’s share in world trade.
  • Developing rivers as inland waterways can also help save domestic logistics costs too. Transport costs are high in India – 18 per cent of GDP, compared to less than 10 per cent in China.
  • Port infrastructure and linkages have been frankly a sinking ship and initiatives such as Make in India cannot take off without better port infrastructure. This has led to expectations that Sagarmala could boost India’s merchandise exports to $110 billion by 2025 and create an estimated 10 million new jobs (four million in direct employment).

The Administrative Framework:

  • National Sagarmala Apex Committee
  • At apex level, a National Sagarmala Apex Committee (NSAC) will be created to provide overall policy guidance. It will be headed by shipping minister
  • Sagarmala Development Company (SDC)
  • Under Companies Act, 2013.
  • This company will serve as a special purpose vehicle {SPV)
  • Sagarmala Coordination and Steering Committee
  • At national level, the government will constitute a Sagarmala Coordination and Steering Committee (SCSC) under Cabinet Secretary with Secretaries other ministeries

National Perspective Plan

  • National Perspective Plan (NPP) for the entire coast of India integrating the Industrial Corridors, Dedicated Freight Corridors, National Highway Development Programme, Industrial Clusters and so on
  • The coastal states have been suggested to set up State Sagarmala Committee to be headed by Chief Minister/Minister in Charge of Ports with members from relevant Departments and agencies.


Why in News?

  • The Union Cabinet has approved the banning of Unregulated Deposit Schemes Bill, 2019. It will replace the banning of Unregulated Deposit Schemes Ordinance, 2019.


  • The Bill will help tackle the menace of illicit deposit taking activities in the country, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings.

Salient Features of the Bill:

  • The Bill contains a substantive banning clause which bans Deposit Takers from promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme. The principle is that the Bill would ban unregulated deposit taking activities altogether, by making them an offence ex-ante rather than the existing legislative-cum-regulatory framework which only comes into effect ex-post with considerable time lags;
  • The Bill creates three different types of offences, namely, running of Unregulated Deposit Schemes, fraudulent default in Regulated Deposit Schemes, and wrongful inducement in relation to Unregulated Deposit Schemes.
  • The Bill provides for severe punishment and heavy pecuniary fines to act as deterrent.
  • The Bill has adequate provisions for disgorgement or repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.
  • The Bill provides for attachment of properties / assets by the Competent Authority, and subsequent realization of assets for repayment to depositors;
  • Clear-cut time lines have been provided for attachment of property and restitution to depositors;
  • The Bill enables creation of an online central database, for collection and sharing of information on deposit-taking activities in the country;
  • The Bill defines “Deposit Taker” and “Deposit” comprehensively;
  • “Deposit Takers” include all possible entities (including individuals) receiving or soliciting deposits, except specific entities such as those incorporated by legislation;
  • “Deposit” is defined in such a manner that deposit-takers are restricted from camouflaging public deposits as receipts, and at the same time, not to curb or hinder acceptance of money by an establishment in the ordinary course of its business; and
  • Being a comprehensive Union Law, the Bill adopts best practices from State laws, while entrusting the primary responsibility of implementing the provisions of the legislation to the State Governments.


Why in News?

  • The Government has created an Indian Nuclear Insurance Pool (INIP) in June 2015, a union minister informed in Lok Sabha.

Indian Nuclear Insurance Pool:

  • M/s. General Insurance Corporation of India (GIC-Re), along with several other Indian Insurance Companies, have launched the Indian Nuclear Insurance Pool (INIP) with a capacity of ₹1500 crore. This aims to provide insurance to cover the liability against accidents as prescribed under Civil Liability for Nuclear Damage (CLND) Act, 2010.
  • This has addressed issues related to Civil Liability for Nuclear Damage (CLND) Act and had facilitated commencement of work in setting up new nuclear power projects.

Nuclear Power in India:

  • The present nuclear power capacity is 6780 MW comprising of 22 reactors.
  • There are 9 reactors with a capacity of 6700 MW (including 500 MW PFBR being implemented by BHAVINI) under construction.
  • The Government in 2017 has also accorded administrative approval and financial sanction of 12 nuclear power plants totalling to a capacity of 9000 MW.
  • On their progressive completion, the installed nuclear capacity is expected to reach 8180 MW by 2020 and 22480 MW by 2031.



  • The Union Cabinet Wednesday approved Banning of Unregulated Deposit Schemes Bill with an aim to tackle the menace of illicit deposit- taking activities in the country.

What is Ponzi scams?

  • is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
  • The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds.

Banning of Unregulated Deposit Schemes Bill:

  • The bill will help tackle the menace of illicit deposit taking activities in the country, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard earned money.
  • The proposed legislation will have adequate provisions for punishment and disgorgement/repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally
  • SEBI and RBI approved deposits will be allowed.


Why in News?

  • Kisan Suvidha is an omnibus mobile app developed by Department of Agriculture & Cooperation, Ministry of Agriculture and Farmers Welfare to help farmers by providing relevant information to them quickly.
  • The app is available in multiple Indian languages.

Facilities available on Kisan Suvida App:

  • Weather – provides weather report for that day and weather forecast for next five days of a selected district. Extreme weather alerts are also provided.
  • Dealers – Name, Mobile number and Address of the dealers of Seeds, Pesticides, Fertilizer and Farm Machinery are provided.
  • Market Prices – information about rates of various crops in different mandies are provided.
  • Plant Protection – Crop specific information related to pest management are provided. If the condition of crop is not normal, farmers can upload a picture/photo of the crop and send it through kisan suvidha app to agriculture experts for advice.
  • Agro Advisories – Information from agriculture experts of districts regarding the advisories about activities to be undertaken and precaution to be taken staring from sowing to harvesting.
  • Contact KCC – This option provides facility to speak to Kisan Call Centre (KCC).
  • Soil Heath Card – option gives information about Soil Health Card, so that farmers can use fertilizer and pesticides judiciously having regard to minerals available in a particular land/farm.
  • Cold Storage and gowdowns – information about warehouse and cold storage available in the district like warehouse / cold storage, name of manager, address, storage capacity and phone number etc are provided.



  • Capital to Risk (Weighted) Assets Ratio (CRAR) is also known as Capital adequacy Ratio, the ratio of a bank’s capital to its risk.
  • The banking regulator tracks a bank’s CAR to ensure that the bank can absorb a reasonable amount of loss and complies with statutory Capital requirements. Higher CRAR indicates a bank is better capitalized.
  • The Capital to risk weighted assets ratio is arrived at by dividing the capital of the bank with aggregated risk weighted assets for credit risk, market risk and operational risk.
  • The capital to risk-weighted assets ratio is calculated by adding a bank’s tier 1 capital and tier 2 capitals and dividing the total by its total risk-weighted assets.
  • As per RBI guidelines, banks are required to maintain a minimum Capital to Risk-weighted Assets (CRAR) of 9% on an ongoing basis.
  • Out of the 9 per cent of CAR, 7 per cent has to be met by Tier 1 capital while the remaining 2 per cent by Tier 2 capital.


Context- Recently Union Minister for Road Transport & Highways exhorted sugar mills to switch to producing ethanol.


  • The surplus production of sugar is a major problem.
  • It is not possible to reduce it, and it is also hard to change crop patterns.
  • Sugar mills must decide whether they want to make sugar or ethanol from sugar cane juice. In Brazil, the price of sugar is ₹22 per kg while in India; we have fixed Rs 32-34 per Kg. Hence in the world market, nobody is willing to buy our sugar and as a result, we are making losses.”


  • Would prove beneficial for tackling the problems stemming from surplus production and falling prices.
  • Steady rise in ethanol blending is set not only to save import of crude oil thus saving of precious foreign currency reserves, but also encourage use of additional cane juice and other raw materials efficiently in addition to protect environment from release of motor vehicle obnoxious gas.

Maharashtra Sugar Mills:

  • Maharashtra is slow in giving permission to sugar factories for converting sugar cane juice to ethanol and B class molasses to ethanol.
  • As a result, a number of sugar factories could not start adopting this policy.

Ethanol Blended Petrol (EBP) Programme:

  • The 5% mandatory ethanol blending with petrol
  • The EBP Programme is presently being implemented in a total of 13 States with blending level of about 2% against a mandatory target of 5%.
  • A stable EBP programme would ensure sustainable benefits for the sugarcane farmers across the nation. It will ensure an alternative market for the farmers who frequently get adversely affected in case of bumper crop of sugarcane and lack of its demand in the market. It will also provide an incentive to small and medium farmers to increase efforts towards sugarcane crop as better returns would be ensured.



  • It is Kharif Crop.
    • The research system of India has also developed some varieties having three basic colours in naturally coloured cotton -brown, grey and green belong to Gossypium hirsutum and Gossypium arboreum species.

Condition for Growing Cotton:

  • Long vegetation periods (175 to 225 days) without frost.
  • Constant temperatures between 18 and 30°.
  • Ample sunshine and fairly dry conditions.
  • A minimum of 500 mm of water between germination and boll formation.
    Deep, well-drained soils with a good nutrient content.

Benefits of Cotton:

  • Edible oil for human consumption
  • de-oiled cake as an animal feed
  • Fabric Making Fibre.
  • Cotton is the backbone of textile industry, which consumes 59 % of the country’s total fibre production.

Major Constraints in Cotton Production:

  • Non availability of Canal Water at the optimum sowing time (North Zone)
  • Salinity and Water logging in irrigated areas (North Zone)
  • Acute Moisture stress during flowering and boll formation mainly in central and south zones.
  • Cotton crop is highly prone to insect pests and diseases due to green succulent leaves, Long duration crop, Hot and humid weather, more fruiting bodies, Open flowers and soft Bolls.
  • Inadequate efficient use of irrigation water through Micro irrigation devises.
    Lack of awareness among the farmers about proper spraying of Pesticides / Bio pesticides.
  • Non availability of standardized package of practices of Bt. cotton and organic cotton cultivation

Pink Bollworm:

  • The Pink Bollworm is an insect known for being a pest in cotton farming.


Why in News?

  • The Finance Minister Nirmala Sitharaman announced a proposal of Zero Budget Natural Farming in budget 2019 for doubling farmer’s income in the country

Zero Budget Natural Farming:

  • “Zero budget” stands for no production cost in farming and “Natural Farming” stands for doing farming without any aided chemical fertilizer or external seed and only using natural resources
  • Aim to pull farmers out of the debt trap, cutting production cost and make small scale farming a viable option
  • ZBNF involves no use of chemical fertilizers and assures zero credit for agriculture
  • This type of farming was successfully initiated in Karnataka and was replicated as a role model in other states
  • It cut down the farming expenditure and ends farmer’s reliance on loans


  • Practice only natural growth of crops
  • Bijamrita, Jiwamrita, Mulching and Waaphasa are the processes of ZBNF
  • Intercropping of crops is one of the features of ZBNF
  • The required materials are cow dung, cow urine, water, neem pulp, etc.
  • The insects are removed by using neem pulp and chillies


Why in News?

  • The Government of India has extended the facility of Kisan Credit Card (KCC) to fisheries and animal husbandry farmers to help them meet their working capital needs.

Kisan Credit Card Scheme:

  • The Kisan Credit Card (KCC) scheme was announced in the Budget speech of 1998-99 to fulfil the financial requirements of the farmers at various stages of farming through institutional credit.
  • The model scheme was prepared by the National Bank for Agriculture and Rural Development (NABARD) on the recommendation of V Gupta committee.
  • The KCC scheme is being implemented by the all Co-operative banks, Regional Rural Banks and Public Sector Banks throughout the country.
  • Scheme covers risk of KCC holders against death or permanent disability resulting from accidents.


  • To provide adequate and timely credit support from the banking system to the farmers at the cheap rate of interest.
  • To provide credit at the time of requirement.
  • To support post-harvest expenses.
  • To provide Working capital for maintenance of farm assets and activities allied to agriculture.
  • Investment credit requirement for agriculture and allied activities (land development, pump sets, plantation, drip irrigation etc.)
  • Consumption requirements of farmers.

Salient features of the Scheme:

  • Revolving cash credit facility involving any number of withdrawals and repayments within the limit.
  • Limit to be fixed on the basis of operational land holding, cropping pattern and scale of finance.
  • Card valid for 5 years subject to annual review. As an incentive for good performance, credit limits could be enhanced to take care of increase in costs, change in cropping pattern, etc.
  • Conversion/reschedulement of loans also permissible in case of damage to crops due to natural calamities.
  • Crop loans disbursed under KCC Scheme for notified crops are covered under Crop Insurance Scheme, to protect the interest of the farmers against loss of crop yield caused by natural calamities, pest attacks etc.


Why in News?

  • The Reserve Bank of India (RBI) has constituted a working group to review the regulatory guidelines and supervisory framework applicable for Core Investment Companies (CIC).

Terms of Reference:

  • To examine the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes therein.
  • To assess the appropriateness of and suggest changes to the current approach of the Reserve Bank of India towards registration of CICs including the practice of multiple CICs being allowed within a group.
  • To suggest measures to strengthen corporate governance and disclosure requirements for CICs.
  • To assess the adequacy of supervisory returns submitted by CICs and suggest changes therein.
  • To suggest appropriate measures to enhance RBI’s off-site surveillance and on-site supervision over CICs.
  • The working group, headed by Tapan Ray, shall submit its report by October 31, 2019.

Core Investment Company:

  • Core Investment Companies (CICs) are a specialized Non-Banking Financial Companies (NBFCs).
  • They have asset size of Rs 100 crore and above.
  • Their main business is acquisition of shares and securities with certain conditions.
  • It holds not less than 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.
  • Its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its net assets.
  • It does not trade in its investments in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment.
  • It does not carry on any other financial activity referred to in RBI Act, 1934 except investment in bank deposits, money market instruments,
    government securities, loans to and investments in debt issuances of group companies or guarantees issued on behalf of group companies.
  • It accepts public funds.


Why in News?

  • The Union Cabinet approved the Agriculture Export Policy, 2018. The Cabinet has also approved the proposal for establishment of Monitoring Framework at Centre with Commerce as the nodal Department with representation from various line Ministries/Departments and Agencies and representatives of concerned State Governments, to oversee the implementation of Agriculture Export Policy.


  • The Government has come out with a Policy to Double Farmers’ Income by 2022. Exports of agricultural products would play a pivotal role in achieving this goal. In order to provide an impetus to agricultural exports, the Government has come out with a comprehensive “Agriculture Export Policy” aimed at doubling the agricultural exports and integrating Indian farmers and agricultural products with the global value chains.
  • The Agriculture Export Policy has the following vision: “Harness export potential of Indian agriculture, through suitable policy instruments, to make India global power in agriculture and raise farmers’ income.”

Objective of the Agriculture Export Policy:

  • To double agricultural exports from present ~US$ 30+ Billion to ~US$ 60+ Billion by 2022 and reach US$ 100 Billion in the next few years thereafter, with a stable trade policy regime.
  • To diversify our export basket, destinations and boost high value- and value-added agricultural exports including focus on perishables.
  • To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products exports.
  • To provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and Phyto-sanitary issues.
  • To strive to double India’s share in world agri exports by integrating with global value chain at the earliest.
  • Enable farmers to get benefit of export opportunities in overseas market.

Elements of Agricultural Export Policy:

Strategic Policy Measure:

  • 1. Infrastructure and logistics support
  • 2. Holistic approach to boost exports
  • 3. Greater involvement of State Governments in agri exports

Operational Policy Measure:

  • 1. Focus on Clusters
  • 2. Promoting value-added exports
  • 3. Marketing and promotion of “Brand India
  • 4. Attract private investments into production and processing
  • 5. Establishment of strong quality regimen
  • 6. Research & Development
  • 7. Miscellaneous


  • Context– India’s emerging green economy will require additional investments of around $80 billion till 2022, growing more than threefold to $250 billion during 2023-30,


  • The country has an installed Renewable Energy Capacity of about 80 gigawatts (GW) and is running the world’s largest renewable energy programme with plans to achieve 175GW by 2022 and 500GW by 2030, as part of its climate commitments.
  • Policy- National Off-Shore Wind Policy was notified in 2015

Offshore Wind Farming:

  • Two Types viz. shallow water and deep-sea farming
  • Advantages of Offshore wind farming
  • Stronger Winds for efficient generation of power;
  • No impact on real estate value of land as in case of onshore wind farming;
  • Its ability to fulfill the demand of the heavily populated coastal regions


  • Heavy investments, better technology needed, maintenance issues etc.
  • challenges of assigning no-go areas for commercial shipping

Why so much Investment in Wind energy now?

  • The push for green energy also comes against the backdrop of the Organization of the Petroleum Exporting Countries (OPEC)-plus arrangement extending its compact for production cuts.
  • The production cut extension will have a wide-ranging impact on energy markets, given that OPEC accounts for around 40% of the global output.
  • It is expected to have a particular fallout on India due to the OPEC accounting for around 83% of the country’s total crude oil imports.

Global Energy Landscape:

  • London Stock Exchange (LSE) has classified oil and gas stocks as non-renewable energy. The move marks a fundamental change in the global investment culture against the backdrop of growing climate concerns with several countries focusing on renewable energy.
  • India has also emerged as the voice of consuming nations amid global uncertainties in the energy markets with supplies from Iran and Venezuela drying up and tension escalating in the Persian Gulf.

Efficiency and Universal access of Energy:

  • Energy intensity of India’s GDP has been declining in the recent past, which is reflective of increases in the efficiency of energy use.
  • India cannot become an upper-middle-income country without
  • 1. Rapidly raising its share of the global energy consumption commensurate with its share of the global population, and
  • 2. Ensuring universal access to adequate modern commercial energy at affordable prices.


  • Having greater energy efficiency is crucial for India that is now the biggest emitter of greenhouse gases after the US and China, and which is also among nations most vulnerable to climate change.
  • India plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.


  • The Union Minister for Finance and Corporate Affairs tabled the Economic Survey 2018-19 in the Parliament. The Key Highlights of Economic Survey 2018-19 are as follows:

Shifting Gears: Private Investment as the Key Driver of Growth, Jobs, Exports and Demand:

  • Survey states that pathways for trickle-down opened up during the last five years; and benefits of growth and macroeconomic stability reached the bottom of the pyramid.
  • Sustained real GDP growth rate of 8% needed for a $5 Trillion Economy by 2024-25.
  • “Virtuous Cycle” of savings, investment and exports catalyzed and supported by a favourable demographic phase required for sustainable growth.
  • Private Investment– key driver for demand, capacity, labor productivity, new Technology, creative destruction and job creation.
  • Survey departs from traditional Anglo-Saxon thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium.
  • Key Ingredients for a self-sustaining virtuous cycle:
    • Presenting data as a public good.
    • Emphasizing legal reforms.
    • Ensuring policy consistency.
    • Encouraging behaviour change using principles of behavioural economics.
    • Nourishing MSMEs to create more jobs and become more productive.
    • Reducing the cost of capital.
    • Rationalizing the risk-return trade-off for investments.

Policy for Real People, Not Robots: Leveraging the Behavioral Economics of “Nudge”:

  • Decisions by real people deviate from impractical robots theorized in classical economics.
  • Behavioral economics provides insights to ‘Nudge’ people towards desirable behavior.
  • Key Principles of behavioral economics:
    • Emphasizing the beneficial social norm.
    • Changing the default option.
    • Repeated Reinforcements.
  • Using insights from behavioral economics to create an aspirational agenda for social change:
  • From ‘Beti Baco Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi).
  • From ‘Swachh Bharat’ to ‘Sundar Bharat’.
  • From ‘Give it up” for the LPG subsidy to ‘Think About the Subsidy’.
  • From ‘Tax evasion’ to ‘Tax Compliance’.

Nourishing Dwarfs to Become Giants: Reorienting Policies for MSME Growth:

  • Survey focuses on enabling MSMEs to grow for achieving greater profits, job creation and enhanced productivity.
  • Dwarfs (firms with less than 100 workers) despite being more than 10 years old, account for more than 50% of all organized firms in manufacturing by number.
  • Contribution of dwarfs to employment is only 14% and to productivity is a mere 8%.
  • Large firms (more than 100 employees) account for 75% employment and close to90% of productivity despite accounting for about 15% by number.
  • Unshackling MSMEs and enabling them to grow by way of:
    • A sunset clause of less than 10 years, with necessary grand-fathering, for all size-based incentives.
    • Deregulating labor law restrictions to create significantly more jobs, as evident from Rajasthan.
    • Re-calibrating Priority Sector Lending (PSL) guidelines for direct credit flow to young firms in high employment elastic sectors.
  • Survey also focuses on service sectors such as tourism, with high spillover effects on other sectors such as hotel & catering, transport, real estate, entertainment etc., for job creation.

Data “Of the People, By the People, For the People”

  • Society’s optimal consumption of data is higher than ever given technological advances in gathering and storage of data.
  • As data of societal interest is generated by the people, data can be created as a public good within the legal framework of data privacy.
  • Government must intervene in creating data as a public good, especially of the poor and in social sectors.
  • Merging the distinct datasets held by the Government already would generate multiple benefits.

Ending Matsyanyaya: How to Ramp up Capacity in the Lower Judiciary:

  • Delays in contract enforcement and disposal resolution are arguably now the single biggest hurdle to the ease of doing business and higher GDP growth in India.
  • Around 87.5 per cent of pending cases are in the District and Subordinate courts.
  • 100 per cent clearance rate can be achieved by filling out merely 2279 vacancies in the lower courts and 93 in High Courts.
  • States of Uttar Pradesh, Bihar, Odisha and West Bengal need special attention.
  • Productivity improvements of 25 percent in lower courts, 4 percent in High Courts and 18 percent in Supreme Court can clear backlog.

How Does Policy Uncertainty Affect Investment?

  • Significant reduction in Economic Policy Uncertainty in India over the last one decade, even when economic policy uncertainty increased in major countries, especially the U.S.
  • Uncertainty dampens investment growth in India for about five quarters.
  • Lower economic policy uncertainty can foster a salutary investment climate.
  • Survey proposes reduction in economic policy uncertainty by way of:
    • Consistency of Actual Policy with forward guidance.
    • Quality assurance certification of processes in Government departments.

India’s Demography at 2040: Planning Public Good Provision for the 21st Century:

  • Sharp slowdown in population growth expected in next 2 decades. Most of India to enjoy demographic dividend while some states will transition to ageing societies by 2030s.
  • National Total Fertility Rate expected to be below replacement rate by 2021.
  • Working age population to grow by roughly 9.7mn per year during 2021-31 and 4.2mn per year during 2031-41.
  • Significant decline to be witnessed in elementary school-going children (5-14 age group) over next two decades.
  • States need to consolidate/merge schools to make them viable rather than build new ones.
  • Policy makers need to prepare for ageing by investing in health care and by increasing the retirement age in a phased manner.

From Swachh Bharat to Sundar Bharat via Swasth Bharat: An Analysis of the Swachh Bharat Mission:

  • Traceable health benefits brought about by Swachh Bharat Mission (SBM).
  • 93.1% of the households have access to toilets.
  • 96.5% of those with access to toilets are using them in rural India.
  • 100% Individual Households Latrine (IHHL) Coverage in 30 states and UTs.
  • Financial savings from a household toilet exceed the financial costs to the household by 1.7 times on average and 2.4 times for poorest households.
  • Environmental and water management issues need to be incorporated in SBM for sustainable improvements in the long-term.

Enabling Inclusive Growth through Affordable, Reliable and Sustainable Energy:

  • 2.5 times increase in per capita energy consumption needed for India to increase its real per capita GDP by $5000 at 2010 prices, and enter the upper-middle income group.
  • 4 times increase in per capita energy consumption needed for India to achieve 0.8 Human Development Index score.
  • India now stands at 4th in wind power, 5th in solar power and 5th in renewable power installed capacity.
  • Rs 50,000 crore saved and 108.28 million tonnes of CO2 emissions reduced by energy efficiency programmes in India.
  • Share of renewable (excluding hydro above 25 MW) in total electricity generation increased from 6% in 2014-15 to 10% in 2018-19.
  • Thermal power still plays a dominant role at 60% share.
  • Market share of electric cars only 0.06% in India while it is 2% in China and 39% in Norway.
  • Access to fast battery charging facilities needed to increase the market share of electric vehicles.

Effective Use of Technology for Welfare Schemes – Case of MGNREGS:

  • Survey says that efficacy of MGNREGS increased with use of technology in streamlining it.
  • Significant reduction in delays in the payment of wages with adoption of NeFMS and DBT in MGNREGS.
  • Demand and supply of work under MGNREGS increased, especially in distressed districts.
  • Vulnerable sections of the society viz. women, SC and ST workforce increased under MGNREGS during economic distress.

Redesigning a Minimum Wage System in India for Inclusive Growth:

  • Survey proposes a well-designed minimum wage system as a potent tool for protecting workers and alleviating poverty.
  • Present minimum wage system in India has 1,915 minimum wages for various scheduled job categories across states.
  • 1 in every 3 wage workers in India not protected by the minimum wage law.
  • Survey supports rationalization of minimum wages as proposed under the Code on Wages Bill.
  • Minimum wages to all employments/workers proposed by the Survey.
  • National Floor Minimum Wage’ should be notified by the Central Government, varying across five geographical regions.
  • Minimum wages by states should be fixed at levels not lower than the ‘floor wage’.
  • Minimum wages can be notified based either on the skills or on geographical region or on both grounds.
  • Survey proposes a simple and enforceable Minimum Wage System using technology.
  • National level dashboard’ under the Ministry of Labour & Employment for regular notifications on minimum wages, proposed by the Survey.
  • Toll-free Number to register grievance on non-payment of the statutory minimum wages.
  • Effective minimum wage policy as an inclusive mechanism for more resilient and sustainable economic development.

State of the Economy in 2018-19: A Macro View:

  • India still the fastest growing major economy in 2018-19.
  • Growth of GDP moderated to 6.8 per cent in 2018-19 from 7.2 per cent in 2017-18.
  • Inflation contained at 3.4 per cent in 2018-19.
  • Non-Performing Assets as percentage of Gross Advances reduced to 10.1 per cent at end December 2018 from 11.5 per cent at end March 2018.
  • Investment growth recovering since 2017-18:
    • Growth in fixed investment picked up from 8.3 per cent in 2016-17 to 9.3 per cent next year and further to 10.0 per cent in 2018-19.
  • Current account deficit manageable at 2.1 percent of GDP.
  • Fiscal deficit of Central Government declined from 3.5 percent of GDP in 2017-18 to 3.4 percent in 2018-19.
  • Prospects of pickup in growth in 2019-20 on the back of further increase in private investment and acceleration in consumption.

Fiscal Developments:

  • FY 2018-19 ended with fiscal deficit at 3.4 per cent of GDP and debt to GDP ratio of 44.5 per cent (Provisional).
  • As per cent of GDP, total Central Government expenditure fell by 0.3 percentage points in 2018-19 PA over 2017-18:
    • 0.4 percentage point reduction in revenue expenditure and 0.1 percentage point increase in capital expenditure.
  • States’ own tax and non-tax revenue displays robust growth in 2017-18 RE and envisaged to be maintained in 2018-19 BE.
  • General Government (Centre plus states) on the path of fiscal consolidation and fiscal discipline.
  • The revised fiscal glide path envisages achieving fiscal deficit of 3 per cent of GDP by FY 2020-21 and Central Government debt to 40 per cent of GDP by 2024-25.

Money Management and Financial Intermediation:

  • Banking system improved as NPA ratios declined and credit growth accelerated.
  • Insolvency and Bankruptcy Code led to recovery and resolution of significant amount of distressed assets and improved business culture.
  • Till March 31, 2019, the CIRP yielded a resolution of 94 cases involving claims worthINR1, 73,359 crores.
  • As on 28 Feb 2019, 6079 cases involving INR2.84 lakh crores have been withdrawn.
  • As per RBI reports, INR50,000 crore received by banks from previously non-performing accounts.
  • Additional INR50,000 crore “upgraded” from non-standard to standard assets.
  • Benchmark policy rate first hiked by 50 bps and later reduced by 75 bps last year.
  • Liquidity conditions remained systematically tight since September 2018 thus impacting the yields on government papers.
  • Financial flows remained constrained because of decline in the equity finance raised from capital markets and stress in the NBFC sector.
    • Capital mobilized through public equity issuance declined by 81 per cent in 2018-19.
    • Credit growth rate y-o-y of the NBFCs declined from 30 per cent in March 2018 to 9 per cent in March 2019.

Prices and Inflation:

  • Headline inflation based on CPI-C continuing on its declining trend for fifth straight financial year remained below 4.0 per cent in the last two years.
  • Food inflation based on Consumer Food Price Index (CFPI) also continuing on its declining trend for fifth financial year has remained below 2.0 per cent for the last two consecutive years.
  • CPI-C based core inflation (CPI excluding the food and fuel group) has now started declining since March 2019 after increment during FY 2018-19 as compared to FY 2017-18.
  • Miscellaneous, housing and fuel and light groups are the main contributors of headline inflation based on CPI-C during FY 2018-19 and the importance of services in shaping up headline inflation has increased.
  • CPI rural inflation declined during FY 2018-19 over FY 2017-18. However, CPI urban inflation increased marginally during FY 2018-19. Many States witnessed fall in CPI inflation during FY 2018-19.

Sustainable Development and Climate Change:

  • India’s SDG Index Score ranges between 42 and 69 for States and between 57 and 68 for UTs:
  • Kerala and Himachal Pradesh are the front runners with a score of 69 amongst states.
  • Chandigarh and Puducherry are the front runners with a score of 68 and 65 respectively among the UTs.
  • Namami Gange Mission launched as a key policy priority towards achieving the SDG 6, with a budget outlay of INR. 20,000 crores for the period 2015-2020.
  • For mainstreaming Resource Efficiency approach in the development pathway for achieving SDGs, a national policy on Resource Efficiency should be devised.
  • A comprehensive NCAP launched in 2019 as a pan India time bound strategy for:
    • Prevention, control and abatement of air pollution
    • Augmenting the air quality monitoring network across the country.
  • Achievements in CoP 24 in Katowice, Poland in 2018:
    • Recognition of different starting points for developed and developing countries.
    • Flexibilities for developing countries.
    • Consideration of principles including equity and Common but Differentiated Responsibilities and Respective Capabilities.
  • Paris Agreement also emphasizes the role of climate finance without which the proposed NDCs would not fructify.
  • Though the international community witnessed various claims by developed countries about climate finance flows, the actual amount of flows is far from these claims.
  • Scale and size of investments required to implement India’s NDC requires mobilizing international public finance and private sector resources along with domestic public budgets.

External Sector:

  • As per WTO, World trade growth slowed down to 3 per cent in 2018 from 4.6 per cent in 2017. Reasons:
    • Introduction of new and retaliatory tariff measures.
    • Heightened US-China trade tensions.
    • Weaker global economic growth.
    • Volatility in financial markets (WTO).
  • In Indian rupee terms growth rate of exports increased owing to depreciation of the rupee while that of imports declined in 2018-19.
  • Net capital inflows moderated in April-December of 2018-19 despite robust foreign direct investment (FDI) inflows, outweighed by withdrawals under portfolio investment.
  • India’s External Debt was US$ 521.1 billion at end-December 2018, 1.6 per cent lower than its level at end-March 2018.
  • The key external debt indicators reflect that India’s external debt is not unsustainable.
  • The Total Liabilities-to-GDP Ratio, inclusive of both debt and non-debt components, has declined from 43 per cent in 2015 to about 38 per cent at end of 2018.
  • The share of foreign direct investment has risen and that of net portfolio investment fallen in total liabilities, reflecting a transition to more stable sources of funding the current account deficit.
  • The Indian Rupee traded in the range of 65-68 per US$ in 2017-18 but depreciated to a range of 70-74 in 2018-19.
  • The income terms of trade, a metric that measures the purchasing power to import, has been on a rising trend, possibly because the growth of crude prices has still not exceeded the growth of India’s export prices.
  • The exchange rate in 2018-19 has been more volatile than in the previous year, mainly due to volatility in crude prices, but not much due to net portfolio flows.
  • Composition of India’s exports and import basket in 2018-19(P):
    • Exports (including re-exports): INR23, 07,663 Cr.
    • Imports: INR35, 94,373 Cr.
    • Top export items continue to be Petroleum products, precious stones, drug formulations, gold and other precious metals.
    • Top import items continue to be Crude petroleum, pearl, precious, semi-precious stones and gold.
    • India’s main trading partners continue to be the US, China, Hong Kong, the UAE and Saudi Arabia.
  • India has signed 28 bilateral / multilateral trade agreements with various country/group of countries. In 2018-19,
    • Exports to these countries stood at US$121.7 billion accounting for 36.9 per cent of India’s total exports.
    • Imports from these countries stood at US$266.9 billion accounting for 52.0 per cent of India’s total imports.

Agriculture and Food Management

  • Agriculture sector in India typically goes through cyclical movement in terms of its growth.
  • Gross Value Added (GVA) in agriculture improved from a negative 0.2 per cent in 2014-15 to 6.3 per cent in 2016-17 but decelerated to 2.9 per cent in 2018-19.
  • Gross Capital Formation (GCF) in agriculture as percentage of GVA marginally declined to 15.2 per cent in 2017-18 as compared to 15.6 per cent in 2016-17.
  • The public sector GCF in agriculture as a percentage of GVA increased to 2.7 per cent in 2016-17 from 2.1 per cent in 2013-14.
  • Women’s participation in agriculture increased to 13.9 per cent in 2015-16 from 11.7 per cent in 2005-06 and their concentration is highest (28 per cent) among small and marginal farmers.
  • A shift is seen in the number of operational land holdings and area operated by operational land holdings towards small and marginal farmers.
  • 89% of groundwater extracted is used for irrigation. Hence, focus should shift from land productivity to ‘irrigation water productivity’. Thrust should be on micro-irrigation to improve water use efficiency.
  • Fertilizer response ratio has been declining over time. Organic and natural farming techniques including Zero Budget Natural Farming (ZBNF) can improve both water use efficiency and soil fertility.
  • Adopting appropriate technologies through Custom Hiring Centers and implementation of ICT are critical to improve resource-use efficiency among small and marginal farmers.
  • Diversification of livelihoods is critical for inclusive and sustainable development in agriculture and allied sectors. Policies should focus on
    • Dairying as India is the largest producer of milk.
    • Livestock rearing particularly of small ruminants.
    • Fisheries sector, as India is the second largest producer.

Industry and Infrastructure:

  • Overall Index of Eight Core Industries registered a growth rate of 4.3 percent in 2018-19.
  • India’s ranking improved by 23 to 77th position in 2018 among 190 countries assessed by the World Bank Doing Business (DB) Report, 2019.
  • Road construction grew @ 30 km per day in 2018-19 compared to 12 km per day in 2014-15.
  • Rail freight and passenger traffic grew by 5.33 per cent and 0.64 per cent respectively in 2018-19 as compared to 2017-18.
  • Total telephone connections in India touched 118.34 crore in 2018-19.
  • The installed capacity of electricity has increased to 3, 56,100 MW in 2019 from 3, 44,002 MW in 2018.
  • Public Private Partnerships are quintessential for addressing infrastructure gaps
  • Building sustainable and resilient infrastructure has been given due importance with sector specific flagship programmes such as SAUBHAGYA scheme, PMAY etc
  • Institutional mechanism is needed to deal with time-bound resolution of disputes in infrastructure sector.

Services Sector:

  • Services sector (excluding construction) has a share of 54.3 per cent in India’s GVA and contributed more than half of GVA growth in 2018-19.
  • The IT-BPM industry grew by 8.4 per cent in 2017-18 to US$ 167 billion and is estimated to reach US$ 181 billion in 2018-19.
  • The services sector growth declined marginally to 7.5 per cent in 2018-19 from 8.1 per cent in 2017-18.
    • Accelerated sub-sectors: Financial services, Real Estate and professional services.
    • Decelerated sub-sectors: Hotels, transport, Communication and broadcasting services.
  • Services share in employment is 34 per cent in 2017.
  • Tourism:
    • 10.6 million foreign tourists received in 2018-19 compared to 10.4 million in 2017-18.
    • Forex earnings from tourism stood at US$ 27.7 billion in 2018-19 compared to US$ 28.7 billion in 2017-18.

Social Infrastructure, Employment and Human Development:

  • The public investments in social infrastructure like education, health, housing and connectivity is critical for inclusive development.
  • Government expenditure (Centre plus States) as a percentage of GDP on
    • Health: increased to 1.5 per cent in 2018-19 from 1.2 per cent in 2014-15.
    • Education: increased from 2.8 per cent to 3 per cent during this period.
  • Substantial progress in both quantitative and qualitative indicators of education is reflected in the improvements in Gross Enrolment Ratios, Gender Parity Indices and learning outcomes at primary school levels.
  • Encouraging Skill Development by:
    • Introduction of the skill vouchers as a financing instrument to enable youth obtain training from any accredited Training Institutes.
    • Involving industry in setting up of training institutes in PPP mode; in curriculum development; provision of equipment; training of trainers etc.
    • Personnel of Railways and para-military could be roped in for imparting training in difficult terrains.
    • Create a database of Instructors, skill mapping of rural youth by involving local bodies to assess the demand-supply gaps are some of the other initiatives proposed.
  • Net employment generation in the formal sector was higher at 8.15 lakh in March, 2019 as against 4.87 lakh in February, 2018 as per EPFO.
  • Around 1, 90, 000 km of rural roads constructed under Pradhan Mantri Gram Sadak Yojana (PMGSY) since 2014.
  • About 1.54 crore houses completed under Pradhan Mantri Awas Yojana (PMAY) as against a target of 1 crore pucca houses with basic amenities by 31st March, 2019.
  • Accessible, affordable and quality healthcare being provided through National Health Mission and Ayushman Bharat scheme for a healthy India.
  • Alternative healthcare, National AYUSH Mission launched to provide cost effective and equitable AYUSH healthcare throughout the country to address the issue of affordability, by improving access to these services.
  • Employment generation scheme, MGNREGA is prioritized by increasing actual expenditure over the budgetary allocation and an upward trend in budget allocation in the last four years.


Context: The Economic Survey lays down the strategic blueprint for fructifying the Prime Minister’s vision of India becoming a $5 trillion economy by 2025.

  • The theme of the Survey is about enabling a “shifting of gears” to sustained economic growth for objective of US$5 trillion by 2024-25.
  • The Survey departs from traditional thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium.
  • Rather than viewing the national priorities of fostering economic growth, demand, exports and job creation as separate problems, the Survey views these macroeconomic phenomena as complementary to each other.
  • The cover design captures the idea of complementary inter-linkages between these macroeconomic variables using the pictorial description of several inter-linked gears. The team for Economic Survey 2018-19 has been guided by “Blue Sky Thinking.”
  • The Survey adopts an unfettered approach in thinking about the appropriate economic model for India.
  • This endeavor is reflected in the Sky-Blue Cover of the Survey.
  • Learning from the global financial crisis, the economy has been viewed as either in a virtuous cycle or a vicious cycle and therefore the concept of equilibrium economics has been disbanded.
  • Second, rather than trying to tackle various economic challenges of demand, jobs, exports et cetera in silos, the Survey makes the case that these phenomena are all complimentary.
  • Therefore, creating the virtuous cycle with investment, especially private investment, as the main driver can enable growth in each of these important macro variables.
  • In an uncertain world, three key elements are necessary: a vision, a strategic blueprint to achieve the vision, and practical tools to recalibrate constantly to the strategic blueprint.
  • The Prime Minister has laid out the vision and Economic Survey 2018 -19 lays out the strategic blueprint to achieve that vision along with the tactical tools to stay on the path of the strategic blueprint.
  • Among these, treating people as humans and not as robots as in classical economics, creating data as a public good, enhancing the legal system for enforcement of contracts, insuring consistency of policy with the blueprint are some tools that have been discussed, the Survey adds.
  • Treating people as humans and not as robots as in classical economics, creating data as a public good, enhancing the legal system for enforcement of contracts, insuring consistency of policy with the blueprint are some aspects that have been discussed in the Survey.
  • This year’s Survey also utilizes advances in Behavioural Economics to address issues of gender equality, a healthy and a beautiful India, savings, tax compliance and credit quality.
  • It recognizes the role of social norms in the success of initiatives such as Beti Bacho Beti Padhao, Swacch Bharat Mission and Jan Dhan Yojana to effect behavioral change.

Jal Shakti Abhiyan

Why in News?

  •       Jal Shakti Abhiyan for Water Conservation Launched.


  •  It is a time-bound, mission-mode campaign that would focus on 1,592 “water-stressed” blocks in 257 districts. The campaign will run through citizen participation during the monsoon season, from 1st July, 2019 to 15th September, 2019.
  • The 1,592 blocks, identified as “water-stressed” as per the Central Ground Water Board’s 2017 data, include 313 critical blocks, 1,000-odd over-exploited blocks and 94 blocks with least water availability (for states without water-stressed blocks).
  • Jal Shakti Abhiyan is a collaborative effort of various Ministries of the Government of India and State Governments, being coordinated by the Department of Drinking Water and Sanitation.
  • The focus of the campaign is on water stressed districts and blocks. The teams of officers from the central government will visit and work with district administration in 1592 water stressed blocks in 256 districts, to ensure five important water conservation interventions.
  •  The Five Important Water Conservation Interventions are:
    • Water conservation and rainwater harvesting,
    • Renovation of traditional and other water bodies/tanks,
    • Reuse of water and recharging of structures,
    • Watershed development and
    • Intensive afforestation.
  • The water conservation interventions will also be supplemented with special interventions including the development of block and district water conservation plans, promotion of efficient water use for irrigation and better choice of crops through Krishi Vigyan Kendras.
  • A large-scale communications campaign has also been planned alongside the JSA involving mass mobilisation of different groups including school students, college students, swachhagrahis, Self Help Groups, Panchayati Raj Institution members, youth groups (NSS/NYKS/NCC), defence personnel, ex-servicemen and pensioners, among various others.

National Electric Mobility Mission Plan

Why in News?

  • The National Electric Mobility Mission Plan (NEMMP) 2020 is a National Mission document providing the vision and the roadmap for the faster adoption of electric vehicles and their manufacturing in the country.


  • The plan has been designed to enhance national fuel security
  • To provide affordable and environmentally friendly transportation
  • To enable the Indian automotive industry to achieve global manufacturing leadership.
  • As part of the NEMMP 2020, Department of Heavy Industry formulated a Scheme viz. Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme in the year 2015 to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth of the same.
  • FAME-India Scheme Phase – II for promotion of Electric Mobility in the country.
  • The scheme proposes to give a push to electric vehicles (EVs) in public transport.
  • It seeks to encourage adoption of EVs by way of market creation and demand aggregation.


  • Target of deploying 5 to 7 million electric vehicles in the country by 2020
  • Emphasizes importance of government incentives and coordination between industry and academia
  • Target of 400,000 passenger battery electric cars (BEVs) by 2020 ~ avoiding 120 million barrels of oil and 4 million tons of CO2
  •  Lowering of vehicular emissions by 1.3 percent by 2020
  • Total investment required – INR 20,000 – 23,000 cr (approx 3 billion USD)

FAME India:

  • FAME India is a part of the National Electric Mobility Mission Plan. Main thrust of FAME is to encourage electric vehicles by providing subsidies.
  • Vehicles in most segments – two wheelers, three wheelers, electric and hybrid cars and electric buses obtained the subsidy benefit of the scheme.
  • FAME focuses on 4 areas i.e. Technology development, Demand Creation, Pilot Projects and Charging Infrastructure.

Minimum Support Price


Recently cabinet has announced MSP for 14 Kharif crops

What is MSP?

  •  Minimum Support Price (MSP) is a form of Market Intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
  • The MSP is announced by the Government of India at the Beginning of the Sowing Season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
  • MSP is a Guarantee Price for their produce from the Government.
  • The major objectives are to Support the Farmers from Distress Sales and to Procure Food Grains for Public Distribution.
  • In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.

Factors Determining the MSP:

  • Cost of production
  • Changes in input prices
  •  Input-output price parity
  • Trends in market prices
  • Demand and supply
  •  Inter-crop price parity
  • Effect on industrial cost structure
  • Effect on cost of living
  • Effect on general price level
  • International price situation
  • Parity between prices paid and prices received by the farmers.
  • Effect on issue prices and implications for subsidy.


Why in News?

  • National Manufacturing Competitiveness Programme (NMCP) aima to support the Micro, Small and Medium Enterprises (MSMEs) in their endeavor to become competitive.


  • The objective of NMCP is to develop global competitiveness among Indian MSMEs.
  • This programme targets at enhancing the entire value chain of the MSME sector through the following components:
  • Lean Manufacturing Competitiveness Scheme for MSMEs;
  • Promotion of Information & Communication Tools (ICT) in MSME sector;
  • Technology and Quality Up gradation Support to MSMEs;
  • Design Clinics scheme for MSMEs;
  • Enabling Manufacturing Sector to be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT);
  • Marketing Assistance and Technology Up gradation Scheme for MSMEs;
  • National campaign for building awareness on Intellectual Property Rights (IPR);
  • Support for Entrepreneurial and Managerial Development of SMEs through Incubators.
  • Bar Code under Market Development Assistance (MDA) scheme.


Why in News?

  • The government is likely to introduce warehousing schemes at village and National level to build an efficient storage infrastructure.
    A National Warehousing Grid along the National Highways may also be introduced in the Budget.

National Warehousing Grid:

  • The Centre’s scheme aims at broad integration of the warehousing capacities in India.
  • Approximately 90% of the warehousing space is controlled by unorganised players, with small warehouses of less than 10,000 sq ft area.
  • An action plan has already been approved by the Centre on sectoral basis for the construction of steel silos with a capacity of 100 lakh metric tonnes in PPP mode for modernizing storage infrastructure and improving shelf life of stored food grains.

Significance of scheme:

  • Practically, much of the country’s warehousing capacity outside of the agri sector is in the unorganised sector, with small warehouses of less than 10,000 sq ft area.
  • Currently, of the total warehousing space of about 180 million sq ft in the country, the industrial segment accounts for about 86% and the agricultural sector the rest 14%, according to NITI statistics.
  • Two-thirds of the warehousing capacity in the food storage segment is owned by the public sector.
  • Apart from conventional storing services, India’s warehousing capacity is increasingly being used to offer value-added services such as the consolidation and breaking up of cargo, packaging, labelling, bar coding and reverse logistics.

Plugging deficiencies:

  • The project is aimed at plugging deficiencies given that India’s current cold storage capacity at 25 MT is barely sufficient for 10% of the fruits and vegetables produced in the country.
  • The lack of adequate storage infrastructure is an important reason for the high cost of food products and wastage.
  • Nearly 60% of the modern warehousing capacity in India is concentrated in top six cities, namely Ahmedabad, Bengaluru, Chennai, Mumbai, Delhi-NCR and Pune, with Hyderabad and Kolkata being the other major markets, according to Care Ratings.
  • This trend is driven by the concentration of industrial activity and presence of sizeable urban population around these clusters.


  • The prime beneficiaries of the new wave of growth in warehousing include peripheral locations of Tier 1 and Tier 2 cities.
  • Much of the fresh investments would go into creating storage facilities for retail and consumer goods.

Forthcoming Challenges:

  • The primary challenge that India’s warehousing market currently faces is acquisition of a feasible land parcel, given that land cost constitutes the largest component of a warehousing project.
  • While rental values that a warehouse owner can charge are primarily driven by demand and supply factors, land prices are inherently dependent on multiple factors like development control regulations, infrastructure development and the best alternative usage of land.


Why in News?

  • 2nd anniversary of Goods & Services Tax to be celebrated on 1st July 2019.


  • GST is one indirect tax for the whole nation, which will make India one unified common market.
  • GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer.
  • Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage.
  • The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

Taxes at the Centre and State level are subsumed into GST:

  • At the Central level, the following taxes are being subsumed:
    • Central Excise Duty
    • Additional Excise Duty
    • Service Tax
    • Additional Customs Duty commonly known as Countervailing Duty, and
      Special Additional Duty of Customs.
  • At the State level, the following taxes are being subsumed:
    • Subsuming of State Value Added Tax/Sales Tax,
    • Entertainment Tax (other than the tax levied by the local bodies), Central Sales
    • Tax (levied by the Centre and collected by the States),
    • Octroi and Entry tax,
    • Purchase Tax,
    • Luxury tax, and
    • Taxes on lottery, betting and gambling.

Benefits of GST:

For business and industry:

  • Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
  • Uniformity of Tax Rates and Structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
  • Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
  • Improved competitiveness: Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.
  • Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.

For Central and State Governments:

  • Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
  • Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
  • Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.

For the consumer:

  • Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
  • Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.

GST Council:

  • As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.
  • As per Article 279A of the amended Constitution, the GST Council will be a joint forum of the Centre and the States. This Council shall consist of the following members namely: –
  • Union Finance Minister.. Chairperson
  • The Union Minister of State, in-charge of Revenue of finance… Member
  • The Minister In-charge of finance or taxation or any other Minister nominated by each State Government.


  • Context: India has recently ratified the international agreement to curb Base Erosion and Profit Shifting (BEPS)
  • India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (multilateral instruments (MLI), which was signed by the Finance Minister in Paris in June, 2017 on behalf of India, along with representatives of more than 65 countries.

About MLI:

  • It is a multilateral convention of the Organisation for Economic Co-operation and Development (OECD) to combat tax avoidance by multinational enterprises (MNEs) through prevention of Base Erosion and Profit Shifting (BEPS).
  • The BEPS multilateral instrument was negotiated within the framework of the OECD G20 BEPS project and enables countries and jurisdictions to swiftly modify their bilateral tax treaties to implement some of the measures agreed.
  • The BEPS multilateral instrument was adopted on 24 November 2016 and signed on 7 June 2017 by 67 jurisdictions for the first signing ceremony.
  • As of July 2018, 83 jurisdictions have signed the BEPS multilateral instrument, covering more than 1,400 bilateral tax treaties.
  • It entered into force on 1 July 2018, among the first jurisdictions that ratified it.

India and MLI:

  • India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from the G20, Organisation for Economic Co-operation and Development (OECD), and other interested countries, which worked on the finalising the text of the Multilateral Convention.
  • The MLI will modify India’s tax treaties to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out.
  • The MLI will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures.
  • Out of 93 tax treaties notified by India, 22 countries have already ratified the MLI so far and the Double Taxation Avoidance Agreement (DTAA) with these countries will be modified by MLI.
  • For the remaining countries with tax treaties with India, the MLI will come into force when they ratify it. The MLI will come into force for India from October 1, 2019.

What is Base Erosion and Profit Shifting (BEPS)?

  • It refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no tax locations.
  • BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from multinational enterprises (MNEs).

MEITY reported that 2.22 crore villagers are given Digital Education under Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA)


  • Ministry of Electronics and Information Technology reported that 2.22 crore villagers are given Digital Education under Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA). 


  • To increase the Digital Literacy rate in India, Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) was launched as an integral part of the ‘Digital India’
  • The vision of this scheme is that one person in every household becomes digitally literate
  • Train them to operate digital devices such as Tablets, Smartphones et cetera.
  • Bridge the digital divide, specifically targeting the rural population
  • It also ensures high-speed internet access for all, though a secure ecosystem.

Electric Vehicles in India

Fame 2(Faster Adoption and Manufacturing (Hybrid&) and electric vehicles


  • The outlay of ₹10,000 crore has been made for three years till 2022 for FAME 2 scheme.
  • The centre has sanctioned ₹8,596 crore for incentives, of which ₹1,000 crore has been earmarked for setting up charging stations for electric vehicles in India.
  • The government will offer the incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes.
  • Plug-in hybrid vehicles and those with a sizeable lithium-ion battery and electric motor will also be included in the scheme and fiscal support offered depending on the size of the battery.

Electric Infrastructure

  • The centre will invest in setting up charging stations, with the active participation of public sector units and private players.
  • It has also been proposed to provide one slow-charging unit for every electric bus and one fast-charging station for 10 electric buses.


  • To encourage state transport units (STUs) to buy more electric buses, ₹20,000 per kW will be offered as incentive.
  • FAME 2 will offer incentives to manufacturers, who invest in developing electric vehicles and its components, including lithium-ion batteries and electric motors.
  • The centre has asked states to frame their EV policy and provide additional fiscal and non-fiscal incentives to manufacturers and buyers.

Why the government is pushing EVs to fight climate change

  • India has been at the forefront of aligning its policies with its commitment to the Paris accord on climate change, signed in 2016.
  • The accord aims to pursue efforts to limit the global temperature rise to 5ºC above pre-industrial levels.

Why is the central government promoting the adoption of electric mobility?

  • To reduce the import of crude oil
  • NITI Aayog, the government think tank is tasked with devising a mass electric energy-based transport system in India,

What are the main Obstacles in adopting electric mobility?

  • A battery, depending on its capacity, will keep a vehicle running at a certain speed for a certain duration.
  • Lack of charging infrastructure
  • High cost difference between ICE-based vehicles
  • firms have invested in making lithium-ion cells for batteries—most of the EV makers assemble the battery packs
  • India also lacks the important minerals, lithium and cobalt, that go into making lithium batteries, which are imported from China.

Working Group for Revision of WPI

Why in news?

  • The Government of India has decided to constitute a Working Group for the revision of the current series of Wholesale Price Index (Base 2011-12).


  • The current series of Wholesale Price Index (WPI) with 2011-12 as base year was introduced in May 2017. Since 2011-12, significant structural changes have taken place in the economy.
  • Therefore, it has become necessary to examine the coverage of commodities, weighting diagram and related issues pertaining to the existing series of index numbers of Wholesale Price Index.
  • Accordingly, Government has constituted the Working Group for the revision of current series of Wholesale Price Index (Base 2011-12) under Chairmanship of Dr. Ramesh Chand, Member, Niti Aayog
  • The Office of Economic Adviser, Department for Promotion of Industry & Internal Trade will be the nodal office for the Working Group and will process the report / recommendation of the Group for further necessary action.

The Terms of Reference of the Working Group:

  • To select the most appropriate Base Year for the preparation of a new official series of Index Numbers of Wholesale Price (WPI) and Producer Price Index (PPI) in India.
  • To review commodity basket of the current series of WPI and suggest additions / deletions of commodities in the light of structural changes in the economy witnessed since2011-12
  • To review the existing system of price collection in particular for manufacturing sector and suggest changes for improvement.
  • To decide on the computational methodology to be adopted for monthly WPI/PPI.
  • To examine the existing methodology of compilation of PPI approved by Technical Advisory Committee on Series of Prices and Cost of Living and suggest further improvement in compilation and presentation.
  • The Working Group may recommend roadmap for switch over from WPI to PPI.
  • To examine the method of computing linking factor adopted so far and suggest appropriate change in method of computing linking factor, if necessary.
  • To suggest any other improvements as may be necessary for enhancing the reliability of the official series of WPI / PPI.


Why in News?

  • The Reserve Bank of India in its directive on ‘Storage of Payment System Data’ has made it clear that entire payment data shall be stored in systems located only in India.


  • All system providers need to ensure that within a period of six months, the entire data relating to payment systems operated by them is stored in a system only in India.
  • Data stored in India should include end-to-end transaction details and info about payment transactions. The data could be pertaining to:
  • Customer data like name, mobile number, Aadhaar number, PAN.
  • Payment-sensitive data like customer and beneficiary account details.
  • Payment credentials like OTP, PIN.
  • Transaction data such as originating and destination system information amount.
  • All data related to payments must be stored only in India and data processed (in case the processing is done abroad) will have to be brought back to the country within 24 hours.
  • There is no bar on the processing of payment transactions outside India if so desired by the Payment System Operators (PSO).
  • Data stored in India can be accessed or fetched whenever required for handling customer disputes as well as for any other related processing activity, such as charge back. The data may be shared with the overseas regulator, if so required, depending upon the nature/origin of a transaction with prior approval of the RBI.
  • For cross border transaction data, (consisting of a foreign component and a domestic component) a copy of the domestic component may also be stored abroad


What is it About?

  • The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system.
  • Gross non-performing assets in the banking system have declined for the second consecutive half year, while the credit growth is picking up.
  • Gross NPA ratio declined to 9.3% as on March 2019. It was 10.8% in September 2018 and 11.5% in March 2018.
  • Gross NPAs could further decline to 9% by March 2020, the macro stress tests indicated.

What is Non-Performing Asset (NPA)?

  • A nonperforming asset (NPA) refers to a classification for loans or advances that are in default or are in arrears on scheduled payments of principal or interest.
  • In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days.
  • While 90 days of non-payment is the standard, the amount of elapsed time may be shorter or longer depending on the terms and conditions of each loan.
  • Following the capital infusion by the government in public sector banks, the overall capital adequacy ratio of the commercial banks improved from 13.7% in September 2018 to 14.3% in March 2019, with state-run banks’ CAR improving from 11.3% to 12.2% during the period. However, there was a marginal decline in the CAR of private sector banks.
  • Credit growth of Public sector banks were at 9.6% while private lenders continue to robust growth of 21%.

What is Capital Adequacy Ratio – CAR?

  • The capital adequacy ratio (CAR) is a measurement of a Bank’s available capital expressed as a percentage of a bank’s risk-weighted credit exposures.
  • The capital adequacy ratio, also known as capital-to-risk weighted assets ratio (CRAR), is used to protect depositors and promote the stability and efficiency of financial systems around the world.
  • The reason minimum capital adequacy ratios (CARs) are critical is to make sure that banks have enough cushion to absorb a reasonable amount of losses before they become insolvent and consequently lose depositors’ funds.


  • Context- dispute settlement panel pronouncing that subsidies and mandatory local content requirements instituted by eight American states breached global trade rules.
  • Panel upholds India’s claims that renewable energy subsidies in eight American states violated a core global trade rule.
  • The renewable energy sector win may help India in settling other disputes with the US.
  • The panel also asked the US to ensure that these states are in conformity with trade rules.

What India claims-

  • India had claimed that the “domestic content requirements and subsidies instituted by the governments of the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota in the energy sector”
  • violated several provisions of the Trade-Related Investment Measures (TRIMs) Agreement and Subsidies and Countervailing Measures Agreement.
  • New Delhi had challenged the “renewable energy cost recovery incentive payment programme” implemented by the state of Washington, California’s self-generation incentive programme, Montana’s tax incentive for ethanol production, Michigan’s renewable energy credits programme, Delaware’s solar renewable energy credits and the Made in Minnesota renewable incentive programme.

WTO Panel:

  • panel urged the US to bring the eight states in conformity with US obligations under Article III:4 of “national treatment”. Under the national treatment provision, foreign producers must be treated on a par with domestic producers.

Option for US:

  • The US can still challenge the panel’s ruling before the Appellate Body (AB); however, the AB itself is feared to have become dysfunctional after 11 December because the US has been blocking appointments to it.


  • it would show the US and its federal states maintain WTO-inconsistent programmes in the renewable energy sector.
  • it is a lesson to the US that it should not undermine renewable energy programmes in other countries such as India on grounds that they violate global trade rules when Washington and its federal states adopt much bigger programmes worth billions of dollars that violate global trade rules.

Background Issue:

  • In 2014, the US had launched a similar trade dispute against India’s Jawaharlal Nehru Solar Energy Mission, on the grounds that it included incentives for domestically produced solar cells and modules. WTO’s Appellate Body had upheld the US complaint against India in that case.

General Agreement on Tariffs and Trade:

  • The General Agreement on Tariffs and Trade was the first worldwide multilateral free trade agreement.
  • The purpose of GATT was to eliminate harmful trade protectionism.
  • It restored economic health to the world after the devastation of World War II.

Trade-Related Investment Measures (TRIMs):

  • This Agreement, negotiated during the Uruguay Round, applies only to measures that affect trade in goods.
  • Recognizing that certain investment measures can have trade-restrictive and distorting effects, it states that no Member shall apply a measure that is prohibited by the provisions of GATT Article III (national treatment) or Article XI (quantitative restrictions).

What is the WTO Appellate?

  • The Appellate Body was established in 1995 under Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).
  • It is a standing body of seven persons that hears appeals from reports issued by Panels in disputes brought by WTO Members.
  • The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate Body Reports, once adopted by the Dispute Settlement Body (DSB), must be accepted by the parties to the dispute.
  • The Appellate Body has its seat in Geneva, Switzerland.
  • The Appellate Body is composed of seven Members who are appointed by the DSB to serve for four-year terms, with the possibility of being reappointed once.
  • Without the statutorily mandated number of judges to hear cases (three or more), the trade will become non-functional for all practical purposes at the end of this year, if the U.S does not allow new nominees to go through.


Why in News?

  • Agricultural & Processed Food Products Export Development Authority (APEDA)in association with North Eastern Regional Agricultural Marketing Corporation (NERAMAC) organised the second Conference cum International Buyers-Sellers Meet in Imphal, Manipur.


  • APEDA, under the Ministry of Commerce and Industries, promotes export of Agricultural and processed food products from India.
  • To promote export of agricultural products from NER, APEDA has been organising various buyers- sellers meets to facilitate market linkages of the exporters with international buyers.
  • The first international buyers – sellers meet for NER was organized by APEDA in Guwahati in March this year.
  • APEDA is conducting regular promotional activities in the area of agriculture exports. It provides support to exporters to set up infrastructure like pack houses and cold storages.
  • APEDA also helps exporters to exhibit their products in several national and international expos and exhibitions.
  • The Imphal event of international buyers – sellers meet is part of the initiative of APEDA to bring the North-Eastern states of India on the export map of the country.


  • The Reserve Bank of India (RBI) has clarified that payment system providers need to store entire payments data in a system only in India.
  • The issue has come to the forefront because a global push for data free flow across national boundaries. Japanese Prime Minister Shinzo Abe has been a torch bearer for such a system.
  • The risk of data going abroad is that it may fall into the hands of misuse that could lead to manipulations in the life of common man in India. Moreover, India being the second largest populated countries in the world, such data could lead to manipulations by big corporates.
  • The data should include end-to-end transaction details and information pertaining to payment or settlement transaction that is gathered/transmitted/processed as part of a payment message/instruction.
  • The data could be pertaining to customer data like name, mobile number, Aadhaar number, PAN; Payment-sensitive data like customer and beneficiary account details; payment credentials like OTP, PIN and, transaction data such as originating and destination system information amount, among others.
  • The processing is done abroad, the data should be deleted from the systems abroad and brought back to India within one business day or 24 hours from the payment processing, whichever is earlier.


  • The Central Board of Direct Taxes has expanded the terms of reference of the task force set up to come up with a new direct tax law.
  • They include appropriate direct tax legislation keeping in view the direct tax litigation in other countries, international best standards, the economic needs of the country and other related issues.
  • The new additions include the creation of a faceless and anonymized verification and security system, and the sharing of information between GST, customs and CBDT, and the Financial intelligence unit.