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Indian Economy

FOOD SYSTEMS

Why in News?

  • As per the recently released Global Nutrition Report 2020, food systems should be inclusive, local and diverse to address food security and malnutrition and build economic and Climate Resilience.

Food System:

  • A food system is a composite of the environment, people, inputs, processes, infrastructures, institutions, etc.
  • Production, processing, distribution, preparation and consumption of food are a part of food systems.
  • They also include the outputs of such activities, including socio-economic and Environmental Outcomes.

How Food Systems can Reduce Malnutrition:

  • By adjusting food systems away from staples like wheat and rice towards non-staples like vegetables, fruits, fish, nuts etc., malnutrition can be reduced.
  • More incentives towards millets, and non-staples will make production of healthy food attractive to producers and therefore improve the availability of more nutritious food, especially for the rural poor.
  • Procurement of nutritious and climate-resilient crops like sorghum and millets should become the policy of the government.
  • Their consumption should be increased through public food distribution schemes and creating awareness on the health benefits of these crops.
  • Child malnutrition is a risk factor that can keep India from fulfilling all its child mortality related Sustainable Development Goals (e.g. SDG 2: Zero Hunger).

Role of Small Farm Holders:

  • Small farm holders who usually do not have access to big value chains will be critical in improving Food Systems.
  • Incentivising and hand-holding them to transition to diverse crops may improve local value chains as better access enables income enhancement.

Food Systems and Climate Change:

  • Smaller and localised value chains instead of supermarket driven long-value chains can reduce carbon footprints.
  • Similarly, climate-resilient and less water intensive crops should be incentivised and popularised among farmers and consumers alike

TO PRINT MORE MONEY, OR NOT TO

Why in News?

  • Reserve Bank of India (RBI) has been trying to boost the liquidity in the financial system. It has bought government bonds from the financial system and left it with money amid COVID 19.

Need for Government to Borrow:

  • Under normal circumstances, just because the economy has stalled and the government will not be getting its revenues, the government fiscal deficit is expected to shoot up to around 15% of GDP when the permissible limit is only 6%.
  • Also, if the government was to provide some kind of a bailout or relief package, it would have to borrow a huge amount. The fiscal deficit will go through the roof.
  • Moreover, for the government to borrow the money, the market should have it as savings. Data show that savings of domestic households are barely enough to fund the government’s existing borrowing needs. So there isn’t enough money in the market for the government to borrow.

Direct Monetisation of Deficit:

  • In this, government deals with the RBI directly and asks it to print new currency.
  • In lieu of printing this cash, which is a liability for the RBI, it gets government bonds, which are an asset for the RBI since such bonds carry the government’s promise to pay back the designated sum at a specified date.
  • This is different from the indirect monetising that RBI does when it conducts the so-called Open Market Operations (OMOs) and/ or purchases bonds in the secondary market.

Has India ever Done this in the Past?

  • Yes, until 1997, the RBI “automatically” monetised the government’s deficit. However, direct monetisation of government deficit has its downsides. In 1994 then RBI Governor decided to end this facility by 1997.

Main Problems with Direct Monetisation of Government Deficit:

  • Government expenditure using this new money boosts incomes and raises private demand in the economy. Thus, it fuels inflation. A little increase in inflation is healthy as it encourages business activity. But if the government doesn’t stop in time, it creates high inflation.
  • Since inflation is revealed with a lag, it is often too late before governments realise they have over-borrowed. Higher inflation and higher government debt provide grounds for macroeconomic instability.
  • While no ideal level of debt is set in stone, most economists believe developing economies like India should not have debt higher than 80%-90% of the GDP. At present, it is around 70% of GDP in India.
  • The other argument against direct monetising is that governments are considered inefficient and corrupt in their spending choices — for example, whom to bail out and to what Extent.

DEPARTMENT OF AGRICULTURAL RESEARCH & EDUCATION (DARE)

Why in News?

  • The Union Minister for Agriculture took a review meeting of the Department of Agricultural Research & Education (DARE) and Indian Council of Agricultural Research (ICAR).

Department of Agricultural Research & Education (DARE):

  • It was established in the Ministry of Agriculture in December, 1973.
  • It coordinates agricultural research & education in the country.
  • It is the nodal agency for International Cooperation in the area of agricultural research and education in India.
  • It has the following four autonomous bodies under its Administrative Control:
  1. 1.Indian Council of Agricultural Research (ICAR)
  2. 2.Central Agricultural University (CAU), Imphal
  3. 3.Dr.Rajendra Prasad Central Agricultural University, Pusa, Bihar
  4. 4.Rani Laxmi Bai Central Agricultural University, Jhansi, UP

The Major Functions of DARE:

  • To look after all aspects of the agricultural research and Education involving coordination between the central and state agencies.
  • To attend all matters relating to Indian Council of Agricultural Research (ICAR).
  • To attend all matters concerning the development of new technology in agriculture, Horticulture, Natural Resources Management, Animal Science and Marketing and Fisheries.
  • International co-operation in the field of agricultural research and education
  • Fundamental, applied and operational research and higher education including coordination of Such Research.

Krishi Kalyan Abhiyan:

  • It was launched by the Ministry of Agriculture and farmers’ welfare in June 2018 to assist and advice farmers on how to improve their farming techniques and raise Their Incomes.

Implementation:

  • It is undertaken in 25 Villages with more than 1000 population each in Aspirational Districts identified in consultation with Ministry of Rural Development as per directions of NITI Ayog.
  • In districts where number of villages (with more than 1000 population) is less than 25, all villages will be covered.

3 Phases of KVKs:

  • So far two phases of Krishi Kalyan Abhiyan have been completed in which 11.05 lakh farmers were trained by KVKs.
  • In the third phase of KKA training of about 17 lakh farmers on diversified farming practices for doubling farmers’ income is planned

HOW COVID-19 UNSETTLED RUPEE

Why in News?

  • The economic disruption due to the spread of the COVID-19 over the past few months has adversely affected various aspects of the Indian economy which can be assessed using multiple parameters including the exchange rate viz a viz other economy.

Exchange Rate:

  • A currency’s exchange rate vis-a-vis another currency reflects the relative demand among the holders of the two currencies.
  • This is dependent on the relative demand for the goods and services of the two countries.
  • If the US dollar is stronger than the rupee, then it shows that the demand for dollars (by those holding rupee) is more than the demand for rupees (by those holding dollars)

Current Scenario:

  • Typically, stronger economies have stronger currencies.
  • For instance, the US economy is relatively stronger than India’s and this is reflected in one US dollar being equal to around 76 rupees.
  • The rupee has been losing value (or depreciating or weakening) against the dollar over the past few months.
  • But the US is not the only other country in the world; India trades with many other countries.
  • To have a better understanding of the Indian economy’s overall competitiveness, one should look at how the rupee is behaving with its major trade partners.

Parameters to Measure Exchange Rate Competitiveness of Indian Economy:

  • Nominal Effective Exchange Rate:The Reserve Bank of India tabulates the rupee’s NEER in relation to the currencies of 36 trading partner countries.
    • This is a weighted index — that is, countries with which India trades more are given a greater weight in the index.
    • A decrease in this index denotes depreciation in Rupee’s value; an increase reflects Appreciation.
  • Changes Observed:
    • In NEER terms, the rupee has depreciated to its lowest level since November 2018.
    • The rupee has been steadily losing value — showing the Indian economy’s reducing competitiveness— since July 2019.
    • The dip in March was likely influenced by the net outflow of foreign portfolio investments from the Indian equity and debt markets — they stood at $15.92 billion in March as against net inflows of $1.27 billion in February.
  • Real Effective Exchange Rate (REER):This is even better at capturing the actual change is essentially an improvement over the NEER because it also takes into account the domestic inflation in the various economies.
    • Many factors affect the exchange rate between any two currencies ranging from the interest rates to political stability (less of either result in a weaker currency). Inflation is one of the most important factors.
  • REER Calculates the purchasing power of a currency by adjusting the nominal exchange rate for inflation effects.
    • Illustration – Suppose Rupee – Dollar exchange rate was exactly 10 in the first year.
    • This means that with Rs 1000, one could buy something that was priced at $100 in the US. But suppose the Indian inflation is 20% and the US inflation is zero. Then, in the second year, an Indian would need Rs 1200 to buy the same item priced at $100, and the rupee’s exchange rate would depreciate to 12.
  • Changes Observed:
    • Even in REER terms, the rupee has depreciated in March and fallen to its Lowest Level since September 2019.
    • As the graph shows, the difference between trends of NEER and REER was due to India’s domestic retail inflation being lower relative to the other 36 countries.
    • As domestic inflation started rising, the REER, too, started depreciating like the

RBI ANNOUNCES SECOND SET OF LIQUIDITY MEASURES

Why in News?

  • The Reserve Bank of India (RBI) has announced the second set of measures to preserve financial stability and help put money in the hands of the needy and disadvantaged during the extended lockdown due to the COVID-19 crisis.

Highlights:

  • The Reserve Bank of India announced a set of nine measures to revive the struggling domestic economy.
  • This follows the earlier set of measures Announced by RBI.
  • Making the announcements through an online address, the RBI Governor stated that the human spirit is ignited by the resolve to overcome the COVID-19 pandemic which has gripped the world in its deadly embrace.
  • The move by the Central Bank aims to maintain adequate liquidity in the system and its constituents in the face of COVID-19 related dislocations, facilitate and incentivize bank credit flows, ease financial stress, and enable the normal functioning of markets.

Measures Announced by RBI:

  • Targeted Long-Term Operations (TLTRO) 2.0:
    • A second set of targeted long-term repo operations (TLTRO 2.0) for an initial aggregate amount of Rs. 50,000 crore will be conducted.
    • This is being done to facilitate funds flow to small and mid-sized corporates, including NBFCs and MFIs, who have been more severely impacted by the disruptions due to COVID-19.
  • Refinancing Facilities for All India Financial Institutions
    • Special refinance facilities for a total amount of Rs. 50,000 crore will be provided to National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI) and the National Housing Bank (NHB) to enable them to meet sectoral credit needs.
  • Reduction of Reverse Repo Rate under Liquidity Adjustment Facility
    • Reverse repo rate has been reduced by 25 basis points from 4.0% to 3.75% with immediate effect, in order to encourage banks to deploy surplus funds in investments and loans in productive sectors of the Economy.
  • Raising Limit of Ways and Means Advances of states and UTs
    • Ways and Means Advances (WMAs) Limit of states and union territories has been increased by 60% over and above the limit as on March 31, 2020, in order to provide greater comfort to states for undertaking COVID-19 containment and mitigation efforts, and also to help them plan their market borrowing programmes better.
  • Asset Classification
    • With respect to recognition of Non-Performing Assets (NPAs), the central bank has decided that the payment moratorium period, which lending institutions have been permitted to grant as per RBI’s announcement (on March 27, 2020), will not be considered while classifying assets as NPAs.
  • Extension of Resolution Timeline
    • Recognizing challenges to resolution of stressed assets or accounts which are or are likely to become NPAs, the period for implementation of resolution plan has been extended by 90 days.
  • Distribution of Dividend
    • It has been decided that scheduled commercial banks and cooperative banks shall not make any further dividend pay-outs from profits pertaining to FY 2019-20.
    • This has been done in order to enable banks to conserve capital so that they can retain their capacity to support the economy and absorb losses in an environment of heightened Uncertainty.
  • Lowering of Liquidity Coverage Ratio Requirement
    • To improve the liquidity position for individual institutions, the Liquidity Coverage Ratio requirement for scheduled commercial banks has been brought down from 100% to 80% with immediate effect.
  • NBFC Loans to Commercial Real Estate Projects
    • The treatment available for loans to commercial real estate projects with respect to the date for commencement for commercial operations (DCCO) has been extended to NBFCs, in order to provide relief to both NBFCs and the real estate sector.
  • The Additional Measures are Aimed to:
  • Maintain adequate liquidity in the system and its constituents in the face of COVID-19 related Dislocations
  • Facilitate and incentivise Bank Credit Flows
  • Ease financial stress, and
  • Enable the normal functioning of Markets

IMPACT OF THE CORONAVIRUS PANDEMIC ON AVIATION INDUSTRY

Why in News?

  • The Aviation Industry, like several other sectors, is facing a crisis in the wake of the COVID-19 pandemic.

Highlights:

  • Issues faced by the aviation industry due to COVID-19: Travel restrictions, grounded fleets, benched staff, schedule uncertainties, ticket liabilities and cash burn. It’s not a question of only restrictions, visas not being allowed, travel not being allowed, airlines not being allowed.
  • Even after upliftment of restrictions there will be Apprehensions.
  • Loss incurred by aviation industry: As per The International Air Transport Association (IATA) severe travel restrictions may cut the industry’s revenue by $252 billion in 2020.
  • In terms of the bottom line, this is expected to translate into a $39 billion net loss in the second quarter.
  • The industry will also burn about $61 billion in money in the second quarter.
  • In India, for example, out of the 650 planes with all the airlines, 50% of them have been taken on lease. So even while they’re on the ground the lease rentals are being paid.
  • If apprehensions and restrictions last much longer, the revenue loss will be higher and, subsequently, the losses will be higher.
  • Loss of livelihood: As per IATA 25 million people will lose their jobs. Both men and machines are taking a heavy toll on the aviation industry.
  • Traffic will not grow for a year or more: for instance, Changi Airport shutting down one complete terminal for a year and Singapore airlines announced the grounding of 96% of their fleet.
  • With respect to India it will take more than a couple of years to come back to at least 50% of what the industry was earlier.
  • No clue for future: The crisis confronting the aviation industry is not only unprecedented but also there is no clue on how to put industry back on track. For instance after the 9/11 terrorist attack it took a long time for the aviation industry to come back.

Implications:

  • Social distancing in airlines: the recent statements of the DGCA [Directorate General of Civil Aviation], even when the flights are put back into operation, the concept of social distancing will be imposed on the airlines.
  • If airlines are only going to be flying one-third of your capacity, the kind of fares that an airline will have to charge to sustain its operations will be very high.
  • Family travel will be seriously impacted by this.
  • India is a price-sensitive market: So we will go back to the era of the 1940s and the 1950s where only the elite could afford to travel.
  • Limited finances: It is difficult that the government pump in money to push up an elite industry at the cost of others.
  • To expect large-scale aid to put the airline industry back on track is an impossibility.
  • Slowdown in Manufacturing of aircrafts: Manufacturers are going to face a big problem for the next 10 years. It’s 10 years because of finances to build up, for airlines to place the order. the industry is not going to start reviving before five years.

Way Forward:

  • It needs professionals with a clear mind, not bureaucrats who know very less about aviation.
  • A clear Plan on how to mitigate the suffering is the need of the hour.
  • Aviation research agency CAPA predicts that airlines will need three stages of relief. CAPA has also said that 250 aircraft will be surplus to needs. As per estimates India will not need even 50% of the 650 planes that all airlines currently have.
  • Radical changes in Business models: The business model that Indian carriers followed is garner market share at the expense of profitability, which in other words was no business model at all.
  • There is really no low-cost airline: The first thing the government can do is to put the Aviation Turbine Fuel, or ATF, in GST.
  • Rebuild aviation: Move slowly, understand where the flights are essential and move away from fixing the schedules based on a Delhi-centric focus and politicians.

IATA:

  • The International Air Transport Association is a trade association of the world’s airlines founded in 1945.
  • IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organizes tariff conferences that serve as a forum for price fixing.
  • IATA supports airline activity and helps formulate industry policy and standards. It is headquartered in Canada in the city of Montréal, with Executive Offices in Geneva, Switzerland.
  • IATA’s mission is to represent, lead, and serve the Airline Industry.
  • Its members include both freight and passenger carriers and it has offices in 53 countries around the world.
  • The organisation offers information on airlines, a range of publications and training programs and accreditation for those working in the Travel Industry.
  • In addition, it supplies a range of financial services, such as a debt collection service for airlines.
  • The main instrument for safety is the IATA Operational Safety Audit (IOSA). IOSA has also been mandated at the state level by several countries. In 2017, aviation posted its safest year ever, surpassing the previous record set in 2012.

OUTDATED CENSUS DATA DEPRIVES OVER 10 CRORES OF PDS

Why in News?

  • Over 10 crore people have been excluded from the Public Distribution System (PDS) because outdated 2011 census data is being used to calculate State-wise National Food Security Act (NFSA) coverage.
  • With the 2021 census process being delayed due to the COVID-19 pandemic, any proposed revision of PDS coverage using that data could now take several years.

Highlights:

  • National Food Security Act (NFSA), 2013 gives legal entitlement to 67% of the population (75% in rural areas and 50% in urban areas) to receive highly subsidized food grains under the Public Distribution System.
  • Coverage under the Act is based on the population figures of Census, 2011.
  • Under the Act, food grain is allocated @ 5 kg per person per month for priority house holds category and @ 35 kg per family per month for Antodya anna Yojna (AAY) families at a highly subsidized prices of Rs. 1/-, Rs. 2/- and Rs. 3/- per kg for nutri-cereals, wheat and rice respectively.
  • In 2013, State-wise ratios were worked out for rural and urban areas, using National Sample Survey data, in such a manner that everyone below a given national “per-capita expenditure benchmark” is covered, meaning that PDS coverage should be higher in poorer States.

Population Missed the PDS Coverage:

    • Under the NFSA, the PDS is supposed to cover 75% of the population in rural areas and 50% of the population in urban areas, which works out to 67% of the total population, using the rural-urban population ratio in 2011.
    • India’s population was about 121 crore in 2011 and so PDS covered approximately 80 crore people. However, applying the 67% ratio to a projected population of 137 crore for 2020, PDS coverage today should be around 92 crore.

  • The biggest gaps are in Uttar Pradesh (2.8 crore) followed by Bihar (1.8 crore) people. State-specific birth and death rates from 2016 were used to calculate the population growth rate and projected population estimates.
  • Many State governments are reluctant to issue new ration cards beyond the numbers that will be provided for by the Central quota, making it difficult to reduce exclusion errors in the PDS.
  • This is because the State government stopped issuing new ration cards several years ago to avoid exceeding the numbers provided for by the Central government.

Public Distribution System:

  • It is a government-sponsored chain of shops entrusted with the work of distributing basic food and non-food commodities to the needy sections of the society at very cheap prices.
  • Wheat, rice, kerosene, sugar, etc. are a few major commodities distributed by the public distribution system.
  • Food Corporation of India, a government entity, manages the public distribution system.
  • Concerns: The system is often blamed for its inefficiency and rural-urban bias.
  • It has not been able to fulfill the objective for which it was formed. Moreover, it has frequently been criticized for instances of corruption and black marketing.

How PDS System Functions?

  • The Central and State Governments share responsibilities in order to provide food grains to the identified beneficiaries.
  • The centre procures food grains from farmers at a minimum support price (MSP) and sells it to states at central issue prices. It is responsible for transporting the grains to godowns in each state.
  • States bear the responsibility of transporting food grains from these godowns to each fair price shop (ration shop), where the beneficiary buys the food grains at the lower central issue price. Many states further subsidise the price of food grains before selling it to Beneficiaries.

E-WAY BILLS

Why in News?

  • Having been stuck for the last two weeks amid lockdown in the country, truckers raise concerns over e-way bills for goods in transit or in godowns, which were getting expired and could not be renewed on due dates.

E-way Bills:

  • E-Way Bill is the short form of Electronic Way Bill.
  • It is a unique document/bill which is electronically generated for the specific consignment/movement of goods from one place to another, either inter-state or intrastate and of value more than INR 50,000, required under the current Goods and ServicesTax (GST) regime.
  • It offers the technological framework to track intra-state as well as inter-state movements of goods of value exceeding Rs 50,000, for sales beyond 10 km in the GST regime.
  • The e-Way Bill has been made compulsory from 1st April 2018.
  • When e-Way Bill is generated, a unique e-Way Bill Number (EBN) is made available to the supplier, recipient and the transporter.
Who Should Generate an e-Way Bill?
  • GST Registered Person:
    • When a registered person causes the movement of goods/ consignment, either in the capacity of a consignee (i.e., buyer) or consignor (i.e., seller) in his/her vehicle or hired vehicle or railways or by air or by ship, then either the registered person or the recipient should generate the e-Way Bill.
  • Unregistered Person:
    • When an unregistered person causes the movement of goods, through his/herconveyance or hired conveyance or using the services of a transporter, then the eWay Bill needs to be generated either by the unregistered person or by the

When Should E-Way Bill Be Issued?

  • Ideally, e-Way Bill should be generated before the commencement of movement of goods above the value of INR 50,000 (either individual invoice or consolidated invoice of multiple consignments).
  • The movement of goods will be either about a supply/ reasons other than supply (like return)/ inward supply from an unregistered person.
  • For purposes of an e-Way Bill, supply is considered either a payment in the course of business/ a payment which may not be in the course of business/ no consideration of payment (in the case of barter/ exchange).

RELIEF PACKAGE UNDER PRADHAN MANTRI GARIB KALYAN YOJANA

Context

  • Recently, Union Finance & Corporate Affairs Minister Niramla Sitharaman has announced Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against CoronaVirus.

The components of the Pradhan Mantri Garib Kalyan Package

    • Insurance scheme for health workers fighting COVID-19 in Government Hospitals and Health Care Centres
    • Insurance cover of Rs 50 Lakh per health worker fighting COVID-19 to be provided under a special Insurance Scheme
    • Safai karamcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors and specialists and other health workers would be covered.
    • All government health centres, wellness centres and hospitals of Centre as well as States would be covered under this scheme
    • Approximately 22 lakh health workers would be provided insurance cover to fight this pandemic.
    • PM Garib Kalyan Ann Yojana
      • 80 crore individuals, i.e, roughly two-thirds of India’s population would be
      • covered under this scheme
      • The scheme aims to solve the problem of non-availability of foodgrains due to disruption in the next three months.
      • People will to get 5 kg wheat or rice and 1 kg of preferred pulses for free every month for the next three months
      • Each one of them would be provided double of their current entitlement over the next three months.
    • Under Pradhan Mantri Garib Kalyan Yojana,
    • Benefit to Farmers:
      • The first instalment of Rs 2,000 due in 2020-21 will be front-loaded and paid in April 2020 itself under the PM KISAN Yojana.
      • It would cover 8.7 crore farmers

Cash transfers Under PM Garib Kalyan Yojana:
Help to Poor:

  • A total of 20.40 crores PMJDY women account-holders would be given an ex-gratia of Rs 500 per month for next three months.

Gas Cylinders:

  • Gas cylinders, free of cost, would be provided to 8 crore poor families for the next three months.

Help to low wage earners in Organised sectors:

  • Wage-earners below Rs 15,000 per month in businesses having less than 100 workers are at risk of losing their employment.
  • The government proposes to pay 24 percent of their monthly wages into their PF accounts for next three months. This would prevent disruption in their employment

Support for senior citizens (above 60 years), widows and Divyang:

  • There are around 3 crore aged widows and people in Divyang category who are vulnerable due to economic disruption caused by COVID-19.
  • The centre proposes to give them Rs 1,000 to tide over difficulties during the next three months.

NREGA:

  • Wages would be increased by Rs 20 with effect from 1 April, 2020.
  • Wage increase under MNREGA will provide an additional Rs 2,000 benefit annually to a worker.
  • This will benefit approximately 13.62 crore families.

Self-Help groups:

  • Limit of collateral free lending would be increased from Rs 10 to Rs 20 lakhs.
  • Women organised through 63 lakhs Self Help Groups (SHGs) support 6.85 crore households, which would be benefitted.

Other components of PM Garib Kalyan Package:

  • Organised sector:
  • Employees’ Provident Fund Regulations will be amended to include Pandemic as the reason to allow non-refundable advance of 75 percent of the amount or three months of the wages, whichever is lower, from their accounts.
  • Families of four crore workers registered under EPF can take benefit of this window.

Building and Other Construction Workers Welfare Fund:

  • A Welfare Fund for Building and Other Constructions Workers has been created under a Central Government Act.
  • There are around 3.5 Crore registered workers in the Fund.
  • State Governments will be given directions to utilise this fund to provide assistance and support to these workers to protect them against economic disruptions.

District Mineral Fund:

  • The State Government will be asked to utilise the funds available under District Mineral Fund (DMF) for supplementing and augmenting facilities of medical testing, screening and other requirements in connection with preventing the spread of CVID-19 pandemic as well as treating the patients affected with this pandemic.
  • Nearly 75% of the Indian economy will be shut down during the 21-day period, which would lead to a direct output loss of approximately 4.5%. The economic relief package might be used to put money directly into the accounts of more than 100 million poor and to support businesses hit the hardest by the lockdown.

RECAPITALISATION OF RRBS

Why in News?

  • The Centre has approved a ₹1,340-crore recapitalisation plan for Regional Rural Banks (RRBs). The move is crucial to ensure liquidity in rural areas during the lockdown due to the COVID-19 crisis.

Significance of the Recapitalisation:

  • This Recapitalisation would improve their capital-to-risk weighted assets ratio (CRAR) and strengthen these institutions for providing credit in rural areas.
  • The step will help those RRBs which are unable to maintain a minimum CRAR of 9%, as per the regulatory norms prescribed by the RBI.
  • The release of the Rs. 670 crore as the central share funds will be contingent upon the release of the proportionate share by the sponsor banks.

Background Info:

  • The recapitalisation process of RRBs was approved by the cabinet in 2011 based on the recommendations of a committee set up under the Chairmanship of K C Chakrabarty.
  • The National Bank for Agriculture and Rural Development (NABARD) identifies those RRBs, which require recapitalisation assistance to maintain the mandatory CRAR of 9% based on the CRAR position of RRBs, as on 31st March of every year.
  • The scheme for recapitalization of RRBs was extended up to 2019-20 in a phased manner post 2011.

About 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 legislation of the Regional Rural Banks Act, 1976.
  • Stakeholders: 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.

Objectives of RRBs are:

  • To provide credit and other facilities to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs in rural areas.
  • To check the outflow of rural deposits to urban areas and reduce regional imbalances and increase rural employment generation.
  • The RRBs are required to provide 75% of their total credit as priority sector lending.

NORTHEAST GAS PIPELINE GRID PROJECT

Why in News?

  • The Union Cabinet has given approval for viability-gap funding of North East Natural Gas Grid that connects Guwahati in Assam to other major cities in the North-eastern Region.

About Northeast Gas Pipeline Grid Project:

  • This proposed gas pipeline grid will connect Guwahati to the major Northeast cities such as Itanagar, Dimapur, Kohima, Imphal, Aizwal, Agartala, Shillong, Silchar, Gangtok, and Numaligarh. It is 1, 656 km long.
  • The project is being implemented under ambitious Pradhan Mantri Urja Ganga Gas Pipeline Project.
  • Besides connecting all the state capitals in the region, the pipeline will also connect with the National Gas Grid through Barauni-Guwahati Gas Pipeline, which is being laid by GAIL. (Barauni is a place in Bihar).
  • The pipeline will enable the supply of piped cooking gas to households and CNG to automobiles, besides fuel to industry.

Implementation:

    • The North-East pipeline grid is to be implemented by Indradhanush Gas Grid,a joint venture of state-owned GAIL India,
    • Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and Numaligarh Refinery Ltd (NRL).

Benefits due to the Grid:

  • Development of Industrial clusters along the pipeline.
  • Reduction in usage of kerosene and wood.
  • Improves standard of living of people belonging to concerned states.
  • Helps to achieve SDG-7: Access to affordable, reliable and sustainable energy.

Significance of the Project:

  • India’s current energy mix:
    • Coal and oil – 86%
    • Natural Gas – 6%
  • The funding support to the gas grid is a part of a broader goal of the government to raise the share of natural gas in the country’s energy mix to 15% by 2030 from current 6.2%.
  • The government has envisaged developing the National Gas Grid. At present, about 16,788 km natural gas pipeline is operational and about 14,239 km gas pipelines are being developed to increase the availability of natural gas across the country.

Existing Problems:

  • Unequal distribution of Gas pipelines. (Majority of the gas lines are concentrated in western and central India).
  • Under Utilisation (only 45%) of existing gas pipelines.

The objectives of the National Gas Grid are:

  • To remove regional imbalance within the country with regard to access for natural gas and provide clean and green fuel throughout the country.
  • To connect gas sources to major demand centres and ensure availability of gas to consumers in various sectors.
  • Development of City Gas Distribution Networks in various cities for the supply of CNG and PNG.

PROJECT SASHAKT

GS 3 : Economy

Why in News?

  • RBI made it mandatory for lenders to enter into an Inter-Creditor Agreement (ICA) during the review of the borrower account within 30 days from date of first default to any lender.
  • ICA allows banks to decide resolution strategy outside the IBC and it will help lenders to accelerate process to resolve stressed assets.

New Framework under Sashakt:

  • The Sashakt ICA can be modified to incorporate the requirements of New Framework and serve as the Master Inter-Creditor Agreement for resolution of all stressed asset.
  • Under the new framework, it is a mandatory requirement for lenders to enter into an Inter-Creditor Agreement (ICA) during the review of the borrower account within 30 days from date of first default to any lender.
  • The New Framework further lays down some parameters to be included in the ICA including decision-making by lenders holding 75% (by value of total outstanding facilities) and 60% by number and protection of dissenting lenders.
  • The ICA is required to be executed by all lenders covered under the New Framework and asset reconstruction companies.

Project Sashakt:

  • Project Sashakt was proposed by a panel led by PNB chairman Sunil Mehta to help consolidate stressed assets.
  • Bad loans of up to ₹ 50 crore will be managed at the bank level, with a deadline of 90 days.
  • For bad loans of ₹ 50-500 crore, banks will enter an inter-creditor agreement, authorizing the lead bank to implement a resolution plan in 180 days, or refer the asset to NCLT.
  • For loans above ₹ 500 crore, the panel recom-mended an independent AMC, supported by institutional funding through the AIF.

Working:

  • According to the committee, banks will have to set up an AMC under which there will be multiple sector-specific AIFs.
  • These funds will invest in the stressed assets bought by existing (Asset Reconstruction Companies) ARCs, such as ARCIL.
  • The ARCs will use the Alternative Investment Funds (AIFs) to redeem security receipts issued to banks against the bad loans.
  • Other AMC-AIFs and ARCs will be allowed to bid for these assets, and match the pricing offered by ARCIL or the national AMC.
  • The AMC will be responsible for the operational turnaround of the asset.

Who will own the stressed asset?

  • The ARC after buying the asset from lenders will transfer ownership to the AIF.
  • The new owner, the AMC-AIF, will hold a stake of at least 76%.

IRSDC ENTERS INTO TRIPARTITE PACT WITH FRENCH RAILWAYS, AGENCY

GS 3 : Economy – Infrastructure’

Why in News?

The Indian Railway Station Development Corporation (IRSDC), has entered in a Tripartite Agreement with French Railways (SNCF) and AFD, a French Development Agency.

Highlights:

  • IRSDC has signed an agreement with French Railways for under which the latter will provide up to 7 lakh euros for railway station development in India.
  • A Special Purpose Vehicle (SPV) under the Ministry of Railways – the Indian Railway Station Development Corporation (IRSDC), has entered in a Tripartite Agreement with French Railways (SNCF) and AFD, a French Development Agency.
  • Under this agreement, AFD has agreed to support capacity building for the railway station development program in India by providing in-kind grant financing up to 7,00,000 EURO, through French National Railways (SNCF)-Hubs as well as Connexions as a Technical Partner to the corporation.
  • This move will not impose any financial liability on Indian Railways or IRSDC. IRSDC is responsible for developing and redeveloping the existing and new railway stations across India.
  • The IRSDC has been tasked to transform many railway stations into airport-like hubs of world-class standard. Currently, the redevelopment is being carried out at Habibganj and Gandhi Nagar railway stations.
  • Besides, Indian Railways is also redeveloping and beautifying various other railway stations. Some of the stations, which were recently given a new makeover include Mathura Junction, New Delhi railway station, Haridwar Junction, Agra Cantt., Lonavala station, Patna Junction, Jaipur Junction among others. This financial year, Indian Railways aims to redevelop 68 railway stations in total

RBI REVISES STRESSED ASSET RESOLUTION NORMS

Why in News?

  • The RBI has released revised set of norms on stressed asset resolution which are substantially less stringent from the previous one.

Inter-Creditor Agreement (ICA):

  • The inter-creditor agreement is aimed at the resolution of loan accounts with a size of ₹50 crore and above that are under the control of a group of lenders.
  • It is part of the Sashakt plan approved by the government to address the problem of resolving bad loans. The lenders may also choose to initiate legal proceedings for insolvency or recovery as per the news circular. If the RP is to be implemented, lenders have been asked to enter into an inter-creditor agreement (ICA), within the review period, to provide for ground rules for finalization and implementation of the RP.
  • The ICA shall provide that any decision agreed by lenders representing 75% by value of total outstanding credit facilities (fund-based as well as non-fund based) and 60% of lenders by number shall be binding upon all the lenders. The RP will have to implement within 180 days from the end of review period.

Review Period:

  • The new circular asked lenders to undertake a prima facie review of the borrower account within 30 days from a default, which is termed as review period. During this review period, lenders may decide on the resolution strategy, including the nature of the resolution plan (RP), the approach for implementation of the RP etc.
  • The review period shall commence not later than the date of the this circular for loans above Rs. 2000 crore; January 1 ,2020 for loans above Rs. 1,500 crore to Rs. 2,000 crore.

What if Resolution Plan delayed?

  • There is a disincentive for banks if they delay implementing a viable resolution plan.
  • In case the plan is not implemented within 180 days from the end of review period, banks have to make additional provision of 20% and another 15% if the plan is not implemented within 365 days from the start of the review period. The additional provisions would be
    reversed if resolution is pursued under Insolvency and Bankruptcy Code (IBC).

RBI MONETARY POLICY

GS 3: Economy

Why in News?

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) cut interest rates by 25 basis points. This is the third time successively that the six-member MPC has decided on a 25-basis points rate cut. The last time the RBI had to cut rates three times in a row was in 2013.

MPC:

  • The Monetary Policy Committee of India is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
  • The committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
  • Decisions are taken by majority with the Governor having the casting vote in case of a tie.
  • The members need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”.

Composition of MPC:

  • Governor of the Reserve Bank of India – Chairperson, ex officio
  • Deputy Governor of the Bank, in charge of Monetary Policy—Member, ex officio
  • One officer of the Reserve Bank of India to be nominated by the Central Board – Member
  • Other three members are nominated by the Government.

GLOBAL ECONOMIC PROSPECTS BY WORLD BANK

GS 3: Economy

Why in News?

World Bank has released the report “Global Economic Prospects: Heightened Tensions, Subdued Investment”. Global Economic Prospects is a biannual report, last one was published in January 2019.

Highlights:

  • World Bank has downgraded global growth prospects by 0.3% to 2.6% for the 2019-20.
  • The cause for down grade is weaker-than- expected international trade and investment at the start of 2019.
  • Risks to global growth include rising trade barriers, a build-up of government debt and slowdowns in several major economies.
  • WB has estimated that economies will begin improving here after and growth might touch 2.8% in 2021.
  • Advanced economies as a group are expected to slow down in 2019, particularly the Euro Area, due to weaker investments and exports.
  • U.S. growth is expected to slow to 2.5% this year, down from an estimated 2.9% in 2018, and then down to 1.7% and 1.6% in 2020 and 2021 respectively.
  • U.S. policy uncertainty is expected to erode growth and investment as protectionist measures impact a wide range of downstream industries and trading partners due to the existence of global value chains.
  • A no-deal Brexit could have a severe impact on the U.K. and to a lower extent on its European trading partners in the event of disruptions and delays at the border.

India’s findings:

The World Bank has retained its forecast for growth in India at 7.5% in the 2019-20 fiscal and the succeeding years. Report has warned that re-escalation of India-Pakistan tensions such as the one in February could increase uncertainty and impact investments in the region. Private consumption and investment will benefit from strengthening credit growth amid more accommodative monetary policy, with inflation having fallen below the Reserve Bank of India’s target. It further stated that the Goods and Services Tax (GST) regime is still in the process of being fully established, creating some uncertainty about projections of government revenues

FISCAL PERFORMANCE INDEX

GS 3: Economy

Why in News?

Confederation of Indian Industry (CII) has launched a Fiscal Performance Index (FPI) to assess state and central budgets.

Fiscal Performance index:

  • the Index incorporates qualitative assessments of revenue expenditure, capital expenditure, revenues, fiscal prudence and the level of public debt arrive at a more holistic picture of fiscal performance than the fiscal deficit to GDP ratio.
  • As an example the index will consider expenditure on infrastructure, education, healthcare and other social sectors beneficial for economic growth compared to other revenue expenditure.
  • It will also consider tax revenues a more sustainable source of revenues for the government as compared to one-time income sources.
  • The CII has used this index to analyse state and central budgets from 2004-05 to 2016-17.
  • The study found that despite improvement a reduction in the fiscal deficit between FY13 and FY18, the overall performance of the budget has been remained steady with improvements only in FY16 and FY17. This is largely due to moderation in the revenue, capital expenditure and and net tax revenues indices.
  • The analysis also shows that the combine performance of all state budgets has improved despite worsening of fiscal deficit numbers because of improvements in revenue and capital expenditure indices.
  • The study also points out that relatively high income states including Gujarat, Haryana and Maharashtra which are presumed to have good fiscal health because of low fiscal deficit to GDP ratio do not perform well on the composite FPI because of poor expenditure and revenue quality compared to other states.
  • Other states including, Madhya Pradesh, Andhra Pradesh, Uttar Pradesh and Bihar have done well on the FPI because of their good performance in revenue and capital expenditure indices.

Recommendations:

  • The government should attempt to broaden the tax base
  • Increase investments in education and healthcare as well as maintenance of assets and well as increase investments in infrastructure, affordable housing and encourage public sector undertakings to also increase capital expenditure by limiting dividends to the government.

FISCAL PERFORMANCE INDEX BY CII

Why in News?

  • Confederation of Indian Industry (CII) has come out with a ‘Fiscal Performance Index’ to assess quality of budgets presented by the Centre and state governments.

Fiscal Performance Index (FPI):

  • The composite FPI developed by CII is an innovative tool using multiple indicators to examine quality of Budgets at the Central and State Level
  • The index has been constructed using UNDP’s Human Development Index methodology which comprises six components for holistic assessment of the quality of government budgets.

Why need such an index?

  • A single criterion such as the ‘fiscal deficit to GDP ratio’ does not tell us anything about the quality of the Budget.
  • Hence, the Government should use multiple indicators to measure the quality of Budgets at the Central and the State levels rather than a single indicator

Components of FPI:

  • Quality of revenue expenditure: measured by the share of revenue expenditure other than interest payments, subsidies, pensions and defence in GDP
  • Quality of capital expenditure: measured by share of capital expenditure (other than defence) in GDP
  • Quality of revenue: ratio of net tax revenue to GDP (own tax revenue in case of States)
  • Degree of fiscal prudence I: fiscal deficit to GDP
  • Degree of fiscal prudence II: revenue deficit to GDP and
  • Debt index: Change in debt and guarantees to GDP

Other measures of FPI:

  • As per the new index, expenditure on infrastructure, education, healthcare and other social sectors can be considered beneficial for economic growth
  • At the same time, tax revenues are sustainable sources of revenue for the government as compared to one-time income source

 

PURCHASE MANAGER’S INDEX

Why in News?

  • • PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity — both in the manufacturing and services sectors.

Purchase Managers Index.

  • • It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.
  • • It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.

What are its implications for the economy?

  • • The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available. It is, therefore, considered a good leading indicator of economic activity.
  • • Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later. Central banks of many countries also use the index to help make decisions on interest rates
  • • For India, the PMI Data is published by Japanese firm Nikkei but compiled and constructed by Markit Economics (for the US, it is the ISM).

PMI for Manufacturing Sector:

  • • The variables used to construct India’s PMI for manufacturing sector are: Output, New Orders, Employment, Input Costs, Output Prices, Backlogs of Work, Export Orders, Quantity of Purchases, Suppliers‟ Delivery Times, Stocks of Purchases and Stocks of Finished Goods. Similar variables are used for the construction of services PMI. A manufacturing PMI and a services PMI are prepared and published by the two.
  • • The Nikkei and Markit economics websites says that PMI data are based on monthly surveys of carefully selected companies.

PMI for Service Sector:

  • • The Nikkei India Services PMI (Purchasing Managers’ Index) is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 350 private service sector companies.
  • • The index tracks variables such as sales, employment, inventories and prices. A reading above 50 indicates that the services sector is generally expanding; below 50 indicates that it is generally declining.

PERIODIC LABOUR FORCE SURVEY (PLFS) DATA FOR 2017-18

Why in News?

The govt has finally released Annual Report of the Periodic Labour Force Survey (PLFS)
2017-18 and the Quarterly Bulletin PLFS.

Periodic Labour Force Survey (PLFS):

  • The PLFS was launched from 1st April 2017.
  • Primary aim of the PLFS is to generate reasonably accurate indicators of labour market at
    a short span for every quarter for which speed of quality data collection and processing
    are important.
  • PLFS was launched with the objective of measuring employment every three months in
    urban areas and once a year in both rural and urban areas.
  • The quarterly survey only captures data classed as current weekly status (CWS), while the
    annual survey measures both the usual status and CWS.
  • The NSSO was historically conducting Employment and Unemployment Surveys as part
    of its National Sample Surveys.

Who are the Unemployed?

  • Labour force means people working or looking for jobs in the age group of 15-29 years.
  • CWS Method: A person who is unable to get work for even an hour in the last seven days
    despite seeking employment is considered unemployed.
  • Usual Status Method: Under this, the employment activity of a person is determined on
    the basis of a reference period of 365 days preceding the date of the survey.

Trends:

  • Labour force participation has been declining and touched 36.9% in 2017-18 as more
    among them, especially females, enrolled for higher studies.
  • The youth accounted for 28.2% of urban males and 27.8% of urban females.
  • During 2017-18, among people aged 15-29 years, the share of the educated was 65.8%
    among urban males. It was 65.4% among urban females.
  • A higher percentage of males compared to females had received either formal or nonformal vocational training.

Reality of jobless growth:

  • The rising unemployment rate despite falling labour force participation for the youth is
    more worrying.
  • This is likely to raise questions about whether India is suffering from jobless growth.
  • According to Census 2011, India has 333 million youth—a number that is likely to touch
    367 million in 2021 and 370 million by 2031.
  • With this huge rise in youth unemployment, it is hard to reconcile this information with
    the EPFO data that people keep talking about, because a majority of the new entrants to
    EPFO would be the younger people.

THE INTERNATIONAL CENTRE FOR AUTOMOTIVE TECHNOLOGY (ICAT

Why in News?

  • • The International Centre for Automotive Technology (ICAT), Manesar, located in the northern automotive hub of India.

Highlights:

  • • It is a leading world class automotive testing, certification and R&D service provider under the aegis of NATRiP (National Automotive Testing and R&D Infrastructure Project), Government of India. With Centres of Excellence (CoE) in Component, Powertrain, NVH and Tyre, ICAT intends to eventually transform it into an automotive product development centre.• Automotive electrical and electronics lab (AEEL):
  • • The AEEL is an important lab considering the rapid increase in the use of electrical and electronics in vehicles. The lab offers services for certification and validation for wide range of E&E components including systems, E-motors, ECUs, Batteries and RFIDS.
  • • It also provides consultancy services to the customers for product development and improvements.

Tyre Test Lab (TTL):

 

  • • ICAT has world class tyre test facilities being operated and managed by highly skilled and experienced team to deliver quality and swift services to customers.
  • • Tyre Test Lab is providing services to the tyre industry, vehicle manufactures and Bureau of Indian Standards.
  • • ICAT has transformed this lab into centre of excellence by developing new capabilities including the dual station endurance test rig and tyre rolling resistance test rig

INDIA RANKS 43RD IN IMD WORLD COMPETITIVENESS RANKINGS-2019

Why in news?

  • India ranks 43rd most competitive economy in the world in IMD World Competitiveness Rankings-2019.

IMD World Competitiveness Rankings-2019:

  • India has gained one point benefit by coming to 43rd Position
  • environment where enterprises can achieve sustainable growth, generate jobs and increase welfare for its citizens.
  • Singapore has ranked as the world’s most competitive economy for the first time since 2010.
  • Hong Kong SAR and USA are on second and third positions
  • Switzerland grabbed the fourth place, thanks to economic growth, the stability of the Swiss franc and high-quality infrastructure
  • The United Arab Emirates (UAE) entered the top five for the first time earlier in 2016 it was ranked 15th
  • Venezuela remained (63rd) at the bottom of the ranking due to inflation, poor access to credit and a weak economy in the country

India’s ranking:

  • India has gained one point benefit by coming to 43rd position. Benefit in ranking was a result of Improvements in business legislation, increase in public expenditure on education.
  • India has scored well on several economic parameters and tax policies but has lagged in terms of public finance, societal framework, education infrastructure, health and environment.
  • However, India is also facing some challenges like maintaining high growth with employment generation, fiscal discipline and Digital literacy and internet bandwidth in rural areas

IMD World Competitiveness Ranking:

  • It is basically a list which is compiled by the Switzerland-based International Institute for Management and Development (IMD)’s World Competitiveness Center (WCC). In order to facilitate long-term value creation, The IMD measures how well countries manage all their resources and competencies. It takes into account a wide range of statistics such as unemployment, GDP and government spending on health and education, as well as data from an executive opinion survey covering topics such as social cohesion, globalisation and corruption.

T N MANOHARAN COMMITTEE

Why in news?

  • The Reserve Bank of India (RBI) on Wednesday constituted a task force to suggest policy and regulatory interventions required for development of secondary market in corporate loans, including loan transaction platform for stressed assets.

Highlights:

  • The six-member body, headed by Canara Bank chairman T. N. Manoharan, has been set up to review the existing state of the market for loan sale/transfer in India as well as international experience in loan trading
  • The terms of the committee would be to suggest required policies for facilitating development of secondary market in corporate loans, including loan transaction platform for stressed assets, creation of a loan contract registry, its ownership structure and related protocols such as standardization of loan information, independent validation and data access.

Importance of the committee:

  • In India, banks sell their stressed loans to the asset reconstruction companies, but has practically no other alternatives
  • Globally, there is a healthy corporate loan market where banks can offload their stressed assets and those get traded
  • Credit Default Swaps (CDS) against these loans also get developed as a result
  • A vibrant, deep and liquid secondary market for debt would go a long way in increasing the efficiencies of the debt market in general and would aid in resolution of stressed assets in particular. A well-developed secondary market for debt would also aid in transparent price discovery of the inherent riskiness of the debt being traded

COMMITTEE FOR HOUSING FINANCE CONSTITUTED BY RBI

Why in News?

  • The Reserve Bank of India (RBI) constituted a committee to review the existing state of mortgage securitisation in India and suggest measures to deepen it.

Highlights:

  • The six-member committee on Development of Housing Finance Securitisation Market is headed by Harsh Vardhan, Senior Advisor, Bain & Co.

Role of the Panel:

  • The panel will review the regulations relating to mortgage-backed securitisation (MBS) currently in place, and make specific recommendations on suitably aligning the same with international norms.
  • It will assess the role of various counterparties, including servicers, trustees, rating agencies, in the securitisation process and suggest the steps required.

Mortgage-Backed Security (MBS):

  • Mortgage-Backed security (MBS) is a type of asset-backed security that is secured by a mortgage or collection of mortgages.

Mortgage-Backed Securitisation (MBS) in India:

  • Data from rating company ICRA showed that the securitisation volume in FY19 more than doubled as against FY18 to Rs.2 lakh crore, of which major chunk of loans sold was by housing finance companies (HFCs) to banks in order to raise funds owing to tough liquidity conditions.
  • The mortgage securitisation market in India is primarily dominated by direct assignments among a limited set of market participants on account of various structural factors impacting both the demand and the supply side, as well as certain prudential, legal and tax and accounting issues.

BLOCKCHAIN DISTRICT

Why in News?

  • Telangana released a draft blockchain policy to set up country’s first ‘Blockchain District’ in Hyderabad.

Highlights:

  • It is aimed to create an ecosystem for major blockchain companies, start-ups for promoting research, innovation and industry collaboration.
  • Earlier, the Telangana Government signed an agreement with Tech Mahindra to set up the Blockchain district in 2018.
  • The draft was released by Information Technology, Electronics and Communications (IT E&C) Department.
  • The main focus will be given to the sectors such as banking, financial services and insurance, pharmaceuticals and healthcare, government institutions and departments, logistics and supply
  • The incentives like access to investments, subsidies, tax credits will be rolled out to attract large enterprises, Small and Medium Enterprises and
  • Other incentives include 25% subsidy on lease rentals up to 5 lakh per annum for the first three years of operations.
  • 100% reimbursement of State Goods and Services Tax (SGST ) for the first three years for startups with revenue less than Rs. 5 crore and along with one-time grant of Rs. 10 lakh, 75% subsidy in travel fare when the founders attend global conferences and 25% reimbursement on Internet charges would be provided.

DRAFT EXPORT POLICY

Why in News?

  • The Commerce Ministry has come out with a comprehensive draft of the export policy which includes product- specific rules with a view to provide a ready reckoner for exporters.

Highlights:

  • Updated draft comprises of all existing policy conditions, all notifications and public notices issued after January 2018 and also includes non-tariff regulations imposed by different government agencies.
  • It aimed at consolidating export norms for each product, has accorded eight digit HS codes to every product.
  • This compendium will help an exporter know all the applicable norms pertaining to a particular product, helping them understand policy conditions for that item.
  • It is proposed to bring out a comprehensive expo rts policy for all ITC (HS) tariff codes (including items which are ‘free’ for export and do not currently exist in the policy), covering conditions/restrictions imposed by partner government agencies on exports.

ITC-HS:

  • ITC-HS Codes are Indian Trade Clarification based on Harmonised System of Coding. It was adopted by India for import-export operations.
  • Every product has been accorded eight digit HS codes.
  • The compendium will help an exporter know all the applicable norms pertaining to a particular product, helping him/her understand policy conditions for that item.

Export Import Policy of India:

  • Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT in matters related to the import and export of goods in India.
  • Foreign trade in India is guided by the EXIM Policy of the Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992.
  • Exim policy or Foreign Trade Policy for the years 2015-20, aims at doubling the overseas sales to $900 billion by 2019-20 and making India global,while integrating the foreign trade with “Make in India” and “Digital India Programme”.

Key features :

  • Five existing schemes to promote merchandize exports have been merged into a single Merchandise Exports from India Scheme (MEIS).
  • Service Exports from India Scheme (SEIS) will be only for India based service providers and will be based on net foreign exchange earned.
  • Paperless Trade and Online filling of forms will ensure trade facilitation and ease of doing business.
  • E-commerce export is applicable to items of worth upto 25,000.
  • Provision for Export oriented units, Export hardware technology park and software
    technology park.
  • The Duty free scrips (form of credit)s are provided to the exporters under various export promotion schemes of the government.The scrips may be transferable or nontransferable

SOCIAL AND LABOR CONVERGENCE PROGRAMME (SLCP)

Why in news?

  • The ‘Social and Labor Convergence Programme (SLCP),’ an initiative to have a standard- neutral, converged assessment framework for the textile and clothing industry, will be launched in India shortly.

Highlights:

  • It is not a code of conduct or compliance programme.
  • The converged assessment framework is a tool developed by the SLCP, which provides a data set with no value judgment or scoring.
  • It is, however, compatible with existing audit systems and codes of conduct. This means that the same data set can be used by a wide-range of stakeholders
  • It eliminates the need for repetitive audits to be carried out on the same facility.
  • The initiative is led by world’s leading manufacturers, brands, retailers, industry groups,
    non-governmental organisations and service providers.
  • Its aim is to improve the working conditions in textile units by allowing resources that were previously designated for compliance audits to be redirected towards the improvement of social and labour conditions.
  • This is a voluntary adoption by the textile and clothing makers.

DOUBLING INDIA’S EXPORTS

GS 3: Economy

Why in News?

The high-level panel constituted by Commerce and Industry Ministry has recommended a host of measures for doubling India’s exports of goods and services to over USD 1,000 billion by 2025. The panel was headed by economist Surjit Bhalla.

The panel recommendations:

  • It has suggested issuance of ‘Elephant Bonds’ wherein people declaring undisclosed income will have to mandatorily invest half of that amount in these securities.
  • Lowering effective corporate tax rate, bringing down cost of capital and simplifying regulatory and tax framework for foreign investment funds.
  • Increasing capital base of EXIM Bank by another Rs 20,000 crore by 2022.
  • Seeking inputs from industry and MSMEs before signing free trade agreements (FTAs) and sensitising them of its benefits.
  • State governments need to be closely involved in improving the competitiveness of exports by providing support measures in a WTO (World Trade Organisation) consistent manner.
  • Building a comprehensive export strategy and rationalise tariff structure.

Industry-specific suggestion are:

  • Textiles and garments sector: modification in labour laws (like the Industrial Disputes Act, 1947) to remove the limitation on firm size and allow manufacturing firms to grow.
  • Medical tourism: Setting up of a pan-India tourism board to promote medical value tourism. Simplification in the medical visa regime.
  • Agriculture exports: abolishing Essential Commodities Act and the APMC (Agricultural Produce Market Committee) to promote agricultural export.
  • Medical sector: a single ministry for medical devices and separate regulation for this sector.

Elephant Bonds:

  • It is a 25-year sovereign bond in which people declaring undisclosed income will be bound to invest 50 per cent.
  • The fund will be utilised only for infrastructure projects.

CHIEF RISK OFFICER (CRO) FOR NBFCS

GS 3: Economy

Why in news?

• The Reserve Bank of India (RBI) on Thursday said non-banking financial companies (NBFCs) with assets of more than ₹5,000 crore must appoint a chief risk officer (CRO).

Functions of CRO:

  • The primary role of the risk officer will be identification, measurement and mitigation of risks.
  • All credit products (retail or wholesale) shall be vetted by the CRO from the angle of inherent and control risks.
  • Deciding credit proposals shall be limited to being an adviser.

Reporting by CRO:

  • RBI has mandated that the CRO shall report directly to the MD and CEO or the risk management committee (RMC) of the board.
  • Moreover, in case the CRO reports to the MD and CEO, the risk management committee or the board shall meet the CRO in the absence of the MD and CEO, at least on a quarterly basis.
  • The CRO shall not have any reporting relationship with the business verticals of the NBFC
    and shall not be given any business targets.

Appointment and Transfer:

  • The CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate professional qualification or experience in the area of risk management.
  • The CRO shall be appointed for a fixed tenure with the approval of the board.
  • There shall not be any ‘dual hatting’ i.e. the CRO shall not be given any other responsibility. The CRO can be transferred or removed from his post before completion of the tenure only with the approval of the board.
  • And such premature transfer or removal shall be reported to the department of non- banking supervision of the regional office of RBI under whose jurisdiction the NBFC is registered.

NEFT & RTGS

GS 3: Economy

Why in news?

The RBI has proposed to examine the possibility of extending availability of National Electronic Funds Transfer (NEFT) round-the-clock on all the seven days of the week — 24×7 basis — to facilitate beyond the banking hour fund transfer. Besides, the central bank will also examine the possibility of extending the timings for Real Time Gross Settlement (RTGS) transactions.

NEFT:

  • NEFT is an electronic funds transfer system maintained by the Reserve Bank of India (RBI).
  • Started in November 2005, the setup was established and maintained by Institute for Development and Research in Banking Technology (IDRBT).
  • NEFT enables bank customers in India to transfer funds between any two NEFT-enabled bank accounts on a one-to-one basis. It is done via electronic messages.
  • Unlike Real-time gross settlement (RTGS), fund transfers through the NEFT system do not occur in real-time basis.

RTGS:

  • RTGS are specialist funds transfer systems where the transfer of money or securities takes place from one bank to any other bank on a “real time” and on a “gross” basis.
  • Settlement in “real time” means a payment transaction is not subjected to any waiting period, with transactions being settled as soon as they are processed.

IMPORT OF REFURBISHED MOBILE PHONES

GS 3: Economy

Why in News?

India has allowed the import of refurbished mobile phones, subject to the condition that they are certified by the Bureau of Indian Standards (BIS).

Highlights:

  • The move meets the demands of mobile operators like Apple which want to tap blooming smartphone business in India.
  • As per a notification by the commerce ministry, the import of electronic goods (new as well as second hand, whether or not refurbished, repaired or reconditioned) which require compulsory registration, is prohibited unless they are registered with the BIS and comply to the labelling requirements. The import can be allowed if the Ministry of Electronics and Information Technology (MeitY) gives a specific exemption for a particular consignment.

What are refurbished mobile phones?

A refurbished mobile phone refers to a handset that was returned to the manufacturer, tested for problems and restored to full-functioning in factory-standard condition.

Bureau of Indian Standards (BIS):

BIS is the National Standard Body of India established under the BIS Act 2016 for the harmonious development of the activities of standardization, marking and quality certification of goods and for matters connected therewith or incidental thereto.

MASALA BOND

GS 3: Economy

Why in News?

The state-owned Kerala Infrastructure Investment Fund Board (KIIFB) debuted its ‘masala bond’ issue of ₹ 2,150 crore on the London Stock Exchange.

Highlights:

  • KIIFB became the first sub-sovereign entity in India to tap the offshore rupee international bond market.
  • The secured fixed-rate bond has a five-year tenure with a 9.723 per cent coupon.
  • The bond issue builds on the Kerala government’s focus to get multinational corporations to invest in the state, which has traditionally been known for its unfriendly business policies, bureaucratic delays and recurrent industrial strikes.
  • As per Kerala state government, the proceeds from the bond issue are slated to be used to part-finance the rebuilding of infrastructure in Kerala that was devastated by 2018 floods.

Masala Bond:

  • Masala Bonds are rupee-denominated bonds, i.e, the funds would be raised from overseas market in Indian rupees.
  • According to RBI any corporate and Indian bank is eligible to issue rupee denominated bonds overseas.
  • The money raised through such bonds cannot be used for real estate activities other than for development of integrated township or affordable housing projects.
  • It also cannot be used for investing in capital markets, purchase of land and on-lending to other entities for such activities as stated above.
  • The rupee denominated bonds can only be issued in a country and subscribed by a resident of such country that is a member of the financial action task force (FATF) and whose securities market regulator is a member of the International Organisation of Securities Commission.
  • The minimum maturity period for masala bonds raised up to rupee equivalent of USD 50 million in a financial year should be 3 years and for bonds raised above USD 50 million equivalent in INR per financial year should be 5 years.

Limitations:

  • RBI mandates that the money raised through such bonds cannot be used for real estate activities other than for development of integrated township or affordable housing projects.
  • It also can’t be used for investing in capital markets, purchase of land and on-lending to other entities for such activities as stated above.

GRAPHITE RESERVES OF INDIA

GS 3: Economy

Why in news?

Geological Survey of India (GSI) has released a report on graphite reserves in India.

Highlights:

  • Arunachal Pradesh sits on 43% of the country’s graphite resources followed by Jammu & Kashmir (37%), Jharkhand (6%), Tamil Nadu (5%), and Odisha (3%).
  • At present India imports majority of Graphite from other countries.

Graphite:

  • Graphite is a naturally-occurring form of crystalline carbon.
  • It is a native element mineral found in metamorphic and igneous rocks.
  • It is extremely soft, cleaves with very light pressure, and has a very low specific gravity.
  • It is the only non-metal element that is a good conductor of electricity.
  • It is also known as a dry lubricant for its greasy feel

PAYMENT AND SETTLEMENT SYSTEMS IN INDIA: VISION 2019-2021 DOCUMENT

GS 3: Economy

Why in news?

The Reserve Bank of India (RBI) has released the ‘Payment and Settlement System in India: Vision 2019 – 2021’ document.

The vision document:

  • The core theme of ‘Empowering Exceptional (e)payment Experience’, the vision document aims at empowering every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable.
  • With its 36 specific action points and 12 specific outcomes, it also aims to achieve a ‘highly digital’ and ‘cash-lite’ society through the goal posts of competition, cost-effectiveness, convenience and confidence (4Cs).
  • The vision document has envisaged four times growth in digital transactions in two years.
  • The RBI expects accelerated growth in individual retail electronic payment systems, both in terms of the number of transactions and increased availability.
  • Payment systems like UPI and IMPS are expected to register average annualised growth of over 100%, and NEFT at 40%, over the vision period.
  • A 35% growth has been targeted in the use of digital modes of payment for the purchase of goods and services through an increase in debit card transactions at Point-of-Sale (PoS) terminals during the vision period.
  • The enhanced availability of PoS infrastructure is expected to reduced demand for cash and thus, over time, achieve a reduction in Cash in Circulation (CIC) as a percentage of GDP.
  • The document talks about creating customer awareness, setting up a 24×7 helpline and self-regulatory organisation for system operators and service providers, among others.
  • The RBI said the payment systems landscape will continue to change with further innovation and entry of more players which is expected to ensure optimal cost to the customers and freer access to multiple payment system options.
  • The RBI is authorised under the Payment and Settlement System Act (PSSA), 2007 to regulate payment and settlement system in India.

PSSA:

  • According to the PSSA, 2007 a payment system is a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them, but does not include a stock exchange.
  • It includes both, paper-based such as cheque, demand draft and digital such as NEFT, BHIM app, settlement systems.

7th ECONOMIC CENSUS 2019

GS 3: Economy

Why in News?

  • In the run up to upcoming 7th Edition of Economic Census, a national training workshop of the Master Trainers was organized by the Ministry of Statistics and Program Implementation (MoSPI).
  • The census is to begin in June this year.

7th Economic Census -2019:

  • The 7th Economic Census -2019 is being conducted by MoSPI to provide disaggregated information on various operational and structural aspects of all establishments in the country.
  • MoSPI has partnered with Common Service Centres, CSC e-Governance Services India Limited, a Special Purpose Vehicle under the MEITY as the implementing agency for 7th
  • An IT based digital platform for data capture, validation, report generation and dissemination will be used in this Economic Census.

Economic Censuses:

  • In 1976, Government of India launched a plan scheme called Economic Census and Surveys.
  • It is the census of the Indian economy through counting all entrepreneurial units in the country which involved in any economic activities of either agricultural or nonagricultural sector which are engaged in production and/or distribution of goods and/or services not for the sole purpose of own consumption.
  • It provides detailed information on operational and other characteristics such as number of establishments, number of persons employed, source of finance, type of ownership etc.
  • This information used for micro level/ decentralized planning and to assess contribution of various sectors of the economy in the gross domestic product (GDP).

Censuses till date:

  • Total Six Economic Censuses (EC) have been conducted till date.
  • In 1977 CSO conducted First economic census in collaboration with the Directorate of Economics & Statistics (DES) in the States/UTs.
  • The Second EC was carried out in 1980 followed by the Third EC in 1990. The fourth edition took place in 1998 while the fifth EC was held in 2005.
  • The Sixth edition of Economic Census was conducted in 2013.

SERVICES TRADE RESTRICTIVENESS INDEX

GS 3: Economy

Why in News?

STRI is released by Organisation for Economic Cooperation and Development (OECD).

Highlights:

  • It was launched in 2014 and it ranks countries (both OECD and non-OECD) based on their services trade policies.
  • The index is now available for 2018 for a total of 45 economies and 22 sectors.
  • The 22 sectors include computer services, air transport, legal services, construction etc.
  • Composite STRI indices quantify restrictions on foreign entry and the movement of people, barriers to competition, regulatory transparency and other discriminatory measures that impact the ease of doing business, are released.
  • There is also a Digital STRI that identifies, catalogues, and quantifies cross-cutting barriers that affect services traded digitally.
  • The STRI indices take values between zero and one, one being the most restrictive.
  • The STRI can support policymakers to scope out reform options, benchmark them relative to global best practice, and assess their likely effects.

CONTRACT SIGNED BETWEEN KONKAN RAILWAYS AND NEPAL RAILWAYS

GS 3: Economics – Infrastructure Railways

Why in news?

  • India and Nepal have inked a deal on procurement of two diesel operated trains.
  • The contract agreement was signed between India’s Konkan Railways Corporation Ltd and Nepal’s Department of Railways to supply two 1600 HP Diesel Electric Multiple Unit (DEMU) train sets.

Highlights:

  • It was signed in Kathmandu in the presence of Manjeev Puri, Indian Ambassador to Nepal and Madhusudan Adhikari, Nepal’s Secretary, Ministry of Physical Infrastructure and Transport.
  • According to agreement, Nepal will procure two diesel-operated trains, which will arrive in Nepal within five months. The trains will be manufactured by Integrated Coach Factory (owned and operated by Indian Railways) in Chennai, Tamil Nadu.
  • Each train set will comprise of three trailer cars with one air conditioned, one driving power car and one driving trailer car with standard accessories.
  • These trains will be used to operationalise the 34 km long railway corridor stretch which links Jayanagar in Bihar, India and Kurtha in Dhanusa district, Nepal.
  • The 34 kms Jayanagar-Kurtha Railway Link was built by IRCON (Ircon International Limited, a construction and engineering PSU in transport infrastructure) with a financial grant from Indian Government under the India-Nepal Development Partnership programme.

BARN OWLS

GS 3: Economics – Animal-Rearing

Why in news?

Three pairs of barn owls have been taken from Kerala to Kavaratti under a rodent management programme.

Highlights:

  • Lakshadweep have ‘recruited’ three pairs of barn owls from Kerala to fight battle against the rodents.
  • For the time being, the three males and three females are getting acclimatised in specially built cages. “They will gradually be released into the coconut plantations under a closely monitored breeding and rodent management programme
  • Bar owls are selected due to the fact that the rats in the Lakshadweep Islands practically live on treetops. Coconut is an important money-spinner for the islands, but the rodents account for 30-40% of the yield loss
  • Similar attempts were reportedly made in the 1960s as well

Barn owls:

  • The barn owl is the most widely distributed species of owl and one of the most widespread of all birds.
  • The Barn Owl has excellent low-light vision, and can easily find prey at night by sight. But its ability to locate prey by sound alone is the best of any animal that has ever been tested. It can catch mice in complete darkness in the lab, or hidden by vegetation or snow out in the real world.
  • The barn owl is found almost everywhere in the world except polar and desert regions

World Customs Organization (WCO)

Why in news?

  • Central Board of Indirect Taxes and Customs (CBIC) is organising a meeting of the Regional Heads of Customs Administration of Asia Pacific Region of the World Customs Organisation (WCO) in
  • India is hosting this meeting in its capacity as Vice Chair of the Asia Pacific region that it assumed on 1st July, 2018 for a two-year

WCO:

  • It established in 1952 as the Customs Co-operation Council (CCC).
  • It is an independent intergovernmental body whose mission is to enhance the

Roles and functions:

  • As a forum for dialogue and exchange of experiences between national Customs delegates, the WCO offers its Members a range of Conventions and other international instruments, as well as technical assistance and training
  • Besides the vital role played by the WCO in stimulating the growth of legitimate international trade, its efforts to combat fraudulent activities are also recognized internationally.
  • WCO has also been responsible for administering the World Trade Organization’s Agreements on Customs Valuation, which provide a system for placing values on imported goods, and the Rules of Origin, which are used to determine the origin of a given

India and China Sign Protocol For Export Of Indian Chilli Meal

Why in News?

  • Delegates from India and China held a meeting in New Delhi today to discuss trade related issues of pending Indian request for clearance of agricultural
  • At the end of the meeting a protocol was signed for export of chilli meal from India to China.

What is Chilli Meal?

  • Chilli meal is the residue left after oil is extracted from chillies
  • It is widely used as an industry input in manufacturing chilli sauce and other similar products.
  • Red Chillies are majorly produced in Andhra Pradesh, Karnataka, Madhya Pradesh and Maharashtra.
  • Crop is planted in August or September and harvested in March or

CBIC ORGANISES MEETING OF REGIONAL HEADS OF CUSTOMS

Why in News?

  • Central Board of Indirect Taxes and Customs (CBIC) is organising a meeting of the Regional Heads of Customs Administration of Asia Pacific Region of the World Customs Organisation (WCO) in Kochi.

Objective of the meeting:

  •  The meeting will take stock of the progress being made in carrying forward the programmes  Initiatives of WCO to promote, facilitate and secure the cross-border trade in the region and
  •  The capacity building and technical assistance required to achieve this goal.

World Customs Organization:

  • The World Customs Organization (WCO) is an intergovernmental organization headquartered in Brussels, Belgium.
  • The WCO is internationally acknowledged as the global centre of customs expertise and plays a leading role in the discussion, development, promotion and implementation of modern customs systems and procedures.
  • It is responsive to the needs of its members and its strategic environment, and its instruments and best-practice approaches are recognized as the basis for sound customs administration throughout the world.
  •  The WCO’s primary objective is to enhance the efficiency and effectiveness of member customs administrations, thereby assisting them to contribute successfully to national development goals, particularly revenue collection, national security, trade facilitation, community protection, and collection of trade statistics.

INDIA LAGS BEHIND IN INCLUSIVE GROWTH

Why in News?

  • According to data computed by the Indian Council of Research on International Economic Relations (ICRIER), India is far behind neighbours China and Indonesia on all major counts of inclusiveness such as education, skills, employment, labour compensation and asset building. The data compiled for six years between 2012-13 to 2016-17.

Why in News?

  • The 15th Finance Commission has scheduled meetings with the Reserve Bank of India (RBI) and with the Banks and Financial institutions

FC meeting with RBI:

  • In the meeting with the RBI, headed by Governor Shri Shaktikanta Das, the Commission is likely to discuss the following issues:-
  • Views on key macro-economic assumptions for the Fifteenth Finance Commission (FCXV), keeping in view the key parameters central to macro-financial
  • Views on the cost of borrowings of the Centre and the States during the award period of the FCXV.
  • Modalities for ensuring that the borrowing cost becomes increasingly market- driven.
  • Issues in quantifying contingent liabilities of States and off-budget transactions of States, and other issues of public financial
  • Views on possible debt trajectories of States and State-specific consolidation road map.
  • Requirements of recapitalisation of banks and their impact on the cost of borrowings of Governments
  • Possible scenarios of the Bimal Jalan Committee Report on surplus capital available with the RBI for transfer to the Government of India
  • RBI’s own assessment of the dividends and surpluses that can be transferred to the Government of India during the award period of FCXV

FC meeting with other Banks:

  • In the meeting with the Banks and Financial Institutions the following issues are likely to be raised:-
  • Cost of borrowings of the Centre and the States during the award period of the FCXV.
  • Modalities for ensuring that the borrowing cost becomes increasingly market- driven.
  • Recapitalization of banks and their impact on the cost of borrowings of governments.

15th Finance Commission:

  • The 15th Finance Commission was constituted on November 27, 2017 and is headed by former Revenue Secretary and former Rajya Sabha MP N.K. Singh. The terms of reference (ToR) of the Fifteenth Finance Commission have raised some questions

Background Information:

  • The Finance Commission is a constitutional body created by the President of India under Article 280 of the Constitution of India
  • It is touted as balancing wheel of fiscal federalism in
  • The provision of setting up Finance commission in the constitution was an original one and was not
  • Article 280 of the constitution lays down following provisions with respect to finance commission
    the President considers necessary, by order constitute a Finance Commission which shall
  • consist of a Chairman and four other members to be appointed by the President
  • (b) It shall be the duty of the Commission to make recommendations to the President as to
  • the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds
  • The principles which should govern the grants in aid of the revenues of the States out of the Consolidated Fund of
  • The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and municipalities in the State on the basis of the recommendations made by the Finance Commission of the State
  • Any other matter referred to the Commission by the President in the interests of sound finance
  • The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them
  • The recommendations made by the Finance Commission are advisory in nature and, hence, not binding on the Government
  • Finance commission (miscellaneous provisions) act 1951 was passed to give a structured format to the finance commission. It lays down qualifications of the members of commission, terms, eligibility and Powers
  • The Chairman of a finance commission is selected from people with experience of public affairs
  • The other four members are selected from people who:
  • Are, or have been, or are qualified, as judges of a high court,
  • Have knowledge of government finances or accounts, or
  • Have had experience in administration and financial expertise;

WAYS AND MEANS ADVANCES (WMA)

Why in news?

  • The Reserve Bank of India (RBI) in consultation with the government of India has set the limits for Ways and Means Advances (WMA) for the first half of the financial year 2019-20 (April 2019 to September 2019) at Rs 75000 crore.

What is WMA?

  • The Reserve Bank of India gives temporary loan facilities to the centre and state governments as a banker to goverment
  • The scheme was designed to meet temporary mismatches in the receipts and payments of the government. This facility can be availed by the government if it needs immediate cash from the The WMA is to be vacated after 90 days. Interest rate for WMA is currently Difict

WMA Scheme for State Governments:

  • Under the WMA scheme for the State Governments, there are two types of WMA – Special and Normal WMA. Special WMA is extended against the collateral (mortgaging) of the government securities held by the State Government. After the exhaustion of the special WMA limit, the State Government is provided a normal WMA. The normal WMA limits are based on three-year average of actual revenue and capital expenditure of the state. The withdrawal above the WMA limit is considered an overdraft. A State Government account can be in overdraft for a maximum 14 consecutive working days with a limit of 36 days in a quarter. The rate of interest on WMA is linked to the Repo Rate
  • Surplus balances of State Governments are invested in Government of India 14-day Intermediate Treasury bills in accordance with the instructions of the State Governments

 

NUGEN MOBILITY SUMMIT 2019

Why in News?

  • The International Centre for Automotive Technology (ICAT) is organizing a NuGen Mobility Summit, 2019, at Manesar, NCR.

The objective of the Summit :

  • To share new ideas, learnings, global experiences, innovations and future technology trends for faster adoption, assimilation and development of advanced automotive technologies for a smarter and greener

Highlights:

  • The event will help in building a platform for bringing together all stakeholders in the automotive industry to understand global advancements in world.

ICAT:

  • ICAT Manesar is a division of NATRIP Implementation Society (NATIS) under the Department of Heavy Industries, Government of
  • It provides services for testing, validation, design and homologation of all categories of vehicles and has a mission to assist the automotive industry in adopting cutting edge technologies in vehicle evaluation and component development to ensure reliability, durability and compliance to the current and future regulations in new generation mobility solutions.

ALGORITHMIC TRADING

Why in News?

  •  Sebi finds National Stock Exchange of India Ltd (NSE)guilty of lapses in algo trade case.

What is Algorithm?

  •  It is a set of instructions which a computer is programmed to follow in order to carry out a particular task.
  •  In the case of trading, advanced mathematical tools are used for facilitating transaction and decision making in the financial market, the need for a human trader’s intervention is minimized and thus the decision making is very quick.
  •  This enables the system to take advantage of any profit making opportunities arising in the market much before a human trader can even spot them.
  •  The common trading strategies used in algo-trading are:

High Frequency Trading (HFT):

  •  It involves placing a large number of trade orders across multiple markets and decision parameters at a very high speed, based on preprogrammed instructions.

Trend Following Strategies:

  •  It follow trends in moving averages, channel breakouts, price level movements and related technical indicators.
  •  A lot of proven mathematical models, like the delta-neutral trading strategy, which allow trading on combination of options and its underlying security, where trades are placed to offset positive and negative deltas so that the portfolio delta is maintained at zero.

Trading Range (Mean Reversion):

  •  It is based on the idea that the high and low prices of an asset are a temporary phenomenon that revert to their mean value periodically.
    Identifying and defining a price range and implementing algorithm based on that allows trades to be placed automatically when price of asset breaks in and out of its defined range.

Volume Weighted Average Price (VWAP):

  •  This strategy breaks up a large order and releases dynamically determined smaller chunks of the order to the market using stock specific historical volume profiles.

Time Weighted Average Price (TWAP):

  •  It breaks up a large order and releases dynamically determined smaller chunks of the order to the market using evenly divided time slots between a start and end time.

Implementation Shortfall:

  •  It aims at minimizing the execution cost of an order by trading off the real-time market, thereby saving on the cost of the order and benefiting from the opportunity cost of delayed execution.
  •  The strategy will increase the targeted participation rate when the stock price moves favorably and decrease it when the stock price moves adversely.

INTERNATIONAL CENTRE FOR AUTOMOTIVE TECHNOLOGY (ICAT)

Why in News?

The automotive industry is the sunshine industry in India contributing to over 7.5% to country’s GDP. Government of India has huge focus to facilitate and grow this industry.

ICAT:

  • Creation of new automotive test centres in the country under NATRIP project, is an important step forward by the Government to support the need of the automotive industry in the backdrop of tightening regulatory framework and technology shift driven by market forces.
  • ICAT is an important element of the automotive sector, with its world-class infrastructure and domain expertise providing services in development, testing, validation and homologation.
  • The International Centre for Automotive Technology (ICAT), Manesar, is a leading world class automotive testing, certification and R&D service provider.
  • ICAT continues its endeavour towards knowledge sharing and dissemination, through seminars and events, on important topics like Power Train, Emission, HEV and EV technology, NVH, Crash, Lighting, Inspection & Certification and Fatigue.
  • ICAT intends to eventually transform it into an automotive product development centre.

Automotive electrical and electronics lab (AEEL):

  • The AEEL is an important lab considering the rapid increase in the use of electrical and electronics in vehicles.
  • The lab offers services for certification and validation for wide range of electrical and electronics components.

Tyre Test Lab (TTL):

  • ICAT has world class tyre test facilities being operated and managed by highly skilled and experienced team to deliver quality and swift services to customers.
  • Tyre Test Lab is providing services to the tyre industry, vehicle manufactures and Bureau of Indian Standards.
  • ICAT has transformed this lab into centre of excellence by developing new capabilities including the dual station endurance test rig and tyre rolling resistance test rig.

Passive Safety Lab (PSL):

  • Passive Safety Lab is dedicated to support automotive industry for their needs of Crash Testing (Regulatory as well as Developmental), pedestrian protection testing, sled testing and airbag deployment testing.
  • The PSL has state of the art test facilities capable of conducting crash testing of vehicles as per Indian and international regulations.
  • Some of the services offered are frontal impact crash test, side impact crash test, side pole impact, rear impact test, static rollover and pedestrian protection testing.

INDEX OF EIGHT CORE INDUSTRIES

Why in News?

  • The Index of Eight Core Industries is a provisional index which is released every month.
  • It is calculated by using Laspeyre’s formula of weighted arithmetic mean of quantity relatives. It measures collective and individual performance of production in selected eight core industries viz. Natural Gas, Coal, Crude Oil, Fertilizers, Petroleum Refinery Products, Steel, Cement and Electricity.

Highlights:

The combined Index of Eight Core Industries stood at 145.0 in March, 2019, which was 4.7 per cent higher as compared to the index of March, 2018. Its cumulative growth during April to March, 2018-19 was 4.3 percent.

Coal:

Coal production (weight: 10.33per cent) increased by 9.1 per cent in March, 2019 over March, 2018. Its cumulative index increased by 7.3 percent during April to March, 2018-19over corresponding period of the previous year.

Crude Oil:

Crude Oil production (weight: 8.98per cent) declined by 6.2 per cent in March, 2019 over March, 2018. Its cumulative index declined by 4.1 percent during April to March, 2018-19 over the corresponding period of previous year.

Natural Gas:

The Natural Gas production (weight: 6.88per cent) increased by 1.4 per cent in March, 2019 over March, 2018. Its cumulative index increased by 0.8 percent during April to March, 2018-19 over the corresponding period of previous year.

Refinery Products:

Petroleum Refinery production (weight: 28.04 percent) increased by 4.3 percent in March, 2019 over March, 2018. Its cumulative index increased by 3.1 percent during April to March, 2018-19 over the corresponding period of previous year.

Fertilizers:

Fertilizers production (weight: 2.63 per cent) increased by 4.3 percent in March, 2019 over March, 2018. Its cumulative index increased by 0.3 per cent during April to March, 2018-19 over the corresponding period of previous year.

Steel:

Steel production (weight: 17.92 percent)increasedby 6.7 per cent in March, 2019 over March, 2018. Its cumulative index increased by 4.7 percent during April to March, 2018-19 over the corresponding period of previous year.

Cement:

• Cement production (weight: 5.37 percent) increased by 15.7 per cent in March, 2019 over March, 2018. Its cumulative index increased by 13.3 percent during April to March, 2018-19 over the corresponding period of previous year.

Electricity:

• Electricity generation (weight: 19.85 percent) increased by 1.4 percent in March, 2019 over March, 2018. Its cumulative index increased by5.1 percent during April to March, 2018-19over the corresponding period of previous year.

Index of Industrial Production:

    • The Index of Industrial Production (IIP) is an index that details out the growth of various sectors in an economy such as mining, electricity and manufacturing.
    • The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.
    • It is compiled and published monthly by the Central Statistical Organisation (CSO) six weeks after the reference month ends.
    • The base year for IIP is 2011-12.

In India, there are eight core sectors comprising of
✓ Refinery products (28.04%)

✓ Electricity (19.85%)

✓ Steel (17.92%)
✓ Coal (10.33%)

✓ Crude oil (8.98%)

✓ Natural gas (6.88%)

✓ Cement (5.37%)

✓ Fertilisers (2.63%)

COMMITTEE ON NATIONAL CLEAN AIR PROGRAMME

GS 3: Environment |Conservation, Environmental Pollution & Degradation

Why in News?

The Union Environment Ministry has constituted a committee to implement the National Clean Air Programme (NCAP).

Highlights:

  • The committee aims to reduce particulate matter (PM) pollution by 20%-30% in at least 102 cities by 2024.
  • The committee will be chaired by the Secretary, Union Environment Ministry and has among its members the Joint Secretary (Thermal), Ministry of Power; Director-General,The Energy Resources Institute (TERI), the Delhi-based think-tank; and Professor Sachidananda Tripathi, Indian Institute of Technology-Kanpur (IIT-K).
  • The committee would be headquartered in New Delhi.
  • It ensures inter-ministerial organisation and cooperation, sharing information and resolving issues that could arise between ministries… The committee would also give overall guidance and directions to effectively implement the programmes.

NCAP:

  • The NCAP is envisioned as a five-year action plan with 2019 as the first year. There would be a review every five years.
  • The programme aims to provide the States and the Centre with a framework to combat air pollution.

Key features of NCAP:

  • Achieve a national-level target of 20-30% reduction of PM2.5 and PM10 concentration by between 2017 and 2024.
  • Central Pollution Control Board (CPCB) will execute this nation-wide programme in consonance with the section 162 (b) of the Air (Prevention and Control of Pollution) Act, 1986.
  • The plan includes 102 non-attainment cities, across 23 states and Union territories, which were identified by Central Pollution Control Board (CPCB) on the basis of their ambient air quality data between 2011 and 2015.
  • Non-attainment cities are those which have been consistently showing poorer air quality than the National Ambient Air Quality Standards. These include Delhi, Varanasi, Bhopal, Kolkata, Noida, Muzaffarpur, and Mumbai.
  • The plan proposes a three-tier system, including real-time physical data collection, data archiving, and an action trigger system in all 102 cities, besides extensive plantation plans, research on clean-technologies, landscaping of major arterial roads, and stringent industrial standards.
  • It proposes state-level plans of e-mobility in the two-wheeler sector, rapid augmentation of charging infrastructure, stringent implementation of BS-VI norms, boosting public transportation system, and adoption of third-party audits for polluting industries.

ISHAD MANGO IS UNDER THE THREAT OF BECOMING RARE

GS 3: Economy – Food Processing & Related Industries In India

Why in News?

A local mango variety called Ishad is facing the threat of becoming rare in its homeland, Ankola of Uttara Kannada district.

Ishad Mango:

  • The mango has two variants — Kari Ishad, which has thin skin, more pulp and is sweeter, and Bili Ishad, which has thick skin and has less pulp and sweetness.
  • Some farmers did try to grow it outside Ankola taluk, but failed.
  • It is delicate to handle given its short shelf life. Hence, the fruit cannot be transported to faraway places.
  • The pulp of this mango has been extracted for over a century for making value-added products. Oriental Canneries and Industries set up a unit in Ankola in 1908 to extract pulp from Ishad for making value-added products.
  • The then Bombay government supported it by supplying wood.
  • The pulp is used for making 48 recipes. It was being used in the United States, Australia and Sri Lanka.

INDIAN ARMY SIGNS MOU WITH NHPC TO BUILD UNDERGROUND TUNNELS

Why in News?

  • Indian Army has signed a Memorandum of Understanding (MoU) with National Hydroelectric Power Corporation (NHPC) Limited to build four underground tunnels.

Highlights:

  • The agreement is to build four underground tunnels along China and Pakistan borders for storage of ammunition and other war-related
  • Three tunnels will be built along the Chinese border and one tunnel will be built along the Pakistan border
  • The tunnel can store 175-200 metric tonnes of ammunition and the cost of this pilot project is around Rs 15 Crore

National Hydroelectric Power Corporation Limited:

 

    • NHPC is an Indian Hydropower generation company
    • It has an objective to plan, promote and organise an integrated and efficient development of hydroelectric power in all aspects
    • NHPC was founded in 1975
    • It is headquartered at Faridabad, Haryana,India
    • Balraj Joshi is the Chairman & MD of NHPC

RBI EXTENDS OMBUDSMAN SCHEME TO NON-DEPOSIT TAKING NBFCS

Why in News?

  •  Reserve Bank of India (RBI) announced the extension of the Ombudsman Scheme for Non- Banking Financial Companies (NBFCs).

Highlights:

  •  To eligible non-deposit taking non-banking financial companies (NBFC-NDs) having asset size of Rs 100 crore or above with customer interface. It has been done to ensure expeditious redressal of complaints against deficiency in services concerning loans and other matters relating to deficiency in the services by NBFCs.

Ombudsman Scheme for Non-Banking Financial Companies (NBFCs):

  •  The Scheme was launched on February 23, 2018, for redressal of complaints against NBFCs registered with RBI under Section 45-IA of the RBI Act, 1934 and covered all deposit accepting NBFCs.
  •  The NBFC Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against NBFCs for deficiency in certain services covered under the grounds of complaint specified under the Scheme.
  •  It provides a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the scheme.
  •  The scheme also provides for an appellate mechanism under which the complainant / NBFC has the option to appeal against the decision of the Ombudsman before the appellate authority.
  •  The offices of the NBFC Ombudsmen are functioning at Chennai, Kolkata, Mumbai and New Delhi and handle complaints of customers in the respective zones.

Who is an Ombudsmen?

  • An ombudsman is a public advocate is an official who is charged with representing the interests of the public by investigating and addressing complaints of maladministration or a violation of rights.
  • The ombudsman is usually appointed by the government or by parliament, but with a significant degree of independence.
  • The typical duties of an ombudsman are to investigate complaints and attempt to resolve them, usually through recommendations (binding or not) or mediation. Ombudsmen sometimes also aim to identify systematic issues leading to poor service or breaches of people’s rights.

RBI DIVESTS ENTIRE STAKE IN NHB, NABARD

Why in News?

  •  The RBI has divested its remaining stake in the National Bank for Agriculture and Rural Development (NABARD) and National Housing Bank (NHB) in February and March this year. The government now fully owns these two financial institutions.
  •  The RBI once held 100 per cent shareholding in NHB, which was divested on March 19, 2019.

NABARD:

  •  NABARD is an apex development financial institution in India, headquartered at Mumbai with regional offices all over India.
  •  It is India’s specialised bank in providing credit for Agriculture and Rural Development in India. The Bank has been entrusted with “matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India”. It was established on the recommendations of B.Sivaraman Committee on 12 July 1982 to implement the NABARD Act 1981.
  •  NABARD supervises State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs) and conducts statutory inspections of these banks.

National Housing Bank:

  • •NHB is an All India Financial Institution (AIFl), set up in 1988, under the National Housing Bank Act, 1987.
  •  The National Housing Policy, 1988 has envisaged the setting up of NHB as the Apex level institution for housing. It is an apex agency established to operate as a principal agency to promote housing finance institutions both at local and regional levels.
  •  It aims to provide financial and other support incidental to such institutions and for matters connected therewith.

GLOBAL TALENT COMPETITIVE INDEX 2019

Why in News?

  •  The sixth consecutive year in the Global Talent Competitiveness Index (GTCI) 2019, announced in Singapore.

Highlights:

  •  The theme of ‘Entrepreneurial Talent and Global Competitiveness’ attempts to identify the ways in which companies, countries, and cities can foster entrepreneurial talent which makes up a critical component of competitiveness and innovation, and will become even more so in a fast-paced world of digitisation and globalisation.
  •  The report also reveals that cities rather than countries are developing stronger roles as talent hubs and will be crucial to reshaping the global talent scene.

India’s performance:

  •  India remains the laggard in the BRICS (Brazil, Russia, India, China and South Africa) region and was ranked 80.
  •  It performs better than its lower-income peers when it comes to growing (48th) talent, primarily by virtue of the possibilities for Lifelong Learning (38th) and Access to Growth Opportunities (41st).
  •  An above-average Business and Labour Landscape (38th) and Employability (34th) raise the scores of the pillars related to Enable (70th) and Vocational and Technical Skills (72nd) that are otherwise hampered by the remaining sub-pillars.
  •  India’s biggest challenge is to improve its ability to Attract (95th) and Retain (96th) talent.
  •  There is a need to address its poor level of Internal Openness (116th)—in particular with respect to weak gender equality and low tolerances towards minorities and immigrants— and its disappointing showing in Lifestyle indicators.

Global findings:

  •  In this sixth edition, Switzerland continues to lead the 2019 Global Talent Competitiveness index, while Singapore and the United States come in second and third respectively.
  •  Singapore continues to occupy the top spot in Asia Pacific. It is the highest-ranked country in three of the six pillars – Enable, Attract, and Global Knowledge Skills.
    • Yemen has finished at the bottom of this year’s index at 125th, just below Congo (124th) and Burundi (123rd).

SEBI Reduces Minimum Subscription Requirement For REITS

Why in News?

  • SEBI has reduced the minimum subscription requirement as well as defined trading lots for REITs and
  • Highlights:

    • SEBI has come out with its guidelines titled “Guidelines for Determination of Allotment and Trading Lot Size for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)”. For determining the allotment in an initial offer and follow on public offers, REITs have to offer their units in lots worth at least Rs 50,000 and in case of InvITs, the minimum value of a single lot should be Rs 1
    • The allotment to any investor shall be made in the multiples of a
    • For initial listing in case of REITs and InvITs, a trading lot should be of 100 units and for follow on public offers, each lot shall consists of such number of units in its trading lot as it had at the time of initial
    • Moreover, SEBI has also increased the leverage limit for InvITs from 49 per cent to 70 per cent.

PROFIT ATTRIBUTION TO PERMANENT ESTABLISHMENT (PE) IN INDIA

Why in News?

  • Recognizing the significance of issues relating to attribution of profits to a permanent establishment as well as the need to bring greater clarity and predictability in the applicable tax regime, a Committee was formed by CBDT to examine the existing scheme of profit attribution to PE under Article 7 of DTAAs and recommend changes in Rule 10 of the Income-tax Rules, 1962. The Committee has submitted its report and it has been decided to seek suggestions/comments of the stakeholders and the general Public

What is a Permanent Establishment?

  • A Permanent Establishment in India is a fixed place of business, wholly or partly carried out by a foreign enterprise operating in India.
  • Such fixed place of business can be a branch office, a place of management, a factory, a warehouse, a workshop etc. However the definition of permanent establishment differs in each tax treaty
  • (PE) has acquired tremendous importance in recent times as it determines taxability of a foreign company in Usually, foreign companies get tax concession under Double
  • Taxation Avoidance Treaties and they pay taxes in their home countries. But if they have PEs in India, they should pay taxes for the income they have created in India. Thus PE makes a foreign companies’ Indian income taxable in India.

Tax treatment of PEs:

  • The significance PE lies in the fact that “business profits” of a foreign enterprise can be taxed in India only if it has a PE in India and the profits are attributable to the PE. Even the amount for “royalty” or “fee for technical services” received by foreign enterprises will be taxed in India as business profits if they are attributable to a PE in the Country

Background:

  • Taxation of non-residents in India is governed by the provisions of the Income-tax Act, 1961 (“the Act”) and the provisions of the Double Taxation Avoidance Agreement(s)[DTAA(s)] concluded or adopted by the Central Government under the powers conferred under Section 90 or 90A of the Act, respectively.
  • The business income of a non-resident can be taxed in India if it satisfies the requisite thresholds provided under the Act as well as the threshold provided in the applicable tax treaty, by a concept of Permanent Establishment (PE), which is defined in Article 5 of Model Tax Conventions and tax treaties
  • Under Article 7 in the Indian treaties, profits are to be attributed to the PE as if it were a distinct and separate entity on the basis of the accounts of the PE and where such accounts are not available to enable determination of profits attributable to the PE, the profits attributable to the PE can be determined under the domestic

UNIFIED PAYMENTS INTERFACE

Why in News?

  • The Reserve Bank of India (RBI), the National Payments Corporation of India (NPCI) and some industry players from April 2018 to March 2019 shows that not only is the UPI platform outperforming e-wallets in terms of the value of transactions done, but it is also eating away at e-wallets’ market share in specific areas such as person-to-merchant (P2M) transactions.

UPI:

  • Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood
  • It caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

Why UPI is outperforming e- wallets?

  • People are changing the way they transact, choosing bank-to-bank methods such as the Unified Payments Interface (UPI) over other instruments such as e-wallets.
  • The UPI is completely interoperable and as such, it is unique in the world, where you have an interoperable system on the ‘send’ and ‘receive’

Gig Economy

Why in News?

  • Delhi has emerged as the top destination for migrant workers.

Highlights:

  • An estimated 56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce. The reasons are:
  • In the digital age, the worker need not sit at a fixed location—the job can be done from anywhere, so employers can select the best talent available for a project without being bound by geography.
  • The millennial generation seems to have quite a different attitude to careers. They seek to do work that they want to do rather than have careers that may not satisfy their inner urges.
  • This suits businesses as well. In a gig economy, they save resources in terms of benefits like provident fund, paid leave and office space.
  • Heightened migration and
  • Readily available job training.

Gig Economy:

  • A gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.
  • A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

Challenges:

  • The gig economy thrives largely unregulated, therefore workers have little job security and few benefits.
  • A gig-economy workers will have to upgrade his skills on his own at his own cost. Lack of policies on job structure, tax , privacy
  • Exponential growth
  • The gig economy in India with respect to workers not getting any social security, insurance, etc

Bamboo Rice Shows Up In Odisha

Why in News?

  • Odisha is among the states known for a wide variety of rice, the staple food of eastern and north-eastern India and beyond.

Bamboo Rice

Bamboo rice is special rice that is grown out of a dying bamboo shoot.

  • When the bamboo shoot breathes its last, it flowers into a rare variety of rice seeds, which are known as bamboo rice.
  • It is said that the bamboo rice harvesting is a major source of income for the tribal communities living in the interiors of Wayanad Sanctuary in Kerala.
  • The gates of Chandaka-Dampara Wildlife Sanctuary in Cuttack district Odisha have been recently opened for forest dwellers to come and collect the rice.
  • Significance:

    • The bamboo rice which grows only twice or thrice in a century. And it is being harvested now. The last collected bamboo rice in Odisha was in 1979.
    • Whenever bamboo blossoms, the rat population increases. To prevent rats from running the rice, local villagers and forest dwellers collect bamboo rice. Also, the rice then becomes a major source of income and food for villagers living near the forest.

    Nutritional content:

    • The variety looks like paddy rice and tastes more like wheat.
    • It is believed to have low glycaemic index compared to other varieties and it is good for diabetics. It’s rich in proteins and does not contain any fat.

    GLOBAL FINANCIAL STABILITY REPORT 2019

    Why in News?

    • The International Monetary Fund (IMF) released the Global Financial Stability Report (GFSR) is a semiannual report. The April 2019 Global Financial Stability Report (GFSR) finds that despite significant variability over the past two quarters, financial conditions remain favourable.

    Highlights:

    •  The report specifically focuses on corporate sector debt in advanced economies, the sovereign–financial sector nexus in the Euro area, China’s financial imbalances, volatile portfolio flows to emerging markets, and downside risks to the housing market.
    •  It recommends action by policymakers, including through the clear communication of any changes in their monetary policy outlook, the deployment and expansion of macroprudential tools, the stepping up of measures to repair public and private sector balance sheets, and the strengthening of emerging market resilience to foreign portfolio outflows.
    •  There is high stock of non-performing assets (NPAs) in India. Portfolio flows to emerging markets are influenced by benchmark-driven investors — 70% of country allocations of investment funds are impacted by benchmark indices
    •  China is likely to become more important for other emerging markets as it gets included in benchmark indices. Portfolio flows to China are expected to increase by $150 billion by 2020 due to its inclusion in a global bond index.

    GFSR Report:

    • The GFSR provides an assessment of balance sheet vulnerabilities across financial and non-financial sectors in advanced and emerging market economies.
    •  It is released twice per year, in April and October.
    •  It draws out the financial ramifications of economic imbalances highlighted by the IMF’s/World Economic Outlook.
    •  The GFSR issues recommendations for central banks, policymakers and others who supervise global financial markets.
    • The latest GFSR introduces a way to quantify vulnerabilities in the financial system, encompassing six sectors: corporates, households, governments, banks, insurance companies, and other financial institutions.

    CURRENCY CHESTS

    Why in News?

    • The Reserve Bank of India (RBI) has issued guidelines for banks to set up new currency chests.

    The guidelines:

    •  Area of the strong room/ vault of at least 1,500 sq ft. The new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. Those situated in the hilly/ inaccessible places, a capacity of 2.1 lakh pieces of banknotes per day. The currency chests should have Chest Balance Limit (CBL) of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of the Reserve Bank.

    Currency chests and its role:

    • Currency chests are branches of selected banks authorised by the RBI to stock rupee notes and coins. The responsibility for managing the currency in circulation is vested in the RBI
    •  The RBI offices in various cities receive the notes from note presses and coins from the
      mints. These are sent to the currency chests and small coin depots from where they are distributed to bank branches. The RBI has set up over 4,075 currency chests all over the country. Besides these, there are around 3,746 bank branches that act as small coin depots to stock small coins.

    WORLD BANK’S MIGRATION AND DEVELOPMENT BRIEF

    Why in News?

    •  According to the latest edition of the World Bank’s Migration and Development Brief, India has retained its position as the world’s top recipient of remittances with its diaspora sending a whopping $79 billion back home in 2018.

    Highlights:

    •  Remittances to low- and middle-income countries reached a record high in 2018.
    •  Global remittances, which also include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017.
    •  The officially recorded annual remittance flows to low- and middle-income countries reached $529 billion in 2018, an increase of 9.6 % over the previous record high of $483 billion in 2017. Growth in remittance inflows ranged from almost 7% in East Asia and the Pacific to 12 %in South Asia.
    •  Remittances to South Asia grew 12% to $131 billion in 2018, outpacing the 6% growth in 2017.
    •  The overall increase was driven by a stronger economy and employment situation in the  United States and a rebound in outward flows from some Gulf Cooperation Council (GCC) countries and the Russian Federation.
    •  In 2019, remittance flows to low- and middle-income countries are expected to reach $550 billion, to become their largest source of external financing.
    •  Among countries, the top remittance recipients were India with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion). Remittances grew by more than 14% in India, where a flooding disaster in Kerala likely boosted the financial help that migrants sent to families. India received $62.7 billion in 2016 and $65.3 billion in 2017 from remittances.

    World Bank’s Migration and Development Brief:

    •  It is prepared by the Migration and Remittances Unit, Development Economics (DEC)- the premier research and data arm of the World Bank.
    •  It aims to provide an update on key developments in the area of migration and remittance flows and related policies over the past six months.
    •  It also provides medium-term projections of remittance flows to developing countries. The brief is produced twice a year.

    Remittances:

    •  Remittances are usually understood as financial or in-kind transfers made by migrants to friends and relatives back in communities of origin.
    •  These are basically sum of two main components;
    •  Personal Transfers in cash or in kind between resident and non-resident households and
    • Compensation of Employees, which refers to the income of workers who work in another country for a limited period of time.
    •  Remittances help in stimulating economic development in recipient countries, but this can also make such countries over-reliant on them

    ASIAN DEVELOPMENT OUTLOOK 2019

    GS 3: Economy

    Why in News?

    Asian Development Bank has published Asian Development Outlook 2019.

    Key Findings:

    • ADB has cut India’s growth forecast to 7.2% for 2019-20 because of a slower-than-expected pickup in investment demand.
    • The growth rate in Financial Year 2020-21 is likely to be 7.3%.
    • India will remain the fastest growing major economy, as China is projected to grow at 6.3% in 2019. India’s strong growth is because of strong household spending and corporate fundamentals. Strong household spending– Income support to farmers, hikes in procurement prices for food grains, and tax relief to taxpayers earning less than Rs 5 lakh, declining fuel and food prices. Strong corporate fundamentals– An increase in utilization of production capacity by firms, falling levels of stressed assets held by banks and easing of credit restrictions on certain banks, is expected to help investment grow at a healthy rate. Imports are expected to rise mainly due to stronger domestic demand, while a growth slowdown in India’s key export destinations would dent export growth.
    • The current account deficit is expected to widen a bit to 2.4% of GDP in FY2019 and 2.5% of GDP in FY2020. The inflation is expected to average around 4% in the first half of FY2019, and therefore the Reserve Bank would have some room for lowering policy rates further increasing credit.

    ADB:

    • The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966. ADB is headquartered in Manila, Philippines.
    • It aims to promote social and economic development in Asia. ADB now has 67 members, of which 48 are from within Asia and the Pacific and 19 outside. Japan holds the largest proportion of shares in ADB followed by the USA.

    NATIONAL INVESTMENT AND INFRASTRUCTURE FUND (NIIF)

    GS 3: Economy | Investment Models

    Why in News?

    Roadis, a private investor and operator of transport infrastructure worldwide and the National Investment and Infrastructure Fund (NIIF) have jointly set up a platform to invest in road projects in India.

    Platform for Road projects in India:

    • The platform would invest up to $2 billion of equity targeting toll-operate-transfer models, acquisitions of existing road concessions and investment opportunities in the road sector.
    • With 710 km of highways under ownership and management, Roadis is one of the largest European highway concession managers in India.
    • Roadis is a wholly owned subsidiary of the Public Sector Pension Investment Board, one
      of Canada’s largest pension funds.

    NIIF:

    • National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country.
    • This is different from the National Investment Fund.
    • Objective: to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects.
    • NIIF was proposed to be set up as a Trust, to raise debt to invest in the equity of infrastructure finance companies such as Indian Rail Finance Corporation (IRFC) and National Housing Bank (NHB).
    • NIIF is envisaged as a fund of funds with the ability to make direct investments as required. As a fund of fund it may invest in other SEBI registered funds.
    • The functions of NIIF are as follows:
    • Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;
    • ✓ Servicing of the investors of NIIF.
      ✓ Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
      ✓ Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity. Preparing a shelf of infrastructure projects and providing advisory service

    WAYS AND MEANS ADVANCES

    GS 3: Economy| Mobilization of Resources

    Why in News?

    • RBI may trigger fresh floatation of market loans when Government utilizes 75% of the WMA limit. The interest rate on WMA will be Repo Rate and overdraft will be 2% above the Repo Rate. The Reserve Bank of India gives temporary loan facilities to the centre and state governments as a banker to government. This temporary loan facility is called Ways and Means Advances (WMA). It is a mechanism to provide to States to help them tide over temporary mismatches in the cash flow of their receipts and payments.
    • It was introduced on April 1, 1997, after putting an end to the four-decade old system of adhoc (temporary) Treasury Bills to finance the Central Government deficit.
    • This facility can be availed by the government if it needs immediate cash from the RBI. The WMA is to be vacated after 90 days.
    • Interest rate for WMA is currently charged at the repo rate. The limits for WMA are mutually decided by the RBI and the Government of India.

    ADVANCED PRICING AGREEMENT

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc

    Why in News?

    The Central Board of Direct Taxes (CBDT) has entered into 18 APAs in the month of March 2019, which includes 03 Bilateral APAs (BAPAs). With the signing of these APAs, the total number of APAs entered into by the CBDT in the year 2018-19 stands at 52, which includes 11 BAPAs. The total number of APAs entered into by the CBDT as of now stands at 271, which inter alia includes 31 BAPAs.

    Why we need APA?

    • The primary goal of such programmes is to provide certainty to taxpayers in respect of the transfer price of the crossborder transactions undertaken by such taxpayers with their group entities.
    • Rapid growth in international trade through an increasing number of Multi National Enterprises (MNEs) has given rise to numerous tax disputes on the issue of transfer pricing.

    Advanced Pricing Agreement:

    • An APA is a mechanism to resolve transfer pricing disputes in advance, i.e., before the cross-border related party transaction actually takes place.
    • The transfer price of goods and services transacted between group entities is decided in advance by the tax authorities and the taxpayers, so as to prevent any dispute arising from such transfer pricing.
    • The Advance Pricing Agreement (APA) programme in India was launched in 2012 vide the Finance Act, 2012 through the insertion of Sections 92CC and 92CD in the Income-tax Act, 1961.
    • These statutory provisions, effective from 1st July, 2012, lent the legal backing to the CBDT to enter into Advance Pricing Agreements (APAs) with taxpayers for a maximum period of 5 years in respect of international transactions between Associated Enterprises (AEs) to determine the Arm’s Length Price (ALP) or to specify the manner in which the ALP is to be determined. It was stipulated that the detailed scheme of the APA would be separately notified by the CBDT.
    • 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.

    GI tag for Kandhamal and Erode Turmeric

    GS 3: Intellectual Property Rights

    Why in News?

    • Kandhamal Haldi’, a variety of turmeric indigenous to southern Odisha, has earned the GI tag.
    • Earlier this month, Erode turmeric also got a GI tag from the Geographical Indication Registry.

    Kandhamal Haldi:

    • Kandhamal in Odisha’s southern hinterland is famed for its turmeric, a spice that enjoys its pride of place in an array of cuisines.
    • The agricultural product also stands out for its healing properties and arresting aroma.
    • The GI tag was primarily developed with the purpose of recognising the unique identity connecting different products and places.
    • For a product to get GI tag it has to have a unique quality, reputation or characteristic which is attributable to its geographic origin. ‘Kandhamal Haldi’ has been placed under Class-30 type
    • The Kandhamal turmeric was accorded the tag on the state’s Foundation Day.
    • Odisha, on April 1 1936, was carved out as a separate state in the then British India on a linguistic identity.

    Erode turmeric:

    • Erode turmeric is a rhizome, both finger and bulb obtained from the Erode local cultivar.
    • In its claim for uniqueness, the application said the mean length of the fingers of Erode turmeric was about 4.15cm and the mean circumference was about 3.03cm.
    • The mean bulb length of the mother rhizome is about 4.54cm and the mean circumference is 6.54cm.
    • Quality parameters of the turmeric included 2.5 to 4.5% of curcumin content, a golden yellow colour and resistance to pests after boiling.

    Geographical Indications in India:

    • A Geographical Indication is used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Such a name conveys an assurance of quality and distinctiveness which is essentially attributable to its origin in that defined geographical locality.
    • This tag is valid for a period of 10 years following which it can be renewed.
    • Recently the Union Minister of Commerce and Industry has launched the logo and tagline for the Geographical Indications (GI) of India.
    • The first product to get a GI tag in India was the Darjeeling tea in 2004. There are a total of 325productsfrom India that carry this indication.
    • Darjeeling Tea, Mahabaleshwar Strawberry, Blue Pottery of Jaipur, Banarasi Sarees and Tirupati Laddus are some of the GIs.
    • The Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) is a sui generis Act for protection of GI in India.
    • India, as a member of the World Trade Organization (WTO), enacted the Act to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights
    • Geographical Indications protection is granted through the TRIPS Agreement. See also the Paris Convention, the Madrid Agreement, the Lisbon Agreement, the Geneva Act.

    SEBI mulls SRO for investment advisers

    GS 3: Economy| Mobilization Of Resources

    Why in News?

    The SEBI has proposed a self regulatory organisation (SRO) for the growing number of investment advisers to address issues related to the quality of advice given to investors by such entities.

    Self Regulatory Organisation:

    • An SRO is the first-level regulator that performs the crucial task of regulating intermediaries representing a particular segment of securities market on behalf of the regulator.
    • An SRO would be seen as an extension of the regulatory authority of the SEBI and would perform the tasks delegated to it by the SEBI.
    • The role of an SRO is developmental, regulatory, related to grievance redressal and dispute resolution as well as taking disciplinary actions.

    Significance:

    • SEBI is in receipt of a large number of complaints alleging charging of exorbitant fees, assurance of returns, misconduct etc. by investment advisers.
    • Incidentally SEBI has said that there was a need for an SRO for mutual fund distributors — that currently register with Association of Mutual Funds in India (AMFI).
    • It was aimed to bring in consistency in industry practices and also to take disciplinary action against alleged malpractices such as mis-selling of products and churning of portfolio.

    Expected functions:

    • SEBI has proposed the strengthening of the existing regulatory framework for SROs by introducing features such as a governing board with public interest directors and a clear policy for arbitration and dispute resolution.
    • The regulator has proposed a governing board with at least 50% public interest directors along with 25% representation each of shareholder directors and elected representatives.
    • Further, the governing board can appoint a managing director or chief executive officer to manage the daily affairs of the SRO.

    NuGen Mobility Summit 2019

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc

    Why in News?

    The International Centre for Automotive Technology (ICAT) will organize a NuGen Mobility Summit, 2019, at Manesar, NCR, from 27th to 29th November 2019.

    Highlights:

    • The Summit is being organized in association with SAENIS, SAE INDIA, SAE International, NATRiP, DIMTS, Department of Heavy Industry, Ministry of Road Transport and Highways, SIAM and ACMA.
    • The objective of the Summit is to share new ideas, learnings, global experiences, innovations and future technology trends for faster adoption, assimilation and development of advanced automotive technologies for a smarter and greener future.
    • This event will help in building a platform for bringing together all stakeholders in the automotive industry to understand global advancements in technologies.
    • The event aims to bring together the automotive OEMs, professionals, researchers, academic experts, vehicle system suppliers, test equipment supplier, quality managers, product planners, component developers, SAE members and students from all over the world.
    • Experts working with leading international scientific and research organizations and testing laboratories from various countries like USA, Europe, Japan and other Asian countries will also participate in the event and share their experiences and knowledge on the development of smart and green technologies and the challenges that the industry needs to overcome.
    • Track demonstrations, drive-touch-feel activity and lab demonstrations on upcoming vehicle technologies like connected mobility, autonomous vehicles, electric mobility, alternate fuels, intelligent transportation system, hydrogen fuel cell, hydrogen IC engine, vehicle dynamics, advanced materials and lightweight, end of life vehicles and recycling are the uniqueness of this event.

    ICAT:

    • ICAT stands for The International Centre for Automotive Technology.
    • ICAT Manesar is a division of NATRIP Implementation Society (NATIS) under the Department of Heavy Industries, Government of India.
    • It provides services for testing, validation, design and homologation of all categories of vehicles and has a mission to assist the automotive industry in adopting cutting edge technologies in vehicle evaluation and component development to ensure reliability, durability and compliance to the current and future regulations in new generation mobility solutions.
    • ICAT Centre-II is under brisk renovation to create a world-class state-of-the-art facility for organizing such significant and sizeable events for the automotive fraternity. Several kinds of tracks such as coast down the track, oval track, abs track, hill tracks, and flood track will be available for demonstrations and events.

    Transport and Marketing Assistance (TMA) Scheme

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in News?

    The Ministry of Commerce and Industry has laid out a detailed procedure for claiming benefits under the Transport and Marketing Assistance (TMA) scheme.

    Highlights:

    • It aims at boosting agricultural exports.
    • The scheme for providing financial assistance for transport and marketing of agriculture products to boost exports of such commodities to certain countries in Europe and North America.
    • The level of assistance would be different for different regions as notified from time to time for export of eligible products. The scheme covers freight and marketing assistance for export by air as well as by sea.

    Objectives:

    • The scheme aims to provide assistance for the international component of freight and marketing of agricultural produce.
    • To mitigate disadvantage of higher cost of transportation of export of specified agriculture products due to trans-shipment.
    • To promote brand recognition for Indian agricultural products in the specified overseas markets.

    Coverage & Eligibility:

    • All exporters, duly registered with relevant Export Promotion Council as per Foreign Trade Policy, of eligible agriculture products shall be covered under this scheme.
    • The Scheme would be applicable for a period as specified from time to time. Presently the Scheme would be available for exports from 1.3.2019 to 31.03.2020.

    APEDA:

    • The Agricultural and Processed Food Products Export Development Authority (APEDA) is a non-trading, statutory body established by the Government of India under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December, 1985.
    • APEDA has marked its presence in almost all agro potential states of India and has been providing services to agri-export community through its head office in New Delhi, five Regional offices and 13 Virtual offices.
    • In 2017, APEDA launched a mobile app- “Farmer Connect” to allow farmers to apply online to facilitate their farm registration, tracking the status of application & approvals by State Government and Lab sampling by authorized Laboratories.

    India imposes anti-dumping duty on import of solar cell component

    GS 3: Economy | Mobilization of resources

    Why in News?

    • India has levied anti-dumping duty worth up to USD 1,559 per tonne on imports of a certain type of sheet used in solar cell making from China, Malaysia, Saudi Arabia and Thailand for five years to safeguard domestic players against cheap shipments.
    • The anti-dumping duty has been imposed after considering the recommendations of the commerce ministry’s investigation arm Directorate General of Trade Remedies (DGTR).

    Highlights:

    • The duty, which is in the range of USD 537 to USD 1,559 per tonne, will be imposed on the imports of “Ethylene Vinyl Acetate sheet for solar module” from the select four nations.
    • It shall be effective for a period of five years unless revoked, superseded or amended earlier.
    • The Directorate General of Trade Remedies had initiated the probe in April 2018 following a complaint by a domestic company.
    • In its probe, the directorate had concluded that imposition of the duty is required to offset dumping and injury caused by dumped imports from China, Malaysia, Saudi Arabia and Thailand.
    • The product is a polymer based component used in the manufacturing of solar PV (Photo Voltaic) modules.
    • The imports of the sheets from the four nations increased to 6,367 tonnes during the period of investigation (October 2016 to September 2017) from 4,674 tonnes in 2016-17. The imports stood at USD 1,025 tonnes in 2015-16 and USD 594 tonnes in 2014-15.

    Why is anti-dumping duty imposed?

    • Nations across the world carry out anti-dumping probes to determine whether their domestic industries have been hurt because of a surge in cheap imports.
    • Following which, anti-dumping duties are imposed as a counter measure to safeguard their domestic market under the multilateral regime of WTO.
    • Hence, the anti-dumping duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers with regard to foreign producers and exporters.

    Background:

    • The imports of components used in solar industry have increased as India launched an ambitious national solar policy named Jawaharlal Nehru National Solar Mission in January 2010.
    • Under this, the country has a target of generating 20,000 megawatts (MW) of solar power by 2022.
    • Several countries are interested in supplying solar equipment to tap into the growing sector in India.

    GI tag for Coorg Arabica Coffee, four others

    • bThe Geographical Indications Registry has granted the Geographical Indication (GI) tag to
    • Coorg Arabica Coffee,
    • Wayanad Robusta Coffee,
    • Chikmagalur Arabica Coffee,
    • Araku Valley Arabica Coffee and
    • Bababudangiris Arabica Coffee.

    The GI was granted on March 1.

    • According to the GI application, Coorg Arabica Coffee is grown specifically in Kodagu district in Karnataka.
    • As per the GI application for Wayanad Robusta Coffee, the flora of Wayanad is characteristic of the Western Ghats and the plantation crops grown in the cool climate.
    • Coffee based farming system is a notable feature of Wayanad. Coffee is grown both as pure crop and as mixed crop along with pepper. Wayanad produces almost around 90% of the state’s Coffee produce which literally concludes that the coffee economy of Kerala is highly correlated with the coffee economy existing in Wayanad. Robusta coffee produce is more than 95% of the total coffee cultivation done in Wayanad.
    • Chikmagalur Arabica Coffee and Bababudangiris Arabica Coffee are both grown in Chikmagalur district, Karnataka which is also known as the birthplace of coffee in the country, as per the application petitions.

    Coffee production in India

    • It is dominated in the hill tracts of South Indian states, with Karnataka accounting for 71%, followed by Kerala with 21% and Tamil Nadu (5% of overall production with 8,200 tonnes).
    • Indian coffee is said to be the finest coffee grown in the shade rather than direct sunlight anywhere in the world.
    • As of 2018, Indian coffee made up just 4.5% of the global production. Almost 80% of Indian coffee is exported; 70% is bound for Germany, Russia, Spain, Belgium, Slovenia, United States, Japan, Greece, Netherlands and France. Italy accounts for 29% of the exports. Most of the export is shipped through the Suez Canal.
    • Coffee is grown in three regions of India with Karnataka, Kerala and Tamil Nadu forming the traditional coffee growing region, followed by the new areas developed in the non-traditional areas of Andhra Pradesh and Orissa in the eastern coast of the country and with a third region comprising the states of Assam, Manipur, Meghalaya, Mizoram, Tripura, Nagaland and Arunachal Pradesh of Northeastern India, popularly known as “Seven Sister States of India.

    GI Tag:

    • Geographical Indication is a genre of Intellectual Property.
    • GI tag is an insignia on products having a unique geographical origin and evolution over centuries with regards to its special quality or reputation attributes.
    • The status to the products marks its authenticity and ensures that registered authorised users are allowed to use the popular product name.
    • These could be naturally grown crops like Assam Chilies or manufactured products like Jaipur Pottery.
    • GI tags are given on the basis of the Geographical Indications of Goods (Registration and Protection) Act, 1999.
    • The registration of GI is valid for 10 years after which it needs to be renewed.
    • Violation of GI tags is punishable offence under law.

    India launches third IT corridor in China

    GS 3: Economy| Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

    Why in News?

    India has launched its third IT corridor in China that will facilitate partnerships between Indian and Chinese companies.

    Xuzhou IT Corridor Project:

    • China being a dominant manufacturing country requires software, IT and IT enabled services to transform towards smart manufacturing.
    • The National Association of Software and Services Companies (NASSCOM) entered into a partnership with China’s Xuzhou city from Jiangsu Province in China to help develop the IT corridor.
    • The IT industry body has already launched such corridors at Dalian and Guiyang cities to cash in on the burgeoning Chinese IT industry market.
    • These have already sprung up opportunities to the tune of 24 Million RMB (USD 4.6 million) and 62 Million RMB (USD 8.9 million) respectively, it said.

    Significance:

    • The first two corridors have paved the way for cooperation in co-create mode in the emerging technologies such as AI, IoT and Analytics in the Chinese market.
    • Xuzhou is the geographic and economic center of over 20 cities and in China’s regional economic layout, the city has slowly established itself as an industrial powerhouse.
    • Xuzhou is an important comprehensive national transportation hub and its proximity from major industrial and economic hub like Shanghai, Beijing, Hangzhou, Nanjing and Suzhou.
    • This will facilitate match-making between Indian companies wanting to collaborate with companies in Huai Hai economic zone looking.
    • This partnership will help create more jobs in Xuzhou and India and facilitating talent transfer between the two countries.

    NASSCOM:

    • The National Association of Software and Services Companies (NASSCOM) is a trade association of Indian Information Technology (IT) and Business Process Outsourcing (BPO) industry.
    • Established in 1988, NASSCOM is a non-profit organisation.

    CII-EXIM Bank Conclave on India-Africa Project Partnerships

    GS 3: Economy

    Why in News?

    Ministry of Commerce & Industry will be organising the 14th CII-EXIM Bank Conclave on India-Africa Project Partnerships, in association with Confederation of Indian Industry and EXIM Bank of India in New Delhi.

    Highlights:

    • The Conclave will mark the pre-eminence of India-Africa partnership in the area of ‘South-South Cooperation’, at a time when the global economy is faced with intractable challenges that stem from rising protectionism and trade conflicts.
    • The India-Africa bilateral partnership is augmented by India’s ascendency as the fastest growing major economy, as well as Africa’s new economic dynamism illustrated by some of the Sub-Saharan economies which are among the top 10 fastest growing economies in the world.
    • The knowledge sessions at the Conclave will focus upon the potential areas for bilateral economic and business partnerships, core capabilities of Indian and African enterprises and opportunities for joint ventures thereof, innovative financing of significant development projects, skill development and capacity building.
    • The deliberations will be guided by long-term goals and objectives:
    • Scaling up India-Africa bilateral trade volume to USD150 billion in the next few years
    • Encouraging Indian exporters to access the African countries and increase their presence in the region
    • Enabling geographical and product diversification of Indian exports to Africa
    • Enhancing manufacturing exports of Africa by optimal utilisation of Duty Free Tariff Preference scheme and capacity building support from India
    • Expanding Indian investments in areas like infrastructure, agriculture and food-processing, energy, services, IT and knowledge industries

    Significance:

    • The event will mark the deepening of India-Africa economic and business ties and pave the way for a whole range of cross-border project partnerships.
    • The annual Conclave, since its inception in 2005, brings senior Ministers, policy makers, officials, business leaders, bankers, technologists, start-up entrepreneurs and other professionals from India and Africa on a common platform in a spirit of partnership.
    • The Conclave coheres into the Indian Government’s broader vision of long-term engagement with Africa. The Government of India’s unflinching commitment to expanding the canvas of India-Africa economic partnership which is evident from the increase in bilateral trade between India and Africa by nearly 22% from last year touching USD 62.66 billion in the year 2017-18.

    SINGLE-LAYER GRAPHENE

    GS 3: Science & Technology | Awareness in the fields of IT, Space, Computers etc.

    Why in News?

    Researchers at Delhi’s National Physical Laboratory (CSIR-NPL) have designed a low-pressure chemical vapour deposition (LPCVD) device that allows high quality, single-layer graphene.

    Highlights:

    • The thickness of a single layer is 0.34 nanometre and average grain size of graphene is 1-3 micrometre. Though there are about one billion grains in 4×2 square-inch single-layer graphene, the grains are highly connected to give a single continuous layer of graphene.
    • The quality of the single-layer graphene grown using this device is superior than the ones reported in the literature.
    • The quality of the single-layer graphene is metrology-grade, and can be used in next-generation quantum devices.
    • The graphene was grown on a substrate made of copper, which acts as a catalyst.

    WHITE LABEL ATM

    GS 3: Economy

    Why in News?

    • The RBI has relaxed norms for white label ATM (WLA) operators.
    • All guidelines, safeguards, standards and control measures applicable to banks relating to currency handling and cyber-security framework for ATMs shall also be applicable to the WLA operators, the RBI said.

    White Label ATM Operators:

    • Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called WLAs.
    • They provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks.
    • Non-bank entities that set up, own and operate ATMs are called “White Label ATM Operators” (WLAO).
    • The WLAO’s role is confined to acquisition of transactions of all banks’ customers by establishing technical connectivity with the existing authorized, shared ATM and Card Payment Network Operators.

    Relaxed norms by RBI:

    • The RBI has been decided to allow WLAs to buy wholesale cash, above a threshold of 1 lakh pieces (and in multiples thereof) of any denomination, directly from the RBI.
    • The RBI also permitted WLA operators to source cash from any bank, including cooperatives and regional rural banks. They are also being allowed to source cash from any scheduled bank, including cooperative banks and regional rural banks and to offer bill payment and Interoperable Cash Deposit services, subject to technical feasibility and certification by the National Payments Corporation of India (NPCI).
    • RBI has also allowed WLA operators to display advertisements pertaining to non-financial products or services anywhere within the WLA premises, including the ATM screen, except the main signboard.

    NEW MEASURES TO PROMOTE HYDRO POWER SECTOR

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in News?

    The Union Cabinet chaired by Prime Minister Narendra Modi has approved measures to promote the Hydro Power Sector, which include declaring Large Hydropower Projects (HPO) as part of non-solar Renewable Purchase Obligation (RPO).

    Highlights:

    • Large Hydropower Projects to be declared as a renewable energy source. As per the existing practice, only hydropower projects less than 25MW are categorized as a renewable energy source.
    • HPO as a separate entity within non-solar renewable purchase obligation to cover large hydropower projects commissioned after notification of these measures. The small hydropower projects are already covered under the Non-Solar Renewable Purchase Obligation.
    • The trajectory of annual HPO targets will be notified by Ministry of Power based on the projected capacity addition plans in hydropower sector and the necessary amendments will be introduced in the tariff policy and tariff regulations to operationalise HPO. The tariff rationalisation measures include providing flexibility to the developers to determine tariff by backloading of tariff after increasing project life to 40 years, increasing debt repayment period to 18 years and introducing escalating tariff of 2 per cent.
    • They also include budgetary support for funding flood moderation component of hydropower projects on case to case basis.
    • They also include budgetary support for funding cost of enabling infrastructure that is roads and bridges on case to case basis as per actual, limited to Rs 1.5 crore per MW for upto 200 MW projects and Rs 1.0 crore per MW for above 200 MW projects.

    Impact:

    • Considering most of the hydro power potential is located in the higher reaches of the Himalayas and north-east region, the new measures to promote the Hydro Power Sector are expected to result in the overall socio-economic development of the region by providing direct employment in the power sector.
    • The measures will also provide indirect employment and entrepreneurial opportunities in the field of transportation, tourism and other small-scale businesses.
    • Another major benefit would be of having a stable grid considering 160 GW capacity addition by 2022 from infirm sources of power like solar and wind.

    India’s Hydropower potential:

    • India is endowed with large hydropower potential of 1, 45,320 MW of which only about 45,400 MW has been utilised so far.
    • Only about 10,000 MW of hydropower has been added in the last 10 years. The hydropower sector is currently going through a challenging phase and the share of hydropower in the total capacity has declined from 50.36 per cent in the 1960s to around 13 per cent in 2018-19.
    • Besides being environmental-friendly, hydropower has several other unique features like the ability for quick ramping, black start, reactive absorption, which make it ideal for peaking power, spinning reserve and grid balancing and stability.
    • Further, hydropower also provides water security, irrigation and flood moderation benefits, apart from socio-economic development of the entire region by providing employment opportunities and boosting tourism.

    TRANSPORT AND MARKETING ASSISTANCE (TMA)

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in News?

    Department of Commerce of the Ministry of Commerce & Industry has notified a scheme for Transport and Marketing Assistance (TMA) for Specified Agriculture Products.

    Objectives:

    • The “Transport and Marketing Assistance” (TMA) for specified agriculture products scheme aims to provide assistance for the international component of freight and marketing of agricultural produce.
    • To mitigate disadvantage of higher cost of transportation of export of specified agriculture products due to trans-shipment. To promote brand recognition for Indian agricultural products in the specified overseas markets.
    • The scheme would be suitably included in the Foreign Trade Policy (2015-20).

    Highlights:

    • The scheme will be available for exports effected from March 1, 2019 to March 31, 2020.
    • Eligibility: All exporters, duly registered with relevant Export Promotion Council as per Foreign Trade Policy, of eligible agriculture products shall be covered under this scheme.
    • The assistance, at notified rates, will be available for export of eligible agriculture products to the permissible countries, as specified from time to time. The assistance shall be admissible only if payments for the exports are received in Free Foreign Exchange through normal banking channels.
    • The scheme shall be admissible for exports made through EDI (Electronic Data Interchange) ports only.
    • The scheme covers freight and marketing assistance for export by air as well as by sea.
    • Exceptions: The assistance is available for most agricultural product exports with some exceptions such as live animals, products of animal origin, milk, cream, curd, butter, buttermilk, whey, rice, wheat, tobacco and garlic.

    SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATIONS

    Why in News?

    • Half a dozen public and private sector banks have been slapped with monetary penalties by the Reserve Bank of India for non-compliance of directions in the Swift (Society for Worldwide Interbank Financial Telecommunications) messaging system used by banks worldwide for foreign currency transfers.
    • The penalty has been levied for delay in compliance to RBI’s directives on Time-bound implementation & strengthening of SWIFT-related controls.

    Swift:

    • It is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes.
    • Under SWIFT, each financial organization has a unique code which is used to send and receive payments. SWIFT neither holds funds on its own nor manages external client accounts. SWIFT is headquartered in Belgium.

    Why does it Matter?

    • Messages sent by SWIFT’s customers are authenticated using its specialised security and identification technology.
    • Encryption is added as the messages leave the customer environment and enter the SWIFT Environment.
    • Messages remain in the protected SWIFT environment, subject to all its confidentiality and integrity commitments, throughout the transmission process while they are transmitted to the operating centres (OPCs) where they are processed — until they are safely delivered to the receiver.

    MAINAMATI MAITREE EXERCISE 2019 CONCLUDED BETWEEN INDIAN BSF AND BGB NATIONAL COMMON MOBILITY CARD

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in News?

    The Indigenous Automatic Fare Collection (AFC) System based on One Nation One Card Model I.e. National Common Mobility Card (NCMC) is the first of its kind in India.

    Objectives:

    • To develop the vendor agnostic interoperable ecosystem for NCMC
    • Indigenous AFC System
    • Banking interface

    National Common Mobility Card:

    • These are bank issued cards on Debit/Credit/Prepaid card product platform.
    • The customer may use this single card for payments across all segments including metro, bus, suburban railways, toll, parking, smart city and retail.
    • The stored value on card supports offline transaction across all travel needs with minimal financial risk to involved stakeholders.
    • The service area feature of this card supports operator specific applications e.g. monthly passes, season tickets etc.
    • It is developed by National Payment Corporation of India in association with the Ministry of Housing & Urban Affairs (MoHUA).
    • India’s First Indigenously Developed Payment Eco-system for transport consisting of NCMC Card, SWEEKAR (Swachalit Kiraya: Automatic Fare Collection System) and SWAGAT (Swachalit Gate) is based on NCMC Standards

    IRCTC LAUNCHES PAYMENT AGGREGATOR IRCTC IPAY

    Why in News?

    Indian Railway Catering and Tourism Corporation (IRCTC) has launched its own payment aggregator system, IRCTC iPay.
    This is a step towards promoting the Government’s Digital India initiative.

    IRCTC iPay:

    • IRCTC iPay is a prepaid card cum wallet.
    • With IRCTC iPay, IRCTC will have full control of the payment system because of its direct relationship with acquiring banks, card networks and other partners.
    • This direct and full control will eventually lead to a substantial reduction in payment failures. Further in case of an online transaction is unsuccessful or some other error occurs, IRCTC can directly get in touch with the bank instead of relying on an intermediate source which usually delays the process. With IRCTC iPay passengers will not need any third-party platforms as the IRCTC iPay provides payment options like credit card, debit card, UPI-Unified Payment Interface and International Card.
    • The exclusive digital payment gateway will provide an improved online digital payment convenience and ease of doing business to passengers availing online travel-related services through the IRCTC website.

    Assam to be oil exporting hub

    GS 3: Economy |Energy Infrastructure

    Why in News?

    Assam is slated to soon become one of India’s major oil exporting hubs catering to the eastern neighbours of the country and Southeast Asia.

    Highlights:

    • There are slew of projects for augmenting oil exploration, refining and transportation capacity in various stages of completion in the region.
    • Eight of these projects under Hydrocarbon Vision 2030 for north-east India.
    • Assam will soon send petrol and diesel to Bangladesh, Bhutan, Myanmar, and Southeast Asian countries.

    Objectives:

    • To leverage the region’s hydrocarbon potential, enhance access to clean fuels, improve availability of petroleum products, facilitate economic development and to link common people to the economic activities in this sector.
    • The states covered include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. The Ministry also undertook series of consultations with the state governments while drafting the vision document.

    Hydrocarbon Vision 2030 for north-east India:

    • The Vision Document has been a focused and consultative exercise to develop a common and shared aspiration for benefiting people of the north east region.
    • With involvement and inputs of various stakeholders, industry players and state governments, the Vision document not only includes the ambition for the region but also an actionable roadmap.
    • The policy focus areas include moderation in light of specific terrain and weather conditions of the region coupled with ensuring fund planning for new projects.
    • In projects, the focus is on pipeline connectivity for carrying liquefied petroleum gas (LPG), natural gas, and petroleum products, oil and lubricants (POL); building refineries and import links; and development of compressed natural gas (CNG) highways and city gas distribution network.
    • The production side emphases include production enhancement contracts, technology deployment and fast-track clearance, and development of service provider hubs.
    • The Vision rests on five pillars;
      • People
      • Policy
      • Partnership
      • Projects
      • Production

    Construction Technology India-2019 Expo-Cum-Conference

    GS 3: Economy | Development- Infrastructure

    Why in News?

    Construction Technology India is being organised to identify proven, innovative and globally established technologies for use in the Indian context.

    Highlights:

    • The Ministry of Housing and Urban Affairs, Government of India has conceptualized a Global Housing Technology Challenge – India (GHTC- India) which aims to identify and mainstream a basket of innovative technologies from across the globe, that are sustainable and disaster-resilient.
    • Pradhan Mantri Awas Yojana – Urban (PMAY-U) targets the construction of 1 Crore housing units by 2022.
    • Within the ambit of the overarching PMAY (U), a Technology Sub-Mission (TSM) was set up, to facilitate the adoption of innovative, sustainable, green and disaster-resilient technologies and building materials for low-cost, speedier and quality construction of houses.
    • The GHTC-India platform aspires to provide an eco-system for the adoption of innovative technologies in the housing construction sector in a holistic manner.

    Benefits of the Expo-Cum-Conference:

    • Potential technology providers can benefit from the support provided by Affordable Sustainable Housing Accelerators- India (ASHA-India) initiative.
    • Proven technologies which are identified during CTI – 2019 will be further invited to design and build lighthouse projects.
    • GHTC-India will also contribute substantially towards achieving the Sustainable Development Goals (SDGs) as laid out by the United Nations (UN), the New Urban Agenda and the Paris Climate Accord to which India is a signatory and similar international commitments by gradually migrating from inefficient & carbon intensive processes to cleaner and compliant options.
    • GHTC-India will bring about a paradigm shift in the manner in which construction is not only done but also received and perceived in the country.

    SUPER-EFFICIENT AIR CONDITIONING PROGRAMME LAUNCHED BY EESL

    GS 3: Economy | Development – Energy

    Why in News?

    • Energy Efficiency Services Limited (EESL), a joint venture of four National Public Sector Enterprises under Ministry of Power, Government of India, launched its Super-Efficient Air Conditioning Programme for residential and institutional consumers in the BSES area.
    • The Super-Efficient ACs Super-Efficient Air Conditioning programme launched by EESL to be 40% more efficient than current 3-star technology.
    • Besides promoting energy efficiency, the Super-Efficient AC programme will also help to reduce the peak power demand enabling the two organisations to harness synergies to promote energy security and sustainability.
    • The programme directly addresses the prospect of the nearly four-fold increase in energy consumption from buildings and cooling appliances in India by 2032, while also addressing goals of India’s Cooling Action Plan and Hydrochlorofluro carbons Phase Out Management Plan, enabling achievement of India’s targets under the Kigali and Paris Agreements.

    Highlights:

    • EESL will conduct all activities related to source, supply, complaint management and redressal, and fulfilment of warranty obligations for the products.
    • Applying its proven business model of demand aggregation, EESL will mobilize the capital of INR 150 crores for the programme while redeeming its investment through upfront payments for the super-efficient ACs from customers.
    • EESL has initiated the procurement process of super-efficient ACs, thereby capitalising on opportunities for leveraging economies of scale through demand aggregation, and so reducing the cost of this superior green technology to consumers.
    • EESL’s investment in the programme is partially supported by a grant from the Global
      Environment Facility (GEF).
    • Further, Asian Development Bank (ADB) is providing necessary grant support and loan while United Nations Environment (UNEP) is providing technical assistance support to the Super-Efficient AC programme.

    EESLmart.in:

    During the event, EESL also launched its e-Commerce website, in, through which customers of BRPL, and of other DISCOMs that partner with EESL in future, can purchase the super-efficient air conditioners. With a focus on increasing consumer adoption of, and access to, energy efficient technologies, the website will also allow customers to purchase other appliances distributed by EESL, including induction cookstoves and products sold under the UJALA programme – 9-Watt LED bulbs, LED luminaries, and BEE 5-star rated energy efficient fans.

    Global Environment Facility (GEF):

    • GEF is an independent financing mechanism that was established on the eve of the 1992 Rio Earth Summit to address global environmental issues.
    • The GEF is an international partnership of 183 countries, international institutions, civil society organizations and the private sector.

    STRATEGIC PETROLEUM RESERVES

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    In a boost to energy security of the country, PM recently dedicated to the nation, 1.33 MMT Visakhapatnam Strategic Petroleum Reserve (SPR) facility of Indian Strategic Petroleum Reserve Limited (ISPRL).

    Highlights:

    • The Facility has the largest underground storage compartment in the country. The Government of India had decided to set up 5 million metric tons (MMT) of strategic crude oil storages at three locations namely, Visakhapatnam, Mangalore and Padur (near Udupi). These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and the reserves would serve as a cushion during any external supply disruptions.
    • In the 2017-18 budget, it was announced that two more such caverns will be set up Chandikhole in Jajpur district of Odisha and Bikaner in Rajasthan as part of the second phase.
    • The construction of the Strategic Crude Oil Storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.

    HIGHLIGHTS OF INTERIM BUDGET 2019-2020

    GS 3: Economy

    Why in News?

    The key highlights of the Interim Budget 2019-20 presented by the Union Minister for Finance.

    Farmers:

    • 12 crore small and marginal farmers to be provided with assured yearly income of Rs. 6000 per annum under PM-KISAN. Outlay of Rs. 75,000 crore for FY 2019-20 with additional Rs. 20,000 crore in RE 2018-19.
    • Outlay for Rashtriya Gokul mission increased to Rs 750 crore.
    • Rashtriya Kamdhenu Ayog to be setup for sustainable genetic up-gradation of the Cow resources
    • New separate Department of Fisheries for welfare of 1.5 crore fishermen
    • 2% interest subvention to Farmers for Animal husbandry and Fisheries activities; additional 3% in case of timely repayment.
    • Interest subvention of 2% during disaster will now be provided for the entire period of reschedulement of loan.

    Labour:

    • Pradhan Mantri Shram Yogi Maandhan scheme to ensure fixed monthly pension to 10 crore unorganized sector workers
    • Rs 3000 per month after 60 years of age with an affordable contribution of only Rs 100/55 per month

    Health:

    22nd AIIMS to be setup in Haryana

    Direct Tax proposals:

  • Income upto Rs. 5 lakh exempted from Income Tax
  • More than Rs. 23,000 crore tax relief to 3 crore middle class taxpayers
  • Standard Deduction to be raised to Rs. 50,000 from Rs. 40,000
  • TDS threshold to be raised from Rs. 10,000 to Rs. 40,000 on interest earned on bank/post office deposits. Existing rates of income tax to continue
  • Tax exempted on notional rent on a second self-occupied house. Housing and real estate sector to get boost-
  • TDS threshold for deduction of tax on rent to be increased from Rs. 1,80,000 to Rs. 2,40,000
  • Benefit of rollover of capital gains increased from investment in one residential house to two residential houses for capital gains up to Rs. 2 crores.
  • Tax benefits for affordable housing extended till 31st March, 2020 under Section 80-IBA of Income Tax Act.
  • Tax exemption period on notional rent, on unsold inventories, extended from one year to two years
  • Fiscal Programme:

    • Fiscal deficit pegged at 3.4% of GDP for 2019-20
    • Target of 3% of fiscal deficit to be achieved by 2020-21.
    • Fiscal deficit brought down to 3.4% in 2018-19 RE from almost 6% seven years ago

    Poor and Backward Classes:

    • 25% additional seats in educational institutions to meet the 10% reservation for the poor
    • Targeted expenditure to bridge urban-rural divide & to improve quality of life in villages
    • All willing households to be provided electricity connections by March 2019

    North East:

    • Allocation to be increased by 21% to Rs. 58,166 crores in 2019-20 BE over 2018-19 BE
    • Arunachal Pradesh came on the air map recently. Meghalaya, Tripura and Mizoram came
      on India’s rail map for the first time.
    • Container cargo movement through improved navigation capacity of the Brahmaputra

    Vulnerable sections:

    A new committee under NITI Ayog to identify all the remaining De-notified nomadic and semi-Nomadic tribes. New Welfare development Board under Ministry of social justice and empowerment for development and welfare of De-notified nomadic and semi nomadic tribes

    Defence:

    Defence budget to cross Rs 3,00,000 crore for the first time ever

    Railways:

    • Capital support of Rs.64,587 crore proposed in 2019-20 (BE) from the budget
    • Overall capital expenditure programme to be of Rs. 1,58,658 crores
    • Operating Ratio expected to improve from 98.4% in 2017-18
    • to 96.2% in 2018-19 (RE) and
    • to 95% in 2019- 20 (BE)

    Entertainment Industry:

    • Indian filmmakers to get access to Single window clearance as well for ease of shooting films. Regulatory provisions to rely more on self-declaration
    • To introduce anti-camcording provisions in the Cinematograph Act to control piracy

    MSME and Traders:

    • 2% interest subvention on an incremental loan of Rs 1 crore for GST registered SMEs
    • Atleast 3% of the 25% sourcing for the Government undertakings will be from women owned SMEs. Renewed Focus on Internal trade; DIPP renamed to Department for Promotion of Industries and Internal trade

    Digital Villages:

    The Government to make 1 lakh villages into Digital Villages over next five years

    Other Announcement(s):

    • New National Artificial Intelligence portal to support National Program on Artificial Intelligence

      Key message in the Interim Budget 2019-20:

    • Moving towards realizing a ‘New India’ by 2022 –
    • Clean and healthy India with universal access to toilets, water and electricity to all. An India where Farmers’ income would have doubled Ample opportunities to youth and women to fulfil their dreams.
    • An India free from terrorism, communalism, casteism, corruption and nepotism
    • Vision for the next Decade:
    • Foundation for India’s growth and development laid in the past 5 years
    • Poised to become a Five Trillion Dollar Economy in the next five years
    • Aspire to become a Ten Trillion Dollar Economy in the next 8 years thereafter
    • Ten dimensions of Vision for India of 2030:
    • India would be a modern, technology driven, high growth, equitable and transparent society.
    • To build physical as well as social infrastructure and to provide ease of living
    • To create a Digital India, digitize government processes with leaders from youth
    • Making India pollution free by leading transport revolution with Electric Vehicles and focus on Renewables
    • Expanding rural industrialisation using modern digital technologies to generate massive employment
    • Clean Rivers, safe drinking water to all Indians and efficient use of water through micro-irrigation
    • Besides scaling up of Sagarmala, Coastline and Ocean waters powering India’s
      development and growth
    • Aim at our space programme – Gaganyaan, India becoming the launch-pad of satellites for the World and placing an Indian astronaut into space by 2022
    • Making India self-sufficient in food, exporting to the world to meet their food needs and producing food in the most organic way
    • A healthy India via Ayushman Bharat with women having equal rights and concern for their safety and empowerment
    • Transforming India into a Minimum Government Maximum Governance nation with pro- active and responsible bureaucracy

    20% LIMIT ON INVESTMENTS BY FPIS IN CORPORATE BONDS LIFTED BY RBI

    GS 3: Economy

    Why in News?

    The Reserve Bank of India (RBI) has withdrawn the earlier order which stipulated a 20% limit on investments by FPIs in Corporate Bonds.

    Highlights:

    • During the review of the FPI investment in corporate debt in April 2018, the limit was introduced to incentivize the FPIs to maintain a portfolio of assets.
    • However, the market feedback suggested that foreign portfolio investors (FPIs) have been constrained by this stipulation.
    • As a result, to encourage a wider spectrum of investors to access the Indian corporate debt market, RBI has decided to withdraw the 20% limit on investments by FPIs in Corporate Bonds.

    Foreign Portfolio Investment (FPI):

    • FPI consists of securities and other financial assets passively held by foreign investors.
    • FPI does not provide the investor with direct ownership of financial assets.
    • In India, FPIs are allowed to invest in various debt market instruments such as government bonds, treasury bills, state development loans (SDLs) and corporate bonds, but with certain restrictions and limits.
    • FPI is part of a country’s capital account and is listed on its balance of payments (BOP).

    FPI vs FDI FPI:

    • FPI allows the investor to purchase stocks, bonds or other financial assets in a foreign country and the investor does not actively manage investments or companies that issue investment.

    • Also, the investor does not have control over securities or business.
    • FPI is more liquid and less risky than FDI.

    FDI:

    • In FDI, the investor has a direct business interest in the entity into which the investment is made.
    • The investor controls his monetary investments and actively manages the company into which the investments are made.

    CONFERENCE ON THE FUTURE OF INDIAN BANKING

    GS 3: Economy

    Why in News?

    NITI Aayog co-hosted a conference on “The Future of Indian Banking” with the
    Foundation for Economic Growth and Welfare (EGROW Foundation).

    Objectives:

    The conference aimed to increase and elevate the discourse on the banking sector in India, and help develop insights to inform the continued evolution of the Indian banking sector for optimally supporting the growing credit needs of the Indian economy.

    Highlights:

    • Technology has become critically important for banking already and will continue to become more important in future. This will serve to bring banking closer to the customer,including those in rural areas, and also bring tremendous efficiencies with greater speed of service at much lower cost.
    • Appropriate skilling of banking human resources is necessary to keep pace with best credit practices and new technology-based banking paradigm. In addition, banking staff needs to be trained to prepare for a larger role of banking in expanding the Indian economy.
    • The banking industry has to be continuously prepared for fraud and rising cyber security risks.
    • The banking industry requires a suitable vigilance mechanism for trustworthy banking but with a clear mandate to distinguish between deliberate action, criminal negligence, error in judgment or unforeseeable business risk.
    • There may be a need to think again in terms of specialised and sector based banking.
    • Public sector banks have consistently supported social banking, unlike private and foreign banks. Public sector banks should continue to do so.
    • To compete effectively globally there is a need for bigger banks in India.
    • There is a need for more research on banking sector issues, specific to the Indian context

    E-COCOON APP

    GS 3: Economy | Infrastructure

    Why in News?

    A mobile application e-cocoon was launched for quality certification in silkworm seed sector.

    Highlights:

    • It will help quality certification in silk worm sector.
    • The application will be used by the Seed Analysts and Seed Officers nominated under Central Seed Act for system and product certification through real time reporting.
    • India is the second largest producer of silk after China and the largest consumer of silk. India’s silk production capacity is expected to reach about 38,500 tonnes by 2020 from the current level of 32,000 tonnes.

    NATIONAL PRODUCTIVITY WEEK

    GS 3: Economy | Issues relating to planning, mobilization of resources

    Why in News?

    • National Productivity Council (NPC) is celebrating its 61st Foundation Day on 12th
      February with the theme “Circular Economy for Productivity & Sustainability”.
    • NPC observes foundation day as Productivity Day and the National Productivity Week.

    Circular Economy:

    • A circular economy is an economic system aimed at minimising waste and making the most of resources.
    • This regenerative approach is in contrast to the traditional linear economy, which has a
      ‘take, make, dispose’ model of production.
    • In a circular system resource input and waste, emission, and energy leakage are minimized by slowing, closing, and narrowing energy and material loops.

    GEMS AND JEWELLERY DOMESTIC COUNCIL

    GS 3: Economy

    Why in News?

    An Ad-hoc National Committee of Domestic Council for Gems and Jewellery consisting 14 Members representing various associations of Gems and Jewellery Sector has been constituted to draft Memorandum and Article of Association and other Rules/Bye-laws of the domestic council.

    Significance of the council:

    It is envisaged that the domestic industry would be benefited from such a representative body which would be the forum for highlighting the issues and concerns of the industry that require redressal through policy measures

    Highlights:

    • To encourage and boost domestic gems and jewellery sector
    • Establishment of Special Notified Zone (SNZ)
    • Setting up of Common Facility Centres for gem and jewellery sector
    • Announcement of separate ITC HS Code for lab-grown diamonds
    • Providing financial assistance for participation in international fairs, organizing buyer- seller meets, creation of export related infrastructure, etc.

    LEAST AVAILABLE DEPTH INFORMATION SYSTEM (LADIS) PORTAL

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in News?

    Moving a step ahead towards ensuring optimum use of National Waterways, the Inland Waterways Authority of India (IWAI) launched a new portal LADIS – Least Available Depth Information System.

    Least Available Depth Information System Portal:

    • IWAI has designed LADIS to facilitate the day to day operations of inland vessels plying
      on National Waterways and to avoid any hindrance in service and operation.
    • It will enhance credibility and efficiency of information sharing to achieve seamless operations on National Waterways, besides pre-empting problems that may occur during movement of vessels. LADIS will ensure that real-time data on least available depths is disseminated for ship/barge and cargo owners so that they can undertake transportation on NWs in a more planned way. The portal being hosted on IWAI’s website iwai.nic.in has been developed in-house.
    • Initially LAD information will be available for NW-1, NW-2, Indo-Bangladesh Protocol route and NW-3, along with the date of survey.

    Utility of the Portal:

    • An assured depth of waterway is required for seamless movement of vessels.
    • If real time information is made available regarding LADs in stretches of various NWs, it will help transporters by guiding them on the suitability of time of movement.

    SOUTH COAST RAILWAY (SCOR)

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in News?

    As per item 8 of Schedule 13 (Infrastructure) of the Andhra Pradesh Reorganization Act, 2014, Indian Railways was required to examine establishing a new railway zone in the successor State of Andhra Pradesh. The matter has been examined in detail in consultation with stakeholders and it has been decided to go ahead with creation of a new zone with headquarter at Visakhapatnam.

    Highlights:

    • The new zone named “South Coast Railway (SCoR)”, will comprise of existing Guntakal, Guntur and Vijayawada divisions.
    • It will be the 18th zone in the country. Waltair division shall be split into two parts. One part of Waltair division will be incorporated in the new zone i.e. in South Coast Railway and will be merged with the neighbouring Vijayawada division.
    • Remaining portion of Waltair division shall be converted into a new division with headquarter at Rayagada under East Coast Railway (ECoR).
    • South Central Railway will comprise of Hyderabad, Secunderabad and Nanded divisions.

    SECOND EDITION OF STATES’ RANKING ON STARTUP INITIATIVES

    GS 3: Economy | Development and Employment

    Why in News?

    The Department for Promotion of Industry and Internal Trade (DPIIT) has released second edition of Startup Ranking for 2019.

    States’ Start-up Ranking:

    • The DPIIT launched this exercise to rank states and UTs on the basis of measures being taken by them to promote startups, and added that it was consulting states for their ranking framework.
    • Erstwhile DIPP began this exercise from January, 2016.
    • The State Startup Ranking Framework is aimed at bringing to fore progress made by States/UTs for promoting startup ecosystem.
    • The report intends to foster competitiveness and propel the states/UTs to work proactively while facilitating states/UTs to identify learn and replicate good practices.

    2019 Framework:

    • The Ranking Framework 2019 comprises of 7 pillars and 30 action points.
    • DPIIT has prepared the framework after several rounds of consultation with State and UT Governments.
    • DPIIT also proposes to recognise States and UTs for their exemplary performance in seven pillars of the

    ranking framework:

     Institutional support
     Simplifying regulations
     Easing public procurement
     Incubation support

    RBI TAKES 3 BANKS OFF PCA FRAMEWORK

    GS 3: Economy

    Why in News?

    The Reserve Bank of India has taken off Allahabad Bank and Corporation Bank, from the public sector, and Dhanlaxmi Bank from the private sector out of prompt and corrective action (PCA) framework.

    Highlights:

    • The banks have shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with.
    • Net NPA and leverage ratios are no longer in breach of the PCA thresholds.
    • According to norms, PCA framework gets triggered when a bank breaches one of the three risk thresholds. Crossing 6% net NPA is one of them.
    • RBI will continuously monitor the performance of these banks under various parameters.

    PCA framework:

    • RBI has issued a policy action guideline (first in December 2002 and revised in 2014 and 2017) in the form of Prompt Corrective Action (PCA) Framework if a commercial bank’s financial condition worsens below a mark.
    • The PCA framework specifies the trigger points or the level in which the RBI will intervene with corrective action.
    • This trigger points are expressed in terms of parameters for the banks.
    • The parameters of PCA:
       Capital to Risk weighted Asset Ratio (CRAR)
       Net Non-Performing Assets (NPA)
       Return on Assets (RoA)

    SELA PASS TUNNEL PROJECT

    Why in News?

    In a key move aimed at improving all weather connectivity and enabling the swift movement of Indian troops to Arunachal Pradesh bordering China, PM laid the foundation stone for the Sela Tunnel Project.

    Sela Pass Tunnel Project:

    • The tunnel covers a total distance of 12.04 kms which consist of two tunnels of 1790 metres and 475 meters.
    • It is being built at an estimated cost of ₹687 crores by the Border Roads Organisation.
    • It aims to provide all weather connectivity to Tawang in Arunachal Pradesh — an area claimed entirely by China — and other forward areas.
    • Once built it will cut travel time to Tawang by at least an hour for Indian troops stationed
      in adjoining Assam’s Tezpur town — the headquarters of the Indian army’s IV Corps.

    Strategic Importance:

    • The lack of motorable roads and rail connections in India’s northeast and Arunachal Pradesh in particular were seen as distinct disadvantages for India vis a vis China in the region.
    • Analysts had been warning of China building infrastructure including access roads right up to the Indian border that would give it a strategic advantage in any conflict with India.
    • Once completed this would result in all-weather connectivity to Tawang and forward areas and reduction in more than one hour of travelling time from Tezpur to Tawang.

    OPEN ACREAGE LICENSING POLICY (OALP)

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc. Prelims Level: Open Acreage Licensing Policy (OALP)

    Why in News?

    The ministry of petroleum and natural gas has launched the third bidding round under the Open Acreage Licensing Policy (OALP).

    OLAP:

    • It provides uniform licences for exploration and production of all forms of hydrocarbons, enabling contractors to explore conventional as well as unconventional oil and gas resources. Fields are offered under a revenue-sharing model.
    • It allows marketing and pricing freedom for crude oil and natural gas produced.
    • Under the OALP, once an explorer selects areas after evaluating the National Data Repository (NDR) and submits the EoI.
    • It is to be put up for competitive bidding and the entity offering the maximum share of oil and gas to the government is awarded the block.

    National Data Repository:

    • It has been created to provide explorers’ data on the country’s repositories, allowing them
      to choose fields according to their capabilities.
    • Data received through the National Seismic Programme, an in-depth study of 26 sedimentary basins, are continuously being added to the NDR.

    MEGA FOOD PARK AT MATHURA

    GS 3: Economy | Infrastructure

    Why in News?

    Union Minister for Food Processing Industries laid foundation stone for M/s Nandvan Mega Food Park Private Limited located in Mathura in Uttar Pradesh.

    Mega food park:

    Government of India has approved a financial assistance of 40% to set up the Mega Food Park. The facilities being created by M/s Nandvan Mega Food Park Private Limited at Central Processing Centre (CPC) of this Mega Food Park include.
     Multipurpose Cold Storage
     Individually Quick Frozen (IQF)with Frozen Storage
     Dry Warehouse
     Raw milk packaging Line
     Pulses and Grain packaging line
     Food testing lab. In addition,
     the lead promoter will also setup an Anchor Unit for Dairy Processing with plant capacity of 500 TPD

    Mega Food Park:

    • The Scheme of Mega Food Park aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximizing value addition, minimizing wastage, increasing farmers income and creating employment opportunities particularly in rural sector.
    • The Mega Food Park Scheme is based on “Cluster” approach and envisages creation of state of art support infrastructure in a well-defined agri / horticultural zone for setting up of modern food processing units in the industrial plots provided in the park with well- established supply chain.
    • Mega food park typically consists of supply chain infrastructure including collection
      centers, primary processing centers, central processing centers, cold chain and around 30-35 fully developed plots for entrepreneurs to set up food processing units.

    7 EXTRA HIGH VOLTAGE (EHV) SUB-STATIONS AND 24 LOW TENSION (LT) SUB-STATIONS AT ITANAGAR

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in news?

    The Prime Minister laid the foundation stone for 7 Extra High Voltage (EHV) Sub-stations and 24 Low Tension (LT) Sub-stations today in Itanagar, Arunachal Pradesh.

    Highlights:

    • This project is a major step towards meeting the national objectives of affordable 24X7 power to all, especially in the remote locations of Arunachal Pradesh and shall also help in bringing the per capita power consumption of the State (233 kwhr) closer to national average (1075 kWh). The project will give impetus to the inclusive growth by enhancing the consumers’ access to reliable and affordable grid connected power supply.
    • It will lead to reduction in operation of Diesel Generating Plants in Arunachal Pradesh thus bringing socio-economic and environmental benefits to the people of Arunachal Pradesh. The project will also facilitate in development of small scale/cottage industries/tourism in the region and boost economic growth by enabling supply of quality power. This project will give impetus to integration of upcoming Hydro Power Generating Plants in Arunachal Pradesh with the National Grid.
    • The project is being implemented by Power Grid Corporation of India Limited (POWERGRID) a ‘Navratna’ Company under Ministry of Power, Government of India.

    2ND PHASE OF RIVER INFORMATION SYSTEM BETWEEN FARAKKA- PATNA

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in news?

    The Union Minister of Water resources, River Development and Ganga Rejuvenation, inaugurate Phase 2 of the River Information System on National Waterway-1 (River Ganga) between Farakka and Patna and also unveil new arrangement of Navigation Lock at Farakka that would enable breeding of Hilsa fish in River Ganga and help preserve the river ecosystem.

    The River Information System (RIS) (Farakka -Patna):

    • It will enhance the swift electronic data transfer between mobile vessels and base stations on shore through advance and real-time exchange of information.
    • It is a form of vessel traffic management using next generation technology. It will help in India is a landmark in itself.
    • Under phase II, five base stations – Manihari, Bhagalpur, Munger, Barh and Hatidah and one control station have been made at Patna.
    • IWAI (Inland Waterways Authority of India) is implementing the project in three phases on NW-1. Earlier, in 2016, the first phase of RIS – on Haldia- Farakka stretch was commissioned. Work on third, Patna-Varanasi stretch is currently in progress.

    RIS:

    • RIS Services are a combination of sensors like Automated Identification system, Meteorological and Hydrological equipment and software related services designed to optimize traffic and transport processes in inland navigation. RIS works on the lines of Air Traffic Controls.
    • It aims to streamline the exchange of information between waterway operators and users.

    NATIONAL GAS GRID

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in news?

    Government has launched National Gas Grid gas pipeline project which aims to provide piped cooking gas.

    Objectives:

    • To remove regional imbalance within the country with regard to access of natural gas and provide clean and green fuel throughout the country.
    • To connect gas sources to major demand centres and ensure availability of gas to consumers in various sectors. Development of City Gas Distribution Networks in various cities for supply of CNG and PNG.

    National Gas Grid:

    • At present about 16,788 Km natural gas pipeline is operational and about 14,239 Km gas pipelines are being developed to increase the availability of natural gas across the country.
    • These pipelines have been authorized by Petroleum and Natural Gas Regulatory Board (PNGRB) and are at various stages of execution viz. Pre-Project activities/laying/testing/commissioning etc.

    Natural gas:

    • Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium.
    • Natural gas available in India can broadly be classified into two categories, viz.
       Domestic Natural Gas
       Imported Re-gasified Liquefied Natural Gas (R-LNG)

    220 KV SRINAGAR- ALUSTENG – DRASS- KARGIL – LEH TRANSMISSION LINE

    GS 3: Economy | Infrastructure: Energy

    Why in News?

    The Prime Minister dedicated the 220 kV Srinagar- Alusteng – Drass- Kargil – Leh Transmission System to the Nation today, a step that would ensure quality power supply to Ladakh round the year.

    Srinagar- Alusteng – Drass- Kargil – Leh transmission line:

    • Built at a height of around 3000-4000 meters, this approx. 335 km long transmission line has been constructed by POWERGRID.
    • In this project, the four new State-of-the-Art 220/66 kV Gas Insulated Sub-stations built at Drass, Kargil, Khaltsi and Leh will help to ensure 24×7 quality power in all weather conditions.
    • Funding provisions have been in the ratio of 95:05 (95% Govt. of India share and 5% J&K state share).

    Significance:

    • The implementation of this project was also aimed to supply power to the people of Ladakh in harsh winters and evacuation of surplus power of Kargil & Leh Hydel stations of NHPC in summers.
    • It is a flagship project of Government of India, under Prime Minister’s Reconstruction Plan for J&K ( PMRP J&K) scheme which was aimed to improve reliability & quality of power supply in Ladakh region of J&K by connecting with National Grid.
    • The project will meet the power demand of Ladakh region at economical rates.
    • This would give huge boost to the tourism sector and enhance socio-economic development of Ladakh.

    Powergrid:

    POWERGRID is one of the World’s Largest Power Transmission Utility, and has a wide network of 150,874 circuit kilometers transmission lines, with 238 Sub-stations and transformation capacity of 351,106 MVA.

    LABOUR MINISTRY NOTIFIES RULES TO ALLOW EMPLOYMENT OF WOMEN IN MINES

    GS 3: Economy | Development & Employment

    Why in News?

    The Central Government has exempted the women employed in any mine above ground and in any mine below ground from the provisions of section 46 of the Mines Act, 1952, subject to following conditions.

    Higlights:

    Rules above ground:

    The owner of a mine may deploy women between the hours of 7 pm and 6 am in the mine above ground including opencast workings;the deployment of women shall be after obtaining the written consent of the concerned woman employee;
    the women so deployed shall be provided with adequate facilities and safeguards regarding occupational safety, security and health; the deployment of women shall be subject to the framing and implementation of Standard Operating Procedures on the basis of the guidelines issued in this regard by the Chief Inspector of Mines from time to time; the deployment of women shall be in a group of not less than three in a shift.

    Rules below ground:

    The owner of a mine may deploy women between the hours of 6 am and 7 pm in technical, supervisory and managerial work where continuous presence may not be required; the deployment of women shall be after obtaining the written consent of the concerned woman employee; the women so deployed shall be provided with adequate facilities and safeguards regarding occupational safety, security and health; the deployment of women shall be subject to the framing and implementation of Standard Operating Procedures on the basis of the guidelines issued in this regard by the Chief Inspector of Mines from time to time; the deployment of women shall be in a group of not less than three.

    Why such move?

    • The Mines Act, 1952, restricted the employment of women in underground mines and also in opencast or aboveground workings of the mine during night hours between 7PM and 6AM.
    • Several women employees groups, industry and students has enrolled with various institutions pursuing mining engineering courses at degree and diploma levels.
    • They have been representing to the government at different forum that women should be provided equal employment opportunity for working in mines.

    RBI LIFTS CURBS ON THREE PSBS

    GS 3: Economy

    Why in News?

    The Reserve Bank of India (RBI) has decided to allow three public sector banks — Bank of India, Bank of Maharashtra and Oriental Bank of Commerce — to exit the Prompt Corrective Action (PCA) framework following capital infusion by the government and a decline in net non-performing asset ratio.

    Highlights:

    • These banks have provided a written commitment that they would comply with the norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis.
    • The government has assured that the capital requirements of these banks will be duly
      factored in while making bank-wise allocations during the current financial year.
    • It will boost credit growth.

    What is PCA?

  • To ensure that banks don’t go bust, RBI has put in place some trigger points to assess, monitor, control and take corrective actions on banks which are weak and troubled. The process or mechanism under which such actions are taken is known as Prompt Corrective Action, or PCA.
  • UNIVERSAL BASIC INCOME (UBI)

    GS 3: Economy

    Why in News?

    Economic Survey for the year 2016-17 has an entire chapter dedicated to the discussion on Universal Basic Income (UBI).

    Highlights:

    • Universal Basic Income is a periodic, unconditional cash transfer to every citizen in the country.
    • Here, social or economic positions of the individual are not taken into consideration.

    Main features of UBI:

    • UBI is universal in nature. It means UBI is not targeted.
    • The second feature of UBI is cash transfer instead of in-kind transfer.
    • The third feature is that UBI is unconditional. That means one need not prove his or her unemployment status or socio-economic identity to be eligible for UBI.

    How UBI works?

    • Under UBI, only those with zero income will receive the full benefits in net terms.
    • For those, who earn additional income over the basic income, the net benefits will taper off through taxation.
    • So even though the basic income is universal, only the poor will receive the full benefits.

    What UBI means to the Government?

    • There would be drastic changes in the way government spends its revenue generated from taxation and other sources.
    • Currently, Government spends its revenue on various services as well as on subsidies.
    • UBI would mean that government may move away from service delivery and empower its citizens to access services through cash transfer.

    Arguments against UBI:

    • A guaranteed minimum income might make people lazy and it breeds dependency. They may opt out of labour market.
    • There is no guarantee that the additional income will be spent on education, health etc. there are chances that the money will be spent on ‘temptation goods’ such as alcohol, tobacco, drugs etc.
    • Given the large population size, the fiscal burden on government would be high.
    • If the UBI is funded by higher taxes, especially by the indirect taxes, it will result in inflation.
    • A ‘guaranteed minimum income’ might reduce the availability of workers in some sectors
      which are necessary but unattractive and raise the wages of such works.

    REGIONAL TESTING LABORATORY OF CPRI AT NASHIK

    GS 3: Economy | Infrastructure: Energy

    Why in news?

    Union Minister of State (IC) for Power and New & Renewable Energy, Government of India laid the foundation stone of Regional testing laboratory of Central Power Research Institute (CPRI) at Nashik, Maharashtra.

    Significance:

    • Manufacturers in the western region will be greatly benefited as they can test their products close to their manufacturing units.
    • This would reduce the turnaround time and overhead cost.
    • This shall help the power utilities in the country to install reliable and quality equipment in the power system network.

    CPRI:

    • To cater to the testing needs, CPRI, Autonomous body under Ministry of Power, Govt of India serves as an Independent third party testing laboratory.
    • CPRI has been serving for the past five decades in the field of Testing and Certification, Research, Consultancy, Third Party Inspection services, Training & Vendor Analysis.

    WTO e-COMMERCE NEGOTIATIONS

    Why in News?

    India decided to stay out of the WTO e-commerce negotiations announced by about 75 members at the World Economic Forum in Davos.

    The negotiation agendas:

      Permanent moratorium on customs duties.

    • Free flow of data located on computer servers without data localization requirements.
    • Non-disclosure of source code.
    • Prohibition of forced technology transfer.

    Problems with E-commerce:

    • Highly asymmetrical space with a few dominant players having the potential to distort a level playing field.
    • Meaning of e-commerce varies from one country to the other
    • E-commerce rules are yet at nascent stage.

    India’s stand:

    Not to be part of any plurilateral talks because such initiatives strike at the very root of multilateralism. India’s huge data reserve and its impact on real economy and management of data without compromising privacy and security considerations are still in progress. RBI’s recent policy mandating data localization. Unsettled E-commerce regulations especially those related to foreign direct investment: marketplace and inventory model.

    Way forward:

    • India should manage its huge precious data resource on its own terms.
    • Status-quo on e-commerce should be maintained till developing countries understand what is at stake in the area of global e-commerce rule-making.
    • Provide weight to India similar stand on e-commerce issues at ongoing talk of RCEP.
    • China is a proponent of e-commerce negotiations both at the WTO and RCEP is another reason for India to step carefully.

    UDAN 3 SCHEME

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    The union Minister for Civil Aviation and Commerce announced the results of Phase 3 bidders under Ude Desh Ka Aam Naagrik (UDAN) Scheme.

    UDAN 3 Scheme Features:

    • Inclusion of Tourism Routes under UDAN 3 in coordination with the Ministry of Tourism.
    • Inclusion of Seaplanes for connecting Water Aerodromes.
    • Bringing in a number of routes in the North-East Region under the ambit of UDAN.

    UDAN Scheme:

    • It is an innovative scheme to develop the regional aviation market.
    • It is a market-based mechanism in which airlines bid for seat subsidies.
    • This first-of-its-kind scheme globally will create affordable yet economically viable and profitable flights on regional routes so that flying becomes affordable to the common man.
    • It envisages providing connectivity to un-served and under-served airports of the country through revival of existing air-strips and airports. The operators could seek a Viability Gap Funding (VGF) apart from getting various concessions. The scheme also provides for various benefits including no airport charges and three-year exclusivity on the routes.
    • The States have a key role under the scheme. The selection of airports where UDAN would start would be done in consultation with State Government and after confirmation of their concessions.
    • The UDAN is likely to a give a major fillip to tourism and employment generation in the hinterland.

    EAC-PM REVIEWSSTOCK OF THE STATE OF ECONOMY

    GS 3: Economy

    Why in News?

    The Economic Advisory Council to the Prime Minister (EAC-PM) had a meeting and took stock of the state of the economy.

    Challenges Identified and to be addressed:

    Amongst challenges that need to be addressed are reforms in the :

    • Agricultural sector
    • The MSME sector
    • Skill development
    • Credit issues
    • Digital payments and the banking sector reforms.

    Highlights:

    • The Council endorsed that the macro-economic fundamentals of the economy are sound, but challenged remain, several of which are structural in nature. While the prospects for world economic growth does not look very promising, particularly in the advanced economics, there is sufficient amount of growth momentum in emerging market economies.
    • India is not insulted from global developments.
    • Nevertheless, India’s growth is expected to be in the 7-7.5% range in the next few years; one of the fastest in the world. However, with reforms designed to address the structural problems, growth rates can easily be enhanced by at least 1%.

    SKILL MINISTRY STRENGTHENS JAN SHIKSHAN SANSTHANS

    GS 3: Economy | Development & Employment

    Why in News?

    The government unveiled new guidelines for Jan Shikshan Sansthans (JSS) aligning them to the National Skills Qualification Framework with an aim to providing standardised training across sectors.

    Scope of JSS:

    • Develop/Source appropriate curriculum and training modules covering vocational elements general awareness and life enrichment components.
    • Wherever possible, JSSs are encouraged to undertake training equivalent to courses designed by the Directorate of Adult Education, National Institute of Open Schooling and Director General, Employment & Training.
    • Provide training to a pool of resource persons and master trainers for conducting training as also availability of infrastructure and training – specific equipment.
    • Administer simple tests and award certificates.
    • Network with employers and industries for trainees to get suitable placements.

    Jan Shikshan Sansthan (JSS):

    • The scheme of JSS was initially launched in 1967 as Shramik Vidyapeeth, a polyvalent or multi-faceted adult education institution.
    • Formerly under the Ministry of Human Resources Development, JSS was transferred to the Ministry of Skill Development and Entrepreneurship in 2018.
    • It was aimed at improving the vocational skills and quality of life of the industrial workers and their family members as well as those persons who had been migrating from rural to urban settings.
    • Now it has challenging mandate of providing vocational skills to non-literate, neo-literates as well as school drop-outs by identifying skills that have a market in the region of their establishment.

    Benefits and progress:

    • JSS guidelines have been reformed keeping in mind the diverse stake-holders engaged in running these institutions.
    • The JSS can play an important role in bridging information asymmetry between skill training and market opportunities thereby giving an impetus to the creation of a workforce equipped in technology-driven skills.
    • By aligning JSSs to the National Skill Framework, the government aims to provide standardised training across sectors.
    • Out of the 247 active JSSs, 43 have been established across 42 Aspirational Districts identified by NITI Aayog.
    • The ministry will soon be introducing a few more in the LWE (left-wing extremism affected) regions to promote skill development of the youth in the region.
    • In the past five years, over eight lakh people have benefitted from the JSS scheme. More than 86,000 men have been registered.
    • More importantly there has been an unprecedented surge in the registration of women, with over 7 lakh registrations.
    • It further said the JSSs have helped open over 1 lakh bank accounts under Jan Dhan Yojana and mobilised around 7.5 lakh beneficiaries who were enrolled in PM Suraksha Bima Yojana.
    • With a substantial rise in establishment of more than 1 lakh entrepreneurs, JSS has successfully generated employment across various sectors.

    VANDE BHARAT EXPRESS

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in news?

    Minister of Railways announced the name “Vande Bharat Express” for Train 18, acknowledging its made-in-India status.

    Highlights:

    • This train set has been manufactured by Integral Coach Factory (ICF) in the period of 18 months under ‘Make in India’ program.
    • It can achieve high speeds (max speed of 160 kmph) due to faster acceleration & deceleration and will reduced journey time by 25% to 45%.
    • Vande Bharat Express incorporates many modern features which debut for the very first time on Indian Railways.
    • It has been provided with ‘State of the Art’ passenger amenities like On-board wifi entertainment, GPS based passenger information system, CCTVs, bio-vacuum toilets, rotating chairs in executive class, etc. at par with global standards.
    • It also has provision of Divyang-friendly facilities.
    • It will have 16 coaches with Chair Car type configuration with 2 Executive Class Chair Cars and 14 Chair Cars.
    • Further, it has intelligent braking system with power regeneration for better energy efficiency thereby making it cost, energy and environment efficient.

    AMENDMENTS TO CURRENCY SWAP ARRANGEMENT FOR SAARC NATIONS

    GS 3: Economy

    Why in news?

    The Union Cabinet headed by Prime Minister Narendra Modi has approved the amendments to the framework on Currency Swap Arrangement for SAARC member countries.

    Highlights:

    • Amendments to Currency Swap Arrangement for SAARC nations approved by Cabinet
    • The amendments incorporate a standby facility of USD 400 million.
    • This stand-by facility enables India to provide a prompt response to the current request from SAARC member countries for availing the swap amount exceeding the present limit prescribed under the SAARC Swap Framework.

    SAARC Swap Framework:

    • The Framework on Currency Swap Arrangement for SAARC Member Countries was formulated with the intention to provide a line of funding for short term foreign exchange requirements or to meet the balance of payments crises till longer-term arrangements are made or the issue is resolved in the short-term itself.
    • It was approved by the Government of India on March 1st, 2012.
    • The agreement has enabled India to strengthen its ties with the SAARC countries together with improving financial stability in the region.
    • This agreement also bolsters the credibility of India among the SAARC countries.
    • Together with enhancing India’s economic influence in the region, the agreement strengthens regional integration and inter-dependence.

    GOVERNMENT TO DEVELOP AROUND 400 ABANDONED AIRSTRIPS

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in news?

    The Union Government has decided to renovate and develop around 400 abandoned airstrips across the country to strengthen air-connectivity.

    Highlights:

    • The Union Government aims to renovate and develop the abandoned airstrips as modern airports along with the respective state governments to improve air connectivity across the country. The Airports Authority of India has prepared a Memorandum of Understanding (MoU) in this regard and sent it to all the 29 states and seven Union Territories expressing its willingness to develop the unused airstrips along with the respective state governments. The first such MoU was signed with Jharkhand government to develop the abandoned airstrip at Dhalbhumgarh.
    • A modern airport at an initial investment of 100 crore rupees will be developed at Dhalbhumgarh and the first phase of the airport would be completed in 18 months.
    • The airport will benefit adjoining states like West Bengal and Odisha and help push up economic growth as well as generate employment opportunity.
    • The Dhalbhumgarh airstrip had been developed by Britishers during the World War II in Ghatsila sub-division of East Singhbhum district.
    • Besides this, the Aviation Ministry is planning to set up an airport at Jamshedpur, which is considered to be the industrial capital of Jharkhand.
    • According to estimates, there are 400 such airstrips lying abandoned across the country.

    GOVT. PLANS GODAVARI-CAUVERY INTERLINKING

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, and Railways etc.

    Why in news?

    Union Ministry for Road Transport and Highways, Shipping and Water Resources has revealed Detailed Project Report (DPR) to take the backwaters of the Godavari up to the Cauvery river in Tamil Nadu.

    Godavari-Cauvery Interlinking:

    • The DPR for the river inter-linking project has already been prepared and is in the process of being submitted to the Cabinet. It is estimated to cost ₹60,000 crore.
    • 1,100 tmcft of the backwater of the Godavari river was going into the sea and there was a dispute between Karnataka and Tamil Nadu over 45 tmcft of it.
    • To solve the crisis, the Centre has decided to link up the above rivers.
    • Once the Cabinet gives its nod, funds will be raised from the World Bank or the Asian Development Bank.
    • It will mitigate the scarcity of water in A.P., Karnataka, and Tamil Nadu.
    • It was former PM Vajpayee who conceived the idea of linking rivers from Ganga to Cauvery.

    Significance:

    The backwaters will be carried through Krishna and Penna using steel pipes instead of developing canals en route as suggested by a non-resident engineer from Andhra Pradesh.By doing so, wastage of water from canals could be prevented and overall cost reduced.

    INDUSTRIAL OUTLOOK SURVEY (IOS) AND SERVICES AND INFRASTRUCTURE OUTLOOK SURVEY (SIOS)

    GS 3: Economy | Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

    Why in News?

    • RBI starts Industrial Outlook Survey (IOS) and Services and Infrastructure Outlook Survey (SIOS).
    • The Reserve Bank of India (RBI) has initiated two quarterly surveys namely, “Industrial Outlook Survey (IOS)” and “Services and Infrastructure Outlook Survey (SIOS)”. The two quarterly surveys aim to examine the current situation including the job scenario in India’s manufacturing, services and infrastructure sectors.

    Industrial Outlook Survey (IOS):

    • The Industrial Outlook Survey (IOS) is based on qualitative responses on a set of indicators pertaining to demand conditions, financial conditions, employment conditions and the price situation.
    • The IOS would provide useful insight into the performance of the manufacturing sector.
    • The IOS would be undertaken by Hansa Research Group Pvt Ltd.

    Services and Infrastructure Outlook Survey (SIOS):

    • The Services and Infrastructure Outlook Survey (SIOS) seeks an assessment of the business situation for the current quarter (January-March 2019) from selected companies in the services and infrastructure sectors in India, and their outlook for the ensuing quarter (April-June 2019).
    • The SIOS would be undertaken by Spectrum Planning India Ltd.

    GANGAJAL PROJECT

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in news?

    Giving a major push to develop and enhance Tourism infrastructure in Agra, the Prime Minister Shri Narendra Modi launched a series of development projects worth Rs. 2900 Crores for the Agra city and the adjoining areas.

    Gangajal Project:

    • It aims to bring 140 cusecs of Ganga Water to Agra which will help meet the drinking water demands in the city.
    • It will provide Agra with better and more assured water supply, at an estimated cost of Rs. 2880 crores.
    • The project was launched in 2005 in collaboration with the Japan International Cooperation Agency and was scheduled to be completed by March 2012 but the project has missed several deadlines.
    • Under the Gangajal project, Agra will get 140 cusec water supply per day from Palra headworks in Bulandshahr’s Upper Ganga canal.

    NEW DISCOVERED SMALL FIELD BID ROUND POLICY

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc

    Why in news?

    Gross estimated revenue of Rs.45000 crore is anticipated under Discovered Small Field Bid Round-II from 25 Contract Areas; and Rs.9000 crore under Discovered Small Field Bid Round-I from 30 Contract Areas. The gross estimated revenue is based on estimates of oil and gas hydrocarbon in place reserves, assumption in terms of hydrocarbon recovery factor, hydrocarbon sale price, etc., from 25 Contract Areas considering project life of 15 years.

    DSF policy:

    The new DSF policy is based on the principle of ‘ease of doing businesses’. This policy is an outcome of a long consultation process between the government and the industry.

    Key highlights of the DSF policy:

    • Revenue sharing with the government instead of the existing cost-recovery based production sharing
    • Freedom of marketing and pricing for both oil as well as gas
    • Permission to explore all kinds of hydrocarbons such as shale, tight rock, coalbed methane (CBM), etc
    • International competitive bidding with no mandatory national oil companies (NOC) participation
    • Prior technical experience not required for bidders
    • No restrictions on exploration activities during the contract period
    • Favourable royalty rate and waiver of oil cess
    • Customs duty on goods and services imported for petroleum operations not to be imposed
    • Royalty on crude oil is 12.5% and 10% for on land and shallow water respectively. Royalty on natural gas is 10% for both on land as well as shallow-water blocks. Royalty on crude oil and natural gas for deep water blocks is 5% for the initial seven years and thereafter the rate will be 10%.

    INDIA-MYANMAR-THAILAND TRILATERAL HIGHWAY

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in news?

    • The 1360 km long highway project is an initiative pertaining to India, Myanmar and Thailand.
    • India is undertaking construction of two sections of the Trilateral Highway in Myanmar namely, Construction of 120.74 km Kalewa-Yagyi road section, and Construction of 69 bridges along with the approach road on the 149.70 km Tamu-Kyigone-Kalewa (TKK) road section.
    • The works on both these sections were awarded on Engineering, Procurement and Construction (EPC) mode in May 2018.
    • The scheduled time for completion of both the projects is three years from the date of commencement at the project site by the executing agency.
    • The above mentioned both the projects are being funded by Government of India under grant assistance to the Government of Myanmar.
    • A Motor Vehicles Agreement along with protocols for regulating and facilitating movement of cargo and passenger vehicular traffic is under inter-governmental negotiations between India, Myanmar and Thailand.

    Utility of the Project:

    • The road is expected to boost trade and commerce in the ASEAN–India Free Trade Area, as well as with the rest of Southeast Asia.
    • India has also proposed extending the highway to Cambodia, Laos and Vietnam.

    EPC Model:

    • Under this system the entire project is funded by the government.
    • The EPC entails the contractor build the project by designing, installing and procuring necessary labour and land to construct the infrastructure, either directly or by subcontracting.
    • Under EPC model the contractor is legally responsible to complete the project under some fixed predetermined timeline and may also involve scope for penalty in case of time overrun.
    • In EPC as all the clearances, land acquisition and regulatory norms have to be completed by the government itself and the private players do not have to get itself involved in these time taking procedures.

    WORLD ECONOMIC SITUATION AND PROSPECTS 2019

    GS 3: Economy | Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

    Why in news?

    The United Nations report “World Economic Situation and Prospects 2019” discusses various challenges in attaining the Sustainable Development Goals.

    The challenges:

    • Economic growth is uneven and is failing to reach where it is most needed.
    • Per capita incomes would stagnate or grow only marginally in 2019 in several parts of Africa, Western Asia, Latin America and the Caribbean.
    • Even where the per capita growth is strong, economic activity is driven by core industrial and urban regions, leaving peripheral and rural areas behind.
    • The report notes that eradicating poverty by 2030 will require both double-digit growth in Africa and steep reductions in income inequality which seems a distant possibility in the current scenario.
    • The confluence of risks is clouding and it may severely disrupt economic activity and inflict significant damage on longer-term development prospects.
    • As the world experiences an increasing number of extreme weather events, other various risks include- escalation of trade policy disputes; financial instabilities linked to elevated levels of debt; and rising climate risks.
    • The report notes that the simultaneous appearance of several important risks endangers efforts to achieve the 2030 Agenda for Sustainable Development containing 17 specific goals to promote prosperity and social well-being while protecting the environment.

    RENUKAJI MULTIPURPOSE DAM PROJECT

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    An agreement for Renukaji Dam Multipurpose Project will be signed among six states-Uttar Pradesh, Haryana, Himachal Pradesh, Delhi, Rajasthan and Uttarakhand.

    Renukaji Multipurpose Dam Project:

    • Three storage projects are proposed to be constructed on the river Yamuna and two of its tributaries – Tons and Giri in the hilly regions of Uttarakhand and Himachal Pradesh of Upper Yamuna Basin. These include Lakhwar project on river Yamuna in Uttarakhand, Kishau on river Tons in Uttarakhand and Himachal Pradesh and Renukaji on river Giri in Himachal Pradesh.
    • These three projects were identified as National Projects in 2008 under which 90% funding of the cost of irrigation & drinking water component will be provided by the Govt. of India as central assistance and the rest 10% cost of the irrigation and drinking water component will be borne by the beneficiary states.

    Significance:

    After the construction of the said dam, the flow of river Giri will increase about 110% which will meet the drinking water needs of Delhi & other basin states up to some extent in lean period. Stored water of Renukaji Dam will be used by UP, Haryana & NCT of Delhi from Hathnikund Barrage, by NCT of Delhi from Wazirabad Barrage and by UP, Haryana and Rajasthan from Okhla Barrage.

    “ONE FAMILY ONE JOB” SCHEME

    GS 3: Economy | Development & Employment

    Why in News?

    Sikkim has recently launched the ‘One Family One Job’ scheme which entitles one government job for every family in the state.

    Scheme – Highlights:

    • The scheme envisions employment to a member of every family which does not have a government job in the state. Under this scheme, all loan debts in the farming and agriculture sector would be revoked.
    • At present recruitments are being made for Group C and Group D posts in 12 government departments. The letters were awarded only to members of those families which do not have a government job at present.
    • The task of providing employment was entrusted to the Department of Personnel.
    • Over 25,000 already employed but unregularised government employees would also be subsequently regularized within 2019 according to their seniority.
    • Sikkim has become the first state in the country to carry out such an exclusive programme for the people who would now be entitled to state government employee benifits.
    • Sikkim was the only state that earmarks 70 per cent of its revenues towards salaries for state government employees. As of now, the state government has over 1 lakh regularised employees on its rolls from a population of just 6.4 lakh.
    • Sikkim is also the only state in the country that gives the highest salaries to state government employees.

    FREIGHT SUBSIDY SCHEME (FSS) 2013

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc

    Why in News?

    In order to facilitate the process of industrialization in hilly, remote and inaccessible areas, transport incentive is provided to:

    • The states of North Eastern Region (including Sikkim) under North Eastern Industrial Development Scheme (NEIDS) – 2017,
    • Jammu & Kashmir under Industrial Development Scheme – 2017
    • Lakshadweep and A&N Islands under Lakshadweep and Andaman & Nicobar Island Development Scheme – 2018

    Highlights:

    • Under these schemes, all eligible industrial units can avail incentive on transportation of only finished goods through Railways or the Railway Public Sector Undertakings, Inland Waterways or scheduled airline (shipping for Andaman & Nicobar and Lakshadweep islands also) for a period of five years from the date of commencement of commercial production / operation.
    • It is applicable to all industrial units (barring Plantations, Fly Ash, Refineries, Power generating units, Coke, including Calcined Petroleum Coke industry and the units producing tobacco and manufactured tobacco substitutes, pan masala and plastic carry bags of less than 20 microns), both in public and private sectors irrespective of their size.
    • Under the scheme, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production.
    • The Freight Subsidy Scheme (FSS), 2013 has been discontinued with effect from 22.11.2016. However, the industrial units registered under these schemes during their currency, are eligible for the benefits of the scheme for the period specified therein.

    REWEAVE – E-COMMERCE PLATFORM

    GS 3: Economy

    Why in news?

    Microsoft India launched a new e-commerce platform ‘re-weave.in’ under project ReWeave to aid handloom weavers.

    Highlights:

    • The e-commerce platform would connect artisans to the buyers directly enabling them to expand to newer customers and markets.
    • It will provide a platform to showcase signature collections created by the weaver communities, showcase traditional designs and products created from natural dyes to a broad set of customers.
    • The e-commerce platform would aid weavers in increasing their income and earning a sustainable livelihood
    • Project ReWeave was initiated by Microsoft India (R&D) Pvt. Limited in 2016 as part of its Philanthropies efforts, with the aim to revive the handloom weaving ecosystem in India.
    • Under the initiative, Microsoft is working closely with NGO partner, Chaitanya Bharathi to provide infrastructure, financing and marketing support to help weaver families keep their weaving traditions alive by sustaining livelihoods.

    SAKHI ONE STOP CENTRE

    GS 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these scheme

    Why in news?

    More than 1,90,000 victims across the country have accessed the OSCs, sponsored by the Centre under the Nirbhaya fund .

    Sakhi One Stop Centre:

    • Ministry of WCD has formulated a Centrally Sponsored Scheme for setting up One Stop Centre, a sub – scheme of Umbrella Scheme for National Mission for Empowerment of women including Indira Gandhi Mattritav Sahyaog Yojana.
    • It is a scheme sponsored under the Nirbhaya fund set up for safety of women after the gang rape of a paramedical student in December 2012 in New Delhi.
    • It being established across the country to provide integrated support and assistance under one roof to women affected by violence, both in private and public spaces in phased manner.
    • The scheme envisages an OSC for medical, legal, psychological and police help for victims of gender-based abuse such as sexual assault or domestic violence.
    • So far, 234 OSCs have been set up and 485 more are in the pipeline to cover all 719 districts in the country.
    • According to government data shared before Parliament, more than 1,90,000 women across the country have accessed these centres.

    Functioning of the OSCs:

    • When a victim of domestic violence comes here, she is asked what relief she wants.
    • If she wants a compromise, the husband is called and both of them are counselled.
    • After this, she is asked to sign on an agreement letter and is sent back to her home and a follow-up is conducted.
    • If a rape victim comes to the centre , it is first ascertained whether she is speaking the truth.
    • First the centre in-charge speaks to her and then a counsellor cross-examines her.

    INDIA SET TO BECOME THIRD-LARGEST CONSUMER MARKET: WEF

    GS 3: Economy

    Why in news?

    • India is set to become the third-largest consumer market behind only the US and China and consumer spending in India is expected to grow from USD 1.5 trillion at present to nearly USD 6 trillion by 2030, as per a World Economic Forum report that released on January 9, 2019.
    • The report titled ‘Future of Consumption in Fast-Growth Consumer Market – India’ noted that growth of the middle class will lift nearly 25 million households out of poverty in India.

    Highlights:

    • According to the World Economic Forum (WEF), with an annual GDP growth rate of 7.5 per cent, India is currently the world’s sixth-largest economy.
    • As per the report, growth in income will transform India from a “bottom of the pyramid economy” to a middle class-led one.
    • By 2030, domestic private consumption, which accounts for 60 per cent of the country’s GDP, is expected to develop into a USD 6-trillion growth opportunity.
    • The report stated that if realised, this would make India’s consumer market the third-largest in the world, behind the US and China.
    • The future consumption growth is expected to come from rich and densely populated cities and the thousands of developed rural towns.
    • The report stated that India’s top 40 cities will form a USD 1.5 trillion opportunity by 2030, many thousands of small urban towns will also drive an equally large spend in aggregate.
    • In parallel, it noted that there will be an opportunity to unlock nearly USD 1.2 trillion of spending in developed rural areas by improving infrastructure and providing access to organised and online retail.

    RBI ISSUES GUIDELINES FOR TOKENIZATION OF CARD TRANSACTIONS

    GS 3: Economy | Mobilization of resources, Banking

    Why in News?

    Reserve Bank of India has released guidelines on tokenization for various card transactions, including from debit and credit cards.

    Tokenised card transactions services:

    • RBI has given permission to offer tokenised card transactions services to all channels such as near field communication (NFC), magnetic secure transmission (MST) based contactless transactions, in-app payments, QR code-based payments or token storage mechanisms, including cloud, secure element and trusted execution environment.
    • Tokenization and de-tokenization shall be performed only by the authorised card network and recovery of original Primary Account Number (PAN) should be feasible for the authorised card network only, the release said.
    • The request for tokenization and de-tokenization should be logged by the card network and available for retrieval.
    • A customer would not have to pay any charges for availing this service.
    • At present, tokenized card transaction facility would be offered through mobile phones or tablets only and will be extended to other devices later based on experience.

    A note for Payment Networks:

    • Card networks shall get the card issuers/acquirers, their service providers and any other entity involved in payment transaction chain, certified in respect of changes done for processing tokenised card transactions by them.
    • Providing card tokenization services, authorised card payment networks shall put in place a mechanism for periodic system audit, at least annually, of all entities involved in providing card tokenisation services to customers.
    • The central bank also asked card issuers to ensure easy access to customers for reporting loss of ‘identified device’ or any other such event which may expose tokens to unauthorised usage. Registration of a card on token requestors app shall be done only with explicit customer consent through Additional Factor of Authentication (AFA), and not by way of a forced / default/automatic selection of check box, radio button.

    Tokenization:

    • Tokenisation, which aims at improving safety and security of the payment system, refers to replacement of actual card details with an unique alternate code called the ‘token’.
    • It shall be unique for a combination of card, token requestor and identified device.
    • Instead of using actual card details, this token is used to perform card transactions in contactless mode at point of sale(POS) terminals, quick response(QR) code payments.

    RBI FORMS DIGITAL PAYMENTS PANEL

    GS 3: Economy | Mobilization of resources, Banking

    Why in news?

    The RBI has constituted a high-level committee headed by former chairman of the UIDAI Nandan Nilekani to set up a robust digital payments ecosystem in the country.

    Aim:

    To undertake cross country analyses with a view to identify best practices that can be adopted in our country to accelerate digitization of the economy and financial inclusion through greater use of digital payments.

    Terms of Reference:

    • The committee has been asked to review the existing status of digitization of payments, identify gaps in the ecosystem and suggest ways to plug them.
    • The panel has to suggest a medium-term strategy for deepening digital payments, and measures to strengthen safety and security.
    • It shall submit its report within a period of 90 days from the date of its first meeting.
    • The panel has also been tasked with the responsibility of increasing customer confidence and trust while they access financial services through digital modes.

    Need for panel:

    • The promotion of digital payments has been one of the primary agendas of the government in the past four years.
    • Payments through all electronic forms such as debit and credit cards, mobile wallets, real-time gross settlement (RTGS), national electronic funds transfer (NEFT) and UPI has seen a huge rise. The newest mode of digital payments, UPI, which was launched in 2016, has witnessed an over 300% rise in transaction volumes in the last year and the growth is seen continuing in the near term.
    • A/c to National Payments Corporation of India (NPCI) , a record 620.17 million UPI transactions worth just over ₹1 trillion were conducted in December 2018.

    BHOOMI RASHI PORTAL

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc

    Why in news?

    The Ministry of Road Transport & Highways has recently launched the Bhoomi Rashi portal.

    Highlights:

    • In the past years, acquisition of land for the purpose of National Highway projects, payment of compensation to the land owners etc were done manually by physical movement of documents in the form of files.
    • However, in that procedure some constraints like delay in issuing notification, errors in the land/area details etc. were being faced. In order to overcome these issues, to cut short delays and avoid parking of public funds with the Competent Authority for Land Acquisition (CALA), Ministry has developed a web based Utility –Bhoomi Rashi to fully digitize and automate the entire process of land acquisition

    Advantages:

    • With the operation of this Portal, the land acquisition process has been expedited significantly, became error-free and more transparent and the notifications at every stage are being processed on real time basis.
    • While the physical processing of the cases usually took considerable time, ranging from weeks to even months, and there were errors whose rectification caused further delays,the processing time using this portal has been reduced to less than two weeks in a majority of cases and even a few days in some cases.

    YARN BANK SCHEME

    GS 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

    Why in News?

    To avoid fluctuation in yarn price, government has launched a Yarn Bank Scheme as one of the component of PowerTex India with effect from 01.04.2017 to 31.03.2020.

    Yarn Bank Scheme:

    • The Scheme provides interest free corpus fund up to Rs.2.00 crore to the Special Purpose Vehicle (SPV)/Consortium formed by powerloom weavers to enable them to purchase yarn at wholesale rate and give the yarn at reasonable price to the small weavers
    • It aims to avoid middleman and local supplier’s brokerage charge on sales of yarn.

    Eligibility Beneficiaries:

    • Registered Co-operative Society.
    • Trusts
    • Company set-up under the Companies Act, 1956 as amended.
    • Firm set-up under the Limited Liability Partnership Act, 2008 as amended.

    CABINET NOD TO INTEGRATED E-FILING AND CENTRALISED PROCESSING CENTRE

    GS 3: Economy | Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

    Why in news?

    The Union Cabinet has approved corpus sum for integrated e-filing and centralised processing centre-2.0, a Project-of the Income Tax Department.

    CPC-ITR 2.0:

    • The broad objectives of the project include a faster and accurate outcome for the taxpayer, first-time-right approach, enhancing the user experience at all stages, and improving taxpayer awareness and education through continuous engagement.
    • It various functionalities such as pre-filling of ITR and acceptance by taxpayer as a means to improve accuracy and to reduce refund/processing turnaround time drastically.
    • The decision will ensure horizontal equity by processing returns filed by all categories of taxpayers across the country in a consistent, uniform, rule-driven, identity blind manner.
    • This will assure fairness in tax treatment to every taxpayer irrespective of their status.
    • The proposal ensures the continuation of the IT Department’s goal towards business transformation through technology.
    • The E-filing and CPC projects have enabled end to end automation of all processes within the Department using various innovative methods to provide taxpayer services and to promote voluntary compliance.
    • At present, it takes around 63 days to deal with income tax return process but this will be completed just in one day after the success of the ‘integration project’.
    • Through digital media platform, we can provide rapid facilities to taxpayers, be it real-time processing of income tax returns, ease in filing accurate returns, resolve grievances of taxpayers and spread awareness.

    FASTags

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    To ensure easier availability of FASTags, Indian Highways Management Company Ltd. (IHMCL), a company promoted by NHAI, is signing MoUs with state-run Oil Marketing Companies (IOCL, BPC, and HPC) for issuance of FASTags through petroleum retail outlets.

    MyFASTag and IHMCLPOS:

    To further supplement the use of FASTags , IHMCL is also planning the launch of two mobile applications – MyFASTag and IHMCLPOS. These apps will enable customers to link the FASTags with their preferred bank account, recharge the FASTag via UPI platform, and also ensure that the tags are bank neutral.

    Significance:

    • These measures will eventually help NHAI cater to its commitment of providing a safe, smooth and seamless journey to commuters on National Highways.
    • The enhanced adoption of FASTag program will increase user convenience by offering seamless toll-fee payments at Plazas and thus help save time, money and fuel.
    • The online payments will improve transparency of toll transactions, reduce revenue leakages, and improve overall efficiency and commercial competitiveness.
    • IHMCL is also striving for the vision of One Nation – One Tag by aligning with various State Authorities/SPV to ensure that FASTag becomes the preferred digital payment instrument at State/Municipal Plazas.

    FASTags:

    FASTag is device that employs Radio Frequency Identification (RFID) technology for making toll payments directly from prepaid or savings account linked to it. It is affixed on the windscreen of vehicle and enables the commuter to drive through toll plazas, without stopping for cash transactions.

    SAKSHAM 2019

    GS 3: Economy | Infrastructure: Energy

    Why in News?

    ‘Saksham’, an annual high intensity one-month long people-centric mega campaign of Petroleum Conservation Research Association (PCRA) under the aegis of Ministry of Petroleum and Natural Gas was launched.

    Highlights:

    • Saksham (Sanrakshan Kshamta Mahotsav) is a campaign organised by Petroleum Conservation Research Association (PCRA) to sensitize the masses about conservation and efficient use of petroleum products which will lead towards better health and environment.
    • This campaign is aimed at showing the way forward for making a change and enhancing the conservation capabilities of people. It helps understand the need for fuel conservation and find solutions thereof.
    • The campaign seeks to promote effective utilization of petroleum products, something that will lead to environmental protection.
    • It also educates the masses on how the efficient and optimal use of energy can protect the health and the environment.

    RAILWAY SETS OUT NEW RULES FOR SECURITY CHECKS

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    Railways is planning to seal stations just like airports and passengers would have to arrive 15-20 minutes before scheduled departure of trains to complete the process of security checks.

    New Security Plan by RPF:

    • These are part of a security plan under the Integrated Security System (ISS) which was approved in 2016 to strengthen surveillance mechanism at 202 railway stations.
    • It is primarily about identifying openings and to determine how many can be closed.
    • There are areas which will be closed through permanent boundary walls, others will be manned by RPF personnel and yet others will have collapsible gates.
    • At each entry point there will be random security checks.
    • However, unlike at airports, passengers need not come hours in advance, but just 15-20 minutes ahead of their departure times to ensure that they are not delayed because of the security process.
    • Passengers will be checked randomly — every eighth or ninth passenger will undergo the process on his arrival at the station.

    Integrated Security System:

    • The ISS will comprise CCTV cameras, access control, personal and baggage screening system and bomb detection and disposal system which together provide multiple checking of passengers and baggage from the point of entry in the station premises till boarding of train.
    • The security plan envisages a layered security check where passengers will be scrutinised even before they enter the station premises to ease the pressure at stations during peak hours.
    • It will also include real-time face recognition software which will alert the RPF command centre of any known offenders.

    INDIAN BRIDGE MANAGEMENT SYSTEM (IBMS)

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    The Ministry of Road Transport & Highways has inventoried 1,72,517 bridges/structures under Indian Bridge Management System (IBMS).

    Indian Bridge Management System (IBMS):

    • The IBM System has been established to develop the data in digital form, to identify, survey and inventorize the number of bridges and other structures on National Highways.
    • It crucially aims to identify the distressed bridges which need immediate attention and to sensitize the concerned implementation agency for taking corrective measures such as repair, rehabilitation reconstruction/new construction etc.

    Inventory process for Bridge Location Number:(IBMS):

    • During inventory creation each bridge is assigned a unique identification number or National Identity Number based on the state, RTO zone and whether it is situated on an National Highway, State Highway or is a district road.
    • Then the precise location of the bridge in terms of latitude-longitude is collected through GPS and based on this, the bridge is assigned a Bridge Location Number.
    • Thereafter, engineering characteristics like the design, materials, type of bridge, its age, loading, traffic lane, length, width of carriage way etc are collected and are used to assign a Bridge Classification Number to the structure.
    • These are then used to do a structural rating of the structure on a scale of 0 to 9, and each bridge is assigned a Structural Rating Number.
    • The rating is done for each component of the structure like integral and non-integral deck, superstructure, substructure, bank and channel, structural evaluation, deck geometry, vertical clearance, waterway efficiency etc.
    • In addition to the structural rating, the bridges are also being assigned Socio-Economic Bridge Rating Number which will decide the importance of the structure in relation to its contribution to daily socio-economic activity of the area in its vicinity.

    PM inaugurates Bogibeel bridge in Assam

    Why in news?

    • Prime Minister Narendra Modi inaugurated the Bogibeel bridge in Assam on the birth anniversary of former PM Atal Bihari Vajpayee.
    •  The Bogibeel bridge will connect the south bank of the Brahmaputra river in Assam’s Dibrugarh to Silapathar in Dhemaji bordering Arunachal Pradesh.
    • The 4.9 km-long bridge on the Brahmaputra river boasts of being Asia’s second longest rail-cum-road bridge.

    Bogibeel bridge:

    •  The Bogibeel bridge is constructed at an estimated cost of Rs 5,900 crore. Due to inordinate delay in its implementation, the cost of the project escalated by 85 per cent from the sanctioned estimated cost of Rs 3,230.02 crore.
    • The bridge has a two-line railway track on the lower deck and a three-lane road on the top deck. For the first time for Indian Railways, the girder has A steel floor system for railway tracks and concrete for road.
    •  The Bogibeel bridge, which was a part of the Assam Accord and sanctioned in 1997-98, is also likely to play a crucial role in defence movement along the India-China border in Arunachal Pradesh.
    •  The bridge will reduce travel time from Assam to Arunachal Pradesh to four hours. It will also reduce the Delhi to Dibrugarh train-travel time by about three hours to 34 hours as against 37 hours presently.
    • The bridge will reduce the distance to Northeast region by 165 km, saving fuel worth Rs 10 lakh per day in the region.
    • The bridge is among the infrastructure projects planned by India to improve logistics along the border in Arunachal Pradesh.
    • The bridge and the train will be a boon for the people of Dhemaji as major hospitals, medical colleges and airport are in Dibrugarh, the third-largest city in the Northeast

    GST Council reduces GST Rates of 23 goods and services

    Why in News?

    • The Goods and Services Tax (GST) Council on December 22, 2018 slashed GST Rates for 23 commonly used goods and services. The reduced rates will come into effect from January 1, 2019.
    • The GST rate on movie tickets, costing up to Rs 100, was cut to 12 percent from 18 percent, while tickets over 100 rupees will attract 18 percent tax against 28 percent. Monitors and TV screens up to 32-inches and power banks will attract 18 percent GST, as against 28 percent earlier.
    •  With this rate rationalisation, only 28 goods are left in the highest 28 percent tax bracket. The rate rationalisation was a part of the government’s attempt to streamline GST and make it more people-friendly.

    GST slash rates:

    • From 28% to 18%:
      • Pulleys, transmission shafts and cranks, gear boxes etc., falling under HS Code 8483
      • Monitors and TVs of upto screen size of 32 inches
      • Re-treaded or used pneumatic tyres of rubber;
      • Power banks of lithium ion batteries. Lithium ion batteries are already at 18%. This will bring parity in GST rate of power bank and lithium ion battery.
      • Digital cameras and video camera recorders
      • Video game consoles and other games and sports requisites falling under HS code 9504.
    • From 28% to 5%
      • Parts and accessories for the carriages for disabled persons
      • GST rate reduction on other goods
    • From 18% to 12%:
      • Cork roughly squared or debagged
      • Articles of natural cork
      • Agglomerated cork
    • 18% to 5%
      • Marble rubble
    • 12% to 5%
      • Natural cork
      • Walking Stick
      • Fly ash Blocks
    • 12% to Nil
      • Music Books
    • 5% to Nil
      • Vegetables, (uncooked or cooked by steaming or boilinginwater), frozen, branded and put in a unit container
      • Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption.
    • Exemptions:
    • Exemption from GST on supply of gold by Nominated Agencies to exporters of article of gold Jewellery
    • Exemption from GST on proceeds received by Government from auction of gifts received by President, Prime Minister, Governor or Chief Minister of a State and public servants, the proceeds of which is used for public or charitable cause.
    • Exemption from IGST/Compensation cess on vehicles imported for temporary purposes under the Customs Convention on the Temporary importation of Private Road Vehicles (carnet de passages-en-douane).
    • Rate of 5%/18% to be applied based on transaction value of footwear
    • Uniform GST rate of 12% on Flexible Intermediate Bulk Container (FIBC) from existing 5%/12% (depending on the value)

    DIPP Announces State-Wise Startup Rankings

    Why in News?

    • The Department of Industrial Policy & Promotion (DIPP), released the much-awaited State Startup Rankings on basis of the startup policy framework that it had announced earlier this year.
    •  According to the State Startup Ranking Report, while Gujarat is rated the ‘best-performing state’, Karnataka, Rajasthan, Odisha and Kerala come in a notch below as ‘top-performing states.’
    •  The state startup ranking framework measures and compares the efforts and results of the startup initiatives and exercises undertaken by different state governments.

    States’ Start-up Ranking:

    • The DIPP launched an exercise to rank states and union territories on the basis of measures being taken by them to promote startups, and added that it was consulting states for their ranking framework.
    • DIPP began this exercise from January, 2016.
    • The State Startup Ranking Framework is aimed at bringing to fore progress made by States/UTs for promoting startup ecosystem.
    •  The report intends to foster competitiveness and propel the states/UTs to work proactively while facilitating states/UTs to identify, learn and replicate good practices.

    E-Drishti Software

    Why in news?

    • An ‘e-Drishti’ interface developed by Centre for Railway Information Systems (CRIS) has been unveiled for the Union Railway Ministry.

    E-Drishti Software:

    • The E-Drishti software is developed by Centre for Railway Information Systems (CRIS).
    • This software includes an interface which provides summary information on punctuality of trains for the previous day.
    • There is also an interface which provides information on current train running on the Indian Railway network.
    •  In addition, there are interfaces providing details of freight earning, freight loading and passenger earnings for the previous day & month and cumulative for the year, in comparison to the corresponding period of the previous year.
    •  Punctuality of passenger carrying trains is being also monitored rigorously to improve punctuality performance on a daily basis at Divisional, Zonal and Railway Board levels.
    • To ensure running of trains right time when pairing trains are running late, scratch rakes are inducted and rakes are standardized to the extent operationally feasible.
    •  Besides, punctuality drives are launched from time to time and staff involved in train operations is sensitized.
    • In addition, Zonal Railways have also been advised to have better coordination with Civil and Police authorities of states to deal with situations arising out of law and order problems.

    NITI Aayog releases Strategy for New India @ 75

    Why in news?

    •  The NITI Aayog has unveiled its comprehensive national Strategy for New India, which defines clear objectives for 2022-23.

    Strategy for New India @ 75:

    • It is a detailed exposition across forty-one crucial areas that recognize the progress already made, identifies binding constraints, and suggests the way forward for achieving the clearly stated objectives.
    • It is an attempt to bring innovation, technology, enterprise and efficient management together, at the core of policy formulation and implementation.
    • It will encourage discussion and debate, and invite feedback for further refining our policy approach.

    Objective:

    • The Strategy document aims to further improve the policy environment in which private investors and other stakeholders can contribute their fullest towards achieving the goals set out for New India 2022 and propel India towards a USD 5 trillion economy by 2030.

    Key recommendations:

    • The forty-one chapters in the document have been dis-aggregated under four sections: Drivers, Infrastructure, Inclusion and Governance.

    Drivers:

    • Steadily accelerate the economy to achieve a GDP growth rate of about 8 percent on average during 2018-23. This will raise the economy’s size in real terms from USD 2.7trillion in 2017-18 to nearly USD 4 trillion by 2022-23.
    • In agriculture, shift the emphasis to converting farmers to ‘agripreneurs’ by further expanding e-National Agriculture Markets and replacing the Agricultural Produce Marketing Committee Act with the Agricultural Produce and Livestock Marketing Act.
    • Give a strong push to ‘Zero Budget Natural Farming’ techniques that reduce costs, improve land quality and increase farmers’ incomes.
    • To ensure maximum employment creation, complete codification of labor laws; and upscale and expand apprenticeships.
    • Launch a mission “Explore in India” by revamping minerals exploration and licensing policy.

    Infrastructure:

    • Expedite the establishment of the Rail Development Authority (RDA), which is already approved.
    • Double the share of freight transported by coastal shipping and inland waterways.
    • Develop an IT-enabled platform for integrating different modes of transport and promoting multi-modal and digitised mobility.
    • Deliver all government services at the state, district, and gram panchayat level digitally by2022-23. With the completion of the Bharat Net programme in 2019, all 2.5 lakh gram panchayats will be digitally connected.
    • The three themes in this section revolve around the dimensions of health, education and mainstreaming of traditionally marginalised sections of the population.

    Inclusion:

    • Successfully implementing the Ayushman Bharat programme including the establishment of 150000 health and wellness centres across the country, and rolling out the Pradhan Mantri Jan Arogya Abhiyaan (PM-JAY).
    • Create a focal point for public health at the central level with state counterparts.
    • Upgrade the quality of the school education system and skills, including the creation of a new innovation ecosystem at the ground level by establishing at least 10,000 Atal Tinkering Labs by 2020.
    • Conceptualise an electronic national educational registry for tracking each child’s learning outcomes.
    • As already done in rural areas, give a huge push to affordable housing in urban areas to improve workers’ living conditions.

    Governance:

    • Implement the recommendations of the Second Administrative Reforms Commission as a prelude to appointing a successor for designing reforms in the changing context of emerging technologies.
    • Set up a new autonomous body ‘Arbitration Council of India’ to grade arbitral institutions and accredit arbitrators to make the arbitration process cost effective and speedy/
    •  Address the backlog of pending cases.
    •   Expand the scope of Swachh Bharat Mission to cover initiatives for landfills, plastic waste and municipal waste and generating wealth from waste.

    Other recommendations:

    • With ‘Strategy for New India @ 75′, Niti Aayog aims to accelerate growth to 9-10 percent and make India a USD 5 trillion economy by 2030.
    • The development strategy includes doubling of farmers’ income, boosting ‘Make in India’, upgrading the science, technology and innovation ecosystem, and promoting sectors like fintech and tourism.
    •  NITI Aayog prescribed reducing upper age limit to join the civil services to 27 years from the present 30 years for General Category candidates by 2022-23 in a phased manner and also to have one integrated exam for all civil services.

    Container cargo circuit on Inland Waterways

    Why in News?

    • Patna witnessed a new landmark in India’s Inland Water Transport (IWT) sector with 16 TEUs of container cargo (equivalent to 16 truckloads) belonging to food giants PepsiCo India and EmamiAgrotech Ltd from Kolkata reaching the city’s Gaighat IWT terminal on river Ganga.

    Highlights:

    • Patna and upcoming IWAI terminal at Kalughat to emerge as new hub for trade up to Nepal with river Gandak announced as National Waterway 37
    • Plans are at an advanced stage to operationalize Patna-Varanasi sector of NW-1 for container cargo movement. Container cargo transport comes with several inherent advantages
    • It also reduces the handling cost, allows easier modal shift, reduces pilferages and damage, it also enables cargo owners to reduce their carbon footprints.
    • The Ministry of Shipping is developing NW-1 (River Ganga) under jal Marg Vikas Project (JMVP) from Haldia to Varanasi (1390 Km) with the technical and financial assistance of the World Bank at an estimated cost of Rs 5369 crore.

    PCS 1x System

    Why in news?

    • Indian Ports Association (IPA) under the guidance of Ministry of Shipping launched the Port Community System ‘PCS1x’ with url indianpcs.gov.in.
    • The platform has the potential to revolutionize maritime trade in India and bring it at par with global best practices and pave the way to improve the Ease of Doing Business world ranking and Logistics Performance Index (LPI) ranks.

    PCS 1x:

    • ‘PCS 1x’ is a cloud based new generation technology, with user-friendly interface.
    • This system seamlessly integrates 8 new stakeholders besides the 19 existing stakeholders from the maritime trade on a single platform.
    • The platform offers value added services such as notification engine, workflow, mobile application, track and trace, better user interface, better security features, improved inclusion by offering dashboard for those with no IT capability.
    • A unique feature of ‘PCS1x’ is that it can latch on to third party software which provides services to the maritime industry thereby enabling the stakeholders to access wide network of services.
    • Another major feature is the deployment of a world class state of the art payment aggregator solution which removes dependency on bank specific payment eco system.

    Features of this Portal:

    • This system will enable trade to have an improved communication with the customs as they have also embarked on Application Programming Interface (API) based architecture, thereby enabling real time interaction.
    • This System offers a database that acts as a single data point to all transactions.
    • It captures and stores data on its first occurrence thereby reducing manual intervention, the need to enter transaction data at various points and thereby reducing errors in the process.
    • It is estimated that this feature alone will reduce 11/2 to 2 days in a life of transaction.
    • The application will have a cascading effect in reducing dwell time and overall cost of transaction.
    • A major training and outreach program is under way to educate the stakeholders about the uses and benefits of ‘PCS 1x’.

    Index of Industrial Production (IIP) grows to 8.1 percent

    Why in News?

    •  A data released by the Central Statistics Office (CSO) displayed the growth of factories output from 4.5 percent in September 2018 to 8.1 percent in October 2018.

    Highlights:

    • The output of the factories was measured in term of Index of Industrial Production (IIP).
    • Favorable base effect and robust output in all key sectors like manufacturing, electricity, and mining attributed to this growth.
    • Index of Industrial Production is used for the assessment of the economic activity in the country.
    •  While the manufacturing sector output grew 7.9 percent in October from 4.6 in September 2018, the electricity production grew to 10.8 percent in October from 8.6 percent in September 2018. The production in mining grew to 7 percent in October 2018 from 0.2 percent in September 2018.
    • The production of the primary goods grew percent by 6.0, intermediate good by 1.8 percent and infrastructure/construction goods by 8.7 percents in comparison to the growth in October 2017.
    • Apart from this, the consumer durables output also witnessed a growth of 17.6 percent from 5.2 percent in September 2018.

    Index of Industrial Production (IIP):

    •  The Index of Industrial Production (IIP) details out the growth of various sectors in an economy such as mineral mining, electricity, and manufacturing.
    •   It is an indicator that quantifies changes in the production of a basket of industrial products during a given period with respect to that in a chosen base period.
    •   It is prepared and released by the Central Statistical Organisation (CSO) six weeks after the reference month ends.

    ADB, India Sign $31 Million Loan to Develop Tourism, Boost Jobs in Tamil Nadu

    Why in News?

    • A loan agreement worth $31 million to develop Tourism and boost Jobs in Tamil Nad has been signed between the Government of India and the Asian Development Bank.
    •   This loan amount will be used to upgrade the state tourism industry in order to attract more visitors to the state.

    Objective:

    • The $250 million IDIPT aims to build opportunities for local communities and boost the local economy by enhancing tourism in three other states – Punjab, Himachal Pradesh, and Uttarakhand- besides Tamil Nadu. This will be achieved through developing and preserving sites of natural and cultural heritage, and building connectivity, capacity, and infrastructure around State tourist sites.

    Key Highlights of the agreement:

    • This project is expected to improve the tourism infrastructure in Tamil Nadu and also help the State in preserving the natural and cultural heritage. The activities under the project would also boost economic opportunities for the local people.
    • The increased tourism traffic generated by this Project will generate extra jobs in Tamil Nadu, especially through skills training and community-based activities targeting the poor and women.
    • The Government of India’s recent Three-Year Action Agenda (2017–2018 to 2019–2020) envisages the hospitality, travel, and tourism sector as a major driver of growth and employment.
    • The Agenda recognizes India’s significant potential to increase:
      • The number of arrivals,
      • Global presence by leveraging its cultural industries, and
      • Capacity to create large-scale jobs among the poorest segments of the population
    • It identifies key areas for action, including infrastructure, marketing, and skill development, all of which are aligned with the MFF Road Map.
    • The Project will support the conservation and restoration of eight heritage monuments, one museum, three temples, and a pond.
    • It will build various facilities at the sites, including information centers, rest centers, and toilet blocks, with facilities served by solar-powered lighting and energy-efficient lighting.
    • The total cost of the Project is $44.04 million, of which the Government will provide $13.04 million. The estimated completion date is June 2020.

    Centre for the Fourth Industrial Revolution in India

    Why in News?

    •  The World Economic Forum (WEF) announced its new Centre for the Fourth Industrial Revolution in India, which would aim to bring together the government and business leaders to pilot emerging technology policies.

    Highlights:

    •  The Centre for the Fourth Industrial Revolution India will work in collaboration with the government on a national level to co-design new policy frameworks and protocols for emerging technology alongside leaders from business, academia, start-ups and international organizations.
    • The National Institute for Transforming India (NITI) Aayog will coordinate the partnership on behalf of the government and the work of the centre among multiple ministries.

    Projects:

    •  Initial efforts at the national level are focused on two emerging technology areas: Artificial intelligence and machine learning, and blockchain and distributed ledger technology.
    • The first project will focus on expanding access to data to accelerate the adoption of artificial intelligence to tackle some of the country’s most pressing socio-economic needs, such as education, healthcare and agriculture.
    •  The second will focus on the application of smart contracts to boost productivity and transparency while reducing inefficiency.
    • At state level, Maharashtra Government in collaboration with Centre is planning to undertake a drone mapping operation in the agriculture sector. These projects will be scaled across India and globally.

    World Economic Forum (WEF):

    •  It is an international institution founded by Klaus Schwab that works to improve the state of the world through public-private cooperation.
    •  It was established in 1971 and is headquartered in Geneva, Switzerland. It serves as independent not-for-profit organization that that works closely with other international organizations.
    •  It also works with leaders in the field of politics, business, academia to set global, regional and industrial agenda.

    Vision of New India – USD 5 Trillian Economy

    Why in news?

    • The Working Group was constituted by the Department of Industrial Policy and Promotion inthe Ministry of Commerce and Industry with participation from government and industry has tasked to develop a roadmap towards achieving a 5 trillion dollar economy by 2025 has prepared its report and it is being circulated to the stakeholders for further suggestions.

    Objective of this initiative:

    • This initiative will enhance the competitiveness of India’s service sectors through the implementation of focused and monitored Action Plans, thereby promoting GDP growth, creating more jobs and promoting exports to global markets.
    • Services sector in India has immense employment potential, it will enhance the competitiveness of India’s service sectors through the implementation of focused and monitored Action Plans, thereby creating more jobs in India, contributing to a higher GDP and exports of services to global markets.
    • As the Services sector contributes significantly to India’s GDP, exports and job creation, increased productivity and competitiveness of the Champion Services Sectors will further boost exports of various services from India.
    • Embedded services are an important part of ‘Goods’ as well. Thus, competitive services sector will add to the competitiveness of the manufacturing sector.
    •  The share of India’s services sector in global services exports was 3.3% in 2015 compared to 3.1% in 2014. Based on this initiative, a goal of 4.2 % has been envisaged for 2022.

    Vision of a new India:

    • The contribution to USD 3 trillion and focused plans will be on boosting services sector, Agriculture to USD 1 trillion and manufacturing to USD 1 trillion.

    Agriculture Export Policy 2018:

    • The Commerce Ministry has formulated India’s first Agricultural Export Policy with a focused plan to boost India’s agricultural exports to USD 60 billion.

    Elements of Agriculture Export Policy:

    • The recommendations in the Agriculture Export Policy are in two categories Strategic and Operational. Strategic involves policy measures, infrastructure and logistics support, holistic approach to boost exports.
    •  Operational involves focus on clusters, Promoting value added exports, Miscellaneous.

    Promotion of trade:

    • Commerce Ministry is working closely with the Finance Ministry to ease credit flow to the export sector, especially small exporters to ensure adequate availability of funds to them.
    •    India has made 23 ranks in the World Bank’s Ease of Doing Business Ranking this year to be ranked at 77. Upward move of 53 ranks highest improvement in 2 years by any large country since 2011. India now ranks first in Ease of Doing Business Report among South Asian countries.

    Made in India:

    • Prime Minister of India Narendra Modi Launched on 25th September 2014 to make India the hub of manufacturing, India has emerged as one of the fastest growing economies.
    •  Exemption is given where estimated value of procurement is less than Rs. 5 lakhs and minimum local content shall ordinarily be 50%.
    •  A Standing Committee in Department of Industrial Policy and Promotion, under the chairmanship of Secretary, DIPP implementation of the 2017 order giving to make in India products.

    India Trade Promotion Organisation:

    •  India Trade Promotion Organisation (ITPO) is the trade promotion agency of the Ministry of Commerce and Industry.
    • Exhibitions and conventionsat ground in PragatiMaidan in New Delhi, the ITPO holds the India International Trade Fair (IITF) since 1980 every year.

    Trade Infrastructure for Export Scheme (TIES):

    • TIES aid with setting up and up-gradation of infrastructure projects with overwhelming export linkages like the Border Haats, Land customs stations, etc.
    •  The Central and State Agencies, including Export Promotion Councils, Commodities Boards, SEZ authorities and apex trade bodies recognized under the EXIM policy of Government of India, are eligible for financial support under this scheme.

    India Improves Ranking in Ease of Doing Business:

    • India had made a leap of 23 ranks in the World Bank’s Ease of Doing Business Ranking this year (2018) to be ranked at 77.
    • India now ranks first in Ease of Doing Business Report among South Asian countries compared to 6th in 2014.

    Multi-Modal Logistics Parks Policy (MMLPs):

    • MMLPs is to improve the country’s logistics sector by lowering over freight costs, reducing vehicular pollution and congestion and cutting warehouse costs with a view to promoting moments of goods for domestic and global trade.

    Way forward:

    • India is one of the fastest growing major economies and is currently ranked as the world’s sixthlargest economy. Projections of growth, over the medium term, remain encouraging and optimistic for India. The Government has several ongoing initiatives across sectors focused on growth. In agriculture, the Government is aiming to reorient policy focus from being production-centric to becoming income-centric.
    • The emphasis on incomes provides a broader scope towards achieving the needed expansion ofthe sector. The proposed Industrial Policy 2018 provides an overarching, sector-agnostic agendafor the enterprises of the future and envisions creating a globally competitive Indian industrythat is modern, sustainable and inclusive.

    India to receive $800 Billion Remittance in 2018

    Why in News?

    •  India is likely to receive total remittances of $ 800 billion, stated the Migration and Development Brief released by the World Bank on December 08, 2018.
    • India was followed by China ($67 billion), Mexico and Philippines ($34 billion each) and Egypt ($26 billion) in the brief.

    Highlights:

    • When a foreign worker transfers money or something to family or any other individual living in his home country, it is called ‘Remittance.’
    •  Such transactions help in poverty alleviation in developing and low-income countries.
    • According to the Brief, the global remittance including flows to high-income countries is expected to grow by 10.3 percent to $ 689 billion. In 2019, they are expected to grow 3.7 percent to $715 billion.
    •   Remittance to developing countries is expected to grow by 10.8 percent to achieve $ 528 billion in 2018. It grew by 7.8 percent in 2017.
    •   It is expected to grow by 4 percent for the low and middle-income countries in 2019.
    • India registered a significant increase in the remittance flow, from $62.7 billion in 2016 to $65.3 billion in 2017. In the year 2017, it was estimated 2.7 percent of the GDP.

    Cabinet nod to merger of skill development bodies

    Why in news?

    • The Union cabinet on has approved the merger of the National Council for Vocational Training (NCVT) and the National Skill Development Agency (NSDA).
    • The merger is aimed to consolidate fragmented regulatory structures and improve the outcome of the Skill India mission.

    National Council for Vocational Education and Training (NCVET):

    •  The National Council for Vocational Education and Training will regulate the functioning of entities engaged in vocational education and training, both long-term and short-term, and establish minimum standards for the functioning of such entities.
    • The primary functions of NCVET will include recognition and regulation, assessment, approval of qualifications developed by different bodies and industry governed sector skill councils.
    • The merger would bring in accountability in skill sector that caters to nearly 15 million students at any given time.
    •  This reform will ultimately increase credibility of the skill sector and encourage greater private investment.

    NCVT and NSDA:

    • The NCVT was a regulator and assessment body of the long-term skill education space comprising more than 13,000 industrial training institutions.
    •  While the NSDA was policy formulating bodies of the skill development ministry helping it devise training and industry collaboration policy for the Skill India mission.
    • The NCVT had been in existence for more than four decades as part of the directorate general of training, while the NSDA was a relatively new body that came into force in 2013.

    Union Cabinet approves implementation of Shahpurkandi Dam

    Why in News?

    • Union Cabinet has approved implementation of Shahpurkandi Dam Project on river Ravi in Punjab.
    •  The project will be implemented by Punjab Government with central assistance of Rs. 485.38 crore (for irrigation component) over a five years period from 2019 to 2023.
    •  It will be completed by June 2022.
    • Funding for central assistance will be made through National Bank for Agriculture and Rural Development (NABARD) under the existing system for funding of 99 Pradhan Mantri Krishi Sinchayee Yojana- Accelerated Irrigation Benefit Programme (PMKSY-AIBP) projects under Long Term Irrigation Fund (LTIF).

    Significance of this Project:

    • ShahpurKandi Dam project was proposed on River Ravi.
    •  This project will help minimizing some of water of River Ravi which at present is going waste through Madhopur Headworks downstream to Pakistan.
    •  It will create an irrigation potential of 5,000 hectares in Punjab and 32,173 hectares in Jammu & Kashmir on completion.
    • Besides, Punjab will be able to generate 206 MW of hydropower.

    Indus Waters Treaty:

    •  Indus Waters Treaty was signed between India and Pakistan in 1960 for sharing of Indus waters.
    •  According to this treaty, India got the full rights for utilization of waters of three eastern rivers namely Ravi, Beas and Satluj.
    •  Bilateral agreement was signed between Punjab and J&K in January 1979 for construction of RanjitSagar Dam (Thein Dam) and Shahpurkandi Dam by Punjab Government.
    •  RanjitSagar Dam was commissioned in August 2000.

    Ombudsman Scheme for Digital Transactions

    Why in news?

    • Reserve Bank of India (RBI) has announced to introduce ‘Ombudsman Scheme for Digital Transactions’ to provide cost-free mechanism to redress grievances of customers related to digital transactions.

    Ombudsman Scheme:

    • The scheme will be notified by end of January 2019.
    •  It will cover services provided by entities falling under RBI’s regulatory jurisdiction.
    • The scheme is being implemented taking into consideration rise in digital mode for financial transactions which is gaining traction in the country.
    • There is an emerging need for a dedicated, cost-free and expeditious grievance redressal mechanism for strengthening consumer confidence in this channel.

    Limiting customer liability:

    • RBI has also decided to come out with a framework for limiting customer liability in respect of unauthorised electronic payment transactions involving prepaid payment instruments (PPI).
    •  It has already issued instructions on limiting customer liability in respect of unauthorised electronic transactions involving banks and credit card issuing non-banking financial companies (NBFCs).
    • This framework will bring all customers up to same level with regard to electronic transactions made by them and extend benefit of limiting customer liability for unauthorised electronic transactions involving PPIs issued by other entities not covered by extant guidelines.
    •  The guidelines will be issued by the end of December 2018.

    Odisha’s KandhamalHaldi to get GI tag

    Why in News?

    • Odisha’s KandhamalHaldi (Turmeric) will soon get a Geographical Indications (GI) tag.
    • It is a few steps away from receiving this tag.

    Odisha’s KandhamalHaldi (Turmeric):

    • Its registration was moved by Kandhamal Apex Spices Association for Marketing and was accepted under sub-section (1) of Section 13 of Geographical Indications of Goods (Registration and Protection) Act, 1999.
    •  KandhamalHaldi is famous for its healing properties.
    •  It is a main cash crop of the tribal people in Kandhamal.
    • Apart from domestic use, it is also used for cosmetic and medicinal purposes.

    Geographical Indication (GI):

    • GI tag is a name or sign used on certain products which correspond to a specific geographical location or origin.
    •  It is used for agricultural, natural and manufactured goods having a special quality and established reputation.
    • The purpose of GI tag enables stakeholders to authenticate their production while earning a premium and derive an improved livelihood.
    • The goods and products having such tag are recognised for their origin, quality and reputation and gives it the required edge in the global market.
    •  It also ensures that none can use their name, giving them exclusivity.
    • The registration of GI is valid for 10 years after which it needs to be renewed.
    •  Violation of GI tags is a punishable offence under law.
    • GI is covered as an element of intellectual property rights (IPRs) under the Paris Convention for Protection of Industrial Property.
    • At the international level, GI is governed by WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
    • In India, GI tag Geographical Indications of Goods (Registration and Protection Act), 1999 governs it.
    • This Act is administered by Controller General of Patents, Designs and Trade Marks, who is also the Registrar of Geographical Indications and is based in Chennai, Tamil Nadu.

    Govt. inks $85 Million Loan Agreement with ADB for Odisha Skill Development Project

    Why in News?

    •  Union Government (Ministry of Finance) and Asian Development Bank (ADB) have signed an $85 million loan agreement for Odisha Skill Development Project.
    •  It aims to improve the skill development eco-system in Odisha and establish World Skill Center (WSC), an advanced skill training center in the state’s capital- Bhubaneswar.

    Highlights:

    •   It will improve the quality of State’s TVET (Technical and Vocational Education and Training) programs by making them relevant to industry and demand driven.
    •  It will impart advanced occupation-ready skills training aligned with international standards.
    •  It will also complement efforts to target the employment needs of the emerging sectors in India and globally.
    •   It will engage Institute of Technical Education Services (ITEES), Singapore to support Odisha Skill Development Authority in setting-up and operationalizing WSC.
    •  This centre will offer internationally bench marked advanced training programs for the working age population of Odisha.
    • It will deliver eight training courses for 13,000 full-time students, provide training for 5,000 teachers and train 1,000 assessors.
    •  The project will help over 150,000 people learn skills in priority sectors, including manufacturing, construction and services for formal employment.
    •    It will improve overall eco-system of skill development in Odisha by providing integrated services through entrepreneurship incubation center, career counselling and placement center, curriculum design and development center and education technology deployment center.
    •  These important functions of WSC will support network of Government ITIs and develop skills and capacity of polytechnics, college of engineering, and other private skilling centers.
    • ADB will also administer $2 million technical assistance grant from Japan Fund for Poverty Reduction, financed by Japanese Government that will support capacity development activities under the project.

    City Gas Distribution projects

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    • Prime Minister Narendra Modi will lay the foundation stones of City Gas Distribution (CGD) projects in 129 districts from New Delhi which will herald the availability of convenient, environment-friendly and cheaper natural gas for almost half of the country’s population spread across 26 States and Union Territories.

    Objective:

    • To promote the usage of environment-friendly clean fuel like natural gas as a fuel across the country to move towards a gas based economy.
    • The development of city gas distribution networks has been focused to increase the availability of cleaner cooking fuel and transportation fuel to the citizens of the country.
    • The expansion of city gas distribution, CGD network will also benefit industrial and commercial units by ensuring the uninterrupted supply of natural gas.

    CGD Networks as of now:

    • Till September 2018, 96 cities/districts were covered for development of CGD networks.
    • About 46.5 lakh households and 32 lakh CNG vehicles are availing the benefit of clean fuel through existing CGD networks.
    • As per commitment made by various entities in this bidding round, around 2 crore PNG (Domestic) connections and 4600 CNG stations are expected to be installed in next 8 years across the country (This expanded the coverage of CGDs to about 50% of the population over 35% of India’s area).
    • Additionally, PNGRB has also initiated the process of 10th CGD bidding round for additional 50 new GAs covering 124 districts in 14 States to increase the coverage to nearly 53% of the country’s area covering 70% of the population.

    Background:

    • As per WHO database released in May 2018, India has 14 out of 15 world’s most polluted citiesin terms of PM 2.5 concentration.
    • India has made a commitment in COP21 Paris Convention in December 2015 that by 2030; it would reduce carbon emission by 33% of 2005 levels.
    • Large number of industries also consumes polluting fuels like pet coke and furnace oil which emit polluting CO2. Some of the courts recently ordered for banning use of pet coke in states within their jurisdiction.
    • Natural Gas (as CNG) is cheaper by 60 per cent as compared with petrol and 45 per cent withrest to Diesel.
    • Similarly, Natural Gas (as PNG) is cheaper by 40 per cent as compared with market price.
    • Natural gas, as domestic kitchen fuel, as fuel for transport sector and fuel for industries and commercial units, will play an imperative role in reducing carbon emission.

    NITI Aayog Organises Capacity Building Programme for Urban Water Management

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    • The Second Phase of Urban Management Programme on ‘Water Recycling and Reuse’ was organized by the NITI Aayog in collaboration with the Singapore Cooperation Enterprise & TF International at the Indian Habitat Centre in New Delhi on November 26, 2018.
      • Significance of the program:

        • Highlighting the importance of this capacity building programme on management of water, particularly its recycling & reuse, as crucial for future urban planning and policy
        • The attaining high rates of economic growth for India will directly be a function of the sustainable use of water.
        • NITI’s Composite Water Management Index, launched earlier this year, is a step toward increasing awareness and promoting best practises in water management throughout the country.
          • Highlights:

            • The National Institution for Transforming India (NITI) Aayoghave signed a Memorandum Of Understanding (MoU) with Singapore Cooperation Enterprise- Temasek Foundation International to launch the second Phase of Urban Management Programme on ‘Water Recycling And Reuse.’
            • A total of eight States including UTs have been selected for the capacity building workshops. Senior officials from Municipal and Parastatal Bodies of the Uttar Pradesh, Tamil Nadu, Punjab, Chhattisgarh, Karnataka, Meghalaya, Puducherry, and West Bengal participated in the workshop.
            • With a steady rise in Urban population from 29 crores in 2001 to 37.7 in 2011, the demand for the water in the urban areas is increasing rapidly.
            • To ensure the availability of the water in the Urban areas where people face acute water shortage, the Government is going to implement rainwater harnessing schemes for groundwater improvement.
              • Recycle and Reuse:

                • The ‘Recycle and Reuse’ technique has been widely practiced in Singapore where the water is recycled for the use. Such an approach is expected not only to reduce pressure on the water sources but is also expected to offer a sustainable solution for water resources management.
                • Nearly 30% of urban water supply and 70% of rural water supply in the country comes from groundwater, which is depleting day by day.

    Govt, ADB sign $169 min loan to provide water, sanitation services in TN

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

  • Why in news?
    • Union Government has inked $169 Million Loan agreement with Asian Development Bank (ADB) for Tamil Nadu Urban Flagship Investment Program. It is tranche of $500 million multi-tranche financing to provide water and sanitation services in Tamil Nadu.

    Significance:

  • The programme will develop climate-resilient sewerage collection and treatment and drainage systems in 10 cities, and install the country’s first solar-powered sewage treatment plant.
  • Introduction of smart water management systems will help reduce non-revenue water and strengthen operational efficiency.
  • Around 4 million people will benefit from piped water and sewerage connections and improved drainage. The program will boost institutional capacity, public awareness, and urban governance as part of a comprehensive approach for developing liveable cities.
  • The first tranche of ABD loan will target cities of Chennai, Coimbatore, Rajapalayam, Tiruchirappalli, Tirunelveli, and Vellore. Moreover, $2 million grant fromAsian Clean Energy Fund, established by Government of Japan will fund solar energy pilot project.
  • Tamil Nadu Urban Flagship Investment Program:

    • The program will develop priority water supply, sewerage, and drainage infrastructure in at least 10 cities located within strategic industrial corridors of Tamil Nadu.
    • It will support innovative pilots, including India’s first solar-powered sewage treatment plant (STP) to offset greenhouse gas emissions and enhance operational efficiency; strengthen urban governance; and build capacity of state and local institutions to enhance urban service delivery, environmental sustainability, and climate resilience.

    Credit scheme for cooperative start-ups

    GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

    Why in News?

    • Union Minister of Agriculture and Farmers’ Welfare Radha Mohan Singh launched YuvaSahakar-Cooperative Enterprise Support and Innovation Scheme of National Cooperative Development Corporation (NCDC).
    • It is a youth-friendly scheme aimed at attracting youth to cooperative business ventures.

    YuvaSahakar-Cooperative Enterprise Support and Innovation Scheme:

    • The scheme is linked to Rs 1000 crore ‘Cooperative Start-up and Innovation Fund (CSIF)’ created by the NCDC.
    • It aims to encourage cooperatives to venture into new and innovative areas.
    • It envisages 2% less than applicable rate of interest on term loan for the project cost up to Rs 3 crore including 2 years moratorium on payment of principal.
    • All types of cooperatives in operation for at least one year are eligible to avail the scheme.
    • Under this scheme, more incentives will be provided for cooperatives of North Eastern region, Aspirational Districts and cooperatives with women or SC or ST members.
    • The funding for the project under this scheme will be up to 80% of the project cost for these special categories against 70% for others.

    NPCC is now a Miniratna

    Why in news?

    • The Union Government conferred the ‘Miniratna status: Category –I’ on the National Projects Construction Corporation Limited (NPCC).
    • The empowerment of Miniratna Status will help NPCC in taking speedy decisions by enhancing the delegation of powers to the Board.
    • NPCC has also been awarded with the ISO 9001:2015 Certification.

    National Projects Construction Corporation Limited:

    • National Projects Construction Corporation Limited (NPCC), a schedule ‘B’ Central Public Sector Enterprise (CPSE) under the administrative control of Ministry of Water Resources, was incorporated in 1957.
    • It is a premier construction company having mandate with creation of infrastructure to provide impetus for economic development of the country.
    • The Corporation is making continuous profit since 2009-10, having positive networth for the last six years and has ambitious business plan with enhanced order book position of Rs 11833 crore.

    Department of Public Enterprises:

    • The Public Sector Enterprises are run by the Government under the Department of Public Enterprises (DPE) of Union Ministry of Heavy Industries and Public Enterprises is the Nodal Government agency to issue guidelines and regulation for the various state-owned CPSEs in India.
    • The DPE also makes policies and guidelines for the performance evaluation and improvement of the PSUs/ CPSEs.
    • The government grants the status of Maharatna, Navratna, and Miniratna to Public Sector Undertakings (PSUs) and Central Public Sector Enterprises (CPSEs) based upon the profit made by these enterprises.
    • The Maharatna category has been the most recent one, created in 2009, while the other two have been in function since 1997.
    • Apart from these, PSUs in India are also categorised based on their special non-financial objectives and are registered under Section 8 of Companies Act, 2013.

    Eligibility criteria:

    Maharatna status of CPSEs:

    • The CPSEs shall fulfill the following eligibility criteria to be considered for grant of Maharatna status:
    • Should already hold the Navratna status.
    • Should be listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations
      • Average annual turnover of more than Rs 25000 crore during the last 3 years
      • Average annual net worth of more than Rs 15000 crore during the last 3 years
      • Average annual net profit after tax of more than Rs 5000 crore during the last 3 years
      • Should have significant global presence or international operations
      • Maharatna Status raises a company’s investment ceiling from Rs 1000 crore to Rs 5000 crore. The Maharatna firms can decide on investments of up to 15 percent of their net worth in a project.

    Navratna status of CPSEs:

    • The CPSEs shall fulfill the following eligibility criteria to be considered for grant of Navratna status:
    • Must have ‘Miniratna Category – I’ status along with a Schedule ‘A’ listing.
      • Should have obtained ‘excellent’ or ‘very good’ rating under the Memorandum of Understanding at least thrice in the last five years of operations
      • Should have a composite score of 60 or above out of possible 100 marks in the 6 selected performance parameters:-
      • Net profit to net worth
      • Manpower cost to total cost of production/services
      • Profit before depreciation, interest and taxes to capital employed
      • Profit before interest and taxes to turnover
      • Earnings per share
      • Inter-sectoral performance
    • Navratna Status allows the companies to invest up to Rs 1000 crore or 15 percent of their net worth on a single project or 30 percent of their net worth in the whole year (not exceeding Rs 1000 crores).

    Miniratna Status of CPSEs:

    • The CPSEs which have made profits in the last three years continuously and have positive net worth are eligible to be considered for grant of Miniratna status.
    • The Miniratnas are divided in two categories – I and II.
      • Category I:Miniratnas that have made profits for the last three years continuously or earned a net profit of Rs 30 crores or more in one of these three years. There are 60 such companies.
      • Category II:Miniratnas that have made profits continuously for the last three years and must have a positive net worth. There are 15 such companies in this category.
    • The Miniratna Category – I PSEs are allowed to invest up to Rs 500 crore or equal to their net worth, whichever is lower. The Miniratna Category – II PSEs can invest up to Rs 300 crore or up to 50 percent of their net worth, whichever is lower.

    IIM Cal Inks Pacts with ICC: Energising start up ecosystem in East and Northeast India

    GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

    Why in news?

    • IIM Calcutta Innovation Park and Indian Chamber of Commerce (ICC) have signed a Memorandum of Understanding (MoU) for energising the start-up ecosystem in East and Northeast India.
    • The MoU will bring the incubator and industry toghether in a more formal way.IIM Innovation Park is currently incubating 40 start-ups with almost half from West Bengal.

    Highligts:

    • ICC has a wide industry connect which will help IIM Calcutta Innovation Park to promote start-ups whom it is incubating.
    • It will offer a platform for market linkage for start-ups and promote their products and services especially from eastern and northeastern region which need greater attention in the startup growth story of the country.
    • ICC is currently working on a new program that aims to offer all key services under a single roof at a very low cost for start-ups beginning from initial advisory, market linkage, fundraising and legal service.

    Indian Chamber of Commerce (ICC):

    • It is a premier body of business and industry in Eastern and North-Eastern India.
    • Its membership comprises several of largest corporate groups in the country, with business operations all over country and abroad.
    • It was established in 1925 by a group of pioneering industrialists led by Mr G D Birla.
    • It is the only National Chamber of Commerce operating from Kolkata.
    • It is also the only chamber from India to win first prize in World Chambers Competition in Quebec, Canada.

    Jharkhand Power System Improvement Project

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    • The Government of India and the World Bank have signed a $ 310 million loan agreement for the Jharkhand Electricity System Improvement Project in Delhi on November 20, 2018. The project will aim to provide reliable, quality, and affordable 24×7 electricity to the citizens of Jharkhand.

    Significance:

    • Jharkhand Electricity System Improvement Project will help in creating new power transmission structure in Jharkhand, and will also improve technical efficiency and commercial performance of the state’s power sector.

    Jharkhand Electricity System Improvement Project:

    • Under this project, the automated sub-stations, network analysis, and planning equipment will be used which will help in ensuring the customers’ satisfaction.
    • The project will help to improve the institutional capabilities of public sector companies for power transmission and distribution.
    • Under the project, new sub-stations with 132 KW voltage transmission line will be constructed for strengthening the operation of Jharkhand Power Corporation Limited (JPCL). The project will also help in integrating the renewable energy with the state grid. The concession period for this loan is 5 years, and the last maturity period is 25 years.
    • ·This project is part of a “SabkeLiyeBijli” launched by the Indian Government in 2014. With the private and public investment, the scheme is expected to produce around 4.5 GW electricity by 2022.

    India’s SEZ policy report

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    • Ministry of Commerce & Industry to study the existing SEZ policy of India constituted Baba Kalyani led committee which submitted its report to the Union Minister for Commerce & Industry and Civil Aviation, Suresh Prabhu, in New Delhi.
    • Key Highlights:
    • India is going to become a USD 5 trillion economy by 2025 then the current environment of manufacturing competitiveness and services has to undergo a basic paradigm shift.
    • The report notes that the success seen by services sectors like IT and ITES has to be promoted in other services sector like health care, financial services, legal, repair and design services.
    • The Union Government has set the target of creating 100 million jobs and achieving 25 per cent of GDP from the manufacturing sector by 2022, as a part of its flagship ‘Make in India’ programme.
    • The Government also plans to increase manufacturing value to USD 1.2 trillion by 2025.
    • While these are ambitious plans to propel India into a growth trajectory, it requires an evaluation of existing policy frameworks to catalyse manufacturing sector growth.
    • At the same time, the policy needs to be compiled with the relevant WTO regulations.
    • The suggestions and findings of the committee constructive will be sent to the Commerce Ministry will immediately begin formal consultations with the Finance Ministry and other Ministries so that implementation of the committee’s recommendations may be done without any delay.

    The key findings of the committee:

    • To evaluate the SEZ policy and make it WTO compatible
    • To suggest measures for maximising utilisation of vacant land in SEZs
    • To suggest changes in the SEZ policy based on international experience
    • To merge the SEZ policy with other Government schemes such as coastal economic zones, Delhi-Mumbai industrial corridor, national industrial manufacturing zones and food and textiles parks.

    History of India’s SEZ Policy:

    • India’s SEZ Policy was implemented from April 1, 2000. Subsequently the Special Economic Zones Act, 2005 was passed by Parliament in May 2005 and received presidential assent on the June 23, 2005 and the Special Economic Zone Act was enacted.
    • The SEZ Act, 2005, supported by SEZ Rules, came into effect on February 10, 2006.
    • The commerce ministry has been consistently lobbying with the finance ministry to exempt units in the SEZs from the minimum alternate tax (MAT), imposed on them in 2011.
    • In June 2018, the Union Commerce Ministry set up a committee headed by Bharat Forge chairman Baba Kalyani to make its special economic zone (SEZ) policy compatible with World Trade Organisation (WTO) rules after the US challenged India’s export subsidy programme at the multilateral trade body.

    India Infrastructure Finance Company Limited

  • GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment
  • Why in News?

    • The Asian Development Bank (ADB) and the Government of India signed here in national capital a $300 million Loan Agreement to support lending by India Infrastructure Finance Company Limited (IIFCL).

    Significance:

    • The loan will enhance availability of long-term finance for PPP projects, improve operational capacity of IIFCL.
    • It will expand portfolio of infrastructure financing instruments available to IIFCL.
    • It is expected to compliment Government’s infrastructure building efforts.

    Key Highlights:

    • ADB funding is expected to fund at least 13 sub-projects through IIFCL, involving roads and renewable power generation, under the last tranche. It expected to help catalyze the financial closing of $2.4 billion in investments. In addition, attached technical assistance will support IIFCL capacity development and will focus on IIFCL’s financial management and social and environmental safeguards.
    • It will support renewed effort of Central Government in accelerating infrastructure growth through increased Private Sector investment.
    • The Project undertaken it will be relevant and responsive to constraints to bank based infrastructure financing, fiscal space creation, and repercussions on GDP growth.

    India Infrastructure Finance Company Limited:

    • IIFCL is a wholly-owned Government of India company set up in 2006.
    • It has been registered as a NBFC-ND-IFC with RBI since September 2013.
    • It provides long term finance to viable infrastructure projects – Both Greenfield and Brownfield projects.
    • It provides refinance to banks and other eligible financial institutions for their loans to infrastructure projects.
    • The sectors eligible for financial assistance from IIFCL are as per the harmonized list of Infrastructure Sub-Sectors as approved by the Government and RBI.
    • It broadly includes transportation, energy, water, sanitation,communication, social and commercial infrastructure.

    Network for Development of Agricultural Cooperatives in Asia and the Pacific

    GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

    Why in news?

    • The inaugural session of the General Assembly of Network for Development of Agricultural Cooperatives in Asia and the Pacific(NEDAC) in New Delhi .

    Highlights:

    • The sessions are going to be held on ‘Cooperatives to Cooperative Trade’ and ‘Capacity Development partnerships in NEDAC’.
    • The ultimate aim would be to bring about an increase in farmers income and raise their economic standard by bringing cooperative trade in the mainstream and enhance cooperative professionalism.
    • The general assembly of 22 prominent cooperative organizations from eight countries unanimously decided to focus on C2C and capacity development to meet challenges of climate change as transformative cooperatives.

    NEDAC:

    • NEDAC was set up in 1991 by the United Nations’ Food and Agriculture Organisation (FAO), the International Cooperative Alliance (ICA) and the International Labour Organisation (ILO).
    • NEDAC sensitises Governments in the region on the role of agricultural cooperatives in promoting agricultural and rural development to ensure rural food and livelihood security for millions of people in Asia and Pacific.

    2nd Startup India Investment Seminar

    GS 3: Economy | Development and Employment

    Why in News?

    • Embassy of India in China in partnership with Startup India Association (SIA) and Venture Gurukool organized 2nd Startup India Investment Seminar in Beijing for fostering innovation and entrepreneurship among Indian youth.
    • Highlights:
    • The event was planned to expose Chinese VCs and investors to the promising Indian startups
    • Help Indian startups to reach out to the large Chinese investors for receiving investment for their companies.
    • To discuss effective strategy for Chinese VCs to enter the Indian startup market and share their experiences about the Indian startup ecosystem.

    Start Up India Scheme:

    • It aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive for growth of Start-ups.
    • According to the scheme, an entity headquartered in India shall be considered as a Startup up to seven years from the date of its incorporation/ registration
    • However, in the case of Startups in the Biotechnology sector, the period shall be up to ten years from the date of incorporation/ registration.

    It provides:

    • Simple Compliance Regime for startups based on Self-certification
    • Single window clearance based on mobile App.
    • Startup India Hub to handhold startups during various phases of their development
    • Legal support and fast-track patent examination by reducing 80% of the patent cost.
    • Faster exit for startups through modified new bankruptcy code ensuring 90 days exit window.
    • Credit Guarantee Fund for startups through Small Industries Development Bank of India (SIDBI).
    • Providing funding support through a Fund of Funds with a corpus of Rupees 10,000 crore
    • Tax exemption on capital gains invested in Fund of Funds.
    • Tax exemption to startups for 3 years.
    • Exemption from labour inspection for 3 years.
    • Launch of innovation hub through Atal Innovation Mission (AIM) with Self –Employment and Talent Utilization (SETU) Program of NITI Aayog
    • Harnessing private sector expertise for setting up incubators.
    • No letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits.
    • The initiative is also aimed at promoting entrepreneurship among SCs/STs, women communities.
    • Rural India’s version of Startup India was named the DeenDayalUpadhyaySwaniyojanYojana.

    INSPIRE 2018

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    • INSPIRE 2018 has been organised in collaboration with the Bureau of Energy Efficiency (BEE), The Energy & Resources Institute (TERI), ADB, UNEP, and the Administrative Staff College of India (ASCI).
    • The three-day symposium will focus on enhancing grid management, e-Mobility, financial instruments and technologies for energy efficiency in India.
    • The event is bringing together policy-makers, innovators and various stakeholders to deliberate on key energy policies, market transformation strategies, and sustainable business models.
    • This will help leverage the full potential of energy efficiency and bring its multiple co-benefits to the fore.

    Innovate To Inspire Challenge:

    • The #InnovateToINSPIRE challenge was organized by EESL and World Resources Institute (WRI).
    • The challenge invited participants to submit sustainable and scalable solutions to seven specific challenges spanning grid management, e-Mobility, energy efficient technologies and financial instruments.
    • The winning entries received an award of Rs. 5 lakhs each along with mentoring and guidance from EESL to help them bring their solutions to market.

    Energy Efficiency Revolving Fund (EERF):

    • To support investments in new, innovative and scalable business models, EESL and ADB signed an agreement for a GEF grant of USD 13 million to establish an EERF.
    • EERF aims to expand and sustain investments in the energy efficiency market in India, build market diversification, and scale up existing technologies.

    Other Agreements:

    • During INSPIRE 2018, EESL and GAIL, a wholly owned subsidiary of GAIL (India) Limited signed a MoU.
    • The MoU is aimed to develop natural gas based cogeneration and tri-generation projects in Commercial & Industrial Sectors in India.
    • This MoU is set to benefit industries such as Hotels, Hospitals, Airports, Commercial Malls, Commercial/Government Buildings and other infrastructure with the advantages of Combined Heat & Power technology.

    Energy Efficiency Services Limited (EESL):

    • EESL under the administration of Ministry of Power is working towards mainstreaming energy efficiency and is implementing the world’s largest energy efficiency portfolio in the country.
    • EESL aims to create market access for efficient and future-ready transformative solutions that create a win-win situation for every stakeholder.
    • EESL has pioneered innovative business approaches to successfully roll-out large-scale programs that allow for incentive alignment across the value chain and rapidly drive transformative impact.
    • EESL aims to leverage this implementation experience and explore new overseas market opportunities for diversification of its portfolio.
    • As on date, EESL has begun its operations in UK, South Asia and South-East Asia.

    Privatisation of Airports

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    • Union Cabinet has recently given in principle approval for operating, managing and developing 6 non-metro airports under Public Private Partnership (PPP).

    Key Facts:

    • The airports are Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru.
    • At present, airports at Delhi, Mumbai, Bangalore, Hyderabad and Cochin are managed under the PPP model.
    • The Airports Authority of India (AAI) will hold a minor stake in 6 new airports under PPP, just like it does at the Delhi and Mumbai airports.
    • The private player will hold at least 75 per cent stake.
    • PPP bidding model – It will be held in a revenue-sharing model, where bidders are required to pay a specified share of gross revenue to the AAI.

    Benefits:

    • PPP in infrastructure projects brings efficiency in service delivery, expertise, enterprise and professionalism apart from harnessing the needed investments in the public sector.
    • The PPP in airport infrastructure projects has brought World class infrastructure at airports, delivery of efficient and timely services to the airport passengers, augmenting revenue stream to the Airports Authority of India without making any investment, etc.
    • The PPP airports in India have been ranked among the top 5 in their respective categories by the Airports Council International (ACI) in terms of Airport Service Quality (ASQ).
    • PPP experiments have helped create world class airports, it has also helped AAI in enhancing its revenues and focusing on developing airports and Air Navigation infrastructure in the rest of the country.

    Eliminate Unmanned Level Crossings Mission

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    • Indian Railway has taken a mission area to eliminate all Unmanned Level Crossings (UMLCs) on Broad Gauge and accordingly special efforts have been made so that elimination can be completed at the earliest.

    What numbers say?

    • As on April 2019, there were 3479 Unmanned Level Crossings on Broad Gauge routes.
    • Total 3402 UMLCs have been eliminated in last seven months.
    • Balance 77 UMLCs have also been planned to be eliminated by December 2018.
    • Most of the UMLCs have been eliminated either by provision of Subway/RUBs or by manning.

    Progress till date:

    • All Unmanned level crossings on routes having speed more than 130KMPH and on Sub-urban routes have been eliminated.
    • 12 Zonal Railways have now become UMLC free on Broad Gauge route.
    • By elimination of UMLCs on war footing, accidents at UMLCs have reduced from 65 in 2009-10 to 3 in 2018-19.

    Regional Connectivity Scheme UDAN 3

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    • ·         Opening the third round of the regional connectivity scheme (RCS), the Ministry of Civil Aviation has invited proposals for air routes that include tourist destinations

    Eye for seaplanes:

    • Seaplanes may soon be operating commercial passenger flights in India with the Centre inviting bids for connecting selected destinations under the RCS
    • Few destinations that the government proposes to connect through seaplanes are the recently unveiled Statue of Unity at SardarSarovar Dam, Sabarmati Riverfront in Ahmedabad, Tehri Dam in Uttarakhand and NagarjunaSagar in Telangana.

    RCS in phase 3:

    • In the latest phase, the Centre is reoffering 34 airports that weren’t successfully connected.
    • Some destinations have been put on the block again as helicopter operations failed to take off.
    • The Centre has also offered 23 tourist destinations including Bodh Gaya, Agra, Kanha, Varanasi, Hampi, Mysore and Kullu.
    • The previous two rounds saw a total of 428 routes awarded to 17 airlines and helicopter operators.

    Quadricycles get go-ahead for pvt use, to boost connectivity

    Why in News?

    • The Union Ministry of Road Transport and Highways has notified inclusion of the ‘Quadricycle’ as a ‘non-transport’ vehicle under the Motor Vehicles Act 1988 on November 23, 2018.
    • Following a notification amending the Central Motor Vehicles Rules, 1989, the Supreme Court approved the classification of Quadricycles under a new category.

    Quadricycle:

    • A Quadricycle is a vehicle of the size of a 3-wheeler but with 4 tires and fully covered like a car. It has an engine like that of a 3-wheeler. This makes it a cheap and safe mode of transport for last mile connectivity.

    Highlights:

    • The Quadricycles were allowed for transport usage under the Act in June but now has also been made usable for non-transport purposes.
    • Following a notification amending the Central Motor Vehicles Rules, 1989, the Supreme Court approved the classification of Quadricycles under a new category.
    • The Quadricycles are different from regular four-wheelers. They weigh almost half of an entry-level car. The car has a smaller and more frugal engine. It is equipped with basic features.
    • The Quadricycle was unveiled in 2012 but could not officially be launched due to some safety concerns cited by the Bajaj’s rivals and industry body in the Supreme Court.
    • According to the order issued in June, the passenger vehicle should not weigh more than 475 KGs while the goods vehicle can weigh up to 550 kg.

    Motor Vehicle Act, 1988:

    • It was an act of Parliament of India which regulates all aspects of road transport vehicles.
    • It was preceded by Motor Vehicle Act, 1939 and Motor Vehicles Act, 1914.
    • This act provides in detail the legislative provisions regarding licensing of drivers/conductors, registration of motor vehicles, control of motor vehicles through permits, special provisions relating to state transport undertakings, traffic regulation, insurance, liability, offences and penalties, etc.
    • For exercising the legislative provisions of the Act, the Government of India made the Central Motor Vehicles Rules 1989.
    • There is provision to provide 50,000 to Rs. 1 lakhas interim relief to the family of victim of fatal accidents. The cases of road accident compensation claims are decided in the Motor Accident Claims Tribunal.

    Outreach Initiative for MSME Sector

    GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

    Why in News?

    • Hon’ble PM has launched a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector.
    • As part of this programme, the Prime Minister unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.
      • Five key aspects for facilitating the MSME sector
      • Access to credit,
      • Access to market
      • Technology upgradation
      • Ease of doing business and
      • Security for employees
      • Key Initiatives

    Access to Credit:

    59 minute loan portal:

    • Loans uptoRs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes.
    • This portal will be made available through the GST portal.
    • 2 percent interest subvention for all GST registered MSMEs, on fresh or incremental loans.

    TReDS compliance:

    • All companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS).
    • Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables.
    • This will resolve their problems of cash cycle.

    Access to Markets:

    • The public sector companies have now been asked to compulsorily procure 25 percent, instead of 20 percent of their total purchases, from MSMEs.
    • Out of the 25 percent procurement mandated from MSMEs, 3 percent must now be reserved for women entrepreneurs.
    • He said transactions worth more than Rs. 14,000 crore have been made so far through GeM (Govt. E Market).
    • All public sector undertakings of the Union Government must now compulsorily be a part of GeM.

    Technology Upgradation:

    • PM announced establishment of tool rooms across the country as they are a vital part of product design.
    • 20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.

    Ease of Doing Business:

    • Clusters will be formed of pharma MSMEs and 70 percent cost of establishing these clusters will be borne by the Union Government.
    • The announcement focused on simplification of government procedures. The return under 8 labour laws and 10 Union regulations must now be filed only once a year.
    • As part of establishing a unit, an entrepreneur needs two clearances namely to establish.
    • The Environmental clearance and consent under air pollution and water pollution laws have been merged as a single consent and self-certifications.
    • For minor violations under the Companies Act, the entrepreneur will no longer have to approach the Courts, but can correct them through simple procedures

    India, ADB sign USD 200 million loan agreement to improve highways in Bihar

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in news?

    • The Asian Development Bank (ADB) and the Union Government on November 26, 2018 signed a USD 200 million loan agreement to finance widening and upgrading of about 230 kilometers state highways in Bihar to all-weather standards with road safety features.

    Bihar State Highways III Project (BSHP-III):

    • The project involves upgrading State Highways to standard two-lane width with road safety features and paved shoulders including reconstructing, widening, and strengthening culverts and bridges.
    • The Project will also build institutional capacity of the State for road design and maintenance and incorporate appropriate new technologies in the State’s road sub-sector.
    • The improved roads will contribute to savings in vehicle operating cost and travel time, reduce vehicle emissions, and improve road safety.
    • It will establish a State-level Road Research Institute to improve technical and management capacity of the Road Agency Staff.
    • The loan will complement the efforts of Bihar Government to upgrade all State Highways to meet the minimum two-lane standard with better surfaces and improved road safety.
    • Since 2008, ADB has provided four loans to Bihar, amounting to $1.43 billion, to upgrade about 1,453 km of State Highways and to construct a New Bridge over the Ganga River near Patna.

    Promulgation of the Companies Amendment (Ordinance), 2018

    GS 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

    Why in News?

    • The recommendation of the Union Cabinet for promulgation of the Companies Amendment (Ordinance), 2018 has been assented to by the President of India.
    • The Ordinance is promulgated to review offences under the Companies Act, 2013.

    Key Amendments:

    • Shifting of the jurisdiction of 16 types of corporate offences from the special courts to in-house adjudication, which is expected to reduce the case load of Special Courts by over 60%, thereby enabling them to concentrate on serious corporate offences.
    • The penalty has been reduced to half for small companies and one person companies of that applicable to normal companies.
    • Instituting a transparent and technology driven in-house adjudication mechanism on an online platform and publication of the orders on the website.
    • Strengthening in-house adjudication mechanism by necessitating a concomitant order for making good the default at the time of levying penalty, to achieve the ultimate aim of achieving better compliance.
    • Declogging the NCLT by:
      • enlarging the pecuniary jurisdiction of Regional Director by enhancing the limit up to Rs. 25 Lakh as against earlier limit of Rs. 5Lakhunder Section 441 of the Act;
      • vesting in the Central Government the power to approve the alteration in the financial year of a company under section 2(41); and
      • vesting the Central Government the power to approve cases of conversion of public companies into private companies.

    19thMeeting of the Financial Stability and Development Council (FSDC)

    GS 3: Economy | Mobilization of resources

    Why in News?

    • The 19th Meeting of the Financial Stability and Development Council (FSDC) to review the current global and domestic economic situation and financial sector performance was held
    • Highlights of the Meet:
    • The Council discussed at length the issue of real interest rate, current liquidity situation, including segmental liquidity position in NBFCs and mutual fund space.
    • The Council decided that the Regulators and the Government would keep a close watch on the developing situation and take all necessary measures.

    Cyber Security:

    • FSDC took note of the developments regarding strengthening of Cyber Security in Financial Sector.
    • It included progress made towards setting up of a Computer Emergency Response Team in the Financial Sector (CERT-Fin) under a Statutory Framework.
    • The Council also deliberated on the need for identifying and securing critical information infrastructure in financial sector.

    Cryptocurrency:

    • The Council also deliberated on the issues and challenges of Crypto Assets/Currency and decided to devise an appropriate legal framework to ban use of private crypto-currencies in India.
    • The panel encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.

    Other discussions:

    • Other issues discussed include market developments and financial stability implications of the use of RegTech and SupTech (IT enabled regulatory process) by Financial Firms and Regulatory and Supervisory Authorities.
    • It also discussed implementing the Recommendations of the Sumit Bose Committee Report on measures, such as, promoting appropriate disclosure regime for financial distribution costs.
    • Financial Stability and Development Council (FSDC):
    • FSDC is an apex-level body constituted by the Government of India to create a super regulatory body as mooted by the RaghuramRajan Committee in 2008.
    • Finally in 2010, the then Finance Minister of India, Pranab Mukherjee, decided to set up such an autonomous body dealing with macro prudential and financial regularities in the entire financial sector of India.
    • An apex-level FSDC is not a statutory body. No funds are separately allocated to the council for undertaking its activities.

    Responsibilities:

    • Financial Stability
    • Financial Sector Development
    • Inter-Regulatory Coordination
    • Financial Literacy
    • Financial Inclusion
    • Macro prudential supervision of the economy including the functioning of large financial conglomerates
    • Coordinating India’s international interface with financial sector bodies like the Financial Action Task Force (FATF), Financial Stability Board (FSB) and any such body as may be decided by the Finance Minister from time to time.

    Limited Liability Partnership (LLP)

    GS 3: Economy | Mobilization of resources

    Why in News?

    • Ministry of Corporate Affairs has launched another process re-engineering by making incorporation of Limited Liability Partnership (LLP) through a complete online system through a web service titled “RUN-LLP (Reserve Unique Name – Limited Liability Partnership)”
    • The Limited Liability Partnership Rules have been amended on 18th September 2018 which would come into effect from 02nd October 2018.

    The amendment rules changes:

    • Introduction of a Web Service titled ‘RUN-LLP (Reserve Unique Name – Limited Liability Partnership)’ replacing the erstwhile Form 1 (Application for reservation or change of name).
    • Introduction of a new integrated Form christened FiLLiP (Form for incorporation of Limited Liability Partnership) replacing the erstwhile Form 2 (Incorporation document and subscriber’s statement) combining therein 3 services i.e.
    • Name reservation
    • Allotment of Designated Partner Identification Number (DPIN/DIN).
    • Incorporation of the LLP

    LLP:

    • LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
    • The LLP can continue its existence irrespective of changes in partners.
    • It is capable of entering into contracts and holding property in its own name.
    • The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
    • It is organized and operates on the basis of an agreement.
    • It provides flexibility without imposing detailed legal and procedural requirements
    • It enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner

    Logix India 2019

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

    Why in News?

    • Union Minister of Commerce and Industry and Civil Aviation, Suresh Prabhulaunched the logo and brochure of ‘Logix India 2019’.
    • Logix India will enable effective international trade logistics and help provide efficient and cost-effective flow of goods on which other commercial sectors.

    Logix India 2019:

    • The logistics event is being organized by the Federation of Indian Export Organisations (FIEO) as a major initiative to improve logistics cost effectiveness and operational efficiencies for India’s global trade.
    • Over 20 countries are sending delegations to explore logistics partnerships with India and FIEO is focusing on logistical solutions for difficult to reach markets.
    • Over 100 international delegates are expected to attend Logix India 2019.
    • FIEO will also focus on investment opportunities in infrastructure development, warehouse consolidation, technology integration and IT enablement and skilling of manpower at the three-day meet.
    • Logix India will enable effective international trade logistics and help provide efficient and cost-effective flow of goods on which other commercial sectors depend.

    India’s Logistics Sector:

    • India ranked 44 in the World Bank Logistics Performance Index 2018.
    • As per the Economic Survey 2017-18, India’s logistics industry which is worth around USD 160 billion is likely to touch USD 215 billion in the next two years.
    • This sector provides employment to more than 22 million people and is expected to grow at the rate of 10.5 per cent over the next 5 years.

    Way forward:

    • Considering the need for India to have more robust trade relations with countries in Africa, Latin America, Central Asia, Middle East and ASEAN, Union Minister of Commerce and Industry is working on an integrated logistics strategy.
    • The need for integrated Logistics sector development has also been felt for in view of the fact that the logistics cost in India is very high compared to developed countries.
    • High logistics cost reduces the competitiveness of Indian goods both in domestic as well as export market.
    • Logistics is the backbone of EXIM trade and creates business opportunities and employment. Logistics sector is expected to grow to USD 360 billion by 2032 from the current USD 115 billion.

    India at 77 Rank in World Bank’s Doing Business Report, 2018

    GS 3: Indian Economy | Issues relating growth and development

    Why in News?

    • The World Bank released its latest Doing Business Report (DBR, 2019) in New Delhi.
    • India’s Performance:
    • India has recorded a jump of 23 positions against its rank of 100 in 2017.
    • It is placed now at 77thrank among 190 countries with a leap of 23 ranks.
    • The DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of an economy to the global best practice.
    • This year, India’s DTF score improved to 67.23 from 60.76 in the previous year.
    • As a result of continued efforts by the Government, India has improved its rank by 53 positions in last two years and 65positions in last four years.

    Doing Business Assessment of India:

    • The Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle.
    • India has improved its rank in 6 out of 10 indicators and has moved closer to international best practices (Distance to Frontier score) on 7 out of the 10 indicators.

    Important features of India’s performance this year are:

    • The World Bank has recognized India as one of the top improvers for the year.
    • This is the second consecutive year for which India has been recognized as one of the top improvers.
    • India is the first BRICS and South Asian country to be recognized as top improvers in consecutive years.
    • India has recorded the highest improvement in two years by any large country since 2011 in the Doing business assessment by improving its rank by 53 positions.
    • As a result of continued performance, India is now placed at first position among South Asian countries as against 6th in 2014.

    8 more States achieve 100% household electrification under Saubhagya

    GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

    Why in News?

    • 8 States have achieved 100% saturation in household electrification under Saubhagya namely Madhya Pradesh, Tripura, Bihar, J&K, Mizoram, Sikkim, Telangana and West Bengal.

    100% Electrification:

  • The Minister informed that as many as 2.1 crore connections have been released under Saubhagya so far.
  • Many more State like Maharashtra, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Chhattisgarh etc. are left with small number of un-electrified households and expected to achieve saturation any time.
  • Nation is expected to achieve 100% saturation in the country by 31st December, 2018.
  • Saubhagya – ‘Pradhan MantriSahajBijliHarGharYojana’:

  • Its objective is to provide access to electricity connections to all the remaining households in the country.
  • Scheme will provide subsidy on equipment such as transformers, wires and meters.
  • Ministry of Power would be the implementing authority.
  • Power connection will be provided in both rural and urban areas of the country.
  • The scheme was launched on the occasion of the birth centenary of PanditDeenDayalUpadhyaya on 25th.
    • Award Scheme under Saubhagya:

  • For creating healthy competition amongst various DISCOMs, an award scheme has been instituted with awards of more than Rs 300 crore to be won by States/Discoms.
  • The first DISCOM/Power Departments to complete 100% household electrification will be felicitated with cash award of Rs. 50 Lakh for the employees and Rs.100 crore grant to be spent for distribution infrastructure.
  • For the purpose of award, States have been divided into 3 categories and award would be given in each of these categories.
  • The States completing 100% household electrification by 31st 2018 will also receive additional grant of 15% of the project cost (5% for special category States) sanctioned under Saubhagya.
  • GLOBAL AGRICULTURE LEADERSHIP SUMMIT 2018

    Why in News?

    • 11th Global Agriculture Leadership Summit & Awards were recently organised by Indian Council of Food and Agriculture (ICFA) with support of Ministry of Agriculture and Farmers’ Welfare; Ministry of Food Processing Industries and Ministry of Commerce.

    11th Global Agriculture Summit 2018:

    • It aims to provide the platform towards facilitating farmers connect with the technologies, markets, industry, institutions and the Governmental programs.
    • The event takes the opportunity to discuss the constraints and opportunities for a global momentum towards making agriculture high-tech, market linked and value added for best returns to farmers.
    • ICFA is bringing together eminent personalities of Indian and global agriculture, food and agribusiness sectors on one platform on the event of 11th Global Agriculture Summit 2018.
    • The experience will be combined with the presentation of 11th Global Leadership Awards and the launch of Agriculture Year Book 2018.

    World Agriculture Prize 2018:

    • Indian Council of Food and Agriculture organises World Agriculture Prize, to be presented annually to an individual or institution.
    • It is awarded to a person for seminal role in transforming agriculture globally and saving the humanity from the curse of hunger.
    • The World Agriculture Prize will be a single prize of $100,000 and will be launched with a special session, named “Swaminathan Global Dialogue on Climate Change and Food Security”.
    • M S Swaminathan was awarded the 1st World Agriculture Prize this year.

    FISHERIES AND AQUACULTURE INFRASTRUCTURE DEVELOPMENT FUND (FIDF)

    Why in News?

    • The Cabinet Committee on Economic Affairs has given its approval for creation of special Fisheries and Aquaculture Infrastructure Development Fund (FIDF).

    Fisheries and Aquaculture Infrastructure Development Fund (FIDF):

    • FIDF would provide concessional finance to State Governments / UTs and State entities, cooperatives, individuals and entrepreneurs etc., for taking up of the identified investment
    • activities of fisheries development. Under FIDF, loan lending will be over a period of five years from 2018-19 to 2022-23 and maximum repayment will be over a period of 12 years inclusive of moratorium of two years on repayment of principal.
    • National Bank for Agriculture and Rural Development (NABARD), National Cooperatives Development Corporation (NCDC) and all scheduled Banks shall be the nodal Loaning Entities.

    Features of the FIDF:

    • Creation of fisheries infrastructure facilities both in marine and Inland fisheries sectors. To augment fish production to achieve its target of 15 million tonne by 2020 set under the Blue Revolution; and to achieve a sustainable growth of 8% -9% thereafter to reach the fish production to the level of about 20 MMT by 2022-23.
    • Employment opportunities to over 9.40 lakh fishers/fishermen/fisherfolk and other entrepreneurs in fishing and allied activities.
    • To attract private investment in creation and management of fisheries infrastructure facilities.
    • Adoption of new technologies.

    Financial Stability and Development Council

    • 19thMeeting of the Financial Stability and Development Council (FSDC) was held under the Chairmanship of the Union Finance Minister.
    • To review the current global and domestic economic situation and financial sector performance.
    • The Council decided that the Regulators and the Government would keep a close watch on the developing situation and take all necessary measures.
    • The Council deliberated on the need for identifying and securing critical information infrastructure in financial sector.
    • The Council deliberated on the issues and challenges of Crypto Assets/Currency.

    FSDC:

    • Financial Stability and Development Council (FSDC) is an apex-level body constituted by the government of India. An autonomous body dealing with macro prudential and
    • financial regularities in the entire financial sector of India. The new body envisages to strengthen and institutionalise the mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation of economy.

    Composition of the council:

    • Chairperson: The Union Finance Minister of India
    • Members:
    • Governor Reserve Bank of India (RBl)
    • Finance Secretary and/ or Secretary, Department of Economic Affairs (DEA),
    • Secretary, Department of Financial Services (DFS)
    • Secretary, Ministry of Corporate Affairs
    • Chief Economic Advisor, Ministry of Finance
    • Chairman, Securities and Exchange Board of India (SEBI)
    • Chairman, Insurance Regulatory and Development Authority (IRDA)
    • Chairman, Pension Fund Regulatory and Development Authority (PFRDA)
    • Chairman, Insolvency and Bankruptcy Board of India (IBBI)
    • Additional Secretary, Ministry of Finance, DEA, will be the Secretary of the Council
    • The Chairperson may invite any person whose presence is deemed necessary for any of its meeting(s).

    Responsibilities:

    • Financial Stability, Financial Sector Development, Inter-Regulatory Coordination
    • Financial Literacy, Financial Inclusion,
    • Macro prudential supervision of the economy including the functioning of large financial conglomerates
    • Coordinating India’s international interface with financial sector

    Fisheries and Aquaculture Infrastructure Development Fund (FIDF)

    Why in News?

    • The Cabinet Committee on Economic Affairs has given its approval for creation of special Fisheries and Aquaculture Infrastructure Development Fund (FIDF).

    Fisheries and Aquaculture Infrastructure Development Fund (FIDF):

    • FIDF would provide concessional finance to State Governments / UTs and State entities, cooperatives, individuals and entrepreneurs etc., for taking up of the identified investment
    • activities of fisheries development. Under FIDF, loan lending will be over a period of five years from 2018-19 to 2022-23 and maximum repayment will be over a period of 12 years inclusive of moratorium of two years on repayment of principal.
    • National Bank for Agriculture and Rural Development (NABARD), National Cooperatives Development Corporation (NCDC) and all scheduled Banks shall be the nodal Loaning Entities.

    Features of the FIDF:

    • Creation of fisheries infrastructure facilities both in marine and Inland fisheries sectors. To augment fish production to achieve its target of 15 million tonne by 2020 set under the Blue Revolution; and to achieve a sustainable growth of 8% -9% thereafter to reach the fish production to the level of about 20 MMT by 2022-23.
    • Employment opportunities to over 9.40 lakh fishers/fishermen/fisherfolk and other entrepreneurs in fishing and allied activities.
    • To attract private investment in creation and management of fisheries infrastructure facilities.
    • Adoption of new technologies.

    Cabinet nod for Indian Institute of Skills

    Why in News?

    • The Union Cabinet has approved the setting up of Indian Institute of Skills (IISs) at different locations across the country in PPP.
    • The PPP Models will be explored for promotion of IIS at select locations based on demand and available infrastructure.

    Benefits of IISs:

    • The IISs shall provide high quality skill training, applied research education and a direct and meaningful connection with industry.
    • The setting up of IISs shall augment the global competitiveness of key sectors of Indian economy
    • It will provide opportunity to aspiring youth across the country to have access to highly skilled training.
    • By leveraging advantages of private sector enterprise and public capital in terms of Government land, it would create new institutes of expertise, knowledge and competitiveness.

    YOUTH ROAD SAFETY LEARNERS LICENCE PROGRAMME

    Why in News?

    • Ministry of State for Road Transport and Highways launched the Youth Road Safety Learners Licence programme in New Delhi.

    Highlights:

    • The programme is a PPP initiative to be run in collaboration with Diageo India and the Institute of Road Traffic Education (IRTE)
    • Attempts to bring a formal and structured training program for young, first-time drivers as they apply for learner’s license.
    • This programme will help the Government achieve its target of reducing road accidents by 50 percent by 2020.

    Reasons for high road accidents:

    • Rash driving, Drunken driving
    • Lack of adequate safety measures like not wearing helmets

    Road to Safety initiative:

    • To provide capacity building training to traffic police officials and educate commercial drivers such as truckers and bus drivers and university students on the dangers of drunken driving.

    REVISED CONSUMER PRICE INDEX NUMBERS ON BASE YEAR

    Why in News?

    • The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has revised the Base Year of the Consumer Price Index (CPI).

    Key Changes:

    • The base year revised from 2010=100 to 2012=100.
    • It will affect from the release of indices for the month of January 2015.
    • The CPI (Rural, Urban, Combined) on Base 2012=100 is being released for the month of September 2018.
    • The Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined are also being released for September 2018.

    CPI:

    • A consumer price index (CPI) measures changes in the price level of market basket of consumer goods and services purchased by households.
    • It is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.
    • The index is usually computed monthly, or quarterly in some countries, as a weighted average of sub-indices for different components of consumer expenditure

    Centre for The Fourth Industrial Revolution In India

    Why in News?

    • The World Economic Forum (WEF) announced its new Centre for the Fourth Industrial Revolution in India, which would aim to bring together the government and business leaders to pilot emerging technology policies.

    Industry 4.0:

    • The WEF has also entered into partnerships with the Maharashtra and Andhra Pradesh governments for the launch of Industry 4.0. The centre would be based in Maharashtra and it has selected drones, artificial intelligence and blockchain as the first three project areas.
    • NITI Aayog will coordinate the partnership on behalf of the government and the work of the centre among multiple ministries. The new centre will work in collaboration with the government on a national level to co-design new policy frameworks and protocols for emerging technology.
    • The launch of this Centre is the fourth in the world after San Francisco, Tokyo and Beijing.

    Focus of the Initiative:

    • The first project will focus on expanding access to data to accelerate the adoption of artificial intelligence in socio-economic areas like education, healthcare and agriculture.
    • The second will focus on the application of smart contracts to boost productivity and transparency while reducing inefficiency.
    • At state level, the Government of Maharashtra in collaboration with the Centre is planning to undertake a drone mapping operation in the agriculture sector.

    INDIA-CHINA TRADE

    Why in News?

    • Union Minister of Commerce & Industry has released a study by the Department of Commerce on India-China Trade.
    • The report tries to analyze the magnitude, extent and plausible reasons of India’s rising trade deficit with China.

    Addressing the Deficit:

    • India’s trade relationship with China is unique and no other bilateral trading relationship evokes as much interest in India as the India-China trade relationship.
    • From being a small trading partner of India in 2001, within a span of fifteen years, China has rapidly become India’s biggest trading partner.
    • Trade between the two countries has been expanding but India’s trade deficit with China has been growing.

    Trade War Looming FTAs:

    • Most industry associations want the Government to pursue a defensive approach to Free Trade Agreements (FTAs) and raise tariffs on the doctrine of domestic markets for domestic producers.
    • The global use of protectionist measures in 2018 was unprecedented with the trade wars looming between two of the largest economies of the world.
    • This analysis helps in studying whether an FTA or tariff concessions by China to India can be beneficial in increasing India’s exports to China.

    Significance of the study:

    • The idea behind this exercise has been to identify whether tariff concessions by China to other countries impede raising the share of India’s exports in the Chinese market. These lines can be taken up by India for negotiations with China under agreements like Asia
    • Pacific Free Trade Agreement (APTA) in which both India and China are involved during the review exercise.
    • Competing countries that have FTAs with China, limits the scope for Indian exports.
    • This is due to higher tariffs faced by exporters as compared to competing nations who have secured tariff concessions under their FTAs.
    • The study also underlines the opportunity available for India in increasing its services exports to China.
    • The imports of China from these countries as well as China’s Most Favored Nation (MFN) rates have been studied.
    • Indices like Revealed Comparative Advantage (RCA) and Trade Complementarity Index (TCI) have been used to analyse the extent of India and China’s competiveness in this arena and the potential for the future.
    • There is a separate section on the opportunities arising for India out of US – China trade standoff with a detailed analysis of specific tariff lines.
    • The new tariffs that have been levied by China on the US amidst the ongoing trade war brings in the potential for India to fill the gaps left by America in the Chinese market.

    GI Tag For Alphonso from Konkan

    Why in News?

    • Alphonso from Ratnagiri, Sindhudurg, Palghar, Thane and Raigad districts of Maharashtra, is registered as Geographical Indication (GI).

    Alphonso Mangoes:

    • The king of mangoes, Alphonso, better known as ‘Hapus’ in Maharashtra, is in demand in domestic and international markets not only for its taste but also for pleasant fragrance and vibrant colour.
    • It has long been one of the world’s most popular fruit and is exported to various countries including Japan, Korea and Europe.
    • New markets such as USA and Australia have recently opened up.

    GI tag and its significance:

    • A GI is primarily an agricultural, natural or a manufactured product (handicrafts and industrial goods) originating from a definite geographical territory.
    • Typically, such a name conveys an assurance of quality and distinctiveness, which is essentially attributable to the place of its origin.
    • Once the GI protection is granted, no other producer can misuse the name to market similar products. It also provides comfort to customers about the authenticity of that product.

    Geographical Indications in India:

    • A Geographical Indication is used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • The first product to get a GI tag in India was the Darjeeling tea in 2004. There are a total of 325productsfrom India that carry this indication.
    • Darjeeling Tea, Mahabaleshwar Strawberry, Blue Pottery of Jaipur, Banarasi Sarees and TirupatiLaddus are some of the GIs.
    • The Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) is a sui generis Act for protection of GI in India.
    • India, as a member of the World Trade Organization (WTO), enacted the Act to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights
    • Geographical Indications protection is granted through the TRIPS Agreement. See also the Paris Convention, the Madrid Agreement, the Lisbon Agreement, the Geneva Act.

    SEZ Policy Review Committee holds final meeting

    Why in News?

    • The SEZ Policy Review Committee has its final round of consultations with the members under the chairmanship of the Commerce Secretary.
    • The Committee was of the opinion that SEZ should now transform into “Employment and Economic Enclaves” (3Es).

    Why such Policy Review?

    • The objective of the Committee was to evaluate the SEZ policy framed in 2000 and suggest measures to make the policy WTO compatible.
    • It is aimed to give suggestions which will encourage manufacturing and services sector and lead to maximizing utilization of vacant land in SEZs.
    • It further aims to create seamlessness between SEZ policy and other schemes like Costal Economic Zone, Delhi-Mumbai Industrial Corridor, National Industrial Manufacturing Zone, Food Parks and Textile Parks.

    Broadening the scope of SEZs:

    • The changes in the macro-economic environment in India required a re-look at the SEZ Policy framework so that focus is on enabling generation of 100 million jobs in the manufacturing sector. It will enable manufacturing competitiveness within the framework of WTO rules, bringing in services sectors like health care, financial and legal services, repair and design services under SEZs.

    Special Economic Zones (SEZ):

    • SEZs are set up under Special Economic Zones Act, 2005 as duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs in India. SEZ units are deemed to be outside the customs territory of India.
    • Goods and services coming into SEZs from the domestic tariff area or DTA are treated as exports from India and goods and services rendered from the SEZ to the DTA are treated as imports into India.

    21 IORA Countries Adopt the Delhi Declaration on Renewable Energy

    Why in News?

    • As many as 21 countries in the Indian Ocean Rim Association (IORA) today adopted the Delhi Declaration on Renewable Energy in the IOR.
    • The Declaration aims for collaboration among IORA member states in meeting the growing demand for renewable energy in the Indian Ocean littorals.
    • It calls for development of a common renewable energy agenda for the Indian Ocean region and promote regional capacity building.

    Highlights of the declaration:

    • As per the declaration adopted, IORA member nations will collaborate with the member nations to exchange knowledge and share views and potential interests in the renewable energy sector;
    • The MoU signed between IORA and ISA with a focus on joint capacity-building programs, research & development activities in solar energy and exchange of best practices.
    • The Delhi Declaration on Renewable Energy in the Indian Ocean Region calls for collaboration among IORA member states in meeting the growing demand for renewable energy in the Indian Ocean littorals and promote regional capacity building.
    • The declaration also calls for promotion of technology development and transfer, strengthening of public private partnerships in renewable energy and collaboration among IORA member states and the member nations of the International Solar Alliance (ISA).

    Global Renewable Energy Atlas:

    • IORA member nations and International Renewable Energy Agency (IRENA) will undertake the expansion of the Global Renewable Energy Atlas.
    • It will be the world’s largest-ever joint renewable resource data project, coordinated by IRENA, thereby creating the IOR’s first and most comprehensive map and database which will be used to tap RE potential of the region.
    • It aims to collaborate on opportunities available under the International Renewable Energy Learning Platform (IRELP).

    Udyam Abhilasha

    Why in News?

    • Small Industries Development Bank of India (SIDBI), had launched a National Level Entrepreneurship Awareness Campaign, Udyam Abhilasha in 115 Aspirational Districts identified by NITI Aayog.

    Udyam Abhilasha:

    • The campaign would create and strengthen cadre of more than 800 trainers to provide entrepreneurship training to the aspiring youths across these districts.
    • SIDBI has partnered with CSC e-Governance Services India Limited, a Special Purpose Vehicle, (CSC SPV) set up by the Ministry of Electronics & IT, Govt. of India for implementing the campaign.
    • SIDBI is also taking-up with stakeholders including Banks, NABARD, NBFCs, SFBs, District Industries Centres, State Govt. etc. to be a part of this campaign and ensure multifold impact.

    Objectives of the Campaign:

    • To inspire rural youth in Aspirational districts to be entrepreneurs by assisting them to set up their own enterprise,
    • To impart trainings through digital medium across the country,
    • To create business opportunities for CSC VLEs,
    • To focus on women aspirants in these Aspirational districts to encourage women entrepreneurship andTo assist participants to become bankable and avail credit facility from banks to set up their own enterprise.

    Role of Village Level entrepreneurs:

    • CSC VLEs would play role of catalyst for these aspiring entrepreneurs.
    • Apart from training, VLEs would also provide handholding support to the aspirants to establish new units by assisting them in availing loans for their enterprise.
    • They will help making youth aware about various initiatives of Government of India like Pradhan Mantri Mudra Yojana, SUI etc.

    Small Industries Development Bank of India (SIDBI):

    • It is the Principal Financial Institution for the Promotion, Financing, Development and Coordination of the Micro, Small and Medium Enterprise (MSME) sector.
    • SIDBI meets the financial and developmental needs of the MSME sector with a Credit+ approach to make it strong, vibrant and globally competitive.
    • SIDBI, under its revamped strategy SIDBI 2.0, has adopted the theme of ease of access to MSEs and being Impact Multiplier & Digital Aggregator.

    Ease of living index

    Why in News?

    •   Andhra Pradesh has topped the charts among States in terms of “Ease of Living Index” rankings launched by the Ministry of Housing and Urban Affairs (MoHUA).
    • It was followed by Odisha and Madhya Pradesh.

    Ease of Living Index:

    •   The Ease of Living Index is a transformative initiative of the MoHUA to help the cities assess their liveability vis-à-vis national and global benchmarks.
    • The Index is aimed to encourage all cities to move towards an ‘outcome-based’ approach to urban planning and management and promote healthy competition among cities.
    •   It seeks to assist cities in undertaking a 360-degree assessment of their strengths, weaknesses, opportunities, and threats.
    • The MoHUA released the first ever ‘Ease of Living Index’ covering 111 Indian cities on 13 August, 2018, which serves as a litmus test to help assess the progress made in cities through various initiatives.
    •   All cities were evaluated out of 100.

    Parameters of the Index:

    • The ‘physical’ pillar (infrastructure) was given the highest weightage of 45, while institutional (governance) and social were weighted 25 each. Economy was weighted 5.
    • The framework comprised four pillars namely Institutional, Social, Economic and Physical which are further broken down into 78 indicators across 15 categories.
    • These include governance, identity and culture, education, health, safety and security, economy, affordable housing, land use planning, public open spaces, transportation and mobility, assured water supply, waste-water management, solid waste management, power, and quality of environment.

    JAN DHAN DARSHAK – MOBILE APP

    Why in News?

    •          Department of Financial Services (DFS), Ministry of Finance and National Informatics Centre (NIC) has jointly developed a mobile app called Jan DhanDarshak as a part of financial inclusion (FI) initiative .

    Jan DhanDarshak App:

    •          This app will act as a guide for the common people in locating a financial service touch point at a given location in the country.
    •          Jan DhanDarshak app is a unique solution to provide a citizen centric platform for locating financial service touch points across all providers such as banks, post office, CSC, etc.
    •          These services could be availed as per the needs and convenience of the common people.
    •          While over 5 lakh FI touch points (Bank branches, ATMs, Post Offices) have been mapped on this App, approx. 1.35 lakh Bank Mitras would be on-boarded by 01.12.2018.

    Salient features of the App:

    •        Find nearby Financial touch points, based on current location (Branches/ATM/Post offices)
    •          Search by place name
    •          Search by place name also available with Voice Interface
    •          Phone number of bank branches available in app, with the facility of call button for integrated dialing
    •         Users’ feedback will go directly to the concerned bank for carrying out the necessary updation in data on financial touch points.

    FINANCIAL INCLUSION INDEX

    Why in News?

    •          The Union Minister of Finance and Corporate Affairs has launched the Financial Inclusion Index.

    Financial Inclusion Index:

    •      Department of Financial Services (DFS), Ministry of Finance will release an Annual Financial Inclusion Index (FII).
    •   The index will be a measure of access and usage of a basket of formal financial products and services that includes savings, remittances, credit, insurance and pension products.
    •  The index will have three measurement dimensions:
      • Access to financial services
      •    Usage of financial services
      •    Quality
    • The single composite index gives a snap shot of level of financial inclusion that would guide Macro Policy perspective.

    Utility of the Index:

    • The various components of the index will help to measure financial services for use of internal policy making.
    •    Financial Inclusion Index can be used directly as a composite measure in development indicators.
    •  It enables fulfillment of G20 Financial Inclusion Indicators requirements.
    •  It will also facilitate researchers to study the impact of financial inclusion and other macro-economic variables.

    RAIL SAHYOG” WEB PORTAL

    Why in News?

    • The Minister of Railways and Coal has launched a web portal Rail Sahyog to provide a platform for the Corporates and PSUs to contribute to creation of amenities at/near Railway Stations through CSR funds.

    Rail Sahyog Portal:

    • The portal has been envisaged as a platform for all including individuals as also private & public organisation to contribute towards CSR activities in association with Indian Railways.
    •  The companies desirous of contributing can show willingness on the portal by registering their requests which will be processed by Railway officials.
    •  This portal will provide an opportunity for Industry/ Companies/ Associations to collaborate with Railways. Individuals, Private companies have the freedom to execute projects in Railways.
    •  The main focus is on ensuring creation of good quality assets through this collaboration.

    CSR Funded activities in Railways:

    •  Construction of toilets in circulating areas of all stations with provision of low cost sanitary pad vending machine & incinerator in female toilets and contraceptives vending machine in male toilets and initial one year maintenance.
    •     Providing free Wi-Fi at stations through setting up Hotspots.
    •     Provision of Benches at station Platforms as facility for senior citizens/disabled.
    •   Bottle crushing machines at 2175 major stations for ensuring environmental sustainability.
    •     Dustbins at all stations for Swachh Bharat will help in preventing littering around.
    •    Separate dustbins for wet/dry waste need to be provided at circulating area of Station and Platforms.

    INDIAN RAILWAYS INITIATIVES TO IMPROVE TRAIN OPERATIONS AND PROVIDE BETTER PASSENGER EXPERIENCE

    Why in News?

    •          Indian Railways has always focused on adoption of new technologies to improve train operations and provide better passenger experience to its customers. In this series, IR has introduced various IT initiatives.

    Real Time Train Information System (RTIS):

    •          Railways have experimented with tracking of trains using GPS devices with these GPS devices located in the locomotive.
    •          For a sustainable solution, a Real Time Train Information System (RTIS) is being implemented, whereby GPS tracking devices would communicate using satellite communications. The trials have been successful.
    •          Apart from this, data logger systems already available in track circuited stations are being used at major interchange points to capture arrival/departure information on trains.

    Computerised Train Signal Register:

    •          In an effort to computerise the transactions of the station master, a Computerised Train Signal Register is going live at 650 stations.
    •          This enables arrival/departure information to be transmitted to the Control Office Application (COA) and the National train Enquiry System (NTES) directly from the station master’s desk.

    Handheld Terminals for TTEs:

    •         Handheld Terminals (HHTs) are being provided to the Train Ticket Examiners (TTEs) to be able to check the reserved coaches, allot the vacant berths and transmit information on available berths to the subsequent stations.
    •         The HHT can also access the ticketing application and collect excess fares as per rules.
    •          The terminal can potentially connect to a Point of Sale (POS) machine and charges can be collected digitally.

    Modernisation of Ticketing Website (IRCTC):

    •          Over the last four years, the capacity of the website has increased to 20,000 tickets per minute starting from 2000 tickets per minute in 2014, a ten-fold increase.
    •          Apart from the capacity, the entire user experience has been improved substantially with the launch a new interface with easier navigation and standard views that enable the passengers to transact smoothly.
    •          New features have been added that enable better planning of journeys aiding the passenger to obtain confirmed tickets.

    Paperless Unreserved Ticketing through Mobile Phones:

    •       Paperless Unreserved ticketing on mobile phones was launched on 25.12.2014 at Mumbai.
    •        This has eliminated the need for passengers to stand in queue for getting tickets for journey in unreserved compartments of trains.
    •         The ticket is delivered on the Mobile Phone and is embedded with QR Code.
    •       This service has added to passenger convenience. About 4 lakh passengers per day are booking tickets on Mobile phones.

    Indian Railway e-Procurement System (IREPS):

    •    Complete tendering activity of Indian Railways for procurement of goods, services & works and e-auction of scrap sale is on IREPS.
    •         IREPS system is largest such G to B portal in India.
    •         It has helped in achieving objectives of transparency, efficiency and improving of ease of doing business.
    •       90,000 vendors have registered themselves on IREPS website.
    •      Central Vigilance Commission has recognized and awarded the system under “Vigilance Excellence Award – 2017” for outstanding contribution in the category of “IT initiatives for transparency in the organization”.

    IWAI MAKES INDIA’S FIRST STANDARDIZED MODERN SHIP DESIGN FOR GANGA A REALITY

    Why in News?

    •          Inland Waterways Authority of India (IWAI) made public 13 standardised state-of-the-art ship designs suitable for large barge haulage on river Ganga (National Waterway-1). This marks attaining a critical milestone in the growth of the country’s Inland Water Transport (IWT) sector.

    Boosting Domestic Shipbuilding and Navigation:

    •          Inland Waterways Authority of India (IWAI) made public 13 standardized state-of-the-art ship designs suitable for large barge haulage on river Ganga.
    •          It will help overcome the unique navigation challenges river Ganga throws due to its complex river morphology, hydraulics, acute bends, shifting channels, meanders and current.
    •          It will serve as an enabler for domestic shipbuilding industry working on inland vessels and open huge possibilities for cargo and passenger movement on National Waterway-1.

    Improving Carrying Capacity:

    •         The Government is implementing Jal Marg Vikas Project (JMVP) for capacity augmentation of navigation on NW-1 (Varanasi-Haldia stretch) with the technical assistance and investment support of the World Bank.
    •     The specially designed vessels will navigate on low drafts with high carrying capacity and at the same time, environment friendly.
    •     It is specialised in low draft and high carrying capacity vessels.
    • The new designs will translate into a savings of Rs 30-50 lakhs in the building of a vessel.
    •    The new designs will obviate the dependence of Indian Ship builders on foreign ship designs for IWT and prove to be a boost to ‘Make in India’ initiative of the Government.

    Freely Available Design for all:

    •  Available free on the IWAI website, the designs will remove ambiguity on the class and type of vessels that can sail on river Ganga with efficient maneuverability.
    • They will help shipyards build vessels of standardized dimensions and capacity and make them available off the shelf besides developing the ‘sale and purchase’ market for inland vessels.
    •  The designs will lead to reduced fuel costs and in turn lesser logistics costs.

    Details of the Design:

    •   The new designs for various categories of dry and liquid bulk carrier, Ro-Ro vessels, car carrier, container carrier, LNG carrier, Tug Barge flotilla (Table below) have been made by M/s DST, Germany.
    • These vessels will sail even in depths of about two metres carrying about 350 cars on a five deck car carrier.
    •    Some of the designs would enable movement of bulk cargo carriers with capacity of 2500 tonnes at three metres depth.
    •  Thus it will help removing almost 150 truckloads of pressure from the road or one full rail rake with the plying of just one such vessel.

    Mobile App NIRYAT Mitra

    Why in News?

    • Union Ministry of Commerce and Industry has launched Niryat Mitra mobile application for exporters and importers of the country.

    Niryat Mitra mobile app:

    • The Niryat Mitra mobile app has been developed by the Federation of Indian Export Organisations (FIEO), the largest exporters’ organisation of the country.
    • The app provides wide range of information required to undertake international trade from the policy provisions for export and import, applicable GST rate, available export incentives, tariff and market access requirements.
    • The app works internally to map the ITC HS code of other countries with that of India and provides all the required data without the users bothering about the HS code of any country.
    • The most interesting part is that all the information is available at tariff line.
    • It also makes available the export promotion programmes organised by FIEO and provides opportunity to the industry to participate in them, thus, helping and encouraging artisans, cottage, micro, small, medium enterprises to plan for exports.

    Promoting Ease of Doing Business

    • The exports are showing good sign and registering increase at the rate of 20%.
    • The app will provide big opportunity to everybody and help promote export interests in the country.
    • The Human Resource tool of the app enables candidates with interest in the international trade sector to register and apply against the vacancies arising in the sector.
    • Companies can also search the profiles of the candidates and engage them.

    Policy Framework for Exploration and Exploitation of Unconventional Hydrocarbons

    Why in News?

    • Union Cabinet has approved policy framework to permit exploration and exploitation of unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc.
    • It will be carried out under the existing Production Sharing Contracts (PSCs), CBM contracts and Nomination fields to encourage the existing Contractors in the licensed/leased area to unlock the potential of unconventional hydrocarbons in the existing acreages.

    Provisions of the new policy:

    • The fiscal and contractual terms of the policy provide for ring-fencing of Petroleum Operations and cost recovery of new hydrocarbon discoveries in PSC block.
    • Additional 10% rate of Profit Petroleum/ Production Level Payment (PLP) in case of CBM contract, over and above the existing rate of Profit Petroleum/PLP is to be shared with Government on new discoveries.
    • For nomination blocks, NOCs will be allowed to explore and exploit unconventional hydrocarbons under the existing fiscal and contractual terms of exploration/lease license.

    Benefits of this Policy Framework

    • This policy will enable the realization of prospective hydrocarbon reserves in existing contract areas which otherwise would have remain unexplored and unexploited.
    • It will give impetus to new investment in exploration and production (E&P) activities and chances of finding new hydrocarbon discoveries and increasing domestic production.
    • It will also spur exploration and exploitation of additional hydrocarbon resources giving impetus to new investment, economic activities, additional employment generation and thus benefitting various sections of society.
    • This will also lead to induction of new, innovative and cutting-edge technology and forging new technological collaboration to exploit unconventional hydrocarbons.

    Coal Bed Methane

    • Coal Bed Methane (CBM) is an unconventional form of natural gas found in coal deposits or coal seams.
    • CMB is formed during the process of coalification, the transformation of plant material into coal.
    • It is considered a valuable energy resource with reserves and production having grown nearly every year since 1989. Varied methods of recovery make CBM a stable source of energy.

    Shale Gas:

    • Shale gas is a natural gas formed from being trapped within shale formations. It is unconventional source of methane, like coal-bed gas (in coal seams) and tight gas (trapped in rock formations).
    • It is colourless, odourless gas, lighter than air. It is cheaper than natural gas, releases 50% less CO2, hence better source for generating electricity.
    • It also provides feedstock for petrochemicals industry, which is turned into fertilizer, plastics and other useful stuff.

    Public Sector Banks to Come Out of PCA Framework

    Why in News?

    • Union Government is expecting that public sector banks (PSBs) placed under RBI’s Prompt Corrective Action (PCA) framework will come out of it by the end of this year.

    What is Prompt corrective action (PCA) framework?

    • PCA framework is a supervisory tool of RBI, which involves monitoring of certain performance indicators of banks to check their financial health as an early warning exercise and to ensure that banks don’t go bust.
    • Its objective is to facilitate banks to take corrective measures including those prescribed by RBI, in timely manner to restore their financial health.
    • It also provides opportunity to RBI to pay focussed attention on such banks by engaging with management more closely in those areas.
    • PCA framework is invoked on banks when they breach any of three key regulatory trigger points (or thresholds).
    • They are: Capital to risk weighted assets ratio, Net non-performing assets (NPA) and Return on Assets (RoA).
    • Depending on the risk thresholds set in PCA framework, banks are put in two types of restrictions, mandatory and discretionary depending upon their placement in PCA framework levels.
    • The mandatory restrictions are on dividend, branch expansion, director’s compensation while discretionary restrictions include curbs on lending and deposit.

    New PCA framework under process:

    • RBI has placed eleven public sector banks – Dena Bank, Central Bank of India, Bank of Maharashtra, UCO Bank, IDBI Bank, Oriental Bank of Commerce, Indian Overseas Bank, Corporation Bank, Bank of India, Allahabad Bank and United Bank of India under the PCA framework.
    • Of these, two banks – Dena Bank and Allahabad Bank – are facing restriction on expansion of business.
    • Various measures taken by the government including implementation of the Insolvency and Bankruptcy Code (IBC) has yielded good results in terms of reining bad loans and increasing recovery.
    • The framework is not intended to constrain the performance of normal operations of the banks for the general public.

    What are the reasons behind this decision of Government?

    • Operational performance of PSBs has improved in April-June 2018 quarter, with steep reduction in net losses, increase in recoveries and significant improvement in provision coverage ratio.
    • Besides, Government is also providing PSUs with adequate capital when required.
    • Some of the capital has already been given, as recoveries are taking place and there is a possibility that some banks will not need it in the future.
    • As of now, there is no bank that is breaching the regulatory norms prescribed by RBI.

    Strategic Investment Fund Under NIIF

    Why in News?

    • Finance Ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments.
    • As on date, three funds have been established by the Government under the NIIF platform and registered with SEBI

    Three funds are

    • Category II Alternative Investment Funds and National Investment and Infrastructure Fund II (‘Strategic Fund’)
    • National Investment and Infrastructure Fund (or Master Fund)
    • NIIF Fund of Funds – I.

    Strategic Fund:

    • The objective of National Investment and Infrastructure Fund II (‘Strategic Fund’) is to invest largely in equity and equity-linked instruments.
    • The Strategic Fund will focus on green field and brown field investments in the core infrastructure sectors.
    • It will focus on green field and brown field investments in the core infrastructure sectors

    National Investment and Infrastructure Fund (NIIF):

    • Proposed in Union Budget 2015, National Investment and Infrastructure Fund (NIIF) has been set up in last month of 2015.
    • The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
    • The Fund aims to attract investment from both domestic and international sources.
    • The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
    • NIIF has been structured as a fund of funds and set up as Category II Alternate Investment Fund (AIF) under the Securities and Exchange Board of India (SEBI) Regulations.
    • It is a Rs. 40000 crore fund to provide long term capital for infrastructure projects.
    • The government’s contribution would be limited to 49% of the subscribed capital.
    • The government will seek participation from strategic investors such as sovereign fund, quasi sovereign funds and multilateral or bilateral investors, which can help leverage this fund to many times.
    • Cash-rich PSUs, pension funds, provident funds, National Small Saving Fund will be able to pick up stake in the fund.

    India’s first ISTS Connected wind Power Project commissioned

    Why in News?

    • The first batch of auctioned 126 MW wind power capacity Interstate Transmission System (ISTS)-connected wind energy projects have been commissioned in India.
    • These projects were tendered by the Solar Energy Corporation of India (SECI) in November 2016 under Tranche I.

    Key Highlights:

    • Solar Energy Corporation of India Limited (SECI) conducted India’s first auction of wind power projects in February 2017.
    • In this the tariff of Rs. 3.46 was discovered, which was much lower than feed in tariffs in vogue those days.
    • Under ISTS power generated from one state (renewable resource rich state) could be transmitted to other renewable deficient states.
    • A part capacity of 126 MW, located in Bhuj (Gujarat) was Commission. The energy generated from this project is being purchased by Bihar, Odisha, Jharkhand and UP.
    • The auction signified a major shift from the earlier regime of state-specific Feed-in-Tariff (FiT) model to a Pan-India, market-driven mechanism

    ISTS:

    • Grant of Connectivity and General Network Access to the inter-state transmission system (ISTS) and other related matters, Regulations, 2017 provide for interstate transmission.
    • It would allow for more than one power generator to share a dedicated transmission line that connects their generating stations to the ISTS polling station.
    • This will be done after all aspects of the sharing are formalized among the generators, including the sharing of transmission charges and transmission line losses among the generators.

    Cabinet Approves Extension of Concessional Financing Scheme (CFS)

    Why in News?

    • The Union Cabinet has approved the first extension of Concessional Financing Scheme (CFS) to support Indian Entities bidding for strategically important infrastructure projects abroad.

    Implementation strategy and targets

    • Under the Scheme, MEA selects the specific projects keeping in view strategic interest of India and sends the same to Department of Economic Affairs (DEA).
    • The strategic importance of a project to deserve financing under this Scheme, is decided, on a case to case basis, by a Committee chaired by Secretary, DEA.
    • Once approved by the Committee, DEA issues a formal letter to EXIM Bank conveying approval for financing of the project under CFS.
    • The Scheme is presently being operated through the Export-Import Bank of India, which raises resources from the market to provide concessional finance.
    • Government of India (GoI) provides counter guarantee and interest equalization support of 2% to the EXIM Bank.
    • Under the Scheme, EXIM Bank extends credit at a rate not exceeding LIBOR (avg. of six months) + 100 bps. The repayment of the loan is guaranteed by the foreign govt.

    Concessional Financing Scheme (CFS):

    • The scheme envisages GoI to provide counter guarantee and interest equalization of 2 % to EXIM Bank to offer concessional finance to any foreign Govt. or foreign Govt. owned or controlled entity if any Indian entity, succeeds in getting contract for the execution of a project.
    • Under the CFS, the GoI supports Indian Entities bidding for strategically important infrastructure projects abroad since 2015-16.
    • Since the objectives of the Scheme continue to be relevant, it is proposed to extend the Scheme for another five years from 2018 to 2023.

    What was the situation prior to CFS?

    • Prior to the introduction of CFS, Indian entities were not able to bid for large projects abroad since.
    • The cost of financing was very high for them and bidders from other countries such as China, Japan, Europe and US were able to get credit at superior terms (i.e. lower interest rate and longer tenures giving advantage to bidders from those countries).
    • Union Government is executing CFS since 2015-16 to support Indian entities bidding for strategically important infrastructure projects abroad.
    • CFS has enabled India to generate substantial backward linkage induced jobs, demand for material and machinery in India and also created a lot of goodwill for India.

    Major Impact:

    • Prior to the introduction of CFS, Indian entities were not able to bid for large projects abroad since the cost of financing was very high for them and bidders from other countries such as China, Japan, Europe and US were able to provide credit at superior terms, i.e., lower interest rate and longer tenures which works to the advantage of bidders from those countries.
    • Also, by having projects of strategic interest to India executed by Indian entities, the CFS enables India to generate substantial backward linkage induced jobs, demand for material and machinery in India and also a lot of goodwill for India.

    Centre Unveils International UDAN

    Why in News?

    • The Union government on Tuesday unveiled a draft scheme for extending the affordable air travel programme UDAN to international circuits, with state governments identifying the routes for operation.

    Draft “UDAN International Scheme”:

    • State governments will be able to encourage tourism on preferred international air routes by offering subsidy to domestic airlines for a period of three years.
    • The Ministry of Civil Aviation has prepared a draft scheme document for “UDAN International” and invited comments from stakeholders.
    • The scheme is designed for State governments that are keen to promote air connectivity on international routes identified by them and for which they are willing to provide subsidy to domestic airlines.
    • Only fixed wing aircraft with more than 70 seats can be operated under the scheme and airlines will have to conduct a minimum of three and a maximum of seven departures on a given route on three days in a week.
    • The Centre has allowed airlines to enter into a code-sharing arrangement with international and domestic airlines for UDAN international.
    • The AAI may also offer additional discounts at its own discretion such as landing, parking and housing charges at airports owned by it.

    Role of State Governments in the Scheme:

    • As per the draft, a State will identify international routes for which the Airports Authority of India (AAI) will determine a subsidy amount per seat and invite bids from domestic carriers.
    • This will be followed by airlines submitting their proposals, which will include the routes they wish to connect as well as the subsidy needed by them.

    Scheme Key Highlights:

    • The airlines will bid on the percentage of flight capacity for which they require financial assistance, provided that the figure doesn’t exceed 60% of the flight capacity.
    • The entity that quotes the lowest amount will be awarded subsidy for a particular route.
    • However, the government will grant financial aid only for the actual number of passenger seats that are unsold, even if the airline had sought subsidy for a higher percentage of seating capacity at the time of bidding.
    • An airline that is awarded a particular route will have exclusive rights to a subsidy on that route for a period of three years.
    • The key difference between this scheme and the regional connectivity scheme (RCS) for domestic routes is that there is no capping of fares.
    • Under RCS, fares are capped at ₹2,500 for one hour of flight on a fixed wing aircraft in order to make air travel affordable, which was why the scheme UDAN.
    • People with disposable incomes looking to undertake international air travel for the purpose of tourism justify the rationale behind not capping fares.
    • The financial assistance to an airline will be offered from the International Air Connectivity Fund (IACF), which will be created through the contributions made by the State government.

    State Energy Efficiency Preparedness Index

    Why in News?

    •  Bureau of Energy Efficiency (BEE) and Alliance for an Energy Efficient Economy (AEEE) have jointly released the ‘State Energy Efficiency Preparedness Index’.

    State Energy Efficiency Preparedness Index

    • Bureau of Energy Efficiency (BEE) and Alliance for an Energy Efficient Economy (AEEE) has released the ‘State Energy Efficiency Preparedness Index’, which assesses state policies and programmes.
    • The nationwide Index is a joint effort of the NITI Aayog and BEE.
    • It will help in implementing national energy efficiency initiatives in states and meet both State as well as national goals on energy security, energy access and climate change.
    • States are categorised based on their efforts and achievements towards energy efficiency implementation, as ‘Front Runner’, ‘Achiever’, ‘Contender’ and ‘Aspirant’.
    • Aim: To create awareness about energy efficiency as a resource and also to develop an action plan for energy conservation initiatives.

    Particulars of the Index:

    • The State Energy Efficiency Preparedness Index has 63 indicators across Building, Industry, Municipality, Transport, Agriculture and DISCOM with 4 cross-cutting indicators.
    • The Index examines states’ policies and regulations, financing mechanisms, institutional capacity, adoption of energy efficiency measures and energy savings achieved.
    • The required data was collected from the concerned state departments such as DISCOMs, Urban Development Departments, etc., with the help of State Designated Agencies (SDAs) nominated by the BEE.
    • States are categorized based on their efforts and achievements towards energy efficiency implementation, as ‘Front Runner’, ‘Achiever’, ‘Contender’ and ‘Aspirant’.
    • The ‘Front Runner’ states in the inaugural edition of the Index are: Andhra Pradesh, Kerala, Maharashtra, Punjab, and Rajasthan based on available data

    Bureau of Energy Efficiency (BEE):

    • BEE was set up under the Ministry of Power in March 2002 under the provisions of the Energy Conservation Act, 2001.
    • Its mission is to assist in developing policies and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act, 2001 with the primary objective of reducing energy intensity of the Indian economy

    Introduction of E-Way Bill System

    Why in News?

    • The E-way Bill System has been introduced nation-wide for inter-State movement of goods with effect from 1st April, 2018.

    Objectives of E-way bill system:

    • Single and unified E-way bill for inter-State and intra-State movement of goods for the whole country in self-service mode.
    • Enabling paperless and fully online system to facilitate seamless movement of goods across all the States,
    • improve service delivery with quick turnaround time for the entire supply chain and provide anytime anywhere access to data/services.
    • To facilitate hassle free movement of goods by abolishing inter-State check posts across the country.
    • The Government undertook various corrective steps in this regard viz., new Information Technology (IT) infrastructure including high end servers were installed to handle the increased load on the system.
    • The upgraded system is capable of handling a peak load of 75 lakh E-way bills per day.

    E-way bill

    • EWay Bill is an electronic way bill for movement of goods which can be generated on the eWay Bill Portal.
    • Transport of goods of more than Rs. 50,000 (Single Invoice/bill/delivery challan) in value in a vehicle cannot be made by a registered person without an eway bill.
    • When an eway bill is generated a unique eway bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.
    • An e-way bill is valid for 1 day for distance less Than 100 Kms and additional 1 day for every additional 100 Kms or part thereof
    • The validity of Eway bill can be extended.

    Economic Capital Framework Committee of RBI

    Why in news?

    • The Central Board of RBI in consultation with the Govt. of India has constituted an Expert Committee to review the extant Economic Capital Framework of the RBI.

    Economic Capital Framework Committee and mandate:

    • The RBI has named former RBI governor, Bimal Jalan to head the Framework committee.
    • Expert committee on economic capital framework will have to give its report within 90 days from its first meeting.
    • Review status, need and justification of various provisions, reserves and buffers presently provided for by the RBI.
    •   Review global best practices followed by the central banks in making assessment and provisions for risks which central bank balance sheets are subject to.
    • To suggest an adequate level of risk provisioning that the RBI needs to maintain.
    • To determine whether the RBI is holding provisions, reserves and buffers in surplus / deficit of the required level of such provisions, reserves and buffers.
    • To propose a suitable profits distribution policy taking into account all the likely situations of the RBI, including the situations of holding more provisions than required and the RBI holding less provisions than required.
    • Any other related matter including treatment of surplus reserves, created out of realised gains, if determined to be held.

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