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DAILY NEWS ANALYSIS

09 Sep, 2021

79 Min Read

New Textiles Policy 2020

GS-III : Economic Issues Industry

Background

  • The existing National Textile Policy 2000 was framed about 13 years ago. Since then, the industry has undergone various changes on the domestic and international front.
  • The domestic textile industry has seen large-scale modernization and technological up-gradation in the last decade and faces new challenges.

About the New Textile Policy 2020

  • It is aimed at developing in the country a competitive textile sector that is modern, sustainable, and inclusive.
  • This new policy will have a special focus on the manufacturing of apparel and garment, technical textiles, man-made fiber products and exports.

  • It will envisage positioning India as a fully integrated, globally competitive manufacturing and exporting hub.
  • It will entail the strategy and action plan for the country's textile and apparel segments while maintaining a pre-eminent position in handicraft and handloom sectors.
  • Technical textiles: The Cabinet has approved the National Technical Textiles Mission. The govt. will spend Rs.1,000 crore in developing raw materials for technical textiles; research associations will be asked to produce applications for these.

Challenges ahead

  • The need for cost-effectiveness is a major challenge.
  • One factor affecting cost-effectiveness is the lack of scale. New industries should look at the scale. The Textiles Ministry plans to develop 10 mega textile parks. Each one will be an integrated park. It is hoped to bring some economies of scale with this. Any State which has a minimum of 1,000 acres ready for the park will be supported to develop it.
  • Indian exporters are largely cotton-based. Therefore we should move to MMF (manmade fiber). If Indian exports in MMF grow to the level of cotton (i.e., the share of Indian cotton product exports in global trade) the overall exports will increase by $20-25 billion.

Click here to read The PLI Scheme for Textiles in India.

Source: Aspire IAS Notes

National Technical Textiles Mission

GS-III : Economic Issues Industry

The Cabinet Committee on Economic Affairs (CCEA) approved the establishment of a National Technical Textiles Mission to help India position itself as a “global leader” in technical textiles. This includes increasing exports of these “futuristic” segments of textiles by over 40 per cent in the next two years.

What are technical textiles?

  • Technical textiles are products used for functional purposes.
  • They have various applications, ranging from agriculture, roads, railway tracks, sportswear and health on the one end, to bullet-proof and fire-proof jackets, high-altitude combat gear and space applications on the other end of the spectrum.
  • India’s technical textiles segment is estimated at $16 billion — approximately 6 % of the global market for this segment.
  • The penetration level of technical textiles is low in India, varying between 5-10% as opposed to a level of 30-70 % in developed countries.

Salient Features of National Technical Textiles Mission

  • The Cabinet has approved a total outlay of Rs 1,480 crore for the project, which will be implemented over four years and aims to promote research, export and skill development in this sector.
  • The Mission has four components to achieve these goals.

  1. Component-l: Promoting both (i) fundamental research at fibre level and (ii) application based research in geo-textiles, agro-textiles, medical textiles, mobile textiles and sports textiles and development of bio­degradable technical textiles.
  2. Component-II: Promotion and Market Development.
  3. Component-III: Export promotion of technical textiles and ensuring 10% average growth in exports per year upto 2023-24. An Export Promotion Council for Technical Textiles will be set up for this purpose.
  4. Component-IV: Promoting technical education at higher engineering and technology levels related to technical textiles.
  • Aim: The Mission will aim at an average growth rate of 15-20 per cent per annum, taking the level of the domestic market size to $40-50 billion by the year 2024. The mission aims to do this through market development, market promotion, international technical collaborations, investment promotions and ‘Make in India’ initiatives.
  • Around Rs 1,000 crore of the outlay is earmarked for “fundamental” research aimed at “path breaking” technological products in the fibres space, as well as application-based research in segments like agro-textiles, medical textiles and mobile textiles. It will also be used towards the development of biodegradable technical textiles.
  • The government aims to enhance exports of technical textiles to Rs 20,000 crore by 2021-22 from approximately Rs 14,000 crore currently.
  • The Mission’s export promotion component also aims for a 10 % average growth in exports per year up to 2023-24.
  • The Mission will also aim at improving education, skill development and adequacy of human resources in the country, which the government feels is currently “not adequate to meet the technologically challenging and fast growing technical textiles segment”. Arrangements have been made for the skill development of 50,000 people in the technical textiles field. The target of the mission is to nullify the burden of this segment on the country’s trade deficit over the course of one year.
  • The Centre will focus on including the usage of technical textiles in “various” flagship missions and programmes of the country, like the Jal Jivan Mission, Swachh Bharat and Ayushman Bharat.
  • A directorate in the Ministry of Textiles will be made operational for the implementation of this mission, but will move into a sunset phase after four years.

Source: Aspire IAS Notes

Enforcement Directorate

GS-III : Internal security Money laundering

What is an Enforcement Directorate (ED)?

  • Enforcement Directorate (ED) is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance.
  • On 1st May 1956, an ‘Enforcement Unit’ was formed in the Department of Economic Affairs for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947. In 1957, it was renamed as ‘Enforcement Directorate’.
  • ED enforces the following laws:
  1. Foreign Exchange Management Act (FEMA), 1999.
  2. Prevention of Money Laundering Act (PMLA), 2002.
  • The Headquarters of Enforcement Directorate (ED) is situated in New Delhi and headed by the Director of Enforcement.
  • The director is appointed by the Appointments Committee of the Cabinet headed by the Prime Minister.

Why in news?

  • The Supreme Court did not intervene with the government’s decision to “retrospectively extend” the tenure of Sanjay Kumar Mishra as the Director of the Enforcement Directorate (ED), saying his tenure is anyway drawing to a close in November 2021.
  • In a judgment pronounced, a Bench led by Justice L. Nageswara Rao, however, said Mr. Mishra should not be given any further extension at the top of the specialized Central agency which investigates sensitive cases under the Prevention of Money Laundering Act.
  • The court, however, upheld the power of the government to extend his tenure beyond two years.
  • As the tenure of appointment of Director of Enforcement is not a maximum period of two years, a person can be appointed as Director of Enforcement for a period of more than two years... The decision to extend the tenure of the respondent [Mishra] is pursuant to the recommendation made by the high-powered committee,”
  • However, the court said the power to grant extensions for a “reasonable period” to the ED Director should be done rarely and only after recording the reasons.

Source: TH

PLI Scheme for Textiles

GS-III : Economic Issues Industry

Why in news?

  • Taking steps forward towards the vision of an ‘Aatmanirbhar Bharat’, Government has approved the PLI Scheme for Textiles for MMF Apparel, MMF Fabrics and 10 segments/ products of Technical Textiles with a budgetary outlay of Rs. 10,683 crore.
  • PLI scheme for Textiles is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs. 1.97 lakh crore.
  • With the announcement of PLI Schemes for 13 sectors, minimum production in India is expected to be around Rs. 37.5 lakh crore over 5 years and minimum expected employment over 5 years is nearly 1 crore.

  • PLI scheme for Textiles will promote production of high value MMF Fabric, Garments and Technical Textiles in country.
  • The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments.
  • This will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status in global textiles trade.
  • The Technical Textiles segment is a new age textile, whose application in several sectors of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation, etc. will improve the efficiencies in those sectors of economy.
  • Government has also launched a National Technical Textiles Mission in the past for promoting R&D efforts in that sector. PLI will help further, in attracting investment in this segment.
  • There are two types of investment possible with different set of incentive structure.
  1. Any person, (which includes firm / company) willing to invest minimum ?300 Crore in Plant, Machinery, Equipment and Civil Works (excluding land and administrative building cost) to produce products of Notified lines (MMF Fabrics, Garment) and products of Technical Textiles, shall be eligible to apply for participation in first part of the scheme.
  2. In the second part any person, (which includes firm / company) willing to invest minimum ?100 Crore shall be eligible to apply for participation in this part of the scheme.
  • In addition, priority will be given for investment in Aspirational Districts, Tier 3, Tier 4 towns, and rural areas and due to this priority Industry will be incentivized to move to backward area.
  • This scheme will positively impact especially States like Gujarat, UP, Maharashtra, Tamilnadu, Punjab, AP, Telangana, Odisha etc.
  • It is estimated that over the period of five years, the PLI Scheme for Textiles will lead to fresh investment of more than Rs.19,000 crore, cumulative turnover of over Rs.3 lakh crore will be achieved under this scheme and, will create additional employment opportunities of more than 7.5 lakh jobs in this sector and several lakhs more for supporting activities.
  • The textiles industry predominantly employs women, therefore, the scheme will empower women and increase their participation in formal economy.

Other Production Linked Incentive Schemes in India

Click here to read other news related to Textile sector of India

Source: PIB

The Collegium System

GS-II : Indian Polity Supreme court

The Collegium System was introduced in response to the executive interference in judicial appointments. However, this system has failed to protect judicial appointments from executive interference. It is due to the reasons like Post-retirement appointments of judges.

At present, the collegium comprises of CJI (Chief Justice of India) and 4 senior-most judges of the Supreme Court. Despite various criticisms and attempts to reform the appointments and transfers process, the collegium system still persists.

Current Scenario

  • The appointments of the judges are formally made by the President of India on the recommendation of the collegium. These proposals are processed through the Ministry of Law and Justice.
  • The system was recently in the news as two judges of collegium expressed caution to CJI against the proposed elevation of 22 lawyers as High Court judges in Bombay. They felt that the proposed people were lacking in integrity and shouldn’t be appointed.

About Collegium System of Supreme Court

  • It is the system by which the judges are appointed and transferred only by the judges.
  • This system is not formed by an Act of Parliament or by a Constitutional provision. Instead, it is the system evolved by the judgments of the Supreme Court.
  • The SC collegium is headed by the CJI and comprises of four other senior-most judges of the court.
  • An HC collegium is led by its Chief Justice of High Court and four other senior-most judges of that court.
  • The names recommended for appointment by a High Court collegium reach the government only after approval by the CJI and the Supreme Court collegium.
  • The government can return the recommended Judge for reconsideration by Collegium.
  • If the collegium reiterates its recommendation then the government is mandated to appoint a person.
  • The system was introduced for strengthening and improving the appointment process.

Evolution of Collegium System

  1. Article 124(2) of the Indian Constitution provides that the Judges of the Supreme Court are appointed by the President. He/she should consult such a number of the Judges of the Supreme Court and of the High Courts in the States as he/she may deem necessary for the purpose.
  2. Article 217 of the Indian Constitution states that the Judge of a High Court shall be appointed by the President in consultation with the Chief Justice of India and the Governor of the State. Further, the Chief Justice of the High Court should also be consulted except in case of his/her own appointment.
  3. In First Judges Case (1981) – The court said consultation under Article 124 doesn’t mean concurrence (unanimity). Based on this judgement, the President is not bound by CJI’s advice.
  4. In Second Judges Case (1993) – The court overruled its previous decision and said CJI’s advice is binding. Further CJI is required to formulate its advice based on a collegium of judges consisting of CJI and two senior-most SC judges.
  5. In Third Judges Case (1998) – The court expanded the collegium to a five-member body to include the CJI and the four senior-most judges of the court after the CJI.
  6. In the Fourth Judges Case (2015)– The SC upheld the primacy of the collegium. Further, the court struck down the NJAC (National Judicial Appointments Commission) Act as unconstitutional. The Court held that the Act gave the government significant powers to appoint Judges. The Court held the Act encroached upon the judiciary’s independence and undermined the basic structure.
    • The NJAC comprised of 3 judges of SC, a central law minister, and 2 civil society experts.
    • A person would not be recommended by NJAC if any 2 of its members did not accept such recommendation, making the appointment process more broad-based.

Need for Collegium System

  1. It separates the judiciary from the influence of the executive and legislative. This ensures impartial and independent functioning. So, the collegium system strengthens the principle of separation of powers (no organ of State should intervene in the functioning of another).
  2. The State is the main litigant in Indian Courts. About 46% of total cases pending in India pertains to the government. If the power to transfer the judges is given to the executive, then the fear of transfer would impede justice delivery.
  3. The executive organ is not a specialist or does not have the knowledge regarding the requirements of the Judge. Therefore, it is better if the collegium system appoints Judges.
  4. The political vulnerability in India- The government handling the transfers and appointments is prone to nepotism. For example, there are ample amount of evidences where the civil servants were transferred for political gains. This cannot be feasible with the present collegium system. Further, the collegium system provides stability to the judges.

Criticisms of the Collegium System

  1. It gives enormous power to judges that can be easily misused. The collegium system has made India, the only country where judges appoint judges.
  2. The selection of judges by collegium is undemocratic. Since judges are not accountable to the people or representative of peoples i.e. executive or legislative.
  3. There is no official procedure for selection or any written manual for functioning. This creates an ambiguity in the collegium’s functioning.
  4. Sons and nephews of previous judges or senior lawyers tend to be popular choices for judicial roles. Thus, it encourages mediocrity in the judiciary by excluding talented ones and breeds nepotism.
  5. The delays over the appointment are still persistent. The Supreme Court last appointed a judge in September 2019, and it currently has four vacancies, which is expected to be increased further this year.
  6. The procedure lacks uniformity- Sometimes a judge of HC is elevated as chief justice of the same HC while in other cases he/she is made chief justice of some other high court.
  7. Proactive decisions on improving transparency were rolled back to secrecy. This includes the practice of disclosing the reasons while announcing the collegium’s decision.

Suggestions and Way Forward

  1. The Centre needs to act on collegium’s decision within a specific time frame so that delays are minimized. Many names for appointments to the High Courts of Bombay and Allahabad are pending before the government since May 2020.
  2. Both the Centre and Judiciary must stop the blame game and focus collectively on reforming the appointment process. A consensus needs to be developed on a memorandum of procedure. This procedure has to include few important provisions such as,
    • Involving an agreement between the judiciary and the government which contains a set of guidelines for making appointments to the higher judiciary.
    • It should be based on four criteria, such as transparency, eligibility criteria for judicial appointments, a permanent secretariat to assist the collegium, and a mechanism for complaints against candidates.
  3. At present, the collegium only puts out a public statement on who has been recommended. But it does not disclose who has been dropped out and for what reason. So, the collegium system must revert to an earlier practice of providing rational reasons for its decision.
  4. Further, a written manual should be released by the Supreme Court. The manual should be followed in letter and spirit during appointments and transfers.
  5. The Supreme Court should also release the records of all collegium’s meetings in the public domain in order to ensure transparency and rule-based process.
  6. Apart from reforming the collegium system, the quality of judges can also be improved through the implementation of All India Judicial Services (AIJS).

Conclusion

The system of appointments should be improved expeditiously as High Courts across the country are short of over 400 judges. A future rise in pendency of cases can be tackled only when the judiciary and executive are willing to negotiate with a citizen-centric spirit. For that, reforming the collegium system is a good step in right direction.

Source: TH

Minimum Support Price and Schemes

GS-III : Economic Issues MSP

What is Minimum Support Price (MSP)?

  • MSP is a form of market intervention by Center to insure agricultural producers against any sharp fall in farm prices (especially in bumper production years).
  • They are announced at the beginning of the sowing season for certain crops on the basis of the recommendations of Commission for Agricultural Costs and Prices (CACP).

  • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution. In case the market price < MSP due to bumper production and glut in the market, Center purchases everything at MSP.

How many Commodities are included in MSP?

  • MSP are currently announced for 24 commodities (7C + 5P + 8O + 4) including
    1. 7 cereals (paddy, wheat, barley, maize, jowar, bajra and ragi);
    2. 5 pulses (gram, arhar/tur, moong, urad and lentil); (Chickpea is in NAFED)
    3. 8 oilseeds (groundnut, rapeseed/mustard, toria, sesamum, soyabean, sunflower seed, safflower seed and nigerseed);
    4. Copra, raw cotton, raw jute and virginia flu cured (VFC) tobacco.

Who decides the MSP in India?

  • State can decide their own MSP but it should be > FCI. State and Center both can procure but the 1st right belong to State now. Whatever extra food grain is there; FCI can procure.
  • Methods of Calculation: Pricing policy is rooted not in cost plus approach. Because along with Cost of production, CACP takes into account
    1. Demand and supply and Trends in market prices.
    2. Cost of production (A2 + FL method) and Changes in input prices.
    3. Input-output price parity and Inter-crop price parity.
    4. Terms of trade between agriculture and non-agriculture
    5. A minimum of 50% as the margin over cost of production
    6. Comprehensive view of entire structure of economy of commodity
    7. Effect on industrial cost structure; cost of living; general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy.
  • Types of Production Costs according to CACP: There are 3 types of costs

    1. A2 = A2 costs = Input cost basically cover all paid-out expenses, both in cash and in-kind, incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel, irrigation, etc.
    2. A2+FL= It covers actual paid-out costs plus an imputed value of unpaid family labour. In 2017-18; Govt adopted the formula A2 + FL = Agri input cost + Unpaid Farm Labour
    3. C2 = C2 costs are more comprehensive, accounting for the rentals and interest forgone on owned land and fixed capital assets respectively, on top of A2+FL.
    4. Present Scenario: Abhijit Sen Committee, National Commission on Farmers chaired by M S Swaminathan said use full C2 cost. But Govt used MSP cost as 150% of A2 + FL.

Critical Analysis of MSP in India

  • Benefits: Remunerative prices to Farmers; Control middlemen, hoarding, Motivate to grow 1 crop; Use dryland area agri (Coarse cereals, pulses and oilseeds)
  • Problems: MSP not working; It is direct subsidy (Amber box subsidy); Differential MSP in States hence inequality in procurement; Gap between MSP and what farmer receives (Hence PM AASHA).
  • For Sugar, it is Fair and Remunerative Prices (FRP). CCEA is the final authority.
  • A pilot project under the Direct Payment Deficiency System (DPDS) for paying MSP guarantee for the cotton farmers has been initiated at Hinganghat taluka of Maharashtra in 2015. Under this system, Farmers will directly get the amount of MSP - Market Price when the Market Price < MSP. DPDS is a mode of DBT to Cotton farmers.

Market Intervention Scheme (MIS)

  • MIS is similar to MSP, which is implemented on the specific request of State Governments for procurement of perishable and horti commodities (if they are ready to bear 50% loss and 25% loss in Northeast States).
  • Under MIS, funds are not allocated to the States. Instead, central share of losses is released to the State Governments/UTs, for which MIS has been approved.

Price Supports Scheme (PSS) for MSP operations

  • The Dept of Agri & Coop implements the PSS for procurement of COP: cotton, oil seeds and pulses through NAFED which is the Central nodal agency, at the MSP declared by the govt.
  • NAFED undertakes procurement as and when prices fall below the MSP.
  • Procurement under PSS is continued till prices stabilize at or above the MSP.

Decentralised procurement (DCP) Scheme, 1997-98

  • It refers to the procurement of foodgrains (like paddy and/or wheat) to Central Govt stock through State agencies, rather than through FCI.
  • States themselves procure grains for Central pool, store and distribute them for TPDS and OWS like Mid Day Meal, SC/ST/OBC Hostels etc. based on the allocation made by Center. Surplus is given to FCI and if there is deficit then FCI provides it.
  • State Govts are not mandated to participate in the Scheme but are encouraged.

Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA), 2018 - MoAFW

  1. It is an umbrella scheme aimed at ensuring remunerative prices to the farmers for their produce.
  2. The main feature is that Central agencies would procure pulses and oilseeds directly from farmers. It allows cash payment to farmers or procurement by Private traders. It is a Centrally Sponsored Scheme.
  3. Main crops covered are moong, urad, arhar, groundnut and soyabean.
  4. The highest sanctioned procurement is in Maharashtra. It is comprised of 3 sub-schemes: Price Support Scheme, Price Deficiency Payment System and Pilot of Private Procurement & Stockist Scheme.
  5. Price Support Scheme (PSS) -

    1. Physical procurement of pulses, oilseeds and Copra will be done by Central Nodal Agencies with proactive role of State govts. (Operation Greens = TOP).
    2. Both NAFED and FCI will take up PSS operations in states /districts.
  6. Price Deficiency Payment Scheme (PDPS)

    1. It will cover all oilseeds (but it does not involve any physical procurement of crops) for which MSP is notified. It is modelled on Bhavantar Bhugtan Yojana of MP.
    2. In this direct payment of the difference between the MSP and the selling price will be made to pre-registered farmers.
  7. Pilot of Private Procurement & Stockist Scheme (PPSS)

    1. States can use it on pilot basis PPSS which is for oilseeds, in addition to PDPS.
    2. It involves physical procurement of the oilseeds, it shall substitute PSS/PDPS in the pilot districts.

Click here to read the Analysis about the Need for MSP Reforms

Source: Aspire IAS Sanjeevani Notes

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